Francis Mining Company Ltd v West Coast Regional Council HC Christchurch CP114/99

IN THE HIGH COURT OF NEW ZEALAND
CHRISTCHURCH REGISTRY CP114/99

BETWEEN FRANCIS MINING COMPANY LTD
Plaintiff

AND THE WEST COAST REGIONAL COUNCIL
Defendant

Hearing: 5th, 6th, 7th and 8th November 2001

Appearances: S P Rennie and J M Airey for Plaintiff
D J Heaney and S H Macky for Defendant

Judgment: 20th December 2001

JUDGMENT OF HON. JUSTICE JOHN HANSEN

Solicitors:
Rhodes & Co, Christchurch for Plaintiff
Heaney & Co, Auckland for Defendant

[1] The plaintiff operated an open cast coal mine above the catchment of the Wellman Creek near Reefton. On 28 July 1995 a land slip occurred in a gully at the head of the Wellman Creek catchment. This caused sediment and soil to be discharged into Wellman Creek, Garvey Creek and ultimately the Inunguhua River.

[2] It is common ground that the discharged material was a contaminant within the meaning of s 2(1) of the Resource Management Act 1991.

[3] On 28 July 1995 the land slip and discharge was inspected by Mr David Coll, an employee of the Defendant. He was exercising his function as an enforcement officer of the defendant. The pleadings allege that Mr Coll determined the land slip had been caused by the plaintiff and as a consequence of that determination the plaintiff carried out extensive remedial and control works to mitigate the effects of the discharge.

[4] Subsequently the defendant charged the plaintiff with alternative charges of contravention of s 15 of the Resource Management Act 1991 by either discharging a contaminant into water or permitting such a discharge.

[5] In an oral judgment dated 24 July 1996 in the District Court Greymouth Judge S. E. Kenderdine found the plaintiff not guilty.

[6] These proceedings were commenced in 1999 and pleaded causes of action in tort, unjust enrichment and contract. At the end of the hearing Mr Rennie conceded that there was no evidence to support the alleged oral contract and that cause of action was, very properly, abandoned.

[7] At paragraph 13 of the second amended statement of claim the plaintiff pleads:

“The Plaintiff relies on the findings of the Court as if they were pleaded herein.”

[8] Relying on the doctrine of estoppel per rem judicatem Mr Rennie, on behalf of the plaintiff, submits that the defendant is bound by the findings of Judge Kenderdine, and in particular a finding that the plaintiff did not cause the land slip and that the probability was that the land slip had been caused by natural forces. Therefore, it is submitted that the defendant cannot seek to argue in these proceedings that the plaintiff was responsible for the land slip.

[9] It is therefore necessary to consider whether the doctrine applies in this case before proceeding further.

ESTOPPEL

[10] The principles of the doctrine and the leading authorities and academic texts were extensively reviewed by Williams J in X v Y [1996] 2 NZLR 196. In this particular case I do not think it necessary to deal with the subject in such great detail.

[11] In his submissions Mr Rennie relied on McIlkenny v Chief Constable of West Midlands [1980] 2 All ER 227; Hunter v Chief Constable of West Midlands [1981] 3 All ER 727 and Meates v Taylor [1992] 2 NZLR 36. He submitted that the findings of the District Court gave rise to an issue estoppel and there was also an abuse of process in that the defendant is attempting a collateral attack upon a final decision of a Court of competent jurisdiction. He said the parties were identical and the defendant was estopped from raising issues already decided. He further submitted that the attempt to relitigate the issues was an abuse and the evidence seeking to attack the issues determined in the District Court cannot be raised because it was available or, with reasonable diligence, could have been obtained at the time of the Resource Management prosecution.

[12] However, Mr Heaney submitted that the findings that the plaintiff sought to rely on were not essential to the decision in the Court below and therefore the doctrine had no application. Furthermore, he submitted that a different standard of proof applied in these proceedings to that in the prosecution which was a further ground to refuse to apply the doctrine.

[13] In considering the authorities two broad approaches to the doctrine emerge. The first is a broad one which holds that the true test is whether for all practical purposes the party seeking to put forward some issue has already had that issue determined against him by a Court of competent jurisdiction. The narrower approach is to confine issue estoppel to that species of estoppel per rem judicatem that may arise in civil actions against the same parties or their privies. In this particular case it does not seem to me to matter which approach is taken.

[14] In Talyancich v Index Developments Ltd [1992] 3 NZLR 28 McKay J, in delivering the judgment of the Court of Appeal, defined issue estoppel at p37 as:-

“Issue estoppel arises where an earlier decision is relied upon, not as determining the existence or non-existence of the cause of action, but, as determining, as an essential and fundamental step in the logic of the judgment, without which it could not stand, some lesser issue which is necessary to establish (or demolish) the cause of action set up in the later proceedings: (Spencer Bower & Turner, The Doctrine of Res Judicata (2nd ed, 1969), pp 149-150, para 191).”

[15] Further, in Joseph Lynch Land Co Ltd v Lynch [1995] 1 NZLR 37 Tipping J held at p 41:

“Issue estoppel is concerned with the prior resolution of issues rather than causes of action. In [16] Halsbury [4th ed, reissue, para 977], it is said that issue estoppel precludes a party from contending the contrary of any precise point which, having once been distinctly put in issue, has been solemnly and with certainty determined against him. Cross on Evidence (4th NZ ed, 1989) by Mathieson discusses issue estoppel at para 12.8 on p 315. The learned author cites the judgment of Lord Denning MR in Fidelitas Shipping Co Ltd v V/O Exportchleb [1965] 2 All ER 4, 9:

‘. . . within one cause of action, there may be several issues raised which are necessary for the determination of the whole case. The rule then is that, once an issue has been raised and distinctly determined between the parties, then, as a general rule, neither party can be allowed to fight that issue all over again.’”

[16] I do not propose to deal at length with the English decision referred to by Williams J but similar ratios are found. (e.g: Arnold v National Westminster Bank Plc [1991] 2 AC 93 per Lord Keith of Kinkel at p 105). What emerges from the authorities has been succinctly summarised by Professor Ricketts in his article The Travails of Issue Estoppel (1992) 22 VUWLR 115, 116 as follows:

“It is generally accepted that to found issue estoppel, the following technical requirements must be established:

(i) a final judgment;

(ii) between the same parties and/or their privies;

(iii) litigating in the same capacity;

(iv) on the same issue;

(v) which must be pleaded.”

[17] To that must be added the following that emerges from Court of Appeal decisions in this country. In Maxwell v Commissioner of Inland Revenue [1962] NZLR 683 at p 696 Gresson P stated:

“It was said by Lord Shaw in Hoystead v. Commissioner of Taxation [1926] A.C. 155, 170, that estoppel extends to any point whether an assumption or admission which was in substance the ratio of and fundamental to the decision. There was therefore a judicial determination not limited to a mere acquittal of the appellant but including a matter which it was necessary to decide as the groundwork of the decision itself.”

[18] Further, at p 709 Cleary J regarded as pivotal:

“. . . the difference as to the onus of proof on such an ‘issue’ in criminal and civil proceedings respectively. The assumption of identity in onus that I have been prepared to make where the issue related to wilful falsity or fraud would not apply if the issue was merely one as to whether the figures in the returns were in fact correct.”

[19] Furthermore, in Gregoriadis v Commissioner of Inland Revenue [1986] 1 NZLR 110 Richardson J and Sir Clifford Richmond held at p 114:

“Where a final judicial decision has been pronounced by a Court of competent jurisdiction any party to that litigation is estopped in any subsequent litigation as against and other party to the earlier proceedings from disputing or questioning the first decision on the merits (Spencer Bower & Turner, Res Judicata (2nd ed, 1969) p 9. In a case such as the present in order to found an estoppel per rem judicatem there must be (i) identity of parties; (ii) identity of subject-matter; and (iii) sufficient co-extensiveness of the standard of proof.”
(my emphasis)

[20] As noted earlier, the plaintiff was alleged to have committed two offences against s 338(1)(a) and s 339(1) of the Resource Management Act 1991. The first information alleged a contravention of s 15 of the Act in that the plaintiff discharged contaminant into water, namely Wellman Creek without such discharge being expressly allowed by a rule in a regional plan, proposed regional plan, resource consent or regulations. The second charge, in the alternative, was permitting the discharge of a contaminant into Wellman Creek.

[21] Therefore the issue faced in the prosecution was whether it was established beyond reasonable doubt that the plaintiff discharged or permitted a discharge of contaminant into Wellman Creek. Mr Rennie sought to rely on the conclusions found at p l4 of the oral judgment, and in particualar the finding that the probability was that the slip occurred from natural forces.

[22] However, such a finding as to the probable cause of the slip was not “an essential and fundamental step in the logic of the judgment, without which it could not stand” (per Talyancich). All that was essential and fundamental in the logic of the judgment was to determine whether or not it had been established beyond reasonable doubt that the plaintiff had caused the contamination. Her Honour did not need to go further and make any finding in relation to the probable cause of the slip. She only had to determine the matter just referred to.

[23] Furthermore, I do not consider that there is an identity of issue. In X v Y Williams J noted at p 24:

“The duty not to be negligent is not the same test as whether a medical practitioner has been guilty of conduct unbecoming, even on the broader view of issue estoppel taken in Craddock’s Transport. It could not be said, in terms of North West Water, that there is “no real or practical difference between the issues” before the Committee and the issues for decision in this claim.”

[24] In my view that is apposite in this case.

[25] As well, issue estoppel should be applied cautiously, especially as far as defendants are concerned least the truth is excluded (see Craddock’s Transport Ltd v Stuart [1970] NZLR 499 (CA), North West Water Ltd v Binnie & Partners [1990] 3 All ER 547, and ; Meates v Taylor [1992] 2 NZLR 36 (CA)).

[26] I am therefore satisfied that the doctrine does not operate in this case and the defendant is not estopped from alleging that the plaintiff was responsible for the slip.

[27] Accordingly it is then necessary to go on and consider the evidence adduced by the parties as to the cause of the slip. Before turning to it in more detail, I can say I prefer the evidence of the expert called for the defendant compared to those of the plaintiff. As well the plaintiff chose not to call the onsite manager who was responsible for the works being carried out at the time, even though he was available.

[28] The plaintiff relied on the evidence of Mr Moynihan, its Greymouth Operation Manager; and an engineer, Mr Higgs. Evidence was also called by a Mr Caffyn, a geologist, and Mr O’Loughlin a forestry expert.

[29] The defendant relied on the evidence of Mr Luxford, a geotechnical engineer.

[30] Mr Moynihan gave evidence of the background to the Wellman mine and the opening of the cast. He said that overburden was placed on the east of the site.

[31] On 28 July he arrived at the site shortly after the slip. He then met with Mr Coll the enforcement and consents officer for the defendant. They walked the length of the slip and down Wellman Creek with a view to establishing a settling pond.

[32] Mr Moynihan has been involved in coal mining all his life and is aged 51. He was of the view that the mining operation had not caused the slip. He said the overburden was placed to the east of the site and there was no stock piling at the point where the slope gave way. He said there was no sense in doing this because it would have had to have been removed later. I note that photographs take on 8th July 1995 indicate what appears to be a wall or mound of earth in this area studded with logs. Whether or not it is described as overburden or something else, it is an indication of material being pushed in the general direction of the slip. This slip apparently being just off to the left of the photograph.

[33] He referred to Mr Coll’s photograph and said that branches to the left had snow on them. He said he had felled the trees in 1993 when he did some core drilling on the site. He was of the view that if overburden had caused the slip one would have normally have expected the overburden to carry off these trees and the surrounding vegetation as it spilled down the slope. He believed the photograph demonstrated that the slope gave way from beneath in a clean type of “plug” with no spillage or wreckage caused as one might expect in the cascade caused by weight of overburden.

[34] Mr Caffyn’s evidence related to aspects of Mr Luxford’s brief. He disagreed with paragraph 51 of his evidence where Mr Luxford noted:

“From my inspection it was apparent that the overburden consisted of fluvioglacial out wash debris, that is a conglomerate, consisting of large hard rock boulders in a very gravelly silty clay matrix.”

[35] The witness stated the geological plan that he relied on and from his own observations there was nothing in the Garvey Creek coal field to show evidence of fluvioglacial out wash debris. He said what Mr Luxford described as conglomerate was in fact land slide debris and that the only conglomerate he has observed is in the drill hole core of the basement rocks above the coal measure. He noted in cross-examination that the land slide he noted on the map had occurred within the last 10,000 years. There was no evidence of recent land slide activity prior to this slip. From his evidence it became apparent that he had not been into the Wellman watershed since the slip to have a close look at the area surrounding it.

[36] Mr Higgs was an engineer residing in Greymouth. He was employed by Opus International Consultants Ltd (formerly Works Consultancy Services) for the past 31 years, largely in civil engineering aspects of roading and river control works on the West Coast. He was asked by the plaintiff to investigate the cause of the slump.

[37] He visited the site and surrounding areas on 2 August 1995 and he studied various photographs that were taken by Mr Coll that can be found in the bundle at pages 132 to 133 and 138. Those photographs were taken on the day of the slip.

[38] He also relied on his own knowledge and experience of the West Coast area gained over his 26 years working in the area. He concluded that the presence of any overburden from the mining operations was unlikely to have caused the slip. He considered the most likely cause of the slip was saturation of the high clay contents in the soil. Finally, he said it was not possible to determine the exact cause of the slip.

[39] As noted he was on the site on 2 August 1995, five days after the slip. But at that time he was there as a consultant to Transit New Zealand to assess the effects of the proposed construction of a settling pond on the waterways under State Highway 7. He noted the discharge was discoloured and there was little settling out of the suspended material causing the discolouration. His impression was that the material was a very fine particle size consistent with clay material. He inspected the general area where the slip had occurred from the access road above the mining operation. He noted surplus draining channels had been constructed and some surface water was present on the working area.

[40] From his inspection of the photographs he concluded the material in the slip had a high clay content which was consistent with the way in which it turned into a slurry downstream of the slip.

[41] In general terms he said slopes become unstable when the forces causing the slope material to move become greater than the forces resisting that movement. He said the type of forces that influence this are the weight of material on the slope, the type of vegetation on the slope, the weight of water that has saturated the material and has been held up by the vegetation, and any additional weight placed on this slope, eg by mining operations.

[42] He said in the present situation the slope material had a high clay content and the forces that resist movement are largely related to soil cohesion. He said this can be contrasted to the frictional forces that resist the driving forces in the most common other types of soil material, namely sand and gravel.

[43] He considered the cause of the imbalance between the resistant forces and the driving forces. He said the photographs suggest little overburden material cast onto the slip area prior to the slip and the stripping operation was away from the slope and if anything was taking load off the slip area. He did not consider that misplaced overburden would have significantly contributed. Nor did he consider the vegetation in itself was significant enough to cause a slip to occur but it could have been a contributing factor. He said it was apparent there was a high degree of saturation of the slope although he did accept that the rainfall in the area had not been excessively heavy. He referred to cracks and fissures through the material and the weight of water it would hold would be greater for that reason.

[44] It was his view that the width and the shallow depth of the slip compared with its length suggested to him the most likely mode of failure is what is known as a “reverse domino” effect. By this he said the slip area occurred as a series of smaller slips starting at the bottom of the slope with the slips working their way up to the top of the gully that was formed. He said this process would have repeated until the series of slips reached the top of the slope.

[45] He also considered the narrow shape of the resulting gully was not consistent with the normal fan shape of the slip that occurs through top overloading.

[46] He accepted that it was a possibility that some redirection of water into the area could have occurred as a result of the mining operation but felt in view of the positive drainage that had been put in place significant water entering the slip area from this source appeared unlikely. Nor did he consider vibration of machinery operations would have contributed.

[47] He accepted in cross-examination that he was not a geotechnical engineer. However, in terms of evidence what concerned me most was his concession to Mr Heaney in cross-examination that he did not go down into the gully where the slip had occurred. He got no closer than an access road some 300 metres away. He also accepted that at that time he was there with his “Transit hat” on. He accepted the contouring of the slip, from information provided but not his own observations, was in the order of one in five. He accepted by West Coast standards that was not “terribly steep”. It was apparent he took no core samples of the land in the area of the slip.

[48] Of relevance is his cross-examination at pages 38, 39 and 40 of the transcript:

“Q. And did u attempt to identify the factor of safety applicable to this terrain in the region of the slip as it was pre slip.

A. No.

Q. And is it the case that because u are not a geotechnical engineer doing that sort of thing is something u would send off to a geotech to do.

A. I personally wdnt do the testing myself and commonly I would be using a geotechnical engineer to do that type of work to advise me.

Q. So when Mr Luxford concludes that at a 1 in 5 gradient this land pre slip achieved a factor of safety of 3.5 would u accept he could be right.

A. I have a little bit of difficulty with that because the land actually slipped.

Q. That we will all agree on Mr Higgs - that is the real problem isnt it because with a factor of safety of 3.5 on a 1 in 5 gradient it should not have slipped.

A. If it had a factor of safety of 3.5 it would not have slipped.

Q. We have to look and ask why did it slip that is where we have to go to.

A. I believe we have to recheck we have that 3.5 factor.

Q. We know that if u put a lot more water into a slope its factor of safety reduces as the water uptake increases don’t we.

A. In general terms.

Q. And u have acknowledged quite fairly that but for the drainage that Francis Mining had on site that could have been a reason why the water mite have been increasing into the slope.

A. My observation was the drainage had been put in there to take the water away from the top of the slope yes.

Q. That is why u concluded that it wasn’t the surcharging of the slope with the water from the mining operations that had an impact.

A. That’s correct I place a reasonable amount of weight on photograph 1 on page 138.

Q. U see Mr Higgs the problem is u didn’t go down there and have a look what drainage was in place on the day.

A. I wasn’t there on the 28th.

Q. This photograph is taken after the slip occurred.

A. That is correct.

Q. U are not in a position to rule out the real possibility that the drainage wasn’t working properly on the 27th July.

A. I cant say it wasn’t or was working properly but there is no real reason for me to suspect it wasn’t.

Q. There is a very good reason and it is we have a gradient of 1 in 5 with Mr Luxfords view of 3.5 factor of safety u and I both know it should not fail, but it did didn’t it.

A. We know it failed yes. We don’t know for certain that the safety factor is 3.5.

Q. But if Mr Luxford is right in that, then the only conclusion u can draw is that there has been extraneous factor, like the drainage, that contributed to the failure right.

A. I would have to agree if the safety factor was 3.5 there would have to be something to change be it natural or unnatural.

Q. Of course there is one other thing we have to take into account and that is if you take the trees and the like the bush off part of any slope that reduces its factor of safety dosnt it.

A. It would only be a laymans opinion if I gave it to u on that I am not an expert in that field.

Q. U are a highway man don’t u get the spray on grass stuff u put over banks for the road cuttings to increase its stability.

A. We have in the past used such a method yes, generally to prevent surface attrition more than slipping.

Q. But any engineer knows if u put plants and trees on banks it makes them more stable.

A. I understand there is some reinforcing from the root structure, and as I say from the leaf or greenery cover u generally can reduce the amount of attrition or fretting off the surface yes.

Q. U see what we have here is we know in the part of the land that was part of the slip Mr Moynihan had cleared off 15 sq metres that is what he said, we for the moment I want u to assume have a factor of safety of 3.5 on this slope, u don’t know what the state of the drainage was on the 27 July, u must conclude Mr Higgs that something Francis Mining were doing up there had a real chance, even if it didn’t cause the slip of contributing to it, you have to conclude that.

A. No I don’t have to conclude that.”

[49] Then at page 41 Mr Higgs was cross examined by Mr Heaney relating to the New Zealand Building Code, and the fact it provides for a factor of safety of 1.5 for houses to be built on.

[50] He then put a series of questions to Mr Higgs assuming a safety factor of 1.5. His questions and the answers were as follows:

“Q. Somethings got to happen, lets look at those possibilities, one we can get inordinate build up of water I am talking about this site.

A. Yes.

Q. Two we could get overburden placed at the top of the slip.

A. Yes.

Q. Three, we could get overburden pushed down the slip face.

A. Yes.

Q. Four, we could have had some of the land cleared of vegetation resulting in some destabilisation of the surface.

A. It is not as simple as that it is not simple straight yes other factors in that one.

Q. Five we could have some interference with the otherwise natural draining of this slope so water was being surcharged into slip area.

A. Yes.”

[51] It also became apparent that Mr Higgs had relied on aerial photographs in forming his conclusions, but had made no stereoscopic analysis of them. He was forced to concede that there was no major rainfall event, but he challenged the safety factor of 3.5 arrived at by Mr Luxford and queried sampling of the material taken.

[52] The plaintiff also adduced evidence from a Mr O’Loughlin, a forestry expert. The defendant’s expert, Mr Luxford, had referred to his report in his evidence. Mr Luxford had stated in his brief that the O’Loughlin study was relevant to assessing the events that occurred at the Francis Mining site as to whether it was due to natural causes or due to activities of mining, which included deforestation. He was of the further view that the conclusions reached in the study were applicable to this mine site.

[53] Mr O’Loughlin disagreed, and said the results of the study were not transportable, because the environment was not directly comparable. He was also of the view that this was a retrogressive failure starting from the bottom. Given the distance of the toe of the slip from Wellman Creek this is a little hard to understand in the absence of some other starting mechanism.

[54] However, more significant, is the cross examination by Mr Heaney. It became apparent that Mr O’Loughlin had not visited the site since the mid 1970’s. He accepted man’s influence on the natural environment played a significant role in slope failure and its frequency. He had not studied the soil types in the Garvey Creek area. Given the slopes found by Mr Luxford, and the safety factors, his general reaction was one of surprise if clear felling influenced any failure in that area. Indeed, he felt the felling on those slight slopes the real impact could possibly be from water getting into the slopes. He accepted that the angles dealt with at this site were not nearly as steep as those in his study, and, finally:

“Q. You speculate that because with a 1 in 5 slope with an inferred factor of safety of between 1.5 and 3.5, a slip should not occur in the ordinary course of events should it.

A. True.”

[55] The expert for the defendant had a different view of the cause. Mr Luxford holds a Masters in geotechnical engineering. He was the only geotechnical expert to give evidence, and he has specialised in that area for all of his working life. He has had a long involvement in geotechnical aspects of open cast mines of various shapes and sizes, some extending to 17,000 hectares. He was told that after the slip the plaintiff implemented a clean up consisting of placement of a rock bund at the top of the slip to prevent further material spilling into the slip area, and of the other remedial works carried out. He was provided with photographs, the evidences of Messrs Cole, Hughes, Higgs, O’Loughlin and Moynihan, the amended statement of claim, site contour and mining layout plans prepared by Carrier & Associates, detailed contour plans prepared in June 1999, work plans for the mines submitted by the plaintiff in July 1993, an application for a mine permit, work proposal prepared by Mr Moynihan, and the field notes of Mr Hughes.

[56] As well, he obtained through his own contacts stereoscopic pairs of aerial photographs of the land, taken on 5th March 1986, i.e. before the slip, and 14th April 1997, i.e. after 5the slip. He also had aerial photographs of the site taken by the Department of Conservation before and after the slip. He also inspected the site and took core samples as close as possible to the side of the slip area. He considered that all of this documentation and information enabled him to make a reasonable reconstruction of the conditions at the time of the slip in July 1995, complimented by his site inspection in May 2001.

[57] He concluded there was no evidence of active land slipping in the area. Mr Caffyn’s evidence was put to him, and relied on heavily by the plaintiff in closing submissions. However, that evidence relating to land slip indicated a land slip that had occurred some time in the last 10,000 years. There was no satisfactory evidence of recent instability.

[58] Mr Luxford detailed the work that had been carried out at the mine, and particularly noted that in a photograph taken just shortly before the slip on the 8th July 1995, the material appeared to have been pushed to the left hand side of the work area adjacent to the slip area. He concluded it was probable that some of the material had spilt down the slope.

[59] Mr Luxford obtained from the National Institute of Water & Atmospheric Research Limited the daily rainfall records for the Reefton rain gauge 10km to the west of the site. He produced a table which showed that the rainfall in the general area at the relevant time was light for that particular district, the maximum being 20.4mm of rain in one 24 hour period some five days or so before the slip. He also supplied in his evidence a rainfall intensity table, which showed that the most severe rainfall recorded in the week preceding the slip could not be described as significant. He said on his calculations the rainfall at the relevant time is what could be anticipated to occur each month. I am quite satisfied on that evidence that there was no significant rainfall event associated with this slip.

[60] On his site visit, Mr Luxford measured the slope degree on either side of the slip, and on the eastern side it varied between 1 in 7 to 1 in 3, but most of the upper reaches were 1 in 5. The steepest part was the lower part at 18 degrees. He noted that the active flow of Wellman Creek was 30 metres beyond the toe of the steeper portion of the slope. He said the upper portion of the slope was very wet, due to seepage emanating from silt ponds at the base of main dump, and there was no evidence of any existing, or past, instability beneath the tree cover. On the west side, the top portion of the natural slope was covered by a waste dump, and the natural slope could not be identified. Beyond that the ground fell for a short distance at 1 in 4, and then flattened to about 1 in 10. In this area, Wellman Creek was some 40 to 50 metres beyond the toe of the slope. He said tree vegetation of the slope was standing vertical, with no sign of instability, even when the land steepened to 1 in 1. He said there were obvious signs of prior movement at some previous time, but the vegetation there was stable and well developed, and was a similar age to the remainder of the mature tree vegetation, which indicated it was an old feature.

[61] Mr Luxford accepted that the area where the slump had occurred had been reworked as a result of remedial work, but he was able, from his review of aerial photographs, to make a reasonably accurate assessment of the likely gradient of the land immediately prior to the slip. He also said that the large boulders and sand had been dumped in the course of the remedial work, which was hard to distinguish from natural fluvioglacial deposits.

[62] He said it was not possible to identify the extent of the slump, as some tree vegetation had been removed as part of the clean up, and the margins of the slump were extended. He noted three critical features apparent at site observation, which were obvious sources of water seepage within the vicinity of the old slump. The first was a flow of between .5 and 1 litre per second of water emanating about 10 metres or so below the lower road on the western side of the slump zone. The second was a similar flow emanating about a similar distance below the lower road near the centre, and the third was on the eastern margin, a much stronger flow of 5 litres per second that ran down the path of what in the aerial photographs was a clearly defined incised gully. Tracing this flow indicated that some of the origin was due to seepage from the sediment ponds below the main road, but some seeped from the ground below the lower road. He said he was surprised to find such an extended flow of seepage, given the West Coast had experienced an exceptionally low rainfall prior to his visit, and he concluded that the source of most of the seepage was natural ground water, and there was no reason to believe that it would not have been present prior to the slump.

[63] Mr Luxford gave evidence of the sampling in his laboratory of the samples he took from either side of the slip. This sampling answered one of Mr Higg’s criticisms. The results indicated that about 10% of the sample consisted of silt and clay, with the remainder being gravel and some silt. Silt and clay fraction was generally too low to be non-plastic, and strength testing indicated representative parameters of the soil could be defined by a cohesive intercept of 14 kpa, and a frictional component of 42 degrees.

[64] He dealt with the probable conditions on the 27th July, and concluded that large parts of the open pit had been denuded of vegetation. He gave evidence relating to the amount of overburden that had been stripped away, and said some of this material would have been placed to the west of the dump site, but would have been transported to the main dump. He said it was probable that some material will have spilt down onto the slope below the initial cut for the mine. He suspected that some material may have piled up at the end of excavation to form a bund, and support for this can be found in the photograph taken on the 8th July which shows a mound of material which is estimated to be between 4 and 5 metres high.

[65] Judged on photographs taken after the event, he said it was apparent the movement of material has occurred immediately down slope and to the east of the open cut, and has slid to the north east into the incised gully that existed on the eastern margin of the slip. He deduced from site inspection, and a review of aerial photographs, that the slope of the ground below the initial open cut for the mine fell at about 1 in 5, or flatter to the north, and had a covering of clayey gravely silt up to 3 metres thick overlying the boulder gravel in a silty clay matrix.

[66] Mr Luxford carried out a stability analysis, and in doing that he assumed the natural ground to be fully saturated and to contain no root vegetation. This is clearly the most conservative approach. He said for a slip event to be due to natural causes it had to initiate in a forested area, and for the rainfall leading up to the time of the slip it is highly improbable that the ground was saturated. He said he also assumed there was no surcharge on the slope, which is contrary to his belief that some of the material had spilt onto the excavation. He said his was approach was conservative because there was no evidence to indicate the ground was saturated because of the rainfall and he believed there would have been additional strength enhancement from the remaining roots. He calculated that the factor of safety against slope failure in the natural materials, sloping at 1 in 5 and denuded of vegetation, would be greater than 3.5. He said even if the slope was as steep as 1 in 2, which is steeper than any of the natural slopes in the area, he calculated such a slope to have a safety factor greater than 2. The evidence, clearly and obviously, is that for a slope to fail the factor of safety needs to be less than 1.

[67] Based on his analysis, he considered it highly improbable that a slope failure occurred within the undisturbed slopes due to natural causes. Effectively, by taking such a conservative approach, he eliminated natural causes for the slip.

[68] Mr Luxford then considered data and publications relating to the observation of forested slopes, and also looked to slip events that occurred since 1995 on the West Coast. He accepted that there may have been other contributing factors, but his table showed that significantly greater rainfall was experienced at the site of these slip events than the case we are dealing with, even where slips occurred in conjunction with earthquake activity.

[69] Finally, Mr Luxford gave evidence as to his theory as to how the slope failed. He said on the basis of strength testing carried on site, and the reported study carried out by others, it is almost inconceivable the slip occurred due to natural causes. He also felt it was highly unlikely that any deforestation which took place as part of the mining activity caused it.

[70] It was his view that the most probable explanation is that either inadvertently, or as part of the bund building exercise that is evident in the photographs, some overburden was placed on the down slope edge of the initial mine cut, which initiated the failure. He noted three sources of ground water seepage that existed at the time, and he believed, given that the typography and the down slope dip of the strata predicted mine drilling, the potential for such a failure could have been predicated by an experienced mine engineer. The stock piling of material would have blocked seepage flow allowing the water pressures to build up in the ground beneath the stock pile, and that, coupled with the rainfall some days before, given that it takes some time for water to percolate through the ground, would have been sufficient for the support beneath the base of the stock pile to be lost, and the slip to occur.

[71] It was his view that the post slip photographs supported this mechanism for the slip, where the debris is concentrated largely within the confines of the incised gully, which existed prior to mining.

[72] He accepted the difficulties presented when investigating a slip some time later. But he said in his evidence:

“However, in spite of that had I had the opportunity to investigate the slip the day it occurred, the photos taken by Dave Coll and others indicate clearly the conditions at the time. Even without other testing I would have almost certainly be forced to the conclusion that Francis Mining had caused the slip. Based on my testing and my experience and also supported by a well controlled study and evaluation in the close proximity of the site I am of the view that the probability of the slip having resulted from natural causes is inconceivable. There is no evidence that an earthquake event occurred at the time of the rainfall and in any event if a significant event had occurred it would be highly unusual for movement to take place at the Francis Mining site in what is some of the flattest land in the area rather than in steeper areas of the site. Accordingly, I am forced to the conclusion the slip can only have occurred as a result of the mining activity in the immediate vicinity”

[73] Mr Luxford was extensively cross examined by Mr Rennie for the plaintiff. It was put to him that his description of fluvioglacial out wash debris was wrong, given the evidence of Mr Caffyn. The answer was:

“I am more than happy with Mr Caffyns description. I am quite happy to defer to his judgment as to what the origins of those materials are, it doesn’t affect the test results that I took of that material.”

[74] When he was questioned about the plaintiff’s theory of the slip starting from the bottom, the so called “domino effect”, he said he did not dismiss it outright, and accepted it was a possible mechanism, however the nature of the materials present, the depth of slumping, and the slope angle suggested to him it was a highly unlikely cause. He was not shaken in that view. He also pointed to how far from the toe of the slip was the active part of Wellman Creek.

[75] Mr Luxford agreed with Mr O’Loughlin’s evidence that the greatest benefit from tree strengthening comes in shallow seated slips technically less than 1 metre deep, but overall he was not shaken in his assessment.

[76] I prefer the evidence of Mr Luxford to that adduced on behalf of the plaintiff. Mr Luxford is the only witness that was properly qualified in geotechnical engineering. Although he did not visit the site until some time later, he took tests from either side of the slip site, and assessed their strength. He accepted in cross examination that was not the slip material but was as close as possible. I found this cross examination somewhat unfair, given the plaintiff’s expert engineer had not visited the slip site, had not strength tested any material, or calculated a safety factor. He recreated the pre-slip conditions as best as anyone could by the use of stereoscopic examination of photographs, and carried out an extensive analysis of his results, which included checking on available literature and the relevant rainfall at the time. That is to be contrasted with the evidence of the plaintiff’s expert who did none of those things. In fact, Mr Higgs never got closer to the site than 300 metres away.

[77] Mr Luxford, impressively, established his methodology, and his analysis of slope stability, which allowed him to exclude natural causes as the probable cause. I accept his evidence without hesitation and his conclusions that the most probable cause of this slip were the mining operations carried out by the plaintiff. Although there is no onus on a defendant, I can say that his evidence excluded natural causes and established mining operations as the cause of the slip well beyond the balance of probabilities.

[78] However, one finds additional support for Mr Luxford’s evidence from other defence witnesses. Essentially Mr Coll and Mr O’Regan in their evidence alleged the plaintiff’s officers admitted they caused the slip. That, of course, is not accepted by Mr Moynihan, Mr Francis or the plaintiff, but in relation to this conflict, I prefer the evidence of Messrs Coll and O’Regan.

[79] Firstly, there was Mr Coll’s diary. An entry for Friday 11th August reads:

“Met Brent F and Brett M at settling pond, discussed where over burden was planned to go and what caused slip. Brent tried to get me to admit slip may have happened even if they were not there. He eventually acknowledged this was highly unlikely. Brett considered initial slump was caused by water from in pit running underground and saturating gully not from over burden placed above the gully. My argument is that even though it is uncertain what started the slip, it was most likely either as Brett says or weight of overburden on top of gully. Photo of 28 July shows where over burden was placed also a large quantity of over burden from towards Wellman basin had directly entered the creek. Re-inspected this took photos and samples.”

[80] In cross examination, Mr Coll accepted that this shows two possible causes for the slip. But, in any event, as I read the diary entry, it is acknowledgement that the minimum activities were the cause.

[81] This is reinforced by Mr O’Regan’s evidence. He cave evidence of a meeting at the Francis Mining site. Present were Messrs Roberts, Teasdale and Groom, fellow regional councillors with Mr O’Regan, accompanied by council staff. The meeting occurred on the 2nd August, and they met Mr Francis, Mr Brazil, and he though Mr Moynihan, of the plaintiff. At paragraph eight his evidence is:

“I cannot remember whether it was Brent Francis or Brett Moynihan from Francis Mining, but one of them explained to us how the slip had occurred. They pointed out to us that they had been clearing the site where they intended to extract coal, and had put some over burden material into the head of the gully adjacent to the intended open cast mine area. It was clear from their description of what was happening that they accepted that the work they had been undertaking had caused the slip.”

[82] Mr Beck, who was then working for the regional council, prepared a memorandum dealing with matters covered at the meeting, and in it it states:

“. . . The source of material that is creating the severe turbidity in the Inungahua River resulted from slumping of saturated soils beneath the stripping area and subsidence of sodden material beneath over burden materials pushed into a gully on the side of the Wellman Creek.”

[83] Mr Rennie challenged Mr O’Regan strongly in cross examination in relation to his recall. He accepted he was reliant on the report for his recollection, but stated his recollection was reinforced from his own diary note in his personal diary which was written at the time. He said that was written before he received Mr Beck’s report.

[84] My acceptance of this evidence shows that the plaintiff acknowledges responsibility for the slip.

[85] Finally, there was the evidence of Mr Hughes, who was the mine inspector for the area. He had 33 years experience in a wide range of minding conditions and methods in several countries. For the past 21 years his experience had been in a professional capacity as a colliery manager, project manager, inspector of coal mines, or mining engineer. His monthly reports were produced to the Court. Those reports are revealing. On the 16th May Mr Hughes noted:

“This pit considerably exceeds the approved bench height and width dimensions. In expressing dissatisfaction about the situation. I placed a time limit of 3 weeks on the mine as it is at the moment. Roads were very greasy due to heavy over night rain and the dump trucks required assistance from the excavators to get out of the hole.

A hazard evaluation had been undertaken, but it was very selective.”

[86] Then on the 14th July:

“Stripping on the Wellman Creek side of the hill and Echo. A D10 bulldozer and a PC400 excavator are being used to move material. The manager was reminded that the work programme requires a bund to be left on the creek side and no over burden material is to be pushed in this direction. The hazards associated with shot firing has been addressed and a procedure set out.”

[87] Finally, on the 28th July:

“At Wellmans section of Echo open cast to discuss remedial measures for cleaning the mess that is entering the Inungahua river via Wellman Creek. The requirement for silt traps downstream of the mine have been explained to Francis Mining management on at least three separate occasions and the fact that they had chosen to deviate from the work programme without consultation with the inspectorate.”

[88] In his brief of evidence Mr Huges gave evidence regarding his visit to the mine on the 14th July. He said that no over burden dump had been commenced at that stage, and there were no dump trucks on site to facilitate the activity. It was his view the plaintiff was not carrying out mining in accordance with the approved work programme. He formed this view because material was being pushed out of the pit towards the creek with no apparent provision to prevent material entering the creek. His concern was not with the quantity of material, but about the position of the material relative to the bank of the creek. His advice regarding the bund was not disputed in any way. He said at paragraph of 10 of his brief:

“My expression of concern about over burden placement in my monthly report was due to its proximity to the creek bank and the possibility of loading up that bank causing it to fail. I was also concerned about the possibility of material entering the creek. Some over burden had certainly been pushed in this direction and that was why I voiced the concerns I had at the time.”

[89] He also commented on the drilling carried out by Francis Mining, but noted it appeared to be solely for the purpose of reserve coal measurement and structure definition, not for any geotechnical evaluation. He considered such an evaluation was a normal part of the mine planning process.

[90] It was his opinion, based on his experience and knowledge, that the failure and subsequent slippage and contamination was a direct result of the mining activity carried out in the head waters of the tributary of Wellman Creek.

[91] Again, Mr Hughes was vigorously and extensively cross examined by Mr Rennie. That did not cause him to change his evidence. He accepted that the material in the area of slump were normal earth works rather than a stock pile, but said his comment to the mine manager was cautionary not casual. He said his concerns about over burden were raised because of the orientation of the bulldozer towards the creek. He accepted in evidence in the District Court he had not seen over burden being pushed towards the creek, but did say that in the normal course of mining operations it would be necessary, even if it was collected later, because the blocks cut would not allow it be collected in any other way.

[92] He accepted that apart from the report of the 14th July the plaintiff had operated in accordance with its licence. Like other witnesses, he had the highest regard of Mr Moynihan.

[93] Again, I prefer Mr Hughes’ evidence to that of the plaintiff’s witnesses. The opinion of this experienced mine inspector supports Mr Luxford’s scientific conclusions.

[94] There is another point, that arises from the defendant’s evidence, and that is the failure of the plaintiff to call the mine manager, Mr Crook (Gonzo). He was obviously responsible for day to day activities, and although no longer employed by the plaintiff the evidence made it clear he was still available to be called. At the very least, this Court is entitled to conclude he could give no evidence to assist the plaintiff. And in the light of my decision in BMW New Zealand Ltd v Pepi Holdings (unreported HC Christchurch CP 16/94 28/94 5th September 1996), and the cases reviewed there commencing at page 75, this Court is entitled to conclude that his evidence would have been adverse to the plaintiff. However, in any event, given my firm findings and acceptance of Mr Luxford’s evidence, there is no need to rely on that.

[95] As noted earlier, the slip occurred on the 28th July 1995, and Mr Moynihan had not been there since the 24th. The person responsible for the operations at the time was Mr Crook, aka Gonzo.

[96] Accordingly, I am satisfied that the plaintiff has failed to make out the factual basis of either cause of action. Its claim must be dismissed.

THE CAUSES OF ACTION

[97] In light of the factual findings, it is unnecessary to consider the causes of action alleged by the plaintiff. However, it is appropriate to make brief comment.

[98] Mr Rennie accepted that the duty of care alleged in the negligence cause of action was novel and was extending the concept of duty. The duties alleged are as follows:

“(a) Properly investigate and determine the cause of the discharge;

(b) to take such reasonable remedial measures as required to control, remedy or mitigate the effects of the discharge;

[99] It was put to Mr Rennie that what was being alleged effectively required regional councils to take remedial action in relation to all slips or land subsidences from land contiguous to rivers, streams, lakes or coast lines throughout New Zealand. It was also put to him that he was alleging a duty on regional councils to give legal advice to such persons.

[100] He specifically disavowed that the duty alleged was intended to extend so far. However, it is difficult to see how it could be limited in any satisfactory manner. Rhetorically one may ask is to be limited to those who carry out potentially hazardous operations in land adjoining creeks, streams, rivers, lakes or coastline? If that is the case, what is defined as potentially hazardous activity? For example, one could argue that farming fell into this category. Furthermore, if the duty could not be limited in some satisfactory way, the burden on rate payers throughout New Zealand, given the terrain of much of the country, to rectify slips or landslides and to take reasonable remedial action in relation to them, could well be on a unimaginable scale.

[101] Likewise, where does one draw the line as to whom one owes a duty to give legal advice to?

[102] The same queries arise in relation to the particulars given under the first duty.

[103] The “floodgate” arguments are significant. In my view, even if the plaintiff had made out its case on a factual basis, there would be powerful policy reasons against imposing a duty on regional councils in these circumstances. Essentially, Mr Rennie was forced to accept that the duty contended for was limited to persons in a similar position to the plaintiff. Even that has the potential to lead to a large number of significant claims. Furthermore, it could act as a disincentive to miners and others involved in potentially hazardous activity for taking responsibility for clearing up where contamination of water ways occurred. Finally, it is hard to see why this duty should be owed to miners, as an example, but not to others who undertake activities near waterways and coast lines.

[104] The remaining cause of action was in unjust enrichment. It is a cause of action that does not sit comfortably with a case of this sort.

[105] In Rod Milner Motors Limited v Attorney-General [1999] 2 NZLR 568, the Court of Appeal noted that the principle of unjust enrichment did not yet have the status of a cause of action, and that case was not the appropriate one to consider whether the time has come to give it such a status.

[106] Mr Rennie made reference to the text by Professor Ricketts in Enrichment & Restitution New Zealand (2000) at page 8 which reads:

“As mentioned the superior Courts of all major Commonwealth jurisdictions have accepted that the principle which unites others disparate instances of restitutionary recovery is that of unjust enrichment. Whether ‘unjust enrichment’ has achieved the status of a cause of action in its own right, as arguably appears to be the case in English and Australian law, or whether it is a merely an organising principle, as the New Zealand Court of Appeal has recently suggested, there is a need to unravel the concept.”

[107] Further reliance was placed by the plaintiff in the Court of Appeal decision, National Bank of New Zealand Limited v Waitaki International Processing (N.I.) Limited [1999] 2 NZLR 211 (Henry J)

“The remaining cause of action was based on an allegation of unjust enrichment. It is unnecessary to embark on a dissertation of the concept of unjust enrichment as a ground for restitution or restoration of benefit. The present claim falls within accepted and well established principles which allow recovery, whether it is to be classed as a claim in restitution (Goss v Chilcott [1996] 3 NZLR 385 @ p 390), a payment made by mistake or a claim for money had and received does not matter. Gallen J’s analysis of the elements required to be established by the Bank to entitle it to recovery were correct. . . . Enrichment of Waitaki by receipt of a benefit, which was at the expense of the Bank, and circumstances rendering it unjust that enrichment be retained . . .

(Thomas J)

This eternal desire to do justice, and with it a significant degree of judicial discretion, is necessarily inherent in the concept of unjust enrichment, whether the principle is expressed in terms of the traditional categories of recovery or general principle. It has been recognised in numerous cases. . . . While the principle is ‘equitable in the sense that it seeks to secure a fair and just determination of the rights of the parties concerned in the case’ it is not entirely discretionary in its application. The various elements of the principle have been identified and, if made out, must lead to a remedy or, if not made out, the rejection of a remedy. But the flexibility and discretion to permit justice to be done must remain.”

[108] Reference was also made to the Law of Restitution Goff & Jones, 1998 page 443, which discusses a line of nuisance abatement cases. Central to the decisions there cited is that where an occupier, following notice from authority, has been required to carry out work which, as it later appeared, they were not in fact responsible. The authors note that in such circumstances if the occupier can show that he was compelled to incur the costs of such work, he can recover the costs from the person responsible. However, the evidence does not support compulsion in this case. I do not accept the plaintiff’s evidence that they felt they were left with no alternative after discussions with Mr Coll other than carrying out the remedial work. In my view, they were faced with a public relations crisis, given the wide publicity and criticism of the contamination of the Inungahua River, a prominent environmental feature in the district. They voluntarily chose to carry out the work.

[109] Nonetheless, Mr Rennie submitted that in this case there was a injustice in that the representative of the local community, the defendant, received the benefit of agreed remedial works.

[110] Mr Rennie accepted that this was based on the need for there to be a factual finding that Mr Moynihan felt that Mr Coll required the work to be done. In other words, there was a degree of coercion, or “choice has been removed”. That is clearly not the case here. And on the evidence, even if the plaintiff could establish it had not caused the slip, I would have not have found for the plaintiff on this cause of action. This is reinforced by the evidence given on behalf of the defendant that it could not afford to remedy slips in its region unless they were life or property threatening.

[111] Memoranda as to costs can be filed by 31st January 2002.

[2001] NZHC 1311

20 December 2001