Civil and Administrative Tribunal New South Wales Medium Neutral Citation: Owners Corporation SP 69470 v Sydney Water Corporation [2015] NSWCATAP 177 Hearing dates: 15 April 2015 Date of orders: 19 August 2015 Decision date: 19 August 2015 Jurisdiction: Appeal Panel Before: D Patten, Principal Member T Simon, Senior Member Decision: 1 Appeal Dismissed. 2 No order as to costs. Catchwords: Consumer Claim – Negligence alleged – no duty of care Legislation Cited: Consumer Claims Act 1998 Civil and Administrative Tribunal Act 2013 Sydney Water Act 1998 (NSW) Cases Cited: Sutherland Shire Council v Heyman (1984 – 1985) 157 CLR 424 Pyrenees Shire Council v Day (1998) 192 CLR 33 Category: Principal judgment Parties: Owners Corporation SP 69470 (Appellant) Sydney Water Corporation (Respondent) Representation: Mr R Wallace (secretary) Mr Catling File Number(s): AP 14/60742 Publication restriction: Unrestricted Decision under appeal Court or tribunal: Civil and Administrative Tribunal Jurisdiction: Consumer and Commercial Division Citation: [2014] NSWCAT Date of Decision: 28 November 2014 Before: F E Gray, General Member File Number(s): GEN 14/19668 reasons for decision 1. This is an appeal from the decision of the Tribunal below (F E Gray, General Member) dismissing the application by the appellant for an order that the respondent refund $19,696.82 paid for the supply of water. The ground of dismissal was that the Tribunal had no jurisdiction as the "application was lodged out of the time period stipulated in the Act." 2. The Notice of Appeal relied on 3 grounds viz: 1. The decision erred in finding that the cause of action in the matter occurred on 21 March 2011 thus lying 19 days outside the 3 year jurisdictional limitation under the Consumer Claims Act. 2. Even if the Appeals Panel finds that the cause of action did occur on 21 March, Member Gray should have considered that part of the claim relates to the period from 9 April 2011 to 10 October 2011. This period of time was within the jurisdiction of the Tribunal and therefore the matter should have been heard at least in relation to this period. 3. The decision to dismiss fails to consider fairness as required by the Consumer Claims Act. 1. The factual matrix in which the dispute occurred is not in issue. Relevantly the facts may be summarised: * On 1 June 2000 consent was given for a 4 storey mixed development (2 shops on the ground floor and 11 residential units above) at 43 North Steyne Manly. * In relation to the connection of water to the development the respondent as the responsible authority under the Sydney Water Act required the residential units to have one shared water meter and for each of the shops to have a separate meter, it being the respondents intention that it would have a separate record of water supplied by it to the residential units and separate records of water supplied to each of the shops. * The 11 residential units were comprised within Strata Plan 69470 which was registered on 28 February 2003 thus bringing into existence the appellant. * The 2 shops were comprised in Strata Plan 69948 registered on 10 March 2003. * The water meter for the 11 residential lots was compliant with the respondents requirements but was physically located wholly within SP 69948. * The two shops were developed as restaurants and they opened for business in or about December 2003. * In October 2003 Mr M Stewart an employee of the respondent recorded that the 2 shops had been connected to the residential water meter a circumstance contrary to the respondent's policy. * As a consequence of the 2 shops sharing a water meter with the residential units all water supplied by the respondent and consumed in both the residential units and the shops was billed to the appellant. * The appellant paid all accounts for water supplied up to the account issued by the respondent on or about 7 March 2011. This account demonstrated a significant increase in the consumption of water in the period since 10 June 2010. * Following investigation by the appellant steps were taken to separate the water metering of the residential units from the shops this being achieved on 10 October 2011. * On 9 April 2014 the appellant commenced proceedings in this Tribunal seeking to recover $19,696.52 from the respondent on the basis that it represented the price of water consumed in the shops but billed to the residential units. There seems to have been no challenge as to the quantum claimed. The respondent is a corporation established by the Sydney Water Act 1994. By s 12 under licence from the Governor it is enabled to provide water drainage and sewerage services in particular areas of operation. Sections 37, 38, 55 and 58 have relevance to this case. 37 Ownership of works (1) The Corporation is the owner of all works installed in or on land, at sea, in or on the seabed, in rivers and other waterways and in or on the beds of rivers and waterways by the Corporation and of all works in or on land or in water vested in or transferred to the Corporation (whether or not the land is owned by the Corporation). (2) The Corporation may, subject to this Act, operate, repair, replace, maintain, remove, extend, expand, connect, disconnect, improve or do any other things that are necessary or appropriate to any of its works to ensure that, in the opinion of the Corporation, the works are used in an efficient manner for the purposes for which they were installed. (3) The Corporation may sell or otherwise deal with works that it owns. (4) The provisions of this section have effect despite anything contained in section 42 of the Real Property Act 1900. 38 Entry on to land (1) The Corporation may, by persons issued with certificates of authority under section 39, enter and occupy land or a building in accordance with this Division for any one or more of the following purposes: (a) to operate, repair, replace, maintain, remove, extend, expand, connect, disconnect, improve or do any other things that the Corporation considers are necessary or appropriate to any of its works or to construct new works and, for these purposes, to carry out any work on, below or above the surface of the land, (b) to read a meter that measures water supplied by the Corporation or material discharged into the Corporation's sewers, (c) to make a valuation or assessment of the usage of the land or of any building on the land, (d) to find the source of pollution of water supplied by the Corporation and, for this purpose, to dig up and remove material from the land, (e) to ascertain whether a customer contract or other contract for the provision of services by the Corporation is being breached in relation to the connection to or use of works and, for this purpose, to dig up and remove material from the land, (f) to cut off or restrict the supply of water or other services to the land if any contract charges relating to the supply of water or those services to the land by the Corporation are unpaid, (g) to rectify defective or improper work that has not been rectified in accordance with a notice served by the Corporation under a customer contract or other contract, (h) to ascertain the character and condition of the land or a building to enable the Corporation to operate, repair, replace, maintain, remove, extend, expand, connect, disconnect or improve, or do any other thing to, the Corporation's systems and services for the purposes of carrying out the terms and conditions of an operating licence, (i) to ascertain the condition and location of any pipe, sewer, drain, channel or fitting or other work used in connection with the land or a building to enable the Corporation to operate, repair, replace, maintain, remove, extend, expand, connect, disconnect or improve, or do any other thing to, the Corporation's systems and services for the purposes of carrying out the terms and conditions of an operating licence. (2) Material that has been excavated from land for the purposes of this section may only be removed from the land by the Corporation: (a) if this is necessary for the purpose of ascertaining whether an offence has been committed against this Act, or (b) if the owner of the land has consented to its removal. 55 Owner of land taken to have entered into customer contract (1) An owner of land that is connected to a water main or sewer main owned by the Corporation is taken to have entered into a customer contract with the Corporation, on the terms and conditions set out in the relevant operating licence or licences as varied from time to time in accordance with section 59, for the provision of water supply or sewerage services, or either of them, to the land. (2) In addition, a customer contract may also include terms and conditions relating to the imposition and payment of charges imposed under section 64 or 65. If a customer contract makes provision for such matters, a person by whom one or more of the charges are payable is taken to have entered into a customer contract with the Corporation on those terms and conditions. (3) A customer contract is not unjust, unconscionable, harsh or oppressive for the purposes of any law. (3A) A customer contract does not operate so as to impose obligations on the Corporation or any owner of land in respect of the supply of water, or the provision of a sewerage service, during the term of any contract in that regard entered into between the owner of the land and a licensed retail supplier within the meaning of the Water Industry Competition Act 2006. (3B) If: (a) the Corporation is a retailer of last resort within the meaning of the Water Industry Competition Act 2006 in relation to any water supply or sewerage service, and (b) a direction in relation to that service is given to the Corporation under section 56 of that Act, the Corporation and the owner are taken to have entered into a special circumstances contract in such terms as are prescribed by the regulations for the purposes of this subsection. (4) This section has effect subject to section 56. 58 Consumer claims The jurisdiction of the Civil and Administrative Tribunal as conferred under the Consumer Claims Act 1998 extends to the hearing and determination of a consumer claim (within the meaning of that Act) relating to a service supplied by the Corporation under a customer contract. Also relevant to this case are provisions of the Consumer Claims Act: 3A Meaning of "consumer claim" (1) For the purposes of this Act, a consumer claim is: (a) a claim by a consumer for the payment of a specified sum of money, or (b) a claim by a consumer for the supply of specified services, or (c) a claim by a consumer for relief from payment of a specified sum of money, or (d) a claim by a consumer for the delivery, return or replacement of specified goods or goods of a specified description, or (e) a claim by a consumer for a combination of two or more of the remedies referred to in paragraphs (a)–(d), that arises from a supply of goods or services by a supplier to the consumer, whether under a contract or not, or that arises under a contract that is collateral to a contract for the supply of goods or services. (2) For the avoidance of doubt, a reference in this Act to a consumer claim includes a reference to a claim by a consumer against a supplier (for example, a manufacturer or wholesaler) who is not the direct supplier of goods or services to the consumer if the claim arises from or in connection with the supply of those goods or services by the direct supplier to the consumer. 6 Application for determination Any consumer may apply to the Tribunal for determination of a consumer claim. 7 Jurisdiction in respect of consumer claims (cf Act No 206 of 1987, sec 10) (1) General The Tribunal has jurisdiction to hear and determine any consumer claim brought before it under this Part, whether or not the matter to which the claim relates arose before or after the commencement of this Part, except as otherwise provided by this section. (2) Supply or agreement made, or supply intended to be made, in New South Wales The Tribunal has jurisdiction to hear and determine a consumer claim only if: (a) the goods or services to which the claim relates were supplied in New South Wales, or (b) a contract or other agreement to which the claim relates contemplated that the goods or services would be supplied in New South Wales (whether or not they were so supplied), or (c) a contract or other agreement to which the claim relates was made in New South Wales (whether or not the goods or services were supplied in New South Wales). (3) The Tribunal has such jurisdiction whether or not: (a) a contract or other agreement to which the claim relates confers jurisdiction on any other court or tribunal (whether in New South Wales or elsewhere), or (b) the rules of private international law require a law other than the law of New South Wales to be applied to the hearing or determination of the claim. (4) Limitation periods The Tribunal does not have jurisdiction to hear and determine a consumer claim if any of the following apply: (a) the cause of action giving rise to the claim first accrued more than 3 years before the date on which the claim is lodged, (b) the goods or services to which the claim relates were supplied (or, if made in instalments, were last supplied) to the claimant more than 10 years before the date on which the claim is lodged. (4A) Nothing in this section affects any period of limitation under the Limitation Act 1969. (5) Claim relating to solicitor's or barrister's costs A matter arising in relation to the fairness or reasonableness of the costs charged by a barrister or solicitor for an item of business transacted by the barrister or solicitor is not within the jurisdiction of the Tribunal if the costs can be the subject of a costs assessment under the legal costs legislation (as defined in section 3A of the Legal Profession Uniform Law Application Act 2014). 8 Tribunal orders (cf Act No 206 of 1987, sec 30) (1) In determining a consumer claim wholly or partly in favour of a claimant, the Tribunal may, subject to this Part, make such one or more of the following orders as it considers appropriate: (a) an order that requires a respondent to pay to the claimant a specified amount of money, (b) an order that requires a respondent to perform specified work in order to rectify a defect in goods or services to which the claim relates, (c) an order that requires a respondent to supply to the claimant specified services other than work, (d) in the case of a claim for relief from payment of money, an order declaring that a specified amount of money is not due or owing by the claimant to a respondent, (e) an order that requires a respondent to deliver to the claimant goods of a specified description, (f) an order that requires a respondent to return to the claimant specified goods which are in the possession or under the control of that respondent, whether the property in the goods has passed or not, (g) an order that requires a respondent to replace goods to which the claim relates, (h) an order that requires: (i) a respondent to refund all or part of the purchase price of specified goods that are in the possession or under the control of the claimant, and (ii) the claimant to return all or part of those goods to the respondent, whether the property in the goods has passed or not. (2) In determining a consumer claim wholly or partly in favour of a respondent to the claim, the Tribunal may make such one or more of the following orders as it considers appropriate: (a) an order dismissing the claim or a part of the claim, (b) an order that requires the claimant to pay to the respondent a specified amount of money, (c) an order that requires the claimant to return to the respondent specified goods which are in the possession or under the control of the claimant, whether the property in the goods has passed or not. (2A) Without limiting subsection (1) or (2), in determining a consumer claim in which there is more than one respondent, the Tribunal may make such one or more of the following orders as it considers appropriate: (a) an order that requires a respondent to pay to another respondent a specified amount of money, (b) an order that requires a respondent to supply to another respondent specified services other than work, (c) an order that requires a respondent to deliver to another respondent goods of a specified description, (d) an order that requires a respondent (the first respondent) to return to another respondent specified goods that are in the possession or under the control of the first respondent, whether the property in the goods has passed or not. (3) In making an order under this section requiring a party to a consumer claim to pay a specified amount of money or to take any other specified action, the Tribunal must, unless it has good reason to the contrary, specify a period within which the money must be paid or the action must be taken. (4) The Tribunal may not make any of the orders referred to in this section unless the claimant's case has been presented to the Tribunal (whether or not in person) following the making of the relevant application under section 6. (5) Nothing in subsection (4) prevents the Tribunal from dismissing or adjourning proceedings under section 55 (Dismissal of proceedings) of the Civil and Administrative Tribunal Act 2013. 1. The matter was dealt with at the hearing below as a consumer claim pursuant to the Consumer Claims Act and s 58 of the Sydney Water Act. The findings of the Tribunal that the appellant was a consumer, that the respondent was a supplier, that the claim before the Tribunal was a consumer claim as defined in s 3A of the Consumer Claims Act, and that the supply took place in NSW are not challenged in this appeal. 2. What is challenged is the basis upon which the Tribunal rejected the claim namely that it was made outside the period permitted by section 7(4)(a) of the Consumer Claims Act: 7 Jurisdiction in respect of consumer claims (4) Limitation periods The Tribunal does not have jurisdiction to hear and determine a consumer claim if any of the following apply: (a) the cause of action giving rise to the claim first accrued more than 3 years before the date on which the claim is lodged, 1. The Tribunal in its reasons referred to the manner in which the case was put before it: 22 The applicants argue that the cause of action accrued on 24 May 2011 and have lodged their application within the required time period for the following reasons: (1) The cause of action relied upon by the applicant is that the respondent acted negligently; (2) The cause of action accrued on the day Sydney Water advised the applicant of the unauthorised connection, being on 20 May 2011; (3) As the provision of water is by instalments, the provisions of s 7(4)(b) of the Act do not apply, as the date of the last instalment was not more than 10 years before the date on which the claim was lodged. (4) The applicant states in their application that the respondent 'allowed the owners of the retail shops to illegally divert water that was billed to the Owners Corporation SP69470. It either knew or should have known that this direction was occurring and yet it failed to act'. (Refer p4 of the attachment to the application). 1. The Tribunal reasoned as follows: 26 In the case of a cause of an action in tort, such as negligence, the cause of action accrues when the damage is discovered. 27 The cause of action identified by the applicant in their application is that of negligence. 28 The applicant asserts that they were not in a position to know that the applicant was paying for the commercial premises water usage at the premises, caused by the failure of the respondent to remedy the incorrectly installed meter and check matters, until they received the large water usage bill in 2011. The applicant asserts in their submissions that the bill was received in April 2011. The applicant further asserts that they did not have actual knowledge of the incorrect meter installation until the email provided by the respondent dated 20 May 2011. 29 The applicant lodged their application with the Tribunal on 9 April 2014. 1. The Tribunal referred to evidence that the appellant received the account which alerted it to something being amiss on 21 March 2011 and held in the light of its earlier reasoning that this was the date upon which the cause of action first accrued and that as a consequence proceedings launched on 9 April 2014 were statute barred. 2. The appellants submissions presented by its secretary Mr R Wallace maintained that its cause of action was in negligence but disputed that its knowledge of such cause of action was acquired on 21 March 2011 when it received the abnormal account. He pointed out with some force that there were a number of explanations for the abnormality other than the one ultimately established, including a leaking pipe, and a fault in the operation of the meter. Rather, so it was submitted, the appellant did not become fully aware of what occurred until 20 May 2011 when it received verbal information that water consumed by the shops was being metered and debited to the residential units. 3. Alternatively it was submitted that the respondent was negligent by failing to act promptly when it discovered what had occurred on 20 May 2011. This proposition was based on the respondents policy that in a mixed use development each use type must have a separate meter. 4. The respondent maintained the correctness of the decision below, in particular submitting that the Tribunal correctly held that any cause of action first accrued on 21 March 2011. 5. In oral submissions Mr Catling who appeared for the respondent pointed out that responsibility for meters lies with the respondent's customers. He referred to the respondent's published policy on water meters including: 2.1. Responsibility Sydney Water responsibility We own meters that measures the water a customer uses. We are responsible for reading and maintaining them. Customer responsibility You are responsible for: • ensuring you have an authorised connection to our water main. In most cases, this will include a meter • ensuring the licensed plumber who installs a meter onto your property follows our Water meter installation guide • protecting the meter from damage • telling us if the meter is behind a locked gate or fence • keeping the area around the meter clear so we can read it regularly • maintaining a private data logger attached to our meter. This includes the connection to the meter • maintaining a private meter if your property has one • maintaining a metered standpipe if you have one. 1. The difficulty with the appellants submissions as we see it and as seems to be accommodated by Mr Catling's submissions is that we do not think there was a cause of action in negligence. The respondent in our opinion had power under sections 37 and 38 of the Sydney Water Act to overcome the problem which had arisen namely a departure from its policy. However in our view it had no duty to exercise that power bearing in mind that the meter was installed by or on behalf of the appellant on its own property and at a point in the water pipe well beyond the responsibility of the respondent which ended at the street frontage. Nor in our view did the law impose upon the respondent a duty to notify the appellant of any breach of its policy which came to its attention. 2. The principles governing the liability of a public authority in negligence in relation to the performance of its statutory responsibilities are discussed in Sutherland Shire Council v Heyman (1984 -1985) 157 CLR 424 and Pyrenees Shire Council v Day [1998] 192 CLR 33. In Heyman the plaintiff was unsuccessful in a case concerning the alleged negligence of the defendant in failing, following an inspection of a building, to detect structural defects in the footings. Gibbs CJ and Wilson J found against the plaintiff on the basis that there was no evidence of negligence in carrying out the inspection. Mason Brennan and Deane JJ held that there was no reliance by the plaintiff upon the Council and therefore it owed no relevant duty of care. 3. Pyrenees Council concerned the alleged failure of a Local Government Authority to respond to a report that residential premises contained a fire hazard. The claim succeeded principally upon the ground that the Council had actual knowledge of a very serious hazard and in the circumstances was under a public duty to act. McHugh J also based his decision on the doctrine of general reliance holding that the circumstances, given the nature of the fire hazard, allowed members of the Community to rely upon the exercise by the Council of its powers to protect them from harm. 4. In our view the facts of this case are well away from Pyrenees Council: there was no dangerous hazard, there was no evidence of or reason to impute reliance, and there was no basis for concluding that the respondent had a positive duty to act when one of its employees discovered a non harzardous breach of its policy. 5. The appeal therefore must be dismissed albeit on a different basis from that decided in the Tribunal below. We should add however that, as held by the Tribunal below, a cause of action in negligence arises when the cause of action is complete that is when damage is suffered. In some situations a limitation period may be extended to meet the circumstance of hidden damage discovered at a later point of time. However it is by no means clear to us that such is the case here given that the meter in question was actually installed by the appellant. 6. Thus although there was a consumer claim in the sense that the appellant was a consumer and the claim "arises from a supply of goods or services by a supplier" there was in our opinion no basis upon which the claim could succeed in negligence or otherwise. There was no suggestion that the respondent was paid twice for the same supply. 7. The notice of appeal raises the question of an outstanding sum claimed by the respondent for the period from 9 April 2011 to 10 October 2011. Although we see no basis in law for making a declaration regarding this period we suggest in fairness that if the respondent is able to quantify the amount attributable to the shops it should make an appropriate adjustment. Orders 1. Appeal dismissed. 2. No order as to costs. I hereby certify that this is a true and accurate record of the reasons for decision of the Civil and Administrative Tribunal of New South Wales. Registrar 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. Decision last updated: 19 August 2015