In brief - Decision in Electricity Networks Corporation v Herridge Parties  HCA 37 is a reminder for statutory authorities to look closely at the legislation conferring their rights, obligations and power to determine the extent of any duty of care owed
This week saw the conclusion of a long running and hotly contested case involving claims for loss and damage by several landowners following the bushfire in Parkerville, Western Australia (Parkerville bushfire).
Western Power contracts Thiess to undertake works to, among others, a point of attachment pole on landowner's property
A fire started on 12 January 2014 when a jarrah pole fell to the ground, causing electrical arcing and igniting dry vegetation around the base of the pole. Attached to the pole was an electrical cable and other apparatus of the appellant, Electricity Networks Corporation (trading as Western Power).
The case centred around a "point of attachment" pole (PA pole), being a pole at which an electricity distribution system is attached to the consumer mains. Often in regional and subregional areas, the PA pole is owned by, and is the responsibility of, the relevant land owner. In this case, Mrs Campbell. The PA pole was installed by Mrs Campbell's late husband in or about 1983 and over the course of just over 30 years deteriorated due to fungal decay and damage by termites below the ground line resulting in its ultimate failure.
Western Power operated the electricity distribution system (known as SWIS), used to deliver electricity to Mrs Campbell's property. The link by which a distribution system delivered electricity between poles was the "service cable". In regional and subregional areas, the service cable runs from the nearest network distribution pole (termination pole) across the property boundary to the privately owned PA pole. From there the electricity is fed to the consumer's residence.
Attached to the PA pole were various attachments, including service protection devices, fuses and a meter owned by Western Power.
The fifth respondent, Ventia Utility Services Pty Ltd (formerly known as Thiess Services Ltd) (Theiss) were contracted by Western Power to construct, maintain and manage aspects of Western Power's distribution system. Theiss was contracted by Western Power to undertake works in the vicinity of Mrs Campbell's PA pole in July 2013 (the July 2013 works). Those works included replacing Western Power's termination pole, which required removing and replacing the service cable between the termination pole and the PA pole.
Supreme Court of Western Australia finds Thiess and Mrs Campbell liable in negligence and nuisance, dismisses claims against Western Power
Four proceedings were commenced by owners of properties damaged or destroyed in the Parkerville bushfire alleging that their loss was as a result of the negligence of or nuisance caused by Western Power, Theiss and/or Mrs Campbell.
Industry practice at the time of the July 2013 works required that steps be undertaken before performing such works, including inspecting and sounding the PA pole to identify signs of deterioration, as well as digging around the base of the pole to detect decay and/or termite attack. Theiss's leading hand did not perform this inspection in accordance with industry standards.
The trial judge found Theiss and Mrs Campbell liable to the plaintiffs in negligence and nuisance, and apportioned liability between them; 70% to Theiss and 30% to Mrs Campbell.
All claims against Western Power were dismissed. The trial judge found that Western Power owed to the plaintiffs a narrow and specific duty of care to conduct a pre-work inspection, but found that duty of care was not breached by failing to supervise Theiss's line crew or to ensure the crew inspected the PA pole.
The trial judge concluded that Western Power had taken reasonable precautions to ensure that qualified and competent personnel carried out the work, including the pre-work inspections of wooden poles, by retaining a competent, reputable and experienced contractor, namely Thiess, to carry out the works.
The trial judge was not satisfied that a reasonable person in the position of Western Power would have taken any additional steps to implement systems for training or instructing line crews to conduct pre-work pole inspections in accordance with industry practice.
The trial judge rejected the plaintiffs' contention that the pre-work inspection duty of care was non delegable. A win for Western Power.
Court of Appeal seeks to expand scope of duty of care owed by Western Power
All parties, other than Western Power, appealed or cross-appealed to the Court of Appeal of the Supreme Court of Western Australia. Importantly, Western Power did not appeal the finding that it owed to the plaintiffs a pre-work inspection duty of care.
The Court of Appeal disagreed with the trial judge, holding that Western Power owed to persons in the vicinity of SWIS a duty to take reasonable care to avoid or minimise the risk of injury or loss or damage to property from the ignition and spread of fire in connection with the delivery of electricity through SWIS. In other words, the Court of Appeal sought to expand the scope of duty owed by Western Power.
That duty of care was broader than the duty found by the trial judge in two ways:
- It was broader in its temporal scope, being an ongoing duty; and
- It was not limited to occasions where work was to be, or was being, done (such as the July 2013 works).
The Court of Appeal found that Western Power breached that expanded duty of care by failing to have in place a system for the periodic inspection of wooden PA poles owned by consumers which were used to support live electrical apparatus forming part of SWIS.
High Court's findings on existence and content of the duty of care for a statutory authority
Western Power appealed to the High Court, arguing that its functions did not give rise to a relationship supporting the asserted duty. It argued that the asserted duty was inconsistent with the statutory scheme.
The High Court considered the applicable principles for determining the existence of a common law duty of care owed by a statutory authority.
In acknowledging that there is no freestanding common law rule which determines whether, and when, a common law duty of care should be extended to a statutory authority, the High Court adopted a systematic approach in determining when such a rule could arise. The High Court cautioned, however, that it would be incorrect to treat all statutory authorities alike. The scope of each authority's statutory duty is to be determined on its facts and the application of the relevant legislation.
The starting point of the High Court's analysis was to review the statutory framework affording Western Power the authority to exercise its statutory powers, including what powers it exercised and in what circumstances. The High Court's examination of the statutory instruments conferring Western Power with its functions and powers found that Western Power:
- Was a statutory corporation with a profit-making purpose required to act on prudent and commercial principles from its statutory functions, including undertaking, operating, managing and maintaining SWIS, as well as any works, system, facilities, apparatus or equipment required for that purpose;
- "Enter[ed] into the field" by exercising its statutory powers to undertake, operate, manage and maintain SWIS. This included attaching Mrs Campbell's premises to SWIS and energising her premises;
- Held specific power to acquire, hold, manage, improve, develop and dispose of any real or personal property, to enter into any contract or arrangements, appoint agents and carry out any investigation, survey or exploration. Those specific powers did not limit the general powers of Western Power;
- Held a specific power to "cause any [SWIS] works or service apparatus or related things to be supported by affixing or annexing them to or against any part of a house, building or other structure"; andHeld a statutory power to enter and re-enter land or premises upon which any works, apparatus or system (including any meter, fitting or connection) was used by Western Power for the purpose of SWIS.
Essentially, by connecting Mrs Campbell's home to SWIS, Western Power had "stepped into the arena" by exercising its powers in the performance of its functions. In doing so, it had the responsibility to undertake, operate, manage and maintain the SWIS electricity distribution system. This duty was ongoing and was not limited only to situations where works were being undertaken.
In the exercise of those powers, Western Power's service cable, fuses and meter were on Mrs Campbell's land and, in particular, attached to her PA pole, remaining there as Western Power continuously exercised its powers in performing its statutory functions of undertaking, operating, managing and maintaining SWIS.
The High Court determined that the PA pole only posed the risk that it did because Western Power had attached its live electrical apparatus to it.
The High Court also determined that Western Power had a duty to take reasonable care in the exercise of its powers, and the content of that duty relevantly required it to avoid or minimise the risk of injury or loss and damage to persons and their property from the ignition and spread of fire in connection with the delivery of electricity through its electricity distribution system. The common law duty of care operates alongside the rights, duties and liabilities created by statute.
Key points for statutory authorities in light of High Court decision in Electricity Networks Corporation v Herridge Parties
Statutory authorities are afforded a number of legislative protections, particularly where the authority has sought to delegate activities to competent contractors. This decision acts as a reminder that a duty of care may nonetheless be imposed, it not being limited to the question of control.
When assessing the existence and content of the duty of care for a statutory authority, the analysis adopted by the High Court was twofold:
- To identify the existence of the duty of care: consider the statutory framework, including the functions and powers conferred on the authority and specify the statutory powers exercised; and
- To identify the content of that duty: who owes the duty, to whom they owe the duty and what risk of harm must they take reasonable care to minimise or avoid.