Stepping into the arena: statutory authorities and the common law duty of care

Electricity Networks Corporation v Herridge Parties [2022] HCA 37

In a nutshell

In Electricity Networks Corporation v Herridge Parties [2022] HCA 37, the High Court gave a helpful overview of the principles governing when a statutory authority owes a common law duty of care.

The two main considerations are the terms, scope and purpose of the relevant statutory framework and the functions and powers that the relevant statutory authority, in fact, exercised.

The Court affirmed that the Electricity Networks Corporation (trading as Western Power) owed a duty to take reasonable care to avoid or minimise risk of injury to persons in the vicinity of its electricity distribution system (or damage to those persons’ property) from ignition and spread of fire in connection with delivering electricity through its electricity distribution system.

The main reason for this finding was that Western Power, in exercising its statutory powers and functions, had ‘stepped into the arena’ by using, and attaching its electrical apparatus to, a pole that caused the bushfire. This gave rise to a risk of harm to classes of persons that Western Power had the power to protect.

What was the case about?

In January 2014, a bushfire started in Parkerville, Western Australia, when a jarrah pole fell to the ground due to fungal decay and termite damage. The jarrah pole was referred to as a ‘point of attachment’ pole because it attached an electricity distribution system to consumer mains.

Many people suffered loss and damage as result of the bushfire, and they commenced proceedings in the Supreme Court of Western Australia, alleging negligence and/or nuisance against:

1.     Mrs Campbell, who owned the property on which the pole fell, and whose husband had installed the pole.

2.     Western Power, being the statutory authority who operated the electricity distribution system that utilised the pole. The case was run on the assumption that Mrs Campbell owned the pole, but Western Power owned and maintained certain apparatus attached to it.

3.     Ventia Utility Services Pty Ltd (formerly known as Thiess Services Ltd), which was an independent contractor of Western Power, and who had recently undertaken maintenance works around the pole.

What were the initial findings?

The trial judge found that Thiess and Mrs Campbell were liable in negligence and nuisance but dismissed the claims against Western Power. It was held that Western Power owed a duty of care limited in scope to pre-work inspections, and no breach of that duty had been established.

The Court of Appeal disagreed, holding that Western Power owed a duty to take reasonable care to avoid or minimise risk of injury to persons in the vicinity of its electricity distribution system (or damage to those persons’ property) from ignition and spread of fire in connection with delivering electricity through Western Power’s electricity distribution system (the Broader Duty of Care). Western Power had breached the Broader Duty of Care by not having a system for periodic inspection of poles.

What was the question for the High Court?

The question for the Court was whether Western Power owed the Broader Duty of Care. Western Power argued that Western Power’s functions did not give rise to a relationship that supported the Broader Duty of Care and that the Broader Duty of Care was inconsistent with the relevant statutory scheme.

What did the High Court find?

The Court rejected Western Power’s arguments. In doing so, it provided a helpful overview of the principles that govern when a statutory authority owes a common law duty of care:

1.     There is no freestanding rule as to when a statutory authority owes a duty of care.

2.     One starts by examining the terms, scope and purpose of the relevant statutory regime – does it create a relationship between the authority and a class of persons that, in the circumstances, displays ‘sufficient characteristics’ that meet the criteria for the ‘intervention’ of negligence?

3.     One must look at:

1.     the functions of the statutory authority;

2.     the powers in fact exercised by the statutory authority; and

3.     the powers the statutory could have exercised, but did not.

4.     Although, generally, a statutory authority will not owe a common law duty to do something that it is not statutorily required to do, that is not always the case. A statutory authority may, by its conduct, assume responsibility to exercise a particular power.

5.     In ascertaining whether assumption of responsibility has occurred, an important consideration is control (that is, the ability to assert power over a person/property). It is helpful to ask: has the statutory authority ‘intervened’ in a ‘field of activity’ in a way that ‘increased the risk of harm to persons whom it had the power to protect’?

6.     However, control should not be regarded as the ‘overarching analytical tool’ – in every case, the statutory authority will be governed by its particular statutory framework.

7.     Finally, a common law duty cannot arise if it would be inconsistent or incompatible with the authority’s statutory powers or duties or the relevant statutory framework.

Applying these principles, the Court held that Western Power owed the Broader Duty of Care. Western Power had statutorily conferred functions to undertake, operate, manage and maintain an electricity distribution system. In performance of its powers, Western Power affixed elements of its system to the pole and continuously energised Mrs Campbell’s premises. Western Power created or increased the risk of harm to persons whom it had the power to protect – the pole posed a risk because Western Power attached live electrical apparatus to it.

Thus, the Court concluded that Western Power had ‘entered into the field’ or ‘stepped into the arena’ and created a relationship with persons within the vicinity of its electricity distribution system.

Finally, it was not inconsistent or incoherent with Western Power’s statutory functions and powers to find that Western Power owed the Broader Duty of Care. Such powers and duties included maintenance duties, and broad emergency and access powers (including for dangerous situations). In fact, Western Power had ‘ample power to discharge its duty of care.’