In an extensive written judgment, the Supreme Court of New South Wales has found the Queensland water authorities and flood engineers responsible for flood operations at Wivenhoe and Somerset Dams liable in negligence for damage arising out of the 2011 Brisbane floods, and the water authorities and the Queensland Government each vicariously liable for the negligence of the flood engineers they employed.
- Did water authorities and flood engineers owe and breach duties of care to persons with an interest in land, by failing to properly address the rising reservoir levels?
- Were the employers of the flood engineers vicariously liable for their negligence?
- What would the level of inundation had been if the flood engineers had conducted flood operations differently?
During December 2010 and early January 2011, south-east Queensland experienced extreme amounts of rainfall, and flood operations were commenced at both the Wivenhoe Dam and the Somerset Dam (the Dams).
The defendants (Queensland Bulk Water Supply Authority trading as Seqwater; Sunwater Ltd; and the Queensland Government) employed the four flood engineers responsible for flood operations at the dams. Seqwater was the owner of the Dams and SunWater was contracted to provide flood management services to Seqwater.
A flood operations manual (the Manual) regulated the conduct of flood operations at the Dams, and required the engineers to use rainfall forecasts to determine appropriate strategies and water releases. It also required the flood engineers to prioritise dam safety and the avoidance of urban flooding over the effects on rural communities of inundating rural bridges. On the morning of 11 January 2011 the flood engineers directed further water releases at Wivenhoe Dam. Flooding of homes and businesses in the surrounding areas began on 11 January 2011 and continued through to 12 January 2011.
The plaintiff (Rodriguez & Sons Pty Ltd) operated a retail sporting goods store in Fairfield, Brisbane. The store became inundated on 12 January 2011, and due to damage to both its premises and stock the plaintiff was forced to close its store for many months, suffering loss of profits. The plaintiff commenced representative proceedings against the defendants on behalf of approximately 6,870 persons or entities that held an interest in land and suffered loss or damage from the inundation of floodwater, had their use and enjoyment of that land interfered with by floodwater, or owned personal property situated on land that was inundated. The plaintiff claimed against the defendants in negligence, trespass and nuisance.
The decision at trial
The Court found that Seqwater and the four engineers each owed duties to a class of persons that included the plaintiff and the group members, to take reasonable care in the conduct of flood operations to avoid the risk of harm to and interference with the use and enjoyment of property. They each had significant control over downstream water flows and the risk of flooding. The risk was foreseeable, and the downstream property owners were vulnerable as they had no effective means of protecting themselves. The Court concluded that Seqwater was not exercising a statutory function in conducting flood mitigation and, in any event, any such function would not be inconsistent with the imposition of a duty of care. The Court found that the class of persons to whom the duties were owed was not indeterminate, as the relevant harm was physical damage and consequential economic loss.
The Court also found that SunWater owed a duty of care (but only in respect of the provision of “flood management services” pursuant to its agreement with Sunwater), and also accepted that each of the defendants were vicariously liable for any breaches of the duty of care owed by the flood engineers they employed.
The Court held that the engineers were required to comply with the Manual and that they failed to do so because they did not use rainfall forecasts to select flood strategies and to guide releases and, further, they failed to prioritise dam safety and the avoidance of urban flooding over the effects on rural communities of inundating rural bridges. These failures resulted in it being necessary to make large water releases on 11 January 2011 to prevent Wivenhoe Dam failing, which in turn led to significant downstream flooding of urban properties.
The plaintiff’s claims in trespass and nuisance were dismissed, and all cross-claims for contribution between the defendants failed.
As to causation, the Court accepted a simulation put forward by the plaintiff’s expert as representing the action that a reasonably competent flood engineer would have taken. The Court accepted the plaintiff’s contention, based on a hydraulic model of the catchment and other evidence, that the plaintiff’s store (and the properties of a number of other group members) would not have been inundated had those steps been taken. The claims of other group members remain to be determined on causation (and quantum) grounds.
Implications for you
The decision exposes the water authorities and the Queensland Government to the damages and costs of the group members, which may be quantified in the hundreds of millions of dollars. Once those losses are quantified and paid, it is likely to become the largest ever class action in Australia.
The proceedings have been adjourned to 21 February 2020 to allow the parties to consider the judgment and the next phase of the litigation, including the quantification of the plaintiff’s damages, and the application of the apportionment provisions to determine proportionate culpability of each of the defendants. Seqwater and SunWater have filed notices of intention to appeal, but have stated that they will make a final decision on whether to commit to the appeal by the next Court date. The Queensland Government has resolved not to appeal.