Sutherland Shire Council v Becker - [2006] NSWCA 344

No judgment structure available for this case.

Reported Decision: 150 LGERA 184

Court of Appeal

CITATION: SUTHERLAND SHIRE COUNCIL v BECKER [2006] NSWCA 344

HEARING DATE(S): 30-31/03/2006

JUDGMENT DATE:
12 December 2006

JUDGMENT OF: Mason P at 1; Giles JA at 2; Bryson JA at 27

DECISION: (1) The appeal is allowed with costs; (2) The orders of the District Court of 9 March 2005 are set aside, and in lieu thereof order: Give judgment for the defendant with costs; (3) The Cross-appeal is dismissed with costs; (4) The Court grants to the respondent an indemnity certificate under s.6 of the Suitors’ Fund Act 1951.

CATCHWORDS: NEGLIGENCE – public authority exercising statutory regulatory powers – subdivision control. LOCAL GOVERNMENT – subdivision control – liability of local government authority for negligence in exercise of statutory powers – Sutherland S.C. approved subdivision in 1977 on conditions which required construction of drainage system between new road and bay and creation of easement in gross in favour of SSC – subdivided land sold by developer and houses erected – in heavy rain in 1998 large quantity of water escaped from drainpipes which by then were defective and caused slippage in a large deposit of fill in the rear yard of Lot 8, the lot subject to the easement – slippage of fill removed support from a large deposit of fill in the rear yard of Lot 7 owned by the respondent Mrs Becker – overflow was caused by combination of exceptionally heavy rain, lodgement of plywood board inside drain and defective joints in pipeline which allowed escape of water – Mrs Becker sued SSC for damages related to slump of fill in her rear yard – consideration whether SSC had duty of care to Mrs Becker in approving subdivision and specification of pipeline – concept of control – whether property damage or economic loss – entitlement to lateral support – vulnerability – reliance – general reliance – operational and policy activities – Ultramares – held, no duty of care NUISANCE – dominant owner of easement in gross over drainage pipeline – nuisance alleged in failure to inspect repair or maintain pipeline – fault as an element in liability for nuisance – awareness of nuisance – whether SSC knew or should have known of defects in pipeline – consideration of facts alleged to show knowledge – held that SSC was not negligent and was not liable in nuisance.

LEGISLATION CITED: Conveyancing Act 1919 (NSW) ss.88A, 88B, 177
Conveyancing Amendment (Law of Support) Act 2000
District Court Act 1973 (NSW) s.83A
Local Government Act 1919 (NSW) Parts XI, XII, XIIA; ss.317A, 327(1)(d), 331(2), 332, 333, 335, 382, 524
Metropolitan Water Sewerage And Drainage Act 1924 (NSW)
Public Works Act 1912 (NSW)
Suitors’ Fund Act 1951 s.6
Supreme Court Rules 1970 (NSW) Pt.51 r.21

CASES CITED: Amaca Pty Ltd v State of New South Wales [2004] NSWCA 124, 1 DDCR 486
Anns v Merton London Borough [1978] AC 728
Associated Provincial Picture Houses Ltd v Wednesbury Corporation [1948] 1 KB 223
Avenhouse v Council of the Shire of Hornsby (1998) 44 NSWLR 1
Bankstown City Council v Alamdo Holdings Pty Ltd (2005) 79 ALJR 1511
Bogunda v Upton & Shearer Ltd (1972) NZLR 741
Brodie v Singleton Shire Council (2001) 206 CLR 512
Bryan v Maloney (1995) 182 CLR 609
Burnie Port Authority v General Jones Pty Ltd (1994) 179 CLR 520
Coote v Forestry Tasmania (2006) 80 ALJR 1089
Crimmins v Stevedoring Industry Finance Committee (1999) 200 CLR 1
Dalton v Henry Angus & Co (1881) 6 App Cas 740
Dennis v Charnwood Borough Council [1983] QB 409
Donoghue v Stevenson [1932] AC 562
Egger v Gosford Shire Council (1989) 67 LGRA 304
Fennel v Robson Excavations Pty Ltd (1977) 2 NSWLR 486
Ghantous v Hawkesbury City Council (2000) 206 CLR 512
Graham Barclay Oysters Pty Ltd v Ryan (2002) 211 CLR 540
Hicks v Lake Macquarie City Council (1992) 77 LGRA 261
Hill v Van Erp (1997) 188 CLR 159
Humphries v Cousins (1877) 2 CPD 239
Inglewood Shire Council v Voli (1963) 9 LGRA 340
Investors In Industry Commercial Properties Ltd v South Bedfordshire District Council & Ors [1986] QB 1034
Kebewar Pty Ltd v Harkins (1987) 9 NSWLR 738
LJP Investments Pty Ltd v Howard Chia Investments Pty Ltd (1988) 4 BPR 9640
McPherson’s Ltd v Eaton (2005) 65 NSWLR 187
Melaleuca Estate Pty Ltd v Port Stephens Council [2006] NSWCA 31
Montana Hotels Pty Ltd v Fasson Pty Ltd (1986) 61 ALJR 282
Overseas Tankship (UK) Ltd v Miller Steamship Co. Pty Ltd (The Wagon Mound (No.2)) (1967) 1 AC 617
Pantalone v Alaouie (1989) 18 NSWLR 119
Walker v City of Adelaide [2005] SASC 206
Parramatta City Council v Lutz (1988) 12 NSWLR 293
Peabody Donation Fund v Sir Lindsay Parkinson & Co Ltd & Ors [1985] AC 210
Port Stephens Shire Council v Booth & Ors [2005] NSWCA 323
Public Trustee v Hermann (1968) 88 WN (Pt 1) 442
Pyrenees Shire Council v Day (1998) 192 CLR 330
Revesz v Commonwealth of Australia (1951) 51 SR (NSW) 63
Richardson v West Lindsey District Council [1990] 1 WLR 522
Rylands v Fletcher (1868) LR3HL 330
Sedleigh-Denfield v O’Callaghan & Ors [1940] AC 880
Sheppard v Glossop Corporation [1921] 3 KB 132
Smith v Eurobodalla Shire Council & Anor [2005] NSWCA 89
Stoneman v Lyons (1975) 133 CLR 550
Stovin v Wise [1996] AC 923
Sullivan v Moody & Ors (2001) 207 CLR 562
Sutherland Shire Council v Heyman (1985) 157 CLR 424
Swain v Waverley Municipal Council [2005] 79 ALJR 565
Torette House Pty Ltd v Berkman (1940) 62 CLR 637
Travis & Anor v Vanderloos & Ors (1984) 54 LGRA 268
Turnbull v Alm [2004] NSWCA 173
Ultramares Corporation v Touche (1931) 174 NE 441
Voli v Inglewood Shire Council (1963) 110 CLR 74
Woolcock Street Investments Pty Ltd v CDG Pty Ltd (2004) 216 CLR 515
Xuereb v Viola (1990) Aust Torts Rep 81-012

PARTIES: Appellant: Sutherland Shire Council
Respondent: Suzanne Margaret Becker

FILE NUMBER(S): CA 40370/05

COUNSEL: Appellant’s counsel: D. Davies SC/S. Glascott
Respondent’s counsel: T.A. Alexis SC

SOLICITORS: Appellant’s solicitor: Phillips Fox
Respondent’s solicitor: Wm Walker Taylor Edwards & Smith

LOWER COURT JURISDICTION: District Court

LOWER COURT FILE NUMBER(S): 7041 of 2002

LOWER COURT JUDICIAL OFFICER: Sorby DCJ

LOWER COURT DATE OF DECISION: 09/03/2005

CA 40370/05

MASON P
GILES JA
BRYSON JA
12 December 2006

SUTHERLAND SHIRE COUNCIL v SUZANNE MARGARET BECKER

Judgment

1 MASON P: I agree with Bryson JA whose reasons I have had the privilege of reading. I also agree with the additional remarks of Giles JA on the topic of uninsurance.

2 GILES JA:: The detailed facts are set out in the judgment of Bryson JA, which I have had the advantage of reading in draft. I agree with the result to which his Honour has come, but in some respects take a different path to the disposal of the appeal and cross-appeal. In the light of his Honour’s reasons, and drawing upon them, I can be brief in my explanation.

Nuisance

3 The cause of action in (private) nuisance provides a remedy for many different kinds of unreasonable interference with the use or enjoyment of land. Prior to the New South Wales legislation later mentioned they included removal of support, which is what happened in the present case. Water escaping from the stormwater pipe saturated the fill on land adjoining the respondent’s land, causing slippage of the fill down the hillside. This removed the support for the fill on the respondent’s land, which itself slipped down the hillside.

4 Removal of support had particular rules. At common law the right to support of land in its natural state was said to be an incident of the land itself (Dalton v Henry Angus & Co (1881) 6 App Cas 740 at 791). There was a remedy in the law of nuisance for removal of support: “The withdrawal of lateral support from land is an actionable nuisance for which strict liability attaches without proof of any negligence” (Fennel v Robson Excavations Pty Ltd (1977) 2 NSWLR 486 at 493 per Glass JA, citing Dalton v Henry Angus & Co).

5 But there was no right to support of a building on the land (Dalton v Henry Angus & Co; Public Trustee v Hermann (1968) 88 WN (Pt 1) 442; LJP Investments Pty Ltd v Howard Chia Investments Pty Ltd (1988) 4 BPR 9640; Pantalone v Alaouie (1989) 18 NSWLR 119), or of fill changing the natural state of the land (Public Trustee v Hermann; Hicks v Lake Macquarie City Council (1992) 77 LGRA 261; Xuereb v Viola (1990) Aust Torts Rep 81-012).

6 The qualification to this where the land would have suffered its collapse even if there had not been the building or other additional load is not of present relevance. Under the particular rules, the respondent had no right as against the owner of the adjoining land to support for the fill placed on her land. If the adjoining owner had caused the loss of support for the fill on her land, she would not have had a cause of action in nuisance against the adjoining owner.

7 In Stoneman v Lyons (1975) 133 CLR 550 at 567 Stephen J observed that “the rule in Dalton v Angus”, meaning that there was no right to support of a building on the land, “is clearly ill-adapted to conditions in modern cities”. This view has been expressed in other cases and elsewhere, but in Kebewar Pty Ltd v Harkins (1987) 9 NSWLR 738 at 741 McHugh JA said that the rules had been referred to with tacit approval by the High Court on more than one occasion, and that if it was to be overturned that could only be done by the High Court. That has not yet been done, and it was not suggested in the present case that this Court should anticipate the High Court.

8 In Sullivan v Moody (2001) 207 CLR 562 at [50] the Court referred, in connection with determining the existence and nature or scope of a duty of care, to the “need to preserve the coherence of other legal principles, or of a statutory scheme which governs certain conduct or relationships”. Their Honours cited Hill v Van Erp (1997) 188 CLR 159 at 231, where Gummow J referred to the law of torts as filling gaps in what should be one coherent system of law. The context of his Honour’s remark was a role of the law of torts filling gaps left by the law of contract. The present context is very different, but there should be coherence in the reach of the cause of action in nuisance.

9 It would be anomalous, in my opinion, if the respondent had a cause of action in nuisance against the appellant on the basis that the appellant’s conduct brought about the removal of support for the fill in the respondent’s land. The indirect interference with the respondent’s use or enjoyment of her land by removal of support should not place the appellant under any greater liability in nuisance for removal of support than the adjoining owner. There would not be a nuisance until the removal of support, see Torette House Pty Ltd v Berkman (1940) 62 CLR 637 at 657 as to nuisance only when water reached the plaintiff’s land. The nuisance would lie in the removal of support and consequent slippage of the fill on the respondent’s land. The respondent had no right to the support protected by a cause of action in nuisance, including in my view a cause of action against the appellant.

10 There was reform of the law of support in New South Wales by the Conveyancing Amendment (Law of Support) Act 2000. It created, through s 177 of the Conveyancing Act 1919, a duty of care not to do anything on or in relation to supporting land that removes the support provided by the supporting land to supported land (s 177(2)). This was accompanied by abolition of “[a]ny right at common law to bring an action in nuisance in respect of the removal of the support provided by supporting land to supported land” (s 177(8)).

11 The respondent did not rely on s 177 for a cause of action in negligence. In submissions in reply the appellant relied on it for abolition of a cause of action in nuisance. Although s 177 did not apply in relation to any proceedings commenced before its commencement (s 177(11)), the present proceedings were commenced after its commencement. An action in negligence commenced after the commencement of s 177 could be based on things done before its commencement (s 177(9)). From these indications of the section’s application, it may be that s 177(8) was an answer to the respondent’s action in nuisance, even as an action against the appellant. However, the matter was not fully argued, and I do no more than draw attention to it.

Negligence

12 It is not sufficient to ask if the appellant owed a duty of care to the respondent. At that level of generality, of course it did. The respondent no doubt walked on the appellant’s roads and footpaths, and was owed a duty of care in relation to their condition (Ghantous v Hawkesbury City Council (2000) 206 CLR 512 and numerous other cases). As Brennan J said in Sutherland Shire Council v Heyman (1985) 157 CLR 424 at 487, a postulated duty of care “must be stated in reference to the kind of damage that a plaintiff has suffered and in reference to the plaintiff or a class of which the plaintiff is a member”.

13 The present case was not, in my opinion, one of a duty of care to avoid economic loss to the respondent. The respondent did not buy defective land, like the defective building bought by the plaintiff in Woolcock Street Investments Pty Ltd v CDG Pty Ltd (2004) 216 CLR 575 where the damage was held to be economic loss (see in particular at [20]). It is true that she would be likely to be injured in her pocket if, because support for the fill on her land was removed, the fill slipped down the hillside. She could incur the cost of reinstatement, or perhaps suffer diminution in the value of her land. But these would be the pecuniary consequences of what happened to her land, and the damage she suffered was physical injury to her land when support from the adjoining land was removed and the fill on her land slipped down the hillside. In my opinion, any duty of care was a duty to take reasonable care to avoid physical injury to the respondent’s land.

14 A duty of care should not be “formulated retrospectively as an obligation purely to avoid the particular act or omission said to have incurred loss, or to avert the particular harm that in fact eventuated” (Graham Barclay Oysters Pty Ltd v Ryan (2003) 211 CLR 540 at [192] per Gummow and Hayne JJ; see also per McHugh J at [106]). There remain difficulties, discussed by Mason P in McPherson’s Ltd v Eaton (2005) 65 NSWLR 187 at [3]-[25], in drawing the line between the existence of a duty of care and its content (or scope, or extent). As his Honour describes, sometimes matters additional to the kind of damage suffered and the class of which the plaintiff is a member are part of the definition of the duty. This is such a case. The duty question arises in the context of the exercise by the appellant of statutory powers or discretions. There can be put out of consideration a duty to take reasonable care to avoid physical injury to the respondent’s land in, for example, the driving of the appellant’s garbage trucks so that they do not knock down the front fence. Any duty is in the exercise by the appellant of its statutory powers or discretions concerning approval and construction of the pipeline and concerning maintenance of the pipeline, and physical damage to land exposed to damage if the statutory powers or discretion were negligently exercised.

15 In New Zealand in 1972 it was held that the owner of adjoining land whose conduct caused removal of support for a building could be liable in negligence: Bogunda v Upton & Shearer Ltd (1972) NZLR 741. That had not been established for New South Wales prior to s 177 of the Conveyancing Act. However, it has been held that a third party can be liable in negligence for the removal of support (Pantalone v Alaouie; Walker v City of Adelaide [2005] SASC 206). Since it was not relied on, I do not stay to consider s 177 of the Conveyancing Act; apart from that provision, the appellant was in the position of a third party and could owe a duty of care notwithstanding that the respondent’s damage was from removal of support.

(a) Approval and construction of the pipeline

16 The appellant approved the subdivision of the land of which the respondent’s land and the site of the stormwater pipe were part. The conditions of approval included that any fill be satisfactorily consolidated and that there be piping of necessary drainage easements and vesting of easement rights in the appellant. The plans for the pipeline were approved and the works as executed drawings were sighted and signed off, although the works were carried out by or on behalf of the developer. Upon registration of the deposited plan, an easement for the pipeline vested in the appellant.

17 It may be accepted that satisfactory consolidation of the fill would benefit the immediate and subsequent owners of the subdivided land. But that is of no direct significance because first, it did no more than tell the developer what proper practice required in any event; secondly, the fill on the respondent’s land which slipped down the hillside was in part (but to an extent which could not be ascertained) placed on her land many years later in the course of building operations; and thirdly, unsatisfactory consolidation was not shown to have brought the slippage when it would not otherwise have occurred. The condition as to satisfactory consolidation does show awareness that there could be fill on the subdivided land.

18 The construction of a pipeline and vesting in the appellant of a drainage easement was for the benefit of the public generally, not for the benefit of the immediate and subsequent owners of the subdivided land. The subdivision included the creation of a road, Myuna Place, which was dedicated as a public road and became vested in the appellant. There had to be provision for removal of stormwater from the road. The pipeline performed that function, for the benefit of road users. Like the council’s powers in Graham Barclay Oysters Pty Ltd v Ryan, the appellant’s powers by which it imposed the pipeline and easement condition were in connection with the opening of the road (s 332 of the Local Government Act 1919) and not given for the protection of the developer or of subsequent owners of the subdivided land (cf per Gleeson CJ at [37]-[39], per McHugh J at [99]; per Kirby J at [250]; and per Callinan J at [325], translated to the council at [327]).

19 As Bryson JA says in his [82], case law and judicial opinion do not provide clear paths for decision on the circumstances in which a duty of care is imposed on a public authority exercising statutory powers. A number of recent cases in the High Court have considered a duty of care to exercise a statutory power or discretion: Pyrenees Shire Council v Day (1998) 192 CLR 330, Crimmins v Stevedoring Industry Finance Committee (1999) 200 CLR 1 and Graham Barclay Oysters Pty Ltd v Ryan, all the subject of valuable analysis in Amaca Pty Ltd v The State of New South Wales (2004) 132 LGERA 309. If a public authority exercises a statutory power or discretion, additional considerations come into play if by its intervention risk of harm has been created or increased.

20 Where a novel duty-situation is in question, as these cases show the answer to the question depends on analysis of the particular circumstances. Although said in a case concerning a duty of care requiring exercise of a statutory power or discretion, the words of Gummow and Hayne JJ in Graham Barclay Oysters Pty Ltd v Ryan are also of application to exercise in fact -

“146. The existence or otherwise of a common law duty of care allegedly owed by a statutory authority turns on a close examination of the terms, scope and purpose of the relevant statutory regime. The question is whether that regime erects or facilitates a relationship between the authority and a class of persons that, in all the circumstances, displays sufficient characteristics answering the criteria for intervention by the tort of negligence.

…

149. An evaluation of whether a relationship between a statutory authority and a class of persons imports a common law duty of care is necessarily a multi-faceted inquiry. Each of the salient features of the relationship must be considered. The focus of analysis is the relevant legislation and the positions occupied by the parties on the facts as found at trial. It ordinarily will be necessary to consider the degree and nature of control exercised by the authority over the risk of harm that eventuated; the degree of vulnerability of those who depend on the proper exercise by the authority of its powers; and the consistency or otherwise of the asserted duty of care with the terms, scope and purpose of the relevant statute. In particular categories of cases, some features will be of increased significance. For example, in cases of negligent misstatement, such as Tepko Pty Ltd v Water Board , reasonable reliance by the plaintiff on the defendant authority ordinarily will be a significant factor in ascertaining any relevant duty of care.

21 Gaudron J agreed with Gummow and Hayne JJ. The same approach of consideration of “the salient features of the relationship” is found, although with differing language and emphasis, in the reasons of McHugh J at [84]. Gleeson CJ and Callinan J took rather different approaches, and Kirby J observed at [236] that “[a] cornucopia of verbal riches has been deployed to identify what, in given proceedings, these ‘salient features’ will be”. Kirby J nonetheless accepted the need to consider “the multitude of special features of the relationship between the parties” (at [243]) and suggested de facto return to the test that a duty of care will be imposed when it is reasonable to do so (at [244]).

22 Once the features of the relationship have been identified, there must be an evaluation to come to a decision. The evaluation and decision will sometimes involve a step which cannot be further explained.

23 In the present case the features of the relationship can in my view be summarised as follows.

· As I have indicated, the imposition of the pipeline and easement condition was not in the exercise of a power for the benefit of the respondent, or a class of which she was a member such as the owners of the subdivided land.

· Consequently, also in satisfying or failing to satisfy itself that the pipeline was properly constructed the appellant was not exercising a power or discretion for the benefit of the respondent or a class of which she was a member.

· The appellant could have foreseen in a general way that deficiency in the construction of the pipeline might affect its functioning, but that there would be significant physical injury to land in its natural state in the vicinity of the pipeline was but remotely foreseeable. If the pipeline fractured, for example, there could be escape of water, but that the land in its natural state would be caused to collapse is a very different matter.

· Importantly, the class of persons upon whose land water escaping from the pipeline would pass did not include the respondent. The contours of the land in its natural state were such that the escaped water would pass over the land adjoining the respondent’s land, but not her land. She was not a member of the class of persons physical injury to whose land was but remotely foreseeable (“the affected class”).

· Thus the “risk of harm that eventuated” (Graham Barclay Oysters Pty Ltd v Ryan at [149] per Gummow and Hayne JJ) was because the adjoining land and the respondent’s land had both had fill placed on them, and the support for the fill on the respondent’s land was removed when the saturated fill on the adjoining land slipped down the hillside. Foresight of harm to the respondent, not a member of the affected class, required foresight of the two placements of fill and the progression from saturation of one lot of fill to the removal of support for the other. I do not think this was reasonably foreseeable.

· Further, the appellant had less than full control over the state of the land in the vicinity of the pipeline. Its building approval powers and discretions gave it some control, but there could be excavation and filling outside its control or without its knowledge altering the risk of harm to the land of the affected class; even more so, altering the risk of harm to the respondent’s land.

· Other than in the now discredited sense of general reliance, it could not be said that the respondent, who was a subsequent purchaser, relied on the appellant having so exercised its powers and discretions that the pipeline was soundly constructed.

24 Evaluating these matters, in my opinion the appellant did not owe a relevant duty of care to the respondent.

(b) Maintenance of the pipeline

25 The appellant as beneficiary of the easement for the pipeline had the ability to inspect and maintain it. It suffices to say that, for the reasons above, I do not think the appellant owed to the respondent a duty to take reasonable care in the exercise of its powers and discretions in that respect; and that, for the reasons given by Bryson JA at [121]-[136] albeit in part as to negligence as an element in nuisance, breach of duty in that respect was not established.

26 I agree with the orders proposed by Bryson JA.

27 BRYSON JA: The appellant, defendant in the District Court, appeals by leave earlier granted from the decision of his Honour Judge Sorby of 9 March 2005 which gave judgment for the plaintiff, now the respondent, on liability; and consequential orders. The respondent cross appeals by leave. The respondent's claim in the District Court arose out of a slippage which occurred in fill material on the southern side of her house property at Lilli Pilli on the evening of 17 August 1998. She claimed a mandatory order that the appellant repair and stabilise the defective drainage system (which is described later) and also damages, interest pursuant to s.83A of the District Court Act 1973 (NSW) and costs. By agreement the Trial Judge deferred quantification of damages and other relief until liability was determined: so the decision was interlocutory.

28 The respondent cross appeals by leave and contends (Ground 1) that the Trial Judge should have found that the appellant was in breach of its duty of care in failing to inspect the stormwater pipe line during its construction, (Ground 2) that the Trial Judge erred in finding that the appellant did not breach its duty of care by failing to institute a system of inspection repair and maintenance, (Ground 3) that the Trial Judge erred in failing to find that negligence in not inspecting, repairing and maintenance the pipeline caused water to flow from the pipeline and caused the landslide and damage to the respondent’s property; and (Ground 4) that the Trial Judge was in error in failing to find liability in nuisance. As the order appealed against was “There will be a judgment for the plaintiff on liability” these matters could have been raised by notice of contention under Supreme Court Rules 1970 (NSW) Pt.51 r.21; the “decision of the court below” referred to in subr. 21(1) is, it seems to me, the order and not the reasons for the order. The issues on the appeal and the cross-appeal can be considered and disposed of together.

29 The respondent's land is Lot 7 Deposited Plan 255123, and her home there is No 12 Myuna Place Lilli Pilli. Christian Enterprises Limited owned the land for some years and developed the subdivision, and Messrs Brown and Little, surveyors, obtained subdivision approval from the appellant on behalf of the developer. The respondent bought the land from the developer in 1980 and built her house in 1982.

30 The application for and consideration of the subdivision extended over some years commencing in 1973 and ending with Council Clerk’s Certificate of 30 June 1977, which showed satisfaction with fulfilment of the appellant’s conditions for the subdivision, followed by registration of the Deposited Plan on 7 September 1977. The land subdivided had a frontage to Turriell Point Road and formed part of the block between Tamba Place on the east and Little Turriell Bay Road on the west. This was a consolidation of several earlier lots, and five buildings on those lots were demolished while the subdivision was being considered. The subdivision created Myuna Place, which was dedicated as a public road and passed into the ownership of the appellant upon registration of the Deposited Plan. The Plan also created eight residential lots including Lots 6, 7 and 8, the southern-most part of the subdivision and bounded on the south by Little Turriell Bay, part of the tidal water of Port Hacking. Lots 9 and 10, narrow strips of land on either side of Myuna Place, passed to the appellant as public reserve.

31 Lot 8 is the westernmost of the three lots with frontages to Little Turriell Bay. Lot 8 is subject to an easement for drainage 1.83m wide which runs the full length of its western boundary from Myuna Place to Little Turriell Bay. The easement was created on registration, and during the approval process the appellant had no rights or interest in the easement or the pipeline. The easement was not made appurtenant to the newly created road as dominant tenement. This is an easement in gross in favour of the appellant and burdens Lot 8 only. Creation of easements in gross in favour of public or local authorities is authorised by s.88A of the Conveyancing Act 1919 (NSW). Rights under easements in gross can only be conferred on public authorities, but they are conferred by the general law of real property, and they operate in a different way to statutory powers to enter private land and carry out works. The terms of the easement are set out in the s.88B Instrument Q281318 registered with the Deposited Plan.

32 The s.88B Instrument refers to the easement as (Blue 1/1) "Easement for Drainage 1.83 metres wide” and states that it burdens Lot 8 and benefits the appellant. The Instrument does not make the easement appurtenant to any dominant land. The terms set out in the s.88B Instrument are (Blue 1/3) "Easement to drain water as set out in Part III of Schedule IVA of the Conveyancing Act, 1919-1964, with the following additions –“ (and there are additional covenants by the registered proprietor which enhance the appellant's rights). Part III of Sched.IVA (which relates to easements in gross) sets out at great length the entitlements under an easement to drain water, and those rights include, as well as the right to drain water through any existing line of pipes, the right to enter (Blue 1/5) “for the purpose of laying, inspecting, cleansing, repairing, maintaining or renewing such pipe line" and the right to open the soil as necessary, with a proviso for minimising disturbance and restoring the surface.

33 The actual function of the pipe as drainage work for the road, assisting its effective function as a road, is clear from plans in Exhibit E which show road and drainage works as constructed; the pipe is part of a system which collects water from a drainage line and pits which run the full length of Myuna Place as far as its intersection with Turriell Point Road. Later works installed five PVC inlet pipes which led water from other sources on Lot 8 into the pipeline; these are unlikely to have contributed much to the flow of water in the pipeline, and they were not part of the pipeline as designed and constructed. One of these PVC inlet pipes was referred to in Mr Shirley’s report adopted in the Trial Judge’s findings as being fractured by a piece of plywood. Other easements in the Deposited Plan include a right of carriageway and an easement for services, both of which burden Lot 7 in favour of Lot 6, and an easement to drain water which burdens Lots 7 and 8 in favour of Lot 5, and Lot 8 in favour of Lots 7 and 5. Those easements did not make significant contributions to the events.

34 Christian Enterprises Limited sold Lot 8 to Mr Le Claire at some time in or before 1979, and Mr Le Claire obtained building approval and a building permit from the appellant in 1979 and proceeded to build his house No 14 Myuna Place. This house was constructed by the time the respondent purchased Lot 7 in 1980. At some time soon afterwards Mr Plunkett, who occupied house No. 14 during the later relevant events, bought Lot 8.

35 The houses are constructed on the highest parts of Lots 7 and 8 on a plateau of Hawkesbury sandstone. The land falls away steeply to the south of the houses, in a manner illustrated by a drawing by Mr Shirley, a consulting engineer, entitled "Inferred Subsurface Conditions” (Blue 1/79). As inferred by Mr Shirley, the Hawkesbury sandstone slope was originally overlain at most places by shallow residual soil, with some sandstone floaters included within the soil. In work associated with the subdivision, and later with construction of the houses, large quantities of fill material were deposited in the sloping rear yards of Lots 7 and 8, stretching almost down to the Bay. The claim relates to slippage in this fill material.

36 The Trial Judge stated a number of facts which he said were not in dispute, including (Red 16-17):

6. While the residences on No 14 and 12 were set on sandstone, to the south of each a considerable quality of fill had been placed stretching almost down to the bay. According to the evidence the slope of that fill was in the order of 30 – 35 degrees and to a depth [of] 3.5 to 4 metres. The fill was composed mainly of clay and building material.

37 The Trial Judge accepted and made findings on the basis of the evidence of Mr Peter Miller, the respondent’s husband, who observed significant events on 17 and 18 August 1998. In findings set out at length (Red 17-20) the Trial Judge accepted Mr Miller's evidence, shortly to the following effect. At about 4:15 p.m. on 17 August Mr Miller saw that a substantial landslip had occurred in the backyard of Lot 8; he observed a large black hole in an area that was formerly covered by trees, grass and the clothes-line. He made observations first from the upstairs back veranda on Lot 7, then by walking down a pebblecrete pathway on Lot 8 adjacent to its boundary with Lot 7. He observed more closely and saw that a substantial proportion of the backyard of Lot 8 had slipped away towards the south and west, extending to an area very close to the rear of the house on Lot 8. Sections of the pebblecrete path on the southern side of the house on Lot 8 had also slipped away. The landslip had occurred up to the boundary of Lot 7, leaving a shear face in a straight line approximately on the boundary. The material which had slumped was yellow, and was saturated. He did not observe signs of movement in the rear yard of Lot 7. He observed a sheer drop running on the western boundary of Lot 7 into a huge gaping void. He walked down towards the Bay and took some photographs which he produced in evidence. He observed that sandy soil interspersed with rocks and rubble had washed down from the back yard of Lot 8. This observation ended about 5:30 p.m.

38 At about 8:30 p.m. Mr Miller checked the drains and attempted to clean the drain pits in Myuna Place, where there was ponding in the turning circle which formed the end of Myuna Place. The water continued to rise. He spoke to Mr Plunkett and walked southward with Mr Plunkett on the western side of Lot 8, generally over the area of the easement and pipeline. He felt the ground underneath his feet vibrating and rumbling, and saw water rushing over the grass surface on which he was standing, and over his boots. He saw two solid concrete pit lids which formed part of the pipeline system; they were vibrating and moving about and water and air were squirting out of these pit lids under great pressure.

39 At about 10 p.m., during a very heavy deluge of rain, Mr Miller heard noises which sounded like wood tearing or splitting; he observed a small gap in the lawn area in the rear yard of Lot 7, made a closer inspection and saw a small area of landslip from the southern side of the lawn. About 30 minutes later he heard water running at full speed through the water pipes of the house, went to the back yard and observed that a copper water pipe was broken and water was pouring into the area that had slumped; he then observed that there had been a landslip at the end of the backyard. He then turned the water off at the main.

40 The Trial Judge made these findings (Red 20-21):

The immediate cause of the landslide on No 14 was described by the Plaintiff’s expert, Mr Shirley, a consultant geotechnical engineer with over 40 years experience. He has investigated hundreds of landslides [T.84]. According to Mr Shirley, the landslide occurred in two stages. Stage 1 was confined to No 14 because the natural movement path was directly downhill on No 14 [EX I p.7.3]. After the slide on No 14 there was left a rear vertical face area near the No 12/14 boundary which was unstable and caused the slide on No 12 [EX I p.7.3; T.142; 146]. It was not physically possible for the landslide on No 12 to occur in the manner observed “unless the postulated stage one landslide on No 14 had already occurred”. Mr Shirley described the landslide as a “combined slump/debris flow”. In a “note” at p.7 of EX I, Mr Shirley said a prerequisite of a slump/debris flow landslide was a “considerable quantity of subsurface water that builds up within the lower part of the fill. This build up – from water under the house at No 14 from Myuna Place and roadway together with “leakage from major joint openings and holes in the pipeline” is demonstrated figuratively by Mr Shirley in Figure I of his Appendix to his first report [EX I]. Mr Shirley continued in his “note” that when sufficient water/water pressures build up in the soil/fill, the whole soil mass becomes unstable and suddenly moves. As a part of this sudden movement the lowermost soil materials flow downslope, whilst the upper part of the landslide mass moves downslope in a “blocky” slump-like form.

41 The Trial Judge also found (Red 21-22):

“…

The second stage of the landslide would appear to have occurred at about 10.30 to 11 pm on 17 August, 1998 with this second stage encompassing much of the filling that had been previously emplaced on No 12 Myuna Place. This failure mechanism, and the extents of the stage one/stage two landslides are indicated on Drawings No BB030G4&G5 [in Appendix].”

42 The Trial Judge found (Red 23):

I therefore find on the balance of probabilities that the stage 1 slip at No 14 occurred on 17.8.98 at about 4 pm (when first seen by Mr Miller) or shortly before when, because of water saturation, the toe of the fill on No 14 failed causing the block of land at the top of the slope at No 14 to collapse in the south western direction as set out in the “Golder diagram”.

Further, on the balance of probabilities, I find that the second stage slip, to the rear of No 12, occurred on 17.8.98 sometime between 5.30 pm (when Mr Miller observed that the garden and lawn in his back yard where “intact”) and about 10 pm when Mr Miller heard noises which sounded like wood tearing and he went outside and observed a “small area of landslip from the southern side of the lawn of No 12 [EX F para 14] and then half an hour later he observed a broken copper waterpipe that was pouring water into an area “that had slumped from the backyard of the property” [EX F para 15].

I also find the second slip was consequent upon the first and was directly caused by, (as set out by Mr Shirley) the unstable shear face near the No 12/14 boundary promoting the landslip on No 12 around 10pm on 17.8.98.

Cause of the No 1 slide
Both Mr Shirley and Mr Jeffery attribute the No 1 slide to unstable fill placed on No 14, which at its base or toe, became saturated with water. Mr Shirley said a pre-requisite for a slump/debris flow landslide to occur, as I have found, at No 14, there had to be a considerable quantity of subsurface water that built up within the lower parts of the fill so that when the build-up in water reached certain pressure levels, the whole land mass above the saturated soil became unstable and moved. The lower most soil materials flow downslope and the upper part of the landslide mass moves downslope in a “blocky” slump like form [EX I p7.2]. The amount of water required to cause the estimated 120m3 of material involved in stage 1 of the landslide on No 14 Myuna Place was at least 25,000 litres [EX J p9.1]. “Maybe up to 40,000 litres” [T.170.15]. Mr Shirley explained the basis of these calculations during cross-examination [T.170.14-55]. They were not challenged. This is a considerable volume of water and its source and track to the toe of the fill was probably the most contentious issue in this trial.

· only have entered the system during a period of high flow [viz: heavy rainfall],

· lodged against and fractured the first PVC inlet pipe, and

· partly blocked the pipeline by skewing & lodging at any point in the pipeline.

43 The Trial Judge said that Mr Miller's evidence of vibrating pit covers (pits B & C) was “indicative of the pipeline being under pressure or blocked beyond Pit C”. His Honour went on (Red 25-26):

“f) As there was apparently no “lifting of the lids” at Pits D or E, the pipeline blockage was probably near Pit D.”
Mr Shirley concluded [EX I p19]:
“In view of the above, it would appear that:
(I). The piece of plywood entered the system during the period of heavy rainfall in August, 1998 from Myuna Place, impacted against the PVC inlet pipe immediately south of the Junction Pit and fractured the inlet part.
(II). The plywood then moved down the pipeline and lodged [skewed] partly blocked the pipeline near Pit D.
(III). As a consequence of the high flows and partial blockage, water ponded in Myuna Place and the stormwater pit lids vibrated/lifted under the resultant water pressure surcharge.
(IV). The water pressures in the pipeline between Pits B & D caused very substantial amounts of water to flow out from the opened pipeline joints, badly formed “bandaged joints”, holes and fracture in the pipeline between Pit B & Pit D [see green shaded arrows on Drawing No BB030G4].
(V). The blockage of the pipeline so reduced its capacity that additional substantial quantities of water ponded in Myuna Place and thus caused subsurface flows through the substrata [see blue shaded arrows on Drawing No BB030G4 & G5].
Note: In view of the comments in the Section headed “SSC Stormwater Drainage Pipeline”, water could also have ponded in Myuna Place during the August 1998 heavy rainfall event due to insufficient capacity [caused by the flat grade] of the 375 mm pipeline across the front of No 14 Myuna Place from the street gully.
(VI). The water pressures in the pipeline as a consequence of the pond water in Myuna Place caused substantial water flows from the pipe fracture between Pit 2 and the Junction Pit, and thus extra water flow through the substrata.”

The role of the ponded water in Myuna Place that may have flowed under No 14 dwelling (as demonstrated in Appendix A referred to earlier) together with general seepage under the roadway was down played by Mr Shirley in cross-examination. While he made that concession, Mr Shirley did not retreat from his position that the “pipeline leaks caused very substantial amounts of water to flow out from the pipeline joints and fractures”.

Giving evidence about the pipeline blockage Mr Shirley said the vibration of the pit covers as observed by Mr Miller whose evidence I accept, (Mr Plunkett not being called), was caused either by the stormwater pipe flowing full and under pressure (due to design fault/under capacity) or a partial blockage in the pipeline. He said, as the pipeline beyond Pit B had a greater flow capacity (due to the greater gradient) than the pipeline between Myuna Place and Pit B (a flatter gradient), the vibration of the pit lids was most probably related to a blockage of the pipeline beyond where the pit lids were vibrating [EX I p9.8].

44 The plan prepared by Mr Shirley’s firm entitled “Probable Failure Mechanism” (Blue 1/80) appears to show about 24 joints in the pipeline of which five are bandaged joints and 19 are spigot and socket joints.

45 The Trial Judge went on to make findings which appear to show that the pipeline may well have been and probably was blocked in some way on 17 August 1998, whether by the piece of plywood found over two years later or in some other way, and also found (Red 27):

Even if the pipeline was not blocked in August 1998, and it was simply overloaded because of the rainfall event, in 1998 an event which caused a pipeline flow larger than the design capacity, the pressure heads would still build up in the pipeline and force water out of any leaks, fractures or holes in the pipeline [EX J p6.5].

46 The Trial Judge went on to refer at length to evidence dealing with the escape of water from the pipeline. The evidence related to and was illustrated by a closed-circuit television (CCTV) film of an internal examination of the pipeline carried out on behalf of the appellant in September 2000. As the Trial Judge said, it showed pipeline fractures, scouring (meaning erosion of the concrete), what appeared to be a large hole between the Junction Pit and Pit No 2 in Myuna Place and open joints and fractures in the pipe line beyond Pit B. Mr Shirley's evidence (which it is plain the Trial Judge accepted) was to the effect that water flowing through the pipeline would flow into the ground through these open joints, fractures and holes thus saturating the lower planes of the fill on Lot 8 and causing pressures underneath the fill. It was Mr Shirley's interpretation that, while water leaking from the pipeline could flow both to the east (onto Lot 8) or to the west (to land not part of DP255123), at least 40% would have flowed into what became the landslide area on Lot 8. Mr Shirley's interpretation of the events is illustrated by his drawing "Possible Failure Mechanism" at Blue 1/80 and by his evidence referred to by the Trial Judge, in which the most probable location for pipe blockage was in the vicinity of Pit D, the third pit, thus subjecting the open joints immediately downstream of Pit C to considerable hydrostatic pressures. In Mr Shirley's interpretation, under a 3 to 4 m water pressure head, water would be forced out of an open joint and into the soil or void surrounding the pipe; and this would provide the most logical source of water for the landslide event.

47 The film taken by the CCTV camera, which was in evidence and which the Court of Appeal saw, gives an internal view of the pipe and shows, in a forceful way, a severe state of deterioration at the joint where the escape of water is most likely to have occurred. It is optically evident that failure of the joint has left ample room for escape of large volumes of water. It seems clearly possible that there has, at least to some extent, been downhill movement of the pipe; whether or not that has happened, what can be observed from the film is consistent with the Trial Judge’s findings about the escape of large volumes of water, particularly when regard is had to blockage downstream by the piece of board which the Trial Judge regarded as likely to have happened. There are also optically evident signs of erosion of the inner surface of the pipe. To a lay observer such as myself, the extent of deterioration and failure, even in a pipe which had been in a position for more than 22 years, is striking. Plainly enough from the retrospective view, better results would have been achieved if there had not been bandaged joints, if there had been spigot and socket joints throughout the pipeline, if ductile cast iron pipe had been used and if rock anchors had been used. However the retrospective view is not the basis for decision.

48 There are other possible sources of water in this area. Mr Shirley made estimates of the contribution from various sources, which included subsurface seepage from under Myuna Place and direct rainfall; and other possible sources, such as the fracture of the copper pipe on Lot 7 which Mr Miller observed. The Trial Judge gave extensive consideration to the evidence of Mr Shirley and of other experts, at the conclusion of which he found (Red 44-45)

Conclusion
Having considered all the evidence, expert and lay, and taking into account the evidence of the highly experienced council officer Mr Sherrie, I have reached on the balance of probabilities the conclusion that the slump on No 12, the Plaintiff’s dwelling was a direct result of the earlier slump on No 14 which in turn had been caused by a large volume of water turning the tip of the fill at the southern end of No 14 into mud, an inherently unstable soil form.

It is uncontested that [there] were heavy rainfall events on 17.8.98 causing huge water flows down the pipeline easement adjacent to the boundary of No 14 on the western side of the property, such volumes of water causing the lids on at least two pits to rise and fall as a result of water pressure. There was a build-up of water in Myuna Place and on the evidence of Messes Shirley and Jeffery, seepage under No 14 into the subsoil that formed the back garden, although this had occurred over time as well as over the period of the rainfall events around 17 August 1998.

49 Mr Shirley gave evidence of estimates of the flow through the pipe and escaping from the pipe, in terms which show the wide range and lack of precision characteristic of water flow calculations, but nonetheless illustrating that it was altogether feasible for very large volumes of water to escape from the pipe and reach and saturate the area at the toe of the fill on Lot 8, precipitating movement; and also showing the unlikelihood of this result being produced by water from other sources.

50 In Mr Shirley's interpretation of the Failure Mechanism, all the material affected was fill. First the fill material at the toe or lowest point of the fill on Lot 8 became saturated, so much so that there was a slump and a sudden flow of mud and debris downhill; in his interpretation there must have been an abundance of water in the basal part of the landslide at the commencement of the landslide event; the landslide was very mobile, occurred very rapidly and travelled a considerable distance. The upper part of the slump was a series of blocks. The lower-most soil material flowed down-slope, while the upper part of the landslide mass moved down-slope in blocky slump-like forms (Mr Shirley's Report Blue 1/43-44). The landslide occurred in two distinct stages, the main event being the first stage confined to Lot 8 in which the movement path was directly down the hill on Lot 8. It was not physically possible for the landslide on Lot 7 to occur in the manner in which it did unless the first stage landslide on Lot 8 had already occurred. The first stage left an unstable scarp line, and the unstable scarp line caused the second stage landslide.

51 The material involved in both stages was fill material, 3.5 to 4m deep (as the Trial Judge found). The event demonstrates that the fill material on Lot 7 had been held in position by lateral support from fill material on Lot 8; it slumped within a few hours after that lateral support was no longer available. The movement involved vegetation and a copper pipe within the fill material on Lot 7, and caused apprehension about sewer pipes within the fill material in the rear yard of Lot 7. Apart from the fill material, and vegetation and pipes supported by it, Lot 7 was not affected; house No 12, which was solidly founded on sandstone at a higher level, was not affected. When considering the risks which the state of the pipeline and the escape of water from the pipeline presented to Lot 7 and the interests of the respondent as its owners, the relevant risk is the risk that the escape of water might cause movement of fill material on Lot 8, and that that movement might withdraw lateral support from fill material on Lot 7, causing a slump of that fill material. The risk is not risk to the sandstone and residual soil which originally formed Lot 7, or to a house on Lot 7; if risks to the respondent's interest in those are involved (and I am unable to see that they are) those risks did not mature.

52 The Trial Judge’s findings relating to the consequences of the events refer, appropriately, only to fill material. The Trial Judge referred to and appears to have accepted a passage in Mr Shirley's report to the effect that the second stage of the slump encompassed "much of the filling that had been previously emplaced on No 12 Myuna Place." The Trial Judge found (Red 49):

Dorset Yacht

53 The first consideration by the appellant of the proposed subdivision shown by records in evidence took place in July 1973. The appellant’s Subdivision Board decided on 31 January 1974 (Blue 2/277-279) to approve subdivision into nine lots subject to conditions and with modifications; the conditions included the requirement (Blue 2/279) “2. That 5 small cottages and outbuildings be demolished and all debris removed from site" and a similar requirement for another demolition.

54 On 29 August 1974 the appellant approved a first stage subdivision of three lots (which does not appear to have proceeded). Conditions again included (Blue 2/289) conditions requiring demolition of the existing structures and removal of all debris and (Blue 2/290) a standard condition as follows:

9. Any filling placed on any lot(s) being free of foreign matter and being satisfactorily consolidated to retain the natural load and bearing capacity of the site.

55 The proposed subdivision was considered again several times, and was modified to eight lots; the standard condition relating to filling was not always imposed, but it was incorporated in the approval dated 20 April 1976 which led to registration of the Deposited Plan the following year. A report made by an officer in the Engineering Department on 20 April 1976 said among other things that this condition had been satisfied (Blue 2/305). This report does not relate to the further deposit of fill from rock excavation during the construction of the respondent's house, some years after the appellant's consideration of the subdivision application and of compliance with the conditions imposed.

56 The approval was communicated in Notice of Approval to Subdivision dated 20 April 1976 (Blue 2/307-308), which contained 21 conditions several of which related to easements. Condition 3 required the creation of necessary easements at no costs to Council. Condition 18 required "Piping of necessary drainage easements and vesting of easement rights in Council". Condition 19 (Blue 2/307) required:

19. Work as executed plans are to be submitted before final inspection and are to clearly show the location and nature of all service conduits, sub-soil drains and interlet drains.

57 The Trial Judge's findings include the following facts, which the Trial Judge said were not in dispute (Red 16):

3. Works as executed drawings for the easement were signed, certified and dated 10.4.77 [EX E]. Approval of the plans had been granted by the Defendant on 20.4.76, [EX D] leading to the conclusion that the pipeline was constructed over the year between 20.4.76 and 10.4.77.

4. The reinforced concrete pipeline extended down the western side of No 14 to the high water mark at the Bay, the gradient between 46 and 52 degrees according the plans tendered. To break the fall of water a series of concrete pits were constructed joining sections of the pipeline, which are marked relevantly on the executed plan, B, C, D and E.

58 The Deposited Plan which bears Council Clerk’s Certificate dated 30 June 1977 shows that by that time conditions had been complied with, the pipeline had been constructed and work-as-executed plans had been submitted. The work was not done by the appellant, but under some arrangement made by the developer. The appellant's rights in respect of the easement arose when the Deposited Plan was registered on 7 September 1977, and not any earlier. The land subject to the easement and the pipes constructed in (and to a large extent buried in) that land have never been owned by the appellant; the pipes and the land are real property owned by the registered proprietors of Lot 8 from time to time, first the developer, later Mr Le Claire and now Mr Plunkett.

59 No authoritative decisions of the High Court of Australia or of this Court of Appeal establish whether or not the appellant had a duty of care to the respondent of the kind upon which the respondent must rely. It is for the Court to decide as a matter of law whether a duty of care existed, deriving such assistance as can be derived from case law which appears to present analogies, while keeping in mind that it is in the nature of analogies to be imperfect. The conclusion on duty of care is to be formed after review and consideration of an array of matters which I do not attempt to define exhaustively, but as an attempt to indicate them, I set them out. Three matters which I have not included in this array, although they receive much attention in recent consideration of duty of care, are control, vulnerability and reliance. As I will later show, I do not think the facts of this case bring them under consideration.

· All the facts, events and conduct which the evidence makes available for consideration about the application for subdivision approval made to the appellant and how the appellant acted upon it; and particularly the appellant’s consideration and approval of the construction of the pipeline and the part in its design and construction taken by others, including the developer and its surveyors, who conducted the development application on its behalf and prepared the plans which were put before the appellant.

· The range of foreseeable risks, whatever considerations are available bearing on the reasonableness of foreseeability of risks and the events foreseeably likely to occur in the future on the land, including construction of dwellings and other structures, and other activities which might foreseeably expose property to risks of damage; and the ways in which it was foreseeable that damage might happen.

· The statutory function performed by the appellant, what its statutory or other public duties required or enabled it to do or made it reasonable for it to do; and the presence or absence of any legislative provision or purpose for the protection of property interests of later proprietors.

· The significance for a decision that there is a duty of care of policy considerations including the avoidance of indefinitely extending liability and policy considerations relating to the burdens or exemptions which relate to exercise of functions of government.

· The class of persons, classes of property and classes of risks which are to be protected by the duty of care.

60 The matters for consideration are not highly defined, and not always easy to distinguish from each other. Reasoning of syllogistic cogency supporting a conclusion is not, I would respectfully say, found in case law, even in decisions of the highest authority and, as I understand matters, is not truly available. Decision whether or not as a matter of law there is a duty of care is a judicial task which is beyond complete exposition: but it must be undertaken none-the-less. There is no generalisation which can express the basis upon which the courts will hold that a duty of care exists: this is a situation which is to be recognised, not rightly understood as a problem with an available solution. Compare Avenhouse v Council of the Shire of Hornsby (1998) 44 NSWLR 1 at 8 (Priestley JA).

61 In Part XII of the Local Government Act 1919 (NSW), in force in 1976 and 1977, s.331(2) gave Councils power to dispose of subdivision applications: “The Council may approve of any such application, or approve subject to conditions, or disapprove.” Drainage of new roads and subdivided land was among the matters which Council was required to take into consideration in relation to opening a road by s.332 of the Local Government Act; this is the basis on which conditions relating to the pipeline and the easement were imposed: Drainage of subdivided land was also required to be taken into consideration under s.333. Section 332 required no more than that Council shall take matters into consideration, and operated with s.331. Subsection 332(1) provided:

332. Subjects for consideration respecting new roads

(1)

62 What the appellant could do under Pt.XII was limited to granting or withholding approval, choosing conditions and imposing them, and ascertaining and certifying that conditions had been complied with. Counsel for the respondent referred to statutory powers with respect to stormwater drainage systems under the Local Government Act, the Metropolitan Water Sewerage And Drainage Act 1924 (NSW) and the Public Works Act 1912 (NSW); in my opinion those statutory powers were not exercised in the present case. The appellant’s statutory powers, powers under public law as distinguished from powers under real property law, included power to protect, maintain, control and manage works of drainage under s.382 of the Local Government Act, and for the purpose of constructing, extending, protecting or maintaining works under s.383 gave the appellant powers conferred on a Constructing Authority by the Public Works Act; these powers could involve obligations to pay compensation. The appellant had further extensive powers to enter land and carry out works under s.524 of the Local Government Act. By obtaining an easement the appellant secured to itself entitlement to use the pipeline and means of control over it without recourse to these public law powers.

63 The powers expressly conferred by ss.331 and 332 do not deal exhaustively with what a Council is to do when dealing with a subdivision application. The appellant was concerned to ascertain whether conditions had been complied with, including conditions in respect of the construction and draining of road, see s.335(1) of the Local Government Act; and after compliance, the certification by Council’s Clerk that the requirements of the Local Government Act had been complied with under s.327(1)(d). Council’s duty to give the Council Clerk’s Certificate was considered in Avenhouse v Council of the Shire of Hornsby: see 20-22 (Sheller JA). The powers conferred by Pt.XII consisted in part of express powers to make decisions, but also in part of implied power to ascertain compliance with conditions; necessarily implied by the need to certify compliance. The legislation does not impose on the Council any duty or function of itself carrying out construction works, and its function is rather to decide what are the appropriate conditions, impose them, and certify that they had been complied with. A wide range is left to the discretion of Council, and the legislation does not specify standards which the conditions imposed are to see to it that works achieve.

64 The powers exercised in approving the subdivision application and imposing conditions were powers which it was the appellant’s legal duty to exercise when an application for subdivision approval was made to it; and those powers could not be exercised in any other circumstances. Applying to the appellant and obtaining the exercise of the powers was the gateway to lawfulness and effectiveness in subdividing the developer's land and creating a new public road. The legislation contained no provision for payment of compensation or damages to persons affected by the exercise of powers in Pt.XII and no provision for making claims, establishing tests for liability or for providing funds, either for a class which could include the respondent or for anyone or all who might be affected by exercise of the powers. The powers in Pt.XII existed for the benefit of the general public in that they tended to improve the outcomes of subdivisions and dedications of new roads, the utility, convenience and amenity of such projects, over the state of affairs which would be produced if subdivision and dedication were not under public administration. Benefit to the general public can also be seen as protection of the interests of the general public; and the benefit and protection are more intense in relation to the people who, both contemporaneously with the subdivision and dedication and during a long future thereafter, actually use the roads and land; in the case of residential land such as this, most intensely by the people who come to own houses on the land, live in the houses and use the new road. There are many degrees of intensity of benefit, declining as definition moves away from those who come to own houses on the subdivision or live in them, to people who become tenants of or visitors to those houses and use the road for visits and access to them, and declining further to members of the public who may never come near the subdivision but benefit from enhancements to the amenity, economy and good order of the community from well-considered town planning. Attribution to the appellant of a duty of care in the exercise of subdivision powers requires identification of some degree of closeness or removal of persons and property affected by their exercise, and of something in the nature of their connection with the land in the subdivision or separation in distance and time from the exercise of the power. Recognition of limits beyond which a duty of care should not be attributed to a subdivision authority is very difficult to explain by any good principle; but limits there must be of any duty of care which is recognized.

65 The power to approve subdivisions and impose conditions, which a local government authority has a statutory duty to exercise on application, and does not involve continuing exercise of control over the regulated activity after its exercise, has characteristics which make attribution of a duty of care in its exercise a very different matter from attribution of a duty of care in the exercise of statutory or public powers which require or enable continuing intervention in some continuing activities. In this respect the power is quite different to the powers of road authorities considered in Brodie v Singleton Shire Council (2001) 206 CLR 512, powers relating to the supervision of circumstances affecting public health in Graham Barclay Oysters Pty Ltd v Ryan (2002) 211 CLR 540, and very markedly different from the circumstances of control over employment in Crimmins v Stevedoring Industry Finance Committee (1999) 200 CLR 1. The power is not at all like powers vested by statute in public authorities which give such a significant and special measure of control over the safety of persons or of property as to impose a duty of care, or to oblige the authority to exercise those powers to avert a danger to safety or to bring the danger to the knowledge of citizens otherwise at hazard from a danger; that is, it is not a power of the kind referred to in Brodie v Singleton Shire Council by Gaudron, McHugh & Gummow JJ at 588-599 [102].

66 The control available to the appellant over hazards of the kind now in question was extremely slight. Imposing the condition requiring compaction of fill should be understood to relate to fill placed in the course of the subdivision works, and not to be an attempt (which could not be successful) to exercise control over placement and stability of fill which might be put in place later. Apart from imposing this condition I can see nothing which the appellant might have done, when exercising subdivision powers, to deal with hazards such as occurred: the hazard that, if after completion of subdivision works and placement of fill on Lot 7 in the course of them, additional fill might later be placed on Lot 7, and that the fill on Lot 7 might be dependent on lateral support from other fill placed on Lot 8, and that after several decades the lateral support might cease to be available because the escape of water from the pipe might make the fill on Lot 8 unstable. Even if this hazard and this chain of events were reasonably foreseeable, the available measure to prevent slippage on Lot 7 by the exercise of subdivision powers can only have been to control the characteristics of the pipeline so completely as to bring it about that water would not escape from it in the course of many years. Once the subdivision plan was registered, the opportunity for the exercise of any statutory power relating to subdivision was ended and such a power could not have any further influence.

67 In referring to the question of control counsel for the respondents referred to Brodie v Singleton Shire Council at 573-574 [140] and to the discussion by Gaudron, McHugh and Gummow JJ of the powers vested in road authorities giving them significant and special measure of control over the safety of the person and property of road users. Their Honours earlier discussed this matter at 558-559 [102]. In my opinion the control exercised by a road authority is to be contrasted very strikingly from control exercised in subdivision powers, principally because of the continuing nature of the control and of operations under a road authority’s powers. The concept and significance of control were recently considered at length in Amaca Pty Ltd v State of New South Wales [2004] NSWCA 124, 1 DDCR 486 by Ipp JA at [18]-[65].

68 It is difficult to bring to bear the concept of control by the appellant in relation to the exercise of its powers over the subdivision. I see no room in reality for the conclusion that in exercising its power to approve the subdivision and to impose conditions in 1976 the appellant was exercising control over stability of the fill, and influences on the stability of the fill, in the rear yard of Lot 7 in 1998. The subdivision powers existed until they were fully exercised, but after the Deposited Plan was registered, statutory powers over subdivision no longer enabled the appellant to do anything. The powers of the local government authority under consideration in Graham Barclays Oysters were altogether different in the respect that they enabled the authority to intervene from time to time when it chose, (and they did not confer control in the relevant sense either).

69 In the conceptual world of reasonable foresight to which the Court pays regard when considering whether a duty of care exists, the persons whose interests are to be protected by conforming to the duty of care are persons who take reasonable care for the safety of their own interests. (Exceptions relating to risk of personal injury for momentary inattention in employment situations are not presently relevant.) The class of persons which includes the respondent whose interests are to be protected by the duty of care under consideration is a class of persons who did not own any nearby land when the subdivision was carried out, and had no part in deciding what form the subdivision should take, or how the application would be conducted or what works should be carried out to comply with conditions imposed by Council, and in what manner; they came on the scene later as purchasers from the developer or from an intermediate owner: in her case, as a purchaser from the developer. The developer itself, acting commercially for the protection and enhancement of its own economic interest and controlling the form in which the subdivision application was put forward and the carrying out of the works, is in my view entirely out of consideration as the object of any duty of care imposed by law on the appellant.

70 The nature of the loss which the respondent alleges was in my opinion plainly damage to property: the fill deposited on Lot 7 lost lateral support and slipped away, carrying with it vegetation and trees which formed much of the backyard, and causing the fracture of a water pipe which appears to have carried water to a garden tap. The claim for relief includes a claim for a mandatory injunction requiring the appellant to restore the property to its previous state. The claim cannot be seen as a claim for economic loss in the sense in which structural stress to the warehouse and office complex in Woolcock Street Investments Pty Ltd v CDG Pty Ltd (2004) 216 CLR 515 was said to be economic loss: the loss claimed went beyond diminution in value of an improvement. The respondent's case requires the deposit of fill in Lot 7 to be considered as in some way a fixture, an improvement or a structure on her land, and the risks to which it was exposed which are to be considered in relation to the existence of a duty of care are risks to its stability created by the manner in which the appellant dealt with the subdivision application.

[146] The existence or otherwise of a common law duty of care allegedly owed by a statutory authority turns on a close examination of the terms, scope and purpose of the relevant statutory regime. The question is whether that regime erects or facilitates a relationship between the authority and a class of persons that, in all the circumstances, displays sufficient characteristics answering the criteria for intervention by the tort of negligence.

[147]

102 Justices Gummow and Hayne also said at 597-598 [149]-[150]:

[149] An evaluation of whether a relationship between a statutory authority and a class of persons imports a common law duty of care is necessarily a multi-faceted inquiry. Each of the salient features of the relationship must be considered. The focus of analysis is the relevant legislation and the positions occupied by the parties on the facts as found at trial Pyrenees Shire Council v Day (1998) 192 CLR 330 at 377 [126]. It ordinarily will be necessary to consider the degree and nature of control exercised by the authority over the risk of harm that eventuated (Howard v Jarvis (1958) 98 CLR 177 at 183); Burnie Port Authority v General Jones Pty Ltd (1994) 179 CLR 520 at 550-552, 556-557; the degree of vulnerability of those who depend on the proper exercise by the authority of its powers Burnie Port Authority v General Jones Pty Ltd (1994) 179 CLR 520 at 551; Crimmins v Stevedoring Industry Finance Committee (1999) 200 CLR 1 at 24-25 [44]-[46], 38-39 [91]-[93], 40-41 [100]; and the consistency or otherwise of the asserted duty of care with the terms, scope and purpose of the relevant statute Sullivan v Moody (2001) 207 CLR 562 at 581-582 [55]-[62]. In particular categories of cases, some features will be of increased significance. For example, in cases of negligent misstatement, such as Tepko Pty Ltd v Water Board (2001) 206 CLR 1 at 16-17 [47], 23-24 [76], reasonable reliance by the plaintiff on the defendant authority ordinarily will be a significant factor in ascertaining any relevant duty of care.

[150]

103 Their Honours’ later observations (paras [150]-[152]) indicate what they had in contemplation; in my view no control, in their sense, was exercised by the appellant over the respondent’s interest in the stability of the fill when the appellant carried out its functions relating to subdivision control. Justice Kirby reached the same conclusion as the other members of the court upon views of the test for liability which it is not open to me to follow, however attractive I find them.

104 Justice Callinan stated the principle and the existence of a duty of care in a rather strict way at 663-664 [320]-[321]:

[320] I return to where I started in this section of my reasons, to the statement of Earl Cairns LC which requires that there be something in all of the circumstances, including of course the terms of the conferral of the powers, which requires that the power be coupled with a duty; or, as Hayne J put it in Brodie, "[something in] the whole range of circumstances relevant upon a question of statutory interpretation" (Brodie (2001) 206 CLR 512 at 633 [326]); or as Lord Hoffmann put it in Stovin v Wise, irrationality in an abstention from exercising the power (Stovin [1996] AC 923 at 954) or some other exceptional matter, or indicator of an intention to permit a person to sue. Unless these conditions are satisfied, in my opinion no relevant duty of care will arise.

[321]

105 As a generalisation, while the judgments in Graham Barclay Oysters give prominence to the question of control, they contain observations adverse to treating as conclusive the classification of powers into policy and operational powers and other classifications, the search for indications of statutory intention, and attempts to identify and apply the Court’s concept of policy considerations: not only from being treated as conclusive, but even (with variations) from being accorded great importance.

106 The Trial Judge found (Red 55):

However I find on the balance of probabilities, based upon principally the evidence of Mr Shirley that the Defendant breached the duty it owed the Plaintiff when it approved the construction of the pipeline that used both spigot and socket joints and bandaged joints without anchor blocks, when it knew or should have known that such construction on steep ground and adjacent to fill, could and would lead to pipeline movement resulting in holes, fractures and leakage from joints into the surrounding subsoil particularly at times of major rainfall events. In my view the risk was high as was the degree of probability of leakage at the level it did. For the Defendant to require spigot and socket joints, a ductile cast iron pipe and anchor blocks in the construction of the pipeline involved neither great expense or inconvenience to the council.

107 For reasons I have stated elsewhere, I am of the opinion that the appellant did not owe the respondent a duty of care in approving the technical requirements for the construction of the pipeline. But further, a decision whether concrete pipes and a specification in detail proposed by the applicant should be treated as sufficient in imposing a condition on subdivision approval is not a matter which can be rationally analysed in terms of the conformity with or departure from a reasonable standard of care. Decision is made under a statutory discretion, conferred on the appellant and not on anyone else, in particular not on any expert and not on the Court. To decide what standard of pipeline to require, implying decision on how much money and effort the subdivider should be required to incur, is a question of policy; demand too much and there may be no subdivision, demand too little and the work may be useless; be even-handed and consider what has been required of other subdividers. It is a matter for discretion whether or not to think through and make again for oneself all the decisions which have been made by the subdivider and its engineers about construction of the pipeline. For the Court to decide, in effect, what a reasonable local authority would do in the exercise of these discretionary powers, and whether the appellant’s decision fell within the limits so decided, cannot be done if the discretionary nature of the power is recognised. In my opinion it was an error to base a decision on standard of care, as the Trial Judge did, on evidence of Mr Shirley on what would have been apparent to a competent drainage engineer reviewing the drawings. The statutory function was not given to a competent drainage engineer. The evidence about the standard of care did not relate to the conduct of a reasonable local authority exercising the statutory power; and I am unable to visualise what evidence could do that.

108 I have endeavoured to marshall and state the elements and circumstances which have led me to the view that there is no duty of care in the present case; conscious that I cannot claim that my exposition is orderly, or that it is cogently expressed. My judgment is that there was no duty of care in the exercise of its subdivision powers owed by the appellant to a class of persons including the respondent with respect to risks of slippage of fill following loss of lateral support from fill on neighbouring land which slumped because of saturation at its toe by water escaping from the pipeline in the easement. In my view the Trial Judge was in error in deciding that there was a duty of care, and that the appellant incurred liability to the respondent, and his decision should be reversed.

109 The Trial Judge addressed liability for acts or omissions after the approval process was concluded in terms only of negligence law, found there was a duty of care, and divided consideration of breach of duty of care into two heads:

110 The Trial Judge disposed of the second subject, relating to breach of duty after the appellant became entitled to the easement, by these findings (Red 54):

It was the Plaintiff's submission that as the approval authority for the pipeline's construction on a steep slope using concrete pipes without spigot and socket joints, throughout, or anchor blocks, the Defendant ought to have known that the pipeline would be subject to downhill creep and consequently joint openings and fractures and therefore should have instituted a regular system of inspection, including CCTV examination of the inside of the pipeline. It was submitted that the council's inspections only of service inlet pits and not the other pits was inadequate.

It seems to me that the Plaintiff must fail on this aspect of breach as there was no evidence as to how frequently the pipeline should have been inspected or the cost of doing so. The evidence that landslip occurred on 1984 and 1985 on the boundary between No 12 and No 14 is not enough, in my view, to cause the Defendant to think they were caused by or related to leakage from the pipeline. Further in the absence of complaint about leaks in the pipeline or blockage there was no reason to inspect the pipeline and the system of responding to complaints as set out in EX S is reasonable.

111 The Trial Judge did not deal expressly with allegations of nuisance, and in view of other conclusions it was not necessary for him to do so. In her Cross Appeal filed on 10 August 2005 the respondent complained that the Trial Judge failed to find that the appellant was liable to her in nuisance. In her Amended Statement of Claim filed on 10 March 2004 the respondent alleged that the appellant was liable to her in nuisance (Red 7):

13B

By reason of

(a) the approval, construction and installation of the stormwater drainage system that would inevitably leak over time ; and

the negligence of the Defendant pleaded in paragraphs 11, 12 and/or 13 hereof and its failure to construct, maintain, mend, repair and/or clean the defective drainage system

the Defendant created, caused and/or maintained a nuisance that resulted in the escape of subsurface water into the Plaintiff's property and the Plunkett property and the marginally stable land (the "nuisance").

112 The negligence pleaded in para.11 in the Amended Statement of Claim related to the design and construction of the stormwater drainage system, in respects which related to the pipeline. All the acts of negligence alleged related to events which occurred before the appellant acquired the easement and became entitled to use the pipeline. Paragraph 12 alleges negligence in failures to inspect and maintain the stormwater drainage system, and the significant allegations relate to inspection and maintenance to ensure that the system did not leak through joints or fractures caused by movement downslope of the pipeline over time, and failure to ensure that the drain did not become liable to blockage. Paragraph 13 alleges negligence in allowing PVC house service connections from the Plunkett Street property to be constructed into the stormwater pipeline; there is no reason to give these allegations continuing significance.

113 Paragraphs 14 and 15 in the Amended Statement of Claim allege causation by negligence, and also by nuisance, of the landslide on Lot 7 and on Lot 8 and attribute causation to heavy rainfall, partial blockage by a piece of timber and leakage or escape of water from the pipeline onto marginally stable land.

114 In my opinion consideration of nuisance in the exercise or failure to exercise statutory powers is not involved on the present facts, and Melaleuca Estate Pty Ltd v Port Stephens Council [2006] NSWCA 31 at [44] is not relevant to the present litigation. Senior counsel for the appellant referred to the passage in the leading judgment in Bankstown City Council v Alamdo Holdings Pty Ltd (2005) 79 ALJR 1511 at 1514-1515 [16], to the effect that a public authority is not, without negligence on its part, liable for a nuisance attributable to the exercise of, or failure to exercise its statutory powers. In my view that passage and the cases there referred to are not relevant to the claim of nuisance now made against the appellant, which relates to its rights under private law relating to the easement, and not to exercise or failure to exercise statutory powers.

115 Written submissions on behalf of the respondent supported the claim of nuisance in these terms (Orange 43):

58. The Appellant is liable to Mrs Becker in nuisance, because water that was allowed to escape from the stormwater pipeline caused physical damage to and a substantial interference with her property. His Honour should have so found, as the inevitable consequence of the unchallenged findings of fact in relation to the cause of the landslide.

116 In oral submissions the respondent's counsel contended that the case in negligence was that the water that escaped from the pipeline caused physical damage and substantial interference to Lot 7. This submission was supported by referring to the Trial Judge's findings that the slippage of fill on Lot 7 was consequent upon slippage of material on Lot 8 and was directly caused by the unstable shear face near the boundary between the two lots after the landslip on Lot 7; and also findings (Red 43) which further dealt with how the slip on Lot 7 was caused by the slip on Lot 8, which created a near vertical face probably about 70 degrees which was totally unstable. Findings dealt with the effect of natural sub-surface seepage, and of saturation of the toe of the fill on Lot 8 which came from a seepage pond underneath Lot 8; and also with long-term seepage through the fill; and effectually excluded them as causes of the slump on Lot 7. Counsel also referred to the statement of conclusions in the Judgment (Red 44):

Conclusion

117 The respondent’s counsel particularly relied on failure to inspect, repair and maintain the pipeline after 1985; the submission was to the effect that events up to then which came to the knowledge of the appellant and Mr Scott's report meant that the appellant should have known of the prospect of the escape of water which it would have been simple to discover by inspection, and should have rectified the open joints and fractures and holes before the escape of water produced slippage. Counsel contended that the law of which is to be applied appears from the speech of Lord Wright in Sedleigh-Denfield v O’Callaghan & Ors [1940] AC 880 at 904.

118 Nuisances take many forms: see Overseas Tankship (UK) Ltd v Miller Steamship Co. Pty Ltd (The Wagon Mound (No.2)) (1967) 1 AC 617, and the facts which gave rise to liability in Sedleigh-Denfield's case are quite unlike the present facts. In that case the flooding and nuisance were caused by works which had been constructed on the defendants’ land by the County Council without the defendants’ knowledge; the County Council was a trespasser in this respect. It was held that after some years the defendants must be taken to have had knowledge of the existence of an ungrated pipe on their land which created a flooding risk. Sedleigh-Denfield was the occasion for several close examinations of case law relating to flooding risks and the law of nuisance, and observations made by Lord Wright at 904-905 have importance extending well beyond their application to the facts then under consideration. His Lordship said (at 904-905):

The gist of the present action; however, is the unreasonable and unjustified interference by the defendants in the user of their land with the plaintiff's right to enjoy his property. Negligence, moreover, is not a necessary condition of a claim for nuisance. What is done may be done deliberately, and in good faith, and in a genuine belief that it is justified. Negligence here is not an independent cause of action, but is ancillary to the actual cause of action, which is nuisance.
...

The liability for a nuisance is not, at least in modern law, a strict or absolute liability. If the defendant, by himself or those for whom he is responsible, has created what constitutes a nuisance, and if it causes damage, the difficulty now being considered does not arise; but he may have taken over the nuisance, ready made as it were, when he acquired the property, or the nuisance may be due to a latent defect or to the act of a trespasser or stranger. Then he is not liable unless he continued or adopted the nuisance, or, more accurately, did not without undue delay remedy it when he became aware of it, or with ordinary and reasonable care should have become aware of it. This rule seems to be in accordance with good sense and convenience. The responsibility which attaches to the occupier because he has possession and control of the property cannot logically be limited to the mere creation of the nuisance. It should extend to his conduct if, with knowledge, he leaves the nuisance on his land. The same is true if the nuisance was such that, with ordinary care in the management of his property, he should have realised the risk of its existence.
...

119 Although there may be some exceptions, fault of some kind is now usually necessary for liability in nuisance; see The Wagon Mound (No 2) at 639, and Montana Hotels Pty Ltd v Fasson Pty Ltd (1986) 61 ALJR 282 at 284. Humphries v Cousins (1877) 2 CPD 239, where the defendant was held liable for escape from a drain which began under his premises, passed under other houses and received their drainage and then returned under the plaintiff's premises, although he did not know of the existence of the drain under the plaintiff's premises, should probably be attributed to the principle in Rylands v Fletcher (1868) LR3HL 330, although that principle was not mentioned in Humphries v Cousins. The strict liability which was imposed in Humphries v Cousins is probably no longer good law, having regard to the absorption of the rule in Rylands v Fletcher by the principles of negligence in Burnie Port Authority v General Jones Pty Ltd (1994) 179 CLR 520.

120 The facts of the present case are distant from Sedleigh-Denfield as there is no element in any way like the intervention of a trespasser, and the appellant’s part in the approval process gave it means of knowledge of the existence of the drainage works including the pipeline, from a time before the appellant acquired its interest. Attention should not be limited to the pipeline and the easement, as the appellant also became the owner of Myuna Place and of the system of pipes and pits for the collection of drainage water from that road, and the easement and the pipeline in it were part of the system by which drainage water was concentrated and carried off from the road.

121 In my opinion whether the appellant is liable depends on whether, when the system became a nuisance, the appellant did not remedy it without undue delay when the appellant became aware of the nuisance, or with ordinary and reasonable care should have become aware of it. Of what was it necessary that the appellant should become aware? There was in my opinion a nuisance when the pipeline and the easement came to be in a defective state so that the escape of water was an unreasonable and unjustified interference with the rights of nearby landowners to enjoy their property. This was not the time when the escape of water caused damage; it was (stating the matter with admitted circularities) the time when with ordinary and reasonable care, the appellant should have become aware of the risk that would happen. What the respondent’s counsel principally relied upon to show this knowledge or imputed knowledge, and what he complained that the Trial Judge did not make findings about in relation to nuisance, was the evidence and information before the Council leading up to Mr Scott's report in 1985.

122 Exhibit S is a letter dated 18 October 2004 containing admissions by the appellant (BLUE 2/385):

1. The Council has no record and no knowledge of any maintenance or repair work being carried out on the 'pipeline' from its construction to date.

2. Up until the year 2000, the Council inspected the 'stormwater drainage system' in response to complaints or requests only.

3. Up until the year 2000, the Council did not have a policy for inspection of its stormwater drainage systems.

4. Up until the year 2000, the Council's system of inspection, maintenance and repair of its stormwater drainage systems was one of response to complaints or requests only.

123 Mr Sherrie, the appellant's Manager of Civil Works, gave evidence that up until the year 2000 the drainage system was generally maintained as a result of public request or complaint. After a decision in 1983 to implement a systematic drainage maintenance system the practice was adopted of conducting inspections of service pits; not inspections of pipelines. The appellant adopted another policy in the year 2000 but this did not extend to inspections of parts of drainage systems within easements affecting private property.

124 The respondent's counsel complained that the Trial Judge's consideration on the question of breach of duty after the creation of the easement was incomplete and inadequate. In support of these contentions Counsel did not refer to any evidence which tended to show what was practice or good practice in inspection by municipal authorities of pipelines in relevant circumstances. Counsel pointed to evidence which showed, clearly, that inspections could have been carried out relatively easily, earlier when staff could have gained access to the pits and inspected the pipelines with torches and mirrors on poles, and even more readily later when television camera inspection, referred to as CCTV, became readily available. It was contended that it should have been found that the cost of inspecting the pipeline was minimal. This contention has no force because it was not related by evidence or in any way to any estimate or understanding of the cost of inspecting pipelines over which the respondent had easements, or of the availability of funds and resources. Counsel also referred to the policy, from the year 2000, to carry out annual inspections, impliedly shown by the admissions in Exhibit S; I do not think that this has any force because, as the terms of para.5 of the admissions show, that did not extend to parts of the system within easements affecting private property. Counsel also cited my observations in Turnbull v Alm [2004] NSWCA 173 at [60] (Bryson JA) which related to annual inspection of the state of the footpath on private property within a shopping centre. Those observations related to the facts of that case and were assisted by much judicial experience relating to practices in maintaining footpaths, and in my opinion they do not have any present importance.

125 Counsel for the respondent also referred to information which came to the appellant’s officers as a result of earlier complaints and landslips, leading up to Mr Scott’s report. In April 1977 the appellant was informed by Mr K. Mason, who owned adjoining property to the west, of a number of complaints relating to the impact on his property of work in construction of the pipeline. Mr Mason's solicitor also narrated complaints and stated that the complaints were made in objection to granting approval for the subdivision. Counsel also referred to the appellant’s consideration of an application by Mr Le Claire in 1979 for building approval for his proposed dwelling on Lot 8; which became house No. 14 and was later sold to Mr Plunkett. The respondent's consideration of the building application shows advertence to the need to protect its interest in the drainage easements. In my opinion these matters are not of any continuing significance.

126 In 1982 officers of the appellant considered a complaint by the respondent (whose surname then was Franklin) that the fill on the adjoining land, that is on Lot 8, was not stable. Records of consideration by officers of this complaint show knowledge that the fill had been placed on both lots. After the inspection was made a responsible officer decided to take no further action.

127 In 1984 there was some further complaint in which it was claimed that there was unauthorised and unstable fill, and that a load of spoil had been dumped on the top flat section of Lot 8. The appellant’s file also showed one or two complaints in August 1984 relating to unauthorised fill, and also to surface and groundwater nuisance. An officer advised Mr Plunkett and the respondent to seek the services of a practising structural engineer to design a method of supporting the fill area. The appellant’s file also shows that Mr and Mrs Plunkett wrote to the appellant at length complaining of the effects of heavy downpours on 24 and 25 March 1984 on the fill on Lot 7, and about further events on 27 July 1984. The burden of the complaint seems to have been that instability of fill on Lot 7 had adverse effects on the Plunketts’ Lot 8, and that the respondent bore some responsibility. There were further communications and inspection, and an officer formed the view that the slope area between the two lots was unstable. The respondent engaged Mr W.J. Scott, a site investigation engineer practising in geo-mechanics and foundation engineering, to report.

128 Mr Scott’s report dated 10 October 1985 (Blue 2/351) reported on his inspection and stated his views. He said (Blue 2/351): “The purpose of the inspection was to enable an assessment of the stability of the fill zone on the southern, downslope side of the existing house. Comment on the future management of slope stability and the effect that this might have on neighbouring property was also requested." He then reported his observations and views on the geology of the area, and on the characteristics of the fill, directing his attention to the respondent’s house on Lot 7. When commenting on the fill zone and dealing with stability characteristics he did not refer to the pipeline in the easement or to possibility of the escape of water from it. He recommended (Blue 2/352) "site management procedures to improve the overall stability regime." These recommendations dealt with drainage – (Blue 2/352) "Probably the most important measure is drainage improvement" - and discussed drainage on the upper fill zone to intercept up-slope run-off, and some measure, to be negotiated with the owner of Lot 8, to deal with stormwater discharge from Lot 8. He also recommended measures dealing with vegetation and its reinforcing effect, and the creation of localised rock-wall supporting terraces on the slope. After discussing the material deposited on Lot 8 Mr Scott expressed this view (Blue 2/352): "However, since the general direction of the slope is to the south it is considered that no significant adverse effect is created by the fill zone of one property on the other."

129 Mr Scott recommended maintaining drainage control on a continuing basis. He observed that natural subsurface drainage through joints in the rock was difficult to intercept, but also recommended that drainage measures, related to drainage on the surface of and within the fill material, should be installed. He said (Blue 2/353): "Further ‘creep movement’ in the fill could fracture waste or drainage pipes embedded in the fill. These should be checked from time to time to ensure that no water is being lost into the fill." Mr Scott did not discuss, or mention at all, the pipeline in the easement or the possibility of the escape of water from it. The drainage which he discussed and the measures which he recommended related to drainage on the surface of or embedded in the fill material.

130 The appellant was given a copy of Mr Scott’s report dated 10 October 1985 (Blue 2/351). A responsible officer reviewed the information available at length but concluded that the problem was one between the two property owners. This report (Blue 2/350) and other indications show that it was well known to officers of the appellant that both properties had substantial fill on them.

131 This material in the appellant’s files shows that officers were aware of instability in the fill on Lot 7, and also possibly on Lot 8, of complaints about interaction between the deposits of fill on these lots, of reports of damage to stairs, pathways and garden drainage consequent on this instability; and of vague claims that the appellant may have incurred some liability. However there was no suggestion of involvement of the pipeline in the easement or of the escape of water from that pipeline in any of the matters under complaint.

132 It was contended that knowledge of Mr Scott's report should have alerted the appellant’s officers to the possibility of creep movement and fracture in the pipeline in the easement, which was also, at least to a large extent and (it may be) wholly covered by fill material. In my opinion there is no substance in these contentions; Mr Scott's observations related almost entirely to the fill material on Lot 7, and to garden drainage lines which are extremely unlikely to have been constructed of materials or with techniques in any way like those used in the construction of the pipeline and the easement. Concrete pipes of diameter 300mm or more, with inspection pits, are of a different technology, in a different place, to the drainage observed on by Mr Scott. The material in evidence shows no reason why the appellant should have thought that the matters under complaint and investigation involved the pipeline and the easement in any way; and indeed there is no reason now to think that the pipeline was involved in any way. The respondent’s proposition was to the effect that knowledge acquired by officers of complaints in the period 1982 to 1985, and of Mr Scott's report, should have shown the appellant, if it considered matters on a reasonable basis, that there ought to be a regular regime of inspection of the pipeline which it was entitled to use: this proposition has no real substance and should not be accepted.

133 A brief note in the appellant's records made on 16 April 1996 (Blue 2/386) indicates or seems to indicate that a ratepayer living at 38 Little Turriel Bay Road Lilli Pillli, immediately West of Lot 8, and at an earlier time occupied by Mr K. Mason, reported that there was water pollution and "Drain blocked from sand from building site. Water builds up and lids keep coming off the drain and flood complainant’s property”. The location of the problem was indicated as "14 Myuna Place" that is, Lot 8. The record says that action was finalised on or by 9 May 1996. There is next to no information in this record and the building site is not identified. The action taken as a result is not recorded. Blockage of the drain from sand from a building site and flooding from lids (which must be lids on inspection pits) on to the land to the West is plainly an altogether different problem to the escape of water which gave rise to this litigation.

134 The appellant’s knowledge that there had been movements in the fill, referred to by the Trial Judge as landslides (Red 49P-T), did not bring with it any duty of care or other obligation relating to the pipeline; the earth movements of which it knew had no relation to escape of water from the pipeline, and no other relation to the pipeline, and the respondent’s land was distant from the pipeline, separated by Lot 8 and the fill on Lot 8. What happened to the fill on Lot 7 was not the responsibility of the appellant, which was involved because of complaints from the owners of Lots 8 and 7, in substance complaints about each other, which in so far as they directed against the appellant had no clear basis. The respondent was not able to enhance or to alter the appellant’s responsibility by bringing or keeping fill in her rear yard in an unstable condition, or in a condition in which its stability depended on lateral support from other fill. This was none of the appellant’s business.

135 The Trial Judge spoke of the appellant as “the occupier/beneficiary of the pipeline”. This is not an accurate or adequate statement of the appellant’s position. The appellant’s position was that it was the dominant owner of the easement; it was not the owner of the servient land, that is, the strip which was subject to the easement, but had rights, related closely to use of the pipeline, to go on the land or (it might be said) not to be unreasonably obstructed as it went on the land to carry out various acts in aid of its easement. The easement brought with it no obligation of the appellant, to the owner of Lot 8 or to anybody else, to go on to the easement or to do anything there. In no sense was the appellant the occupier of the servient land, or of the pipeline.

136 The Trial Judge's conclusion that the appellant should not be found to be negligent in respect of failure to inspect or maintain and repair the stormwater drainage system to ensure that it did not leak was correctly based on there being no evidence as to how frequently the pipeline should have been inspected or the cost of doing so, and should not be disturbed. In the law of nuisance as it operates in this case, negligence is a necessary element: for similar reasons the appellant was not negligent and is not liable in nuisance. Indeed there was a need for the respondent to go further than the proofs which the Trial Judge mentioned: even if inspections should have been carried out, it was necessary to show that an inspection would probably have revealed the need for some maintenance work or repair and that if that maintenance work or repair had been carried out the escape of water would not have occurred. Compare Swain v Waverley Municipal Council [2005] 79 ALJR 565 at 587 [100]-[102] McHugh J and cases there referred to.

137 A further matter is that I am of the view that the interest of the respondent for which she claimed protection under the law of negligence and the law of nuisance is beyond their range. Foreseeable risk of harm to her property interest in the fill deposit on Lot 7 is beyond the protection of negligence law and nuisance law because her property interest depended upon lateral support from unstable fill material on Lot 8 to which she was not entitled; she was not acting reasonably in continuing in existence a deposit of fill which depended on that lateral support, and damage to her interest is beyond the range of the reasonably foreseeable. Even if it were shown that the escape of water from the pipeline and disturbance by it of the stability of the fill on Lot 8 was a nuisance for which the owner of Lot 8 was entitled to remedy (and I am inclined to think that it was not), the respondent would not have any remedy in respect of that nuisance for similar reasons: it was not the tort of nuisance committed against her.

138 In my opinion the Court of Appeal should order:

(1) The appeal is allowed with costs.

(2) The orders of the District Court of 9 March 2005 are set aside, and in lieu thereof order:
Give judgment for the defendant with costs.

(3) The Cross-appeal is dismissed with costs.

(4) The Court grants to the respondent an indemnity certificate under s.6 of the Suitors’ Fund Act 1951.

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Citations

Sutherland Shire Council v Becker [2006] NSWCA 344

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Cases Cited

39

Statutory Material Cited

8

Proprietors Units Plan v Jiniess Pty Ltd [2000] NTSC 89

Nicholls v Michael Wilson & Partners Ltd [2012] NSWCA 383

Proprietors Units Plan v Jiniess Pty Ltd [2000] NTSC 89

CITATION:	SUTHERLAND SHIRE COUNCIL v BECKER [2006] NSWCA 344
HEARING DATE(S):	30-31/03/2006
JUDGMENT DATE:	12 December 2006
JUDGMENT OF:	Mason P at 1; Giles JA at 2; Bryson JA at 27
DECISION:	(1) The appeal is allowed with costs; (2) The orders of the District Court of 9 March 2005 are set aside, and in lieu thereof order: Give judgment for the defendant with costs; (3) The Cross-appeal is dismissed with costs; (4) The Court grants to the respondent an indemnity certificate under s.6 of the Suitors’ Fund Act 1951.
CATCHWORDS:	NEGLIGENCE – public authority exercising statutory regulatory powers – subdivision control. LOCAL GOVERNMENT – subdivision control – liability of local government authority for negligence in exercise of statutory powers – Sutherland S.C. approved subdivision in 1977 on conditions which required construction of drainage system between new road and bay and creation of easement in gross in favour of SSC – subdivided land sold by developer and houses erected – in heavy rain in 1998 large quantity of water escaped from drainpipes which by then were defective and caused slippage in a large deposit of fill in the rear yard of Lot 8, the lot subject to the easement – slippage of fill removed support from a large deposit of fill in the rear yard of Lot 7 owned by the respondent Mrs Becker – overflow was caused by combination of exceptionally heavy rain, lodgement of plywood board inside drain and defective joints in pipeline which allowed escape of water – Mrs Becker sued SSC for damages related to slump of fill in her rear yard – consideration whether SSC had duty of care to Mrs Becker in approving subdivision and specification of pipeline – concept of control – whether property damage or economic loss – entitlement to lateral support – vulnerability – reliance – general reliance – operational and policy activities – Ultramares – held, no duty of care NUISANCE – dominant owner of easement in gross over drainage pipeline – nuisance alleged in failure to inspect repair or maintain pipeline – fault as an element in liability for nuisance – awareness of nuisance – whether SSC knew or should have known of defects in pipeline – consideration of facts alleged to show knowledge – held that SSC was not negligent and was not liable in nuisance.
LEGISLATION CITED:	Conveyancing Act 1919 (NSW) ss.88A, 88B, 177 Conveyancing Amendment (Law of Support) Act 2000 District Court Act 1973 (NSW) s.83A Local Government Act 1919 (NSW) Parts XI, XII, XIIA; ss.317A, 327(1)(d), 331(2), 332, 333, 335, 382, 524 Metropolitan Water Sewerage And Drainage Act 1924 (NSW) Public Works Act 1912 (NSW) Suitors’ Fund Act 1951 s.6 Supreme Court Rules 1970 (NSW) Pt.51 r.21
CASES CITED:	Amaca Pty Ltd v State of New South Wales [2004] NSWCA 124, 1 DDCR 486 Anns v Merton London Borough [1978] AC 728 Associated Provincial Picture Houses Ltd v Wednesbury Corporation [1948] 1 KB 223 Avenhouse v Council of the Shire of Hornsby (1998) 44 NSWLR 1 Bankstown City Council v Alamdo Holdings Pty Ltd (2005) 79 ALJR 1511 Bogunda v Upton & Shearer Ltd (1972) NZLR 741 Brodie v Singleton Shire Council (2001) 206 CLR 512 Bryan v Maloney (1995) 182 CLR 609 Burnie Port Authority v General Jones Pty Ltd (1994) 179 CLR 520 Coote v Forestry Tasmania (2006) 80 ALJR 1089 Crimmins v Stevedoring Industry Finance Committee (1999) 200 CLR 1 Dalton v Henry Angus & Co (1881) 6 App Cas 740 Dennis v Charnwood Borough Council [1983] QB 409 Donoghue v Stevenson [1932] AC 562 Egger v Gosford Shire Council (1989) 67 LGRA 304 Fennel v Robson Excavations Pty Ltd (1977) 2 NSWLR 486 Ghantous v Hawkesbury City Council (2000) 206 CLR 512 Graham Barclay Oysters Pty Ltd v Ryan (2002) 211 CLR 540 Hicks v Lake Macquarie City Council (1992) 77 LGRA 261 Hill v Van Erp (1997) 188 CLR 159 Humphries v Cousins (1877) 2 CPD 239 Inglewood Shire Council v Voli (1963) 9 LGRA 340 Investors In Industry Commercial Properties Ltd v South Bedfordshire District Council & Ors [1986] QB 1034 Kebewar Pty Ltd v Harkins (1987) 9 NSWLR 738 LJP Investments Pty Ltd v Howard Chia Investments Pty Ltd (1988) 4 BPR 9640 McPherson’s Ltd v Eaton (2005) 65 NSWLR 187 Melaleuca Estate Pty Ltd v Port Stephens Council [2006] NSWCA 31 Montana Hotels Pty Ltd v Fasson Pty Ltd (1986) 61 ALJR 282 Overseas Tankship (UK) Ltd v Miller Steamship Co. Pty Ltd (The Wagon Mound (No.2)) (1967) 1 AC 617 Pantalone v Alaouie (1989) 18 NSWLR 119 Walker v City of Adelaide [2005] SASC 206 Parramatta City Council v Lutz (1988) 12 NSWLR 293 Peabody Donation Fund v Sir Lindsay Parkinson & Co Ltd & Ors [1985] AC 210 Port Stephens Shire Council v Booth & Ors [2005] NSWCA 323 Public Trustee v Hermann (1968) 88 WN (Pt 1) 442 Pyrenees Shire Council v Day (1998) 192 CLR 330 Revesz v Commonwealth of Australia (1951) 51 SR (NSW) 63 Richardson v West Lindsey District Council [1990] 1 WLR 522 Rylands v Fletcher (1868) LR3HL 330 Sedleigh-Denfield v O’Callaghan & Ors [1940] AC 880 Sheppard v Glossop Corporation [1921] 3 KB 132 Smith v Eurobodalla Shire Council & Anor [2005] NSWCA 89 Stoneman v Lyons (1975) 133 CLR 550 Stovin v Wise [1996] AC 923 Sullivan v Moody & Ors (2001) 207 CLR 562 Sutherland Shire Council v Heyman (1985) 157 CLR 424 Swain v Waverley Municipal Council [2005] 79 ALJR 565 Torette House Pty Ltd v Berkman (1940) 62 CLR 637 Travis & Anor v Vanderloos & Ors (1984) 54 LGRA 268 Turnbull v Alm [2004] NSWCA 173 Ultramares Corporation v Touche (1931) 174 NE 441 Voli v Inglewood Shire Council (1963) 110 CLR 74 Woolcock Street Investments Pty Ltd v CDG Pty Ltd (2004) 216 CLR 515 Xuereb v Viola (1990) Aust Torts Rep 81-012
PARTIES:	Appellant: Sutherland Shire Council Respondent: Suzanne Margaret Becker
FILE NUMBER(S):	CA 40370/05
COUNSEL:	Appellant’s counsel: D. Davies SC/S. Glascott Respondent’s counsel: T.A. Alexis SC
SOLICITORS:	Appellant’s solicitor: Phillips Fox Respondent’s solicitor: Wm Walker Taylor Edwards & Smith
LOWER COURT JURISDICTION:	District Court
LOWER COURT FILE NUMBER(S):	7041 of 2002
LOWER COURT JUDICIAL OFFICER:	Sorby DCJ
LOWER COURT DATE OF DECISION:	09/03/2005