New South Wales Supreme Court CITATION : Collendina Pty Ltd v Murray Darling Basin Commission [2004] NSWSC 404 HEARING DATE(S) : 20 April 2004 JUDGMENT DATE : 13 May 2004 JURISDICTION: Common Law Division JUDGMENT OF : Windeyer J at 1 DECISION : CATCHWORDS : APPEAL for Master - application for summary dismissal - whether statement of claim pleaded facts sufficient for cause of action or whether no foundation for claims made LEGISLATION CITED : Legal Profession Act 1987 s118L(2) Supreme Court Rules 1970 (NSW) Pt13 r5 Scott v Scotis [2003] VSCA 121 CASES CITED : Trade Practices Commission v CC (New South Wales) Pty Ltd (1995) 58 FCR 426 WA Pines Pty Ltd v Bannerman (1980) 41 FLR 175 Collendina Pty Ltd (First Plaintiff) Rohan Geoffrey Cranney (Second Plaintiff) David Kenneth Cranney (Third Plaintiff) Cranney Properties Pty Ltd (Fourth Plaintiff) Wongala Holdings Pty Ltd (Fifth Plaintiff) Murray Darling Basin Commission (First Defendant) John Lovering (Second Defendant) PARTIES : Geoff Gorrie (Third Defendant) Phillip Toyne (Fourth Defendant) Kevin Sheridan (Fifth Defendant) Michael Taylor (Sixth Defendant) David Stringer (Seventh Defendant) Edward Phipps (Eighth Defendant) Dennis Mutton (Ninth Defendant) Tom Fenwick (Tenth Defendant) Richard Grimes (Eleventh Defendant) FILE NUMBER(S) : SC 20005 of 2003 COUNSEL : Ms R Sofroniou with her Ms N Obrart (Plaintiffs/Respondents) Mr S Gagler SC with him Mr F Kunc (Defendants/Appellants) SOLICITORS : Jackson Smith (Plaintiffs/Respondents) Blake Dawson Waldron (Defendants/Appellants) LOWER COURT Supreme Court (Master) JURISDICTION : LOWER COURT FILE NUMBER(S) : LOWER COURT Master Malpass JUDICIAL OFFICER : - 11 - IN THE SUPREME COURT OF NEW SOUTH WALES COMMON LAW DIVISION WINDEYER J THURSDAY 13 MAY 2004 20005/03 COLLENDINA PTY LTD & ORS V MURRAY DARLING BASIN COMMISSION & ORS JUDGMENT 1 This is an appeal from a decision of Master Malpass, where he dismissed the defendants' notice of motion seeking orders for summary dismissal pursuant to Pt13 r5 of the Supreme Court Rules 1970 or striking out the statement of claim pursuant to Pt26 r15. 2 There is also an application for production for inspection of documents made by the plaintiffs pursuant to Pt23 r2(1)(b). To avoid confusion I will refer to the parties to the appeal and to the notice of motion as plaintiffs and defendants. 3 This case concerns releases of water from the Hume Dam in or about October 1996. The first plaintiff owns a property located approximately 80km west of the Hume Dam. The second and third plaintiffs operate a farming and grazing business on the property. The fourth and fifth plaintiffs operate a tourism venture on the property (Collendina Joint Venture). The first defendant is a statutory body pursuant to the Murray-Darling Basin Act 1992 (the Act). The position of the other defendants is not stated in the amended statement of claim. Presumably they are the members of the Commission. No point is taken about this. It is accepted if the appeal succeeds the whole of the action will be dismissed. 4 The first defendant was established by the Murray-Darling Basin Agreement, as approved by s6 of the Act. Section 13 of the Act confers upon the Commission the powers given to it under the Agreement. Clause 95 of the Agreement confers the power to give directions for the release of water from "upper River Murray storages", which include the Hume Dam. 5 The plaintiffs allege that the defendants negligently caused releases of water causing their land or the land on which they carried on their business to be flooded. The relevant paragraphs in the amended statement of claim filed on 7 April 2003 are as follows: … 8. At all material times the First Defendant had a statutory power pursuant to Clause 95 of Schedule 1 of the Act to cause releases of water from the Hume Dam ('the statutory power'). First Defendant 9. At all material times the First Defendant knew or ought to have known that the Plaintiffs were in a position of vulnerability or reliance on the First Defendant. Particulars The plaintiff repeats paragraphs 4-7 above. 10. At all material times the First Defendant owed the Plaintiffs a duty to exercise the statutory power with reasonable care. … 15. In or about late September to October 1996 the First Defendant caused water to be released from the Hume Dam pursuant to the statutory power ('the releases'). 16. The First Defendant failed to take reasonable care in carrying out the releases. Particulars (i) The time at which the releases were commenced (ii) The daily volume of water released (iii) The total time period over which the releases were carried out (iv) The geographic area over which the releases were carried out. 16A The failure to take reasonable care in carrying out the releases caused waters to flow onto and remain on the property …… 6 The second DCM document sets out the following: 1. Concise Narrative of facts on the issue of liability The plaintiff intends to prove the following facts on the issue of liability. 6. The Defendants caused releases of water from the Hume Dam in or about October 1996 ('the releases'). 7. The First Plaintiff owned a property located ……… from the Hume Dam. 8. The Second and Third Plaintiffs operate a farming and grazing business on the property ('the farming business'). 9. The Fourth and Fifth Plaintiffs operate a tourism venture on the property ('the tourism venture'). 10. The releases caused waters to flow onto the property. 11. As a result of the waters flowing onto the property: (i) The property was damaged; (ii) The farming business lost income. (iii) The tourism venture lost income. 7 This omitted more precise claims numbered 1-5 in the original DCM document perhaps because the plaintiff had no evidence establishing them. If the plaintiffs proved the facts listed and no more they would not succeed on liability. Decision of the Master 8 The question at issue before the Master was whether or not the plaintiffs had pleaded facts sufficient to establish a cause of action in negligence. The negligence alleged amounts to a claim of breach of duty to exercise a statutory power with reasonable care. 9 The Master held that proceedings forming the basis of an application under Pt13 r5 had to "fall within the category of being…hopeless or doomed to failure" (at [19]). The Master was not satisfied that this was such a case. In outlining his reasons, he referred to the position of control and the relevant statutory powers of the defendants; the fact that there were releases of water from the Dam and there was flooding of the plaintiffs' property. 10 The Master further noted that this was a case where "at least largely the relevant information may be solely within the knowledge of the defendants" (at [23]). He went on to state that should the proceedings be summarily dismissed, the plaintiffs "would be deprived of pursuing the various interlocutory processes available to them such as discovery and interrogatories". He took into account the solicitor's certificate and what he said was delay in bringing the application. 11 While the motion before him sought orders under both Pt13 r5 and Pt15 r26 the Master said at paragraph 17 "no claim pursuant to Pt15 r26 was pressed. It is not suggested that the existing process has pleading difficulties". This last statement creates some problems but in the long run counsel for the defendants seemed to acknowledge that the hearing before the Master proceeded on that basis and no ground of appeal is based on Pt26 r125. I proceed accordingly. Paragraph 16 of the amended statement of claim presents some difficulties. The word "Particulars" is struck out by way of amendment. If that was intended – (which is doubtful) - the following sub-paragraphs, whether particulars or pleaded facts in no way comply with Pt16 r4. But this can be put aside. The Appeal The appeal was filed on 9 December 2003. The grounds of appeal are that the Master erred in the following respects: 1. Failing to find that the proceedings are an abuse of process and dismissing them accordingly; 2 Failing to give any or any sufficient weight to the Respondents' inability to provide particulars of their claim; 3 Failing to give any or any sufficient weight to the fact that the Respondents commenced the proceedings without any expert advice; 4 Failing to give any or any sufficient weight to the breadth of the Respondents' request for discovery; 5 Finding that the proceedings have not been brought on the basis of a bare or unsubstantiated allegation; 6. Confining the application of Pt13 r5 to cases which were hopeless or doomed to failure; 7 Not being satisfied that the Respondents are unable to lead evidence of matters of fact which are capable of disclosing an arguable case; 8 Taking into account the possibility of the Respondents having further interlocutory processes available to them; 9 Taking into account against the Appellants the fact that the Appellants motion was not brought on for hearing until several months after the proceedings had been commenced. 12 The central basis of the appeal is that, as the plaintiffs have been unable to articulate any factual basis for the allegation of negligence, either in the amended statement of claim or by particulars or in the amended DCM (Differential Case Management) document, the commencing of the action pleading a bare cause of action is entirely speculative and an abuse of process and that the Master fell into error in failing to so find. Some further facts 13 On 27 September 2002 – a week prior to the expiration of the 6-year limitation period – the plaintiffs filed a verified statement of claim with the required solicitor's certificate from Mr Peter Jackson. On 15 October 2002 the defendants requested details of the alleged loss and damage but not as to liability. A letter of 30 October 2002 set out some issues which would arise on liability on the original statement of claim. Particulars on the issue of liability were sought by separate letter of 30 October. Some particulars were given by letter of 3 December together with details of the damages claim, showing quite clearly the claim is not large. The request for further and better particulars was repeated on 13 December 2002, 28 February 2003, and 23 April 2003. 14 There were complaints about the vagueness of the claim in December 2002. There were discussions about security for costs. A draft defence was provided with a statement that no adequate defence could be prepared without an understanding of the claim made. From the correspondence, particularly two letters from the defendants' solicitor of 30 October 2002, it is reasonably clear that the defendants understood the claim that was being made was that releases of water were made which were neither necessary nor appropriate and that such releases caused damage to the plaintiffs. The amended statement of claim was filed on 7 April 2003, said to be after "continuing consultation with relevant experts". The amended DCM document was filed two days later. By letter of 23 April the defendants' solicitors asserted the amended pleading did not comply with Pt16 r4 and did not assert any proper factual basis for the breach of duty alleged. The plaintiffs' solicitors briefed an expert who sought further information required from the defendant, which was not provided. 15 There was a status conference on 7 May 2003. The procedure was to say the least, strange. Counsel for the defendants called on a notice to produce and the expert's advice. Counsel for the plaintiffs claimed that anything of that nature would be privileged. It seems that counsel for the defendants considered some advice must have been obtained for the solicitor to give his certificate necessary to be appended to the statement of claim. The Deputy Registrar ordered that the plaintiff serve a preliminary expert's report by 1 August 2003. This somewhat extraordinary order may have been made in light of the fishing allegations. The plaintiffs' request for production of documents was resisted. By letter of 3 July, the plaintiffs' solicitor said he did have a preliminary expert's report and that in any event privilege would be claimed for it. It has, however, been produced to the court but not made available to the defendants. All this was followed with further correspondence on various issues. The plaintiffs sought inspection of documents of certain categories, which if production is proper, I consider reasonable. There was other material before the Master and therefore before me which was perhaps only relevant to a separate application for security for costs. If it was to show prejudice to the defendants insofar as costs would be incurred in contesting a claim with little knowledge of its nature it shows nothing except that the requirement for proportionality has been completely disregarded. Discussion of grounds of appeal 16 As I have said the argument really centred on ground one. Grounds two, three, five, seven and eight are really subsidiary to this. Ground nine is of little import. The Master could take this into account even though much of the delay arose through attempts to obtain particulars of the plaintiffs' claim. It is not an appealable error. Ground six is not made out. The Master said at paragraph 18 and 19 of his judgment: 18 The defendants contend that the proceedings are an abuse of process and that they would be put to enormous expense if required to defend the proceedings at trial. In substance, the defendants say that there is no evidence to support the allegations made in the pleading. It is said that this is a case where the plaintiffs can present nothing more than bare or unsubstantiated allegation. In support of their contentions, the defendants have referred the court to certain cases (including WA Pines Pty Ltd v Bannerman (1980) 41 FLR 175 and Scott v Scotis [2003] VSCA 121). 19 The court has a discretionary power to grant summary relief. The power is exercised having regard to the particular circumstances of the case before the court and so that justice is best served between the parties. The court is bound by authority which restricts the exercise of the power to what might be described as clear cases. The proceedings must fall within the category of being inter alia hopeless or doomed to failure. Generally speaking, an application for summary relief should be made promptly. The onus rests with the defendants. "Inter alia" does not exclude abuse of process. The two paragraphs must be read together. 17 I turn to ground one. To say the least paragraphs 16 and 16a of the amended statement of claim are not fine examples of the pleader's art. Counsel for the plaintiff was asked if she wished to seek leave to amend and she declined the invitation, but that may have been because she was not ready with some prepared document. Nevertheless it is that response which has caused me to delay this judgment. If the claim of the plaintiffs could succeed it would be necessary to establish that either (1) the releases made which caused the damage were unnecessary or made over too short a period or, (2) that they were only necessary because the dam had not been properly managed prior to the releases being made. It does not, I think, matter which. The particulars, sparse as they are, direct attention to those matters by referring to time of commencement of releases, volume of water released and the period over which the release took place. One can assume that in the proper management of dams, every effort is made, or ought to be made to avoid flooding of downstream land. 18 Senior counsel for the defendants placed particular emphasis on passages in the cases of WA Pines Pty Ltd v Bannerman (1980) 41 FLR 175 at 181 and Scott v Scotis [2003] VSCA 121 at 14 and a number of other cases where it has been held that it is an abuse of process to commence an action without an evidentiary basis to support it. The present case may be close to the line, but I do not think, in the words of WA Pines that "the pleadings appear clearly to be no more than an unsustainable assertion which will not be supported" nor a case where application for early production of documents is no more than seeking a licence to fish unknown waters. Scott v Scotis is a much different case, although the principle is not open to doubt. But there, even after early discovery, the plaintiff could not give facts or particulars to establish or set out the claim. The defendants in Scott, the subject of discovery orders, had none of the documents sought. Here it is obvious that the defendants have relevant material. The original response as to the issues which might arise on the original statement of claim I think make that quite clear. 19 I consider that the Master was correct and there was no incorrect exercise of his discretion. I do not consider that the proceedings at this stage should be dismissed as an abuse of process. 20 In coming to this decision I place no reliance on the certificate of the plaintiffs' solicitor given under s118L(2) of the Legal Profession Act 1987. The court should decide the question on the pleadings and on the evidence but not on the opinion evidence given, albeit that the intention of the certificate is to prevent an abuse of process. Notice of motion for production and inspection 21 By notice of motion filed 1 October 2003, the plaintiffs sought an order pursuant to Pt23 r2(b) that the defendants produce for inspection certain documents. Ten categories of documents were listed. The categories relate, among other things, to operational procedures for water releases, engineers reports, flood protocols, and the structural integrity of the Dam. The defendants have consistently refused to provide these documents to the plaintiffs as a result of which refusal the motion for production and inspection was filed. This was not dealt with by the learned Master for certain reasons. In hindsight it would have been preferable for both motions to be heard together. However, the motion is before me. 22 No argument was directed to the question of whether the provisions of Pt23 r2(1)(b) could be brought to bear at a time when there is no defence and that therefore the facts in issue are not determined. In pure pleading terms there is not a fact in issue until it is put in issue. However, it is clear that the question of the method and times of release and the appropriateness of the management of the dam will be facts in issue. I do not consider that the rule which allows such notices for production to be given is restricted to actions in which a defence has been filed. 23 The documents requested by the plaintiffs are in the possession of the defendants. The plaintiffs point to the decision in Trade Practices Commission v CC (New South Wales) Pty Ltd (1995) 58 FCR 426 at 439 where Lindgren J stated: A well-accepted situation which the court often exercises its discretion by ordering discovery before particulars are supplied is that in which the party which seeks particulars and resists discovery is alone in possession of the relevant documents. This is such a case. As the action remains on foot production and inspection should be ordered. Orders 1. The appeal from the Master is dismissed with costs 2. Make orders sought in notice of motion filed by the plaintiffs on 1 October 2003. 3. Defendants to pay plaintiffs' costs of the notice of motion. ********** Last Modified: 05/17/2004 DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.