Recently, the Court of Appeal in SAJ Ranhill Sdn Bhd v SWM Greentech Sdn Bhd & Anor [2023] 1 LN 881 revisited the principles in relation to causation in an action for negligence.
Background Facts
The Appellant (SAJ Ranhill Sdn Bhd) was the operator of a water treatment plant (WTP) which sourced raw water from Sungai Benut which was then treated at the WTP. On the other hand, the Respondents (SWM Greentech Sdn Bhd and SWM Environment Sdn Bhd) were responsible for the operation and management of a landfill which was also located along Sungai Benut.
Between November 2016 and January 2018, there had been 8 occurrences during which the WTP was shut down due to the leakage of untreated effluents and leachate which originated from the landfill. Based on the Appellant’s investigations, the raw water supply from Sungai Benut was contaminated with high ammonia level which was caused by leachate pollution where the source was traced back to the landfill. Pursuant to this, the Appellant filed a claim at the High Court against the Respondents amongst others, for negligence.
The High Court’s Decision
The High Court found that the Respondents were not liable for negligence. In doing so, the High Court had relied on an expert opinion that although the landfill was the primary contributor of the ammonia pollution, the blame fell squarely on the local authorities for their failure to anticipate the highly likely incidents of pollution by choosing the location of a landfill upriver from the WTP. Additionally, the expert opinion also stated that the leachate water treatment ponds at the landfill were not well designed and managed.
Following the case of Chua Seng Sam Realty v. Say Chong Sdn Bhd [2013] 2 MLJ 29, the High Court applied the ‘but for’ test to determine whether the damage would not have been caused but for the Respondents’ conduct/omission. The factors that had primarily caused the leachate spillage into Sungai Benut were found to be:
a)The location of the landfill being upstream from the WTP.
b)The poorly designed landfill.
c)The local authorities’ decisions to allow an overcapacity of waste into the landfill.
The High Court found that the parties who had primarily caused the shutdowns were not the Respondents. Instead, it is the owners of the landfill and the local authorities who bore the primary responsibility for the shutdowns. Further, it was found that these two parties, with reasonable enquiry and investigation, would have known that such shutdowns were inevitable bearing in mind the capacity and state of the landfill.
The Court Of Appeal’s Decision
The main issue before the Court of Appeal was whether the High Court had wrongly applied the ‘but for’ test instead of applying the proximate cause test in determining the cause of the shutdowns. The Court of Appeal decided in the affirmative and allowed the appeal.
In citing the Singaporean case of Armstrong, Carol Ann v. Quest Laboratories Pte Ltd and another and other appeals [2020] 1 SLR 133, the Court of Appeal held that the ‘but for’ test was an inquiry into the facts of the case and was the first step to determine the cause sine qua non factors. However, a further determination must be carried out, which was a legal inquiry in order to establish the causa causans i.e. the effective factor.
The Court of Appeal also discussed the Federal Court case of Majlis Perbandaran Ampang Jaya v Steven Phoa Cheng Loon & Ors [2006] 2 MLJ 389 which established that where injury has been done to the plaintiff and the injury is indivisible, any tortfeasor whose act had been a proximate cause of the injury, must compensate for the whole of it.
In applying the above legal principles to this instant case, the Court of Appeal found that the effective factor or proximate cause of the shutdowns was the act which was very near or close in time to the shutdowns. The chain of causation resulting in the shutdowns of the WTP can be illustrated as follows:
As such, the proximate cause of the shutdowns was the spillage of leachate from the landfill since the spillage was the closest in time to the shutdowns. This spillage had caused the ammonia pollution which had ultimately resulted in the shutdowns.
On the other hand, the Court of Appeal had also considered the three factors identified by the High Court and decided that those factors were not the proximate causes of the shutdowns, based on the following reasons:
a)The factor of the location of the landfill was historical as it had been in operation since 1995.
b)The factor of the ‘poor’ design of the landfill was not proven.
c) The factor of the decision of the local authorities leading to the overcapacity of the landfill was not probable.
Further, the Court of Appeal also held that the preventive measures taken by the Respondents did not aid them in the discharge of their duty of care. In this regard, the Court of Appeal held as follows:
“[49] However, it will also be seen with reference to Cambridge Water Co v. Eastern Counties Leather Plc [1994] 2 AC 264 at page 300:
“... it is still the law that the fact that the defendant has taken all reasonable care will not of itself exonerate him from liability, the relevant control mechanism being found within the principle of reasonable user.”
[50] Thus, the preventive measures taken, do not assist the Respondents.”
Conclusion
For the above reasons, the Court of Appeal found in favour of the Appellant and held that the Respondents were liable in negligence as there was a duty of care on part of the Respondents to the Appellant. The said duty of care had been breached and the damage as a result of the breach was not remote.
This decision by the Court of Appeal is vital as it serves as an important reminder that the ‘but for’ test is only the first step in determining what had caused a breach of duty in a negligence claim. Upon applying the ‘but for’ test, courts must also undertake a legal inquiry in order to determine the proximate or effective cause of a breach of duty. Therefore, both the ‘but for’ test and the proximate cause test must be applied hand in hand.
7 August 2023