Electricity Networks v Herridge Parties Ors

What you need to know

• The High Court of Australia has unanimously upheld a decision of the Court of Appeal of the Supreme Court of Western Australia that a statutory authority owed a duty of care to avoid or minimise the risk of harm to persons and their properties in the vicinity of its electricity distribution system.
• The High Court considered the applicable principles for determining the existence or otherwise of a common law duty of care allegedly owed by a statutory authority.
• The Court found that when determining the existence and content of such a duty, the starting point should be a consideration of the terms, scope and purpose of the statutory framework and the statutory functions and powers which the authority in fact exercised.

What you need to do

• For statutory authorities, assess risk on the basis that an authority may owe a duty of care where the exercise of statutory powers or functions has created or increased a risk of harm.

The High Court of Australia has held that a statutory authority responsible for distributing electricity owed a common law duty to take reasonable care (which operated alongside the statutory rights, duties and liabilities), in a decision arising out of the 2014 Parkerville bushfire: Electricity Networks Corporation Trading as Western Power v Herridge Parties & Ors.

In doing so, the High Court confirmed the principles for determining when a statutory authority owes a common law duty to take reasonable care.

When will a statutory authority owe a duty of care?

There is no freestanding common law rule which fixes whether and when a statutory authority owes a common law duty of care.

The starting point is to consider the terms, scope and purpose of the statutory framework. The analysis involves identifying, first, the functions of the statutory authority, and second, the statutory powers that the statutory authority in fact exercised.

A statutory authority that is under no obligation to exercise a statutory power generally owes no duty of care to do so. However, a statutory authority may by its conduct assume a responsibility to exercise the power such that it can be tortiously liable for an omission to exercise the power.

Whether a statutory authority has assumed responsibility may be assessed by reference to whether it has "control". This depends on both the statutory powers the authority has exercised and also interconnected powers which it has not exercised.

Bushfire started after failure to check the poles

The claims arose out of the 2014 Parkerville bushfire, which was started when a decaying jarrah point of attachment pole supporting an electrical cable fell to the ground, causing electrical arcing, which ignited dry vegetation around the base of the pole. The blaze spread and caused damage to 392 hectares and the loss of 57 homes.

While the service cable was owned by Western Power, the cable ran from Western Power's termination pole into a mains connection box secured adjacent to the top of the pole owned by Mrs Campbell and located on her property.

Claims were also brought against Western Power's subcontractor that had undertaken works in the vicinity of the pole, Thiess Services Pty Ltd (now known as Ventia Utility Services Pty Ltd), and the landowner of the property on which the pole was located, Mrs Campbell.

Court of Appeal decision

At first instance the Court had apportioned liability 70% to Thiess and 30% to Mrs Campbell and held that Western Power had not breached its duty of care. The trial judge had found that Western Power owed a narrow duty of care, to inspect the pole before performing work, and not to use the pole if it identified the pole to be unsafe. The Court found that Western Power had not breached this narrowly defined duty of care.

The Court of Appeal overturned the trial judge's decision that Western Power had not breached its "pre-work inspection duty of care" by taking reasonable precautions to ensure that qualified and competent personnel carried out the work, including the pre-work inspections of wooden poles.

The Court of Appeal instead found that Western Power owed a (wider) duty of care to persons in the vicinity of their electricity distribution system to take reasonable care to avoid or minimise the risk of injury to those persons, and loss or damage to their property, from the ignition and spread of fire in connection with the delivery of electricity through its electricity distribution system. This duty was said to extend to ensuring that Western Power had a system for routinely inspecting consumer-owned poles.

Ultimately, the Court of Appeal apportioned liability as follows: Western Power 50%, Thiess 35%, Mrs Campbell 15%.

Did Western Power have sufficient "control" to give rise to a duty of care in relation to consumer property?

Western Power argued that the scope of its duty did not extend to require any routine inspection of consumer-owned poles. The authority submitted that this was particularly due to the fact that it was not in physical control of the pole.

The Court found that where a statutory authority has exercised statutory powers with respect to a particular subject matter, it may place itself in a relationship to others where a common law duty of care attaches to the exercise of those statutory powers. In this case, the statutory framework also conferred powers on Western Power to enter land or premises to exercise its statutory functions and to do all things necessary for maintaining or repairing any supply system, undertaking, or related works.

The Court found that it was Western Power's activity arising from the exercise of its statutory powers which created the risk of harm.

Is the duty of care inconsistent with the statutory scheme?

The High Court considered whether the common law duty of care asserted was inconsistent with the statutory framework. In doing so, the Court confirmed the proper test for inconsistency between a common law duty and a statutory scheme which regulates a statutory authority.

Western Power had defined statutory duties under numerous statutes to operate, manage and maintain the State's electricity distribution system. This system was used to deliver electricity to consumers' premises, including Mrs Campbell's property, where the relevant pole was located. This statutory framework conferred a power on Western Power to access land or premises to perform its statutory functions.

When considering the actual exercise of Western Power's functions in this case, the Court found that it had attached Mrs Campbell's premises to the distribution system and energised those premises, meaning that Western Power had created or increased the risk of harm to persons in that vicinity. This created a relationship between Western Power and the persons within the vicinity of its electricity distribution system. As such, this required Western Power to take reasonable care to avoid or minimise the risk of injury to those persons.

The Court ultimately found that the duty of care articulated by the Court of Appeal in this way was not incoherent with the broader statutory framework.

Implications

This decision confirms the applicable principles for determining the existence or otherwise of a common law duty of care allegedly owed by a statutory authority.

Authors:  John Pavlakis, Partner; Andrew Westcott, Expertise Counsel; Finley Harding, Graduate