State of Queensland v Baker Superannuation Fund Pty Ltd & Anor; Aurizon Operations Limited v Baker Superannuation Fund Pty Ltd & Anor

In this decision, the Court of Appeal considered the rights and liabilities of a higher proprietor of land who concentrates the flow of surface waters coming naturally onto their land onto the adjacent land of a lower proprietor where the concentrated flow damages the lower proprietor's land by erosion. The judgments contain a useful overview of the applicable principles and the law of nuisance more generally.

Morrison and McMurdo JJA and Jackson J

27 July 2018

Facts

The State of Queensland ("the State") owns land which is now used as a public facility for recreational cyclists, horse riders and walkers. [189]. It is known as the "Brisbane Valley Rail Trail". [189]. Until 1993 the land had been the Brisbane Valley rail line. [189]. In about 1884, during the construction of the rail line, a particular embankment was formed to provide a level surface for the track. [190]. Two culverts were also installed through that embankment, so that surface water could pass underneath the track and follow the line of a pre-existing channel. [190]. In about 1956, those culverts were replaced by substantially identical concrete box culverts. [190]. The land was previously owned by Aurizon Operations Limited ("Aurizon") (which was called Queensland Rail until 2010). [204]. It was transferred to the State in April 2003. [204].

Baker Superannuation Fund Pty Ltd ("Baker") owns a grazing property which adjoins some of the former rail line, including at the site of this embankment. [191]. From about 1999, Baker's land at that point had been "badly eroded by the passage of surface water flowing towards the rail line from its other side, and then being effectively funnelled through these culverts". [191]. Before 1999, there had been no significant damage caused to what is now Baker's land from the presence of these structures. [191]. What changed was an increase in the volume of water flowing towards the embankment, as a result of the actions of other owners in clearing and developing their lands on the uphill side of the rail line. [191]. The principal of Baker first wrote to Aurizon (then called Queensland Rail) to complain about the erosion in February 2000. [206]. There was no suggestion that Queensland Rail ought to have been aware of the damage to Baker's land, or to have foreseen it, so as to become liable to abate a nuisance before the complaint was made. [206].

Decision at First Instance

Baker sued the State and Aurizon in the Supreme Court, claiming that "by not preventing the flow of water through the culverts during the period of each [of the State and Aurizon's] ownership of the rail line, it committed an actionable nuisance". [192]. The trial judge (Mullins J) found for the respondent. [192]. Her Honour ordered that the State and Aurizon each pay damages in an amount of $75,000, and that the State seal up the two culverts to prevent the discharge of water from them in the direction of Baker's land. [192]. The State and Aurizon appealed to the Court of Appeal.

Court of Appeal

The leading judgment was given by McMurdo JA. His Honour referred to the judgment of Windeyer J in Hargrave v Goldman (1963) 110 CLR 40 and noted that in general, an unlawful interference with a person's use or enjoyment of land is an unreasonable interference. [193]. His Honour also referred to Gartner v Kidman (1962) 108 CLR 12, where Windeyer J held that a higher proprietor of land will not be liable simply because surface water flows naturally from his land onto lower land, or as a result of his natural use of his land. [199]. On the other hand, he may be liable if he causes surface water to flow onto the lower proprietor's land in a more concentrated form than it naturally would. [199].

Many arguments were raised by the State and Aurizon. This summary necessarily addresses only the main points.

Statutory Scheme

McMurdo JA noted that the common law position might be affected by statute. [203]. He summarised the following principles from Marcic v Thames Water Utilities Ltd [2002] QB 929, which had been endorsed in Bankstown City Council v Alamdo Holdings Pty Ltd (2005) 223 CLR 660:

"(a) in the absence of negligence, a body is not liable for a nuisance which is attributable to the exercise by it of a duty imposed upon it by statute, even if by statute it is expressly made liable, or not exempted from liability, for nuisance;

(b) in the absence of negligence, a body is not liable for a nuisance which is attributable to the exercise by it of a power conferred by statute, if by statute, it is not expressly either made liable, or not exempted from liability, for nuisance;

(c) a body is liable for a nuisance which is attributable to the exercise by it of a power conferred by statute if by statute it is expressly made liable, or not exempted from liability, for nuisance;

(d) the condition that a statutory duty or power be exercised ‘without negligence’ means that, as a condition of obtaining immunity from action, the body is required to carry out the work and conduct the operation with all reasonable regard and care for the interests of other persons." [203].

Aurizon traced the history of legislation which provided for the construction and maintenance of railways, and submitted that the statutes established a statutory scheme within the principles of Marcic. [204]–[205]. It submitted that the scheme was inconsistent with the existence of a "parallel common law right, whereby an individual might complain about the statute of the railway land or some structure within it". [205]. McMurdo JA concluded that as at February 2000 (when the initial complaint was made) no relevant legislative provisions applied to provide a statutory immunity from liability. [206]–[210], [214]. His Honour also rejected another argument that the State and Aurizon were immune from liability because of compensation paid to a predecessor in title of Baker in 1884. [211]–[214].

Claim against Aurizon

His Honour then considered the claim against Aurizon. He concluded that Aurizon was not acting unreasonably in not doing what was necessary to abate the nuisance because to do so would have required substantial engineering works costing in the order of several hundred thousand dollars at a time when a categorisation process was underway which could result in the land becoming vested in the State. [227]–[234]. Accordingly, the claim against Aurizon should have been dismissed. [234].

Claim against the State

His Honour next considered the claim against the State. His Honour agreed with the trial judge that there was an actionable nuisance committed by the State for the following reasons:

   "There was no evidence ... that the works on the former railway corridor, which the respondent claimed were required to abate the nuisance, would have compromised the use of this land as the public recreational facility which it had become. The embankment and the culverts were changes which had been made to the landscape so that the land could be used for a railway. There was no justification for retaining them apart from saving costs to the State, once the nature of the ongoing use of the land had become clear, and where that use would not be compromised by their removal. In short, the use of the culverts within this embankment no longer constituted a use of the State’s land ‘in a reasonable and proper manner’, having regard to the damage which they continued to cause to the respondent’s land." [236].

Failure to mitigate

Finally, his Honour considered whether Baker had failed to mitigate its own loss. [238]. He held that "there was little which [Baker] could have done to mitigate the effect of the discharge of this water from the culverts absent work being done also on [Aurizon and the State's] land". [241]. His Honour also rejected a submission that Baker should have sought Aurizon's consent to undertake works on its land, on the basis that "the argument appears to have been that [Baker] might have mitigated its loss from the nuisance by itself taking the steps which, by law, ought to have been taken by the tortfeasor". [241].

Conclusion

In the result, his Honour would have allowed the appeal by Aurizon and dismissed the appeal by the State. [245]. Morrison JA delivered a concurring judgment, and agreed with the orders proposed by McMurdo JA. [1]–[188]. Jackson J dissented. [246]–[291].

M J Hafeez-Baig of Counsel