Trial Judgement

Duty of Care owed to the first plaintiff by the defendant? [11] The first issue is whether the defendant, as a government entity (see s 3C of the Transport Administration Act 1988 (NSW)) which was engaged in the construction of local infrastructure, owed a duty of care to the first plaintif to take reasonable care to avoid causing SSM economic loss. [12] The law has long recognised that whether a duty of care exists partly depends on the type of harm which it is alleged has occurred. In cases of "pure economic loss" such as the present claim, it is clear that a duty of care will only be found where the case falls into one of the limited categories of the law recognised by previous authority, except where it can be established by analysis of "salient features" of the case that a novel category ought to be recognised for the first time. [13] The comments of McHugh J in McHugh J in Perre v Apand Pty Ltd [1999] HCA 36 suggest that the appropriate test is the "incremental" approach to determination of a new duty, at para [94]: In my view, given the needs of practitioners and trial judges, the most helpful approach to the duty problem is first to ascertain whether the case comes within an established category. If the answer is in the negative, the next question is, was the harm which the plaintif sufered a reasonably foreseeable result of the defendant's acts or omissions? A negative answer will result in a finding of no duty. But a positive answer invites further inquiry and an examination of analogous cases where the courts have held that a duty does or does not exist2. The law should be developed incrementally by reference to the reasons why the material facts in analogous cases did or did not found a duty and by reference to the few principles of general application that can be found in the duty cases. [14] As indicated, I am not aware of any clearly established category of case where a duty of care has been imposed on a government body to avoid causing economic loss through its infrastructure decisions. There was no pre-existing contract between the parties, no negligent misstatement by the defendant on which the first plaintif relied, no set of defective premises. Nor did the defendant harm any third party to whom the first plaintif was related. [15] Indeed, such analogous cases as there are point clearly against a duty. In Precision Products (NSW) Pty Ltd v Hawkesbury City Council [2008] NSWCA 278 the local Council had ordered a business to be shut down due to pollution concerns. A claim was made for economic loss caused as a consequence, but the Court of Appeal held that there was no duty of care of the sort claimed. MM Constructions (Aust) Pty Ltd v Port Stephens Council (No 7) [2012] NSWCA 417 also points to this result- see para [93]. I do not think that the diferent majority decision in Meshlawn Pty Ltd v Queensland [2010] QCA 181 is persuasive, even were I as a trial judge free to follow that decision in preference to decisions of the NSW Court of Appeal. [16] I have given consideration to the "salient features" which require consideration under the authority of Caltex Refineries (Qld) Pty Ltd v Stavar [2009] NSWCA 258, but these do not persuade me that a diferent outcome is appropriate. In particular, a very important feature considered in almost all "economic loss" cases is the question of "vulnerability". Although I accept that it is not an "essential" part of a such a claim (see Apache Energy Ltd v Alcoa of Australia Ltd (No 2) [2013] WASCA 213 at [239]), it is always very important. Here I find that SSM were not relevantly vulnerable- they are a fairly profitable business which could have insured against the disruption caused by major works, and indeed would have had
the resources to have moved elsewhere for the period of the construction to mitigate the loss of business. [17] I have considered with some care the decision of the Victorian Supreme Court in 5 Boroughs NY Pty Ltd v State of Victoria; Roberts v State of Victoria [2021] VSC 785, where John Dixon J allowed a claim for economic loss against the Victorian government based on its mishandling of COVID quarantine restrictions, to continue to trial. His Honour provides a thorough review of decisions relating to a duty of care to avoid causing economic loss at paras [35]-[151] of that decision. But I am not persuaded that his Honour's reasons provide justification for finding a duty of care is owed in this case. [18] I hold that TfNSW did not owe SSM a duty of care to avoid causing economic loss through construction decisions around the light rail project.
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