Recent High Court guidance - When will a statutory authority owe a common law duty of care?

Overview

• Electricity Networks Corporation (trading as Western Power) v Herridge Parties [2022] HCA 37 marks the conclusion of a lengthy negligence dispute from Western Australia involving a statutory corporation. The case considered the existence and content of a duty of care that it owed in the exercise of statutory powers.
• The case was commenced by a large class of plaintiffs who sought compensation for loss and damage resulting from a 2014 bushfire. The source of that fire was a fallen power pole which had ignited dry vegetation around the base of the pole.
• In a unanimous decision of five justices, the High Court upheld the earlier decision of the Western Australian Court of Appeal that Western Power was liable for the plaintiffs' losses. This is because Western Power owed a duty of care to them (being a common law obligation to avoid causing harm to other people or property). It had a duty to take reasonable care in the exercise of its powers.

Key points

• A duty of care will arise when harm is 'reasonably foreseeable'.[1] Though there are a few well-established duty-creating relationships, the courts have been careful to impose such duties on statutory authorities.
• There is no freestanding rule which determines whether and when a statutory authority owes a duty of care.[2]
• It is wrong to treat all statutory authorities alike. This is because such authorities take many forms and possess different functions and powers.[3]
• To determine the existence and content of a duty of care which might be owed by a statutory authority, the starting point is the terms, scope and purpose of the relevant statutory framework.[4] An authority which is under no statutory obligation to exercise a power 'comes under no common law duty of care to do so'.[5]
• In this case, the common law imposed a duty in tort on Western Power that operated 'alongside the rights, duties and liabilities created by statute'.[6] It is important to note that a duty cannot arise where it would be 'inconsistent or incompatible with the statutory powers or duties imposed on the statutory authority or it would be incoherent with the statutory framework'.[7]

Facts of the case

• The jarrah pole - from which the bushfire was caused - supported an electrical cable.[8] It was located on a private property and owned by the property's owner (not Western Power). However, Western Power operated the distribution system which was used to deliver electricity to the property. This included the service apparatus that supported the pole.[9]
• The blaze that ensued destroyed and damaged many properties. The victims of this fire commenced proceedings against several defendants (including the property owner who was ultimately found to be liable) for the failure and collapse of the pole.

How was the case decided at first instance, on appeal to the Court of Appeal and then in the High Court?

• At first instance, the Western Australian Supreme Court dismissed claims against Western Power (but found that it did owe the plaintiffs a duty of care regarding the pre-work inspection of the pole).[10]
• This decision was reversed on appeal, with Western Power being found to be liable in negligence. Interestingly, the Court of Appeal held that it owed a broader duty of care in terms of its temporal scope and it was not limited to occasions when work was to be, or was being, done.[11] Western Power was found to have breached the common law duty it owed to the plaintiffs by not having a system for the periodic inspection of 'point of attachment' poles.[12]
• Western Power appealed this ruling to the High Court. On 7 December 2022, the High Court affirmed Western Power's liability in negligence.

What factors are taken into account when determining if a statutory authority owes a duty of care when exercising its statutory powers?

First - Look at the relevant legislation.

• This will enable you to determine whether 'that regime erects or facilitates a relationship between the authority and a class of persons that, in all the circumstances, displays sufficient characteristics answering the criteria for intervention by the tort of negligence'.[13]
• When a statutory authority exercises its powers, the analysis focuses upon the relevant legislation and, in particular, the powers that have been exercised in the performance of the authority's functions. 

Second - identify the statutory powers that the statutory authority exercised in performance of their functions.

• Among several functions, Western Power was to 'undertake, operate, manage and maintain' its electricity distribution system,[14] and 'do anything that it determined to be conducive or incidental' to those functions.[15] It is important to identify the statutory authority's powers that were actually exercised because 'it is the manner of the exercise of those powers to which a common law duty of care may attach'.[16]
• The Court found that Western Power had exercised these functions by connecting the property owner's premises to its distribution system, by affixing elements of its system to the pole, and energising the premises.[17]
• Further, the statutory framework recognised that Western Power required access to land or premises to perform its functions. Western Power was given the power to enter land or premises on which any works, apparatus or system used by Western Power, for the purpose of distributing electricity to a consumer, were situated.[18]

Third - In exercising its statutory duties, did the statutory authority place itself in a relationship to others where a common law duty of care attached to the matter of the exercise of those powers?

• Yes! By exercising these functions, Western Power had 'enter[ed] into the field' and 'stepped into the arena'.[19] This created a relationship between the authority and people within the vicinity of its electricity distribution system. The Court stated that:

Western Power's exercise of those powers therefore created a relationship between it and all other persons within the vicinity of its electricity distribution system. And a critical feature of that relationship was that Western Power exercised those powers in a manner which created or increased the risk of harm to those persons – persons it had the power to protect. The PA pole only posed the risk that it did because Western Power had attached its live electrical apparatus to it.[20]

• Western Power had a duty to take reasonable care in the exercise of its powers. The content of that duty required it 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.[21]
• The reasonable precautions that are required to discharge that duty will depend upon, firstly, the nature of the powers which are to be exercised, and secondly, the circumstances in which they will be exercised.[22]

Prepared by Alexander Laurence (Law Graduate) and Sara Dennis (Assistant Victorian Government Solicitor).

^{[1] Sydney Water Corporation v Turano (2009) 239 CLR 51, 70 [45].}

^{[2] Electricity Networks Corporation v Herridge Parties [2022] HCA 37, 6 [19] ('Electricity Networks Corporation').}

^{[3] Ibid.}

^{[4] Ibid, 6 [18].}

^{[5] Ibid, 8 [22], citing Sutherland Shire Council v Heyman (1985) 157 CLR 424.}

^{[6] Ibid, 10 [27], citing Graham Barclay Oysters Pty Ltd v Ryan (2002) 211 CLR 540 ('Graham Barclay Oysters').}

^{[7] Ibid, 10 [27].}

^{[8] Herridge Parties v Electricity Networks Corporation [2021] WASCA 111, [1].}

^{[9] Ibid, [4].}

^{[10] Electricity Networks Corporation, 4 [12].}

^{[11] Ibid, 5 [15].}

^{[12] Ibid.}

^{[13] Ibid, 6 [20], citing Graham Barclay Oysters, 596-597 [146].}

^{[14] Ibid, 20 [48].}

^{[15] Ibid, 14 [36].}

^{[16] Ibid, 10 [28].}

^{[17] Ibid, 19 [45].}

^{[18] Ibid, 20 [49].}

^{[19] Ibid, 18 [45], 20 [48].}

^{[20] Ibid, 21 [51].}

^{[21] Ibid, 22 [52].}

^{[22] Ibid, 11 [30].}