On 8 September 2021 the NSW Court of Appeal delivered its decision in the appeal by Seqwater relating to the 2011 Queensland flood claims. One of the points of appeal related to the application of s 36 of the Queensland Civil Liability Act 2003 (CLA) whether, contrary to findings made by the primary judge, a lower standard of care provided statutory protection to Seqwater, limiting the circumstances in which it could be liable in damages.

Section 36 of the CLA provides that in a proceeding that is based on an alleged wrongful exercise of or failure to exercise a function of a public or other authority, an act or omission of the authority does not constitute a wrongful exercise or failure unless the act or omission was in the circumstances so unreasonable that no public or other authority having the functions of the authority in question could properly consider the act or omission to be a reasonable exercise of its functions. The section has obvious application in defending claims on behalf of the State of Queensland, as it works to provide a high threshold for plaintiffs to meet.

Prior to the decision in Seqwater v Rodriguez, the Supreme Court of Queensland had interpreted and applied s 36 of the CLA on the basis that it only applied to breaches of statutory duty. In Hamcor Pty Ltd & Anor v State of Qld & Ors [2014] QSC 224, Justice Dalton decided that it did not apply to negligence claims involving a breach of a duty of care. In doing so, great weight was placed on the heading of s 36 which refers to ‘statutory duty’. In the case under review, the Court of Appeal did not follow Hamcor Pty Ltd & Anor v State of Qld & Ors.

The Court of Appeal found that Section 36 of the CLA should not be read down to apply only to proceedings where the cause of action was breach of statutory duty. The omission of “duty” from s 36 suggested that the section was not limited to any particular cause of action; the term appeared only in the heading to that section and did not limit its operation. The reference to “functions” in s 36 applied to the functions of Seqwater provided for by statute, including flood prevention and floodwater control. Although Seqwater was required to carry out its functions as a commercial enterprise, this did not prevent its functions from being those of a public authority.

The Court of Appeal found that the primary judge held that s 36 was not engaged without reaching a conclusion as to whether Seqwater was “a public or other authority”. However, both because it is not easy to isolate particular aspects of the operation of s 36 without some risk to the proper construction of the section as a whole, and because Rodriguez sought to re-agitate the issue on appeal, it is necessary to explain why this element in s 36(1) is satisfied in relation to Seqwater.

The Court further found that for an authority to be liable, the exercise of a power must be so unreasonable that the court cannot envisage any authority in that position considering it to be a reasonable exercise of the power. It was a relevant consideration in applying s 36(2) and apportioning liability, that Seqwater’s engineers adhered to the strategy determined by the senior flood engineer.

The decision in Seqwater v Rodriguez is significant in that it provides greater scope for public authorities or other authorities, including the State, to defend negligence claims.  A plaintiff will need to satisfy a Court that the act or omission complained of was in the circumstances so unreasonable that no public or other authority having the functions of the authority in question could properly consider the act or omission to be reasonable.

It remains to be seen whether the NSWCA decision will be appealed to the High Court on the application of s 36. However, for now, it appears that s 36 is open to be applied beyond cases where there is a breach of statutory duty, and can be applied in cases of negligence where a breach of a duty of care is alleged.

If you have any queries arising from this article, please contact Chris Gasteen, Special Counsel at chris.gasteen@crownlaw.qld.gov.au or Paul Lack, Senior Principal Lawyer at paul.lack@crownlaw.qld.gov.au from the Native Title, Resources and Dispute Resolution Branch.

^{The information in this publication is provided for general purposes only. It is not to be relied on as a substitute for legal advice. Crown Law and the Department of Justice and Attorney-General accept no liability for losses caused by reliance on the material in this publication. Formal legal advice should be obtained for particular matters.}