Watches of Switzerland Pty Ltd v Transport for NSW

1. [1]

   These proceedings commenced by the filing of a statement of claim on 24 April 2018. The claim was amended by the filing of an amended statement of claim on 14 June 2018.

2. [2]

   The plaintiff claims damages in respect of both public nuisance and private nuisance said to have been committed by the defendant in the construction of the light rail system from Circular Quay to Kensington and Kingsford. The plaintiff since 1 July 2014 has occupied as sub-lessee retail premises being shops 1, 2 and 8 on the ground floor of the Four Seasons Hotel at 199 George Street, Sydney. Since 1 October 2016 the plaintiff has occupied as sub-lessee retail premises being shop 7 on the ground floor of the Hotel.

3. [3]

   The plaintiff claims that in March 2016 the defendant by its contractors, servants or agents, commenced to construct the light rail system in the vicinity of the hotel. To that end it is alleged barricades were constructed on George Street which had and continue to have the effect of obstructing that public road by preventing or restricting vehicular and pedestrian traffic upon it in a very substantial way, and by significantly restricting pedestrian access to the Hotel. The plaintiff further alleges that the construction work carried out by the defendant in the vicinity of the premises has resulted in the emission of excessive noise and dust. The plaintiff claims that it has suffered loss and damage in the form of a substantial reduction in its turnover and its profitability.

4. [4]

   In its defence to the amended statement of claim filed 22 June 2018 the defendant pleads some admissions, some non-admissions and some denials in response to specific paragraphs in the amended statement of claim. The defendant also says, when answering those specific paragraphs, that the noise and dust was inevitable from the carrying out of the works, that the noise and dust was not excessive, that it did not unreasonably affect the reasonable enjoyment of the plaintiff's premises and that it did not result in the alleged loss and damage or any loss and damage.

5. [5]

   Thereafter, the defendant pleads specific defences to the whole of the amended statement of claim in paragraphs 11-32 of the defence.

6. [6]

   By an amended notice of motion filed 29 June 2018 the plaintiff seeks pursuant to r 14.28 Uniform Civil Procedure Rules 2005 (NSW) to strike out paragraphs 11-32. It is necessary, therefore, to set out those paragraphs in the defence to the amended statement of claim. Those paragraphs read:

Factual background

1. [7]

   In or about December 2012, the defendant, which is a statutory corporation constituted by s 3C of the Transport Administration Act 1988 (NSW), determined that it would develop a light rail system from Circular Quay to Randwick and Kingsford along roads including George Street in the city. The determination was apparently made in the exercise of the discretion conferred by s 104O(1) of the TAA. That section relevantly provides:

2. [8]

   On 11 September 2015 clause 82A of the Transport Administration (General) Regulation 2013 (NSW) was made. That clause provided the route of the light rail system.

3. [9]

   On 2 October 2015 Roads and Maritime Services granted its consent and approval to the defendant under the Roads Act 1993 (NSW) in respect of the light rail system upon and subject to certain project conditions and requirements as set out in schedules 3 and 4 to the instrument by which that consent was given.

4. [10]

   In March 2016 the defendant commenced to construct the light rail system in the vicinity of the Four Seasons Hotel by constructing barricades which, as the defendant agrees in the defence, are intended to, and do, affect the flow of vehicular traffic. The plaintiff alleges that they also prevent and restrict pedestrian traffic in a substantial way and significantly restrict pedestrian access to the Hotel and to the shops occupied by the plaintiff.

5. [11]

   The claim in public nuisance concerns the interference with passage along George Street as a result of which the plaintiff claims to have suffered special damage. The claim in private nuisance is said to be related to the excessive dust and noise.

Submissions

1. [12]

   The plaintiff submitted, in reliance on UCPR r 14.28(1)(b), that the deficiencies in the pleading of paragraphs 11 to 32 meant that the Amended Defence had a tendency to cause prejudice, embarrassment and delay, and should be struck out, although the defendant should be given leave to re-plead.

2. [13]

   The plaintiff submitted that the terms of s 104O(1) of the TAA, so far as the design and selection of the particular light rail system chosen by the defendant to be constructed along a route declared under s 104N(2) are concerned, are "permissive only" with the consequence that the power conferred by that section "must be exercised in strict conformity with private rights". Further, the defendant is obliged "to carry out the work and conduct the operation with all reasonable regard and care for the interests of other persons", in reliance on what was said by Lord Wilberforce in Allen v Gulf Oil Limited [1981] AC 1001 at 1011. The plaintiff submitted that the defendant has not observed those obligations.

3. [14]

   The plaintiff submitted that while cl 82A of the Transport Administration (General) Regulation 2013 arguably amounts to a legislative authorisation for the construction of the light rail "at or in a specified location", it is apparent from the defence that there has been no such authorisation for the construction "of a precisely defined structure or work", relying on what Powell J (as his Honour then was) said in York Bros (Trading) Pty Ltd v Commissioner of Main Roads [1983] 1 NSWLR 391 at 397. The plaintiff submitted that, in that circumstance, the defendant has the onus of proving that the particular type of light rail system which it has chosen to construct is "reasonably necessary" and that the work in which it has been engaged has been "properly performed in all respects". The plaintiff submitted further that, since that construction work has occasioned damage to the plaintiff, the defendant must prove that, in the light of scientific knowledge available when it embarked upon the project, there was no reasonable way in which a light rail system along the route in question could have been constructed without occasioning that damage.

4. [15]

   The plaintiff submitted that those matters inform what it is necessary for the defendant to plead, in the light of the requirement of UCPR r 14.14, where a defendant raises an affirmative defence.

5. [16]

   The plaintiff submitted that in paragraphs 11-21 of the amended defence the defendant has pleaded the grant of the RMS approval and, in paragraph 20, that as a consequence of the RMS approval the rights of passage, that would otherwise exist under s 5(1) of the Roads Act and at common law, are curtailed to the extent of any inconsistency with the exercise of the powers granted to the defendant under the RMS approval under the Roads Act. The plaintiff submitted that the RMS approval was granted subject to certain conditions and requirements, and that the approval is only effective to qualify the rights of passage over public roads for so long as the defendant has complied with, and performed all its obligations under the conditions of the RMS approval. In particular, the plaintiff pointed to cl 9(b) of schedule 4 to the approval which requires due diligence so that construction is completed as soon as is reasonably practicable. The plaintiff submitted that if the Court found that there was a breach of cl 9(b) of schedule 4 it would follow that the defendant has obstructed the roadways without any proper consent or approval, and in that way has committed the tort of public nuisance.

6. [17]

   The plaintiff submitted that if the defendant is to be permitted to maintain its assertions in paragraphs 20 and 21 of the amended defence it should plead all of the facts, matters and circumstances demonstrating its compliance with all of the requirements imposed upon it by the RMS approval or if there has been a failure to comply, any waiver or concession by RMS if given should also be pleaded.

7. [18]

   The plaintiff submitted that in the absence of a pleading of all of the facts, matters and circumstances which it alleges demonstrate that the light rail system it has chosen to construct is reasonably necessary, that the work which it has performed has been properly performed, and that in light of the scientific knowledge available when it embarked upon the design of the light rail system there was no reasonable way in which such a system along the route in question could have been constructed without occasioning the damage to the plaintiff, the pleading in paragraphs 22-30 is defective and should be struck out.

8. [19]

   In relation to paragraphs 31 and 32, the plaintiff submitted that by simply pleading the language of ss 42 and 43A of the Civil Liability Act 2002 (NSW)(the CLA) without pleading any of the underlying facts, the pleading was thereby defective.

9. [20]

   The defendant submitted that to strike out a pleading under r 14.28, the party seeking to strike it out must demonstrate that the test in General Steel Industries Inc. v Commissioner for Railways (NSW) (1964) 112 CLR 125 is satisfied.

10. [21]

    The defendant noted that reference was made by the plaintiff to rr 14.7 and 14.14. The defendant submitted that to the extent that the defence did not comply with those rules, which the defendant denied, any deficiency could have been, and still could be, cured by the provision of responses to a request for further and better particulars. No such request has been made of the defendant.

11. [22]

    The defendant submitted that the plaintiff does not in the amended statement of claim allege non-compliance with any particular condition or conditions, and that the plaintiff’s approach, by asserting that a breach of the conditions would mean the defendant would have committed the tort of public nuisance, was unorthodox.

12. [23]

    The defendant submitted that a breach of a condition does not render the approval itself ineffective. The defendant submitted, in any event, that the position reflected in paragraphs 11-21 in the defence was not so devoid of merit as to warrant being struck out under the General Steel test.

13. [24]

    In relation to paragraphs 22-30, the defendant submitted that it would prove in the usual way that the interference was reasonably necessary and that there was no reasonable way to avoid the damage that was in fact suffered. The defendant submitted that r 14.7 made clear that pleadings should not refer to the evidence that will be called. The defendant submitted that the possibility of being taken by surprise is not a ground for striking out a pleading. In any event, once the evidence is filed there will be no possibility of surprise. In that way the pleading is not deficient.

14. [25]

    In relation to paragraph 31 pleading s 42 of the CLA, the defendant submitted that it was not a stand-alone defence but would be a relevant consideration in the other defences, particularly in relation to what is the ambit of reasonable alternative methods and measures that might have been utilised by the defendant to avoid any inconvenience to the plaintiff by virtue of the construction. The defendant submitted that in relation to paragraph 32, dealing with s 43A of the CLA, it will be a matter of evidence whether the circumstances are such that the Court will find that the defence is made out.

15. [26]

    The defendant submitted generally that any difference in view that the parties have as to what is legally required to make out the defences should not be resolved in a strike-out motion. The defendant submitted that the appropriate course is for the plaintiff to file a reply and for the parties to proceed to resolve the legal issues at trial. The defendant submitted that if the plaintiff considers it is entitled to further and better particulars, those particulars can be made the subject of a request in the usual way.

Consideration

1. [27]

   A number of Rules in the Uniform Civil Procedure Rules are relevant to a determination of this Motion. Rule 14.7 provides that a party’s pleading must contain only a summary of the material facts and not the evidence by which those facts are to be proved. Rule 14.8 requires a pleading to be as brief as the nature of the case allows. Rule 14.11 provides that, if it is a condition precedent necessary for a party’s case in any pleading that a thing has been done, an event has happened or a state of affairs exists, a statement to the effect that the condition has been satisfied is taken to be implied in the party’s pleading. Rule 14.14(2) provides that in a defence a party must plead specifically any matter that if not pleaded specifically may take the opposite party by surprise, or that the party alleges makes any claim not maintainable, or that raises matters of fact not arising out of the preceding pleading.

2. [28]

   In the light of those Rules, I consider that the plaintiff’s approach to the pleading of the amended defence is misconceived for the following reasons.

3. [29]

   First, the plaintiff appears to have elided that which it will be necessary for the defendant to prove with what the defendant is required to plead. The plaintiff relies on certain principles of law from a number of significant cases. Those principles appear in the following extracts.

4. [30]

   In City of Manchester v Farnworth [1930] AC 171 Viscount Dunedin said (at 183):

5. [31]

   In Allen v Gulf Oil Refining Limited, Lord Wilberforce said (at 1011):

6. [32]

   In Symons Nominees Pty Ltd v Roads and Traffic Authority of New South Wales (1997) Aust Torts Reports 81-413, Meagher JA (with whom Priestley JA agreed) said (at 63,835):

7. [33]

   In York Bros (Trading) Pty Ltd v Commissioner of Main Roads Powell J (as his Honour then was) said at 397:

8. [34]

   The principles set out in those cases demonstrate what it will be necessary for the defendant to prove when establishing the defences it has pleaded. Those cases say nothing about how those matters ought to be pleaded. Nor, contrary to the plaintiff’s submission, do the cases inform the way the defences should be pleaded except in the most general sense.

9. [35]

   Paragraphs 11-21 of the Defence plead that there was no public nuisance because of the rights derived from the Roads Act which were exercised in relation to the approval of the light rail system under that Act. The defendant pleads the relevant sections of the Road Act which it says curtailed what would otherwise be common law rights in relation to passage along a roadway. The defendant pleads the approval of the work by Roads and Maritime Services and the sections of the Roads Act relevant to that approval. In doing so, the defendant has pleaded the material facts on which it relies to establish that defence.

10. [36]

    The plaintiff’s complaints, more particularly summarised in its submissions set out at [13]-[17] above, do not appear to take into account either r 14.11 nor the ordinary course of pleading where the onus (ultimate or evidentiary) may shift. In my opinion, it would be necessary for the plaintiff in a Reply to the Defence to plead in response to paragraphs 11-21 the matters that have been identified in paragraphs [13]-[17] above: Roads and Maritime Services v Grant [2015] NSWCA 138 at [14].

11. [37]

    The defendant’s case is that by virtue of the Roads Act and the approval given, there was no public nuisance. The plaintiff seeks to show that there was such a nuisance by asserting that various conditions of the approval by the RMS have not been fulfilled. The defendant is not required in its pleading to anticipate the matters that the plaintiff will assert impugn the carrying out of the work purportedly pursuant to the approval given. It is entitled to rely on r 14.11 without setting out that the conditions have been fulfilled and in what way.

12. [38]

    In paragraphs 22-30 of the defence, the defendant pleads that it carried out the work pursuant to statutory authority. It identifies the source of that authority in the Transport Administration Act and Transport Administration (General) Regulation. Its case is that it was an inevitable consequence of the exercise of its statutory power to construct the light rail that passage along the roadway would be impeded and that there will be noise and dust.

13. [39]

    The plaintiff seeks to challenge that in the way contained in the plaintiff’s submission set out at [18] above. In a similar fashion, it will be for the plaintiff in its Reply to raise those matters. Rule 14.11, in the first instance, relieves the defendant from having to set out compliance with the sorts of matters the plaintiff raises in its submission.

14. [40]

    The presumption of regularity, omnia praesumuntur rite esse acta, may have some relevance to the matters raised by the plaintiff in respect of the defences pleaded in paragraphs 11 to 30. In Minister for Natural Resources v New South Wales Aboriginal Land Council (1987) 9 NSWLR 154, McHugh JA said (at 164):

15. [41]

    That last form of the maxim appears to me to be relevant to the pleading issue here. The defendant’s answer to the nuisance claim is that the statutory authority and approval for the work demonstrates why no nuisance was committed or, at least, that it was not actionable. Implicit in those defences is the assertion that the work has been carried out in accordance with that statutory authority and the approval given. What is presumed to have been rightly and duly perfomed may, however, be displaced by the contrary being shown. A recent example of the operation of the maxim where questions of onus of proof arise is to be found in the judgment of Emmett JA (Barrett JA and Preston J agreeing) in McNeil v Narrabri Shire Council [2013] NSWCA 112 at [48]-[49].

16. [42]

    In order to displace the presumption the onus, at least an evidentiary one, shifts to the plaintiff to plead and give evidence of the ways in which the works have not been carried out in accordance with the statutory authority and approval.

17. [43]

    Secondly, the plaintiff appears to have applied r 14.14 as if it applied to the evidence that the defendant would lead. Rule 14 is concerned with specific pleading of “any matter”. The word “matter” is not defined in the Dictionary to the Rules. However, sub-r (3) assists in the understanding of what a matter is. A number of things are listed including fraud, performance, release, Statute of Limitation, extinction of right or title, and voluntary assumption of risk. It is clear that a matter is some principle of law that, for a defendant, would amount to an answer to a claim being made. In that way, the Rule is not concerned with being taken by surprise as a result of some evidence which is adduced.

18. [44]

    Of course, ambush of any sort is strongly disapproved of in the conduct of litigation at the present time: Nowlan v Marson Transport Pty Ltd (2001) 53 NSWLR 116; [2001] NSWCA 346 at [28]-[32] and [40]-[46]. Protecting parties from surprise in relation to evidence is dealt with in Practice Notes which are issued from time to time. The Practice Note governing the present proceedings is SC CL 1. Clause 42 provides that the Registrar will order witness statements or affidavits, and cl 43 provides that a witness may only give oral evidence at trial with leave. This is relevant to what the plaintiff says it does not know. Those matters were identified in the plaintiff’s submissions as follows:

19. [45]

    It is doubtful that these items would even constitute particulars, because the identification of that information would only become relevant where the plaintiff filed a Reply challenging the way the approval and authorisation for the light rail system was gone about by the defendant. More likely, if the issues as to the implementation of the approval and authorisation were raised, the listed items would simply be evidence that would be required to form part of statements, affidavits and other documentary material served by the defendant prior to the trial.

20. [46]

    Thirdly, the position with regard to paragraphs 31 and 32 is a little different. Paragraph 31 relies on the provisions of s 42 of the CLA and appears to rely on that section as a stand-alone defence. That section provides:

21. [47]

    It may be observed that the principles set out are applied when determining whether an authority has a duty of care or has breached a duty of care in proceedings for civil liability to which Part 5 of the Act applies. Section 40(1) of the CLA provides that Part 5 of that Act applies to civil liability in tort, and extends to any such liability even if the damages are sought in an action for breach of contract or any other action. Section 42 is in Part 5 of the CLA.

22. [48]

    Part 5, therefore, applies to the present proceedings although they are not proceedings alleging negligence. Nevertheless, s 42 only has work to do where it needs to be determined whether there is a duty of care or if such a duty of care has been breached. There is no such issue in the present case because nuisance is established without reference to a duty of care.

23. [49]

    Gales Holdings Pty Limited v Tweed Shire Council [2011] NSWSC 1128 involved a claim by a plaintiff in nuisance. The plaintiff claimed that the council conducted itself so as to cause or allow untreated and polluted stormwater runoff to discharge directly onto its land. One of the defences relied upon the by the council was s 42 of the CLA. The issue concerning that section was whether it had any applicability to a claim in nuisance. Justice Bergin held at [362] and [372] that the section did not apply to a claim in nuisance because such a claim was not concerned with a duty of care. However, her Honour went on to say at [362]:

24. [50]

    With all due respect to Bergin J (as her Honour then was), it is not easy to see how s 42 could become relevant to the enquiry about unreasonableness in s 43A where that enquiry about unreasonableness is not concerned with a duty of care, and duty of care is the prerequisite for the application of the principles in s 42. In Precision Products (NSW) Pty Limited v Hawkesbury City Council (2008) 74 NSWLR 102; [2008] NSWCA 278, Allsop P (with whom Beazley and McColl JJA agreed) said at [177]:

25. [51]

    Justice Bergin noted that statement of Allsop P and said at [381]:

26. [52]

    With respect, even if the application of s 43A is confined to ameliorating the effects of the nuisance, it is still difficult to see where the notion of a duty of care fits into what must be regarded as the concept of Wednesbury unreasonableness legislated in s 43A(3).

27. [53]

    I accept that in Grant Basten JA at [27] suggested that the principles in s 42 could be applied in the application of s 43A, but that was said in the context of a claim in negligence only.

28. [54]

    In the present matter, counsel for the defendant said that the defence relying on s 42 was “not really a stand-alone defence”. In that regard, he pointed out what Basten JA had said in Grant both at [26] and [27]. I understood counsel’s submissions in that regard to be that s 42 was being called in aid in establishing the defence under s 43A, perhaps in the way suggested by Bergin J in Gales at [381].

29. [55]

    In my opinion, s 42 is not available as a stand-alone defence to the plaintiff’s claim because it simply has no application where a claim for nuisance is made. Gales at [362] and [372] is authority for that view.

30. [56]

    However, despite my doubts about whether it can be engaged when considering s 43A or some other defence which has been pleaded, I do not consider that the defendant should be prevented from pleading and relying upon s 42 as part of another defence. As I see it, the law concerning s 42 other than in reference to pure claims in negligence, has not been settled. In those circumstances it would be inappropriate to determine the matter on an interlocutory application to strike out pleadings.

31. [57]

    In relation to the defence in reliance on s 43A, the plaintiff drew attention to what was said in a number of authorities commencing with Curtis v Harden Shire Council (2014) 88 NSWLR 10; [2014] NSWCA 314 at [241]-[244]. In that case, Basten JA was dealing with a submission that s 43A was not engaged because the claim as to liability was not “based on” any exercise of a special statutory power by the council. The submission went on to say that the liability was based on a breach of a common law duty to warn of dangers created by the carrying out of the road works in that case.

32. [58]

    Justice Basten (with whom Bathurst CJ agreed on this aspect of the matter) said at [244]:

33. [59]

    Similarly, in Grant, Basten JA (with whom McColl JA agreed) said:

34. [60]

    What was said by Basten JA in Grant at [17] is satisfied in paragraph 32 of the present defence. The defendant makes clear by reference to the CLA and the Transport Administration Act that it is the relevant authority. What Basten JA deals with in [18] is not entirely apposite to the position in the present case. In that case the particulars of negligence were all said to involve failures to take a number of steps by a road authority with respect to an intersection. That led to a distinction being argued between a failure to exercise and a failure to consider. It may have been relevant, therefore, for the authority to identify by reference to the plaintiff’s particulars of negligence which “failures” fell within the exercise of the special statutory power.

35. [61]

    In the present case, failures are not alleged. Liability is alleged to attach by the nuisance created by the defendant in carrying out the works. The defendant says that those works were carried out by the exercise of the special statutory power. Paragraph 32 complies in that way with the requirements in Grant at [18]. The requirements in Grant at [17]-[18] are concerned with identifying precisely the acts and omissions which a defendant says are within the special statutory power and not the acts and omissions which are relied on to show that the defendant acted reasonably.

36. [62]

    What the plaintiff appears to require are details of the way the defendant has carried out the works which the plaintiff asserts will show that the defendant has acted unreasonably in the way the section describes. That requirement of the plaintiff’s appears to me to be the same error that I have earlier discussed in relation to the defences involving the approval and statutory authority. Section 43A imposes an onus on the plaintiff in the first instance to demonstrate the sort of unreasonableness of which the section speaks. That in itself points to the need for the filing of a Reply before a need to identify or particularise on the defendant’s part the way the statutory power has been exercised reasonably.

37. [63]

    Nevertheless, a reading of the defence as a whole makes clear that paragraphs 9(a), 27, 28 and 30 assert that the matters complained about by the plaintiff, the noise and dust, and the impeding of the passage in George Street, are the inevitable consequence of the works which were, and are being, carried out pursuant to the statutory power. It seems tolerably clear, therefore, that a pleading of inevitability from works carried out pursuant to the statutory power is related to the question of unreasonableness in s 43A. In that way, the plaintiff is put on notice even prior to filing a Reply, of the basis for the defendant showing that it has the protection of s 43A in the way it exercised the power.

38. [64]

    As Basten JA made clear in Grant at [14] the plaintiff is required to file a Reply to a properly pleaded reliance on the statute. Unless that is done, the real issues will not be adequately identified. In my opinion the defence contains a properly pleaded reliance on the statute. At that point the obligation shifts to the plaintiff to identify in a Reply the manner in which the defendant has carried out the work, or has failed to ameliorate the nuisance, using the unreasonableness test in the section. That may then mean that this case is one of the rare ones where a Rejoinder or something similar is needed with leave: see r 14.5.

Conclusion

1. [65]

   By reason of what I have said earlier, it will be necessary for the defence to be amended to make clear that reliance on s 42 of the CLA is not a stand-alone defence but forms part of some other defence. I do not consider that that requires an order striking out paragraph 31. Rather, the point of the amended defence is to make clear how that section is relied upon in conjunction with the other defences pleaded.

2. [66]

   There is no other basis for striking out paragraphs 11 to 32 of the defence.

3. [67]

   Except for paragraph 31 of the Defence, the plaintiff has been unsuccessful on its Notice of Motion. The matter of the application of s 42 of the CLA was raised by the Court during argument, and not by the plaintiff. In those circumstances the plaintiff should pay the costs of the Notice of Motion.

4. [68]

   I make the following orders: