On 7 December 2022 the High Court handed down Judgment against a Western Australian statutory power authority, finding it owed (there was no Appeal on breach) a duty of care to landowners who suffered loss and damage from a fire caused by works performed by a specialist subcontractor on a privately owned power pole on private property. Although breach was not considered by the High Court, the reasoning for the decision has application to all NSW Government agencies, as the WA Civil Liability Act 2002 largely mirrors the NSW Act and because of the High Court’s approach to finding the existence of a common law duty of care when statutory powers are exercised.
Western Power operated, managed and maintained an electricity distribution system. Pursuant to its statutory powers, electrical cables and associated devices were attached to a 30 year old wooden power pole owned, and on the land of, Mrs Campbell. Western Power’s specialist and independent contractor undertook works associated with Mrs Campbell’s pole, however the contractor employee did not adequately inspect it in accordance with industry standards. The pole subsequently fell as a result of decay and termite damage, causing a bushfire and significant loss and damage to surrounding properties.
At first instance, the Supreme Court found Western Power owed, but did not breach its duty. Western Power was found to have taken reasonable precautions by retaining their competent contractor. Western Power was not required to train and instruct thier subcontractor’s employees. (This reasoning is consistent with established High Court authority in cases like Stevens v Brodribb and Leighton Contractors v Fox).
The trial Judge found the subcontractor and Mrs Campbell both liable in negligence and nuisance and apportioned 70% and 30% respectively. The subcontractor breached its duty by failing to adequately train and supervise its employee who inspected the pole. Mrs Campbell failed to arrange periodic inspection and maintenance of her private power pole.
The WA Court of Appeal held Western Power owed a broader duty of care to surrounding property owners in relation to the risk of fire in connection with the delivery of its electricity distribution system, and breached that duty by failing to periodically inspect the pole owned by Mrs Campbell, but which was used to support Western Power’s network.
Importantly, Western Power’s sole ground of Appeal was a very narrow one, based only upon a challenge of the broader duty of care found by the Court of Appeal in relation to inspection of poles privately owned by consumers. However, the Court of Appeal’s findings regarding a failure to have an inspection regime related to breach and critically, Western Power’s Appeal to the High Court did not challenge the Court of Appeal’s findings of breach.
The High Court considered the principles to determine the existence of a common law duty of care potentially owed by a statutory authority, and the existence and content of the broader duty of care imposed upon Western Power by the Court of Appeal.
There is no common law rule determining when a common law duty of care upon a statutory authority is owed (Pyrenees Shire Council v Day). Statutory authorities all need to be considered individually. As established by Graham Barclay Oysters, the starting point must always be close examination of the terms, scope and purpose of the particular statutory framework for each statutory authority. The functions and powers of the statutory authority need to be carefully identified, and determined whether they were actually exercised.
Next, if a common law duty is imposed, it must be consistent and compatible with the rights, duties, powers and liabilities upon the statutory authority set out in the relevant statute (Crimmins v Stevedoring Industry Finance Committee).
In considering the statutory powers Western Power had exercised, the High Court found it connected and energised Mrs Campbell’s premises to its system, which created or increased the risk of harm to the plaintiffs, whom it had the power to protect. The pole on Mrs Campbell’s land only posed a risk to the plaintiffs because Western Power had attached its electrical system to it.
Accordingly, Western Power’s exercise of statutory powers created a relationship with all persons in the vicinity. In the circumstances, Western Power had a duty to take reasonable care in the exercise of its powers. The content of that duty required it to avoid or minimise the risk of harm to surrounding properties from potential fires in connection with delivery of its electrical distribution system which it operated, managed and maintained in the discharge of its functions and powers under statute. The common law duty of care operated alongside the rights, duties and liabilities created by the statute. There was nothing inconsistent.
As set out above, Western Power’s Appeal was limited to the existence of a duty of care, and further, was then only to harm arising from its own property. However, the High Court found this was misplaced and incorrectly focused on the question of control and ownership of the pole upon Mrs Campbell’s property, rather than Western Power’s exercise of its statutory powers in the discharge of its statutory functions that gave rise to the risk of harm.
Although the Appeal concerned the existence, content and scope of the duty of care on Western Power, the High Court found it had available to it a number of powers to take reasonable precautions to prevent the risk of harm. However, that related to breach, which was not in issue on Appeal.