Thomas v Powercor (No 10)
[2013] VSC 708
•17 December 2013
| IN THE SUPREME COURT OF VICTORIA | Not Restricted | |
AT HORSHAM
COMMON LAW DIVISION
No S CI 2009 09166
| LAURENCE PETER THOMAS | Plaintiff |
| v | |
| POWERCOR AUSTRALIA LIMITED | Defendant |
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JUDGE: | BEACH JA | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | 12 December 2013 | |
DATE OF JUDGMENT: | 17 December 2013 | |
CASE MAY BE CITED AS: | Thomas v Powercor (No 10) | |
MEDIUM NEUTRAL CITATION: | [2013] VSC 708 | |
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GROUP PROCEEDING - Settlement of group proceeding – Settlement agreement – Construction of agreement – Whether proceeding included claims for pure economic loss – Identity of group members – Pure economic loss – Consequential losses – Pleadings – Basis upon which proceeding conducted.
CONTRACT – Settlement of group proceeding – Settlement agreement – Construction of agreement.
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Mr G D Dalton | Maddens |
| For the Defendant | Mr D McWilliams | Wotton + Kearney |
HIS HONOUR:
Introduction
On 7 February 2009, Black Saturday, a bushfire started near the intersection of the Horsham-Remlaw Road and Remlaw Station Road, some 7½ kilometres west of Horsham. Over about eight hours, the fire burnt approximately 2,500 hectares. It destroyed 13 homes and many farm buildings and other structures. There was widespread loss of crops, pastures, livestock, yards, fences, trees, smaller vegetation and farm and other equipment. The Horsham Golf Club clubhouse was destroyed and its grounds were razed.
Laurence Peter Thomas, the plaintiff, lived on, and farmed, a property with his wife at West Road, Drung. Some parts of his property were damaged or destroyed in the fire. Pursuant to Part 4A of the Supreme Court Act 1986, the plaintiff commenced a group proceeding, or class action, on behalf of all those who suffered loss of or damage to property as a result of the fire. The fire was caused by a live power conductor coming into contact with vegetation. The conductor, the line of which it was a part and the pole upon which the line was supported were all owned and maintained by Powercor Australia Limited, the defendant. The claim against the defendant was pleaded in negligence, nuisance and breach of statutory duty (s 75 of the Electricity Safety Act 1998[1]).
[1]At the time of the fire, s 75 of the Electricity Safety Act 1998 relevantly provided that:
“A network operator must take reasonable care to ensure that all parts of an upstream network … that it owns or operates –
(a) are designed, constructed, operated and maintained in accordance with the regulations; and
(b) are safe and operated safely.
Penalty:1500 penalty units.”
On 5 September 2011, the trial of this proceeding commenced before J. Forrest J, sitting in Horsham. The trial proceeded for five weeks. At the close of the fifth week, terms of settlement were provisionally agreed between the parties and the trial was adjourned.
Terms of settlement of the proceeding were executed by the plaintiff and the defendant. The essential terms of the settlement agreement provided for a settlement of 55% of each claimant’s losses assessed according to certain principles either agreed, or to be determined by the Court, plus penalty interest (from the date of issue of the proceeding) plus party-party costs. On 5 December 2011, pursuant to s 33V of the Supreme Court Act 1958, the compromise of the proceeding and the settlement agreement were approved by the Court.
A dispute has now arisen between the parties as to whether the defendant is required to compensate group members in respect of claims for pure economic loss. By pure economic loss, I mean loss that is not the result of injury to a person or tangible property.[2] In order to resolve this dispute it is necessary to examine the plaintiff’s statement of claim and the settlement agreement.
[2]Cf Perre v Apand Pty Ltd (1999) 198 CLR 180, 208[70] (McHugh J). An example of such a claim in the present case is a claim made by Grampians Wimmera Mallee Water (“GWMW”). GWMW has a claim in respect of damaged (destroyed) fencing, sheds and items of plant. But it also claims some $30,000 as
loss of income due to a direction by the State Government [via the DSE] …, that tariffs and charges not be levied … on all Bushfire impacted properties for the first quarter of 2009”.
The plaintiff’s statement of claim
The version of the plaintiff’s statement of claim that was current at trial was an amended statement of claim dated 16 March 2010. In paragraph 1 of the statement of claim, the plaintiff pleaded:
“The plaintiff brings this proceeding on his own behalf and on behalf of all other persons (‘group members’) who suffered loss of or damage to property as a result of the fire which started near the intersection of the Horsham-Remlaw Road and Remlaw Station Road, west of Horsham … on 7 February 2009 (‘Horsham bushfire’).”
The statement of claim was divided into sections headed as follows:
(a) “Statutory duties of care” (paragraphs 5 to 7);
(b) “General duty of care” (paragraphs 8 to 14);
(c) “Standard of care” (paragraph 15);
(d) “The SWER line” (paragraphs 16 to 28);
(e) “Breaches of duties of care” (paragraphs 29 to 31);
(f) “Breaches of duty caused Horsham bushfire” (paragraphs 32 to 37);
(g) “Sub-group claims – private nuisance” (paragraphs 38 to 42);
(h) “Loss and damage” (paragraph 43); and
(i) “Common questions of law or fact” (paragraph 44).
In paragraph 12 in the statement of claim, the plaintiff pleaded the duty of care (described as “the General Duty”) which he alleged the defendant owed to group members. The duty was pleaded as a duty:
(a) to take reasonable care, by its [the defendant’s] officers and servants; and
(b)to ensure that all reasonable care was taken, by its agents or contractors;
to ensure that all parts of the SWER line were safe and operated safely in the operating conditions that were foreseeable for the line.
The plaintiff submits that the pleaded duty was not expressed as being referable to, or limited to, any particular type of injury, loss or damage. In his written submissions, the plaintiff contended that the fact that the duty pleaded includes a duty of care in respect of pure economic loss is made clear from the statement of claim, and in particular paragraphs 43, 10 and 11 of the statement of claim. In argument, the plaintiff also relied upon paragraph 8 of the statement of claim. As the argument has progressed, it has become necessary to focus on paragraphs 43, 10, 11 and 8 of the statement of claim.
Paragraph 43 of the statement of claim provides:
43. By reason of:
(a) the breaches of Statutory Duties;
(b) the breaches of the General Duty; further or alternatively
(c) the nuisance;
by Powercor alleged herein, the plaintiff, and each of the group members or sub-group members as the case may be, suffered loss and damage of the kinds referred to in paragraph 10(c) above.
Paragraph 43 then contained some particulars of loss and damage of the plaintiff, before asserting that further particulars of the plaintiff’s loss and damage would be provided prior to trial, and particulars relating to individual group members would be provided “following the trial of common questions or otherwise as the Court may direct”.
Paragraphs 10 and 11 of the statement of claim were in the following terms:
10. At all material times it was reasonably foreseeable to Powercor that:
(a)a discharge of electricity from the SWER line could cause ignition of flammable material in the vicinity of the point of discharge;
(b)such ignition could produce a fire which might spread over a wide geographic area;
(c)such fire could cause death or injury to persons and loss of or damage to property within the area over which the fire spread, and consequential losses including economic losses;
(d) the risks referred to in “b” and ”c” were likely to be higher when the environment around the SWER line was dry and hot and windy than when the environment was damp or cool or windless;
(e)the environmental conditions which heightened the risks referred to in “b” and “c” above were also likely to:
(i)increase the physical stresses on installations on the SWER line, including stresses on fasteners such as tie wires or retaining screws or bolts; and consequently
(ii)increase the risk that installations would fail.
11.At all material times members of the public who might be, or who owned or had an interest in real or personal property that might be, within the area across which might spread a fire caused by the discharge of electricity from the SWER line (“the Horsham Class”):
(a)had no ability, or no practical and effective ability, to prevent or minimize the risk of such discharge occurring; and
(b) are vulnerable to the impact of such fire; and consequently
(c)were to a material degree dependent, for the protection of their persons and property, upon Powercor ensuring that the SWER line was safe and operated safely in the operating conditions applying to it from time to time.
Paragraph 8 of the statement of claim pleaded facts that led to a conclusion (which was also pleaded) that at all relevant times the defendant had control over the SWER line.
In support of his contentions that the statement of claim pleads a case in respect of pure economic loss claims, the plaintiff relies upon the reference in paragraph 43 of the statement of claim to paragraph 10(c).
The settlement agreement
The settlement agreement was expressed to be, and made, in settlement of the proceeding.[3] In clause 1.3 of the settlement agreement, it was provided that the defendant agreed to make the payments provided in the agreement in full and final settlement of all claims made in the proceeding by the plaintiff on his own behalf and on behalf of group members. It is thus critical to determine what claims were made by the plaintiff in the proceeding.
[3]See Recital F of the settlement agreement.
The settlement agreement provided for a payment of 55% of each claimant’s losses, together with penalty interest from the date of issue of the proceeding plus party-party costs. These costs include the costs of each assessment. The settlement agreement deals comprehensively with, amongst other things, the amount of the settlement, the notification of claimants, claims assessment procedures, claims assessment principles, the payments of claims and mutual releases. Whilst it is not necessary to set out all of these terms, it is necessary to refer to the claims assessment principles set out in the settlement agreement.
The claims assessment principles agreed between the parties are set out in clauses 5.1 to 5.4 of the settlement agreement. Those clauses provide:
“5.1Save as provided in clause 5.2 below, all issues regarding the assessment of losses will be determined by the Court, and the principles fixed by the Court or agreed in clause 5.2 (‘Assessment Principles’) shall be applied in accordance with this agreement to the claims of all PGMs [participating group members/claimants].
5.2The following special provisions for the assessment of PGMs’ losses shall apply:
(a)garden/amenity trees (ie, over 4m tall) will be assessed at $1100.00 per tree;
(b)farm/utility trees will be assessed at $100 per tree;
(c)non-tree vegetation (ie, under 4m tall, eg, shrubs, bushes, lawns) to be valued at retail price to replace;
(d)the questions whether work completed by the labour of a PGM or by volunteers is compensable, and the measure of any such compensation, are to be determined by the Court, save that if the Court determines the work is compensable and is to be measured by an hourly labour rate the rate is agreed at $25.00 per hour, and it is further agreed the rate shall only be payable upon delivery of a statutory declaration from the PGM verifying (as a best estimate where necessary) the hours applied in performance of the work;
(e)the losses of the Horsham Golf Club:
(i)will be paid as to 55% of their assessed value plus interest; but
(ii)will not be assessed in accordance with the Assessment Principles but rather referred to mediation to be completed within 120 days after Court approval or if the mediation is not successful then referred to the trial Judge for determination.
5.3The appendix to this agreement titled ‘Appendix 1 – Principles for the Assessment of Compensation’ forms part of this agreement and subject to clauses 5.1 and 5.2 is part of the Assessment Principles.
5.4If during the implementation of the claims assessment procedure Maddens or Powercor become aware of a category of loss not addressed by the Court in its determination of the plaintiff’s damages claim or by clause 5.2 above, the parties shall make reasonable efforts to agree the principles for assessing that loss but absent agreement may apply to the Court for a determination of the issues of principle regarding the compensability and measurement of losses in that category and the principles so determined shall form part of the Assessment Principles.”
Appendix 1, referred to in clause 5.3, is in the following terms:
“APPENDIX 1 (in addition to the principles enunciated in clause 5 of the Settlement Agreement)
PRINCIPLES FOR THE ASSESSMENT OF COMPENSATION
1 Fencing
1.1The Group Member to establish the nature and amount of the fencing replaced.
1.2A material cost of $4,591 per kilometre for fencing replaced.
1.3A labour cost for fencing replaced if incurred and paid by the Group Member of $2,800 per kilometre.
2Loss of stockyard
2.1The Group Member to establish the extent of fire damage to stockyard.
2.2Materials used to repair or replace the stockyard will be paid by the Defendant at cost incurred and paid.
2.3Labour will be paid at cost if incurred and paid by the Group Member.
3Pasture and crop loss
3.1The Group Member to establish the loss.
3.2A cost of agistment of sheep at $0.30/head/week.
3.3A cost of agistment of cattle at $4.00/head/week.
3.4Purchase of hay at cost as incurred and paid.
4Repairs to house, barn, bridge, front gate and any other items damaged by fire
4.1The Group Member to establish the item lost or damaged and extent of loss or damage.
4.2The Group Member to be paid material and labour costs incurred and paid to repair or replace.
4.3Any betterment to be excluded.
4.4If the item is not replaced or repaired, then payment will be on diminution in value.
5Shed contents
5.1The Group Member to establish the items lost or damaged.
5.2The Group Member to be paid the material and labour costs incurred and paid to repair or replace items lost.
5.3Any betterment to be excluded.
5.4If the item has not been replaced or repaired, then any payment will be based upon diminution in value.
6Farm machinery
6.1The Group Member to establish the items lost or damaged.
6.2The Group Member to be paid the material and labour costs incurred and paid to repair or replace items lost.
6.3Any betterment to be excluded.
6.4If the item has not been replaced or repaired, then any payment will be based upon diminution in value.
7Water supply
7.1The Group Member to establish the extent of damage to water supply caused as a consequence of the fire.
7.2The Group Member to be paid for materials and labour incurred for replacement and paid by the Group Member.
7.3Any betterment to be excluded.
8Consequential losses – livestock trading
8.1The Group Member to quantify loss of livestock trading.
8.2Any quantification provided to be accompanied by financial records for the calendar years 2007 and 2008.
8.3Loss of profit on livestock trading will be allowed in principle subject to quantification and established legal principles of proof of loss and recoverability.
9Livestock
9.1The Group Member to provide details of loss of livestock and market value of livestock at date of loss.
9.2The Defendant will pay market value of livestock at date of loss.”
Whilst clauses 4.3, 5.3, 6.3 and 7.3 of Appendix 1 provide in respect of the items covered by those clauses that “any betterment to be excluded”, at the time of the approval of the settlement, the Court was informed by the plaintiff’s counsel that the parties agreed that a claimant would not, as a matter of ordinary principle, be entitled to recover as damages costs incurred in erecting replacement infrastructure to the extent that the new infrastructure involved “adding any extras” (to use the words of Lord Denning in Harbutt’s Plasticine Limited v Wayne Tank & Pump Co Limited[4]). The parties are agreed that the question of principle as to what constitutes “betterment” was one of the matters upon which the trial judge would rule.
[4][1970] 1 QB 447, 468.
It may immediately be noted that notwithstanding detailed provisions concerning the assessment of compensation for loss of tangible property, the only specific reference to consequential losses is to be found in principle 8 of Appendix 1. Further, there are no terms that deal expressly with pure economic loss, much less any specific term that might deal with the resolution of what might be called novel pure economic loss claims. All of that said, the settlement agreement falls to be construed objectively in accordance with well known authority.[5]
[5]See Codelfa Construction Pty Ltd v State Rail Authority (NSW) (1982) 149 CLR 337, 352; Pacific Carriers Limited v BNP Paribas (2004) 218 CLR 451; Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd (2004) 219 CLR 165, 179 [40]; and Western Export Services Inc v Jireh International Pty Ltd (2011) 86 ALJR 1, 3 [5]. See further, Retirement Services Australia v 3143 Victoria Street Doncaster Pty Ltd [2012] VSCA 134 [50].
The issues in dispute
The central issue presently in dispute between the parties is whether or not a group member (that is, a person who suffered loss of or damage to property as a result of the Horsham bushfire) is able to claim compensation for pure economic loss (that is, loss which is not the result of injury to that group member’s tangible property). While it appeared at one stage the plaintiff might have been maintaining the proposition that any person who suffered pure economic loss as a result of the Horsham fire could recover compensation under the terms of settlement, that suggestion has been specifically disavowed by the plaintiff.[6]
[6]See paragraph 5(1) of the plaintiff’s submissions on claims for pure economic loss dated 15 November 2013.
The plaintiff’s position is neatly encapsulated in his written submissions[7] as follows:
On the proper construction on the terms of settlement and the amended statement of claim, the proceeding and the settlement include claims for pure economic loss and the damages for those claims fall to be assessed under the terms of settlement.
…
All participating group member claims that were the subject of the proceeding, including claims for pure economic loss, were resolved by the terms of settlement and are recoverable at the agreed rate of 55% of the assessed loss. The only matters that remain to be determined relate to the assessment of the loss. The role of the Court in relation to the assessment of claims under cl 5.4 is to determine according to law any disputed principles as to the assessment of damages. The role of the assessors is to assess the quantum of damages in accordance with the principles as determined by the Court or agreed by the parties.
[7]Plaintiff’s submissions on claims for pure economic loss, paragraph 5(4) and (5).
The plaintiff then submits:
It follows that the question in dispute is whether a participating group member, who by definition will have suffered loss of or damage to property, is also entitled to claim for pure economic loss under the terms of settlement. That is a question of construction.[8]
[8]Ibid, [6].
In contrast, the defendant submits that any claim by a group member for pure economic loss is not maintainable because such a claim was not contemplated by the plaintiff’s statement of claim, the settlement agreement or the Court’s approval of the compromise.
The resolution of the present dispute
The plaintiff submitted that while questions of construction were involved in the resolution of the present dispute, if the statement of claim encompassed more claims than were specifically referred to in the settlement agreement (which claims might involve different claims assessment procedures), the settlement agreement could not (and did not) limit the claims that had been made. Specifically, if pure economic loss claims were made in the statement of claim (or proceeding generally), then the terms of the settlement agreement do not preclude a relevant group member from including such a claim under the settlement agreement. I accept that submission.
While there may be nothing in the settlement agreement that deals specifically with pure economic loss, there is nothing in it which excludes such a claim. However, the real point is that if claims for pure economic loss were made in the proceeding, it is perhaps surprising that a settlement agreement that dealt in detail with principles concerning damage to property and economic loss consequential upon that damage did not make at least some provision for the principles that might govern the assessment of pure economic loss claims brought by group members. But as was fairly conceded by counsel for the plaintiff in argument,[9] at no time during the conduct of the proceeding was there any explicit statement about pure economic loss. I turn now to the statement of claim.
[9]T6.12 – T6.19 of the hearing on 12 December 2013.
The plaintiff relies upon the fact that in paragraph 43 of the statement of claim it is alleged that by reason of the various breaches and nuisance committed by the defendant the plaintiff and each group member “suffered loss and damage of the kinds referred to in paragraph 10(c) [of the statement of claim]”. It is thus necessary to analyse closely the terms of paragraph 10(c) of the statement of claim.
Paragraph 10 of the statement of claim appears in that part of the statement of claim dealing with the pleading of a duty of care. Extracting the relevant part of paragraph 10 so far as the current argument is concerned, one sees the plaintiff’s plea in the following terms:
At all material times it was reasonably foreseeable to Powercor that … [a relevant fire] could cause death or injury to persons and loss of or damage to property within the area over which the fire spread, and consequential losses including economic losses.
Putting to one side for the moment the paucity of any express or specific reference to pure economic loss in the statement of claim, one might conclude that the expression “consequential losses including economic losses” is referable to losses consequential upon “death or injury to persons” or “loss of or damage to property”. If the pleader meant the “losses including economic losses” to be consequential upon the fire, then the use of the word “consequential” was unnecessary. In such a case one might have expected paragraph 10(c) to refer to the fire being able to cause death or injury to persons and loss of or damage to property and (perhaps) other losses including economic losses (or perhaps just economic losses). In my view, a fair reading of paragraph 10(c) of the statement of claim put the defendant on notice that it was being alleged that it was reasonably foreseeable to the defendant that a relevant fire could cause death or injury to persons and loss of and damage to property and losses consequential upon those matters (ie death or injury to persons and loss of or damage to property).
The plaintiff submits that the facts pleaded to establish the existence of the defendant’s duty of care “make it clear that the duty is not limited to a duty to avoid exposing the plaintiff and group members to a foreseeable risk of loss of or damage to property”.[10] In support of this submission, the plaintiff relies upon his pleas in paragraph 11 of the statement of claim that the plaintiff and group members “had no ability … to prevent or minimise the risk of [discharge of electricity from the SWER line occurring]” and that they were “vulnerable to the impact of [a relevant fire]”. It is then submitted that:
These are salient features of cases in which a duty of care to avoid exposure to pure economic loss has been found to exist: Perre Apand Pty Ltd (1999) 198 CLR 180. They are irrelevant to an action based solely on loss of or damage to property.[11]
[10]Plaintiff’s submission on claims for pure economic loss dated 15 November 2013, paragraph 20.
[11]Ibid, [21].
While it may be accepted that these matters are specifically relevant in pure economic loss cases, I reject this submission. It is not correct to say that issues of vulnerability or the ability to prevent or minimise risk are issues solely confined to cases concerning claims for pure economic loss. A number of High Court authorities dealing with the existence and scope of particular duties of care (not limited to mere pure economic loss cases) show that vulnerability and issues of dependence are, and have been considered, relevant in a wider context. For example, in Burnie Port Authority v General Jones Pty Ltd,[12] Mason CJ, Deane, Dawson, Toohey and Gaudron JJ said:
Viewed from the prospective of the person to whom the duty is owed, the relationship of proximity giving rise to the non-delegable duty of care in such cases is marked by special dependence or vulnerability on the part of that person.
The relationship of proximity which exists, for the purpose of ordinary negligence, between a plaintiff and a defendant in circumstances which would prima facie attract the rule in Rylands v Fletcher is characterised by such a central element of control and by such special dependence and vulnerability.[13]
[12](1994) 179 CLR 520.
[13]Ibid, 551.
Similarly, in Crimmins v Stevedoring Industry Finance Committee,[14] McHugh J noted that while the notion of general reliance had been the subject of criticism, more recent decisions of the High Court had tended to focus on the vulnerability of the person who suffered injury.[15] Crimmins, it is to be remembered, was not a case involving pure economic loss. Similarly, in Graham Barclay Oysters Pty Ltd v Ryan,[16] another case not confined to pure economic loss, issues of vulnerability and the ability of an injured person to safeguard or protect himself or herself were canvassed.[17]
[14](1999) 200 CLR 1.
[15]Ibid, 24 [43].
[16](2002) 211 CLR 540.
[17]See for example the judgment of McHugh J in Graham Barclay Oysters Pty Ltd v Ryan (2002) 211 CLR 540, 577 [84].
Even if it could be said that the pleas of vulnerability and an inability to minimise risks in paragraph 11 of the statement of claim were strictly speaking unnecessary to the issue of whether or not the defendant in fact owed the plaintiff and group members a duty of care in respect of physical loss, it was open to the plaintiff to plead those matters in further support of the existence of the duty and/or as giving content to the duty. Further, while those pleas were contained in that part of the statement of claim dealing with the existence of the duty, it could not be said that they were not also relevant to questions of breach. The extent, and/or known extent, of an injured person’s vulnerability is a matter capable of being relevant when one looks at the content of any duty owed and/or whether any such duty was breached.
Additionally, even if one could say that ordinarily one finds pleas of vulnerability and an inability of a person who suffered loss to protect himself or herself only in statements of claim where damages for pure economic loss are claimed, it must be said in the present case that if it was the pleader’s intention to put the defendant on notice that group members were also pursuing claims for pure economic loss then the pleader was singularly unsuccessful. Having regard to the novelty and difficulty associated with some claims for pure economic loss, it is all the more surprising that, if the pleader intended to encompass claims for pure economic loss, the pleader did not make this clear and explicit.
While I have so far dealt with the plaintiff’s submissions relating to his pleas in respect of vulnerability and ability to minimise risk, the same answers may be given in respect of the plaintiff’s submissions concerning his plea in relation to the issue of control. The issue of control also features in discussions concerning the existence or otherwise of duties of care in relation to physical injury. It is not a concept that is limited, and only relevant, to pure economic loss claims.[18]
[18]See for example Crimmins v Stevedoring Industry Finance Committee (1999) 200 CLR 1, 24[43] and the cases referred to therein.
Another point that tells against the statement of claim actually pleading any claim for pure economic loss is the definition of group member in paragraph 1 in the statement of claim. One asks rhetorically if the plaintiff intended to encompass claims for pure economic loss then why was the group description limited to only those who sustained property damage? In argument, counsel for the plaintiff suggested that it might be easier to establish a duty to take reasonable care not to cause pure economic loss in those cases where the claimant had also suffered property damage. Reference was made to Caltex Oil (Australia) Pty Ltd v The Dredge “Willemstead”.[19] While in some cases the existence of property damage may make it easier to establish a duty of care in relation to pure economic loss,[20] I do not think that proposition is sufficient to explain the limiting of the class in paragraph 1 of the statement of claim if it was truly contemplated that the proceeding encompassed the recovery of damages for pure economic losses.
[19](1976) 136 CLR 529.
[20]But cf Woolcock Street Investments Pty Ltd v CDG Pty Ltd (2004) 216 CLR 515, 529-531[20]–[21] and 547[74]-[75]. See further, Barclay v Penberthy (2012) 246 CLR 258, 284[42].
There is also the issue of indeterminacy. In pure economic loss cases, indeterminacy is usually an issue that needs to be considered in determining whether a duty to take reasonable care to prevent another from suffering pure economic loss is owed. One suspects that issues of indeterminacy would have loomed large in the proceeding had the plaintiff put the defendant on any notice that it was intended to claim damages in respect of pure economic losses. Further, it would, of course, be no answer to the issue of indeterminacy to say that any liability of the defendant for pure economic loss damages in this case was not indeterminate because the class was defined as only those people who suffered relevant property damage. The question of duty and any issue of indeterminacy has to be looked at in terms of the whole of the class to whom it might be alleged that the defendant owed the relevant duty to take reasonable care not to cause a person to suffer pure economic loss.
The plaintiff contends that on its proper construction the settlement agreement permits group members who have claims for damages for pure economic loss to simply have those claims assessed by an assessor. Such claims, it is submitted, fall to be assessed without reference to the question of whether a duty of care in respect of pure economic loss was owed by the defendant. It follows from what I have said above that I reject this submission. The settlement agreement provided for the payment of 55% of property damage losses and losses consequential upon property damage to the relevant group member.
For the sake of completeness I should say that the construction of paragraph 10(c) of the statement of claim results (all other things being equal) in the possibility of a group member claiming economic loss consequent upon a group member suffering personal injury. However, to do so, on one reading of paragraph 43 of the statement of claim,[21] would result in either the abandonment of any claim in respect of pain and suffering and loss of enjoyment of life, or an impermissible splitting of the one personal injury cause of action. In any event nothing further need be said about this as it appears that at no time during the conduct of the proceeding was there any contemplation of any potential personal injury proceeding being pursued by a group member.[22]
[21]Paragraph 43 of the statement of claim pleads that claims are made for loss and damage of the kinds referred to in paragraph 10(c), being the loss and damage referred to in paragraph 10(c), not the death or injury referred to in that paragraph.
[22]See T6.12 – T6.23 of the hearing on 12 December 2013.
Conclusion
For the reasons given above, there will be a declaration (if necessary) to the effect that in order for a group member to recover in respect of economic loss under the settlement agreement, that economic loss must be consequential upon the group member suffering a loss of or damage to property as a result of the Horsham bushfire. I will hear the parties as to the need for any declaration to be made consistent with these reasons, an appropriate form of order and any question of costs.
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