D.J. & M.A. Hose Pty Ltd ATF The Hose Family Trust v Wide Bay Insurance Broking Pty Ltd ATF The Wide Bay Business Trust [2022] QSC 191

SUPREME COURT OF QUEENSLAND CITATION: D.J. & M.A. Hose Pty Ltd ATF The Hose Family Trust ACN 010 999 210 v Wide Bay Insurance Broking Pty Ltd ATF The Wide Bay Business Trust ACN 130 391 301 [2022] QSC 191 PARTIES: D.J. & M.A. Hose Pty Ltd ATF The Hose Family Trust ACN 010 999 210 (Plaintiff) V Wide Bay Insurance Broking Pty Ltd ATF The Wide Bay Business Trust ACN 130 391 301 (Defendant) FILE NO/S: BS No 12169 of 2021 DIVISION: Trial Division PROCEEDING: Applications ORIGINATING COURT: Supreme Court at Brisbane DELIVERED ON: 14 September 2022 DELIVERED AT: Brisbane HEARING DATE: 26 July 2022 JUDGE: Hindman J ORDERS: 1. The strike out application in respect of paragraph 55 of the defence is dismissed. 2. I give leave to the defendant to withdraw any deemed admissions in paragraphs 4, 6, 9(e), 14, 21, 24(e), 26, 29, 30, 32, 33, 34, 35, 36, 37, 38, 39, 40, 41, 42, 43, 44, 45(b) and 45(c), 46, 47, 48, 49, 50, 51 and 52 of the defence. 3. I give leave to the defendant to withdraw any admissions in paragraphs 1(a)(ii)(iii) and (iv), 1(f)(ii), 5, 6(b)(i), (ii) and (vii), 24(e), 31, 42, 45(a), (b) and (c) of the defence. CATCHWORDS: TORTS – GENERALLY – MULTIPLE WRONGDOERS, PROPORTIONATE LIABILITY AND CONTRIBUTION – PROPORTIONATE LIABILITY – CONCURRENT WRONGDOER AND OTHERS TO WHOM LEGISLATION APPLIES – where the defendant respondent is a licenced insurance broker and the plaintiff applicant is in the asbestos removal business – where the plaintiff applicant in the performance of an asbestos remediation contract imported asbestos contaminated landfill onto a -- 1 of 26 -- 2 site – where the plaintiff applicant was directed to rectify the contamination – where the plaintiff applicant’s insurance claim for the cost of the rectification was rejected – where the contaminated landfill was provided by a third party – where the plaintiff applicant has a claim against the defendant respondent for damages for alleged negligence, breach of contract and breach of statutory duties in respect of the provision of insurance broking services – where the defendant respondent pleads a proportionate liability defence with the third party landfill providers – where the plaintiff applicant applies to have the proportionate liability defence struck out – whether the proportionate liability defence is “manifestly hopeless” – whether the defendant respondent and third party landfill provider are concurrent wrongdoers. PROCEDURE – CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS – ADMISSIONS – JUDGEMENT ON ADMISSIONS – where the defendant applicant applies for leave under r 188 UCPR to withdraw admissions made in its defence – where there are both deemed and express admissions – where defendant applicant has put on evidence to show the admissions were unintentional – where the plaintiff respondent, with exceptions, opposes the grant of leave to withdraw admissions – whether the judicial discretion to grant leave to withdraw admissions should be exercised. Australian Securities and Investments Commission Act 2001 (Cth) Civil Liability Act 2003 (Qld) Corporations Act 2001 (Cth) Agar v Hyde (2000) 201 CLR 552 AON Risk Services Australia Ltd v Australian National University (2009) 239 CLR 175 Davies v Davies (No. 1) [2019] QSC 293 General Steel Industries Inc v Commissioner for Railways (NSW) (1964) 112 CLR 125 Green v Pearson [2014] QCA 110 Hamilton v Oades (1989) 166 CLR 486 Hunt Lawyers v Mitchell Morgan Nominees Pty Ltd (2013) 247 CLR 613 Mahony v J Kruschich (Demolitions) Pty Ltd (1985) 156 CLR 522 March v Stramere (E & MH) Pty Ltd (1991) 171 CLR 506 Medina v Electro Industry Group Queensland Limited [2019] QSC 63 PC Case Gear Pty Ltd v Instrat Insurance Brokers Pty Ltd (2020) 379 ALR 732 Ridolfi v Rigato Farms Pty Ltd [2000] 2 Qd R 455 Royal Brompton Hospital NHS Trust v Hammond [2002] 1 WLR 1397 Spencer v The Commonwealth (2010) 241 CLR 118 St George Bank Ltd v Quinerts Pty Ltd (2009) 25 VR 666 -- 2 of 26 -- 3 TLL Investments Pty Ltd v Body Corporate for the Grange Community Titles Scheme 20993 & Ors [2022] QSC 87 Wallace v Litwiniuk (2001) 200 DLR (4th) 534 COUNSEL: K Holyoak for the plaintiff M Daley for the defendant SOLICITORS: Troy Legal for the plaintiff Gilchrist Connell for the defendant Plaintiff’s strike out application Introduction [1] By paragraph 55 of the draft amended defence the defendant pleads a proportionate liability defence, identifying Dynamic Vision Management Pty Ltd trading as Coastal Soil, Sand & Mulch (Coastal Soil) as a concurrent wrongdoer, as follows: “[55] Further or alternatively, if the defendant is liable to the plaintiff (which is denied) then the defendant alleges that: a) the plaintiff’s claim is an apportionable claim within the meaning of: (i) Part 2, Division 2, Sub-Division GA ASIC Act; (ii) Part 7.10, Division 2A Corporations Act 2001 (Cth); and (iii) Chapter 2, Part 2 Civil Liability Act 2003 (Qld); b) Dynamic Vision Management Pty Ltd trading as Coastal Soil, Sand & Mulch (Coastal Soil) is a wrongdoer whose acts or omissions caused the loss or damage at paragraphs 41(a), 48(a), 52(a)(i) and (ii) and 52(c) ASOC by reason of the following material facts which are pleaded solely for the purpose of this proportionate liability claim: (i) in or about October 2020 the plaintiff entered into a contract with Coastal Soil (Coastal Soil Contract) for the supply of landfill in connection of plaintiff’s obligations under the Remediation Contract in consideration of monetary payment by the plaintiff; (ii) it was an implied term of the Coastal Soil Contract that Coastal Soil exercise reasonable care and skill in the performance of its obligations under the Coastal Soil Contract; Particulars of duty of care -- 3 of 26 -- 4 1. To supply soil that was reasonably fit for its purpose; 2. To supply that was free from Asbestos Containing Materials, Asbestos Contaminated Debries or Asbestos Cement fragments (Asbestos contaminants) (iii) Coastal soil owed a duty of care to the plaintiff to exercise reasonable care and skill in the performance of the Coastal Soil Contract; Particulars of duty of care 1. To supply soil that was reasonably fit for purpose; 2. To supply that was free from Asbestos Contaminants (iv) the defendant adopts the allegations in paragraph 24(f) and 25 ASOC; (v) in the premises: 1. the landfill supplied by Coastal Soil was not fit for the purpose for which it was purchased by the plaintiff; 2. Coastal Soil breached the Coastal Soil Contract and its duty of care to the plaintiff to supply goods that were reasonably fit for purpose, alternatively to supply goods that were free from Asbestos Contaminants; 3. Coastal Soil’s breach of contract and breach of duty of care has caused the economic loss and damage alleged at paragraph 52(a)(i) and (ii) and 52(c) ASOC; c) in the premises, the defendant’s liability is limited to an amount reflecting that proportion of the plaintiff’s loss or damages claimed at paragraphs 41(a), 48(a), 52(a)(i) and (ii) and 52(c) ASOC that this Honourable Court considers just and equitable having regard to the extent of the defendant’s responsibility for the loss or damage.” [2] The plaintiff applies to strike out paragraph 55 of the defence on the basis that it fails to reveal a reasonable defence. The basis for that contention is the plaintiff’s submission that the -- 4 of 26 -- 5 defendant and Coastal Soil are not concurrent wrongdoers within the meaning of the relevant proportionate liability schemes that apply.1 [3] The defendant submits that the plaintiff’s application to strike out paragraph 55 of the defence should not succeed because the defendant and Coastal Soil are (or at least arguably are, given the liability of neither is yet established) concurrent wrongdoers within the meaning of the relevant proportionate liability schemes that apply. [4] I agree with the defendant. The defendant and Coastal Soil are arguably2 concurrent wrongdoers. Paragraph 55 of the defence is an appropriate pleading and I refuse to strike it out. These are the reasons for that decision. The relevant principles [5] An apportionable claim requires that there be “concurrent wrongdoers”. Concurrent wrongdoers are two or more persons whose acts or omissions (or act or omission) “caused independently of each other or jointly, the damage or loss that is the subject of the claim”.3 [6] The relevant principles that I am required to apply to determine whether two persons are concurrent wrongdoers are set out in the High Court majority decision in Hunt & Hunt Lawyers v Mitchell Morgan Nominees Pty Ltd (2013) 247 CLR 613 (the majority comprised French CJ, Hayne and Kiefel JJ; Bell and Gageler JJ in dissent) (Hunt & Hunt). [7] The facts of Hunt & Hunt can be briefly summarized as follows: (a) Messrs Caradonna and Vella entered into a business venture; (b) Mr Vella, in the company of Mr Caradonna, took possession of certificates of title to three properties in his name; (c) Unbeknownst to Mr Vella, Mr Caradonna obtained possession of the certificates of title and used them to fraudulently obtain money for his own purposes. He did that by taking out loans in Mr Vella’s and his own name and then disbursing the money for 1 Australian Securities and Investments Commission Act 2001 (Cth) (ASIC Act); Corporations Act 2001 (Cth) (CA); Civil Liability Act 2003 (Qld) (CLA). 2 Given liability of neither is yet established. 3 Underlining added; in the case of s 30(1) of the CLA the word “jointly” does not appear. A concurrent wrongdoer must be “persons whose acts or omissions caused independently of each other the loss or damage that is the subject of the claim”. -- 5 of 26 -- 6 his own purposes (forging Mr Vella’s signature). He was assisted in that by his cousin, Mr Flammia (together, the fraudsters). (d) Mitchell Morgan was a company from whom approximately $1m was obtained via a loan by the fraudsters using one of the certificates of title. Hunt & Hunt Lawyers acted for Mitchell Morgan in the transaction, drafting both a mortgage and a loan agreement. (e) The loan agreement was void by reason of forgery (of Mr Vella’s signature) by the fraudsters. The mortgage purported to secure Mr Vella’s indebtedness by reference to the void loan agreement and so secured nothing. The mortgage did not contain a covenant to repay a stated amount. (f) Hunt & Hunt Lawyers was negligent in its preparation of the mortgage. (g) The fraudsters were bankrupt. (h) Mitchell Morgan sought to recover its losses against Hunt & Hunt Lawyers. [8] At first instance the primary judge held that Hunt & Hunt Lawyers and the fraudsters were concurrent wrongdoers: Mitchell Morgan’s claim against Hunt & Hunt Lawyers was an apportionable claim and the fraudsters were a cause of the damage or loss claimed by Mitchell Morgan against Hunt & Hunt Lawyers. [9] The Court of Appeal disagreed (Bathurst CJ, Giles, Campbell, and Macfarlan JJA and Sackville A-JA). It held that Hunt & Hunt Lawyers was not a concurrent wrongdoer because the fraudsters’ acts did not cause the damage or loss that Mitchell Morgan claimed against Hunt & Hunt Lawyers. [10] The majority of the High Court disagreed with the Court of Appeal, holding that Mitchell Morgan’s claim against Hunt & Hunt Lawyers was an apportionable claim. The damage or loss that Mitchell Morgan suffered was its inability to recover the monies it advanced. The acts or omissions of Hunt & Hunt Lawyers and the fraudsters materially contributed to that inability. [11] The majority posed the following two questions to determine whether there are concurrent wrongdoers: (a) What is the damage or loss that is the subject of the claim? (b) Is there a person, other than the defendant, whose acts or omissions also caused that damage or loss? -- 6 of 26 -- 7 [12] To answer those questions, I consider the following principles can be extracted from the majority decision in Hunt & Hunt: (a) As to the first question - damage or loss: Damage or loss is not to be equated to “damages”. “Damage, properly understood, is the injury and other foreseeable consequences suffered by a plaintiff. In the context of economic loss, loss or damage may be understood as the harm suffered to a plaintiff’s economic interests”.4 In an action for negligence causing economic loss it will almost always be necessary to identify, with some precision, the interest infringed by the negligent act. That identification is necessary for a proper understanding of the harm suffered and for the determination of what acts or omissions may be said to have caused that damage.5 (b) As to the second question - causation: “[I]t is not a requirement of proportionate liability that the actions of one independent concurrent wrongdoer contribute to the negligence of another. The question is whether each of them, separately, materially contributed to the loss or damage suffered.”6 Wrongdoers may be liable for the same damage, even though one may be liable for only part of the damage for which the other is liable.7 [13] In applying those principles to the facts in Hunt & Hunt, the majority concluded: (a) As to the first question - damage or loss: The damage or loss suffered by Mitchell Morgan was its inability to recover the monies advanced (at [24]). The interest of Mitchell Morgan infringed by the negligent act of Hunt & Hunt Lawyers was the ability to recover the monies advanced under the mortgage by sale of the property. The harm it suffered was its inability to recover the monies advanced.8 (b) As to the second question - causation: The harm suffered had more than one cause - the moneys were advanced under the loan agreement and on the security of the mortgage (at [48]). It was the effect of the fraudsters’ conduct that led to Mitchell Morgan entering into the transaction that left it with an unenforceable loan agreement 4 At [24], footnotes omitted. 5 At [25]. 6 At [53]. 7 At [44] relying upon Mahony v J Kruschich (Demolitions) Pty Ltd (1985) 156 CLR 522 at [527] and March v Stramere (E & MH) Pty Ltd (1991) 171 CLR 506 at [512]. 8 At [27]-[28]. -- 7 of 26 -- 8 (at [50]) - the fraudster’s conduct was a material cause of the harm that resulted (at [51]). [14] It is also useful to mention two other cases that the majority in Hunt & Hunt appeared to agree with in terms of the outcome where the damage or loss was not the same as between the wrongdoers (and therefore no concurrent wrongdoers): (a) first, Royal Brompton Hospital NHS Trust v Hammond [2002] 1 WLR 1397 (referred to in Hunt & Hunt at [37]). The majority recorded: “The Royal Brompton Hospital NHS Trust sued its architects for damages arising from their negligent issue under a building contract of certificates which permitted the builder extensions of time. The architects sought to claim contribution, in respect of hospital’s claim against them, from the builder. The architects were unsuccessful because the hospital’s claim against the builder for its loss which has been caused by the delay in the completion of the building, whilst its claim against the architects was for the impairment of its ability to proceed against the builder. The damage was not the same. The builder could not be said to have contributed to the damage claimed to arise from the architect’s breach of duty.” (b) second, Wallace v Litwiniuk (2001) 200 DLR (4th) 534 (referred to in Hunt & Hunt at [38]). The majority recorded: “That case concerned a plaintiff who suffered physical injuries as a consequence of another driver’s negligent driving. Her solicitors, the defendants, also failed to institute proceedings within time. Unsurprisingly, the Alberta Court of Appeal concluded that the damage caused by each wrongdoer was different: the physical injuries the plaintiff suffered were damage as distinct from the harm to her economic interests by reason of her inability to recover damages from those injuries.” [15] It is also useful to consider what the majority in Hunt & Hunt said regarding the decision in St George Bank Ltd v Quinerts Pty Ltd (2009) 25 VR 666 (Quinerts). In that respect: (a) The decision in Quinerts came after the initial judgment in Hunt & Hunt. Nettle JA (with whom the other members of the Court agreed in Quinerts) was unable to agree with the conclusion reached by the primary judge in Hunt & Hunt. (b) Nettle JA posed a hypothetical case that he considered to be analogous to the facts in Hunt & Hunt as follows (taken from Hunt & Hunt at [39]): “A thief steals money from a bank. Because of the negligence on the part of its insurance brokers, the bank finds that the risk of theft is not covered by its insurance. Nettle JA opined that ‘the damage caused -- 8 of 26 -- 9 by the thief would be the loss of the bank’s money’. However the insurance brokers did not cause the theft. Nettle JA considered that “the loss or damage caused by the insurance brokers would be the bank’s inability to obtain indemnity from an insurance company for the loss suffered by reason of the theft. But nothing done by the thief would have caused the bank’s insurance cover to be inadequate.” (c) The majority in Hunt & Hunt said (at [40]): “In that analogy, it is correct to describe the damage or loss suffered by the bank as its inability to recover the moneys stolen. One source of recovery could have been its insurer, hence the brokers were a cause of its loss. The other possible source of recovery is the thief. The harm to the bank’s economic interest, at a certain point, is the inability to recover from either source.” (d) The facts in Quinerts (summarised in Hunt & Hunt at [34]) involved a loan by a bank secured by a mortgage where Quinerts (the valuer) had negligently overvalued the property the subject of the security. The borrower defaulted and the property sold for less than the amount of the loan. Nettle JA, with whom the other members of the Court agreed, concluded that the borrower and the guarantor were not concurrent wrongdoers with Quinerts because the damage they had caused was not the same. Nettle JA said at [76] of Quinerts: “The loss or damage caused by the borrower and the guarantor was their failure to repay the loan. Nothing which Quinerts did or failed to do caused the borrower or the lender9 to fail to repay the loan. The damage caused by Quinerts was to cause the bank to accept inadequate security from which to recover the amount of the loan. Nothing which the borrower or the lender did or failed to do caused the bank to accept caused the bank to accept inadequate security for the loan.” (e) The majority in Hunt & Hunt concluded that analysis was wrong. They said at [35]: “In this passage, his Honour characterises the loss or damage caused by the borrower and the guarantor on the one hand and the valuer on the other as different by reference to two circumstances, neither of which can be equated with loss or damage. In the first place, his Honour identifies the default by the borrower and guarantor under their separate agreement as loss or damage. This identifies the act or omission which may be causative of loss, rather than the harm which results from it. The loss or damage caused by the valuer is said to be the immediate effect of the valuer’s negligence, namely the bank taking inadequate security. This is properly to be seen as a step in causation of damage, as it was in this case.” 9 I expect this reference to “lender” should be a reference to “guarantor”. -- 9 of 26 -- 10 [16] It appears that the majority of the High Court in Hunt & Hunt would have concluded in both Quinerts, and the hypothetical case posed in Quinerts, that there were concurrent wrongdoers. The nature of the claim by the plaintiff against the defendant [17] The plaintiff operates an asbestos removal business in the Maryborough region. The defendant is a licenced insurance broker. [18] The plaintiff’s claim against the defendant is for damages for alleged negligence, breach of contract and breach of statutory duties in respect of the defendant’s provision of insurance broking services to the plaintiff in 2020. [19] In the ASOC the plaintiff relevantly alleges that: (a) it entered into a policy of liability insurance for the period March 2020 to March 2021 on the brokerage of the defendant;10 (b) it entered a building contract with the State of Queensland in about August 2020 (the Remediation Contract) whereby it was required to perform ‘asbestos remediation work, and associated works’ at the site of the Maryborough Special School;11 (c) on about 12 October 2020 it ‘completed placement and spread of imported new landfill’ as part of the works under the Remediation Contract;12 (d) on about 20 October 2020, it was advised that testing had revealed ‘asbestos contamination in the landfill installed by the plaintiff on the site’13 and on 26 October 2020 the plaintiff was directed by the State to rectify the ‘contaminated landfill’;14 (e) on 27 November 2020 the plaintiff submitted a claim to its insurer under its policy of insurance in respect of the State’s claim against the plaintiff;15 and (f) on 5 July 2021, the insurer rejected the plaintiff’s claim.16 10 ASOC, [20]. 11 ASOC, [22]. 12 ASOC, [24(f)]. 13 ASOC, [25]. 14 ASOC, [26]. 15 ASOC, [27]. 16 ASOC, [28]. -- 10 of 26 -- 11 [20] In terms of the negligence action pleaded, in simple terms, the plaintiff alleges that the defendant was negligent in not brokering an insurance policy for the plaintiff that would have responded to the plaintiff’s claim above. The nature of the possible claim by the plaintiff against Coastal Soil [21] The plaintiff’s dealings with Coastal Soil that give rise to an alleged apportionable claim are as follows: (a) the plaintiff retained Coastal Soil to supply the topsoil for the Remediation Contract; (b) QBuild (for the State) contended that the topsoil did not meet the standards required under the Remediation Contract; (c) the plaintiff obtained an environmental assessment report that revealed that topsoil provided by Coastal Soil was contaminated with asbestos; (d) Coastal Soil is ‘responsible’ for the ‘current problem of asbestos contamination’ in respect of the Remediation Contract.17 [22] Those facts form the basis for the material facts alleged in the defendant’s proportionate liability defence. Plaintiff’s position [23] The plaintiff submits that paragraph 55 of the defence does not disclose a reasonable defence because: (a) the damage or loss claimed against the defendant is not the same damage or loss that the plaintiff could allege against Coastal Soil; (b) as a corollary, Coastal Soil did not cause the loss or damage that is the subject of the claim of the plaintiff against the defendant. [24] As to [23(a)] above, in summary, the plaintiff says: (a) the claim of the plaintiff against the defendant is for economic loss. It is not for property damage.18 Nor is it for the rectification and other costs. 17 Letter sent by the plaintiff’s former lawyers to Coastal Soil dated 21 May 2021. 18 Hunt & Hunt at [19]-[21], [37], [38]. -- 11 of 26 -- 12 (b) the nature of the economic interest of the plaintiff which has been infringed and the kind of economic loss suffered by the plaintiff stems from the policy of insurance which the defendant, for reward as broker, arranged for the plaintiff being inadequate to extend to a claim made by the State against the plaintiff to rectify contaminated (asbestos) landfill in consequence of the performance of the Remediation Contract. (c) the nature or kind of economic interest of the plaintiff infringed was the inability to have monetary expenses and costs incurred in and as a consequence of the land rectification defrayed to and borne by, or recovered from an insurer under an appropriate policy, being the “required asbestos insurance”,19 as well as other losses consequent on not having the insurance. (d) the plaintiff does not claim the primary loss suffered as damage. Rather the plaintiff claims such losses as the measure or assessment20 of the damages for the loss or damage it suffers by reason of the statutory misleading conduct, breach of retainer and negligence alleged. (e) the plaintiff is to be put in the same position that the plaintiff would have been in had the retainer been performed, or to be put in the same position as if the contraventions of the statutory provisions relating to misleading and deceptive and similar conduct had not been contravened, or the tort had not occurred - being the ability to defray to and have an insurer bear, or to recover from an insurer, such losses. Or put another way, not having to incur losses consequent upon not having the required asbestos insurance. (f) the allegations made in [55] of the defence relate to the primary losses and not to the economic loss which the plaintiff claims; being the inability to defray to and have an insurer bear, those losses or to recover those losses from an insurer and losses consequent upon not having that insurance. (g) this is evident from reading [51] and [52] of the ASOC read together and in context. For example, [52(a)] of the ASOC makes it clear that what is being claimed as loss and damage for breach of the implied terms, the statutory warranty and the duty of care is the value in the amounts incurred by the plaintiff by way of investigation, management costs and rectification costs as the measure of the loss. This is also clear by the concluding words “less the amount of any excess or deductible and any increase 19 ASOC, [8(a)]. 20 Hunt & Hunt at [24]. -- 12 of 26 -- 13 in premium if the required asbestos insurance had been obtained”. This follows from [51] of the ASOC which pleads the causal link to such loss being the absence of their required asbestos insurance. (h) so much is clear also from the losses claimed under the ASIC Act 2001 (Cth)21 and under the CA.22 Notably, the amounts are not claimed but the loss and damage is claimed “in the amount” of those losses. [25] As to [23(b)] above, in summary, the plaintiff says: (a) no act or omission alleged on the part of Coastal Soil caused the loss or damage arising from absence of the required asbestos insurance and the inability of the plaintiff to defray to an insurer, and have the insurer bear, the rectification costs, the investigation and management costs, the additional insurance costs and other costs or the inability to recover from an insurer those costs, less a deductible. (b) the notional claim by the plaintiff against Coastal Soil is not an inability to recover property lost or its equivalent. It cannot be equated with the economic interest of the inability to defray to, or recover from, an insurer the amounts which had been incurred. Rather, what is alleged in paragraph 55 is that Coastal Soil’s breach of contract and breach of duty “caused the economic loss and damage alleged in [52(a)(i) and (ii)] and [52(c)] of the ASOC”.23 That is, the primary loss suffered by the plaintiff, not the inability to defray that loss or to recover that loss from an insurer. They are, self- evidently, two entirely different species of loss. Defendant’s position [26] The defendant says: (a) the plaintiff’s alleged loss or damage suffered is its personal liability (to the State) for rectification and investigation costs associated with the Remediation Contract. One alleged source of recovery is the defendant, that is the insurance broker, who, it is alleged, caused the plaintiff to be personally liable for these costs by failing to procure the appropriate insurance. The other source of recovery is Coastal Soil, with whom it 21 ASOC, [37]-[41] – which claims an indemnity for all such costs. 22 ASOC, [47] and [48]. 23 Defence, [55(b)(v)(3)]. -- 13 of 26 -- 14 had a contract to provide the landfill, and who it is alleged, supplied the contaminated soil. (b) but for Coastal Soil’s breach of duty of care in delivering contaminated soil, the plaintiff would not have been liable for the rectification and investigation costs, nor would it have had to make a claim on its insurance for its personal liability to the State. (c) Coastal Soil’s conduct was a material cause of the harm suffered by the plaintiff, being its personal liability for the rectification and investigation costs. Analysis [27] In accordance with [11] above, I consider there are two questions I am required to answer: (a) What is the damage or loss that is the subject of the claim? (b) Is there a person, other than the defendant, whose acts or omissions also caused that damage or loss? [28] I apply the principles taken from Hunt & Hunt that I have set out at [5] to [16] above. First question – damage or loss [29] In respect of the claim against the defendant, the interest of the plaintiff here infringed by the alleged negligent act of the defendant is the plaintiff’s ability to recover against an appropriate insurance policy. [30] The harm (or put another way, the injury and other foreseeable consequence) suffered by a plaintiff as a consequence of the infringement of that interest is the plaintiff’s liability for rectification and other costs (or put another way in language that is more consistent with that used in Hunt & Hunt when dealing with claims against insurance brokers, its inability to recover rectification and other costs incurred). [31] Although not strictly necessary to do so, I also address the first question by reference to the possible negligence claim against Coastal Soil. [32] In respect of the possible negligence claim against Coastal Soil, the interest of the plaintiff here infringed by the alleged negligent act of Coastal Soil is the plaintiff’s interest in having the Coastal Soil works appropriately undertaken. [33] The harm (or put another way, the injury and other foreseeable consequence) suffered by a plaintiff as a consequence of the infringement of that interest is the plaintiff’s liability for rectification and other costs. -- 14 of 26 -- 15 [34] The harm suffered is the same. That, of course, is not to conclude that the damages that might be payable by the defendant and Coastal Soil are identical. In my view, it does not matter that the damages that might be assessed as payable by the defendant and Coastal Soil are unlikely to be identical (see at [12(b)] above). [35] To put it as it was put in Hunt & Hunt at [40], the damage or loss suffered by the plaintiff is its liability (to a third party, the State) for rectification and other costs. One source of recovery could have been its insurer; the other possible source of recovery is Coastal Soil. [36] I consider that the error in the plaintiff’s submissions reflects the same error that the NSW Court of Appeal fell into in Hunt & Hunt, and that the Victorian Court of Appeal fell into in Quinerts. The plaintiff identifies the acts or omissions which may be causative of loss, rather than the harm which results from it. The plaintiff also focuses on the differences in “damages” between the two claims and that is not the proper focus of the enquiry. Second question – causation [37] As the majority said in Hunt & Hunt (at [43], footnotes omitted): “The proper identification of damage should usually point the way to the acts or omissions which were its cause. Causation is largely a question of fact, to be approached by applying common sense to the facts of a particular case.” [38] It is then plain having regard to what I have concluded on the first question, that the acts or omissions of Coastal Soil also caused the plaintiff’s liability for rectification and other costs. Conclusion [39] Noting this is a strike out application and the liability of neither the defendant nor Coastal Soil has been established, I conclude: (a) The damage or loss that is the subject of the claim against the defendant is the plaintiff’s liability for rectification and other costs. (b) It is arguable that there is another person, other than the defendant, whose acts or omissions also caused that damage or loss, namely, Coastal Soil. -- 15 of 26 -- 16 [40] Accordingly, in applying the “General Steel”24 test I am unable to conclude that the defence sought to be advanced by the defendant in [55] of the defence is “manifestly hopeless”. The strike out application in respect of [55] of the defence fails. The defendant’s withdrawal of admissions application The relief sought by the defendants [41] The defendant applies for leave pursuant to rule 188 UCPR to withdraw certain admissions made in its defence filed 15 November 2021, both deemed and express. [42] The defendant has put on evidence to show that deemed admissions were made unintentionally and arise by the manner of the pleading of the defence by the defendant’s South Australian-based lawyer that did not comply with the pleading requirements of the UCPR. In so far as express admissions are sought to be withdrawn, the defendant has sought to explain why. That evidence is supplemented by the proposed amended defence the defendant seeks to rely upon which it is said by the defendant: (a) properly pleads to allegations that were the subject of deemed admissions; (b) pleads to allegations previously the subject of express admissions where those express admissions are sought to be withdrawn; (c) pleads to new allegations in the ASOC and otherwise substantially amends the defence pursuant to rule 378 UCPR. [43] The plaintiff is critical of the evidence, or lack of evidence in some respects, relied upon by the defendant to support the application. It says that the delay in the making of the application is not sufficiently explained and that there is prejudice to the plaintiff. It says there is no genuine dispute about many of matters presently admitted. Except in so far as certain concessions have been made by the plaintiff, it says leave to withdraw admissions should be refused. Relevant principles [44] Rule 188 UCPR provides that a party may withdraw an admission made in a pleading or under rule 187 UCPR only with the court’s leave. 24 General Steel Industries Inc v Commissioner for Railways (NSW) (1964) 112 CLR 125 at [129]-[130]; see the later cases in which the test has been restated of Spencer v The Commonwealth (2010) 241 CLR 118 at [131]; Agar v Hyde (2000) 201 CLR 552. -- 16 of 26 -- 17 [45] Whilst the discretion to grant leave is a broad one, the following factors can be relevant in determining whether to exercise the discretion to grant leave: (a) there is no principle that admissions made, or deemed to have been made, may always be withdrawn “for the asking”, subject to payment of costs;25 (b) sworn evidence is generally required verifying the circumstances justifying the grant of leave;26 (c) how and why the admission came to be made;27 (d) “whether the subject matter of the admission is truly contested”;28 it is not enough for the applicant “simply to assert that a dispute exists”;29 (e) evidence surrounding the issues the subject of the admission;30 (f) “an admission may be withdrawn if the admission is contrary to the actual facts”;31 (g) whether there is likely to be a real dispute about the evidence, including detailed particulars of the issue or issues which the party would raise at trial if the admission was withdrawn;32 (h) any delay in making the application for leave to withdraw the admission and if that delay is explained;33 and (i) prejudice to the other party.34 25 Ridolfi v Rigato Farms Pty Ltd [2000] 2 Qd R 455 (Ridolfi) at [19] per de Jersey CJ. 26 Ridolfi at [19] per de Jersey CJ. 27 Medina v Electro Industry Group Queensland Limited [2019] QSC 63 (Medina) at [46] per Burns J. 28 Hanson Construction Materials Pty Ltd v Davey (2010) 79 ACSR 668 at [15] – [16] (Hanson); cited recently by Jackson J in TLL Investments Pty Ltd v Body Corporate for the Grange Community Titles Scheme 20993 & Ors [2022] QSC 87 (TLL Investments) and Burns J in Medina. 29 Hanson at [12] citing Ridolfi at [459]-[460]. 30 Medina at [46]. 31 Bernard Cairns, Australian Civil Procedure (Thomson Reuters, 12 th ed, 2020) [8.120]. 32 Ridolfi at [32] per Williams J. 33 Medina at [46]. 34 Ridolfi; Hanson Construction Materials Pty Ltd v Norlis & Or [2010] QSC 34 at [16] per Wilson J, citing Ridolfi, and affirmed on appeal in Hanson at [15] – [16]; TLL Investments at [17]; Medina at [46]. -- 17 of 26 -- 18 [46] Courts have: (a) distinguished between the evidence that may be required in respect of an application for leave to withdraw express admissions as opposed to deemed admissions;35 and (b) noted that in exercising the discretion to give leave there is no “a priori rule as to what evidence is required in every case. Nor is that an a priori rule that an affidavit generally verifying a proposed defence will not be enough”.36 [47] The discretion to withdraw an admission is to be guided by rule 5 UCPR.37 [48] In Davies v Davies (No. 1)38 Bradley J, referring to the analogous discretion in rule 367 UCPR wrote: “[45] The court has a broad power to make ‘any order or direction about the conduct of a proceeding it considers appropriate’39 that may be engaged to grant leave to withdraw an admission. The interests of justice are paramount in determining whether an order or direction should be made.40 The broad power is to be applied with the objective of ‘avoiding undue delay, expense and technicality’ and facilitating ‘the just and expeditious resolution of the real issues … at a minimum of expense.’41 The court’s inherent power to control and supervise proceedings extends to granting such leave where that is an ‘appropriate action to prevent injustice’.42 [46] A party seeking leave to withdraw an admission should identify the reason for the withdrawal, explain how the admission came to be made, and identify any prejudice that may be caused if the application is refused. The stage of the proceeding, the prospects of the party succeeding on the issue if the admission is withdrawn, any prejudice to other parties if the admission is withdrawn, and any other matter affecting the administration of justice should be considered to determine how the interests of justice may be served, consistently with the express objective of the rules. All of these matters may inform the exercise of the discretion under r 367 or the court’s inherent power.” 35 Hanson, 675 at [14]; Green v Pearson [2014] QCA 110 at [51] – [52] (Green); Medina at [47]. 36 Green at [46]. 37 Ridolfi at [18], [21], [22]. Piatek v Piatek [2010] QSC 122 at [1]-[29] citing also AON Risk Services Australia Ltd v Australian National University (2009) 239 CLR 175 at [112]. 38 [2019] QSC 293. 39 UCPR, r. 367(1). 40 UCPR, r. 367(2). 41 UCPR, rr. 5(1), (2). 42 Hamilton v Oades (1989) 166 CLR 486 at [502] (per Deane and Gaudron JJ). -- 18 of 26 -- 19 The issues of delay and prejudice in this proceeding [49] I do not consider that the issue of delay looms large as a factor in this proceeding. [50] The delay in applying to withdraw the admissions is not excessive and there is some explanation for it. The proceeding is at an early stage. The subject matter of the proceeding is not too distant in time. [51] Nor do I consider that the issue of prejudice to the plaintiff, that can not be adequately compensated for by way of an appropriate costs order, looms large in this proceeding. In addition to the matters mentioned above, the plaintiff amended its statement of claim against the defendant in February 2022. It may also be that as a consequence of my decision in respect of [55] of the defence, that the plaintiff may seek to join Coastal Soil to the proceeding. [52] I note that if leave is granted pursuant to rule 188 UCPR, and the defendant files an amended defence pursuant to rule 378 UCPR, the plaintiff is entitled to have its costs thrown away as a result of the amendment paid by the defendant pursuant to rule 386 UCPR unless the court orders otherwise. Deemed admissions [53] I am satisfied with the defendant’s explanation as to how the deemed admissions came about. [54] I will particularly focus my attention on the issue the subject of the admission and whether there is likely to be a real dispute about the issue. Paragraph 4 of the defence [55] The parties appear to proceed on the basis that [4] of the defence contains a deemed admission as to the oral component of the WBIB retainer pleaded at [4] of the ASOC. I do not agree. The oral component of the WBIB retainer is denied in the defence and a reason for that denial given. There is no deemed admission. [56] If I am wrong about that, I give leave to withdraw any deemed admission in [4] of the defence. The proposed pleading in defence (about which there is no complaint that it does not comply with the pleading rules) seems to me to substantially replicate what was pleaded in the defence, albeit with some additional particularity. Paragraph 6 of the defence -- 19 of 26 -- 20 [57] It is necessary to first note that not all of [6] of the ASOC is the subject of a deemed admission by the defendant. There is no deemed admission of [6(b)(iii), (iv), (v), (xii), (xiii), (xiv) and (xv)] of the ASOC. Further, [6(b)(xvi)] of the defence appears to be responsive to the whole of [6] of the ASOC, caveating even the express admissions otherwise made in [6] of the defence. [58] I do not agree with the plaintiff’s submission that none of the allegations in [6] of the ASOC are controversial, nor that they reflect settled implied obligations which must be implied into the WBIB retainer. There is scope for argument about such matters. [59] I consider that the defendant should have the opportunity to dispute the implied terms as set out in its proposed amended defence. [60] I give leave to withdraw any deemed admissions in [6] of the defence. Paragraph 9(e) of the defence [61] It is unclear to me what part of [9(e)] of the ASOC is said by the parties to be the subject of a deemed admission. There is sufficient pleaded in [9] of the defence, albeit clumsily, that not the whole of [9] of the ASOC is deemed to be admitted. [62] I agree with the plaintiff that the defendant’s proposed amendment to [9] of the defence is not adequate. A more direct, proper, fulsome and articulate pleading of what is in the defence presently (but so as to deal with any deemed admission that otherwise arises) would be acceptable. [63] I give leave to withdraw any deemed admissions in [9(e)] of the defence but indicate that the proposed pleading is unacceptable. Paragraph 14 of the defence [64] Again, it is unclear to me what part of [14] of the ASOC is said by the parties to be the subject of a deemed admission. [14] of the defence pleads a denial and contains at least some identified reasons for the denial (although the allegations could be better particularised). [65] The plaintiff’s complaint about proposed [14] of the amended defence is that does not explain what the differences in the terms were, nor the differing insurance periods. That seems to me to be a matter for particulars. [66] I give leave to withdraw any deemed admission in [14] of the defence. -- 20 of 26 -- 21 Paragraph 21 of the defence [67] The plaintiff does not oppose the defendant being granted leave to withdraw any deemed admission in [21] of the defence. [68] I give leave to withdraw any deemed admission in [21] of the defence. Paragraph 24(e) of the defence [69] The part of [24(e)] of the statement of claim that is the subject of a deemed admission is that the certificate reported that the asbestos had to be removed. The defendant denied that part of the allegation without providing an explanation for same. [70] The defendant now wishes to plead that the certificate did not so report. [71] Leave to withdraw the deemed admission of [24(e)] of the ASOC will be permitted as the defence did attempt to deny part of that allegation. The document the subject of that subparagraph will ultimately speak for itself. Paragraph 26 of the defence [72] [26] of the defence attempts to plead a non-admission of the allegation in [26] of the ASOC on the basis of a lack of knowledge, but does not use the usual form of words that would accompany such a non-admission. [73] The proposed amended defence makes some admission, and then seeks to maintain the non- admission on the basis of a lack of knowledge (but using an appropriate form of words). [74] It appears to me that the deemed admission has arisen as a consequence of an error in form, rather than substance. [75] I give leave to withdraw the deemed admission in [26] of the defence. Paragraphs 29(a) and 29(b) of the defence [76] The matters in [29] of the ASOC are matters solely in the knowledge of the plaintiff that it would ordinarily be expected a defendant would plead a non-admission to, at least unless such time as disclosure was complete so that the costs incurred by the plaintiff could be verified. That is particularly so where the quantum pleaded by the plaintiff are only estimates. [77] In this case the defendant in the defence denied the allegation, made complaint about the pleading of quantum not being as required by the UCPR and indicated it may plead further once full particulars were provided. -- 21 of 26 -- 22 [78] I do not consider it appropriate that the defendant in those circumstances be stuck with a deemed admission of costs it has no evidence the plaintiff has incurred and that are only estimates. [79] I give leave to withdraw the deemed admission in [29] of the defence. Paragraph 30 of the defence [80] [30(a)] to [30(d)] of the defence deny [30] of the ASOC but repeat and rely upon paragraphs A-K and [1]-[29] of the defence. It is not entirely clear therefore what parts of [30] of the ASOC are actually the subject of a deemed admission. [81] Proposed [30] of the amended defence comprises admissions and denials. [82] The plaintiff is particularly concerned as to the denial in [30(b)(ii)] of the proposed amended defence which relies upon renewal questionnaires (which are in evidence) and says the defendant does not advance what is the basis for the denial. That seems to me to be a question of particulars. [83] The plaintiff also says that there is no explanation as to how and why the admission came to be made on the evidence surrounding the issue the subject of the admission, but that ignores that the defence denied the allegations (albeit not in a way compliant with the UCPR). A further explanation is not called for in such circumstances. [84] I give leave to withdraw any deemed admission in [30] of the defence. Paragraphs 32 to 41 of the defence [85] The parties seem to be agreed that the outcome for these paragraphs follows [30] of the defence. Accordingly, I give leave to withdraw any deemed admissions in [32] to [41] of the defence. Paragraphs 42 to 44, 45(b) and (c), 46 to 48 of the defence [86] Again, the parties seem to be agreed that the outcome for these paragraphs follows [30] and [32] to [41] of the defence. [87] Accordingly, I give leave to withdraw any deemed admissions in [42] to [44], [45(b) and (c)], [46] to [48] of the defence. Paragraphs 49 to 52 of the defence -- 22 of 26 -- 23 [88] The plaintiff does not oppose the defendant being granted leave to withdraw any deemed admissions in [49] to [52] of the defence. [89] I give leave to withdraw any deemed admissions in [49] to [52] of the defence. Express admissions Paragraph 1(a)(ii) of the defence [90] There appears to be no issue that [1(a)(ii)] of the ASOC is factually incorrect and leave should be granted to withdraw the admission in [1(a)(ii)] of the defence. [91] I give leave to withdraw the admission in [1(a)(ii)] of the defence. Paragraphs 1(a)(iii) and 1(a)(iv) of the defence [92] The only contentious part of the proposed change to the defendant’s pleading seems to be that the defendant wishes to clarify that in so far as it admits that the plaintiff carried out ‘asbestos removal and containment work’, the containment part is restricted to containment for the purpose of removal, not to permit asbestos to remain in situ indefinitely. I do not consider that is in truth the withdrawal of an admission. It is clarifying what was intended by the admission. Nothing seems likely to turn on the clarification. [93] In so far at the defendant wishes to maintain some non-admissions about the operations of the plaintiff based on a lack of knowledge, I do not consider such non-admissions unreasonable where realistically the only enquiries likely to be able to be made are of the plaintiff (which the defendant is unlikely to have any way of verifying). [94] I give leave to withdraw any admissions in [1(a)(iii)] and [1(a)(iv)] of the defence. Paragraph 1(b)(vi) of the defence [95] The defendant seeks to withdraw an admission that the defendant provided financial services in respect of the services “pleaded herein” – that is, in the statement of claim. It asserts it cannot admit the allegation because what are the “services pleaded herein” is not properly particularised. [96] I think it is clear enough that the “services pleaded herein” are those pleaded in [2], [8(b)], [9(c)], [13], [16] and [19] of the ASOC that specifically refer to certain brokering services being supplied by the defendant to the plaintiff. The defendant should be able to plead an admission or denial (or some combination) to the allegation. -- 23 of 26 -- 24 [97] I do not give leave to withdraw any admissions in [1(b)(vi)] of the defence. Paragraph 1(f)(ii) of the defence [98] The admission that Mr Jarret had a long history of dealing with the plaintiff remains (although the precise length of time seems contentious). I do not consider there is any difficulty with the parties pleading the length of time for which they contend. [99] The admission that actually seems to be being withdrawn is the deemed admission that Jarrett was the Hoses’ sole insurance broker and the precise nature of the relationship (adviser or not, whatever that actually means). The plaintiff does not appear to have any expressed complaint about that part of the proposed amended defence. [100] There does appear to be a real issue as to whether Jarrett was the sole insurance broker to the plaintiff, and if services beyond insurance brokering (ie advising) were involved. [101] I give leave to withdraw any admissions in [1(f)(ii)] of the defence. Paragraph 5 of the defence [102] [5] of the defence admits that the retainer included the letter dated 24 November 2008. [103] The defendant now wishes to deny the allegation on the basis that the letter in fact only related to the Hoses’ personal home and contents insurance (which is why it was addressed to the Hoses, and not the plaintiff), not business brokering services. The plaintiff says the terms of the letter were generally expressed and applied to all insurance being effected for the Hoses. [104] The terms of the WBIB retainer may be important. [105] The defendant advised that the letter was provided to the defendant’s solicitors in late November 2021, after the defence was filed. In those circumstances, the original admission appears to be an error. [106] I consider there is a real issue in dispute that should be permitted to be agitated. [107] I give leave to withdraw any admissions in [5] of the defence. Paragraphs 6(b)(i), (ii) and (vii) of the defence [108] The defendant seeks to withdraw certain admissions that the WBIB retainer included certain implied terms (both as a legal incident thereto and in order to give it business efficacy). -- 24 of 26 -- 25 [109] Whilst the case for the implication of such terms (at least as a legal incident of the retainer) is strong,43 I consider that there is scope for and appears to be a real dispute between the parties as to the fact and content of any implied terms (which may be influenced by the express terms which also appear to be contentious). [110] I give leave to withdraw any admissions in [6(b)(i), (ii) and (vii)] of the defence. Balance paragraph 24 of the defence (excluding 24(e)) [111] The admission sought to be withdrawn relates to the work performed by the plaintiff under the Remediation Contract. The defendant says the admissions were made in error and it wishes to plead non-admissions because it does not know what work the plaintiff actually performed. [112] Whilst the defendant does not have “direct knowledge of the work performed” it is difficult to see how there could be any real dispute about this issue. Neither the defendant’s affidavit material, nor the proposed amended defence demonstrate why there is likely to be a real dispute about the fact of what work was performed under the Remediation Contract. [113] I have already given leave to withdraw any admissions in [24(e)] of the defence. I do not give leave to withdraw any admissions in the balance of [24] of the defence. Paragraph 25 of the defence [114] This admission seems to be in the same category as the balance of [24] of the defence. [115] There does not appear to be disclosed in defendant’s affidavit material, nor in the proposed amended defence, reasons why there is likely to be a real dispute about the plaintiff being advised about asbestos contamination on the site. [116] The letter of 11 November 2020 pleaded in the proposed amended defence is not relevant to [25] of the ASOC. [117] I do not give leave to withdraw any admissions in [25] of the defence. Paragraphs 31, 42 and 45(a), (b) and (c) of the defence 43 PC Case Gear Pty Ltd v Instrat Insurance Brokers Pty Ltd (2020) 379 ALR 732; [2020] FCA 137 at [104], [108]. -- 25 of 26 -- 26 [118] I have permitted the withdrawal of any deemed admissions in [30] of the defence. The basis of the withdrawal of the admissions in these paragraphs hinge on [30] of the defence denying the making of the WBIB representations. [119] I am satisfied, having regard to the proposed amended defence, that there is a real dispute as to these matters. [120] I give leave to withdraw any admissions in [31], [42], [45(a), (b) and (c)] of the defence. Conclusion [121] The orders I propose to make are: 1. The strike out application in respect of paragraph 55 of the defence is dismissed. 2. I give leave to the defendant to withdraw any deemed admissions in paragraphs 4, 6, 9(e), 14, 21, 24(e), 26, 29, 30, 32, 33, 34, 35, 36, 37, 38, 39, 40, 41, 42, 43, 44, 45(b) and 45(c), 46, 47, 48, 49, 50, 51 and 52 of the defence. 3. I give leave to the defendant to withdraw any admissions in paragraphs 1(a)(ii)(iii) and (iv), 1(f)(ii), 5, 6(b)(i), (ii) and (vii), 24(e), 31, 42, 45(a), (b) and (c) of the defence. [122] I will hear the parties as to costs. -- 26 of 26 --