Court rules on apportionment and interest in Brisbane floods class action

26 June 2020

The Supreme Court of New South Wales has ruled on further issues arising from its November 2019 judgment in the Queensland floods class action, including the representative plaintiff’s claim for interest on damages for “gratuitous services” and the apportionment of liability amongst the defendants.

In Issue

  • Are the defendants liable to pay interest to the plaintiff on damages for “gratuitous services”?
  • How should liability be apportioned against each of the defendants pursuant to the Civil Liability Act 2003 (Qld)?

The background

On 29 November 2019, Justice Beech-Jones delivered the principal judgment in the class action proceedings, finding 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 (Rodriguez & Sons Pty Ltd v Queensland Bulk Water Supply Authority trading as Seqwater (No 22) [2019] NSWSC 1657: “Rodriguez (No 22)”).

A further hearing took place on 29 and 30 April 2020 to determine the following issues: (1) the calculation of the plaintiff’s damages; and (2) the determination of the respective proportions of the plaintiff’s judgement (and group members’ claims) that each defendant must bear.

The decision

As to the first issue (interest), the parties agreed on the quantification of the plaintiff’s damages prior to any allowance for interest, being $200,968 (comprised of $101,517 for trading and inventory loss, $10,377 for loss of fixtures, and $89,074 for what was described by the parties as “gratuitous services”). In Rodriguez (No 22), the Court found that the plaintiff was entitled to recover the latter component, being the commercial cost of the cleaning and repair of the plaintiff’s shop, fixtures and stock, undertaken for no charge by a director of the plaintiff, members of his family, and a “mud army” of volunteers. SunWater contended, however, that interest should not be allowed for this component.

The Court noted the discretionary and compensatory nature of the statutory power to award interest, and concluded that the plaintiff was not entitled to receive interest on so much of its award of damages that reflected flood damage to its fixtures and fittings and which was calculated by reference to the commercial cost of the volunteer labour of others that repaired that damage. The Court accepted SunWater’s submissions that, in circumstances where the plaintiff’s shop and chattels were repaired by free labour, there were no detriments the practical effect of which were experienced by the plaintiff at the date of judgment. An award of interest in such circumstances would amount to a windfall, rather than restoring the plaintiff’s position.

As to the second issue (apportionment), the Court (citing Podrebersek v Australian Iron and Steel Pty Ltd (1985) 59 ALJR 492) noted that the apportionment exercise draws attention to three particular factors, namely, the “degree of departure from the standard of care”, the “relative importance of the acts of the parties in causing the damage” and “the whole conduct of each negligent party in relation to the circumstances of the accident”.

The Court did not accept that the causal potency of each party’s acts was either entirely determinative or capable of being mathematically ascertained in this case, but considered that “even if only broad or impressionistic conclusions concerning the relative importance of the acts of the parties in causing the damage can be drawn, then they should be considered.” The court referred to the findings in Rodriguez (No 22), and further analysis, to draw broad conclusions about the relative causal contributions made by the various failures of the flood engineers during relevant periods of time throughout the Brisbane floods. In doing so, the Court noted that “any differentiation between the responsibility of the flood engineers must be tempered by the circumstance that the January 2011 Flood Event was a joint undertaking and the flood engineers adopted a common negligent approach”.

Adopting that approach, the court attributed:

  • A 30% proportion to Mr Ayre (an employee of SunWater), owing to the shifts he worked, his position, and his failure to implement recommended strategy.
  • A 37.5% proportion to Mr Malone (an employee of Seqwater), given the period in which he failed to declare a flood event and the number of shifts he performed during the relevant period.
  • A 20% proportion to Mr Ruffini (an employee of the State), again owing to the number of shifts he worked over the relevant time period and how dire the situation was whilst he was working.
  • A 12.5% proportion to Mr Tibaldi (another employee of Seqwater) based on the timing of his first shift and the discussion of his breaches in Rodriguez (No 22).

Thus, the court concluded that the judgement entered in favour of the plaintiff should be apportioned against Seqwater, SunWater, and the State in the proportions 50%, 30% and 20% respectively.

Implications for you

The decision provides an illustration of an approach to apportionment by a higher court which is based on broad conclusions and matters of impression as to the potency of particular acts and overall context. It also highlights the discretion the court will apply when determining whether interest should be awarded, particularly when considering detriment actually suffered.

Seqwater and SunWater have indicated that they are proceeding with an appeal of the principal judgment in Rodriguez (No 22). There is no word yet of any appeal in respect of this further decision.

Rodriguez & Sons Pty Limited v Queensland Bulk Water Supply Authority t/as Seqwater (No 23) [2020] NSWSC 650

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