Watches of Switzerland Pty Ltd v Transport for NSW (No. 2)

I gave judgment on 14 August 2018 in respect of a notice of motion filed by the plaintiff seeking to strike out paragraphs 11-32 of the Defence: Watches of Switzerland Pty Ltd v Transport for NSW [2018] NSWSC 1256.

In support of its motion the plaintiff drew attention to a number of authorities dealing with an action for nuisance which discussed where the onus of proof lies, and the way that nuisance could be justified if the event or events took place pursuant to statutory authority. The nub of the plaintiff’s submissions is to be found at [18] of my judgment as follows:

Having set out extracts from the authorities to which the plaintiff referred, I held at [34] that those cases said nothing about how matters ought to be pleaded.

I held at [36] that the plaintiff’s complaints about the pleading did not appear to take into account r 14.11 Uniform Civil Procedure Rules 2005 (NSW) nor the ordinary course of pleading. I said, in reliance on Roads and Maritime Services v Grant [2015] NSWCA 138 at [14], that it would be necessary for the plaintiff in a Reply to plead in response to paragraphs 11-21 of the Defence the matters that were identified by the plaintiff and which I summarised in [13]-[17] of that judgment. I said at [37] that the defendant was not required in its pleading to anticipate the matters that the plaintiff would assert to impugn the carrying out of the work purportedly pursuant to the approval given. I held at [41] that the presumption of regularity applied and, in order to displace the presumption, there was at least an evidentiary onus on the plaintiff to plead and give evidence of the ways in which the works had not been carried out in accordance with the statutory authority and approval.

In the result, I declined to strike out any of the paragraphs of the Defence apart from paragraph 31 which pleaded a stand-alone defence in reliance on s 42 of the Civil Liability Act 2002 (NSW). I directed that the plaintiff was to file a Reply to any Amended Defence and I gave leave to the defendant to file a Rejoinder if it wished to do so.

On 18 September 2018 the solicitors for the plaintiff served a copy of the Reply which they had filed. The solicitors for the parties then engaged in correspondence which included assertions by the solicitors for the defendant that the Reply was not properly pleaded. Particulars were sought of certain aspects of the Reply. That correspondence produced further drafts of an Amended Reply by the solicitors for the plaintiff. That culminated on 15 October 2018 with the solicitors for the defendant saying in a letter to the plaintiff’s solicitors that, subject to what they set out in that letter and without conceding that the plaintiff complied with my earlier judgment in the form of the proposed Amended Reply, they had no object to the plaintiff filing the draft Amended Reply. That was duly done although the correspondence continued, with the defendant’s solicitors asserting the inadequacy of the pleading.

Paragraphs 3 and 8 of the Amended Reply plead as follows:

On 16 November 2018 the defendant’s solicitors filed a notice of motion seeking the following orders:

It may be observed that the challenge by the defendant is in substance to paragraphs 3 and 8 of the Reply. The remaining paragraphs referred to in prayer 3 simply pick up the pleading contained in those two paragraphs. In that way, the plaintiff responds to paragraphs 11, 12, 21, 22, 27, 28, 29 and 30 of the Amended Defence.

The plaintiff submitted that the legislative authority conferred on the defendant was an authority expressed in general terms to construct a light rail along a specified route, and does not operate to authorise the construction of a particular type of light rail system. Reference was made to ss 104N and 104O of the Transport Administration Act 1988 (NSW) and to cl 82A of the Transport Administration (General) Regulation 2013 (NSW). The plaintiff submitted that nowhere in those provisions was there to be found any stipulation, definition or expression of the design and specifications of the particular light rail system which the defendant chose to construct. The plaintiff drew attention, as it had done at the hearing of the previous motion, to what was said by Powell J (as his Honour then was) in York Bros (Trading) Pty Ltd v Commissioner of Main Roads [1983] 1 NSWLR 391 at 397.

The plaintiff submitted that for it to be required, as the defendant submitted, to articulate what the plaintiff’s case is, and to set out facts to support the contention that a particular system or method of construction would not have caused the noise and dust alleged to have been suffered, and the way the construction work was improperly performed, was contrary to well-settled authority including York Bros and earlier authority in both the United Kingdom and Australia.

The plaintiff submitted that my earlier judgment does not give rise to any issue estoppel, that all I determined was that it was not incumbent upon the defendant to plead in its defence the facts upon which it relied to prove the matters set out in paragraph 3 of the Amended Reply, that my observation at [40] that the presumption of regularity may have some relevance to the matters raised by the plaintiff in respect of the defences pleaded in paragraphs 11 to 30 was merely obiter, and that if I had ruled that the statutory authority and approval pleaded by the defendant was conferred otherwise than in general terms so as to impose the burden of proof of the matters in paragraph 3 of the Amended Reply on the plaintiff, then that ruling was in error and should be corrected.

However, the plaintiff also acknowledged that the defendant could rely on the presumption of regularity in relation to compliance with the conditions of the RMS approval, and accepted that unless the plaintiff was in a position to adduce evidence after discovery that the defendant had not complied with one or more of the conditions of the approval, the defence to the claim in public nuisance pleaded in paragraphs 11-21 would prevail.

In my opinion, the approach taken by the plaintiff to the pleading in the Amended Reply is not in accordance with my earlier judgment. If, as the plaintiff suggests, I have fallen into error, it was open to the plaintiff to seek to vary my judgment by an application under UCPR r 36.16 within the 14 day period prescribed in sub-r (3A) or to seek leave to appeal from my judgment. Senior counsel for the plaintiff suggested that an application for leave to appeal would be inappropriate because my judgment concerned discretionary matters of practice and procedure. That may be so, but in the absence, at least at this stage, of the judgment being set aside by the Court of Appeal, the parties must act in accordance with that judgment.

The cases to which I was taken by senior counsel for the plaintiff, and from which passages were read, were to the same effect as the passages I extracted from a number of leading authorities at [30]-[33] of my earlier judgment. However, as I there indicated, those authorities said nothing about how matters should to be pleaded in a case such as the present.

Moreover, the plaintiff’s approach takes no account of my determination that the defendant was not required in its pleading to anticipate matters the plaintiff might raise whether in evidence or otherwise, it takes no account of my determination that the presumption of regularity applied so that there was at least an evidentiary onus on the plaintiff to plead that the work had not been carried out in accordance with statutory authority and the approval given, and how it was that there was such a failure. Nor does the plaintiff’s approach take account of what was said by Basten JA in Grant at [14], as I made clear in my earlier judgment.

I accept the submission of senior counsel for the defendant that paragraph 3 of the Amended Reply cannot be regarded as a pleading, but amounts to no more than a submission. Putting aside what appears in paragraph 3(a), and subject to any change in the onus of proof that ss 43 and 43A of the Civil Liability Act may have effected (and it is not necessary on this application to pursue that matter), it may be accepted for present purposes that, at the hearing, there will be an onus on the defendant to show that the noise and dust experienced in the plaintiff’s premises was the inevitable consequence of carrying out the work, that the work had been carried out in a proper manner and that there was no other light rail system according to the state of scientific knowledge at the time which, if constructed, would not have caused the noise and dust experienced by the plaintiff. That, however, does not assist in any way in defining what the real issues are between the plaintiff and the defendant in terms of how the work should properly have been carried out and what other light rail system could have avoided the damage which the plaintiff claims to have suffered.

Senior counsel for the plaintiff appeared to suggest that the issue about the “other light rail system” in paragraph 3(b) was what appears in the affidavit of an expert called by the plaintiff, Greg Sutherland. The issue raised by Mr Sutherland was the one concerning the power supply for the light rail being under the ground in the vicinity of the plaintiff’s premises when it could have been by means of overhead power lines. However, there is no suggestion anywhere in the Amended Reply that that is the other light rail system being referred to. If the plaintiff wishes to rely on Mr Sutherland’s evidence it must appropriately plead and particularise the “other light rail system”.

Nor is there any pleading or particulars about how the work is said not to have been properly performed as paragraph 3(c) alleges. In a letter from the defendant’s solicitors dated 25 October 2018, in reference to paragraph 3 (there wrongly described as paragraph 4), the solicitors pointed to paragraphs [42], [62] and [64] of my judgment and asked, relevantly:

The answer given in a letter of 30 October 2018 was as follows:

As to the former statement in that passage, where the plaintiff has not sought to have my judgment varied or overturned, it must be taken as the proper basis for the way in which the pleading is to proceed. As to the latter statement, the plaintiff appears to have difficulty understanding the distinction I made in my earlier judgment between what must be ultimately proved by the defendant at the hearing, and what must be set out in the pleadings so that the real issues between the parties can be identified. That difficulty in understanding is reflected in the inadequate and inappropriate pleading in paragraph 3 of the Amended Reply.

Paragraph 3(a) of the Amended Reply is even more problematic. It may be accepted that the words “in that vicinity” refer to the route that passes the plaintiff’s premises. However, if what is being asserted in paragraph (a) is different from what appears in (b), it is difficult to draw any other conclusion from that paragraph than an assertion that the light rail system per se passing by the plaintiff’s premises was not reasonably necessary. Such an allegation should not be permitted to be pleaded because no challenge is made to reg 82A of the Transport Administration (General) Regulation 2013 which prescribes the route under the power given in s 104N(2) of the Transport Administration Act.

The matter was raised in correspondence by the solicitors for the defendant. They wrote on 6 November 2018 dealing (inter alia) with paragraph 3(a) and (b) of the Reply in these terms:

The reply dated 7 November 2018 from the solicitors for the plaintiff was as follows:

In fact, the solicitors for the defendant had not misquoted anything. The quote was from paragraph 9(a) of the Amended Defence and not paragraph 3 of the Amended Reply. The significant matter is, however, that it is clear that the plaintiff is asserting that the light rail system per se was not reasonably necessary. They were not as paragraph 3(b) of the Amended Reply suggests, confining it to the sort of light rail system (with below ground power supply) that was constructed near the plaintiff’s premises. I accept the submission of the defendant that the plaintiff in these proceedings cannot plead that the light rail system per se was not reasonably necessary. The decision to build it was an executive decision of the government and is non-justiciable. Clause 82A of the Regulation and the incorporated documents make that clear.

Senior counsel for the plaintiff eschewed in oral submissions any notion of a challenge even to the route of the light rail system, let alone to the idea of a light rail system per se, but that sat uneasily with what appears in the letter of 7 November 2018 set out above.

Paragraph 8 of the Amended Reply suffers from a similar problem to paragraph 3(c) of the Amended Reply in that there is a mere non-admission that the defendant has acted in accordance with the conditions of the approval. There is not, but should be, a specification of the way in which the defendant has not acted in accordance with the approval. My earlier judgment made that clear at [36], [37], [42] and [64].

As I endeavoured to explain in my earlier judgment, the defendant is entitled to plead that it had acted in accordance with statutory authority and the RMS approval. The plaintiff is entitled to assert that it did not do so on both counts, but paragraphs 3 and 8 simply do not admit that the defendant did so. Such a pleading is embarrassing. It does not enable issue to be joined on the real and substantive disputes between the parties in respect of the way the light rail was constructed, including whether it was done in accordance with the statutory authority and within the limits of the RMS approval.

In the Reply filed on 18 September 2018 paragraph 8 read as follows:

For no stated reason, the solicitors for the plaintiff informed the defendant’s solicitor in a letter of 12 October 2018 that they had decided to delete that form of paragraph 8. In the meantime, particulars had been sought by the defendant’s solicitor asking in what way the defendant had failed to do things alleged in sup-paragraphs (i), (ii) and (iv), or had failed to satisfy the condition in paragraph 8(iii).

Following the filing of the Amended Reply, in the letter of 25 October 2018 the defendant’s solicitors sought particulars of what is now paragraph 8 in the Amended Reply. They asked whether the plaintiff alleged that the defendant had acted in accordance with the conditions and, if so, in what respect or respects. The answer given in a letter of 30 October was as follows:

Sub-clauses (a), (b), (f), (g) and (h) of clause 9 of schedule 4 are set out in the original form of paragraph 8 of the Reply. The answers given in the plaintiff’s solicitor’s letter of 30 October 2018 contain no specific matters, and the impression I have is that the plaintiff hopes that there will be something in any discovery that is sought which will enable them to identify and specify matters more particularly. It seems fairly clear from the correspondence of the plaintiff’s solicitors, particularly the generality of the matters alleged in the letter from the plaintiff’s solicitors of 2 October 2018 purportedly providing particulars, that at the present time, the plaintiff has little information to support the allegations made.

In McGuirk v University of New South Wales [2009] NSWSC 1424 Johnson J said at [33]:

For the reasons given, the pleading in paragraphs 3 and 8 is embarrassing. Those paragraphs will be struck out. Paragraphs 9, 10, 12, 15, 16 and 17 incorporate those paragraphs by reference, and will also be struck out. The plaintiff will be given leave to re-plead in accordance with this judgment and my earlier judgment. The leave given to the defendant to file a Rejoinder remains extant.

I make the following orders: