Shire of Brookton v Brechin & Ors

[2004] HCATrans 415

[2004] HCATrans 415

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
  Perth  No P85 of 2003

B e t w e e n -

SHIRE OF BROOKTON

Applicant

and

CYRIL BRUCE BRECHIN

First Respondent

WATER CORPORATION

Second Respondent

WESTERN POWER CORPORATION

Third Respondent

ANNE ASTILL

Fourth Respondent

IAN DOUGLAS ASTILL

Fifth Respondent

WINIFRED EDITH BRECHIN

Sixth Respondent

BARRY DAVID CROCKETT

Seventh Respondent

NORMA VIVIENNE CROCKETT

Eighth Respondent

MALCOLM LESLIE CUNNINGHAM

Ninth Respondent

BRONWYN MAREE CUNNINGHAM

Tenth Respondent

ALLAN CLAYTON CUNNINGHAM

Eleventh Respondent

JOANNE ELIZABETH CUNNINGHAM

Twelfth Respondent

ALEX HAIG HAMILTON CUNNINGHAM

Thirteenth Respondent

MALCOLM LESLIE CUNNINGHAM (AS TRUSTEE FOR THE MALBRO FAMILY TRUST)

Fourteenth Respondent

BRONWYN MAREE CUNNINGHAM (AS TRUSTEE FOR THE MALBRO FAMILY TRUST)

Fifteenth Respondent

ROBERT DOUGLAS EVA

Sixteenth Respondent

JAMES HENRY EVA

Seventeenth Respondent

TALMA THERESE EVA

Eighteenth Respondent

JOHN FREDERICK MARTIN GILLETT

Nineteenth Respondent

MARGARET ANNE GILLETT

Twentieth Respondent

KIRRALEE FARMS PTY LTD

Twenty-first Respondent

KENNETH THOMAS HALL

Twenty-second Respondent

CORAL FLORENCE HALL

Twenty-third Respondent

HILLROY FARMS PTY LTD

Twenty-fourth Respondent

AMBIKA PTY LTD

Twenty-fifth Respondent

STEVEN CHRISTOPHER KOLB

Twenty-sixth Respondent

LINDSAY KELVIN LANGE

Twenty-seventh Respondent

KELSIE GRAZING CO PTY LTD

Twenty-eighth Respondent

KELVIN ERNEST LANGE

Twenty-ninth Respondent

NATHANA NOMINEES PTY LTD

Thirtieth Respondent

STEPHEN BARTLETT LEAKE

Thirty-first Respondent

ROBERT BRUCE LEAKE

Thirty-second Respondent

VERONICA LINDIANTINI LEAKE

Thirty-third Respondent

JOHN EDMUND MATTHEWS

Thirty-fourth Respondent

DAPHNE ELEANOR MATTHEWS

Thirty-fifth Respondent

MATTHEWS BROOKTON (WA) PTY LTD

Thirty-sixth Respondent

LYNTON JAMES MESSENGER

Thirty-seventh Respondent

NEVILLE JAMES MESSENGER

Thirty-eighth Respondent

JAMES ARTHUR MESSENGER

Thirty-ninth Respondent

JEAN CLARIBEL MESSENGER

Fortieth Respondent

ALLAN ARTHUR MESSENGER

Forty-first Respondent

THOMAS WILLIAM MITCHELL

Forty-second Respondent

DIN-MORE PTY LTD

Forty-third Respondent

WENDY ELIZABETH POWELL

Forty-fourth Respondent

FRANK AUSTIN POWELL

Forty-fifth Respondent

JAMES AUSTIN POWELL

Forty-sixth Respondent

ANTHONY RICHARD ROBINSON (AS TRUSTEE FOR THE MEDERBERRIN FARM TRUST)

Forty-seventh Respondent

ANTHONY RICHARD ROBINSON

Forty-eighth Respondent

ROBERTA BEATRICE ROBINSON

Forty-ninth Respondent

GRAEME LEIGH  TOWNEND

Fiftieth Respondent

LINDA TOWNEND

Fifty-first Respondent

GREGORY JOHN WARD

Fifty-second Respondent

ROSALYN JOY WARD

Fifty-third Respondent

BENSFIELD NOMINEES PTY LTD

Fifty-fourth Respondent

GRAEME ALEX WATTS

Fifty-fifth Respondent

ROSEMARY ANNE WATTS

Fifty-sixth Respondent

HAMP PTY LTD

Fifty-seventh Respondent

HARRY GEORGE WILLIAMS

Fifty-eighth Respondent

ALEXANDRIA MARY WILLIAMS

Fifty-ninth Respondent

DOUGLAS GRAHAM WINDSOR

Sixtieth Respondent

JENNIFER KAY WINDSOR

Sixty-first Respondent

Application for special leave to appeal

GLEESON CJ
GUMMOW J

TRANSCRIPT OF PROCEEDINGS

AT PERTH ON WEDNESDAY, 27 OCTOBER 2004, AT 2.34 PM

Copyright in the High Court of Australia

__________________

MR G.R. HANCY:   Your Honours, I appear for the applicant.  (instructed by Minter Ellison)

MR K.J. MARTIN, QC:   May it please your Honours, with my learned friend, MR P.D. QUINLAN, I appear for the respondents.  (instructed by Talbot & Olivier)

GLEESON CJ:   Yes, Mr Hancy.

MR HANCY:   Your Honours, the issue in the proposed appeal is whether the intermediate appellate court made an error in principle in arriving at the conclusion the applicant Shire failed to exercise reasonable care to prevent damage by escape of fire because it did not instruct employees promptly to extinguish fire, including smouldering grain, at its tip.

GLEESON CJ:   What is the issue of principle involved?  That sounds like a question of fact.

MR HANCY:   The issue of principle is whether it is correct in principle in negligence cases for a court to come to a conclusion of this kind that a required precaution was an instruction and to formulate itself the content of that instruction where that conclusion is not supported by evidence, particularly ‑ ‑ ‑

GUMMOW J:   In any event, what do you say about the vicarious liability point ‑ ‑ ‑

MR HANCY:   The issue about vicarious liability was covered ‑ ‑ ‑

GUMMOW J:   ‑ ‑ ‑ with particular reference to what appears in the application book page 51, paragraphs 10 and 11?  They decided to finish their lunch before they got moving when things were at some advanced state of alarm.

MR HANCY:   The first thing to say about that is that, first of all, no findings of vicarious liability, no findings of liability by the staff were made.

GUMMOW J:   I know, but we are at the special leave stage and I am worried about the interests of justice in the broad sense. 

MR HANCY:   Her Honour Justice McClure dealt with it at page 65 and quite properly pointed out that a number of questions that are required to be determined to decide that issue were not determined before the Master, they were not part of the trial, and they are whether a duty of care was owed by either of those employees and, if so, whether it was breached and other matters that she deals with in paragraph 53.  So vicarious liability was alleged at trial but those sort of issues that were important were not addressed.  The Master did not make findings, there was no notice of contention that his finding of negligence should be upheld on vicarious liability grounds and her Honour dealt with it as not being proper for the appeal at page 65 in the application book. 

So, in those respects, the interests of justice do not really weigh against the applicant in terms of the conduct of the two employees, Watts and Forward, but there is also an additional matter that is relevant because, in respect of Watts, the issue may have been – certainly it was raised at trial – about his conduct in not putting out or dealing with a waft of smoke.  In the case of Forward ‑ ‑ ‑

GUMMOW J:   As the Chief Justice said to you, we are just back to facts.

MR HANCY:   Certainly, there are facts involved, that is right, because the particular case illustrates the proposition that we advert to in our written submissions and which I propose to talk more about.  The proposition that the formulation of, effectively, a standard of care must have some foundation in evidence.  That might be evidence about what people of a similar ilk do, and I give various examples in the written submissions, or it may turn on what the defendant knew or ought to have known, so that in an appropriate case, applying commonsense or common human experience, the court can reason to the conclusion that the appropriate standard of care was, particularly in this case, a direction with a particular content. 

Before I say more about that, I need to say in respect of Forward that a concession was made on the appeal that his delay was not a causal factor in the occurrence of the fire, so it is only Watts and the smoke that is relevant.  But Watts and what he did or did not do concerning the smoke feeds into this question of standard of care and whether a direction to staff was appropriate and, if so, what direction and how is the court to formulate whether and what a direction is required.

GLEESON CJ:   Was the conduct of the officers of your client in, first of all, walking away from the smouldering grain heap and leaving it to smoulder and then finishing their lunch before they went to attend to the alarm that had been raised by somebody else, was that all consistent with your client’s system?

MR HANCY:   The conduct that your Honour is talking about was – well, take the first one, walking away, the evidence of Watts was evidence given as a witness for the respondents, that is, for the plaintiffs.  They called him to give evidence about what he saw and what he did, including extracting from him evidence that when he left he considered that what he left was safe.  He was not called as a witness for the respondents.  It was never suggested to him that he should have done anything different in the circumstances.  He was a witness for the respondents.  Now, that is one of the reasons why what your Honour is adverting to is a problem that has not given rise to a conclusion of vicarious liability in the Full Court and it was not the subject of a decision before the Master. 

As to walking away, there was criticism levelled at Forward for doing that by the Master, but the concession was made on appeal that that was not causally relevant.  So everything focuses back to Watts’ behaviour in leaving a waft of smoke, no bigger than his finger, unattended at the tip site, but not his conduct as someone who is shown to owe a duty of care individually to landowners, but his ‑ ‑ ‑

GLEESON CJ:   One thing I am not clear about in the evidence, Mr Hancy – you may be able to clear this up – did the evidence indicate whether it was common to have smoke rising from the tip?

MR HANCY:   There was evidence that some witnesses saw smouldering grain but there was no evidence that anyone reported it as a problem.  There was some evidence that fires occurred from time to time and there was also evidence that fires that had occurred were extinguished.

GUMMOW J:   This was in December 1997, was it not?

MR HANCY:   The fire was, yes.

GUMMOW J:   On a hot, dry day and a windy day too.

MR HANCY:   It was a hot day and it was a windy day.  The evidence about what the applicant’s staff knew about smouldering was really from their environmental health officer and building surveyor who spent part of his duties attending to the tip and part of them attending to building matters and other health matters but he also shared his duties with two other councils, this being a comparatively small country shire. 

In September 1997 he first noticed that this grain was deposited at the tip by someone whose identity was never discovered.  He did see some wafts of smoke coming from it, a bit like smoky sawdust.  He directed the works supervisor to spread it out and cover it.  When he later looked at the grain he saw that it had been spread out, although it was not clear from the evidence whether it had been covered.  So before the fire it had been spread out. 

Now, within the week prior to the fire, that is, in December 1997, the same witness saw a wisp of smoke from apparently the grain but it disappeared.  So the evidence about smouldering and knowledge of smouldering was pretty minimal so far as the applicant is concerned.  There certainly was no evidence that the chief executive officer knew about smouldering or that it was a problem because no one reported it to him.  There was evidence from one of the ‑ ‑ ‑

GUMMOW J:   Well, her Honour says at page 63:

The uncontradicted evidence was that there is a risk of grain spontaneously igniting.

MR HANCY:   There was not uncontradicted evidence that this was a matter that was known to the applicant.

GUMMOW J:   Perhaps it ought to have been.

MR HANCY:   It was not a case where evidence was tendered showing why that conclusion should have been drawn.  The evidence about spontaneous combustion was given by one of the witnesses who the Master decided gave admissible expert evidence, a Mr Tong, a former policeman, an arson investigator.  That is at page 63 of the application book.  He simply said, as summarised by her Honour at paragraph 48, that there was a risk of grain spontaneously igniting.  That is the uncontroverted evidence.  But he went on to say:

if a large quantity of grain had been dumped and became damp or affected by rain, it was possible that if it was not dispersed or adequately covered, spontaneous heating to ignition temperature could occur. 

He goes on and says a bit more, but if I could stop at that point.  This was not a case where a large quantity of undispersed grain was left in conditions where it was damp and affected by rain and then later heated with spontaneous combustion arising.  But Mr Tong also went on to make the point:

Unless the oxygen supplied to combustible material is excluded . . . spontaneous heating to ignition temperature could continue to re-occur –

But he talked about measures that could be taken to prevent that and one of them was dispersing the grain over a large area.  That was one of the suggested precautions.  Now, that was what, in fact, happened in September 1997. 

From time to time, people who did not report the fact to the Shire saw smouldering but there was nothing to suggest that it was on anything other than an intermittent basis.  One witness concluded it was burning, and her Honour refers to his evidence at page 60, that is, Andrew Beaton.  He said he saw grain burning around four to five times, but when his evidence was explored in cross‑examination he confirmed that what he meant was smouldering, so he did not see flame.  No one saw flame until the day of the fire apart from a Harold Shipley, who is dealt with at page 60.  So one individual claims to have seen flames one to two weeks before the fire – no one else – but no one reported any of this to the Shire. 

Mr Leslie Eyre, who is also dealt with at page 60, had seen grain smouldering before but had never seen the start of a fire.  He was a councillor and chief fire control officer but his role, it appeared from the evidence, was to declare harvest ban days and when fires were reported then he set in train the local fire brigade.

GUMMOW J:   This was a harvest ban day, was it not?

MR HANCY:   It was, yes, it was a harvest ban day.  The only reason in the end why the applicant was held liable – because many grounds were asserted – vicarious liability was not a ground that succeeded before the Master and it did not succeed before the Full Court; breach of statutory duty did not succeed either before the Master or the court below and negligence based on breach of licensing conditions did not succeed; delay in attending the fire did not succeed and the concession was made that I have referred to before.  All that became relevant was that incident of a waft of smoke, no bigger than a finger, being left by an experienced firefighter who did not think that it was anything other than safe.  He did not regard it as fire, although her Honour Justice McClure has drawn a parallel between smouldering and fire.

GLEESON CJ:   Mr Hancy, have damages been assessed?

MR HANCY:   No, but I can tell your Honour that there are 58 plaintiffs, or groups of plaintiffs, in this action and there is another parallel action of a similar ilk with another 24 plaintiffs, or groups of plaintiffs, because when that waft of smoke – and we did not challenge the Master’s conclusions on causation before the intermediate court – somehow, in a way that was never understood or explained, generated a fire that spread from the tip pad area, across a bund, into a vegetated area where it created a fire in what was effectively Wandoo forest, which is not high trees but significant enough to generate firebrands, and with the strong north winds – one of these, it seems, was picked up and it flew uphill above even higher trees, some hundreds of metres to the southern boundary of the tip, and then another 500 metres or so into what was called Hall’s paddock to the south, where it fell down and started another fire. 

Now, that fire is the one that eventually went out of control.  It spread further south through Hall’s paddock into, I think, Water Authority land which was unimproved land in the sense that it is full of vegetation and trees, and from there it went on to cause extensive damage to farming properties that were mainly in the Pingelly Shire, the adjoining shire to the south. 

GLEESON CJ:   That puts the references to the waft of smoke no bigger than a finger into perspective, does it not?

MR HANCY:   Yes.  Where all that leads, your Honour, is that although damages have not been assessed, the likely quantum is quite substantial, many millions of dollars.  So it is significant from the applicant’s point of view, it is not a minor matter, and I suppose it does lead on to that injustice question because your Honours keep saying it is a question of fact, and really that is what we are seeking this Court to determine.  If your Honours decide today that it is just merely a question of fact, then maybe that is the end of it.

GLEESON CJ:   I have to tell you that at first blush it does not look like a question of legal principle, that is, whether or not it is negligent of a council to have a system that produces this result.

MR HANCY:   No, I am not saying that is the principle.  That is the error that we are contending, but in arriving ‑ ‑ ‑

GUMMOW J:   You have to contend also that the attitude of the common law, which is hundreds of years old, that to cause an escape of fire is a very seriously regarded matter.

MR HANCY:   We accept that, but the problem here is the tension between the general obligation to exercise reasonable care to avoid conduct ‑ ‑ ‑

GUMMOW J:   Yes, but it informs that general duty, you see.

MR HANCY:   ‑ ‑ ‑ that may lead to an escape of fire causing damage.

GUMMOW J:   …..and so on.

MR HANCY:   That is the general obligation which we say is correct, but it involves consideration of many issues and not simply whether the particular loss that occurred should be avoided.  That is what we say happened here.  In her Honour’s final conclusion at page 64 she has done a balancing exercise which is balancing the risk of escape, which there was, although the minor firebrand was minimal, against the proposed alleviating action, but when she has identified the proposed alleviating action, which we say is the problem and the error of principle, she must have gone back to the way the particular loss occurred rather than consider foresight, an escape of fire generally, and what a reasonable shire would do.  She must have gone to the particular way the fire was caused to determine the remedial action.

So that means that the occurrence of loss, effectively, of a particular kind through that reasoning leads directly to liability.  So we were required to promptly extinguish fire, including smouldering grain at the tip.  Even if it was simply an obligation to direct employees to promptly extinguish fire, on the facts nothing would have been different because Watts did not consider the matter was fire that required attention.  To say that the direction should have included a reference to smouldering grain has no foundation in evidence because there was no evidence that would have led us, and particularly Mr Curley, to shape a direction of that kind. 

The only way it could have been formulated by the court below is by reference to the particular loss that occurred, that is, hindsight.  So it is an application of principle that was not principle, so in that sense an error of

principle.  The principle was not applied.  Her Honour refers to correct principle but then does not apply it in a correct way, which reveals a case like this, when Wyong v Shirt is applied, can lead to this kind of result.

GLEESON CJ:   Thank you, Mr Hancy.  We do not need to hear you, Mr Martin.

This case does not raise an issue of legal principle suitable for a grant of special leave to appeal but turned on an issue of fact.  Furthermore, we are not persuaded that the interests of justice require such a grant, and the application is dismissed with costs.

AT 2.55 PM THE MATTER WAS CONCLUDED