This case has important implications for property owners, building contractors, utility service providers and insurers.
The case arose after the plaintiff’s (Anderson) home was badly damaged by a fire. The Anderson’s claimed that electrical company, Ausgrid was liable for the damage.
In determining Ausgrid’s liability, the Supreme Court of New South Wales did not need proof from Anderson that Ausgrid had caused the fire. Anderson was only required to satisfy the Court that Ausgrid was the most likely cause of the fire.
What you need to know
This case has important implications for property owners, building contractors, utility and service providers and insurers, including that:
- property owners/insurers have the onus of proving, on the balance of probabilities, the cause of the fire/damage;
- the inability to show precisely how the fire started/damage was caused is not critical; and
- building contractors/utility service providers accused of causing damage to properties need to raise any exclusion of liability clauses early on.
Anderson’s home was badly damaged in a fire. A month before the fire, Ausgrid had replaced one of the three meters in the meter box as it was faulty. The damages included significant property damage along with the costs for sourcing alternative accommodation. The total amount claimed in damages amounted to $819,676.50.
Anderson’s insurers paid this amount and commenced proceedings in Anderson’s name to recover the amount paid from Ausgrid on the basis of Ausgrid’s negligent cause of the fire.
The exact cause of the fire was examined by experts with competing theories.
Anderson’s expert evidence indicated that the most likely cause of the fire was the defective installation of the meter by Ausgrid. Whilst the Anderson’s expert could not conclusively submit that the fire was not caused by anything else, including a fault of a component of the meter box, he found that the probability of this was extremely low.
Although Ausgrid’s expert believed the defective installation of the meter was unlikely to have caused the fire, he accepted the proposition that it was a possible cause of the fire.
The deciding factors
The Court found that:
- Ausgrid was responsible for the negligent installation of the meter at the Anderson home;
- the negligent installation of the meter by Ausgrid, was a reasonable and probable explanation for the fire; and
- Ausgrid was liable to pay damages amounting to $819,676.50 plus interest on this sum from the date the loss was suffered until the Court’s decision.
On an interesting side point, during closing submissions Ausgrid, for the first time and without prior notice, sought to rely on an exclusion clause in its Supply Contract with Anderson.
Ausgrid contended that even if it was found liable for the damage caused by the fire, such liability was excluded under the Supply Contract between Anderson and Ausgrid.
Ausgrid submitted that it was not necessary to plead the exclusion clause as Anderson had relied on the Supply Contract in support of their claim that Ausgrid owed them a duty of care.
The Court took a strong view however and refused to consider the exclusion clause as the clause had not been specifically pleaded by Ausgrid.
Despite Anderson’s failure to show precisely how the fire started, the decision demonstrates the Court’s willingness to draw inferences.
This decision is likely to be extremely helpful to not only property owners but also insurers seeking recovery for payments made to property owners for damages (including fire damage). Building contractors and utility service providers should also bear in mind the implications this case may have if a claim for damages is made against them by a property owner or insurer.
Case reference: Anderson v Ausgrid  NSWSC 1308