Supreme Court New South Wales Medium Neutral Citation: Rodriguez & Sons Pty Ltd v Queensland Bulk Water Supply Authority trading as Seqwater (No 8) [2017] NSWSC 554 Hearing dates: 3 May 2017 Date of orders: 03 May 2017 Decision date: 03 May 2017 Jurisdiction: Common Law Before: Beech-Jones J Decision: See [39] Catchwords: REPRESENTATIVE ACTION – Queensland Floods – application to strike out statement of claim – alleged defect in failure to plead steps required of flood engineer in pursuing alternative case – alleged failure to plead methodological errors by flood engineers – breaches of duty in December 2010 had no causal consequence – application rejected – experts reports – form of orders necessary to address alleged inconsistencies in reports – no question of principle Legislation Cited: Evidence Act 1995 Uniform Civil Procedure Rules, r 14.28 Cases Cited: Rodriguez & Sons Pty Ltd v Queensland Bulk Water Supply Authority trading as Seqwater [2014] NSWSC 1565 Rodriguez & Sons Pty Limited v Queensland Bulk Water Supply Authority trading as Seqwater (No 3) [2015] NSW SC 838 Category: Principal judgment Parties: Rodriguez & Sons Pty Limited (Plaintiff) Queensland Bulk Water Supply Authority trading as Seqwater (First Defendant/Applicant) SunWater Limited (Second Defendant) State of Queensland (Third Defendant) Representation: Counsel: N Owens SC; JE Taylor (Plaintiff) B O'Donnell QC; D Klineberg (First Defendant) DL Williams SC; H Neal (Second Defendant) GA Thompson QC; JM Horton QC; E Morzone (Third Defendant) Solicitors: Maurice Blackburn Pty Ltd (Plaintiff) King & Wood Mallesons (First Defendant) Norton Rose Fulbright (Second Defendant) Crown Solicitor for the State of Queensland (Third Defendant) File Number(s): 2014/200854 EX TEMPORE Judgment 1. By an amended notice of motion filed in court today, 3 May 2017, the first defendant, Queensland Bulk Water Supply Authority trading as Seqwater ("Seqwater"), sought various forms of relief. Prayer 1 sought a ruling pursuant to s 192A of the Evidence Act 1995 that the expert reports provided by Dr Ronald K Christensen be ruled inadmissible because they do not satisfy s 79 of the Evidence Act, or, alternatively, not be admitted under s 135 of the Evidence Act. In view of the position taken by the plaintiff, that relief was not pressed. 2. Prayer 2 of the motion sought an order directing the plaintiff to file further reports from Dr Christensen to address various matters set out in Appendix A to the motion ("Appendix A"). Appendix A lists twenty-three issues of concern to Seqwater in relation to Dr Christensen's reports which are said to impact upon its admissibility, whether it was capable of being excluded under s 135 and the overall ability of Seqwater to prepare its case for trial. In the end result, Seqwater did not press that order either. Instead, it sought a more limited order which required Dr Christensen to prepare and serve amended copies of his reports, which were marked up to identify those parts which were not relied upon, and which otherwise addressed the matters set out in Appendix A. 3. Prayer 3A of the amended notice of motion sought an order pursuant to r 14.28 of the Uniform Civil Procedure Rules 2005 that the fourth amended statement of claim ("FASOC") be struck out. Prayer 3B sought an order, in the alternative, that those parts of the FASOC which allege breaches of duty in the period 16 December 2010 to 1 January 2011 be dismissed. Prayer 4 sought a consequential order directing the plaintiffs to serve a further proposed amended statement of claim. The balance of the amended notice of motion sought various directions in relation to that amended pleading. Strike‑Out 1. I will address the challenge to the pleading first. I will do so on the basis that it is accepted that the plaintiff will have the opportunity to address the various issues that are raised in relation to Dr Christensen's reports and specifically what are said to be inconsistencies in the approach he adopted in and between those reports. 2. To address Seqwater's complaints, it is necessary to describe the structure of the FASOC. The FASOC identifies various points throughout the period December 2010 to January 2011 and pleads, at those points, matters said to constitute a breach of duty on the part of the flood engineers responsible for flood operations at the two relevant dams, that is, Somerset Dam and Wivenhoe Dam. 3. For example, paragraph 158A pleads that as at 16 December 2006, circumstances were such that there was: "…a significant risk: a) that there would be insufficient flood storage and capacity in Lake Somerset and Lake Wivenhoe to store flood inflows should further rainfall occur …; and b) that, without such a capacity, subsequent releases would be necessary in volumes that would cause urban flooding downstream of Wivenhoe Dam." 1. Paragraph 160 then pleads as follows: "Further, by reason of the matters pleaded at paragraphs 158-158A, a reasonably prudent flood engineer responsible for Flood Operations at Somerset Dam and Wivenhoe Dam on 16 December 2010: a) would have complied with the Flood Mitigation Manual; b) would have recommenced or continued Flood Operations and releases on 16 December 2010; c) would have implemented Strategy W1 at Wivenhoe Dam; d) would have implemented Strategy S2 at Somerset Dam. e) would have caused Wivenhoe Dam and Somerset Dam to release water at rates exceeding the rate of inflow. f) would have reduced the water level in Lake Somerset to no higher than approximately EL 99.04 m AHD by the end of 16 December 2010; g) would have reduced the water level in Lake Wivenhoe to no higher than approximately EL 67.09 m AHD by the end of 16 December 2010; h) would have continued Flood Operations until Lake Somerset and Lake Wivenhoe were no longer likely to exceed their respective Full Supply Levels. 1. Allegations of a similar form of breach by the flood engineers are then made in the balance of the FASOC in respect of the other dates and periods, specifically for the periods 25 December 2010 to 1 January 2011; 2 January 2011; 3 to 5 January 2011 and thereafter until 10 to 11 January 2011. Each of these subsequent allegations are in fact alternative cases in that the plaintiff pleads that, had the defendants taken the pleaded steps at previous times, including, for example, during the period 3 to 5 January 2011, then the water level faced by the flood engineers in control of the dams would have been different from that which in fact transpired. 2. The causation issues raised by this form of pleading were considered by Garling J in Rodriguez & Sons Pty Ltd v Queensland Bulk Water Supply Authority trading as Seqwater [2014] NSWSC 1565 ("Rodriguez (No 1)"). In particular, in Rodriguez (No 1), at [64] to [69] his Honour stated as follows: "64 Senior counsel for Sunwater next submitted that the manner of pleading meant that in considering questions of causation, the defendants were confronted with "… a rolled up allegation that one or more of the 300 breaches (in innumerable combinations) have caused the plaintiffs and group members losses". 65 This lead Sunwater to submit that it is impossible to discern from the pleading the real case which the plaintiff wishes to run and which the defendants will be required to meet. It is impossible to identify what breach or combination of breaches is said to have been causative of the plaintiff's and group members' loss. 66 Counsel for Seqwater, by reference to a chart of the level over the requisite period in the Wivenhoe Dam, sought to emphasise a similar point. That is, that as the pleading presently stands it is impossible for the defendants to known whether, if they did take action at an earlier point in time, it would have had any causal effect on the flooding, without the plaintiff specifying the consequences of that earlier action. 67 In my view, to the extent that the pleading does not include a paragraph, referrable to each of the selected nine time periods, which alleges that by the relevant point during the time period, the conduct of the defendants was negligent, because the level of the dam was no higher than a specified, and identified level, the pleading is defective. 68 In my view, in order to enable the defendants to properly understand the causation pleading, it is necessary for the plaintiffs to specify the appropriate level of available capacity by reference to dam height at a level for which they contend. I do not understand, after submission, that counsel for the plaintiff disputes this requirement. 69 In my view, providing a Statement of Claim includes such a specification, then notwithstanding the multitude of breaches pleaded, the defendants will be in a position to properly understand the case which they have to meet." 1. As a consequence of Rodriguez (No 1) the statement of claim was amended so that, for each relevant period, there is identified what the plaintiff contends would have been the water level in the various dams had the flood engineers commenced undertaking the various pleaded steps at a particular point in time. 2. Thus, for example, paragraph 307 of the FASOC alleges the matters that it is contended a reasonably prudent flood engineer would have taken on the morning of 9 January 2011 in the circumstances that had transpired to that time. Paragraph 307B then pleads: "Further, by reason of the matters pleaded in paragraphs 151-152, 163A-165, 170-170A, 174, 179A-182, 192-201, 214-219, 231-236, 248-252, 270-275, 291-295 and 307A, by the end of 9 January 2011, a reasonably prudent flood engineer: a) having first commenced reasonably prudent Flood Operations on 16 December 2010 (by taking the actions pleaded in paragraph 160 above), and having continued reasonably prudent Flood Operations since that time, would have kept the water level in Lake Somerset to no higher than approximately EL 100.42 m AHD, and would have kept EL 64.13 m AHD; or, alternatively, b) having first commenced reasonably prudent Flood Operations on 2 January 2011 (by taking the actions pleaded in paragraph 211 above), and having continued reasonably [prudent] Flood Operations since that time, would have kept the water level in Lake Somerset to no higher than approximately EL 100.43 m AHD, and would have kept the water level in Lake Wivenhoe to no higher than approximately EL 64.12 m AHD; or alternatively, c) having first commenced reasonably prudent Flood Operations on 5 January 2011 (by taking the actions pleaded in paragraph 228 above), and having continued reasonably prudent Flood Operations since that time, would have kept the water level in Lake Somerset to no higher than approximately EL 100.20 m AHD, and would have kept the water level in Lake Wivenhoe to no higher than approximately EL 64.82 m AHD; or, alternatively, d) having first commenced reasonably prudent Flood Operations on 6 January 2011 (by taking the actions pleaded in paragraph 245 above), and having continued reasonably prudent Flood Operations since that time, would have kept the water level in Lake Somerset to no higher than approximately EL 101.06 m AHD, and would have kept the water level in Lake Wivenhoe to approximately EL 65.36 m AHD; or alternatively, e) having first commenced reasonably prudent Flood Operations on 7 January 2011 (by taking the actions pleaded in paragraphs 267 above), and having continued reasonably prudent Flood Operations since that time, would have kept the water level in Lake Somerset to no higher than approximately EL 101.90 m AHD, and would have reduced the water level in Lake Wivenhoe to approximately EL 66.51 m AHD; or alternatively, f) having first commenced reasonably prudent Flood Operations on 8 January 2011 (by taking the actions pleaded in paragraph 288 above), and having continued reasonably prudent Flood Operations since that time, would have kept the water level in Lake Somerset to no higher than approximately EL 102.85 m AHD, and would have kept the water level in Lake Wivenhoe to approximately EL 67.67 m AHD; or alternatively, g) having commenced reasonably prudent Flood Operations on 9 January 2011 (by taking the actions pleaded in paragraph 307 above), would have kept the water level in Lake Somerset to no higher than approximately EL 102.98 m AHD, and would have kept the water level in Lake Wivenhoe to approximately EL 68.83 m AHD; or alternatively, h) would have reduced the water level in Lake Wivenhoe to, or maintained the water level in Lake Wivenhoe at, Temporary Full Supply Level; or alternatively, i) would have reduced the water level in Lake Wivenhoe to, or maintained the water level in Lake Wivenhoe at, Full Supply Level." (emphasis added) (This paragraph is analogous to paragraph 267 which was addressed in Rodriguez & Sons Pty Limited v Queensland Bulk Water Supply Authority trading as Seqwater (No 3) [2015] NSWSC 838; "Rodriguez (No 3)".) 1. This paragraph is not a pleading that it was negligent for the flood engineers who were in charge of the respective dams to have failed to achieve specified flood levels by a particular date. Instead, consistent with what Garling J stated in Rodriguez (No 1), this paragraph pleads what the plaintiff contends the water levels would have been had the various steps pleaded in the statement of claim been undertaken. 2. Further, the subparagraphs of [307B] relate to the alternative cases that the plaintiff seeks to mount by reference to the various dates throughout December 2010 to January 2011 that I identified earlier. Thus, for example, s 307B(b) addresses itself to the scenario that "reasonably prudent flood operations" would only have commenced on 2 January 2011 by taking the actions pleaded in paragraph 211 of the FASOC. The paragraph pleads that, had those actions been undertaken, then the water levels in the two dams would have been as stated. 3. The first and most substantive point raised by prayer 3A of Seqwater's amended notice of motion concerns those parts of the FASOC which refer to the actions taken by reasonably prudent flood engineers throughout the entirety of the counterfactual periods such as those noted in 307B(a) to (g). Seqwater contends that the pleading is defective because it does not identify what action was required by the reasonably prudent flood engineer throughout those periods such as, for example, in the case of paragraph 307B(b) the period from 2 January 2011 up to the morning of 9 January 2011. Instead, the FASOC, so it is said, only identifies what actions were required at the commencement of that time, namely 2 January 2011, being the actions that are pleaded in paragraph 211. 4. Seqwater complains that the details of that action can only be ascertained from an analysis of various simulations that are set out in Dr Christensen's reports. Dr Christensen's reports contain simulations as to what would have occurred in the operations of the two dams had flood mitigation operations been commenced at various points throughout December 2010 to January 2011 that correspond with the dates pleaded. 5. It is noteworthy that, if this is a defect which warrants striking out the FASOC, then it is one that has existed for a long time without any complaint. 6. On 24 July 2015 I addressed various complaints about the then proposed statement of claim which has been raised in light of the service, to that time, of Dr Christensen's first report and his supplementary report (Rodriguez (No 3). Although a number of similar complaints were made and addressed, this complaint was not. Instead it appears to have been first notified by Seqwater last Friday. Given that the parties have been preparing the matter for trial in the meantime this undermines the contention that somehow this alleged defect in the pleadings is such that it prevents Seqwater from preparing its case. In any event, I do not accept that this is a matter which raises any defect with the pleading. 7. In particular, I do not accept that in order for Seqwater to know the case it has to meet there must be pleaded the minutiae of the steps that would have had to have been taken by the reasonably prudent flood engineer throughout the various counterfactual periods that are pleaded in the subparagraphs of 307B. In essence, this is a complaint about the lack of particularisation of what each of those subparagraphs refers to as "reasonably prudent flood operations since that time". If there really was a concern about this part of the pleading, then it could have been addressed by directing a simple question to the plaintiff in correspondence which asked it to specify what were the "reasonably prudent flood operations since that time" as referred to in the relevant parts of the FASOC. 8. In fact, the parties have been preparing the matter on the basis that the "reasonably prudent flood operations since that time" are the various simulations that have been identified in Dr Christensen's report. What has emerged is some confusion as to how Dr Christensen's reports interrelate with one another, and what is ultimately the plaintiff's primary case in respect of those simulations. 9. Those matters are sought to be addressed by the other parts of the motion to which I will come. At this point it suffices to state that if it was incumbent upon the plaintiff to plead the minutiae of every step that had to be taken as part of the "continued reasonably prudent flood operations since that time", then the statement of claim would be undoubtedly prolix, and most likely liable to be struck out on that basis. 10. There were a number of other complaints raised by Seqwater in relation to the FASOC which I will briefly address. In its written submissions, Seqwater complains about those parts of the pleading which are in the same form as paragraph 307B set out above in that they refer to what the water level in the two dams would have been had the reasonably prudent flood engineer commenced flood operations on a particular date up to a particular time (ie, "… no higher than …"). 11. The complaint is that the method of pleading has not put the defendants on notice of the case they must meet as to what a reasonably prudent flood engineer would have done. This is said to be contrary to what was stated by Garling J in Rodriguez (No 1). 12. In the written submissions, three points are made in support of this contention. The first is to cross-refer to the reports of Dr Christensen, and then submit that an analysis of the simulations in those reports, "…demonstrates that the water level at midnight 24 hours after the decision as to flood operations was made is a poor indicator of what the decision a reasonably prudent flood engineer should have taken." 13. The second complaint is said to be a related difficulty in relation to ascertaining the water level at midnight 24 hours after the relevant decision was taken. The third complaint is that the rates of release of water referred to in the various simulations in Dr Christensen's reports are not explained by the supposed target of a "no higher than" level by the end of a particular day as referred to in the FASOC. 14. The ultimate complaint is that the "upshot is that the pattern of pleading that by the end of a given day the water level should have been 'no higher than' a pleaded figure tells the defendant little or nothing of the case they must meet." 15. There are two short answers to these contentions. The first is that they misconceive the significance of paragraphs such as 307B in the FASOC. As stated, paragraph 307B and its equivalents are not intended to identify the particulars of negligence or the actions that had to be taken by a reasonably prudent flood engineer. Instead they were introduced into the pleading in response to what was stated by Garling J in Rodriguez (No 1) to enable the defendants to know the case they had to meet on causation, not breach. 16. Second, the real substance of this complaint appears to be with so much of the pleading that implicitly incorporates the simulations from Dr Christensen including what was required of "continued reasonably prudent flood operations". I have already addressed that complaint. 17. A further complaint was made that the FASOC does not properly plead criticisms of the conduct of the flood engineers to enable the defendants to know the case they have to meet. 18. The particular example that is given concerns a large debate in the experts' reports as to whether a reasonably prudent flood engineer should have determined the appropriate strategy for flood mitigation by predicting inflows based either on only rain that actually fell in the relevant catchment area, or rainfall that was forecast to fall in or near the catchment area. The short answer to this, and the other complaints of a similar nature, is that I addressed and rejected them in Rodriguez (No 3) at [22] to [25]. I do not propose to reconsider that analysis. 19. As noted, prayer 3B of the amended notice of motion concerns the allegations of breaches in the periods prior to January 2011. It is contended that they should be dismissed or struck out because the plaintiff's experts' reports indicate that, even if all of the steps alleged by the plaintiff had been undertaken, it would not have made any material difference to the water flowing out of the Wivenhoe Dam, and no different result in terms of the flooding at the lead plaintiff's premises. 20. I addressed a similar contention in Rodriguez (No 3) at [28] to [29]. I accepted that there was force in the contention that there does not appear to be any causal consequences flowing from any alleged breaches of duty that were said to have occurred prior to 2 January 2011. However, I declined to refuse leave to file a statement of claim that included these claims, in the absence of considering the hydrological evidence, and bearing in mind that it was accepted by all the parties that the Court would nevertheless have to consider the events of December 2010 as part of its consideration of the allegations of breach in January 2011. 21. Since Rodriguez (No 3), there has been further hydrological evidence which, as I have indicated, appears to state that the alleged breaches up to 10 January 2011 could not have had any causal consequences for the flooding at the lead plaintiff's premises. However, there still remains the possibility that there are other persons within the group for whom those alleged breaches may have had consequences. 22. I am not persuaded at this point that there is any utility in either striking out or granting summary judgment in respect of this part of the FASOC. Instead I will stand over this part of the notice of motion to the first day of the hearing in October 2017. By no later than the opening, the plaintiff will have to have given serious attention to whether it wishes to maintain those parts of the FASOC that allege a breach of duty prior to January 2011 when the evidence appears to suggest they had no causal consequences. Dr Christensen's Reports 1. This brings me back to the debate about Dr Christensen's reports. Seqwater's proposed order directs the plaintiff to serve amended copies of Dr Christensen's reports marked up to identify which parts are relied on, which parts are not, and which also address each of the matters set out in Appendix A. It became apparent that this order contemplated that Dr Christensen would prepare further versions of the original reports which would expand upon his reasoning, and also contemplated the preparation of additional simulations concerning the conduct of the dams during the relevant period. 2. The plaintiff's position was that the relevant form of order should allow it to serve a further report from Dr Christensen which addresses the issues that have been raised and which includes additional simulations. The plaintiff submitted that the parties can then debate whether that report can be relied on having regard to questions such as prejudice and so forth. 3. The second and third defendants strongly opposed any form of order which gave the plaintiffs permission to put on material from Dr Christensen which included additional simulations. They contended that the task for them in responding to additional simulations is significant and that to allow the plaintiff to take that course would inevitably cause prejudice and jeopardise the trial date. They proposed a form of order which limited the nature of the response that the plaintiff could file in respect of Appendix A. The order effectively limited any further report from Dr Christensen to a report exposing the process of reasoning in his earlier reports, identifying workings and connections with the earlier reports, identifying any changes to the opinions expressed in the earlier reports, and identifying those parts of the earlier reports no longer relied on. The order specifically excluded the grant of any permission to advance further simulations. The plaintiff contended that such an overly prescriptive order was only likely to cause further delay. 4. It is my assessment that, if the matter is progressed by allowing the plaintiff to put on whatever further material from Dr Christensen it chooses, and then having the parties debate matters of prejudice, that will cause a loss of further time as the trial date draws near. I accept that Seqwater is entitled to obtain clarification of various issues that it has raised. In particular, it is entitled to know exactly what the plaintiff says is its primary case in respect of Dr Christensen. Its concerns are best addressed, albeit imperfectly, by a regime that grants the plaintiff leave to file a further affidavit or report in the form envisaged by the second and third defendants' orders, but which also orders them to file any further affidavit that contains additional simulations by a particular date on the understanding that any further affidavit containing simulations will not be able to be read or relied on at the trial without the leave of the Court. 5. At this point, I will indicate the proposed draft orders which the parties can refine, namely: "1. Leave be granted to the plaintiff to serve a further affidavit or report: (a) addressing the issues raised concerning Dr Christensen's reports dated 19 February 2015, 3 July 2015 and 22 December 2016 ("Earlier Reports") by Seqwater in annexure A to its amended notice of motion filed in Court on 3 May 2017, but limited to (i) exposing the process of reasoning in his earlier reports; (ii) identifying workings and connections in his Earlier Reports; and (b) identifying any changes to the opinions expressed in his Earlier Reports; and (c) identifying those parts of his earlier reports no longer relied upon. 2. For the avoidance of doubt, the affidavit or report referred to in order 1 does not permit the plaintiff to advance further simulations in addition to the simulations contained in his earlier reports. 3. On or before 19 June 2016 the plaintiff is to serve any further affidavit or report from Dr Christensen that contains any further simulations that it proposes to rely on. Such report or affidavit may not be read at the trial of the proceedings without a grant of leave. 4. On or before 19 June 2017 the plaintiff is to notify the defendants of what constitutes the "reasonably prudent flood operations" as referred to in paragraph 339B of the fourth amended statement of claim." 1. [His Honour indicated that, subject to the matters raised in the judgment, the Amended Notice of Motion would be otherwise dismissed. The proceedings were stood over to 4 May when orders giving effect to the judgment were provided and made.] ********** Amendments 15 May 2017 - Coversheet amended 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: 15 May 2017