In this edition we provide an update on the current state of law regarding the liability of fire fighting authorities and occupiers for damage caused by bushfires

Author: Kiley Hodges







Introduction

Throughout 2011 we reported on extensive flooding in the eastern states ofAustralia, and the legislative changes and threats of litigation that followed.  This flooding caused a build up of significant undergrowth, creating perfect conditions for the bushfires that swept the eastern states during the 2012/13 summer.

This spate of bushfires, together with the delivery of the contentious judgment in Electro Optic Systems Pty Ltd v The State of NSW; West & West v The State of NSW [1] in December 2012, and the ongoing hearings in the Black Saturday bushfires class action, has increasingly focused the attention of the insurance industry and legal community on the potential for exposure to liability for bushfires.

In this paper we outline the reasoning adopted in Electro Optic, consider the different reasoning adopted in Warragamba Winery Pty Ltd v State of New South Wales (No 9) [2], and also provide comment on potential liability for warnings.


In Brief - Electro Optic

  • In a second judgment within 6 months relating to the State of NSW’s management of bushfires, the question of when a fire fighting authority and occupier will owe a duty of care was explored with unexpected results.
  • In contrast to Warragamba Winery, the Court found where a fire has started in a national park, the relevant parks and rural fire fighting authorities will owe a duty of care to use reasonable care to prevent the spread of the fire (to the extent legislation imposes such a duty upon those authorities).  The Court also found that this duty had been breached due to adoption of an inappropriate containment strategy.
  • Despite the finding of negligence, no finding of liability was made.  This was because the test for breach of statutory duty under s 43 of the Civil Liability Act (NSW) was not satisfied.  This test requires proof that the actions were so unreasonable that no authority could properly consider those actions reasonable.  That is, a degree of negligence beyond that required by the common law (effectively ‘gross’ negligence).
  • Where fire fighting authorities have a statutory ‘good faith’ immunity, more than mere negligence must be shown in order to prove that the authority did not act in good faith.  The defence is satisfied by evidence of a ‘real attempt’ to execute the authority’s functions.

The Electro Optic judgment

This case arose out of the devastating Canberra bushfires of 2003 which caused the loss of 4 lives, injury to hundreds of people, destruction of and damage to more than 500 residential and commercial properties and almost 70% of the ACT being burnt.

Two sets of plaintiffs commenced proceedings:

  • Electro Optic Systems Pty Ltd and 19 others insured by QBE who suffered injury, loss and damage in the ACT (ACT Plaintiffs); and
  • Wayne Karl West and Lesley Anne West who suffered damage to their property in NSW (West Plaintiffs).

Approximately 100 ACT resident plaintiffs settled their claims by way of judgment in favour of the ACT Government and the State of NSW (NSW) in September 2012.

The ACT and West Plaintiffs alleged NSW was liable as the owner and occupier of a national park within which bushfires originated (Park).  They claimed negligence and breach of statutory duty by the NSW Rural Fire Service (RFS) and NSW National Parks and Wildlife Service (NPWS) in management of the McIntyre’s Hut fire in NSW near the ACT.

Facts

The relevant facts are extensive.  We have summarised below the most crucial issues.

On 8 January 2003, lightning strikes were recorded in the McIntyre’s Hut region of the Park and that afternoon a fire in that region was observed during aerial reconnaissance (McIntyre Hut Fire).

That evening, a meeting was held between the incident controller and several NPWS and RFS officers, as well as officers from other agencies.  It was agreed the fire was beyond direct attack (those present believing it had already crossed the “Baldy trail”) and the appropriate strategy was indirect attack.  This involved the creation of containment lines by clearing suitable areas, and burning out the fuel between the containment lines and the fire.

The containment strategy carried out between 9 and 17 January was unsuccessful.  Back burning operations in critical areas had not been completed by the afternoon of 17 January.  On 18 January the fire burnt through containment lines spreading into the ACT and causing devastation throughout the suburbs ofCanberra.

Negligence

The findings of negligence made by Chief Justice Higgins centred on the failure to directly attack the Baldy trail, and the failure to back burn along the Goodradigbee River:

  • Firstly, Higgins CJ found the fires were containable on the evening of 8 January and the morning of 9 January.
  • As to the Baldy trail, Higgins CJ made the following findings:
    • By not performing more thorough reconnaissance to investigate the fire or deploy crews to directly attack this fire early on 9 January 2003, the incident controller lost the opportunity to use the Baldy trail as a containment line.
    • The loss of the Baldy trail as a containment line forced the authorities to rely on a longer, more distant containment line that required more time to clear and back burn.
    • There were sufficient resources for the incident controller to have sent persons to the Baldy trail both to investigate the McIntyre Hut Fire and attempt a direct attack.  Failure to do so was “inexplicable“.
      • The failure to have taken these steps was both negligent and causative of the escape from those fire fronts to the east and the west.
  • As to theGoodradigbee River, Higgins CJ made the following findings:
    • The river was low due to drought and there was an infestation of blackberry bushes on the eastern bank.  The crowns of trees met, or nearly met, above it.
    • The authorities had relied on the river as a containment line without properly clearing and back burning through the area.  The authorities merely monitored the river and this meant that when the fire spread in this direction they were unable to properly respond.
    • This then allowed the fire to breach containment lines on the western front and damage the West Plaintiffs’ property and move intoCanberra.

Was there a private cause of action?

While Higgins CJ found that NSW had statutory control over the operations in relation to suppressing the fires, his Honour questioned whether the exercise of those powers, if performed negligently, enlivened a private cause of action against NSW.

Higgins CJ found that the relevant statutory power, and concomitant statutory duty, for both the RFS and NPWS derived from s 63(1) of the Rural Fires Act 1997 (NSW) (RFA), which states:

“It is the duty of a public authority to take the notified steps (if any) and any other practicable steps to prevent the occurrence of bush fires on, and to minimise the danger of the spread of a bush fire on or from:

(a)        any land vested in or under its control or management …”

However, Higgins CJ’s reliance on s 63 of the RFA seems out of context, as it relates to the duty of a public authority to take notified steps or practicable steps to prevent the occurrence of, or minimise the danger of, the spread of bushfire on or from land under its control or management as an owner or occupier.  It essentially relates to duties of a public authority as a land manager in liaison with a Bushfire Co‑ordinating Committee, not as a fire fighting authority in the context of a bushfire emergency.

In determining whether this duty enabled a private cause of action for individuals suffering damage, Higgins CJ relied on a 3‑point test applied by Kirby J in Pyrenees Shire Council v Day [3], also known as the Caparo test.  This test included consideration of whether it was “fair, just and reasonable that the law should impose a duty…” in the circumstances.  However, this test was previously rejected by the High Court[4].  These findings are also at odds with Warragamba Winery, discussed in more detail under Implications below.

Breach of statutory duty

Higgins CJ noted that various jurisdictions have implemented statutory measures in order to balance the burden of the duties imposed on statutory authorities for the benefit of the public generally, the allocation of resources, and the interests of individuals such as the victims of bushfire.

The relevant provision is s 43 of the Civil Liability Act (NSW) (CLA).  This section provides that, in proceedings for breach of a statutory duty, an act or omission of the authority will not constitute a breach of statutory duty unless it was, in the circumstances, so unreasonable that no similar authority could properly consider the act or omission to be a reasonable exercise of its functions.

Higgins CJ found that the relevant duty was to use reasonable care to avoid the spread of fire and avoid damage to persons or property.  His Honour also noted that if a duty is imposed by statute, a common law duty of care cannot be imposed to widen the scope of the statutory duty.  Therefore, the scope of duty imposed on NSW could not exceed the statutory duty established by s 63 of the RFA and limited by s 43 of the CLA.

Thus, whilst Higgins CJ agreed that the authorities had been negligent in choosing the containment strategy that they did, and that the alternative responses proposed by the plaintiffs would have had better results, a greater degree of negligence needed to be shown in order for the plaintiffs to succeed.  Critically for Higgins CJ, at the time of the bushfires and the interagency meetings no person involved suggested that such an alternative strategy be used, despite the array of training and experience present at these meetings.

Higgins CJ could not conclude that no reasonable authority could have acted in the manner that the authorities did and therefore no breach of duty was established.

Statutory immunity

Having found that NSW had not breached the duty of care it owed to the plaintiffs, Higgins CJ continued, in obiter, to consider whether the statutory immunity provided under the RFA applied in these circumstances.

Section 128(1) of the RFA provides:

“A matter or thing done or omitted to be done by a protected person or body does not, if the matter or thing was done in good faith for the purpose of executing any provision (other than section 33) of this or any other Act, subject such person personally, or the Crown, to any action, liability, claim or demand.”  (emphasis added)

The definition of “protected persons” included the incident controller.  The key question was whether the incident controller’s acts or omissions that might otherwise be considered negligent were done “in good faith” so as to excuse NSW from liability.

Higgins CJ noted that in order to establish a lack of good faith there must be something more than mere negligence.  To accept that actionable negligence, of itself, evidences bad faith would be to prevent the statutory protection from performing any real work.  Higgins CJ also emphasised that a failure to observe established procedures does not equate to a lack of good faith.

In these circumstances the relevant acts and omissions were being performed in pursuance of the authorities’ statutory duty, the adopted strategy was clearly directed towards the containment of the fire, and was done honestly in a real attempt to do what needed to be done.  The statutory protection would, thus, have conferred immunity on NSW.

Relevant authorities

In finding a duty of care in this case, Higgins CJ has not followed the relevant Australian authorities such as Sullivan v Moody[5]; Crimmins v Stevedoring Industry Finance Committee[6]; Graham Barclay Oysters v Ryan [7]; or Stuart v Kirkland-Veenstra [8] and appears to be in error in:

–       following the 3‑point Caparo test applied by Kirby J in Pyrenees (above) which related to a man‑made fire and has been expressly rejected by the High Court[9].  Kirby J conceded this in Graham Barclay Oysters;

–       finding a duty to rescue by emergency personnel which is at odds with the High Court judgment in Stuart v Kirkland-Veenstra in which the two leading judgments[10] confirmed that the common law “does not recognise a duty to rescue another person” and “generally does not impose a duty to take affirmative action to protect another from harm.  The law draws a distinction between the creation of, or the material increase of, a risk of harm to another person and the failure to prevent something one has not brought about”;

–       finding a private cause of action: Higgins CJ relied on s 63 of the RFA and referred to public expectation of the emergency services as a justification.  In Warragamba Winery, Walmsley AJ held that the provisions of s 63 RFA (which the defendants submitted relate to hazard reduction by occupiers, benefit the general public and require only minimisation of danger) were “merely descriptive of obligations and did not confer private rights of action” or ground a duty of care[11];

–       not adequately dealing with the judgment in Warragamba Winery which found no duty of care:

  • by an occupier which has not created the risk of fire or made it worse;
  • by a fire authority based on Graham Barclay Oysters or Crimmins [12] as there was no relevant control of the fire, no vulnerability beyond that of the general public and as matters of policy, the safety of crews and available resources would need to be considered.

As discussed below, Electro Optic is on appeal.  The ACT Court of Appeal will further examine the relevant Australian authorities with regard to duty of care in these circumstances, and is likely to come to the same conclusion as Walmsley AJ following his thorough examination of authorities in the recent NSW Supreme Court decision in Warragamba Winery Pty Ltd v State of New South Wales (No 9) [13] (see our Case Note of 25 July 2012 for further details of this decision).


Comparison with Warragamba Winery

The finding of a duty of care in Electro Optic is clearly at odds with the finding of no duty of care in Warragamba Winery.  In Warragamba Winery, the Court found that the same authorities responding to bushfires started by the same natural cause (lightning strike), also in a NSW National Park, did not owe a duty of care to the plaintiffs (as a statutory authority or as an occupier) in circumstances where they had not created the risk and had not made it worse.

The facts of Electro Optic and Warragamba Winery are quite similar (both relate to bushfires ignited by lightning strikes in remote country).  However, the factual findings may potentially be distinguishable. In Electro Optic, Higgins CJ found that the incident controller was negligent in failing to undertake more thorough reconnaissance, an inadequate strategic approach to implementing achievable containment lines and failing to undertake an earlier direct attack of the fire.  In Warragamba Winery, Walmsley AJ found that nothing done by the three agencies made the Mt Hall fire worse or created a new hazard.

In Warragamba Winery, Walmsley AJ took judicial notice of the fact that bushfires such as the Mt Hall fire are a natural force that ‘cannot be coped with’.  He found that, because the fire was caused by lightning strike, the defendants had no power to stop the fire being started or to control the fire.  He stated that the relevant enquiry, when examining whether there is a duty of care is whether there was control of the harmful cause of the fire.  Walmsley AJ noted that most cases where control is relevant relate to dangerous premises which are static.  Cases relating to bushfires are generally distinguishable from the authorities relating to man‑made fires or other risks where control has been found, as the situation with a bushfire is not static[14].

Walmsley AJ noted that there is no legal authority in Australia(nor in any other common law countries) for the imposition of a duty of care on an emergency service or public authority in the circumstances of a fire ignited by lightning[15].  Walmsley AJ also found that the High Court in Burnie Port Authority v General Jones Pty Ltd [16] had held that an occupier is not liable for the escape of fire from premises where the fire was caused by an act of God or by a stranger, not the occupier.

One issue consistent across both judgments, if only discussed in obiter, was that the good faith immunity defence under s 128 RFA would have been successful had breach of duty of care been established.  We can suppose, therefore, that the challenge of proving a lack of good faith as well as a breach of statutory duty in fire fighting agencies will be a significant deterrent to future actions.

Appeal

Wayne West and the QBE plaintiffs have filed appeals in relation to the judgment.  Despite the fact that (as a first instance judgment) the judgment in Warragamba Winery is not a precedent, it contains a well‑reasoned and thorough analysis of the relevant authorities based on similar facts and the same statutory framework.  It is therefore likely the same reasoning will be applied by the Court of Appeal.

The findings in Electro Optic that the fire was containable on 8 and 9 January, and that the containment strategy was inadequate, if upheld, may be significant.  These findings point to an element of control that was missing in Warragamba Winery.

As a general proposition, cases relating to fires started by natural causes (rather than man‑made causes), and where the risk has not been created or worsened by the defendant, have failed on the basis of duty of care due in part to the absence of the key element of control.

Regardless of any findings made regarding breach of duty of care, the application of s 43 of the CLA, effectively requiring “gross negligence” for breach of statutory duty, and the s 128 good faith immunity under the RFA, remain as substantial further hurdles to a successful appeal.


A word on warnings

One further issue for consideration for statutory authorities is the potential for liability in respect of a duty to warn in respect of bushfire emergencies.  There has been no duty to warn found in either Electro Optic or in Warragamba Winery, although the duty of care regarding warnings was not dealt with separately from the consideration of a general duty of care.

It should be noted that the legal landscape has progressed since these fires, particularly in the wake of the tragic events of the Victorian Black Saturday bushfires.  Section 9 of the RFA was amended in 2010 to require the RFS to “issue public warnings about bush fires and bush fire threats in the State for the purpose of protecting life and property”.  Residents in bushfire prone areas can now expect to receive text messages on high fire danger days.  This duty to the general public creates a new area at risk of litigation.


Conclusion

The recent spate of bushfire litigation in Australia(Warragamba Winery, Electro Optic and recent cases in the Northern Territory[17] and in Tasmania[18]) has not yet led to a favourable outcome for plaintiffs, particularly in circumstances where the bushfires have started by natural causes.  However, liability in litigation relating to bushfires started by man‑made causes, such as electrical faults, is much clearer and often results in settlements well before hearing.  Interestingly, the Black Saturday litigation inVictoria has involved claims relating to fires from a mixture of man‑made and natural sources.  In the meantime, the ACT Court of Appeal may have the opportunity to make findings, particularly relating to duty of care, which will lead to more settled law in the area of claims relating to bushfires started by natural causes.


[2012] ACTSC 184

[2012] NSWSC 701

(1998) 192 CLR 330

Perre v Apand Pty Ltd (1999) 198 CLR 180; Modbury Triangle Shopping Centre Pty Ltd v Anzil (2000) 75 ALJR 164; Sullivan v Moody [2001] HCA 59; Graham Barclay Oysters v Ryan (2002) 211 CLR 540

(2001) 207 CLR 562

(1999) 200 CLR 1

(2002) 211 CLR 540

(2009) 237 CLR 215

Op cit Sullivan v Moody

Gummow, Hayne & Heydon JJ and Crennan & Kiefel JJ

Based on Bennett & Wood v Orange City Council (1967) 67 SR (NSW) 426 relating to provisions which were similar to s 63 RFA.

Crimmins v Stevedoring Industry Finance Committee [1999] HCA 59

[2012] NSWSC 701

Op cit Graham Barclay Oysters v Ryan [at 707]

Op cit Graham Barclay Oysters v Ryan [at 725]

[1994] HCA 13 [at 529]

Gardner v Northern Territory [2004] NTCA 14

Myer Stores v State Fire Commissioner (Tasmania) [2012] TASSC 54