N8261

PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]
WS NO.224 OF 2014

BETWEEN:
SERIBU DAYA (PNG) LIMITED
Plaintiff

AND:
TROPICANA LIMITED
Defendant

Waigani: David, J
2020:   3rd April
 
TORT – claim in negligence  – plaintiff’s building burnt down – fire originated from a building on defendant’s property – defendant’s property leased out to third party – no proof of ownership of property by plaintiff – no application of strict liability - rule in Ryland v Fletcher – principles of negligence liability apply – application of nonfeasance rule – fire caused by electrical arcing therefore accidental – no  fault on the part of the defendant - claim dismissed.     

Cases Cited:
Papua New Guinea Cases 

Board of Management, Holy Spirit Primary School v Moses Sariki (2013) N5446
Burns Philp (NG) Ltd v Maxine George (No 2) (1983) SC259
Catholic Diocese Wabag Board of Trustees v Enga Provincial Government (2011) N4562
Chief Collector of Taxes v Bougainville Copper Limited (2007) SC853
Damien Kora v Carol Pio (2018) N7434
Francis Wandaki v Wini Henao (2009) N3676
Galem Falide v Registrar of Titles and The State (2012) N4775
Kembo Tirima v Angau Memorial Hospital Board and The State (2005) N2779
Kolta Development Pty Ltd v PNG Defence Force [1997] PNGLR 585
Marshall Lagoon Investment Company Pty Ltd v Ding Company Ltd (2008) N3650
Micky Akai v John Stanley Reeves (2014) SC1393
Papua New Guinea Banking Corporation v Jeff Tole (2002) SC 694
Reference by the East Sepik Provincial Executive (2011) SC1154
Shaw v Commonwealth of Australia [1963] PNGLR 119
Sir Arnold Amet v Peter Charles Yama (2010) SC1064
Supreme Court Reference No 4 of 1980 [1982] PNGLR 65
The Government of Papua New Guinea v Elizabeth Lauwasi Uguna Moini (1978) PNGLR 184
Tony David Raim v Simon Korua (2010) SC1062
Wong v Lam (1980) N268

Overseas Cases:

Ryland v Fletcher (1868) LR 3 HL 330
Donoghue v Stevenson (1932) AC 562
Burnie Port Authority v. General Jones Pty Ltd [1994] 179 CLR 520
Caparo Industries PLC v Dickman (1990) 2AC 605

Treatises Cited:

JD Heydon, Cross on Evidence, Butterworths, Fifth Edition, 1996
Paul Vout, Torts, The Laws of Australia, Second Edition, 2007

Counsel:

George Kaore, for the Plaintiff
Belinda Sinen, for the Defendant

JUDGMENT
3rd April, 2020

1.	DAVID, J: INTRODUCTION:  The plaintiff, Seribu Daya (PNG) Limited’s action against the defendant, Tropicana Limited is in the tort of negligence.  These proceedings were commenced by writ of summons filed on 20 March 2014 which was later amended by amended writ of summons filed on 7 November 2016.  The plaintiff’s claim is pleaded in the amended statement of claim endorsed on the amended writ.  

2.	The plaintiff claims, among others, damages for loss of building in the sum of K2.5 million, damages for loss of company assets in the sum of K1 million and damages for loss of business to be assessed due to a fire which occurred in 2009.  The fire originated from one of the buildings used as a warehouse (Building A) on the defendant’s property, Allotment 3 Section 55, Gordon’s, Port Moresby situated along Ume Street (the Property) which was leased out to Classic Trading Limited, a company involved in the sale of highly inflammable liquids and substances such as turpentine, oil lubricants and dangerous chemicals which were prone to catch fire easily.  The fire spread to another building used as a residence (Building B) on the Property and then across to the plaintiff’s neighbouring property, Allotment 2 Section 55 Gordon’s (Adjacent Property) burning down its two-level building consisting of office spaces on the ground level and rented units on the top floor (Building C).

3.	In its averments, the plaintiff claims that due to the close proximity of the parties’ properties, the defendant owed a duty of care to the plaintiff not to cause any harm to it which would result in unnecessary loss and damage especially when a tenant of the defendant’s was selling highly inflammable liquids and substances.  The particulars of the defendant’s duty of care allegedly breached were: 

1.	It failed to build a brick wall separating the properties.
2.	It failed to install fire alarms to warn the neighbourhood and tenants promptly of presence of fire.
3.	It failed to deploy security personnel to work after hours who could offer assistance in case of fire.
4.	It failed to control the activity of its tenant who was selling and storing dangerous chemicals in Building A.
5.	It failed to install sufficient extinguishers in Building A and Building B to stop the fire from spreading.
6.	It failed to install temporary barricades for use by tenants to block off fire from spreading.   

4.	The defendant denies the claim.  Its defence is pleaded in the further amended defence filed on 6 September 2018. The defendant essentially avers that  it is not liable in negligence as; it was not in possession or had supervisory control of the Property hence did not owe any duty of care to the plaintiff; if it owed a duty of care to the plaintiff, which was not admitted, that duty of care did not extend to that which was claimed by the plaintiff; the fire began accidentally as a result of electrical arcing notwithstanding all reasonable care taken by the defendant; and the fire was not caused by the negligence of the defendant.

EVIDENCE

5.	Trial was conducted by affidavits. All affidavits for the parties were admitted into evidence without objection. No cross-examination was conducted by either party.

6.	The plaintiff’s evidence comprises the:

1.	Affidavit of Roger Hwong sworn on 18 April 2018 and filed on 19 April 2018 (Exhibit A); and
2.	Affidavit of Jacob Kairi sworn on 18 April 2018 and filed on 19 April 2018 (Exhibit B).

7.	The defendant’s evidence comprises the.

1.	Affidavit of Didi Carlos sworn and filed on 4 March 2015 (Exhibit 1);
2.	Affidavit of Chief Superintendent Kamea Mea sworn on 3 August 2015 and filed on 4 August 2015 (Exhibit 2); and
3.	Affidavit of Didi Carlos sworn on 30 August 2018 and filed on 4 September 2018 (Exhibit 3);

SUMMARY OF PLAINTIFF’S EVIDENCE
Roger Hwong

8.	He is the Managing Director of the plaintiff company.  The plaintiff is a company duly incorporated under the Companies Act.  

9.	The plaintiff is the proprietor of the Adjacent Property.  It owned the duplex building erected on the Adjacent Property.

10.	Two buildings were erected on the Property. The parties’ properties were separated by a brick wall that was built by the plaintiff just enough to protect the office space on the ground level from flooding.  

11.	From the Fire Investigation Report and accounts of bystanders, on 29 April 2009, fire started from Building A, it spread to Building B and then spread to the Adjacent Property resulting in the burning down of Building C and loss of personal effects including three registered firearms.  Annexure A to Exhibit A is an inventory of properties and valuables lost valued at K2,571,710.00 with interest at 8% accruing.

12.	Building C accommodated the plaintiff’s Head Office, a transit lodge for the plaintiff’s associated companies that were involved in logging and lodging for clients and rented rooms for staff on the top floor.

13.	Annexures B1, B2 and B3 to Exhibit A are copies of tenancy agreements with three different tenants.  These agreements are not stamped.

14.	Annexure C to Exhibit A is a copy of a Police Investigation Report dated 20 May 2009 authored by Detective First Constable Nicholas Kisok of CID General Squad, Boroko Police Station.  His report was compiled following an investigation he conducted after a Crime Report No.149/09 was lodged by one Kok Boon Shin of the plaintiff company on 4 May 2009.  His investigation included conducting interviews with eye witnesses and tenants residing in the Property and the Adjacent Property and obtaining their statements.  Eye witnesses said on 29 April 2009 between 4:15 am and 5:00 am, fire originated from a building on the Property and spread to the Adjacent Property completely burning down the Building C with its contents. Two vehicles were also burnt.  Prior to the fire, the Adjacent Property accommodated the plaintiff’s Head Office, a transit centre for associated companies engaging in logging activities, transit lodge and office spaces that were rented out.   First Constable Kisok said that at the time of making his report, the cause of fire had not been established.

15.	There were six office spaces on the bottom floor that were rented out to various tenants at K3,000.00 per month.  

16.	The defendant failed to install fire safety equipment in the buildings including fire alarms and fire sprinklers to prevent fire and to warn neighbours of the presence of fire.

17.	The fire that started from the warehouse, Building A could be considered as an accident, but the fire from Building B was not and it was due to the defendant’s tenant’s failure to contain the fire from spreading to the Adjacent Property.  

18.	The Fire Investigation Report is not conclusive as it could not be possible to identify evidence of electrical arcing in a labyrinth of burnt-out electrical wires. There was no report from PNG Power Limited to corroborate the finding or conclusion in the Fire Investigation Report.

19.	The plaintiff’s attempt to have its claim of K2,571,710.00 with the defendant’s insurers through its insurance brokers has not been successful.  Annexure D to Exhibit A is a true copy of its letter to Pacific Assurance Group dated 2 September 2010.

20.	Annexure E to Exhibit A is a bundle of documents constituting IRC business returns for the plaintiff.  

Jacob Kairi

21.	He is the Chairman of the plaintiff company. 

22.	The plaintiff is a company duly incorporated under the Companies Act.  Annexure A to Exhibit B is a copy of what appears to be an incomplete company extract obtained from the Investment Promotion Authority.  The extract shows that a company called Seribu Daya (PNG) Limited was incorporated under the Companies Act and has registration number 1-18818.  A person called Yih Siang Hwong whose residential address is the Adjacent Property and whose postal address is PO Box 7382 Boroko consented to act as a director of the company and was appointed as a director on 3 December 2013.

23.	The plaintiff was the proprietor of the Adjacent Property.

24.	The plaintiff owned Building C on the Adjacent Property.  The defendant owned two buildings on the Property which were used as warehouses and a residential unit.  One warehouse was occupied by Classic Trading and Sinopac Limited.  Classic Trading occupied the bottom level while Sinopac Limited occupied the upper level. The other with the residential unit was occupied by Dianos Compound Limited.  The properties were separated by a brick wall that was built by the plaintiff which was just enough to protect the office space on the ground level from flooding. 

25.	As a customer of Classic Trading, the plaintiff had been buying many lubricants from the company. He is aware that that company also sold inflammable substances such as turpentine, oil lubricants and dangerous chemicals that were prone to trigger off fire. Fire started from that part of the building occupied by Classic Trading.  The Fire Investigation Report makes no mention of this and apparently only concentrated on electrical faults when there was no independent report from PNG Power Limited.  The possibility of workers or the Manager working after hours causing the fire such as from cigarette butts not properly extinguished was not considered.  Fire started from the Manager’s office.  The fire was triggered off by flammable liquid stocks sold by Classic Trading. 

26.	The excuse that fire started due to electrical arcing and therefore was an accident cannot stand.  While the fire that started from Building A can be deemed to be an accident, the same excuse cannot be said about Building B as it caught on fire when the fire from Building A was not contained and spread to it.  The fire from Building B also was not contained and subsequently spread across to Building C burning it down altogether and resulting in the total loss of the building and all things in it including personal effects.  The distance between Building A where the fire started from and Building C was about 15 to 20 metres so the flames from that building alone could not reach Building C.

27.	The Fire Investigation Report is not conclusive as it could not be possible to identify evidence of electrical arcing in a labyrinth of burnt-out electrical wires.  There was no report from PNG Power Limited to corroborate the finding or conclusion in the Fire Investigation Report.  No statements from people interviewed in the investigation conducted by the PNG Fire Service have been produced to determine the independence of interviewees and establish the integrity of the Fire Investigation Report.

28.	No fire protection devices such as fire alarms to alert occupants of presence of fire and automatic fire sprinklers to assist contain fire were installed in the warehouse from which sales of dangerous flammable chemicals were conducted.  The defendant had a duty to install them and more so because the buildings were in an industrial area.

29.	Building C accommodated the plaintiff’s Head Office, a transit lodge for the plaintiff’s associated companies involved in logging activities, lodging for clients and rented rooms for staff situated on the top floor. The bottom floor had six office spaces which were tenanted by two law firms and four other businesses. 

SUMMARY OF DEFENDANT’S EVIDENCE

Didi Carlos

30.	Didi Carlos’ evidence was that at the material time, he was employed by the defendant as a Property Manager.  

31.	In the early hours of the morning on or about 29 April 2009, a fire occurred at the Property. A true copy of the relevant State Lease for the Property is annexure DC1 of Exhibit 3.   An investigation was conducted by the PNG Fire Service commencing on 29 April 2009 and subsequently a Fire Investigation Report was compiled.  On 25 September 2014, he obtained a copy of the Fire Investigation Report from the PNG Fire Service.  True copies of the Fire Investigation Report are annexure DC1 to Exhibit 1 and annexure DC2 to Exhibit 3.  According to the report, the origin of the fire was Building A and the fire occurred as a result of electrical arcing and was therefore accidental without any fault on the part of the defendant.

32.	At the material time, the Property was leased to a company called OSC Supplies Limited (OSCSL).   OSCSL was in possession and control over the Property and sublet parts of the property to various tenants.

33.	There were a number of buildings situated on the Property.  Two of the buildings, Building A and Building B were affected by fire on 29 April 2009. 

Kamea Mea
	
34.	The evidence relied on by the defendant regarding the cause of the fire largely comes from one Chief Superintendent Kamea Mea of the Papua New Guinea Fire Service (PNG Fire Service).  His evidence is that on or about 29 April 2009, while in his capacity as the Superintendent overseeing the NCD Fire and Hazard Safety Division of the PNG Fire Service, he attended the fire scene at the Property to conduct a fire investigation.  He was accompanied by fellow officers namely, Inspector Leo Ovia and Inspector Daniel Jack of NCD Fire & Hazard Safety Section.  From information obtained from witnesses and physical evidence obtained at the scene of the fire, he concluded that the cause of the fire was due to an electrical fault and therefore accidental. A true copy of the Fire Investigation Report he compiled is annexed to exhibit 2 as annexure KM1.

35.	The conclusion of Chief Superintendent Mea found at p.9 of the report is as follows:

F.1	Area of Origin

The area of fire origin (as determined from my investigations) is the Manager’s office located on the Ground Floor of the Warehouse Building (Building ‘A’).  This office was permanently partitioned with timber walls - separating it from the Sales Office and rest of the warehouse stocks area.
F.2	Point/s of Lowest Burning 

Points of lowest burning occurred at the timber interior wall areas of the Manager’s office – more specifically the rear internal timber wall at the rear of the office. (See attachments 4 & 5)

F.3 	Point of origin (Source of Ignition)

The process of eliminating all possible cause(s) was done on the fire scene.  From scene examination, excavation of debris and closer physical re-examination of electrical wiring – evidence of initial electrical ‘arcing’ was observe to have occurred at rear timber wall area.  (All evidence pointed to electrical arcing occurring at the power point/s – and this was ruled as the point of origin/source of ignition). (sic)

F.4	Category of Fire
  
The fire incident, as per my findings is determined as Accidental.  

36.	The fire completely burnt down the two-level building on the Adjacent Property.  The building consisted of several offices on the ground floor and a number of residential units on the upper level.   Two vehicles and a forklift were also burnt.

37.	He also reported that the factors affecting spread of the fire from the area of origin was that; there was direct burning of combustible materials within the office and intense build-up of heat caused the fire to spread within Building ‘A’ ground floor.  Further spread occurred via direct burning and convection currents onto the upper floor warehouse stocks and storages.  He also reported that due to lack of brick walls separating the buildings, the fire eventually spread from Building ‘A’ (Warehouse Building) to Building ‘B’ (Warehouse Building containing 2 x residential units) on the Property and onto Building ‘C’ on the Adjacent Property. The fire intensified within Building ‘A’ and Building ‘B’ due to high fire load within those areas and spread occurred externally to Building ‘C’.

AGREED FACTS

38.	In the Statement of Agreed and Disputed Facts endorsed by the parties and filed on 10 September 2018 (the Statement of Facts), the parties state that the following facts are not disputed:

1.	The defendant is a company duly incorporated under the Companies Act.
2.	The defendant is the registered proprietor of the Property.
3.	There were a number of properties situated on the Property.
4.	On 29 April 2009, Building A and Building B were affected by fire.
5.	At the time of the fire, the Property was leased to OSC Supplies Limited who had possession and control of the Property and who sublet it to various tenants.
6.	The origin of the fire on the Property was a warehouse, Building A.  

DISPUTED FACTS

39.	In the Statement of Facts, the parties state that the following facts are disputed:

1.	The plaintiff is a company incorporated under the Companies Act.
2.	The plaintiff is the registered proprietor of the Adjacent Property.
3.	The fire which occurred on the Property on 29 April 2009 began as an accident from electrical arcing.
4.	The defendant did not owe a duty of care to the plaintiff.
5.	The defendant was not negligent and any damage done to the property was caused or contributed to by the negligence of the plaintiff.
6.	The plaintiff has failed to properly and adequately plead its loss and damage.              
        
LEGAL ISSUES FOR TRIAL

40.	The main issues for my deliberation and decision are as the parties have agreed and these are:

1.	Whether the defendant owed a duty of care to the plaintiff?
2.	If the answer to the first issue is in the affirmative, whether the duty of care to the plaintiff extends to the duty claimed by the plaintiff in its amended writ of summons filed on 7 November 2016?
3.	If the answer to the second issue is in the affirmative, whether the defendant was negligent?
4.	Whether the plaintiff contributed to the injury/damage it sustained?  

ONUS AND STANDARD OF PROOF

41.	In civil proceedings, the general rule is that he who asserts must prove it (Shaw v Commonwealth of Australia [1963] PNGLR 119, Supreme Court Reference No 4 of 1980 [1982] PNGLR 65, Reference by the East Sepik Provincial Executive (2011) SC1154, Galem Falide v Registrar of Titles and The State (2012) N4775, Board of Management, Holy Spirit Primary School v Moses Sariki (2013) N5446) and the standard of proof is on the balance of probabilities. Hence, the burden may shift to the party who asserts and who must then prove it:  JD Heydon, Cross on Evidence, Butterworths, Fifth Edition, 1996, paragraphs 7200-7230.

COMPETENCY OF PROCEEDINGS 

42.	The defendant has raised the issue of competency of the proceedings as it contends that the plaintiff was not incorporated and therefore had no legal standing.  While it is settled law that issues of competency can be raised at any stage of court proceedings (Chief Collector of Taxes v Bougainville Copper Limited (2007) SC853, Sir Arnold Amet v Peter Charles Yama (2010) SC1064), this issue was not raised among the main issues agreed to by the parties contained in the Statement of Facts for determination at the trial.  The defendant is estopped from raising the issue during the course of making its submissions by its conduct.  In any event, the company extract produced by Mr. Kairi to my mind is sufficient to demonstrate and I find as a fact that the plaintiff is a company duly registered under the Companies Act.   

OWNERSHIP OF ADJACENT PROPERTY

43.	The plaintiff alleges that it is the owner of the Adjacent Property.  The plaintiff however has not produced a copy of the relevant State Lease or Certificate of Title to verify ownership. The evidence available before the Court is insufficient to prove ownership.  The plaintiff has failed to prove the assertion that it is the owner of the property on the balance of probabilities.  The claim as owner of the Adjacent Property is therefore untenable.  What the evidence demonstrates however is that the plaintiff was an occupant of the Adjacent Property. 

CAUSE OF FIRE

44.	In the Fire Investigation Report compiled by Chief Superintendent Kamea Mea of the PNG Fire Service, he reports that the area of fire origin was the Manager’s office located on the Ground Floor of Building ‘A’ and the cause of the fire was due to an electrical fault and therefore accidental.     

45.	The plaintiff disputes the finding of Chief Superintendent Mea saying that it is not conclusive for the following reasons.  First, it argues that it was impossible to make such a finding in the maze of burnt out electrical wiring and suggests that the fire was started by the negligence of workers working after hours including the Manager possibly from cigarette butts not properly extinguished which went on to ignite flammable substances sold from products stored for sale in Building A and spread to Building B and across to the Adjacent Property burning down Building C and vehicles parked within the property. Secondly, it argues that the Fire Investigation Report was not corroborated by PNG Power Limited.

46.	The PNG Fire Service headed by the Chief Fire Officer is the only body in Papua New Guinea responsible for the organization, management and control of all Fire Brigades established pursuant to the Fire Service Act and for the protection of life and property in case of fire in fire areas.  An investigation undertaken by the PNG Fire Service as to the cause of fire, in my view, would be a specialist service provided by the PNG Fire Service in connection with fire prevention and control to persons requiring them.  Alternatively, the fire investigation undertaken by the PNG Fire Service and Fire Investigation Report compiled thereafter would have been incidental or consequential to the carrying out of its functions or duties imposed as a body through the Chief Fire Officer, firemen and volunteer firemen.

47.	The generation, supply and sale of electricity to consumers, whether to the public or public bodies, the State or State bodies or agencies in Papua New Guinea, in my view, would be the main function of PNG Power Limited.   It would have been desirable to have another report from PNG Power Limited, but for reasons I have alluded to already, not really necessary.

48.	I find no evidence of bad faith, bias or unreasonableness in the Fire Investigation Report.  It is to my mind conclusive in the absence of any strong explanation to the contrary.  The suggestion that the fire may have been caused by the negligence of workers after hours including the Manager in the relevant building through improperly extinguished cigarette butts is mere speculation.

49.	The Fire Investigation Report does not mention the absence of fire protection devices such as fire alarms and automatic sprinklers.  It reports however that factors affecting the spread of fire from the area of origin included; burning of combustible materials within the office and intense build-up of heat; direct burning and convection currents; and lack of a brick wall separating the buildings.

50.	The onus was on the plaintiff to prove its assertion on the balance of probabilities.   It is not for the defendant to prove the contrary.      

51.	I therefore find on the evidence available that on 29 April 2009, fire started from the Manager’s office located on the ground floor of Building A as a result of electrical arcing and therefore fire originating from that building was accidental.

52.	I also find that fire from Building A spread to Building B and then on to Building C which was in close proximity totally burning down the building together with its contents, office spaces, transit lodge, rented units and two vehicles and a forklift parked there.  This scenario is also confirmed by the Investigation Report on Fire compiled by Detective First Constable Nicholas Kisok. 

LAW OF NEGLIGENCE

53.	In the landmark case of Donoghue v Stevenson [1932] AC 562, Lord Atkin set the foundation of the modern law of negligence when he propounded the “neighbour test” as the basis for when a duty of care is owed.  Lord Atkin at p.580 said:

The rule that you are to love your neighbour becomes in law, you must not injure your neighbour; and the lawyer’s question, Who is my neighbour? receives a restricted reply.  You must take reasonable care to avoid acts or omissions which you can reasonably foresee would be likely to injure your neighbour.  Who, then, in law is my neighbour? The answer seems to be – persons who are so closely and directly affected by my act that I ought reasonably to have them in contemplation as being so affected when I am directing my mind to the acts or omissions which are called in question.   

54.	At Independence, pursuant to Schedule 2.2 of the Constitution, Papua New Guinea adopted the common law of negligence as part of the underlying law.

55.	Thus, in order to establish a cause of action in negligence, the essential elements that must be proved by a claimant or plaintiff are:

1.	The defendant owed a duty of care to the plaintiff;
2.	The defendant breached that duty;
3.	The breach of duty caused injury to the plaintiff; and
4.	The type of injury was not too remote.

56.	Many decisions of both the Supreme Court and National Court affirm these principles and some of these, to name a few, are; The Government of Papua New Guinea v Elizabeth Lauwasi Uguna Moini (1978) PNGLR 184; Burns Philp (NG) Ltd v Maxine George (No 2) (1983) SC259; Kolta Development Pty Ltd v PNG Defence Force [1997] PNGLR 585; Kembo Tirima v Angau Memorial Hospital Board and The State (2005) N2779; Francis Wandaki v Wini Henao (2009) N3676; Tony David Raim v Simon Korua (2010) SC1062; Catholic Diocese Wabag Board of Trustees v Enga Provincial Government (2011) N4562; and Micky Akai v John Stanley Reeves (2014) SC1393.  

Duty of care

57.	Mr. Kaore for the plaintiff contends that the fire that destroyed Building C was as a result of fire escaping from Building B which caught on fire from fire that spread from Building A.  Hence, the defence of accident was not tenable.  The defendant breached its duty towards the plaintiff as its neighbour from foreseeable danger or harm from acts or omissions originating on the Property applying the principle in Donoghue v Stevenson (1932) AC 562 when it failed to contain the fire in Building B from escaping to the Adjacent Property and totally burning down Building C and other things as a result.   

58.	Mr. Kaore argued that the defendant was negligent when it failed to prevent fire from spreading to the Adjacent Property for the following reasons:

1.	It failed to build a brick wall separating the properties.
2.	It failed to install fire alarms to warn tenants promptly of presence of fire.
3.	It failed to deploy security personnel to work after hours.
4.	It failed to control the activity of its tenant who was selling dangerous chemicals by allowing them to work after hours.
5.	It failed to install sufficient extinguishers.
6.	It failed to install automatic sprinklers in the building used by the tenant selling dangerous chemicals.
7.	It failed to install automatic smoke detectors to warn tenants to act promptly to put off any impending fire.   

59.	The alternative argument advanced by Mr. Kaore was that if the fire started by accident, which the plaintiff disputed, the defendant is still liable under the rule in Ryland v Fletcher (1868) LR 3 HL 330.    

60.	Ms. Sinen for the defendant contends that the claim in negligence ought to be dismissed and or that it would not be fair and just or reasonable to impose liability on the defendant as:

1.	The plaintiff is not the owner of the Adjacent Property.
2.	At the material time, the defendant did not have physical possession and supervisory control of the Property and could not envisage a reasonable foreseeable risk of injury or damage to the plaintiff which could give rise to a duty of care to the plaintiff.
3.	The fire which began on the Property was as a result of electrical arcing as found by Chief Superintendent Mea in the Fire Investigation Report and was therefore accidental without any fault on the part of the defendant. 
4.	No contrary evidence was provided by the plaintiff to refute the findings contained in the Fire Investigation Report.  

61.	In addition, Ms. Sinen argued that the claim in negligence should be dismissed for lack of proper pleading as the plaintiff failed to plead in its amended statement of claim the existence of or any factual basis for a duty of care to be imputed on the defendant.  

62.	In Catholic Diocese Wabag Board of Trustees v Enga Provincial Government (2011) N4562 when deliberating on the question as to whether police and other Governmental bodies owed a duty of care to the plaintiff to take positive steps to intervene in and stop the tribal fighting and provide security to protect the plaintiff’s property that had been looted and burnt down by warring tribes, at paragraph 4 of the judgment, Thompson, AJ described the concept of duty of care in the following terms:

A person who undertakes an activity or creates a situation which could reasonably harm another person, such as driving a car or giving financial advice, owes a duty of care to the other person.  Conversely, where a person has not undertaken the activity or created the situation, he owes no duty of care.  Broadly speaking, no duty of care exists to prevent harm occurring to others i.e. a pure omission to act (as opposed to the commission of an act) does not create a duty of care.  This is known as the nonfeasance rule (see Fleming, The Law of Torts, Torts – the Laws of Australia Edited by Paul Vout, et al)…. 

63.	Her Honour referred to a number of English cases and opined that the common law generally did not create a general duty of care owed by police and Governmental bodies towards members of the public in the absence of any prior special relationship between them.  One of the cases she considered was Caparo Industries PLC v Dickman (1990) 2AC 605 which propounded the test to determine when determining the question as to whether or not there is a duty of care and these are:

1.	The plaintiff’s loss must be a reasonably foreseeable result of the defendant’s conduct.
2.	There must be a prior sufficient relationship of proximity between the plaintiff and defendant.
3.	It must be fair, just and reasonable to impose liability on the defendant.

64.	The test of reasonable foreseeability was addressed by Mc Dermott, J in the Supreme Court decision in Burns Philp (NG) Ltd v Maxine George (No 2) (1983) SC259 in the following terms:

It is a cardinal principle of tort liability that persons ought only be held liable for the foreseeable consequences of their conduct and that the damage caused must be proximate to the breach of the duty of care. Foreseeability is a matter of common sense and judicial discretion; it cannot be reduced to a formula. Ultimately, the resolution of whether or not a consequence of conduct is foreseeable, is a question of fact.  

65.	In the circumstances of this case, did the defendant owe a duty of care to the plaintiff?  I think the answer lies in the application of the nonfeasance rule.  The rule can be described as inaction that results in harm to a person or property because there is no pre-existing relationship with the person harmed.   The treatise, Paul Vout, Torts, The Laws of Australia, Second Edition, 2007 at p.57 para 33.2.330 states that the rule does not impose duties of care to take positive action.  In other words, there will generally be no breach of duty where physical harm or loss arises as a result of a failure to act: Paul Vout, Torts, The Laws of Australia, Second Edition, 2007 at p.57 para 33.2.330. This rule was considered in Catholic Diocese Wabag Board of Trustees v Enga Provincial Government (2011) N4562 and Damien Kora v Carol Pio (2018) N7434. 

66.	I have found as a fact already that the plaintiff has failed to prove on the balance of probabilities that it was the owner of the Adjacent Property. The pleadings are predicated on that premise when the Property was actually leased to OSC Supplies Limited who then sublet it to various tenants.  

67.	I accept Ms. Sinen’s submission that at the material time, the defendant did not have physical possession and supervisory control of the Property and could not envisage a reasonable foreseeable risk of injury or damage to the plaintiff which could give rise to a duty of care to the plaintiff.  This submission accords with the nonfeasance rule.  The upshot of this is that the defendant did not owe any duty of care to the plaintiff.

68.	If I am wrong in coming to that conclusion through the application of the nonfeasance rule (which I think I am not), I think the fact that the fire started as a result of electrical arcing and therefore fire that started in Building A was accidental, the defendant who might have owed a duty of care to the plaintiff as a neighbour is absolved from liability.  The spread of fire from Building A to Building B then to Building C had its origins from fire starting in Building A as a result of electrical arcing and therefore accidental.  Mr. Kaore’s contention to separate the source of fire that spread from Building A and Building B then to Building C is rejected.  The fires in Building A and Building B were not caused by the defendant.  
  
69.	Given this outcome, the remaining elements of the tort of the negligence need not be addressed, but it suffices to say that they are relevantly considered in favour of the defendant.   

Strict Liability - the rule in Ryland v Fletcher

70.	As to the plaintiff’s alternative submission that the defendant was strictly liable for damage caused to Building C under the rule in Ryland v Fletcher (1868) LR 3 HL 330, I make these observations.  The rule in Ryland v Fletcher (1868) LR 3 HL 330 stands for the principle of strict liability. The rule does not apply in Australia:  Paul Vout, Torts, The Laws of Australia, Second Edition, 2007 at p.367 para 33.6.150.  The rule also does not apply in Papua New Guinea:  Marshall Lagoon Investment Company Pty Ltd v Ding Company Ltd (2008) N3650.  Liability for damage caused by fire may arise by the application of the principles of negligence, trespass or nuisance:  Marshall Lagoon Investment Company Pty Ltd v Ding Company Ltd (2008) N3650, Paul Vout, Torts, The Laws of Australia, Second Edition, 2007 at p.367 para 33.6.160.

71.	The rule in Ryland v Fletcher (1868) LR 3 HL 330 was considered by Hartshorn, J in Marshall Lagoon Investment Company Pty Ltd v Ding Company Ltd (2008) N3650 at paragraphs 23 to 26 of the judgment where His Honour said that the correct statement of the law was expressed in the decision of the High Court of Australia in the case of Burnie Port Authority v General Jones Pty Ltd [1994] 179 CLR 520 which was persuasive in this jurisdiction.   I set out His Honour’s observations below.

…….[A]s far as I am aware the Supreme Court has not considered the rule in Rylands v. Fletcher (supra).

In the High Court of Australia decision in Burnie Port Authority v. General Jones Pty Ltd [1994] 179 CLR 520 the question of the rule’s relevance in relation to the law of ordinary negligence was considered. At paragraph 43 the Court said:

There may remain cases in which it is preferable to see a defendant's liability in a Rylands v. Fletcher situation as lying in nuisance (or 	even trespass) and not in negligence.  It follows that the main consideration favouring preservation of the rule in Rylands v. Fletcher, namely, that the rule imposes liability in cases where it would not otherwise exist, lacks practical substance.  In these 	circumstances, and subject only to the above-mentioned possible qualification in relation to liability in nuisance, the rule in Rylands v. Fletcher, with all its difficulties, uncertainties, qualifications and 	exceptions, should now be seen for the purposes of the common law of this country, as absorbed by the principles of ordinary negligence.  Under those principles, a person who takes advantage of his or her control of premises to introduce a dangerous substance, to carry on a 	dangerous activity, or to allow another to do one of those things, owes 	a duty of reasonable care to avoid a reasonably foreseeable risk of injury or damage to the person or property of another.  In a case where the person or property of the other person is lawfully in a place 	outside the premises that duty of care both varies in degree according to the magnitude of the risk involved and extends to ensuring that such 	care is taken.

Given that principles and rules of common law and equity in England were adopted as part of the underlying law, subject to qualifications, and given that Australia is a common law jurisdiction, the decisions of the High Court of Australia are persuasive in this jurisdiction.  In the absence of any Supreme Court determination to the contrary, I am satisfied that the passage cited from Burnie’s case (supra) is a correct statement of the law.

Consequently, the degree of the duty of care has to be determined after regard is had to the circumstances of the particular case. Once determined, the next question is, has that duty of care been breached?  It is not the case that the person in charge of the premises is strictly liable.  For him to be liable it must be established that there has been a breach of the particular degree of duty of care required as a result of the negligent or careless performance of that duty by him…. 

72.	I subscribe to His Honour’s views.

73.	The plaintiff’s submission is untenable and therefore rejected.  

NUISANCE

74.	Mr. Kaore also argues that the facts of this case support a case in nuisance.  He relies on the rule in Ryland v Fletcher (1868) LR 3 HL 330.  He also referred the Court to Wong v Lam (1980) N268 where the Court there observed that where people living in closeness in the city or flats, much more was expected in the use of natural elements such as fire or water.      

75.	The rules on pleadings will operate as a bar to the plaintiff raising this argument.  The cause of action pleaded in the amended statement of claim is founded on the tort of negligence, not in nuisance:  Papua New Guinea Banking Corporation v Jeff Tole (2002) SC 694.   The Kaore’s argument cannot be sustained.

76.	In addition, this is not an issue the parties had agreed to be tried.  The defendant is estopped from raising the issue during the course of making its submissions by its conduct.

OTHER ISSUES

77.	Given the findings of the Court above, it is now not necessary to address the remaining issues specified for determination in the Statement of Facts or others raised in the course of the parties’ submissions.  

CONCLUSION

78.	The plaintiff has failed to prove its claim on the balance of probabilities and therefore it is dismissed.

COSTS

79.	Costs will follow the event, i.e., the defendant, Tropicana Limited is awarded costs of the entire proceedings not specifically awarded during the course of the proceedings.  This means that the plaintiff, Seribu Daya (PNG) Limited shall pay the defendant, Tropicana Limited’s costs not specifically awarded during the course of the proceedings on a party-party basis, which shall, if not agreed, be taxed.

ORDER

80.	The formal orders of the Court are:

1.	Judgment is entered in favour of the defendant, Tropicana Limited. 
2.	The entire proceedings commenced by writ of summons endorsed with a statement of claim filed on 20 March 2014 and amended by amended writ of summons and statement of claim filed on 7 November 2016 are dismissed. 
3.	Costs shall follow the event, i.e., the plaintiff, Seribu Daya (PNG) Limited shall pay the defendant, Tropicana Limited’s costs of the entire proceedings not specifically awarded during the course of the proceedings on a party-party basis, which shall, if not agreed, be taxed.
4.	Time is abridged.  

Judgment and orders accordingly.
___________________________________________________________
Kaore: Lawyers for the Plaintiff
Pacific Legal Group: Lawyers for the Defendant