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High Court of Australia Transcripts |
Sydney No S141 of 1998
B e t w e e n -
FERDINANDO PUNTORIERO and TONETTA PUNTORIERO
Appellants
and
WATER ADMINISTRATION MINISTERIAL CORPORTION
Respondent
GLEESON CJ
McHUGH J
GUMMOW J
KIRBY J
CALLINAN J
TRANSCRIPT OF PROCEEDINGS
AT CANBERRA ON TUESDAY, 13 APRIL 1999, AT 10.18 AM
Copyright in the High Court of Australia
MR D.F. JACKSON, QC: If the Court pleases, I appear with my learned friends, MR J.A. DARVALL and MR A.A. HENSKENS for the appellants. (instructed by Denniston & Day)
MR P.M. DONOHOE, QC: May it please the Court, I appear with my learned friends, MR B.M. GREEN and MR F. KUNC, for the respondent. (instructed by Department of Land and Water Conservation Corporate Counsel)
GLEESON CJ: Mr Jackson.
MR JACKSON: Your Honours, before I commence, may I just say that your Honours should have a one page document which sets out an additional argument which we wish to put in support of our submissions on the appeal.
GLEESON CJ: Yes.
MR JACKSON: And may I come to that perhaps in due course? Your Honours, as is apparent from the written submissions, the appellants' case is concerned with the issue upon which they failed in the Court of Appeal and that is, whether the respondent had a statutory immunity pursuant to section 19(1) of the Water Administration Act 1986 . The respondent, of course, seeks to maintain the judgment, in any event, by the matters referred to in its notice of contention and may I deal with those in response to the respondent's argument?
Your Honours, could I then commence by going - and I will do so very briefly - to the jury's verdict, which your Honours will see in volume 5 at page 1071. Your Honours will see that, leaving aside the question of damages, which is not an issue, which is question 4, that the jury gave answers to questions 1, 2 and 3, question 3 having four parts. Your Honours will see that the verdict meant, by its answer to question 1, that the jury was satisfied that the damage to the appellants' potato crop was "caused by a phytotoxic substance" - that really means, a poisonous one which has got some relevance to light - your Honours will see a reference to that in volume 1 page 143 to 144. I suppose I could put it simply by saying it is a form of weed killer really, but that is where your Honours will see something about it:
by a phytotoxic substance applied to it with the water from the Cudgel Channel, when the plaintiffs irrigated the crop, in October 1992.
Your Honours, the Cudgel Channel may be seen in volume 4 in the map which is at page 823.
KIRBY J: The theory was that somebody had dumped this in the Channel?
MR JACKSON: Yes. Unknown, your Honour, who did it. Various suggestions mooted but unknown. Now, your Honours will see the Main Canal, the flow of which is, in effect, east to west. Your Honours will see going from the east a property shaded in yellow. That is referred to as "Donaldson's farm" and your Honours will see that running into Donaldson's farm is a channel called Lateral 240.
If you go further west you will see the Cudgel Channel named in about the middle of the diagram. The water running from it past on, in effect, its northern or north western side, the green property which is the appellant's property, and the water then also connects up to the property which is where the name is split in half by part of a channel, the Ainsworth property and the Channel goes underneath the road to Leeton and then your Honours will see that it goes on the northern boundary of the Ainsworth property. Your Honours will see there in a corner of the Ainsworth property a reference to the fact that two water samples were taken there at a time which was, of course, after the damage to the appellant's property.
Now, the jury's verdict involved rejecting a number of theories advanced on behalf of the respondent as to the cause of the damage, including disease in the crop, leaching of nutrients and poor farming practices and I will come to this, of course, in some detail when dealing in response to our learned friend's argument, but, may I just say that it involved accepting the evidence of Mr Hutchins that you could see the effects of some form of weedkiller not only the appellant's potato crop but also at the water entrance to the property and along the Cudgel Channel itself and involved accepting the evidence of Mr Salvestrin, an officer then of the New South Wales Department of Agriculture, as to the cause of damage to the crop.
By its answer to question 2 your Honours will see that the jury found that it was foreseeable, and if I could interpolate, that must have been from the earlier damage to the properties of Donaldson and the Atkinson property in 1991, that there could be damage to the appellant's crop by contaminants in the channel. And, your Honours, those findings tie up with the four respects in which the jury found against the respondent in relation to failure to exercise reasonable care.
If I could refer your Honours to paragraphs i to iv of question 3. Now, your Honours, once one came to question 3, having answered the two prior questions in the way in which they were answered by the jury, the answers, we shall be submitting, were hardly surprising because the respondent, even after it became aware in November 1991 that there were complaints about the water from the Cudgel Channel, did not even test that water, and that the jury's verdict, of course, involved a rejection of the contention that such testing as was done was, in the circumstances, adequate.
T4.tr
Now, your Honours, may I go from those findings to the Act itself. Could I go first, your Honours, to section 19(1), and what I propose to do, if I may, is to identify first the broad structure of section 19(1) and come back to it a little later, having been to the other relevant provisions of the Act.
Your Honours will see that section 19(1) of the Water Administration Act 1912 consists really of three parts. First there is the central proposition, namely that:
an action does not lie against the Ministerial Corporation with respect to loss or damage suffered as a consequence of the exercise of a function of it.
That is the central proposition, as it were.
The second thing is that there is an inclusory provision, and your Honours will see the words "including the exercise of a power", and then paragraphs (a) and (b) follow. The third feature is the qualification which is found in the opening words of the subsection and that is:
Except to the extent that an Act conferring or imposing functions on the Ministerial Corporation otherwise provides -
Now, your Honours, could I go then to the other provisions of the Act and come back to section 19(1) in a moment. Your Honours will see that by section 7(1) establishes the Corporation as such, and by section 4 of the Act, the objects of the Act are there stated. Could I invite your Honours to note, in particular, the object which is set out in section 4(b), that is:
to provide water and related resources to meet the needs of water users in a commercial manner consistent with the overall water management policies of the Government.
And if I could pause, your Honours, at that point. The reference in the objects of the Act to provision of the water in a commercial manner, is potentially relevant in three respects. In the first place, it suggests, your Honours, that that part of the respondent's activities, is not likely to be the subject of special privileges or disabilities, because the reference to "in a commercial manner" rather suggests that it is to be carried on in a manner akin to the way in which generally similar transactions would be carried on in - - -
KIRBY J: That makes a bold assumption that privatisation is performed in an intellectually rigorous and consistent manner. Sometimes there are expressions of this kind which are token political slogans - - -
MR JACKSON: Of course, your Honour.
KIRBY J: - - - and which may have some legal effect but, nonetheless, the section 19 remains to which effect must be given.
MR JACKSON: Of course, your Honour, but if one is looking to see what is the ambit of section 19(1) and looking to see what effect follows from that, one does look at the Act as a whole, and whilst the objects of an Act can reflect political slogans, indeed the life of politics, one would think, or part of the life is to end up with legislation, that may accord with the policies of those who are the constituents, in effect, of the government of the day. At the same time, the enactment of legislation having objects is the enactment of something which puts the slogan into the Act, to put it shortly; and then, your Honours, one must look at the Act to see what in toto it means.
All I was seeking to make at this point, your Honours, was simply that the reference to the words "in a commercial manner" is some suggestion that that part of the respondent's activities is not to be the subject of special privileges or disabilities that would not ordinarily obtain in commerce. Your Honours, if I could take perhaps the simplest example: if one looked at section 19(1) for a moment, one could ask, would that provision of its own force - I use that qualification for a reason to which I will come in a moment - protect against an action for breach of contract?
McHUGH J: Yes, I was just going to put that to you, that it would seem absurd, would it not, if you could enter into a contract for millions of dollars, be in clear breach of it, and yet section 19 could prevent them being sued.
MR JACKSON: Well, indeed, your Honour, and I was going to say, for example, to supply polluted drinking water. I am not talking about what - the contract provides to provide water, but if the water was polluted or for, your Honour, for damages for failing to supply water which it had contracted to supply; and, your Honours, indeed, one sees that the Act does contain a special provision in relation to the matter to which I have just referred, that is, failure to supply water. Your Honours will see that in section 12(5)(b) where it provides that:
No action or proceeding may be brought -
and, one is:
(a) to compel the Ministerial Corporation to supply water -
and the second is:
(b) to recover any penalty or damages from the Ministerial corporation in respect of a failure to supply water.
and your Honours - - -
KIRBY J: Would the answer to that last point or the contract point be that one would then characterise the loss or damage as suffered not as a consequence of the exercise of the power, but as a consequence of the breach of contract?
MR JACKSON: Well, your Honour, may I answer it by saying this, your Honour. There are really, in a sense, two levels at which one could look at it. What we would seek to say is that, first of all, as a matter of construction, whatever is covered by section 19(1), the presence of the section 12(5)(b) seems to suggest that the subjectmatter of 12(5)(b) would not be covered by it and there is a perceived need for a special provision. If one goes then to ask, what are the types of functions to which section 19(1) refers, what we would seek to say in relation to that is that the presence of a provision like section 12(5)(b) suggests that it does not cover the exercise by the Corporation of the power to sell and to deal commercially.
Your Honours, I was referring to section 4(b). May I say that the second feature of it, we would submit, is that by the reference to provision of water:
to meet the needs of water users in a commercial manner -
it seems unlikely, in our submission, that the provision of water, pursuant to an agreement to do so, is contemplated by the concluding part of section 19(1) and by that I am referring, your Honours, to that part of section 19(1) which includes:
the exercise of a power:
(a) to use works to impound or control water;
but, more particularly:
(b) to release water from any such works.
Now, your Honours, what I am seeking to convey in saying that is that, if section 4(b) - and this, in effect, picks up part of the first thing I said - is requiring that the provision of water be:
to meet the needs of water users in a commercial manner -
it seems unlikely, we would submit, that when section 19(1), by the concluding words, seeks to put within the immunity the exercise of a power to use works or release water from the works in the manner there referred to, it seems unlikely that it is dealing with the case of the delivery of water pursuant to contract and what the provision, in our submission, is designed to deal with is to ensure that where the impounding or controlling of water by works causes damage, the person injured is left without a remedy. What I mean by that is the impounding of water, so it backs up to cover properties or causes other damage, or where there is the loss of the benefit of a down-stream flow or where there is the release of waters in times of flood or where flood is caused by the release of waters, for example, in relation to irrigation. Your Honours will be familiar that in times of flooding there are sometimes great debates over whether dams should be opened or dams should be closed; one side or the other tends to suffer.
McHUGH J: Have you given any thought to the proposition that perhaps section 19 has got nothing at all to say about private rights and liabilities; that it is really directed, particularly having regard to the opening words, "conferring or imposing functions", that it is really directed to ensuring that the Corporation cannot be sued for breach of statutory duties?
MR JACKSON: Your Honour, that is the underlying concept of it. What I mean by that, your Honour, is that if one looks at the circumstance which brings the provision into operation, it is the bringing of an action with respect to loss or damage suffered as a consequence of the exercise of a function. If one looks then to see what are the functions, one sees that, your Honours, from section 11(1) and it makes it clear that the functions that it has are functions which are statutorily conferred. Your Honours will see that from the two provisions of subsection (1).
McHUGH J: I rather had in mind an action on the case for breach of the statutory duty as opposed to an action for breach of contract, action for breach of fiduciary duty, action for negligence, that sort of thing. In other words, that the whole field of private rights and liabilities stand outside section 19.
KIRBY J: I think that is your second argument, is it not, as I read it?
MR JACKSON: I do not know that we would quite put it in quite as restricted a way as your Honour has put it to us. Your Honour, it would be tempting to adopt that. The words of section 19(1) seem to go a little bit wider than that, however.
KIRBY J: Is not a fundamental problem that the Corporation is a creature of statute?
MR JACKSON: Yes.
KIRBY J: It only has the personality that is provided by Parliament and the powers, express or implied, that Parliament gives and therefore, as I understand it, the majority in the Court of Appeal took the view that when you are looking at the words you are really looking at a Corporation that cannot perform functions except pursuant, directly or indirectly, to statute.
MR JACKSON: Your Honour, that is the view that the Court of Appeal took. That view, in our submission, is really something that, ultimately, cannot be consistent with this Court's decision in - - -
McHUGH J: Ardouin, Hudson v Venderheld, Steven's Case destroyed that line of thinking.
MR JACKSON: Yes.
McHUGH J: When I was first at the New South Wales Bar the view was taken that anything done by councils, for example, was done under the Local Government Act. Hudson v Venderheld denied that in terms and - - -
MR JACKSON: And, your Honour, Newman's Case really deals specifically with the point.
McHUGH J: Yes.
MR JACKSON: What I am seeking to say, your Honours, and I perhaps got a little ahead of what I am seeking to say, is that what is established by, for example, Newman's Case, to take the most recent of them, I think, what is established by that is that one looks at the particular circumstances that give rise to the cause of action, then looks to see whether that is the performance of the function that is contemplated by the Act, not anything that may be incidental to it. Your Honour, I am putting that a little badly but what I am seeking to say in relation - - -
McHUGH J: In Hudson v Venderheld, for example, this Court said you do not need any power under the Local Government Act to drive a motor vehicle along the highway, so if you knock somebody down while driving a local government vehicle along the highway, it is not done under the Local Government Act, therefore, the old section 580 was no answer.
MR JACKSON: Your Honour, I accept that. What I am seeking to say at the moment in relation to section 4(a) is really in a sense that it is the lead in to a number of provisions, none of which, if I may say, immediately, your Honours, says that section 19(1) does not apply where you are, in effect, disposing of water but where it is apparent from the nature of the transactions that are involved that it would be inappropriate for section 19(1) to apply and whether one treats that as being a reading down or a confinement of the operation of the principal provision or else as an operation of the exception provision at the start of section 19(1), in either case the situation is one where it is inapt for section 19(1) to apply.
KIRBY J: There is one other construction and that is that it is a political aspiration, but, I suppose it appears in a statute and it has to be given some meaning. If people use this language in statutes they have to expect that it will have legal results.
MR JACKSON: Well, your Honour, they have to expect that people - as your Honour says, that is what happens and if you have people who have suffered a great deal of damage - your Honours will see from the damages in this case - which, on this assumption is foreseeable and was caused by negligence then one would seek to give, in our submission, the words of section 4(b) a proper meaning rather than one which is hollow.
GLEESON CJ: I noticed that there were four causes of action sued upon. The argument seems to be proceeding on the assumption that the cause of action which formed the basis of the verdict was an action in tort for negligence.
MR JACKSON: In tort, your Honour, yes.
GLEESON CJ: So, what happened to the action for nuisance or breach of statutory duty or breach of contract?
MR JACKSON: Not ultimately pursued.
GLEESON CJ: Thank you.
GUMMOW J: But if one were asking whether there would be an action for breach of statutory duty, if one were, it is said, trying to discern the statutory intention - now, that notion has been criticised - why would you not say, "Well, here, in fact, there is a clearly expressed statutory intention, that an action does not lie"? In other words, no action in the case for damages is to be treated as arising here.
MR JACKSON: Your Honour, that is a possible view, of course, but it is a question, really, of what is the ambit of the prohibition that is imposed?
GUMMOW J: Well, the question is, what is the phrase "an action does not lie with respect to"? Does it mean no action is to be taken as coming out of this statute or whatever the private rights would otherwise be, they do not exist. That would seem to me the threshold question.
MR JACKSON: Yes. Well, that is, in a sense, a facet of what Justice McHugh was putting about it.
GUMMOW J: It is. Yes.
MR JACKSON: Yes. Well, the way in which it is expressed certainly seems to be to say that if there is loss or damage suffered as a consequence of the exercise of a function by the Ministerial Corporation no action lies in respect of that. The wording, first of all, is appropriate to nip the action in the bud. The question, of course, is to what actions does that apply? Your Honours, in the end I am not certain that there is a difference between the two propositions because in the end it comes down to identifying what is the ambit of the concept suffered as a consequence of the exercise of a function of a ministerial corporation because the term "function" is quite widely defined and the term "function" is - section 3(2)(a) and (b) is the provision I was thinking of, your Honours.
GLEESON CJ: Would section 19 cover a case where, as a result of the negligence of an employee of the Corporation, water was inappropriately released and caused flooding to land?
MR JACKSON: It probably would, your Honour.
GLEESON CJ: Would it cover a situation where, owing to the negligence of an employee of the Corporation, water was not released causing a failure of crops which suffered from insufficient irrigation?
MR JACKSON: Yes, your Honour, it may - - -
GLEESON CJ: Where would that fall within your dichotomy between the non-exercise and the exercise of a function?
MR JACKSON: I am sorry, your Honours. I was going to say, in relation to the second thing that your Honour put to me, there is really an anterior question in a sense, or another question involved in that, and that is whether one can identify relevantly doing nothing as being the exercise of the function of the Ministerial Corporation. There, one can understand and, in particular of course, specifically because paragraph (b) says so in section 19(1), that the release of water is something that would, apparently, attract section 19(1). But in relation to the failure to release to the disadvantage of the person who might have got it, your Honour, one then needs to see some other provision which one could regard as giving rise to the exercise of the power in not doing so. Your Honour, that is where section 19(1) - but may not go far enough.
KIRBY J: Does not your theory of the dichotomy require your answer to the second proposition of the Chief Justice to be no, that section 19 does not apply?
MR JACKSON: Not necessarily, your Honour. There is a number of possible dichotomies, I have to say, in relation to that. But, in our submission, no, it does not - - -
KIRBY J: What is the history of this legislation? I see it is a relatively recent Act. Is there anything in the predecessor Act that gives any clue? Was there anything like this section or like the object section?
MR JACKSON: No, your Honour. The object section, I will come to. But section 19(1) was, as we understand the position, your Honour, was new in this Act. The object section I will have to have checked in relation to that.
GUMMOW J: What about section 12(5), is that new:
No action or proceeding may be brought:
(a) to compel the Ministerial Corporation to supply water -
That would seem to exclude what would otherwise might be the equity jurisdiction to grant an injunction in respect of breaches of statutory requirements.
MR JACKSON: Your Honour, I will have to check that, I am afraid, but I am endeavouring to give your Honour - - -
GUMMOW J: It would fit in with what I was putting to you about 19(1).
MR JACKSON: Your Honour, if I could perhaps go back to what your Honour Justice Gummow was putting to me. The difficulty in taking, if I could put it this way, the narrowest view of the operation of section 19(1) in relation to the question whether its operation is to bring an action, or prevent an action ever arising on the one hand, or prevent an action from succeeding if it might otherwise be brought, is really, in a sense, the ambit of the concept of "functions" because, in the end, it would not matter very much, in our submission, because so much of the activities of the respondent would be covered by what would be described within the ambit of the term "functions". But, your Honours - - -
GUMMOW J: I am not sure I understand that.
MR JACKSON: I am sorry, your Honour.
GUMMOW J: I am not sure I follow.
MR JACKSON: Your Honour, what I am seeking to say is this, that it is possible, of course, to take the two views to which your Honour adverted. What we would seek to say, though, or what we are saying is that, because the term "function" is defined in the wide way one sees in section 3(2), to include not just functions in the fullest sense, but rights, powers, authorities and duties and, in particular, I suppose, powers and authorities. Then, the situation which would obtain would be if the former view were taken about the action not arising, one sees, still, that the term "function" because of the ambit, the width of its definition, would have the result that many cases would still be covered by it. If one looks at it the other way as preventing an action from succeeding, one would think that many actions - maybe not all of course - and many of the same actions, would be covered by it.GLEESON CJ: A possible point of view is that the very width of the description of the functions in section 11 supports a narrow view of section 19.
MR JACKSON: Indeed, your Honour.
GLEESON CJ: If you just looked at the very first function referred to in subsection (4), that is:
construct or maintain works or building -
on the view against you, as I would understand it, there could be no cause of action for any harm to anybody resulting from the negligent construction or negligent failure to maintain a building.
MR JACKSON: Or, presumably, your Honour, for breach of contract in relation to failure to pay the money on time, to the builder.
GUMMOW J: Yes, that is right, so it seems to me, once you get away from what you describe as the narrow view, does it mean there is an exemption with respect to breach of contract? In other words, if "any action" includes "any action in contract", you would reach an absurdity, so it has to be "some actions". What are they?
MR JACKSON: Your Honour, that is something that one has to derive really from looking at the provisions of the Act - I am sorry to put that in so bland a fashion, but that is really what one does come down to. What we would seek to say is, if one looks at a situation where the provisions of this Act and of the Irrigation Act that I mention in passing, which are the provisions dealing with the obligation to supply and to pay and so on, they make it apparent that one is dealing with the ordinary case of commercial transactions of a particular kind, some statutory backing for them, but, in relation to those, it would seem really quite odd if, in relation to transaction designed to be conducted in a commercial manner, you get provisions that take away the ordinary rights of the other parties to those transactions and persons affected by them.
GLEESON CJ: Well, take what used to be called an action for occupiers liability. How would you relate that to the provisions of section 11(4)(a), which confers the function of maintaining "works or buildings" and section 19? Suppose somebody walks into a building owned and maintained by the Corporation and slips on the floor.
MR JACKSON: Well, your Honour, if one were looking at an enactment, which did not contain that specific provision, then the case would be one to which - and I referred earlier to the Court's decision in Newman - it would be a case similar to that because what one had, in that case was a statute which provided, in relatively broad terms, for the operations of the Australian Airlines Commission, I think, TAA, and it provided for the functions in the broad terms one would expect, together with power to do things incidental to it, and what was held in that case was that the lady who, I think, slipped on the floor in the kitchen was able to recover, notwithstanding the relevant provision - I think in the case it was a limitation provision - because the particular function was not something that was specified in the Act. But, your Honour, in this case, because of the provision as to maintenance, it seemed difficult to say that it was not covered by section 19(1), provided one can identify the particular thing and it is not inconsistent with the nature of it.
CALLINAN J: Mr Jackson, it would not be very attractive to a joint venturer under (m) if the broad construction were to be preferred.
MR JACKSON: No, your Honour, and - - -
CALLINAN J: You would not get many people prepared to enter into joint ventures, I would think.
MR JACKSON: Well, they would not be rushing, your Honour. That may well be why one sees section 12A having been added, and it would seem really unlikely, your Honour, what we would submit that the commercial operations contemplated by 12A would be ones to which section 19(1) would apply. Your Honour, I mentioned 12A simply because it would seem to be something that has been added to cover the case which your Honour mentioned. I do not suggest that 12A is this case.
McHUGH J: Under 12A(2) they can enter into a trust or a partnership and that must be a function, having regard to the definition.
KIRBY J: Is that what is meant by one of the exceptions in the opening words?
MR JACKSON: Well, your Honour, it must be in the end, one would think.
KIRBY J: There is no other express exception that says, notwithstanding section 19, you are liable for anything you do in relation to this?
MR JACKSON: Your Honour, 12A is not express, of course - - -
KIRBY J: Yes, but it is still a little elliptical.
MR JACKSON: Yes, your Honour, one would think to make 12A work, you have to treat it as being something that, one way or other, is not covered by 19(1).
McHUGH J: But one strong indication that 19(1) cannot be intended to give a blanket exclusion from liability is section 19(2) because it would be meaningless if section 19(1) covers the field, then 19(2) would seem to have little work to do.
MR JACKSON: Well, that is so, your Honour, yes.
CALLINAN J: Mr Jackson, is there any commercial element in the drawing of water by the appellants? They paid for it, did they not?
MR JACKSON: Oh yes, your Honour, I am going to come to that in just a moment, if I may. Yes, in fact, your Honour, the way in which the water goes on to their property is through a wheel, but the wheel has a meter so that the quantities can be taken and then paid for in due course, and there are quite strong provisions of the Irrigation Act which give some particular powers in relation to non-payment.
CALLINAN J: That is under the Irrigation Act?
MR JACKSON: Yes, I am coming to that in a moment, your Honour.
CALLINAN J: Are there any documents brought into existence when somebody enters into an arrangement to draw water from the Corporation?
MR JACKSON: Yes, there is a document variously referred to as a "white card" and so on. There is one in the appeal books, I will give your Honours the reference in a moment, if I may. But it is the, I think, the request to draw water and in due course, the amount has to be paid.
CALLINAN J: An invoice is sent, I suppose?
MR JACKSON: Yes, your Honour, I think the evidence is not 100 percent clear on the actual time of payment in relation to the particular case, but there is no doubt if one looks at the evidence of, for example, Mr Puntoriero is the first witness, in his evidence in-chief in the early parts of it he describes the system that one has to go through.
CALLINAN J: But the contract is what, with the irrigation - - -?
MR JACKSON: With the respondent.
CALLINAN J: With the respondent.
MR JACKSON: Yes. Now, your Honours - - -
KIRBY J: Presumably, when section 19 was enacted 12A was not there, and therefore, when it referred to the exception in the opening words, that was a reference to some other provision in the statute. Are there any other such express exceptions?
MR JACKSON: No, your Honour, not that I am aware of, but what I am seeking to say about it is that one does see, for example, in, I think, it is section 23 of the Irrigation Act, there is a particular but limited exception. I will come to it in just a moment but all I am seeking to say, your Honour, is that whilst I recognise that one cannot identify an express exception to section 19(1), it is possible, by looking at the Act, to identify circumstances in which it would seem curious if section 19(1) were to apply to them including circumstances such as the present where one is speaking about the water that is sold.
KIRBY J: Well, it must be assumed that Parliament's purpose was, in enacting those opening words, that there would be exceptions.
MR JACKSON: Quite, your Honour.
KIRBY J: And that, therefore, one must construe the statute in a way that implied exceptions should be read into it, otherwise those words would have no effect at the time the statute was enacted.
MR JACKSON: Your Honours, I was going to go on to say that the third thing that we would say about that section 4(b) - and I know I have taken a while to get, finally, to this - the third thing is that if one treats the reference in section 4(b) as showing that one of the functions of the respondent which attracts the operation of section 19(1) is the provision of water and, your Honours, if I could interpolate to say this, that in other words, turning the argument against us to say if one looks at section 4(b) and treats it as showing that one of the functions of the respondent which would attract section 19(1) is the provision of water, one has to note that section 4(b) is not quite so broadly stated because 4(b) is expressed as being to provide water with two qualifications. One is to meet the needs of water users and the other is in a commercial manner.
Now, your Honours, as to the first of those things, to meet the needs of water users, the needs of water users, I suppose, would contemplate things such as quality, quantity, availability and, to a degree, price, but one thing that one could certainly say about them was that the needs of water users so far as presently relevant were to have irrigation water which would make crops grow, not ones which would, in effect, snuff out their life and the question of the quality is something involved in the needs of water users.
The second thing, and this is, perhaps, just to say the same thing in a different way, is that it could hardly be to provide water to water users in a commercial manner if the water supplied is completely unsuitable for the task for which it is known to be required.
Now, your Honours, if one goes then to see what are the functions of the respondent, one goes first to section 11(1) and what your Honours will see is that the:
Corporation has, and may exercise:
(a) the functions specified in subsection (4), and
(b) any other functions conferred or imposed on it by or under this or any other Act.
GUMMOW J: That is principally the Irrigation Act, Mr Jackson.
MR JACKSON: Your Honours, may I deal first with section 11(4) and then go to the other relevant source which is the Irrigation Act. Your Honours, if one goes to the list in section 11(4), may I say two things about it. The first is that the matters there enumerated and, your Honours, I will not read them out, do not seem to have a great deal to do with the facts of the present case but, and this is the second thing, if one looks at the range of activities that may be engaged in pursuant to section 12(4), they cover a very wide range of situations which might give rise to potential liability.
I have discussed with your Honour the Chief Justice one or two arising out of section 11(4)(a) and it would be very surprising if the rights of people who may have suffered the most ghastly personal injuries were snuffed out by section 19(1) by a blanket provision which would apply to virtually every potential activity - I am sorry, not to every potential activity, but to very many potential activities covered by section 11(4) of the most ordinary and dreary, as it were, kind, not particularly related, apart from their ultimate purpose, to the activities of the respondent.
Your Honours, could I move then to the next provision which is section 12. Now, your Honours will see that section 12(1) speaks of the right to the use of:
flow, and to the control of:
(a) the water in rivers and lakes,
(b) the water conserved by any works -
Now, your Honour, if I could just pause to say, the definition of "rivers" includes artificial channels and it may be a question whether this case falls within 12(1)(a) or 12(1)(b) or both, it does not seem to matter very much. But, what it says is that:
The right to use and flow, and to the control, of -
those waters -
is vested in the Ministerial Corporation -
and goes on to say in the concluding words of 12(1):
except to the extent that.....the right is divested by the exercise of a function of the Ministerial Corporation.
If one goes to section 12(3), your Honours will see that it is dealing with the taking of measures for the various matters to which it there refers. Your Honours, this case, of course, does not appear to be concerned with the taking of any such measures but perhaps it is in one sense concerned with the release of water contemplated by section 12(4). I referred earlier in passing to section 12(5). It does not have any particular application to this case except that it makes apparent that on an occasion when the legislature has sought to refer to a failure to do something, it has said so specifically. The other provisions potentially relevant are those under the Irrigation Act and that Act, by section 8, gave the respondent the:
control of any irrigation area and any works within or used in connection with such area -
Your Honours, the respondent was empowered by section 9(1)(a) to "construct works for storage or diversion of water". There are various other powers referred to in section 9(1). By section 12(1) the respondent was under a statutory obligation to:
supply water in pursuance of the water rights which are attached to the land of any occupier.
"Water rights", your Honours, are not quite as bounteous as one might think. They are defined by section 3 to mean a "right to a quantity of 1 megalitre of water, annually". The supply must be paid for. That is section 12(1A). You will see from section 12(2), the charge is "a fixed charge on the land". But, of course, there is also provision for more than the megalitre per property.
Your Honours will see that in section 13(1) that additional water may be supplied and you will see from section 13(1) that the respondent, "may fix the prices to be paid for such additional water rights" from time to time, and, then, the second paragraph of 13(1), the Corporation or respondent is to:
supply him with additional water at such charges as the Ministerial Corporation may determine.
And, then, subsection (2):
may supply water for special purposes in such manner and at such charges as the Ministerial Corporation may determine.
In addition, another reference to the price can be seen in section 14(1)(b). The opening words of section 14(1) refer to:
a supply of water through pipes under pressure -
but the subsections do not seem to be limited to that type of supply. I would refer, your Honours also to section 14(1)(c).
The charge is payable by the "occupier of the land". That is section 15(1). Interest is payable for late payment: section 15(2)(c); and the charges and any interest are debts due to the respondent "by the occupier". That is section 15(3). A failure to pay them is capable of leading to forfeiture of the land. That is section 15(4).
I mentioned earlier, your Honours, that there is a specific, but limited, protection given by this Act. That is section 23 and, your Honours will see in subsection (1) that the respondent cannot be obliged "to supply water" if the circumstances make it "impracticable to do so", in its opinion":
by reason of drought, accident, or other cause -
and by subsection (2), the respondent:
if it is satisfied that by reason of an actual or threatened shortage of water or for any other sufficient cause it is necessary or expedient so to do, determine that:
quantities "be reduced" or "such supply shall be discontinued". And then, what your Honours will see is, in section 23(2)(d) that:
No matter or thing done by the Ministerial Corporation or by any person whomsoever acting under the direction of the Ministerial Corporation shall, if the matter or thing was done bona fide for the purpose of carrying this subsection into effect, subject the Ministerial Corporation or any such person to any action, liability, claim or demand whatsoever.
GUMMOW J: But suppose, looking at section 23(1), there was no drought, no accident, no other cause, does section 23(1) assume that this legislation may oblige the Ministerial Corporation to supply?
MR JACKSON: Your Honour, it does.
GUMMOW J: In some circumstances.
MR JACKSON: In some circumstances, your Honour, and it would seem to tie up with section 13(1), where, to put it at the lowest, there was a power to allot additional water rights and to fix the prices for additional water rights. Your Honours, it may be that it would not be possible for a person to enforce such right, as against the Corporation, as there may be under section 13(1), but no doubt section 23(1) is working on the assumption that there may be some such right.
GUMMOW J: But that, to the extent that there is such a right, no action, if "bona fide", et cetera, under 23(1)(d).
MR JACKSON: Yes.
KIRBY J: Does not that section, that is 23(1)(d), the paragraph in the Irrigation Act 1986 , tell against you to some extent in that it is a much narrower exemption and it is posited on certain preconditions, namely, it has got to have been done bona fide, and it is also posited on the exception only for the liability under that section which is related to the supply of water, whereas when you look to 19(1), it looks as though Sir Humphrey slipped in a few more exceptions here. And, in fact, it is, as Justice Gummow pointed out at the outset, expressed, at least on its face, in very general terms.
MR JACKSON: Your Honour, it may be, of course, that Sir Humphrey's work was done after lunch, because the provision that was inserted was one that contains within itself the opening words of the provision. That has the result, in our submission, that one looks to see what other provisions say and what the effect of the Act in toto is, and if, in reality - - -
GUMMOW J: The opening words of 19(1), as to the exception, would pick up 23, would they not, of the Irrigation Act?
MR JACKSON: Yes. Your Honour, of course the terms of section 23 of the Irrigation Act do not contain a specific reference to, for example, section 19, and one is - - -
GUMMOW J: No, but 23 does seem to assume that, in some circumstances, there would be an action for breach of statutory duty.
MR JACKSON: Yes. Your Honour, it also, of course - - -
GUMMOW J: Subject to the bona fide limitation.
MR JACKSON: Quite, your Honour. What I am seeking to say is this, that section 23(1) perhaps goes a little further than that and if one had a situation where there had been an agreement to supply, section 23(1) would seem to have the effect that if a circumstance arose that was within the contemplation of section 23 then, notwithstanding the presence of that agreement, the obligation to supply would be at least suspended during a period to which the circumstances in 23(1) were applicable. Your Honour, that can be seen, perhaps, a little more sharply if one looks at the circumstance to which section 23(2)(a) would apply where, for example, there was a shortage of water and one could imagine a situation having arisen where there had been an agreement made today to supply a quantity of water in two months time, but that the rains had not come or there was some other difficulty that prevented the supply.
KIRBY J: Is there anything in the explanatory memorandum or the Minister's speech to explain the wide language of 19?
MR JACKSON: Your Honour, nothing that conveys any light on anything that - - -
GLEESON CJ: Mr Jackson, the judgments in the courts below and the submissions here proceed on an assumption, which may be a perfectly valid assumption, but I would just like to check it. There is a line of country in relation to exclusion clauses in contracts which establishes that if there is a liability other than negligence capable of being covered by the exclusion clause, then you would read the general words of an exclusion clause as not covering negligence, the thinking behind the reasoning being that, if parties want to exclude negligence in their contracts, they ought to say so. It strikes me as a possible point of view that if governments want to exclude liability for the negligence of their corporations, they ought to be forced to say so. Has that line of authority ever been applied to statutory provisions like this?MR JACKSON: Not in quite that way, your Honour. May I just pause to say I am coming in just a moment to deal with the area related to that. May I just say one other thing about the facts before I move on to it. All I was going to say was this, that what we would seek to say is that a person who is supplied by goods, to put it shortly, is able to sue both in contract and in tort. If one supplies goods or products which are to be used for particular purposes and if one knows they are not going to be tested before they are used, then the supplier is potentially liable to the consumer whether the deleterious substance be the assumed snail or be it atrazine or some other herbicide. That is really part of what is involved in dealing commercially. That is the point at which, if I may, I could go to something akin to what your Honour the Chief Justice was asking me.
KIRBY J: Could I not just suggest that there is an important difference. What private people do in their own contracts is, subject to any special law, up to them, but here we are dealing with what the Parliament has provided, speaking for the people who elect it and for the jurisdiction. Also the Parliament is not to be identified exactly with the Ministerial Corporation. On the contrary, given its commercial character, it has a degree of its own role. Parliament is laying down the terms on which people can sue it, so I do not think it is really analogous to a private contract.
MR JACKSON: No. Your Honour is right in saying, if I may say so with respect, that it is not analogous to the private contractor. That is true, with respect, in relation to an aspect of it. Its personality is created by a statute. Parliament has given it a number of rights, powers and so on. In giving those it has done, I suppose, two things relevantly. One is to say in respect of matters that fall within section 19(1) you have the protection that is referred to there. Parliament has said on the one hand, "In a broad proposition your activities have to be carried on to meet the needs of, in effect, consumers and to deal with them in a commercial manner". But the activities that are to be carried on are in significant measure those which are activities involving contracting to dispose of the water that is controlled by it.
In dealing with that aspect of it, your Honour, one sees that Parliament is really recognising that its activities are ones that will be regulated largely by contract. Terms of the contract of course are to some extent provided for by Parliament or by the Corporation acting pursuant to powers given by Parliament and one sees it has the ability to fix the price. That part of the bargaining has gone.
But where it is entitled to recover the money as a debt, where it is entitled otherwise to deal, there is no particular reason why one would exclude the ordinary liabilities that would apply to a supplier. Indeed, your Honour, if one looks at the Act - I do not suggest this provision is in any way decisive on the issue - but what your Honours will see is that section 12(1), which is the provision that confers "The right to the use and flow and control" of waters, and says that "is vested in the Ministerial Corporation", it goes on to say that there are two qualifications to that, the second of them being:
except.....to the extent that the right is divested by the exercise of a function of the Ministerial Corporation.
Now, your Honours, that contains within itself a recognition that one of the activities of the Corporation will be to sell, in effect, water, to put it shortly, and - - -
KIRBY J: I suppose there is the fiction that is very strongly entrenched that Parliament is not going to act in a way that will take away people's established, ordinary civil rights, unless it does so clearly, and where one construction of this exemption would take away a very large measure of rights or all rights, and one would confine that to a smaller ambit, then one would perhaps attribute to Parliament the intention to have the smaller ambit, rather than the larger.
MR JACKSON: Well, your Honour, I suppose another fiction - I do not mean this in the slightest degree offensively, of course - is that Parliament takes account of what decisions of the Court say about provisions of this kind and how they will be interpreted, and that is the matter to which I was going to come now, and that is the view adopted by the Court as to the approach to be taken to provisions of this kind. May I, in that regard, take your Honours to Australian National Airlines Commission v Newman [1987] HCA 9; (1987) 162 CLR 466 where, if I could say something about it first, your Honours, all members of the Court adopted the view that a provision which limited rights should be strictly construed. May I take your Honours at the moment to two passages. The first is that in the reasons for judgment of Chief Justice Mason and Justices Deane, Toohey and Gaudron, at page 471, about point 5 on the page, and your Honours will see that their Honours said in the second sentence:
A limitation provision -
and they were speaking of the provision which appears halfway down the preceding page -
because it derogates from the ordinary rights of individuals, should be strictly construed.
Now if I could pause to say, your Honours, that your Honours will see a reference to Ardouin a little further down the page. But also the other reference I was going to give was that of Justice Brennan, the other member of the Court, at page 476, about point 7 on the page, where - - -
KIRBY J: But what is, in your submission, the foundation of this approach? I mean, ordinarily, the law has treated a little bit from differential approaches to different statutes, but why ought one to take a restrictive approach to the language of a limitation provision?
MR JACKSON: Your Honour, the reason why, I suppose, is that one takes into account first the social context, if I can put it that way, in which provisions of this general kind occur and that is that they are provisions expressed in relatively broad terms capable, if they are read in their broadest fashion, of application to a very wide set of circumstances that the legislature is unlikely to have foreseen, in terms of looking at any particular case.
So the second thing is that one looks at the nature of them and the nature of them is, in one way or another, to take away or diminish rights of individual citizens or individuals in the community and, in looking at that question, a decision has to be made to say, if an issue arises in relation to the application of a provision of this kind, does one, in interpreting it, say Parliament must have intended to take away rights in a broad way or does one say, in dealing with a provision of this kind, one assumes, because Parliament is ultimately representing the will of the electors, that what it is seeking to do is to take away those rights only to the extent to which it is necessary to deal with the issue and, allied to that is, really, a long history of construing provisions of a general kind by reference to the view that if Parliament wishes to take away rights, and is able to do so, then it is for Parliament to make it clear that it has done so.
Now, your Honours, undoubtedly there is a value judgment lying behind all that but it turns on which way the Court is to decide the matters and it decides by reference to considerations which favour those who have no ability to change the law compared with those who have an ability to change it. Your Honours, I do not know that I can endeavour to put it any higher or a more sophisticated level than that. It is really a choice of the way in which the law should go in circumstances of that general kind.
KIRBY J: This is a relatively recent case that you are reading now - 87 - but there has, I think it is fair to say, been a general shift away from special categories like taxed statutes and other statutes receiving a special treatment and there is a tendency in most common law countries now to say you should just construe the statute on its own terms.
MR JACKSON: Your Honour, that is right.
KIRBY J: But it may be that what you have said is merely calling in aid a very well-established principle that common law countries have invoked and that is that you do not impute to Parliament an intention, by an interpretation that would be too wide, to take away fundamental civil rights, unless they make it clear. You construe it in a way that is defensive of those rights.
MR JACKSON: Yes, your Honour. Your Honour, if I could just say in relation to where one can see perhaps an identification of a time at which there was, perhaps, a change in view, one sees in, I think, the foreword that Chief Justice Barwick wrote to Professor Pearce's work on statutory interpretation where he refers to it but, your Honour, there are really two aspects to it. One aspect really reflects views that had earlier been taken and that, in a sense, by modern standards, have gone too far. What I meant by that was that sometimes strained constructions had been adopted to avoid the - particularly in relation to criminal provisions - strained constructions had been adopted so that too much was required of Parliament.
Now, your Honour, one can see that there has been a change in relation to that - the statute is interpreted. But if at the end of the day - and this is something, in our submission, that really has not changed either in philosophy or really in its application - what you have is a statute that is capable of two constructions, then the construction which is against the taking away of rights, without the more specific statement of it, is that which is the preferred one. Your Honour, I have spoken perhaps too long on that. May I move on to the second - - -
McHUGH J: Well, the trend, in effect, has been the opposite in this area, has it not? Until Ardouin the courts gave a very wide view to limitation actions. It can be found in English cases like Bradford Corporation v Meyers, I think a case called Clark v St Helens' Borough Council; and in Justice Dixon's judgment in Little v The Commonwealth in this Court, but then, starting with Ardouin's Case, the courts have cut back the wide scope of these immunity provisions and there has been a constant trend since Ardouin in the opposite direction.
MR JACKSON: Well, your Honour, certainly what one sees is that the passages to which I have referred are ones that continue to be applied - one sees them sought to be applied by the Court of Appeal in this case - and there does not seem to have been any resiling from those propositions; of course, there have not been many cases in this Court since Newman dealing with the precise issue, but there is nothing to suggest, in our submission, that there has been a change in the application of the tests since the cases to which I am referring.
Your Honours, I was going to give a reference to Justice Brennan. That was page 476 about point 7 on the page and, in the second sentence of the paragraph commencing on that page, his Honour said:
Such provisions are strictly construed for they protect the interests of the statutory authority at the expense of individual rights.
His Honour then referred to Ardouin. If I could take your Honours for just a moment to what was said by Justice Kitto, for example, in Ardouin's Case [1961] HCA 71; (1966) 109 CLR 105 and to the reference at page 116 - there are two references on the page, point 6 and point 9. At point 6 his Honour said:
By contrast, the protective nature of the provision made in section 46.....is such that a most strict interpretation of its words is plainly demanded.
And then, more fully at the bottom of the page, his Honour said:
Section 46 operates, then, to derogate, in a manner potentially most serious, from the rights of individuals; and a presumption therefore arises that the Legislature, in enacting it, has chosen its words with complete precision, not intending that such an immunity, granted in the general interest but at the cost of individuals, should be carried further than a jealous interpretation will allow.
Now, your Honours, perhaps his Honour's manner of expression is maybe a little dated by today's standards, but the concept remains.
Could I refer also to some observations of your Honour Justice Gummow in the Federal Court in Suatu Holdings Pty Limited v Australian Postal Corporation (1989) 86 ALR 532 and at page 541 - I am sorry, I thought your Honours had this, but the answer is that your Honours do not seem to. Could I just give your Honours a reference: it is page 541 between lines 35 and 55, where, if I could perhaps - - -
KIRBY J: Which volume again, I am sorry?
MR JACKSON: It is 86 ALR. Could I just read out a short passage, your Honours:
Secondly, a statutory limitation or exclusion provision such as s 104 is to be strictly construed for it protects the interests of a statutory authority which is given privileges in the nature of a monopoly for provision of a public service, at the expense of what otherwise would be individual justiciable rights.
Your Honour referred to Newman's Case and another case and then said:
Thus, such phrases in s 104(1) as "in respect of" and "by reason of" are to be construed narrowly rather than generously, as would otherwise be the case.
That takes me back to our written submissions. Could I go then to - - -
KIRBY J: Of course, it may be that whoever drafted this had Newman and all those cases in mind and said, "Well, this time we'll make it absolutely clear. An action does not lie".
MR JACKSON: Well, your Honour, maybe that is so.
KIRBY J: There is a price paid of course for courts cutting down, quite apart from their legitimate constitutional function, and the price paid is that you get very convoluted and very detailed legislation.
MR JACKSON: Your Honour, one - - -
KIRBY J: I do not want you to repeat what you said. I do appreciate what you have said and the rule relating to cutting down civil rights is very deeply entrenched in the common law.
MR JACKSON: Yes indeed, your Honour. One should not feel too tender about the position of drafters of enactments. I drafted one which this Court has held invalid, but these things happen.
GLEESON CJ: Now you have softened us up and told us to be strict and jealous in our construction, what is the construction for which you contend?
MR JACKSON: Your Honour, we contend first of all - and I am just going to take your Honours to paragraph 15 of our submissions - if I could put it shortly, that one must look at the operative words first of all of section 19(1). It requires that:
an action.....with respect to loss or damage suffered as a consequence of the exercise of a function of the Ministerial Corporation -
Your Honours, if one looks to see what the loss or damage was suffered by, the loss or damage was not, in our submission, suffered by something which can be described as "the exercise of a function of the Corporation". What I mean by that is that the damage was not caused by the release of the water or by the sale of the water. It was damage which was caused because of the fact that none of the actions which are the subject of the jury's findings had been taken which would have had the result that the water which we had acquired was water which we could safely use.
GLEESON CJ: Would section 19 have applied in the present case if, owing to malice on the part of the Corporation, it had deliberately supplied polluted water?
MR JACKSON: Well, your Honour, no. I think the answer is "no", because I am seeking to draw a distinction between, in effect, two things: one is the supply of the water; the other is the use by us. What I should say, perhaps, is that the water was supplied into our dam. The water sits in the dam. We then draw the water from the dam to use in the irrigator, and it is the use in the irrigator which, of course, caused the damage to the many acres of the crops.
GLEESON CJ: I was trying to pick an example of something that could not be described as nonfeasance, but was deliberate misfeasance.
MR JACKSON: Your Honour, if one took a case of deliberate misfeasance, I suppose there would be a question whether one could regard that as falling at all within the concept of the exercise of a function. There would be a separate argument about that, I suspect. But assuming that it otherwise could be, the same situation would obtain, we would submit, because you would simply have a situation where the exercise of the function is to supply the water. The problem that gives rise to the damage is not the exercise of the function of supplying the water, but not taking one of the steps which would have had the result that we either did not get it, or did not use it.
GLEESON CJ: Well, the damage resulted from the supply of polluted water, did it not?
MR JACKSON: That is one way of putting it, your Honour, I accept that. But that really does not pick up the full case because the water that was supplied to us was polluted, but the damage was caused because of the fact that we then proceeded to use that water.
GLEESON CJ: The water just went through its irrigation system, did it not?
MR JACKSON: Well, it did, but how it - - -
GLEESON CJ: Somebody turned on a piece of machinery and out flowed polluted water which damaged the crop.
MR JACKSON: Your Honour, that is true, of course, but there is another stage in it. What I am seeking to say is that, it is not as if we put the line to the irrigator in the channel. The water flows from the channel, flowed into a dam, we then had in the dam a pump which we connect up and use as we choose. The water is in the dam. We then pump from that into the irrigator. The irrigator then puts the water onto the crop. Your Honours, undoubtedly - and as a broad proposition - it was the supply of the water that was polluted that caused the damage. But to say that, does not bring it, in our submission, within that part of section 19(1) because what we would seek to say about it, your Honour, is that the exercise of the function that was relevant was, at the highest, to release the water to us, to sell us the water, if one likes.
Having done that, what gave rise to the cause of action was not that, it was something else. What it was, was that no step was taken beforehand and we were not warned about what might happen if we actually used the water. That is why, your Honour, we would seek to say that the case really does fall within the observations that were made by the Court in Newman's Case. May I take your Honours back to that for just a moment. That is in - - -
GLEESON CJ: Yes, and that did not turn on the distinction between nonfeasance and misfeasance, did it?
MR JACKSON: No, your Honour. What it turned on, though, was the distinction between, on the one hand, the statement of the powers and, on the other hand, the events that gave rise to the cause of action. Your Honour, what I mean by that can be seen from three passages. One is at page 471 about point two on the page, where reference was made to:
The flaw in this argument is that s. 63(1) lends no support to the view that, for the purpose of determining whether the sub-section applies, we should look to the general statutory function or power, pursuant to which the Commission carried on its relevant undertaking, rather than to the particular act of which the respondent complained.
Now, the second passage is the one that one sees at page 471, again at the bottom of the page, where their Honours say:
The starting point.....must necessarily be the identification of the thing "for or arising out of" which the action is brought, which, as we have indicated, will correspond with what the section describes as the "act complained of".
That passage goes down to about point three on page 472. The third passage is the one at page 474 at the top of the page where, in the second line, their Honour says:
The Court in each of the two cases.....directed its attention to the particular act that caused the injury, the negligent driving.....instead of looking to the general statutory function - operating as a fire brigade or as a local authority - in the course of which the particular act was done. Both Ardouin and Hudson are inconsistent with the notion -
Your Honours will see the remainder of that sentence going on.
KIRBY J: Now, unusually, this was a jury trial. Do you have an argument that it was, at the least, open to the jury to determine that the particular Act that caused this loss was the failure to check, as distinct from the letting of the water through or the stirring up of the water unknown to be contaminated?
MR JACKSON: Yes, your Honour. We submit there was evidence on which the jury was perfectly entitled to arrive at each of the conclusions that the jury did in - - -
KIRBY J: I just think where you see relatively few jury trials, now, in civil matters of this kind. We have to put our minds back into the gear that was appropriate to reviewing a jury verdict and if it was open to the jury to reach that conclusion on the facts then it has to be a very powerful case to authorise an appeal court even if it would have reached a different view on the facts to substitute its view from the view of the jury.
MR JACKSON: Well, your Honour, if one takes the jury's findings - I gave your Honour the reference before, page1071 in volume 5 - you will see, for example, that one of the findings was that in paragraph 3 ii that:
the defendant failed to exercise reasonable care.....by failing to warn the plaintiffs that the water was contaminated.
Now, your Honours, it gets a little difficult in our submission, if one tries to compare that finding with the terms of section 19(1), and I am speaking of the operative terms of 19(1), to regard that finding as one which regards the "loss or damage as being suffered as the consequence of the exercise of a function of the Ministerial Corporation" because the finding is that they failed:
to exercise reasonable care.....by failing to warn the plaintiffs that the water was contaminated.
GLEESON CJ: Well, that finding resulted from writing or ticking the word "yes" against the answer to a question that was formulated by the trial judge.
MR JACKSON: Yes.
GLEESON CJ: Does the outcome of this case depend upon the precise way in which the trial judge formulated the questions that were put to the jury?
MR JACKSON: Your Honour, that is a possible view. We would submit the answer is no.
GLEESON CJ: I mean, the jury did not go away and reflect upon the case and come back with this as their explanation of what was the cause of the damage.
MR JACKSON: No, of course not, your Honour, but one had to look to see how the trial developed and these were the questions that, in the end, went to the jury. There is no complaint before this Court about that.
KIRBY J: Yet these were common questions, were they; were agreed by the parties at the trial?
MR JACKSON: Our learned friends had sought to have a different set which do not appear, I think, in the appeal books but in the end these were the questions that the judge put. The first version he had put, I think, had not required the jury to answer all of question 3, each of the parts only, but the second set he thought should require them to answer each of them and that is the set but, your Honour, there is no complaint about the questions that your Honours have to consider, so the jury gave these answers. Now, as your Honour said, of course, what the jury were not giving, as they might have in the past, perhaps an overall verdict, they were simply answering the questions that dealt with the case as the case appeared to the judge and to them.
KIRBY J: Did the jury give a general verdict in the light of those?
MR JACKSON: No.
KIRBY J: That is an odd thing, is it not? Is there not some authority that you cannot interrogate the jury under the New South Wales Act?
MR JACKSON: Your Honour, I cannot give your Honour immediate reference to it. His Honour actually had referred to the fact when he was summing up to the jury that, in the past, they would have given a general verdict but he was now empowered by a provision to which he referred to give them specific questions. It is referred to in passing at page 1041.
KIRBY J: Anyway, there is no ground of appeal on this issue, is there? So what happened was they gave those answers and then in the light of those answers it is inferred that they found for the plaintiffs by the answer to 4 and the judge entered the general judgment in favour of the plaintiffs in the light of these answers and in the amount that the jury had found.
MR JACKSON: Yes, your Honour will see at page 1072 that after the jury had given its answers to the questions, there were then some matters which were raised by our learned friends concerning defences and his Honour referred then, for example, at 1072 about line 34 to:
liabilities and immunities of bodies which exercise statutory power -
Your Honour will see at page 1073 line 20 section 19(1) is referred to and then, your Honours, he refers to a number - - -
KIRBY J: Why was that defence not left to the jury, given that it involves factual questions and that a jury had been summoned to be part of the tribunal of fact for the trial?
MR JACKSON: Your Honour, in relation to that, the course that seems to have been adopted is that it seems to have been accepted that this was an issue of law to be based on the findings that had been made by the jury. It is referred to at page 1065 at the bottom of the page in discussion between my learned friend and his Honour.
KIRBY J: At the trial the parties did not ask that these matters be left to the jury for their determination?
MR JACKSON: No.
KIRBY J: And this course was followed by agreement of the parties.
MR JACKSON: Well, your Honour, it does not seem to have been dissented from, the critical thing being, no doubt, once the jury's view on the various parts of question 3 had been arrived at, it would be then be a question whether section 19 applied to it.
GLEESON CJ: Mr Jackson, suppose you had the facts of Ardouin in the present case.
MR JACKSON: Yes.
GLEESON CJ: Suppose a motor vehicle owned by the Corporation ran down a pedestrian and the driver was on the way to release some water into somebody's property, would section 19 apply?
MR JACKSON: Well, your Honour, in our submission, no. It would be a case no different from Ardouin, and it would really fall within the approach taken there and in Hudson and in Newman and that is that would be the matter to which we refer as being, for example in paragraph 15(c) of our submissions and developed a little later, it was simply omission or a negligence of an ordinary character requiring no special statutory authority. That is the class of case dealt with by Ardouin.
McHUGH J: One of the problems I have is - I may be wrong about this - but neither in the Court of Appeal nor in the respondents' argument is there identified with precision what is the function, except some general statement that there is a right to control the supply of water. But if you ask yourself, how did this water get on to these crops, it was not because the respondent exercised some statutory power, such as under section 15 of the Act to enter the property, it got on with the permission of the appellant. So, the water could not have come on without the appellant's permission or the appellant's act or pursuant to the arrangement between the parties. If you apply the reasoning in cases like Ardouin and Venderheld, although in a general way the respondent may be pursuing its functions or its powers, it did not need any power under any of these Acts to enter into these arrangements to permit this water to come on to the premises. It was a matter of contract.
MR JACKSON: Indeed, your Honour. Your Honour it is really that the function was exhausted, really, at the time when, to put it shortly, it agreed or it was deemed to have agreed to sell us the water.
GUMMOW J: Yes, the function was entering into the contract. Is that not right?
MR JACKSON: Indeed, your Honour, yes, and that is the performance, and that is why we would seek to say two things. If one is looking at it, your Honours, the first thing is that the damage is not caused - and I said this a little earlier - by the actual supply of the water, the damage is caused by something that we do, having got the water, not knowing the particular condition of it, that is the first thing. The second thing is that if one looks at the provision to which I referred a little earlier, which is section 12(1), the concluding part of section 12(1), that in dealing with the rights of the Corporation in relation to water, that recognises that those rights are capable of coming to an end at a particular point. The right would be divested by the exercise of the function of the Ministerial Corporation by, as your Honour Justice Gummow said, entering into the contract with us and having entered into the contract with us, the water is ours once it comes on to the property.
GLEESON CJ: This does not go to the ultimate strength of your argument, but one of the problems with paragraph 15 in your written submissions may be that paragraphs (a) - I will put it this way: paragraphs (a), (b) and (c) are all aimed at judgments of judges rather than at the construction of section 19. Paragraph (a) is aimed at Justice Meagher in the Court of Appeal; paragraph (b) is aimed at the judgments in Newman and paragraph (c) is aimed at the judgments in Ardouin. That is an understandable forensic technique, but what we have to do is consider the language of section 19 and, in particular, the meaning of the words:
loss or damage suffered as a consequence of the exercise of a function - - -
MR JACKSON: Well that is why, your Honour, we have the rolled-up plea, as it were, in paragraph 31. I appreciate what your Honour puts to me and, your Honour, I think it is right to say that the submissions, which deal with the three heads in paragraph 15, are ones which pick up the words of cases and indicate ways in which particular provisions have been held not to be applicable. But, as we would seek to submit, in the end - and your Honour is quite right - the proposition is, "What is the application of section 19(1)?" In relation to that, it is a little difficult to do more than to say, one looks at the words of the section, construes them in the light of the principle or construction to which I have referred earlier, and then says, "Do these words apply to the particular case?"
That is why, your Honour, we have adverted to the additional submission I have sought to make today, more specifically, and that is if you look at the functions of the Corporation and you seek to apply section 19 sensibly to those functions, it is a very odd thing that one of the functions contemplated by section 19 is the function which, itself, is the supply of goods - "goods" may be perhaps factually slightly inapt - pursuant to contract and, your Honour, one way of saying that section 19(1) is not applicable, is by saying, as a matter of construction of the Act, the opening part of section 19(1) applies; in other words, section 19(1) is excluded, because of an implication of the Act. The other is to say, if it is not potentially excluded, you have to look at what was done in the exercise of the function and section 12(1) contemplates that the function relevantly may terminate at a point; in this case the function terminated at the point of supply, in effect, to our land or the point of making the contract, but the loss or damage is not caused as a consequence of the exercise of that function.
Your Honours, those are the submissions we wish to make. I would refer your Honours to our written submissions on the issue, but it would, I think, to be repetitious for me to say more about them.
GLEESON CJ: Thank you, Mr Jackson. Yes, Mr Donohoe.
MR DONOHOE: May it please the Court. The first matter that we seek to emphasise, in relation to this Act, is that it is an Act for the provision and supply of irrigation water and some of the conceptions that might underlie a reservation about giving section 19 its full force have less force when it is understood that there are provisions regulating the provision of waters other than irrigation waters, as to their purity and so on.
Now, in our written submissions, we have dealt with my learned friend's immunity arguments, and I do not propose to repeat the written submissions. May we follow them, however, briefly, as a chart to our answers to the submissions from my learned friends.
The first point we make in paragraph 13 is that the provisions of section 19 are unqualified as to the nature of the action; that the draftsmen of section 19 focused attention upon loss or damage as the point of contact, or the trigger, rather than any particular cause of action.
GLEESON CJ: Can the Ministerial Corporation be sued for damages for breach of contract? Suppose, for example, it entered into a contract with a builder to build a building for it, exercising, in that respect, one of its functions under section 11, and it did not pay the builder, could it be sued for breach of contract?
MR DONOHOE: No.
McHUGH J: You have to go that far, I think, have you not?
MR DONOHOE: No, I do not think I have to go that far for this reason. What we seek to do is simply to say, the particular activity in this case, whatever other frightening possibilities, hypothetically, might be advanced, this was the very thing, we respectfully submit, authorised, that is to say, the release of water. That is, ultimately, all I have to defend.
KIRBY J: It is natural that you should say that is all you have to say. But, you see, we have to test it neutrally by the outrageous results that would follow if your construction were adopted to its full logic, and they are so outrageous that they cannot be - they will not be attributed to Parliament. That you could engage somebody to do something in connection with the functions and not pay their bill, that is so outrageous that it cannot be what Parliament intended, therefore you would look again at the section and see what construction will be adopted that does not have that consequence.
MR DONOHOE: I accept what your Honour says to me, as a matter of analysis, with the utmost respect. What I am then seeking to endeavour to do is to say, in a certain circumstance, such as a completely unwarranted refusal to perform a contract, then it may very well be said that that is not an "exercise of a function". That is why I said to Justice McHugh, I do not think I have to go quite that far. Also, because we place, with the utmost respect, great importance on the provision of section 19(3) and we do that because, we say, that the immunity conferred by it upon individuals, is expressed in different terms.
So, for example, if we take the situation where an individual was responsible and could be sued for what might be regarded as a callous disregard for obligations conferred under the Act, then that person would not have the advantage of section 19(3) and, we respectfully submit, that that reflects the resolution by Parliament of the apparent tension between the absurd possibilities that might be postulated and the real world where the individuals, through whom the Corporation must act, may be - - -
GLEESON CJ: But subsection (3) is not concerned with actions against the Corporation.
MR DONOHOE: No, indeed.
GLEESON CJ: It only protects the Minister and people.
MR DONOHOE: Yes.
McHUGH J: But rather than subsection (3) being in your favour, can I put this to you as indicating it is heavily against you. When it talks about person "acting under the direction of the Ministerial Corporation" it is surely not talking about the ordinary employee down on the ground digging a trench. It says "No matter or thing done by the Ministerial Corporation" and it must mean something done by the Ministerial Corporation at the very heart of its power, by its governing body, by its board or any person under the direction, so you have got a direction. You have got to ask yourself is this the thing done by the Corporation, by the mind of the Corporation or by a person acting under its direction, so it is very limited in that respect. You seem to have assumed it was a provision which protected any servant or agent of the Corporation.
MR DONOHOE: To the extent that it applies I accept that it is directed in that way because it assumes, of course, I accept, a direction of the Ministerial Corporation or that the act be an act of the Ministerial Corporation, so your Honour says it must be a core activity but if the act were done by the servant in the ordinary course of his employment, then that would expose, in certain circumstances, both the Ministerial Corporation and the servant to suit.
McHUGH J: But supposing the servant is told to go down and get the other men's lunches and on the way, driving a vehicle, he or she knocks down a pedestrian, in those circumstances is there no claim against anybody?
MR DONOHOE: If the servant is acting under the direction, then it must be established that the matter or thing was done in good faith by the servant who may be personally sued, assuming that that action was brought against the driver.
McHUGH J: What I was putting to you is that it is not for the ordinary activities of employees that subsection (3) is giving protection but for those matters and things which are done either by the Corporation itself or by a person acting under the direction, that is that we are really talking about things done and by the direction of the board or somebody such as the managing director whose mind would constitute the Corporation.
MR DONOHOE: Your Honour, may I accept that against myself for the moment and take this illustration.
McHUGH J: Yes.
MR DONOHOE: Suppose the question was whether or not, in a time of drought, to release water or not release water. That may very well be a matter that would be a decision of the Ministerial Corporation. Let us assume, for the sake of this exchange, that the Ministerial Corporation directed the release of water. That would be a matter that might very well be the subject of a direction. There may be - and I am deliberately, I acknowledge, trying to get away from those activities which fall on the Ardouin category, if I can put it that way - so that if you have something that is, to use your Honour's notion, a core activity and it is the subject of a direction, then, in that situation, immunity is intended to be conferred by section 19 and that is our case. That is the way I seek to meet the challenges, that the very thing that was aptly described by what happened, and the jury's findings, was loss suffered as a consequence of the release, of the exercise of the power to release water.
McHUGH J: But was it? Certainly you did not exercise any power to release this water onto the appellants' property. The appellants permitted you to do it by virtue of an arrangement, whether it be contractual or otherwise. That is how you got on. You did not need, for example, to exercise the power under section 15 of the Act to enter the property. If you had, you might have had to pay compensation under that section. That is .....while I think of it. What happen, on your construction of the section, to an exercise of the power of entry under section 15(1), the Corporation through its employees or agents causing damage and being required to pay compensation for the damage under subsection (3), what happens to the damaged person's right to sue in respect of that? Does section 19 preclude an action for the compensation?
MR DONOHOE: No, because the specific is a provision that limits the immunity and it is a provision of an Act.
CALLINAN J: You say it helps you really because it provides an express exception to the broad operation of section 19?
MR DONOHOE: I do.
GUMMOW J: But what do you say was the function here, the exercise of which had as its consequence the loss complained of?
MR DONOHOE: The release of water from works.
GUMMOW J: Where is that function found?
MR DONOHOE: In section 19(1)(b).
CALLINAN J: You said section 19?
MR DONOHOE: I did, your Honour: section 19(1)(b).
GUMMOW J: That is:
the exercise of a power.....
(b) to release water -
Where is that power found?
MR DONOHOE: The function is defined - - -
GUMMOW J: No, it talks about the exercise of a power to release water. Where is that power found? It is not conferred by section 19(1) itself.
MR DONOHOE: That arises from section 12.
McHUGH J: Only by implication. There is no express power to that effect, so you need to imply it from one of the general powers in section 12, do you not, and in accordance with the principle laid down in Ardouin, you do not imply power to do that which you can do lawfully. Here you do it lawfully by virtue of your contract with the appellant.
MR DONOHOE: With respect, that we may do it lawfully and pursuant to a contract may give it a legal complexion or character. It does not answer the approach taken by the President in the Court of Appeal, namely, to ask: as a matter of language does what happened answer what section 19 is speaking of? If I may go to the question, "Where is the power to release water?", in section 12, subsection (1) confers the right to the use of waters in rivers and "water conserved by any works".
GUMMOW J: That is the monopoly really. That creates your monopoly right.
MR DONOHOE: And in subsection (3):
In the exercise of the right.....the Ministerial Corporation may take such measures as the Ministerial Corporation thinks fit for:
(a) the.....supply of water - - -
GUMMOW J: Yes, that is as it thinks fit. In other words, it can force this on people. That is what it is talking about.
MR DONOHOE: But your Honour asked me where was the function. I accept that.
GUMMOW J: What was the function that was being exercised, that is what I am trying to find out.
MR DONOHOE: Yes. It is the exercise - I am now looking at 19(1) - of a function "including the exercise of a power". "Function" is defined in section 3(2) to include, "a reference to a right, power" - - -
GUMMOW J: Yes.
GLEESON CJ: Well, I suppose you could say that if the question arose in a different way, not because somebody was complaining about the quality of the water that was being released but because some other person with an irrigation permit or a licence was complaining about the fact that you were releasing water on to the land of the appellants and said, "By what right are you doing that?" you would say, "We are doing it in the exercise of one of our statutory functions".
MR DONOHOE: Yes. And, it may be that if we did it with permission - - -
GUMMOW J: But in 12(3) it says, "take such measures as the Ministerial Corporation thinks fit for" - which particular subparagraph is it?
MR DONOHOE: Subparagraph (a).
GUMMOW J: The "supply of water" and no one could complain, and this is the thrust of 12(5), that the Ministerial Corporation refuses to do it.
MR DONOHOE: That is right.
GUMMOW J: But that is not what this is about.
MR DONOHOE: No.
GUMMOW J: This is about discharging the contract, is it not? It is a consensual activity - - -
MR DONOHOE: Your Honour, that is the legal complexion that is put upon it, but the approach which we adopt is that adopted by Justice Mason and that is to say, pursuant to whatever contractual arrangement had been made, what was going on, and if it fairly answers the description that we were exercising a power to release water then we are - - -
GUMMOW J: I just do not understand that, I am afraid.
McHUGH J: But that is contrary to this principle that has been developed in cases like Ardouin by Chief Justice Dixon and by Justice Kitto in that case, and again as applied by the Court in Hudson and again in Newman, that you do not look for a statutory power. Section 19 is the exercise of statutory powers.
KIRBY J: Well, you have to say that 19 explicitly refers to the release of water.
MR DONOHOE: Yes.
KIRBY J: That that is a power that by section 3(2):
a function includes a reference to a right, power -
and that when it was defining the scope and ambit of the exclusion of liability it gave particular attention to this release of water and that it is no function of a court to narrow that down if Parliament has specifically referred to it.
MR DONOHOE: Indeed. And, may we say that the Ardouin exception, if I may put it that way, was an exception of an activity that required no statutory warrant.
GUMMOW J: But look, Mr Donohoe, when you are talking about 12(3) you are talking about:
In the exercise of the right conferred by subsection (1).
All right? Now, the rights conferred by subsection (1) have been "divested by the exercise of a function" because a contract was entered into. Is that not the end of it?
MR DONOHOE: No, with respect; the powers have not been - - -
GUMMOW J: And otherwise, you get into this terrible situation with your client and go around making contracts and breaking them.
McHUGH J: And, can I just point - look at the effect that your submission has in relation to section 20. You have a contract:
a charge, fee or money.....as a debt due -
You can recover it against the appellant:
in a court of competent jurisdiction -
but the appellant could not say to you "I am not liable" or "I have got a cross-action against you by reason of the impurity of this water. It is breach of an implied term of our contract." You would say, "Well, sorry, that is no defence. You have got no answer, either by way of cross-action or as a defence".
MR DONOHOE: Well, with respect, the case I am concerned with - and I accept that I have to follow the principles through. But in Pyrenees v Day the Court emphasised that, in looking at these sorts of questions, and particularly the notion of duty, one has to look at the particular facts that are being addressed. Now, what your Honours are putting to me is that if there was, in existence, a contract to let some of this water going down a canal to the appellants, then the process of interrupting the flow of some of that water and diverting some of that water, could no longer be described as the exercise of a power to release water, because a contract had been made. On the other hand, to test the proposition, if through some error, oversight, a contract had not been made, then it would plainly be the exercise of a power to release water, to put the checks in place through our water bailiff and direct it into the dam. That would otherwise be a trespass. So that the view that I am being asked to meet changes the whole complexion of the exercise of a power because there stood in place a contract.
GUMMOW J: Quite so.
McHUGH J: That is quite so, and the reason is because your power has to arise by implication. It does not arise from section 19. You have to spell it out at section 12. The great principle, as Justice Kitto pointed out in Ardouin, is that you only imply something, in a statute, when it arises by necessary implication and, that being so, there is no necessity to imply the power to do something when you have done it by contract. Now, it would be different if, for example, the Corporation had said, "There is far too much water in this canal; it is causing damage, it is overflowing down, we are going to have to release water on to various properties along the canal",and it causes damage. The plaintiff has no answer to your reliance on section 19; you have exercised a statutory power. But here you come on with the appellants' permission. That is the only way your water got there; with the permission of the appellants. You did not exercise any statutory power to get it there, except in this general fact that. You might as well say, it arises out of your creation as a Corporation. It is in the background.
MR DONOHOE: May I respond or attempt to respond by taking on this illustration. Let it be assumed that water was released, as your Honour has just illustrated. We ask ourselves rhetorically, "What power was then being exercised?" That would unquestionably be the power to release water. That would be - - -
McHUGH J: That would arise by implication from some function that you have, whatever it is. It might arise under section 12. But there is no express power to release water anywhere, is there?
MR DONOHOE: Yes, there is, in section 12(4).
McHUGH J: Yes, "release water impounded by any works under its control". What does that mean, "impounded by any works under its control"?
MR DONOHOE: Well, the Main Canal - - -
McHUGH J: "Works" is defined, is it not?
MR DONOHOE: No, no, it is not defined.
McHUGH J: Yes, it is. It means, "works connected with or affecting water in respect of which the Ministerial Corporation has a function."
GLEESON CJ: A canal would be works, would it not?
McHUGH J: Yes.
MR DONOHOE: Yes. So there is, we would say, an express power to release for any reason; it may be a commercial reason.
GLEESON CJ: But we still have to construe this expression "as a consequence of the exercise of a function". Let it be assumed for the moment that the central and, indeed, definitive function of the Corporation is to build canals, impound water in canals and control the management of water in the canals and the release of water from the canals into properties adjoining the canal.
MR DONOHOE: Yes.
GLEESON CJ: The question still is whether a casual act of negligence on the part of an employee of the Corporation in the course of building or maintaining or controlling the operations of a canal which causes damage to somebody, causes damage suffered as a consequence of the exercise of a function within the meaning of section 19.
MR DONOHOE: Yes.
GLEESON CJ: That act of negligence might, for example, be operating a piece of mechanical equipment in a way that causes personal injury to somebody. Would that be covered by section 19?
MR DONOHOE: No.
GLEESON CJ: Why not?
MR DONOHOE: Because the law frequently identifies several causes of the one consequence. A failure to warn case is probably the simplest illustration. If we put it in the context of medical negligence, it is not the failure to warn that causes the damage, it is the surgeon's knife. And for that reason - - -
McHUGH J: On that view, there would be no liability for failure to warn. You have to show a causal connection between the failure to warn and the damage.
MR DONOHOE: The question that I was about to come to is whether or not in the circumstances of a particular case it is appropriate to conclude that the loss was suffered as a consequence of the exercise of a function or, in my illustration, that is a failure to warn or the surgeon's knife to adhere to that just for a moment. It may be that in the case of a casual act of negligence by an employee of the Corporation it is not the appropriate conclusion to draw that the loss was suffered as a consequence of the exercise of the function but as lawyers, we say, as a matter of common sense, the real cause was the casual act of negligence of the employee and section 19 does not apply.
KIRBY J: I am just puzzled by the questions that were left to the jury. I am sorry to keep going back to that but this was a jury trial. The question that elicited their views on the critical matters was, did the defendant fail to exercise reasonable care in particular ways and then the four sub-questions.
MR DONOHOE: Yes.
KIRBY J: There was no further question that you might have expected 3(a), "Did the failure to exercise reasonable care on any of the matters answered in 3 cause the loss of the plaintiff?"
MR DONOHOE: Yes.
KIRBY J: And yet his Honour took the answer, and I suppose the answer to 4, to be equivalent to that and you raised no protest then or now about that.
MR DONOHOE: I do not raise protest now.
KIRBY J: So we have just got to accept that the jury came to the conclusion that the failure to do these various things was the cause of the plaintiffs.
MR DONOHOE: May I direct your Honour's attention to 1 and its answer which is another characterisation of cause:
Was the damage to the plaintiffs' crop caused by a phytotoxic substance applied to it with the water -
One only has to paraphrase that by saying the release of water and the jury have, we would submit, found that the words of the section aptly apply and that is an illustration, if I may say so, of how the law may find several causes of a particular consequence.
KIRBY J: That is so, but given that there were possible different answers to the factual question in this case, why were the questions which we are now confronting not left to the jury as the tribunal of fact?
MR DONOHOE: We would respectfully submit that it is a question of law whether the phrase "suffered as a consequence of the exercise of the function" was capable of aptly describing what was established on the evidence.
GLEESON CJ: If the judge had left to the jury the question, was the loss or damage in the present case suffered as a consequence of the exercise of the function of the Ministerial Corporation, he would then have had to have given the jury a direction on exactly the issues that we are concerned with now because the jury would have said to him, "What do you mean by that?"
MR DONOHOE: Yes. Well, that is a way, we would submit, that it is a question of law. Whether it is capable of applying - - -
McHUGH J: It cannot be a question of law. There is a great deal of authority for the proposition that the meaning of words in Acts are questions of fact and what is more, the onus is on you. This was a plea in confession and avoidance and with suitable directions from the judge, you had to prove it. Now, it is a large proposition to say that the judge should have directed the jury as a matter of law that your defence was made out.
KIRBY J: Yet, that is how you apparently treated it. You apparently treated it that way.
MR DONOHOE: I am not sure - - -
KIRBY J: It was a matter of law for the judge to rule on, and that it was not a matter upon which any opinion of the jury was in the slightest relevant.
McHUGH J: And, if I could add what I said earlier, it was not for the judge to rule on. At best, from your point of view, all he could was direct the jury to bring in a verdict for you. But it was still the jury's function.
GLEESON CJ: What was the statutory provisions pursuant to which these questions were asked, Mr Donohoe?
KIRBY J: These are special verdicts, are they? Is it 91 or something?
MR DONOHOE: Yes. The section of the Supreme Court Act that permits the posing of questions is section 90:
It shall be the duty of a jury to answer any question of fact that may be left to the jury by the presiding Judge at the trial.
And the particular rule - may I give your Honours a reference to that rule in a moment.
GLEESON CJ: You can come back to it after lunch if you prefer, Mr Donohoe.
MR DONOHOE: I am obliged, your Honour. I will do that. It is not difficult to find. It is expressly referred to in something I can find shortly.
GUMMOW J: Now, this contract: it was pleaded against you, at pages 1 and 2, that there was the contract of 1992. Paragraph 4 of page 1, there was this agreement. Then, in your defence, on page 9, you denied the date but not the contract, and the date you preferred, at paragraph 9 on page 9, was November 1987. But, you said, there was an exemption clause in the contract.
MR DONOHOE: Yes.
GUMMOW J: But the exemption clause is not pursued, I imagine.
MR DONOHOE: No.
GUMMOW J: So, is the situation then, on the pleadings, there was a contract and there was no reply. There was a contract and the date was November 1987. Is that what it comes to?
MR DONOHOE: Yes.
GLEESON CJ: And Mr Jackson said to us earlier this morning that the claim for breach of contract was not pursued.
MR DONOHOE: That was abandoned. All claims, other than the claim in negligence, were explicitly abandoned. The references are 15 and 131 of volume 1, and volume 2, 356.
GUMMOW J: Oh quite. But if one is working out how section 19 applies, and what power or function is being exercised, it may be useful to know that there was a contract - - -
MR DONOHOE: Yes, it may be useful, I accept that.
GUMMOW J: And that it was not some force majeure, as it were, some exertion of paramount authority to do this, given by the Act.
MR DONOHOE: No, we could not suggest that and there was no suggestion like that as the trial was conducted.
GLEESON CJ: Is it one of the functions of the Corporation to maintain the quality of the water in these canals?
MR DONOHOE: They power a power to but no obligation to. That was a matter I mentioned very early on. Quality of water and pollution of water is regulated by the Clean Waters Act and the Environment Protection Agency may give a direction to the respondent and then the respondent must clean up waters.
KIRBY J: There is no suggestion that that direction was given in this case?
MR DONOHOE: None whatever. Your Honours, the reference to the rule I was looking for is Part 34, Rule 8A. Its purpose was said to be to enable the Court of Appeal to give a judgment contrary to the verdict.
GLEESON CJ: Was the discharge of this water a contravention of the Environmental Protection Act?
MR DONOHOE: I stand to be corrected, but I am quite confident not. This was irrigation water. If it had been known and if it had been polluted water, that may very well have attracted - - -
GLEESON CJ: My recollection of the definition of "pollution" in some of that legislation includes, for example, the stuff you put in swimming pools.
MR DONOHOE: Your Honour, I cannot answer that. I can say that no such issue was run at the trial and that the statutory regime is that that would be corrected by direction from the EPA.
KIRBY J: At some stage, either now or after lunch, I would be helped by an understanding of your theory of this section. In other words, how it can operate in a way that avoids the horrible suggestions that driving cars and making contracts exempts you and yet does still operate on a release of water in a case where that is said to be the very power and function that you exercise. It is the presence in that section of release of water that seems to indicate - first of all, that we should not assume that Parliament made a mistake and that therefore in the exemption being provided there was to be included release of water. The question is, I suppose: is that simply to be confined to the release of water pursuant to the statutory power for the purposes of the Corporation in order to release the pressure of water or does it involve all release of water?
MR DONOHOE: Yes, I will endeavour to do that. I understand the question.
McHUGH J: Does that cover the case of people who are poisoned as a result of drinking tap water?
MR DONOHOE: Well, I endeavoured to make clear that this case is not about drinking water.
McHUGH J: Why? Is that not a release of water?
KIRBY J: Are you in the business of releasing potable water; is your water drinkable?
MR DONOHOE: I am sorry, I was distracted, your Honour.
KIRBY J: Are you releasing drinkable water or are you just releasing water for farms?
MR DONOHOE: No. We are diverting to farmers the dirty waters of the Murrumbidgee, with their logs and all their impurities that come down hundreds of kilometres.
KIRBY J: You would have to be very thirsty to drink it.
MR DONOHOE: Or swim in it with mortar bombs, but it is suitable for irrigation and it is certainly not potable water; it is taken downstream, where it is brought up by councils to health standards for the purpose of being drunk in the town of Leeton, but this just goes on, and has for most of this century, from the upper reaches to the farms.
KIRBY J: I am sure when those first settlers reached the Murrumbidgee they did not require that it be filtered; they just got down and drank.
MR DONOHOE: Well, they may have up there, but I do not think many farmers these days would be drinking down at Cudgel; certainly not these days.
GUMMOW J: But does section 12 - your monopoly that is created by section 12 by this vesting, what parts of the water supply of the State does that extend to? It is not just what is involved in the Irrigation Act, is it, or is it?
MR DONOHOE: No, no, there are other waters, definitely other waters, potable waters in other places.
GUMMOW J: Yes, so that - - -
McHUGH J: You have rivers and lakes.
MR DONOHOE: Yes, dams.
McHUGH J: You have monopoly control of everything: dams, the Hunter River.
MR DONOHOE: Yes.
GUMMOW J: Warragamba Dam.
MR DONOHOE: Yes.
GLEESON CJ: Is this taken over the functions of what used to be called the Metropolitan Water, Sewerage and Drainage Board?
MR DONOHOE: No, the Water, Irrigation and Conservation Commissioner.
GLEESON CJ: I see.
KIRBY J: But now you are in the commercial business, so why should you not be treated as a commercial person?
MR DONOHOE: The answer to that is that the draftsman has permitted us to enter the commercial world with section 19 and with the other limited immunities in other parts of this section.
KIRBY J: Not many commercial people have the protection of section 19. In fact, I cannot think of a single one in the private sector that does, not one. They enter and they take their risks and meet their obligations.
MR DONOHOE: That may be so, yes. I understand the thrust of your challenge and I have to accept that.
GLEESON CJ: The issue we have to face up to is this. Sir Owen Dixon once said of section 260 of the Income Tax Assessment Act that it either means far too much or it means very little.
MR DONOHOE: Yes.
GLEESON CJ: We might have a similar problem in relation to section 19.
MR DONOHOE: Yes, and that is ultimately a conclusion that has been reached in other cases, and that is the approach taken by his Honour the learned President. He just said, "Well, you can put all the tags on it you like and all the glosses, but if the words fit, then it applies", and in his view, they fitted. So he called up a literal approach and that is the conclusion.
GUMMOW J: I am not worried about a literal approach, but I want to know what the function is that is being exercised.
MR DONOHOE: Yes, well - - -
GUMMOW J: And I will not go over it again.
MR DONOHOE: No, no, I appreciate your Honour's concern. I take it your Honour is not - - -
GUMMOW J: I am happy to be as literal as anything with all of this.
MR DONOHOE: Yes, and your Honour sees - - -
GUMMOW J: You may die by literalism, you seek to live by it, that is the problem.
MR DONOHOE: Yes. your Honour has the reference to 12(4) and there is no point in repeating that. May I have just a moment? I apprehend that I may have covered most of the matters I wish to in the dialogue with the members of the Bench - - -
KIRBY J: Was this section modelled on any, as it were, precedent in the New South Wales's Parliamentary Counsel's Office or is this entirely unique to your Corporation, as far as you are aware?
MR DONOHOE: We have not found another in the same terms. My learned friends in the special - - -
KIRBY J: Sydney Water does not have a protection like this, for example? This is special to you.
MR DONOHOE: No, this is special to us.
KIRBY J: Well, when you come to the theory of it, perhaps you could tell me what warranted this new commercial enterprise getting this special provision to have the drastic effects that you arguing for.
MR DONOHOE: I appreciate the question.
KIRBY J: Because, the alternative is very simple for the Court. We simply go back to Ardouin and the line of authority and say, "Well, it is not clear or it can be given a confined construction. Give it that."
MR DONOHOE: Yes. I understand what your Honour is saying. May we take issue with one proposition that underlies this notion that by entering into a contract the power is exhausted. We would respectfully submit that the power is not exhausted, it is exercised, and - - -
GUMMOW J: Which power?
MR DONOHOE: The power to control water and to release water under section 12(4), for any reason, and that they can live side by side, if I may put it in that language.
GUMMOW J: But you do not need that. You have the power to make the contract and that surely carries with it all that is necessary to perform the contract so, it comes down to the contractual power. That certainly does not vanish merely by entry, that includes discharge by performance.
MR DONOHOE: We did not need a contract to - - -
GUMMOW J: I know, but you did.
MR DONOHOE: We had a contract, but - - -
GUMMOW J: Of course, as good commercial people, you were not going around foisting this water on people; you are dealing with them consensually.
MR DONOHOE: No, but if a person is driving a car and has power to drive a car, if they do it for commercial purposes, it would not be, we would respectfully submit, inapt to describe them as driving a car when it was for a commercial purpose.
KIRBY J: Given the course of the procedure that was adopted in this jury trial, would it be a correct approach to take that, in so far as there were questions of fact which remained open to be determined by the jury, but which were not by reason of the course of procedure that was followed, that you are taken to have accepted that those factual determinations were made in a way favourable to the plaintiffs?
MR DONOHOE: Yes, I accept that. The point I was seeking to make, and perhaps made badly before, draws upon Bathurst City Council v Hope to the effect that when one looks at a statute, there are three processes: the first is, are the words capable of applying, and that is a question of law; what they mean and whether they apply can be questions of fact and mixed questions of fact and law. It is the first threshold at which we seek to place ourselves. That is to say, there is a question of law, that question of law is whether these words are capable of applying to the particular facts and we say that remains alive at this level.
McHUGH J: Well, I thought you put your case differently, Mr Donohoe; I thought you said, upon the facts on which the plaintiff relies, as a matter of law, the case was within section 19 and, if the proper procedure had been followed, the judge would have been bound to direct the jury to return a verdict for the defendant.
MR DONOHOE: Or, alternatively, after their verdict, he was bound to enter a judgment, notwithstanding the verdict. Yes, we are obliged to your Honour, that is a better way of putting it.
KIRBY J: But which answer gave him that warrant?
MR DONOHOE: None of the answers did.
KIRBY J: This is his own determination of factual questions as the judge of law in a matter where facts were the province of the constitutional tribunal?
MR DONOHOE: Yes.
GLEESON CJ: This is the matter you are going to look up over the luncheon adjournment and let us have some more about after lunch, that is the question of the power under which this procedure was followed?
MR DONOHOE: Yes, your Honour, I will do that.
KIRBY J: It is possible that because no point has been taken on this at any stage that we should just accept that this is the way the parties chose to fight this case but it is a matter that worries me.
MR DONOHOE: Well, your Honour appreciates that the trial judge - - -
KIRBY J: I appreciate nobody is used to civil juries any more.
MR DONOHOE: The trial judge invited my learned friend, Mr Foord, and me to formulate questions and rejected our formulations then formulated his own and in response to submissions from me reformulated them. They were entirely his creation.
McHUGH J: But it appears that both counsel at the trial seem to accept that the issue was one for the judge to decide, whether as a matter of law or fact or whether they gave any thought to what its proper characterisation it was for the judge to decide.
MR DONOHOE: For the judge to decide the question of whether or not this immunity was available as a matter of law, yes.
McHUGH J: Well, as law or fact, is it not? I mean, this is in your favour but your opponent seems to have abandoned his right to have the issue determined by the jury.
MR DONOHOE: Yes.
McHUGH J: I cannot see anything in the appeal book or I cannot detect anything in the appeal book.
MR DONOHOE: No, he did not object to procedure followed at all.
GUMMOW J: Now, if you are correct - just go back a little bit - in saying that what was involved here was the exercise of a power to release water, you would agree also, I think, that it was also in discharge of a contractual obligation, the contract having been entered into as an exercise of a power.
MR DONOHOE: Yes, I accept that.
GUMMOW J: If it has two characteristics, one of which attracts section 19 and one of which does not, does not one give the plaintiff the benefit of the duality?
MR DONOHOE: With respect, not. We say that cannot be given the benefit in the face of the parliamentary proscription. That is the submission.
GLEESON CJ: The essence of your submission is that whatever else section 19 might or might not mean, it reflects a parliamentary intention that farmers cannot sue the Corporation for the quality of the irrigation water.
MR DONOHOE: Correct.
McHUGH J: For the damage caused by the quality of water.
MR DONOHOE: Yes. We say that firmly. I do not want to be seen to even retreat from that because that really comes from the whole history of the Murrumbidgee Irrigation Area, the source of these waters and the way in which these canals were constructed. They were constructed at the beginning of this century in response to a huge drought at the end of last century and all they were doing was making waters available. There was no notion that now appears to be developing that we assumed some responsibility for improving the waters of the Murrumbidgee or policing malefactors who may dump atrazine in waters or anything of that scale. That is the heart of this case.
McHUGH J: But you would also say, I suppose, that if you negligently released too much water so that it flooded the appellants' property, then again you would not be liable?
MR DONOHOE: Yes, we certainly say that.
McHUGH J: Pursuant to a contract or otherwise?
MR DONOHOE: The contract may present the difficulty that it is no longer proper to regard the loss as suffered as a consequence, in a commonsense way of the exercise of the function, but may properly be regarded as suffered as a consequence of the breach of contract.
GUMMOW J: But you say you cannot contract to supply water without, as it were, having in it an exemption clause which is the effect of 19.
MR DONOHOE: No, indeed, we would say that if we tried to - suppose we said, "Oh, look, we are going to contract with you. You are a very attractive person to do business with, and although we have the section 19, we are going to accept that if we flood your land - - -
GUMMOW J: No, not flood it, in exercise of that power; just supply it ordinarily, but polluted.
MR DONOHOE: Polluted. If it proves to be polluted - - -
GUMMOW J: "That is tough, but we do not have a contract with you on any basis that requires us to do anything else but leave that risk to you."
MR DONOHOE: That is what Parliament has told us to do, "and you take the Murrumbidgee waters at your risk". We have not got the infrastructure to improve the waters of the Murrumbidgee, or to police the vast number of channels. That is essentially - - -
GUMMOW J: So the contracting power has to be read with that limitation, is that right?
MR DONOHOE: Yes.
KIRBY J: One could, in that context, perhaps, understand the policy behind section 19 which is that you have this large area of channels and canals and lakes and river that you really cannot effectively control, and that people can put all sorts of things into it, and that you should not be held liable for everything that goes into it, and to prevent people having a try; the Parliament has exempted you.
MR DONOHOE: Yes.
McHUGH J: The answer to that may be that you would not be negligent. I mean, if somebody just goes and pours some deleterious material in somewhere, while you might be liable for breach of contract - and even you seem to concede in some circumstances you may be liable for breach of contract but you probably would not be guilty of common law breach of a duty of care. This must have been close-run case, this particular case.
GLEESON CJ: That is not going to lead you to be expansive about your notice of contention, though, is it, Mr Donohoe?
MR DONOHOE: Not in the light of what your Honour has just said.
GLEESON CJ: How long do you expect to require for the remainder of your submissions?
MR DONOHOE: I will be finished at 3.00.
GLEESON CJ: Very well then. Is it convenient if we adjourn now until 2.15?
MR DONOHOE: I am obliged to your Honour.
GLEESON CJ: We will adjourn until 2.15.
AT 12.48 PM LUNCHEON ADJOURNMENT
UPON RESUMING AT 2.20 PM:
GLEESON CJ: Yes, Mr Donohoe.
MR DONOHOE: Before the luncheon adjournment Justice Gummow asked me on several occasions where I could point to the power referred to in 19 to release water. May I give one or two other references? Section 8 of the Irrigation Act confers on the Corporation "control of the area and any works within" it. It does not carry the matter very far. Section 12(3)(a) and 12(4) of the Water Administration Act I have already given the
Court references to. In the Irrigation Act section 13 is expressed to be a power to supply water and my learned friend has taken the Court to the first two paragraphs of section 13(1). The evidence disclosed that water is supplied as a matter of fact by being diverted down canals, released from canals into channels, interrupted in channels and diverted into dams.
KIRBY J: The Irrigation Act is still in force?
MR DONOHOE: Yes, it is.
KIRBY J: I see.
MR DONOHOE: Another way of viewing the relationship between section 19 and the Irrigation Act is that the power conferred by section 13 is a function within the meaning of section 19. Justice Kirby asked me to - - -
KIRBY J: Can I just ask you on that, how are the two Acts to work together? I have not studied the two Acts, but what is the objective of the two Acts and how do they relate to each other?
MR DONOHOE: Historically, there are a number of Water Acts and irrigation areas and slowly they were drawn together and - this may be too superficial but with the Water Administration Act it was intended that one body have the supervision and control of all those various activities.
KIRBY J: But had not the Irrigation Act 1912 already brought together the various irrigation areas and made the old Commission the equivalent of the Water Administration Ministerial Authority?
MR DONOHOE: Your Honour, may I come back to that and give you a more considered answer? They continued to operate but how precisely they interrelated I cannot readily give an answer to, but I will. Justice Kirby before the adjournment asked me to give a rationale for the collision or the tension which has emerged in the discourse between the apparent enormity of the immunity that flows from reading section 19 with the section 11 powers.
The way in which we seek to reconcile that, or explain that away, is that section 11(4) is properly to be regarded as an expression of general powers. One, for example, might find similar provisions in the articles of association of a corporation and, although they are expressed to be functions, when one comes to section 19, if one takes the illustration - I think Justice Kirby suggested it this morning - that where there is a breach of contract and it is not a contract relating to what I will call for the moment core activities, then it may be that section 19 would not readily be construed as giving force or immunity to what might be regarded as the peripheral activities. Support for that view is derived from the history of the provisions.
May we hand up to your Honours the sections that preceded section 19. I think I may have said before the luncheon adjournment that section 19 was, in substance, an orphan. It had within the water legislation a predecessor in a much more limited form and it is helpful to have a look at that. The first should be the Water (Amendment) Act 1930 .
KIRBY J: Is that still in force?
MR DONOHOE: It has been substantially overtaken by section 12; whether it has any residual force, I will come to in a moment, if I may. The provisions of section 4A conferred "The right to the use and flow and to the control of the water in all rivers". That is substantially the same language as is found in section 12 of the 1986 Act. In 1955 that was amended in a way that is not material and in 1966 it was amended by the introduction of section 2(c), which is set forth in the pages your Honours have in the bundle. Section 4A was deleted in 1986 - that is the last page, your Honour; that is the answer to your Honour's question - with the introduction of the Water Administration Act 1986 . What emerges from an examination of those provisions is that the immunity introduced in 1966 was linked to the section 12 power, or rather, right.
GLEESON CJ: Well, it was linked to "The right to the use and flow and to the control of the water".
MR DONOHOE: Yes. That is what, in section (2C), the "said right" means. The ultimate resolution of the question that your Honour Justice Kirby asked me, we respectfully submit is this: that when section 19 was introduced in 1986, it had the general words of immunity; that is to say:
with respect to loss or damage suffered as a consequence of the exercise of a function -
and then there was included, to remove any ambiguity, a reference to what we would submit is the core activity, the exercise of a power to release water from such works.
The last matter on which I wish to address the Court in relation to matters raised by my learned friend, just to give a reference to where the questions were treated as questions of law to be determined by the judge, and that is in volume 5, page 1072, lines 20 to 30, where his Honour said because he had formed a view against our contentions on the questions of law, he proposed to deal with them immediately.
May I come now to - - -
KIRBY J: There is no challenge to the way in which that matter was handled at the trial?
MR DONOHOE: No. May I come now to the oral submissions in relation to the matters in the notice of contention. May I reassure your Honour the Chief Justice my approach will be to supplement them on the assumption that the written submissions have been read and not to - - -
GLEESON CJ: Thank you. Just before you pass from the first point, I notice that the old section 4A which defined the right that was then qualified by the immunity included "protection from pollution" of the water.
MR DONOHOE: Yes.
GLEESON CJ: It was a right to:
enter any land and take measures as may be thought fit, or as may be prescribed for the conservation and supply of such water as aforesaid and its more equal distribution and beneficial use, and its protection from pollution -
MR DONOHOE: Yes, those words are substantially the same as those now found in 12(3)(c) and (b).
GLEESON CJ: The right which was qualified by the immunity granted by the 1966 Act was, at least in large part, it appears, a right to enter people's land and do various things without their permission for the purpose of discharging the responsibilities of the Commission. Yes?
MR DONOHOE: May we take your Honours briefly to the decision of this Court in Pyrenees Shire Council v Day [1998] HCA 3; 192 CLR 330. In paragraph 108 Justice McHugh said this:
Second, the public authority must know or ought to know that the plaintiff will suffer damage unless care is taken. A public authority incurs no liability under the general reliance doctrine -
he was there dealing with that -
unless it has knowledge or imputed knowledge of the danger.
Justice Gummow at paragraph 168 said about halfway through that paragraph after the footnote (194):
the touchstone of what I hold to be its duty was the Shire's measure of control of the situation including its knowledge, not shared by Mr and Mrs Stamatopoulos or by the Days, that, if the situation were not remedied, the possibility of fire was great and damage to the whole row of shops might ensue. The Shire had a duty of care "to safeguard others from a grave danger of serious harm", in circumstances where it was "responsible for its continued existence and [was] aware of the likelihood of others coming into proximity of the danger and [had] the means of preventing it or of averting the danger or of bringing it to their knowledge".
Finally Justice Kirby at paragraph 244, in relation to the first of his three tests, wrote this:
1. Was it reasonably foreseeable to the alleged wrong-doer that particular conduct or an omission on its part would be likely to cause harm to the person who has suffered damage or a person in the same position?
Against those statements of principle, what we seek to do is analyse carefully what was the knowledge, or what ought to have been the knowledge, of the authority in the relevant period. The relevant period was between November 1991 and October 1992. In that period, the respondent did not know of a danger that the water was contaminated. On the contrary, it had responded to a suspicion of poison in the water by carrying out comprehensive tests which revealed no contaminant.
Annexed next to our written submissions is a document entitled "Chronology of Testing and Inspection of Events", and may I take your Honours to that document. The left-hand column is headed "Serial" and then there is a number attributed to each entry. The first sign of difficulty was on 4 November 1991. In item 4, Gavin Lamb, who was the district agronomist, could not, at that stage, see anything suggesting poison. In item 10 - this was on the first occasion when any information was conveyed to the respondent that there might be a problem, namely, a Saturday, it immediately responded sending out Mr Kelly who took various readings. And it is important to note, in item 14, that he went to the Ainsworth property and inspected the crop there and that he took, in item 15, various tests there, to ascertain oxygen content and temperature and Ph level.
CALLINAN J: What does that mean, "damage"? Is it "damage was deeper into rice paddocks"?
MR DONOHOE: Yes.
CALLINAN J: What does that mean?
MR DONOHOE: There was less damage at the inlet and more damage further into the paddock.
CALLINAN J: What sort of damage?
MR DONOHOE: The plants were showing signs of dying.
CALLINAN J: Were they becoming yellow, were they?
MR DONOHOE: Yes.
KIRBY J: I am sorry to return to my earlier theme, but you are approaching this on a footing that you are arguing the rationale inference from the evidence, but this was a verdict jury, and therefore we have to approach it on the question, as I understand it, that either there was no evidence or that the decision was one to which no reasonable jury could properly come. If there was evidence of any kind, then it is for the jury to assess it, unless they reach an irrational decision.
MR DONOHOE: Indeed, but I am at the stage of examining evidence that could give rise to a duty of care and that evidence depends upon knowledge or the knowledge that ought to have been acquired before the damage in respect of which claim was made occurred.
KIRBY J: But the evaluation of this evidence is a matter entirely for the jury. They can pick and choose and take little bits and reject little bits and accept some witnesses, reject others, that is their province.
MR DONOHOE: Yes, indeed. The thrust of this evidence is that - accepting the way your Honour has suggested it should be approached, there was nothing to cause alarm. They looked and looked and looked and found nothing.
KIRBY J: You say there was no evidence upon which the jury could conclude that your client had knowledge of the existence of the contaminant? None at all?
MR DONOHOE: There was nothing. Yes, your Honour, we say that. There was crop damage and more precisely, I think I should I should put it this way, there was certainly evidence that the crop had been damaged and some people, whom the jury could accept, thought it was herbicide damage, later on with the benefit of later tests. Mr Hutchins gave evidence, and they are entitled to accept it, that the Ainsworth crop damage was herbicide damage but the authority - - -
KIRBY J: But if there were conflicting evidence then it is for the jury to assess that. You must approach the matter, as I understand the principles, on the footing that every matter which was favourable to the present appellant was decided in their favour on issues of fact.
MR DONOHOE: Yes, I accept that, your Honour.
GLEESON CJ: You accept that, do you? I understand that would be the case if the jury had entered a verdict for the plaintiff but where is the verdict for the plaintiff? The only decisions the jury made, unless I am mistaken, are those reflected on page 1071 of the appeal book.
MR DONOHOE: Yes.
GLEESON CJ: Well, then, what is the jury's decision? The jury just answered some questions.
MR DONOHOE: Yes.
CALLINAN J: But on an evaluation of the evidence, in order to answer those questions, the - - -
MR DONOHOE: Yes.
GLEESON CJ: Now, what is the question or what is the answer to the question that you are challenging in this argument?
MR DONOHOE: In this argument we are advancing the proposition that on all of the findings made by the jury and all of the evidence before the jury there was no basis upon which a duty arose on the part of the respondent.
GLEESON CJ: No, I am asking an anterior procedural question. This is not a case in which the jury entered a verdict for the plaintiffs, unless I am mistaken.
MR DONOHOE: Your Honour is not mistaken.
GLEESON CJ: All right. Well, then, there were a series of questions addressed to the jury. They were not asked whether the plaintiff owed a duty of care to the defendants. What is the question set out on page 1071, the answer to which you are now seeking to contradict?
MR DONOHOE: At this stage of the submission I am not challenging those answers.
GLEESON CJ: So I thought. Well, then, who are you disagreeing with, the judge or the jury?
MR DONOHOE: The judge. I am obliged to your Honour, it is the judge.
GLEESON CJ: Where do we find the decision of the judge with which you are disagreeing?
MR DONOHOE: Only in the rejection of our arguments.
GLEESON CJ: You mean you moved for a verdict by direction?
MR DONOHOE: No, we moved for a judgment notwithstanding the verdict. We moved in that way.
KIRBY J: You say "notwithstanding the verdict". That implies there was a verdict.
MR DONOHOE: Well, the answers to these questions. We moved for judgment in our favour notwithstanding.
KIRBY J: Did the judge enter judgment or did the judge treat the answers to these questions as the entry by the jury of a verdict in favour of the appellants?
MR DONOHOE: The material appears at 1074.
GLEESON CJ: You are seeking to persuade us at the moment that there was no duty of care.
MR DONOHOE: Yes.
GLEESON CJ: Who, at this trial, decided that there was a duty of care and by what process of decision making?
MR DONOHOE: His Honour made that decision.
GLEESON CJ: Where?
GUMMOW J: Page 1074, line 36.
MR DONOHOE: Yes, 1074.
KIRBY J: Whereabouts?
MR DONOHOE: At the top:
I would point out that in addition to matters relating to that the jury made a specific finding in relation to failure to warn.....I see nothing in the statute which would exclude the neighbourly or proximal duty which the deliverer of water to a customer ought to be entitled to rely upon.
I have noted the submissions that are made concerning various remarks in the authorities concerning whether or not the statutory authority adopts practices or not. It does not seem to me it is necessary to make any specific findings of fact.
KIRBY J: Yes, but if you look at about line 39 it says:
For those short reasons I do not believe that any of the defences raised should prevail against the plaintiff having -
the -
judgment pursuant to the jury's verdict.
GLEESON CJ: No, having "a judgment pursuant to the jury's verdict".
MR DONOHOE: Yes.
KIRBY J: But it is pursuant to the jury's verdict, not pursuant to the jury's answer to the questions. It looks as though his Honour was treating the answer to the questions as equivalent to a verdict in favour of the plaintiffs.
MR DONOHOE: Your Honour, if you go to 1072:
Counsel's submission concerning defences raised as matters of law -
GLEESON CJ: Yes. Perhaps the summing up ought to contain the answer to this question. We just need to understand what it is you are quarrelling with and you were in the process of acceding to a proposition that you were seeking to set aside a verdict of a jury when you were asked where was the verdict.
MR DONOHOE: Yes.
GLEESON CJ: You are now addressing the question of whether or not the plaintiffs were owed by the defendant a duty of care.
MR DONOHOE: Yes.
GLEESON CJ: If the jury decided that question and, just for the moment I cannot see where they decided it, but if they decided it that must have been pursuant to a summing up of the trial judge in which he instructed them on the principles of law and guided them on the facts relevant to that decision. Did the summing up cover this issue?
KIRBY J: I see at page 169 his Honour said, "Would you please retire and consider your verdict". That is at line 14. And the question immediately arises, what business would it be of the jury to be assessing damages, if it did not find in favour of the appellants?
GUMMOW J: At 1040, line 41, is it not? They thought he was putting to them the four issues involved in negligence.
McHUGH J: But was the issue ever raised, was the point of it taken?
KIRBY J: It does not look as though this problem was ever specifically raised, either at the time of the trial or in the Court of Appeal, but I am just trying to get the category that we have got to attach to the jury, so we know the jury's "verdict", so we know how we are to approach the review of the facts.
MR DONOHOE: Yes.
KIRBY J: This trial was conducted two years before the High Court gave judgment in Pyrenees Shire Council v Day.
MR DONOHOE: Yes.
KIRBY J: So, if I could come back to the question Justice McHugh asked you, was this issue ever raised at the trial?
MR DONOHOE: Yes. The existence of a Heyman duty was specifically raised with the trial judge.
McHUGH J: But, in what way?
MR DONOHOE: We, by way of defence, said that there was no duty in all the circumstances.
McHUGH J: Well then, as a matter of law or as a matter of fact?
MR DONOHOE: As a matter of law.
McHUGH J: If there was no evidence at all upon which the jury could find for the plaintiff?
MR DONOHOE: On the issue of duty, yes.
GLEESON CJ: It could not, by any chance be the case, could it, that the trial was conducted on the assumption that there being damage to the property of the plaintiffs, if there was foreseeability of a risk of damage to the property for the plaintiffs, there was a duty of care in the defendant, subject to section 19? That could not be the way the case was conducted at first instance, could it?
MR DONOHOE: The way in which the trial judge summed up on this issue gives some insight at page 1038.
GLEESON CJ: And the way in which he framed the questions is pretty suggestive too, is it not?
MR DONOHOE: And there is no doubt that we - perhaps I should be more specific.
McHUGH J: I do not recall seeing any statement about a duty of care in the summing up; I may be wrong.
MR DONOHOE: Page 1038, your Honour.
McHUGH J: I see, yes.
KIRBY J: His Honour was not making the mistake that foreseeability was enough. It is fundamental that foreseeability is not enough - it is necessary but not enough. His Honour was referring to proximity and he appears to be charging the jury that they have to consider whether there is a duty of care, "but it's just not one of the specific questions unless you imply that you don't get to the money unless you find the duty of care which I've told you exists". That would make your answer to my earlier question, in order to work out what the category of review we have to apply is, correct, that the case was conducted on the footing that the jury's answers to the particular questions, including the one of quantification, was in the context of a trial which was conducted on the basis that if they answered those questions favourable to the plaintiff, it would be taken that the jury was finding that there was a duty of care, a breach of the duty and a general verdict for the plaintiff.
MR DONOHOE: No, we made clear that we contended for a proposition of law that was not suitable to be determined by the jury that, in the case of this statutory authority, no duty of care arose as a matter of law.
KIRBY J: I do not care which way it is. I just want to know what category of law I am to apply. If the judge is taken to have reached the conclusion by reaching his judgment, then there are different rules that you apply for reviewing the facts than if it is the jury, because the jury can pick and choose. We have to approach it on the footing that they decided everything favourable to the appellants and everything against you.
GLEESON CJ: If you look at the directions in the summing up on pages 1039 to 1040, what the judge told them constituted the elements of a cause of action in the plaintiffs did not cover the point that you are now raising. He said at page 1039 line 38 that the first thing the plaintiffs have to prove is "that there was a foreseeable risk" and he asked them a question about it.
The second thing that the plaintiff had to prove is that the loss or damage.....was able to be prevented -
That turned on whether they had known that there was toxicity in the water, then they "could have taken steps to avoid the damage". Where did he ask the question about that?
GUMMOW J: I thought the point of your case was really question 1, that is to say 1052, the judge says it is your case, the defendant's case, that the crop was not damaged because there was no "application of toxins through the water system at all", and that led to question 1.
MR DONOHOE: Certainly, that was the question of causation, but on the question of a duty, it was our case that there was no duty. Mere proximity did not give rise to a duty. Mere foreseeability did not give rise to a duty.
GLEESON CJ: On pages 1039 to 1040, he states the elements of the plaintiffs' cause of action, is that right?
MR DONOHOE: Yes.
GLEESON CJ: Which is the one to which you are addressing argument at the moment?
MR DONOHOE: That there was a foreseeable risk.
GLEESON CJ: Well, that is covered by question 2. Are you equating the question whether there was a foreseeable risk with the question whether there was a duty of care?
MR DONOHOE: No. What we are saying - - -
GLEESON CJ: I thought you were addressing to us an argument about the duty of care.
MR DONOHOE: Yes. What we are endeavouring to say is that in the circumstance of a relationship such as this, no duty can arise unless there is a foreseeability of injury to the person to whom the statutory authority stands in a particular relationship defined by the statute.
GLEESON CJ: Could I ask a slightly different question: was any objection taken to this summing up?
MR DONOHOE: We asked for supplementary directions, or supplementary summing up.
McHUGH J: They all seem to be about reliance.
MR DONOHOE: At 1063, we ask for a direction about reliance in the context of the failure to warn count or particular.
KIRBY J: Mr Donohoe, going back to my earlier question, question No 2 is addressed to the issue of foreseeability.
MR DONOHOE: Yes.
KIRBY J: That is a special verdict, as it might once have been called, or an answer to a question. Leave aside these complications, because it appears to be a sort of a hybrid of some kind, but it is not a matter that has been raised in the grounds of appeal, and not argued, and I am not keen to press into territory. We have enough problems. If we take 2 as equivalent to a special verdict, and if you are arguing about foreseeability, then at least so far as 2 is concerned and the answer the jury gave to that, we would have to deal with that on the footing that I mentioned earlier, would we not? That is to say, that in approaching their answer to that and their special verdict on that point, it has to be evaluated on the footing that they were entitled to decide every contested issue of fact in a way that was unfavourable to your client. And unless the end result is perverse, then we cannot disturb it.
MR DONOHOE: I accept that.
KIRBY J: Even though on a rational examination, we, as judges, could come to a different view.
MR DONOHOE: Yes.
KIRBY J: Well, does that allow us to put to one side the procedural complications that arise from the way his Honour charged the jury, and the apparent defect in the questions and the taking of the general verdict, and simply concentrate on the special verdict on question No 2, and approach it in the traditional way, that you have to establish that there is no foundation for the jury's answer to that question?
MR DONOHOE: Yes. Could I - - -
McHUGH J: What was the purpose of these questions? I am afraid I have not the faintest idea why they were ever asked and what they have to do with the proceedings.
MR DONOHOE: The questions posed by his Honour were motivated, I feel confident, by a desire to assist if there should be an appeal, to enable the basis for the jury's finding on matters of fact to be discriminated from discrete matters of law for the judge, and for an appellate court.
GLEESON CJ: I failed to take a note of it, I am sorry, but what was the power the judge was exercising to ask these questions?
MR DONOHOE: Section 91.
GLEESON CJ: Section 91 of the Supreme Court Act 1910 .
MR DONOHOE: The Supreme Court Act, and Part 34, rule 8A.
McHUGH J: Would you just read 91 and remind me of it again.
MR DONOHOE: Section 90, I am sorry, your Honour:
It shall be the duty of a jury to answer any question of fact that may be left to the jury by the presiding Judge at the trial.
KIRBY J: That overcomes the old common law rule that a judge may not interrogate a jury as to findings of the fact.
MR DONOHOE: Yes. May I also draw attention to the fact - - -
GLEESON CJ: Could we just have that red book for a moment please. Do you mind? You do not have obscenities or offensive remarks about judges scrawled in it?
MR DONOHOE: As it belongs to the Library, I could hardly exercise - - -
GLEESON CJ: Most certainly it will not have.
KIRBY J: It is nice to see that old volume again.
MR DONOHOE: Yes.
GLEESON CJ: Thank you.
MR DONOHOE: May I draw attention to the fact that I drew attention to Lutz's Case and Heyman, and that is recorded as part of oral submissions on questions of law at 1072 to 1073. His Honour dealt with them very quickly and briefly, but they were certainly raised.
KIRBY J: And issues of special reliance, so called, were debated, were they not?
MR DONOHOE: They were.
KIRBY J: I think the course that his Honour adopted is one which is quite commonly taken now, taking special verdicts or answers to particular questions.
MR DONOHOE: It is certainly something that the editorial notes would suggest is to be encouraged, though I have to confess it does not seem to have been of very great assistance on this occasion.
McHUGH J: But ordinarily, in practice, the questions asked: was the defendant negligent; was the plaintiff guilty of contributory negligence, et cetera, et cetera, and questions like that, and I can understand it if there is an argument about disputed facts which the judge wants for the purpose of making some conclusion about the law. But take Question 2, what does that mean:
Between November 1991 and 10th October 1992 was it foreseeable -
what has foreseeability got to do with it. I thought "reasonable foreseeability" was the test. That is a question that is a bit stacked against you, is it not?
MR DONOHOE: Yes.
KIRBY J: But you did not take that point?
MR DONOHOE: We put up questions, and his Honour rejected them and said these were the questions that he was going to put, and I got some amendment on a different point.
KIRBY J: An advocate has got to have a few successes, but, did his Honour explain "reasonable foreseeability" in his exposition of "foreseeability"? It is at 1039, line 36, "there was a foreseeable risk".
MR DONOHOE: Yes.
KIRBY J: Although, he does go on to say that it is to be judged by how "the defendant, behaved in a reasonable fashion", so, that might be enough.
McHUGH J: Well, that seems to be on the preventability issue:
likely to fall upon the plaintiff unless it, the defendant, behaved in a reasonable fashion.
Not the foreseeability issue. He goes on to prevention on the next page.
KIRBY J: What is your answer to the Chief Justice's question, that is to say, to what verdict or judgment are you directing your present attack, as stated in the notice of contention?
MR DONOHOE: It is the rejection by his Honour and his rulings that led to his conclusion at 1074:
For those short reasons I do not believe that any of the defences raised should prevail against the plaintiff having a judgment pursuant to the jury's verdict.
So, I challenge his Honour's rejection of our first submission that there was no duty on this public authority properly applying Heyman.
KIRBY J: But what did he mean by "pursuant to the jury's verdict"? What did he mean by that?
MR DONOHOE: Well, obviously damages. That is all be could have meant.
KIRBY J: Can we read that as meaning "pursuant to what I take to be the jury's general verdict inherent to the answers to the specific questions which I posed to them"?
MR DONOHOE: "Pursuant to the jury's findings of fact, special findings, I adjudge that the plaintiff is entitled to recover the verdict assessed by the jury in answer to the last question."
GLEESON CJ: Where do we find him entering judgment for the plaintiff?
MR DONOHOE: At 1075, line 11.
KIRBY J: But it does purport to be a judgment pursuant to the jury's verdict, as at 1074, line 39?
MR DONOHOE: Yes.
KIRBY J: I wish I had not raised the point earlier because I was only trying to get clear the way in which we have to approach your notice of contention but I think, speaking for myself, I am inclined to treat it as if everybody proceeded on the basis that inherent in the answers to the special questions was a general verdict in favour of the plaintiffs and that pursuant to that his Honour entered the judgment pursuant to that general verdict, to the jury's verdict, and rejected the obstacle which was said to lie in the path which was the operation of section 19.
MR DONOHOE: And the absence of duty and the absence of reliance in relation to the failure to warn.
McHUGH J: Is there a power in New South Wales that now allows the judge to enter a verdict? If you have a jury trial it is the jury that brings in the verdict for one party or the other. Section 90 may empower the judge to direct the jury to answer questions but where does the judge get the power to enter a verdict?
MR DONOHOE: What he purported to do was enter judgment in accordance with the verdict.
KIRBY J: So he obviously assumed that nobody jumped up and screamed at the time and said there has been no verdict.
MR DONOHOE: No.
KIRBY J: There have been answers to questions.
MR DONOHOE: That is so, your Honour.
KIRBY J: So I think you must be fixed with that. I think it would be quite unjust now to everybody, including your client, to try to unravel this and to say there was no verdict. Everyone treated it as a verdict. You do not raise that point. You did not in the Court of Appeal and you do not before this Court. I think it would be very unfair to allow that point to be raised now, speaking only for myself.
McHUGH J: I think there is a judgment in this Court in the 1930s. It may be McDonnell & East v McGregor in which, I think, Justice Dixon said that the judge has got power to enter judgment just from the questions without any verdict.
CALLINAN J: Mr Donohoe, you said whoever was representing the respondent said everything that was required to be said on the sufficiency of the evidence and on points of law before the trial judge gave judgment. Is that not right?
MR DONOHOE: Yes, your Honour.
KIRBY J: There are a couple of cases in the Court of Appeal too in the late 80s where Justice McHugh and I sat in them.
McHUGH J: Otis Elevators v Zitis (1984) New South Wales Law Reports, I think.
KIRBY J: There were two of them about the same time, I think. They referred to the proper procedure under section 91.
GLEESON CJ: You see the jury being recorded as answering the questions on pages 1069 and 1070.
McHUGH J: Here is a passage in that judgment of McDonnell & East 56 CLR 56 which helps you, Mr Donohoe. Mr Justice Dixon said:
When a jury answers specific questions and is discharged without giving a general verdict, the jury and the parties are, in the absence of express objection, taken to have authorized the court to enter such verdict and consequent judgment as flows in law from the answers which are given.
GLEESON CJ: Well, that is precisely in point here, is it not?
MR DONOHOE: Yes.
GLEESON CJ: If you look at 1069 and 1070 they answered questions and they were discharged without giving a verdict.
MR DONOHOE: Yes. In the light of my indication, would it be convenient if I now just identified the items that I was going to take your Honours to in the schedule to the written submissions?
GLEESON CJ: Yes.
KIRBY J: But can I say that you do so against the background now in the light of that principle that the jury, in the absence of your protest, must be taken to have determined this issue against your client.
MR DONOHOE: They determined the questions - - -
KIRBY J: No, because you sat quietly by, the judge then proceeded to enter a general verdict.
MR DONOHOE: No, what we did was to say notwithstanding those answers, we should have judgment, and he - - -
KIRBY J: But that was on section 19, was it not?
MR DONOHOE: And on Heyman - that appears at pages 1072 to 1073.
GLEESON CJ: So, what you are challenging at this point in your argument is the judge's refusal to enter judgment for the defendant, notwithstanding the answers given by the jury to the questions?
MR DONOHOE: Yes.
KIRBY J: So that really means that you are saying there was no evidence on which the jury could find a general verdict which will otherwise pass into judgment?
MR DONOHOE: No, we were saying on those findings and on the law as it stood, as a matter of law we were entitled - those findings being, as they stood - - -
KIRBY J: But that can only be so - - -
MR DONOHOE: That is to say, accepting that it was foreseeable that the plaintiffs' crop could be damaged by the application of contaminants, I have to accept that against me.
KIRBY J: But if there are still factual matters to be argued, and you are now seeking to argue before us factual matters, logically, if they remained outstanding, they would be matters that would have to be sent back to the jury for a further answer or for a general verdict but, instead of seeking that, you purported to ask the judge, who is the tribunal of law in this trial only, to answer factual matters, and that is just not his province.
MR DONOHOE: Because the fact that the trial was by a jury, it was not his province?
KIRBY J: Yes.
MR DONOHOE: Those matters of fact that related to breach of duty, I concede that that is so, but whether the facts could give rise to a duty of care was a question of law, in our submission.
McHUGH J: Well, it all depends. There is some misunderstanding about this question of duty of care and in what circumstances it is a matter of law and what is a matter of fact. In Caledonian Collieries Ltd v Speirs (1956-1957) 97 CLR 204 at page 220, Chief Justice Dixon said:
It has been contended before us that it was for the judge to decide as a matter of law whether the appellant was under any duty of care, and if so what that duty was. It was, of course, for the judge to tell the jury what conclusions of fact they must reach before they could be entitled to treat the appellant as under a duty of care to users of the level crossing, and to describe in abstract terms the standard of that duty if it existed.
And his Honour then goes on to cite a passage from the judgment of Chief Justice Jordan. So it is only when there is no evidence upon which it could be held that there was a duty of care that you would be entitled to have the judge deal with it as a matter of law but, if it was arguable either way, then it was a jury question, subject to proper directions from the judge, as Chief Justice Gleeson indicated to you earlier. And you have to go so far as to say there was no evidence at all upon which this jury could find for the plaintiff. In other words, at the close of the plaintiffs' case or at the close of your own case, you could have got up and asked for a verdict to be directed.
MR DONOHOE: We certainly adopt that level in relation to the issue of causation and the whole of our written submissions are cast against that burden.
KIRBY J: So you accept - and this is where it all began about half an hour ago - that you have to establish the proposition and that we approach your submissions on the notice of contention in the light of the proposition that you demonstrate that there was no evidence on which the jury could find causation?
MR DONOHOE: Or the evidence in its totality so preponderated against the conclusion that it was perverse.
McHUGH J: That is a new trial point.
MR DONOHOE: Yes, and that is the way we have framed it in the written submissions on the issue of causation.
KIRBY J: No evidence is not a new trial point, is it? That is a verdict point.
McHUGH J: That is a verdict point.
KIRBY J: But to preponderate - - -
McHUGH J: Is a new trial point.
KIRBY J: That is a Demir v Precision Plastics case.
MR DONOHOE: Yes, and we do ask for a new trial in our written submissions.
CALLINAN J: Mr Donohoe, you said that on the answers to the questions and on the proper application of the law there should have been a verdict or judgment entered for you, is that correct?
MR DONOHOE: yes.
CALLINAN J: All of the questions were answered affirmatively in favour of the appellants.
MR DONOHOE: Yes.
CALLINAN J: Then all of the questions were irrelevant because you would have won if the answers were all negative. You say you should win but the answers are affirmative to the appellants. So none of the questions should have been asked because they make no contribution on your argument.
MR DONOHOE: On our argument - take, for example, section 19. It did not matter if all of them were answered in the affirmative. We still submitted that as a matter of law that is an illustration of how - do I understand your Honour correctly?
CALLINAN J: Yes, I think so.
McHUGH J: That is why I said to you earlier I did not understand the purpose of these questions. They did not seem to me to lead anywhere.
MR DONOHOE: With the benefit of hindsight, I think your Honour's assessment may very well be correct. May I explain the origin of them. This was a case appreciated to contain a number of difficult questions of fact and of law and yet it had been ordered to be tried by a jury. At a very early stage it was anticipated that it may be necessary to have some explanation of factual matters so that discrete questions, particularly the section 19 point, could be taken on appeal and if the factual substratum had been resolved by the jury, the discrete question could be taken up on appeal and if - - -
McHUGH J: I can understand it if there were questions like: "Was the defendant negligent? If so, what was the negligent act or omission?" "Was the defendant exercising a function? What was it?". That would give rise to arguments of law but none of these questions seem to touch any of these issues, duty of care or section 19.
MR DONOHOE: Well , that is so, your Honour.
McHUGH J: In fact, one of them, question 3, is it not, seems to assume that there was a duty of care:
Did the defendant fail to exercise reasonable care in any one of the following ways.
It seemed to imply that there was a duty in respect of those three matters.
KIRBY J: Justice Glass, who knew a lot about these things, used to say we work with imperfect materials.
MR DONOHOE: May I take your Honours briefly - we accept the high standard. We invite your Honours attention to the following items in the chronology, and I will just enumerate them. Would your Honours please add these references in 14. Volume 2, 228D, 584U; 15. On page 2, your Honours might wish to note that WEL is not an - - -
McHUGH J: You mentioned 15, are you going to add a reference to 15?
MR DONOHOE: We have a reference there and I do not need to add to it, your Honour.
McHUGH J: I see.
MR DONOHOE: I was going to explain that, on the following pages, there is an abbreviation WEL, which stands for Water Environmental Laboratory. Would your Honours please note item 32 on that page. On the following page, 38, 42, 44; page 4: 59, 61 and 62, 66 and add a reference page 642. On page 5, 80, 81, 82, 91 through to 97, 104 and 105, 113 and 115.
KIRBY J: Are these the most important factual elements?
MR DONOHOE: They are, and what they disclose is that there was testing that the authority had no knowledge of a cause. The testing for herbicides produced no abnormal readings, that there was one particular reading that mentioned atrazine and it was 5,000 times less than the permitted levels and was described as insignificant. So that when the damage occurred, I should also add - we have also included references to what the consultant for the appellant was doing, and he was not doing any better in terms of finding that the water had caused damage. Because your Honours will appreciate that to fix liability on the respondent, it was necessary to say that the events of 1991 had something to do with the events of 1992 and the Channel was implicated.
Now that required some evidence about, if I may put it neutrally, how the Channel was implicated. There was, ultimately, a theory produced at the trial, but at the critical time, no one had any evidence that the Channel and the supposedly poisoned water in the Channel was the culprit. And, indeed, until shortly before the trial, the expert called by the plaintiff thought that the source of contamination might be 100 kilometres upstream, that is as the crow flies. So, that we - - -
KIRBY J: How would that be relevant to reasonable foreseeability and causation of the damage?
MR DONOHOE: Because, if as we sought to extract from Pyrenees, the duty arises when the public authority does or should know of a danger, for example, with the fireplace in Pyrenees, then one looks at the evidence to see what it was the authority in fact knew, and this evidence discloses it knew nothing or, alternatively, should have known and then it is relevant to see what the other experts knew and they were, at that stage, equally in the dark about the circumstances.
McHUGH J: Your general proposition maybe right but I do not think Pyrenees has anything to do with it at all, has it? Pyrenees is a question as to where a defendant corporation was negligent in failing to take steps to avoid somebody else's negligence which they had nothing to do with but here you were a supplier of water. Your duty arises from the fact that you supply water.
MR DONOHOE: But we had nothing - - -
McHUGH J: A question arises, though, as to whether or not there was anything about the supply of your water that would provide or require you to take some steps.
MR DONOHOE: Yes. That is the point we were seeking to get to. We accept that we are a supplier of water and I will not waste this Court's time by saying that that was not - - -
McHUGH J: But does not that, itself, imply a duty of care? A duty of care arises from the fact that you are a supplier of water. The question is whether there is any evidence of your breach of your duty. That depends upon whether or not there was a risk from your supply that was reasonably foreseeable and which you could have avoided by the exercise of reasonable care.
MR DONOHOE: I accept that the fact that we are a supplier is a strong factor in finding a sufficient relationship to give rise to a duty of care.
McHUGH J: Was that not the way the judge put it? I thought he did.
MR DONOHOE: Yes, I think that is so.
McHUGH J: Yes, it is. At 1039, line 19:
But the relevant duty upon which this case is founded is that which is imposed upon the defendant; that is to say, the supplier of water.
KIRBY J: So, you accept that you supply the water, you owe a duty of care but that you were not in breach because even with all the information that you had at the time none of it was such as to put you on notice or to alert you or to raise a risk that would propel you into checking?
MR DONOHOE: Your Honours asked two questions. I do not formally concede that we had a duty but I see the way in which it is put against me on supplier but I do, with the utmost respect, firmly submit that there was nothing that suggested that this water was dangerous or what we could do but critically, there was nothing to explain how the - assuming for the moment that there was contaminant somewhere in this water, that there was any causation in fact between that apparent contaminant and the crop damage.
In other words, the critical evidence was that somehow a contaminant had lain in the Channel for a year and somehow, unexplained, it had entered into the dam of the appellant and the appellant attempted to explain it at trial because it bore the onus of proving how the damage was caused. It advanced the theory, and this was essentially the only evidence of causation advanced, that what happened was that at the time contaminant flowed downstream and hit Ainsworth, it flowed past Puntoriero's dam and went into Puntoriero's dam and lay on the bed of that dam.
That was an attractive theory because it would be relatively undisturbed and connected it temporarily exactly with the damage to Ainsworth but that was based upon an assumption of fact which was proved to be wrong, namely, that water flowed in that period and the records show that it had not. Now, once that was gone there was no basis in the evidence, no basis, we respectfully submit, to explain how, as a matter of causation, in fact, the damage had been suffered.
McHUGH J: This is where you have got to be very careful when you have a jury. You see you say it went because there was evidence in the records that showed that water did not flow but that is a jury issue. Maybe the jury did not accept that evidence. There might be a reason. It might go to the question of perversity if the evidence is indisputable but it does not go to a no evidence point.
MR DONOHOE: I accept that. May I say on the perversity point that counsel for the appellant abandoned it as an explanation. I know that is not conclusive. The jury may very well have said, "All these records are forgeries. The Channel attendant's daybook which showed no flow of water, we do not accept that evidence." I appreciate, technically, that is open so it is a perversity point and that is on the causation. The onus was on the - - -
McHUGH J: Well, it is not really a perversity point if your opponent conceded. If your proponent abandoned it - - -
MR DONOHOE: He did. He did not address the jury to that effect. He advanced a completely new theory based on the specific gravity of Atrazine being greater than one so therefore it sank and he had to do that because the only way of connecting it then was that these impurities had lain in the sediments at the bed of this Channel for a year and somehow, on the occasion of irrigating, rose from the bed, toxic after all this immersion, and did the damage.
McHUGH J: Mr Foord has always been very flexible with the way he conducts his case and in the Otis Case which came up here he changed his case completely after the close of the evidence.
MR DONOHOE: He was resourceful, I have to concede.
GLEESON CJ: What was the defence case on causation?
MR DONOHOE: On causation, the defence case was that there was nothing in the water that caused damage and that, essentially, it was bad husbandry. There was not enough fertiliser supplied to this crop.
GLEESON CJ: What exactly was the damage again?
MR DONOHOE: Putting aside technical things, a number of the plants died, a number wilted and an assessment was made that as a crop it was not worth attempting to cultivate and sell, and it was just ploughed over or taken up.
GLEESON CJ: Yes. So the defence case was that that resulted from the fact that the Puntorieros were bad farmers?
MR DONOHOE: Had farmed badly or, importantly, had not put on enough fertiliser and the evidence was very strong that they had financial difficulties.
McHUGH J: But what about these other farmers? They also suffered from this as well. Were they bad farmers as well?
MR DONOHOE: But there was evidence that a survey of the 20 users of the Cudgel revealed that the only two incidents, the only recollection was that in 1991 the Ainsworths were one of all of the farmers who suffered. No one else suffered any problems and in 1992 the Puntorieros suffered these problems and no one else suffered them; and there was evidence in relation to the Ainsworth and Donaldson properties that they had algae problems. There is plenty of evidence that the jury did not have to accept.
GLEESON CJ: You must be directing this to the jury's answer to question 1?
MR DONOHOE: Yes.
GLEESON CJ: Which really does support the proposition, does it not, that the issues that were left to the jury by the judge were issues of causation and foreseeability and damage.
MR DONOHOE: Yes.
GLEESON CJ: And he.....because he thought that the duty of a supplier of water, in legal terms, was not materially different from the duty of a supplier of ginger beer, and there is a case in point.
MR DONOHOE: Yes, I seem to recall that case. But he accepted, or at least I think I recall it and it is clear from the reference to Heyman, that we were asserting that this was not a simple case of a supplier of ginger beer, and that we had the peculiar question of a public authority with no prima facie, no duty to act, and that you had to find some special reliance or, at that stage, general reliance or something - - -
McHUGH J: But why did you have to? You are a supplier of water, but in Donoghue v Stevenson, you do not have to place - there is no question of reliance, you are a supplier. That is why I said to you I do not think Pyrenees has anything to do with it.
MR DONOHOE: Why Pyrenees has nothing to do with it?
McHUGH J: Yes.
GLEESON CJ: You will find the judge expressing the duty in straight Donoghue v Stevenson terms on page 1074, line 15, when he is doing it in the context of asking how section 19 applies. That looks to be the reason he did not leave the question of the jury about the duty of care, but it is causation that you are on now.
MR DONOHOE: Yes.
GLEESON CJ: Where do we find the trial judge dealing with this argument, on your motion for judgment notwithstanding the verdict?
MR DONOHOE: Page 1072.
McHUGH J: But they do not seem to have much to do with it, really, do they? I mean, like Lutz it was a case of general reliance. Heyman is a case about economic loss over a subsequent purchaser of premises and Shaddock is a negligent misstatement case. The judge made it very plain in his summing up to the jury at 1038 that this was a Donoghue v Stevenson case, proximity. He told the jury:
In this case, the proximity between the Puntorieros and the defendant is said to be their relative positions as a supplier of water to irrigation farmers within this district, on the one hand, and as a potential user of that water on the other.
Then he says at 1039:
The duty is imposed upon each of them to take reasonable care in relation to his or its activities for the other.
MR DONOHOE: Then, I can only say that I sought to persuade him, in the way I was bound to do, and failed, but, we respectfully submit, it is open to us to, at this level, raise the questions of law which we have raised, and I will not repeat - - -
McHUGH J: Yes, I know, but I am not sure that you raised the questions of law that you are now seeking to raise; that does not mean they are not still open to you, but your point now is that there was no evidence upon which the jury could find that there was a causal connection between any lack of care on your part, if there was any lack of care, and the damage.
MR DONOHOE: That is a discrete issue which I am now addressing; yes, I accept that. Your Honours, I have endeavoured to meet my estimate of time.
McHUGH J: And you have had a bit of interruption.
MR DONOHOE: I think that in the course of the exchanges, most of those matters that I wish to raise, I have referred to. Would your Honours please note that the evidence of the interview of people served by the Cudgel, who could not recall any event or occurrence that would have supported a theory of water contamination, appears at pages 4768 to 4769. If your Honours will pardon me, I just want to take a moment, I think that is all that I wish to put in oral submissions. My learned friends rely on the evidence of Mr Hutchins and, in relation to that, we would draw attention to the fact that Mr Hutchins agreed that he was not a chemist - that was at page 116A; nor an engineer, a hydrologist or a person experienced in the mechanics of physics of the movement of herbicides; that was at volume 1, 176B.
KIRBY J: Your notice of contention does not seek a new trial; you seek to defend the judgment of the Court of Appeal, which was for a verdict for your client but, as I understand it, you have an alternative proposition that if, contrary to your submission, you lose the statutory point and the Court approaches the matter on the traditional way of a jury verdict, as to at least one of the questions, and reaches the view that the verdict is perverse, do you agree that that is a matter that - or do you ask for a verdict in your favour or?
MR DONOHOE: We ask for a new trial by a judge.
KIRBY J: I see.
GLEESON CJ: How did it come to be before a jury?
MR DONOHOE: Justice O'Keefe heard an application to have the matter entered in the Commercial List because it had engineering questions. He rejected that and then on his own motion directed that it be heard by a jury in Griffith.
GLEESON CJ: Thank you, Mr Donohoe.
MR DONOHOE: May it please the Court.
GLEESON CJ: Yes, Mr Jackson.
CALLINAN J: Mr Jackson, could I just ask you a question before you start? If the narrow construction for which you contend, or narrower construction for which you contend is right, what is the work that section 15(3) of the Water Administration Act and section 23(2)(d) of the Irrigation Act have to do? They are both provisions which impose a liability in express terms.
MR JACKSON: Yes. Well, your Honour, so far as 15(3) of the Water Administration Act is concerned, it really, I suppose, performs two functions. The first is one that one commonly sees in relation to entry provisions of this kind and that is that it is an exhortation, in effect, to require that as little damage as possible be done. The second thing is to give a specific and a new right to pay compensation for the damage.
CALLINAN J: Why would it be a new right, assuming the absence of any immunity provision? Why would it not simply be damage for which payment would have to be made, either negligently or deliberately caused?
MR JACKSON: Perhaps I misheard what your Honour was putting to me but if the position were that there was a statutory power given, then, in the ordinary course of events, the exercise of the statutory power by entry upon premises may or may not give rise to a right to damages. What the second half of section 15(3) is seeking to do is to indicate that in all the cases that are contemplated by the earlier provisions of section 15(1) there is a right to damages without any need to analyse - the right to damages by way of compensation - without the need to analyse whether there was an absolute entitlement to do otherwise or an entitlement arising only if something were done negligently.
McHUGH J: Mr Donohoe contended that 15(3) came within the exception in 19(1) but you have to stretch 19(3) somewhat to achieve that result because 19(1) is dealing with actions. It says, "an action does not lie" unless an Act otherwise provides. So, you have to get out of 15(3) not only an obligation to pay compensation but a cause of action as well.
MR JACKSON: Yes, your Honour. I, broadly speaking, would make the submission I have made already in relation to section 15(3). I am not certain - - -
CALLINAN J: And adopt what Justice McHugh has just said.
MR JACKSON: Yes, your Honour. May I come back to the provisions of section 19 and deal immediately with some of the matters that were raised by our learned friends in relation to their notice of contention.
CALLINAN J: You were going to say - I asked you also about section 23(2)(d) of the Irrigation Act.
MR JACKSON: (2)(d), your Honour?
CALLINAN J: I think so.
MR JACKSON: The last provision of it, yes. What I am going to say in relation to it is that section 23(2)(d) is a provision which seems to do a number of things. One is that its presence indicates that it is at least, one would think, an implied exception of some kind to the operation of section 19(1). What I mean by that is that one can treat it in one of two ways. One way is to say section 19(1), by the opening words, indicates that there are some exceptions to it. They are to be gathered both from implication as well as in any other course. Another aspect of it, and this is a slightly wider one, is to say that if one looks at section 23, what it does do is to contemplate that, even if there are otherwise enforceable agreements between the Ministerial Corporation and other persons for the supply of water, in the circumstances to which (d) applies - and they are those referred to in subsection (2)(a) because (d) uses the words, "of carrying this subsection into effect" - that in those circumstances what otherwise would be a breach of contract does not give rise to a cause of action. To put that a little more broadly perhaps again, what it does recognise is that there may be agreements to which their own rules apply; they are not something which can be treated as just the exercise of a function for the purposes of section 19(1).
Could I just say, your Honours - and I did intend to come back to this when dealing with this - that one does see in the regulation-making power, for example, that section 26(1)(i) of the Irrigation Act gives power to the Governor to make regulations which prescribe "the forms of agreement for the sale or disposal of water". All I would wish to say about that at the moment is that it tends to indicate that the function is exhausted, in effect, or carried out by entry into the agreement. The agreement then takes its own course thereafter.
Your Honours, may I come back and I will endeavour to do so briefly to section 19 in just a moment but, could I say a couple of things about our learned friend's argument on the notice of contention. The first thing I am going to say about the notice of contention which your Honours will see at page 1135 is that there is not any contention which, in terms, raises the issue that they were not in breach, assuming there to be a duty.
Now, our learned friend's argument in response, I think, particularly to your Honour Justice Kirby rather slipped into, in our submission, the contention that their case was one where they were not in breach. Your Honours, that is the first thing.
The second thing is this. If one is looking at the question of duty, could I take your Honours to what seems to have happened in relation to this. It commences at page 1074 and that is where the judge is dealing with the submissions which were made after the jury had returned its answers to the questions, and your Honours will see the passage at line 14 on page 1074 where his Honour says:
I see nothing in the statute which would exclude the neighbourly or proximal duty which the deliverer of water -
et cetera, and when he is referring to the statute it is apparent from the preceding page at about line 35 that he is speaking of the Water Administration Act and what seems to have been argued, your Honours, is, apart from the argument that one sees at the bottom of page 1072 about Parramatta City Council v Lutz and Sutherland Shire, that the argument was one that was based on statutory provisions as distinct from one being one under the general law.
If one goes from page 1074 backwards to what occurred, firstly at page 1038, one sees at line 34 through to page 1039 at line 25, one sees the judge summing up on the basis that it was simply a Donoghue v Stevenson Case, to put it shortly, and proximity. From there, one goes, your Honours, to page 1063 and at page 1063, this is after the jury has been retired to consider its verdict - I am sorry, and after the jury has been summed up to by his Honour, one then sees invitations for redirections and at the bottom of page 1063, one sees a limited application by my learned friend.
Now, your Honours, if one goes from that to page 1066, at the top of the page, your Honours will see that at about line 10, his Honour said:
I have to say it was with that in mind that I had as long ago as before the weekend before last asked both counsel to give consideration as to whether or not there are any issues of fact that they wanted determined by the jury in order to have found the statutory arguments.
So, your Honours, if one were looking to see if there were further issues that it was desired to raise, to have the jury decide then, your Honours, it lay in my learned friend's hands to raise them with the judge. That is the first thing, your Honours, we would seek to say about duty. And what we would simply say is that this was a case where it was manifest, if I could adopt the judge's words at page 1074, that nothing "would exclude the neighbourly, or proximal duty" of a supplier of water to a consumer or customer of it.
Your Honours, so far as causation is concerned, one sees at page 1073 the judge dealing at about line 29, very briefly, with a question of causation, and he said:
Having regard to the jury's findings which were based inter alia upon directions that the plaintiff was required to prove causation in the relevant sense I am of the view -
et cetera. What his Honour is referring to is at page 1042 at about line 10, in the passage which goes through to line 39, you will see that he describes the question as the one upon which the parties were on a "total collision course". Now, your Honours, the judge's perception of that, of course, may be possibly be wrong but it does rather indicate that the contention that there was no evidence upon which the jury could find in our favour is one which is unlikely to be correct.
Your Honours will see that his Honour deals with the topic on that page and he refers to the fact that the issue had been much addressed before him. May I go on, your Honours, to say this, that the jury's findings, in our submission, do involve - and I will seek to demonstrate this in just a moment - non-acceptance or rejection of very large parts of the evidence adduced on behalf of the respondent and, on the question of causation, it is clear, in our submission, that the jury accepted the evidence that the cause of the damage to the crop was not any of the things that had been deposed to by our learned friend's witnesses; that is, for example, bad farm management, algae and other things, but rather that the cause of the damage was the Atrazine or the other chemical. There was clear evidence to that effect from Mr Hutchins and Mr Salvestrin.
Could I just say, your Honour, something about Mr Salvestrin. He was a person who had been, at the relevant time, the State Government expert in the Department of Agriculture in the area. He had gone into private practice by the time of the trial. He was called by our side. Your Honours will see his qualifications - and I will only take a minute dealing with this - in volume 1 at page 134, about line 32, and he said he was:
a district horticulturist but, in practical terms, I was the senior specialist in inland agriculture so far as vegetables are concerned for New South Wales Agriculture.
And he gave evidence - and if I could just select a couple of passages of it, your Honours - at page 135, about line 25, and this is when he inspected the appellants' crop. He was asked:
Did you inspect the crop and speak to Mr Puntoriero about it?
Yes. I made a thorough examination of the crop. I remember being extremely thorough in my diagnosis because it was unusual.
Then he discussed the difference in the symptoms and, your Honours, if one goes down to line 39, he was asked:
What.....was the cause of the damage?
I have no doubt at all about what the cause was. It was caused by some phytotoxic material that had been - that had come through the irrigation system on to the potatoes. Most likely a herbicide. That conclusion was after I analysed every factor there was. I was extremely thorough.
And went on to say that.
Now, your Honours, if one reads his evidence he was something of an over the top personality which he, himself, said but his evidence was obviously accepted and he was extremely critical of the evidence called on behalf of the other side. You will see that at page 136 about line 35 where he was asked:
for how long beyond the date of damage do you believe that the soil problem would have extended?
He discussed with that and this was relevant to the damages.
McHUGH J: What page is this, Mr Jackson?
MR JACKSON: I am sorry, your Honour, 136 line 35. What he was saying there was how long the chemical would remain in the soil which was something that gave rise to the substantial damages and then at page 137 at about line 26 he was asked to "comment on the findings of", to put it shortly, the other side's witnesses and, your Honours, he spoke of that in a rather scathing way in the answer which he gave. Then on the same page at about line 43 he said:
I totally disagree with the whole report.....it shows lack of understanding of the real situation.
Then he went on to discuss that fairly fully and at the top of the next page he said, "It is completely wrong." On page 138, when dealing, for example - this is about line 33 when dealing with one of the suggestions that there was leaching and he said:
It is impossible for leaching to cause those symptoms. It is simply impossible.
CALLINAN J: None of that matters in view of the evidence at 135.
MR JACKSON: Of course, your Honour.
CALLINAN J: He could have acted on that, could he not?
MR JACKSON: Yes, and, your Honour, may I just say something before agreeing with your Honour. At page 139, your Honour will see about line 32 where he dealt with the question of whether the seed had been contaminated and that was the cause and he said it was not. Now, your Honours, I will not go through the whole of his evidence but it is manifest that if one looks at his evidence, it was perfectly possible to get to the basic question, "What was it that caused the damage to the crop?" and the answer was that it was a chemical which had come onto the property through the irrigation system.
KIRBY J: First of all, can I ask you what is your submission in relation to the proper approach of this Court to the notice of contention? Are we looking at it from the point of view of deciding which is the more rational conclusion or are we looking at it from the point of view of what it was open to a jury to determine and did they determine this question?
MR JACKSON: Well, your Honour, as I understand the submissions on behalf of the respondent, they are put in the alternative, one contention being that there was no evidence upon which the jury could arrive at the relevant views; the other contention being that the jury's verdict was perverse, the relevant test being those adopted by the Court in Calin v Greater Union.
GLEESON CJ: Is it the case that there was some sampling and testing done, the results of which, according to the evidence of some of the witnesses, showed that it was atrazine or probably atrazine which was causing this harm?
MR JACKSON: Yes, your Honour.
KIRBY J: But were there not two factual questions? One, what was the cause? Bad husbandry or this chemical? The chemical point seems to be determined, or at least it was certainly open to the jury to determine it rationally and fairly on this evidence , but that leaves the question of whether it was open to them to conclude that the respondent ought to have known about this and ought to have done things that protected them from it.
MR JACKSON: Quite, your Honour. That is what I am coming to.
McHUGH J: But your point about that is that it is not raised in the notice of contention.
MR JACKSON: That is the starting point, really.
McHUGH J: There is no notice of contention about breach of duty.
MR JACKSON: Indeed, your Honour, so that it is - I am sorry, your Honour, there is no notice of contention on the question whether if there was a duty there was a breach of it, yes.
McHUGH J: Well, you might be a bit lucky there. The evidence seems a bit thin on breach.
MR JACKSON: Well, your Honour - - -
KIRBY J: Strong on duty.
MR JACKSON: If you get first over the line you are there. It does not matter how close the second contestant is.
KIRBY J: But it does say:
not under a duty to the Applicants to do any of the matters that they allege it negligently omitted to do.
So, I do not know whether that brings in the question of causation.
MR JACKSON: Well, your Honour, but "causation" I think is raised by ground 2 of the notice of contention.
KIRBY J: Yes.
MR JACKSON: I am sorry, your Honour, I do intend to deal with the second point. What I was going to say was - - -
McHUGH J: I was putting to Mr Donohoe that his real point was that there was evidence of breach of duty but, as you point out, the notice of contention does not raise that point. It raises the question of whether there was a duty, which is a very different thing.
MR JACKSON: Indeed.
KIRBY J: Well, it does say "duty to do any of the matters". It is a question of whether that means that they were not in breach of any duty that they had. Would that not be a fair reading of 1?
MR JACKSON: Well, your Honour, with respect, no. The answers to question 3 give four answers which demonstrate, if one makes the assumption of duty, that there was a breach. So the point that is raised is, was there a duty to do any of those things. Now, your Honour, if one looks at the four things that are mentioned, and if one is dealing in circumstances where you have a supplier of the water to a consumer, it would seem manifest, in our submission, with respect, that each of those things would be something that they would be required to do, if the duty existed. Now, your Honour, I am not responsible, with respect, for the drawing of ground 1 in the notice of contention; what we would seek to say is that, if there is some other point, it is not very clearly articulated and really is not there.
Your Honours, may I go on a little from what I was just saying, to say this, that if one looked at the evidence of Mr Salvestrin, his evidence, if accepted, also demonstrated another thing that was antithetical to fundamental planks of the other side's case and that was, that if one accepted his evidence, as the jury is perfectly entitled to, it demonstrated that there was enough Atrazine in the Channel to cause the damage and, your Honours, the contention, of course, from the other side, was that there was somehow some improbably high amount in there and it could not have been there. But, your Honours, in addition, the jury was also very likely to have accepted Mr Hutchins' evidence that there was Atrazine damage, not merely to the crop, but also to the weeds around the dam and then also to the vegetation on the banks of the Cudgel Channel itself, both sides.
Now, your Honours, if one looks at - and I give your Honours two references in that regard: the first is volume 3, page 515. This is part of Mr Hutchins' report. Your Honours will see at paragraph 6.3, he said:
In the Cudgel canal, the paspalum, particularly on the eastern bank, was very flaccid in appearance and not growing. The lamina had a reddish discolouration and was chlorotic, the leaf sheath was bending over. The paspalum on the western bank was not so badly affected. This affect goes right up to the junction of the Cudgel Canal with the Main Canal.
And, your Honours, at page 104, in volume 1, you will see at about line 36 he was asked about the vegetation damage and then, in the question at line 40:
Q. Therefore did you draw a conclusion about where the contaminated water came from, that is to say the banks or the channel? We know it came by the dam ultimately?
A. Yes. The damage to weeds or the symptoms on the weeds on the channel led me to believe that the source of the contaminant was the water that came from the channel.
So, your Honours, the point to which I have now gone is this, that it was obvious that the jury accepted the evidence of those two witnesses. There must have been a considerable amount of atrazine in the channel and very near to our premises because not only could the damage from it be seen in the water that had gone through to the crop but also it could be seen on the edges of the canal itself. That took away a large part of the dramatic element of the other side's case. How did so much atrazine get there? We are not exactly sure but it is there.
The next feature was that the respondent knew that there was some problem in the Cudgel Channel, but all the talk about the tests, it did not ever test the water in the Cudgel Channel. The jury's answers to questions 2 and 3 demonstrated, in our submission, that they must have accepted the evidence of there being a similarity of damage occurring in late 1991 between that of the damage to Mr Donaldson's crops - that was on the Lateral 240 Channel - that was where there was some testing of the surface water - on the one hand, and on the other hand the damage to the Atkinson property which was on the Cudgel Channel. Mr Hutchins, if I could just take your Honours to it very briefly, gave evidence that the damage to the two was similar and was similarly caused. Your Honours will see that in two references. At page 90 in volume 1 at about line 31 he was asked:
Q. So in November of 1991 did you also look at the Ainsworth/Parr property?
Your Honours, Ainsworth and Parr were in partnership in the same property.
A. I did, yes.
Then further down the page about line 41 he was asked:
Q. Presumably because of similarity of appearance?
A. Because of exactly the same appearance, yes.
The opinion to which he was referring was that at about lines 40 to 42:
The opinion that I formed was that whatever had caused the damage on Donaldson's was the same substance that caused the damage on Ainsworth's.
Now, your Honours, the respondent knew of the damage to both properties. Mr Ainsworth gave evidence, and his evidence was relevantly at page 228 in volume 1.
KIRBY J: Is this within time to do something to avert the damage that was then suffered by your client?
MR JACKSON: Oh yes, this is in 1991, your Honour. This is at the time of these events, the damage to the Donaldson and the Ainsworth properties, and Mr Ainsworth, your Honour, at page 228, at about line 40, was speaking of a meeting that took place at Mr Donaldson's home where he was there, Mr Donaldson was there and they met a number of people from the respondent, and you will see the references at the bottom of - from about line 40 to the end of the page. They had a round table discussion, they went off on an inspection. They went to his place and inspected the crop.
Now, your Honours, the evidence also demonstrated that the respondent's officers believed that the two cases, Ainsworth on the one hand on the Cudgel Channel, Donaldson on the Lateral 240, were similar or similarly caused. And that that is so appears from volume 3 at page 612 and, your Honours, they got the answer wrong but they believed that there was similar causation, and that that is so, your Honours, appears from page 612 at about line 28, where it was said:
A neighbouring rice crop belonging to Mr. J. Ainsworth also showed crop stress and damage. Again algae was present and the other chemical and physical parameters were similar to Mr. Donaldson's crop.
Now, your Honours, the jury were perfectly entitled to take the view, in our submission, that the respondent - - -
McHUGH J: What page did you say that was?
MR JACKSON: Page 612, about line 28. Your Honour, the point I am making about it is not that there was a reference to algae in it but that the officers of the respondent believed the two things were the same. Your Honours, the jury were perfectly entitled to take the view that the respondent was really jumping to a conclusion which was the algae conclusion, and one which was justified by the work that had been done.
Your Honours, they did not ever, and I have said this before, ever test the water in the Cudgel Channel prior to the occurrence of the damage to our property. Your Honours, it was not as if the issue had gone away because, in September of 1992, one had, as one sees at page 486 on 16 September 1992, Mr Parr, on behalf of his partnership wrote in relation to the damage to the crop in the preceding year, and said they:
Are of the opinion that a growth retardent came into this crop via the regular water supply under your jurisdiction and -
They were -
Responsible for its failure.
KIRBY J: And there was evidence that you could lock off the Cudgel Channel so that it did not extrude its contaminant into your client's property, that was within the control of the respondent?
MR JACKSON: It was blocked off from us, your Honour, unless we wanted to take water from it.
McHUGH J: What was that reference to that letter, 16 September 1992?
MR JACKSON: Volume 2, page 486. Now, your Honours, the other points we would seek to make are set out in our written submissions.
McHUGH J: Could I just raise this matter with respect to the notice of contention. Ground 1 says:
The Respondent was not under a duty to the Applicants to do any of the matters that they alleged it negligently omitted to do.
Why does that not raise a question of breach? If you take the view that there is a general duty to take reasonable care in all the circumstances of the case, but unless they were on notice of the necessity that there may be chemicals causing the problem, then there was no duty to do what the jury found in paragraph 3(i) and 3(ii) and 3(iii), et cetera. In other words, although rather inelegantly worded, if I might say so, 1 does raise a breach question.
MR JACKSON: I can see the force of what your Honour puts to me, but may I say, if that be so, then, your Honour, what should have happened was that either the question should not have gone to the jury in that form and there should have been some complaint about that, or, on the other hand, the argument should have been advanced that there was no evidence to support those findings.
KIRBY J: Can I ask on that point, just following up your answer to my earlier question, which was to ask you what your submission was on the way the Court should approach testing the evidence. You answered back by saying, "Well, the respondent submits that it is one or the other". Now, I would still like to know what your submission is.
MR JACKSON: I am sorry, your Honour. Your Honour, I would not dispute the theoretical correctness of the way in which the respondent puts the argument. However, in dealing with the issues, in so far as any part of either of the issues is touched upon by the answers given by the jury then the situation which emerges, in our submission, is that for them to succeed on that not being open, it would have to be shown there was no evidence. For them to succeed on the basis that the verdict was perverse, which goes only to the question of causation, they would have to demonstrate that no jury acting reasonably could arrive at that conclusion, the testing in Calin.
KIRBY J: So is it your submission that we should approach it in the way Justice Dixon referred to and that is to say to take the answers to the particular questions and the judges then proceeding to enter a judgment as if it was accepted, leave aside the argument relating to the section of the Act and leave aside the argument that there was no evidence and therefore a judge's province that what happened was that it was accepted that the jury had given a verdict of a general character but authorised the judge to proceed directly to enter the judgment himself, though this was a jury trial.
MR JACKSON: Yes, your Honour. I say that with a slight degree of hesitation because to answer it, yes, perhaps does not entirely convey what I want to put. What I would seek to say about it is that the parties are allowed to go to the jury or a judge rule they should go to the jury and there was not a relevant contest about it, the issues of fact which were regarded as issues of fact which required determination. Once those issues of fact had been determined by the jury that was, subject to resolution of any question of law adverse to us, a determination of the matter finally and unless the judge were to decide a matter of law adverse to us then he would have to enter a verdict for us, to put it shortly.
KIRBY J: That does appear to be the way the parties at the trial approached the matter.
MR JACKSON: Yes. Now, your Honours, those are the other matters that I wanted to raise in relation to the notice of contention. May I say a couple of additional things in relation to the argument concerning section 19(1) and, in particular, in relation to the question of release, in the sense that the argument on behalf of the respondent seeks to identify the relevant "exercise of a function" as being the release of water. What we would submit is that really is not the better view. Factually the damage was not suffered because of the release of the water; it was suffered because we used it after we had bought it and, your Honours, it was suffered because, on one view, they did not tell us something about it which they should have.
GLEESON CJ: Well, just a moment. If the whole case proceeded on the basis that the duty of care arose out of the supply of water, in the context of this case, the concepts of release and supply are coextensive, are they not?
MR JACKSON: Well, with respect, your Honour, no; the occasion for the existence of the duty arose out of the fact that it was a supply of water, but it was a supply of water pursuant to, if one assumes statutory powers, but the elements that gave rise to the damage were not the - and one has to look to see precisely what section 19(1) says, but the element that was in consequence which the damage arose, was not the release of the water; it was, for example, failure to warn us that the water might be contaminated.
Your Honours, if one is looking at section 19(1) also, we would seek to submit that the reference to "release" of "water", that one sees in section 19(1) is, we would submit, related to the release of water otherwise than by contract; to release water when there is a decision to do so for reasons that suit the respondent. There is no especial reason why the terms of section 19(1) should be read up.
Indeed, we would submit why would one read it as destroying the general law rights that would arise where there is a supply pursuant to a contract. The terms of section 12(1) showing that the function may come to an end - and I was taking your Honours to those - are against that suggestion. The fact of the matter is of course that the supply was pursuant to the provisions of the Irrigation Act and, if I could just say this in relation to one of our learned friend's submissions, the contention that the Corporation could not bear the costs, for example, of ensuring that water was satisfactory is a little difficult to maintain, we would submit, for a couple of reasons. One is that the terms of the Irrigation Act allow the respondent to fix the charges. Your Honours will see that in, for example, sections 14(1)(b) and 14(2).
The terms of section 23 to which I have adverted already in answer to your Honour Justice Callinan assume that there may otherwise be a liability at least under contract. Could we also say that the provisions of section 25 of that Act, whilst clearly enough dealing with the catchment areas, do work on the assumption that water quality may be a matter of interest to the Corporation. If I could just take your Honours to the Irrigation Act for a moment - - -
GLEESON CJ: Just before you pass from that last point, if supply pursuant to contract is covered by section 19, then presumably the corollary of that is that it would not be open to the Corporation to enter into a contract which accepted liability for the quality of water supplied.
MR JACKSON: Yes, it would not be much of a contract, one would think, with respect - only in commercial terms - but your Honour is right. Your Honour, one would have a situation which really sits a little oddly with the provisions of the Irrigation Act to which I have referred and also the provision of section 26(1)(i) that I took your Honours to earlier which allows, for example:
the forms of agreement for the sale or disposal - - -
GLEESON CJ: No matter how much the customer was prepared to pay for the supply.
MR JACKSON: Indeed, yes, and that seems to be a little inconsistent with the reference to meeting the needs of consumers on commercial terms in section 4(b) of the Water Administration Act.
GLEESON CJ: Well, doing things on commercial terms sounds like freedom of contract.
MR JACKSON: It does, your Honour, yes, and then the essence of commercial terms is that one might be able to identify reasonable ones but very often one cannot identify them in the abstract. They depend on what parties agree. Your Honours, I was going to say if one goes to the provisions of section 26 of the Irrigation Act it does indicate in a number of provisions that there is some interest in the quality of water. Your Honours will see, for example, section 26(1)(a) which allows the making of regulations:
for the prevention of the pollution of water conserved or distributed in works constructed under the Construction Act, or the Murrumbidgee Irrigation Act -
Your Honours, I will not go through all the provisions of the regulations or the regulation-making power but very many of them are provisions which deal with the question of pollution and prevention of pollution and, indeed, there have been such regulations made. Could I refer your Honours to two sets of - your Honours should have copies of these, I think - first of all, the Irrigation General Regulations under the Irrigation Act 1912 and could I refer briefly to those, your Honour. Do your Honours have those, might I inquire?
GLEESON CJ: We do, yes.
MR JACKSON: Yes, and your Honours will see Regulation 2 speaks of pollution of waters, "no person shall bathe or deposit", et cetera. And, your Honours, there is, by way of passing amusement as it were, in Regulation 3A(1), your Honours will see two provisions which seem to say in two sentences what might have been said in one. But your Honours will also see in Regulation 6 a provision dealing with depositing rubbish, and the second set of regulations, your Honours, would be the Irrigation (Destruction of Noxious Weeds and Plants) Regulations and, your Honours, they deal with the topic that one might expect from the name, and I refer particularly to Regulation 2.
Your Honours, there is also another set of regulations which deals with the particular area. I am sorry, these were not able to be photocopied in time to give - they are readily available to your Honours - - -
GLEESON CJ: Thank you.
MR JACKSON: They are the Yanco and Mirrool (Supply of Water for Irrigation) Regulations.
GLEESON CJ: Do they apply to your client's property.
MR JACKSON: Yes, well, Yanco, your Honour. Your Honour, that we are appears from, for example, the document which is in volume 4 at page 892. It is a document which, I think, is the transfer document in relation to the ownership of the particular property and described it as being in the Yanco irrigation area.
Now, your Honours will see that the regulations deal with a significant number of matters in relation to water, for example, Regulation 5, "Payment of charges for water rights", 6, "Schedule of Deliveries", 7, "Application for water", 8, "Special deliveries of water" and so it goes on, your Honours. There are provisions, for example, Regulation 17 contains some circumstances in which:
The Commission may refuse to deliver water during any delivery or may discontinue any delivery of water -
including -
(i) For the watering of any land if in the opinion of the Commission such delivery would injure or tend to injure the land -
and so on.
KIRBY J: What do you seek to get from this?
MR JACKSON: Your Honour, all I am seeking to say, in relation to them, is not to seek a course to derive a cause of action from them or anything of that kind. All I am seeking to say is that the delivery of water is something that appears to be something dealt with by the Irrigation Act and the regulations thereunder. It seems plain enough from the terms of the Irrigation Act that what is contemplated is that there will be a contract for the disposal of the water and, your Honours, all we would seek to say about it is that the function of the respondent is, in effect, exhausted, for the purposes of section 19(1), when it.....in the agreement to supply the water and the specific, but limited, exemptions given by, for example, section 23, militate against the view that section 19(1) is the relevant one.
Could I give your Honours, and I will do this finally, references that I said I would give earlier, to where the actual dealings in relation to this water are to be found. They are in the evidence of Mr Puntoriero in volume 1 at pages 26 to 27, 38, 46, and 70 to 71 and relevant documents are in volume 3 at page 697 and volume 2 at page 362. Your Honour, I think I said Atkinson a few times and I should have said Ainsworth was the relevant name. Your Honours, those are our submissions.
GLEESON CJ: Yes, thank you, Mr Jackson. Did you want to say anything in reply on the notice of contention matter, Mr Donohoe?
MR DONOHOE: Yes, your Honour, and I can be brief. May I say, at the outset, that we had intended by ground 1, and the written submissions that we prepared in relation to the steps taken to ascertain the presence or absence of any contaminant, which have been the subject of a substantial schedule, to address breach of duty. To make that clear, I seek leave to amend the notice of contention by adding at page 1135 the words "and breach of duty" in paragraphs 2 and 3 of the notice of contention.
GLEESON CJ: What is your attitude to that?
MR JACKSON: Well, your Honour, in relation to it, if the Court were to permit that, we would seek to have leave to put in, in writing, within say seven days, any further submission we might wish to make in relation to it.
GLEESON CJ: Well you better put those submissions in within seven days. It is a matter we will deal with when we give our reasons for judgment.
MR JACKSON: Yes, your Honour, and if we wish to make any submission about the ability to take the point, in this Court, we would make it in that document, if we may.
GLEESON CJ: Very well. We will deal with Mr Donohoe's application when we come to give judgment and you can anticipate what we may do by putting in any submissions within seven days, as you wish.
MR DONOHOE: I am obliged to your Honours. May I make these submissions in point form by reference to paragraph 11 of the appellants' written submissions in reply to the contention submissions. As to paragraph (c), it is true that tests were not carried out on the Cudgel but logically the place to test was the point where the crops were damaged and the focus of attention was the damaged crops on Donaldson and Ainsworth and then the schedule discloses, "Mr Donaldson appeared to have more troubles", and so the focus of attention naturally went in that direction. As to (e), the respondents' tests to the water of Lateral 240" were indeed of the surface only, but there was no evidence that the sediment should be tested, that paragraphs (f) to (i), the condition of the crop does not explain what caused the deterioration and how it was connected with the events of the preceding year. As to (k), the evidence of Mr Brown was equally consistent with atrazine being washed away. As to (h) it is true that Mr - - -
KIRBY J: What does that matter if it is a no evidence point?
MR DONOHOE: On the no evidence point it does not, it is perverse. As to paragraph (l) it may be accepted - - -
KIRBY J: It may be the barrier on perverse jury verdicts has fallen in the last 10 years since I used to sit on appeals from perverse jury. They had to be very, very bad.
MR DONOHOE: Perverse, yes.
KIRBY J: It is not just that you just disagree with them.
MR DONOHOE: No, I accept that. As to error, it may be accepted that there was evidence that led Mr Hutchins to the view in 1996, that atrazine caused both incidents. That is not a matter within his knowledge, or the knowledge of the respondent at the relevant time. We invite your Honours to look carefully at the schedule that we have prepared and the references to the evidence upon which my learned friends rely. As to (m), Mr Hutchins' report was influenced, that is the report dated 1996, was influenced by tests on the sand trap in November 1995. As to (m), Mr Salvestrin's opinion that the crop loss was the result of phytotoxic substance supplied in the irrigation system may be accepted, but it did not explain how that might be connected with the events of 1991. Similarly, with the evidence of Messrs Toth and Brown.
As to (q), it is submitted that it is only a matter of weight that Mr Hutchins was confused about the custody of samples. When your Honours look at carefully, you will find that he conceded that if it were the fact that as it was proved to be, that there only was one sample in the deep freeze of Mr Puntoriero and it was cut in two, then it was a matter of pure speculation as to where it might have come from. So, it is not a matter for weight, it is a case of no reliable evidence. As to paragraph 12, Mr Hutchins saw effective vegetation on the banks of the Cudgel, that is taken from his report at 3515. He does not state there when he noticed that damage, but at volume 1, 101M to S, he makes it clear enough that he was referring to an inspection in 1992 after the damage and that offers no explanation of the caual connection between the events of 1991 and the damage in 1992.
Finally, one housekeeping matter. Your Honours may have noticed that some of the appeal books have pages that are difficult to read or utterly illegible. My learned junior Mr Kunc has taken this up with my learned friend's junior. We have a bundle of pages that it may be convenient to the Court if we hand to the associates so they may be substituted. May it please the Court.
GLEESON CJ: If we were to order a new trial, the order of Mr Justice O'Keefe concerning the mode of the trial would continue to operate, would it not?
MR DONOHOE: Yes. We would ask your Honours to very carefully reflect upon what the mode of trial should be.
GLEESON CJ: Well, there was no appeal from that order.
MR DONOHOE: No, there was not.
GLEESON CJ: That was a discretionary matter.
MR DONOHOE: Yes, a discretionary matter.
GLEESON CJ: We will reserve our decision in this matter. The Court will adjourn until 10.15 tomorrow morning.
AT 4.32 PM THE MATTER WAS ADJOURNED
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