COVID-19: Civic Legal Client Update – 12 July 2021

The Parkerville Bushfire: who is responsible for asset management?

1 Sep 2021

Image:  Supot Phanna/Shutterstock.com

 

On 2 July 2021, the Court of Appeal of Western Australia handed down its decision on the 2014 Parkerville bushfire case.

That case had been the subject of appeal after Western Power had not been found liable for the losses caused by the bushfire in the original trial. This was notable for being the first WA Supreme Court trial to be live-streamed on the internet.

The Court of Appeal found that Western Power was liable for 50% of the losses caused by the fire. It apportioned the remaining liability at 35% to Ventia and 15% to the owner of the property.

Western Power was found negligent in the Court of Appeal, because it did not have a system of periodic inspection of the “point of attachment” poles which supported its electrical apparatus.

The pole in question in this case belonged to the owner of the property where the fire started.

The Court of Appeal judgment noted “… in our view, a reasonable operator would have undertaken periodic inspections of wooden poles more than 15 years old, especially in rural areas where there was an elevated risk of bushfires. The risk of harm was foreseeable and known.”

Significantly, the Court of Appeal decision means that:

  • The common law duty of care owed by a utility operator is extended beyond the maintenance of its own assets and to the maintenance of assets belonging to other parties, where they are attached to its own assets; and
  • Owners of assets, to which electrical apparatus is attached, may be liable where they do not carry out regular inspections of their asset.

'We now wait to see whether the High Court will allow Western Power to appeal.'

Some key points on asset management

As a result of this decision, any asset owner, whether a public authority like a local government or a private individual or company, should:

  1. consider the extent of their responsibility to take steps to avoid foreseeable harm to others;
  2. review any outsourcing arrangements, contractual indemnities and limitation of liabilities;
  3. consider whether any asset management systems are required to discharge their responsibility (as owner of the asset) to avoid foreseeable harm to others;
  4. consider whether it is appropriate to pass on the costs of asset management to the owner of any attached asset; and
  5. whether their insurance cover is adequate for the purpose.

Western Power has applied for special leave to appeal to the High Court. We now wait to see whether the High Court will allow Western Power to appeal.  And if so, whether any other parties will cross-appeal and whether the above outcomes will be overturned.

Contact

For commercial and insurance litigation matters, please contact:

Isabelle Kelland

Solicitor

9200 4900

Disclaimer: This article contains references to and general summaries of the relevant law and does not constitute legal advice. The law may change and circumstances may differ from reader to reader. Therefore, you should seek legal advice for your specific circumstances. The law referred to in this publication is understood by Civic Legal as of publication date.