CPB Contractors Pty Ltd v Liberty Mutual Insurance Company (No 2)

1. [1]

   I propose to give some short oral reasons to deal with the defendants’ further amended notice of motion, filed on 17 November 2025.

2. [2]

   I heard argument on 15 December 2025. The parties sought and were given an opportunity to make some brief additional written submissions during the week, which I have read.

3. [3]

   I published reasons concerning an earlier form of the notice of motion on 7 November 2025: see CPB Contractors Pty Ltd v Liberty Mutual Insurance Company [2025] NSWSC 1323. The reasons that follow assume familiarity with those earlier reasons.

4. [4]

   By the further amended notice of motion, the defendants seek two main things. First, they continue to seek an order that certain questions be decided separately from and before all other questions in the proceedings. Second, they seek an order that MTR Corporation (Sydney) NRT Pty Limited and UGL Rail Services Pty Ltd (referred to together as SJV) be joined as defendants.

5. [5]

   The plaintiffs oppose the orders. SJV, who appeared on the application, consents to an order for joinder and does not oppose an order for separate questions (but suggested some edits to the questions).

6. [6]

   I will deal first with the proposed separate questions.

7. [7]

   The form of the questions that were pressed at the hearing were as follows (omitting footnotes):

8. [8]

   Proposed question 1 was propounded for the first time at the hearing on 15 December 2025. It seems to me that this new question seeks essentially to achieve the same thing as question 2, but arguably does so with greater clarity and precision.

9. [9]

   The observations I made at [36]-[41] of my earlier reasons, which point away from orders for a separate question on the limitation point (which now comprises questions 1 and 2) remain relevant and were not addressed by the defendants with fresh contentions on the hearing of the further amended notice of motion. There is something to be said for the proposition that the new proposed question 1 is an improved formulation, but it does not alter the underlying difficulties that arise.

10. [10]

    The plaintiffs took the opportunity at the hearing of the further amended notice of motion to propound a further argument against the separate questions concerning the limitation defence. This is the argument that resulted in some further written submissions.

11. [11]

    The plaintiffs point out that at [218] of the list response, the defendants contend that in order for the plaintiffs to be indemnified under the mitigation extension, the plaintiffs must demonstrate, among other things, that they had notified the insurer of the Design Errors during the policy period. The plaintiffs contend in their reply at [105] that the Design Errors were notified in the policy period and contend at [111] that no cause of action accrues until the plaintiffs notified the insurer of the Design Errors during the policy period. The plaintiffs submit that the pleading by the defendants at [218] is consistent with the plaintiffs’ case as to the accrual of their cause of action.

12. [12]

    The plaintiffs submit that [218] of the list response is inconsistent with [241]. At [241], the defendants allege that any cause of action accrued at the time any costs and expenses were incurred. The plaintiffs submit, in effect, that it is inconsistent for the defendants to allege: (1) that the plaintiffs right to indemnity does not accrue until they have notified the insurers of the Design Errors; and also allege (2) that any cause of action accrued when costs and expenses were incurred.

13. [13]

    The apparent tension is likely explained by a contention by the defendants that the right to indemnity is relevantly only triggered if the plaintiffs have notified the insurer of the Design Errors before any costs and expenses were incurred. This is consistent with the use of the word “then” in [218(c)(vi)] of the list response.

14. [14]

    The plaintiffs point to a further complexity arising from their reliance on s 54 of the Insurance Contracts Act 1984 (Cth) in response to the defendants’ allegations that the plaintiffs failed to meet certain preconditions to indemnity. They contend that the section works to protect them if the policy required the plaintiffs to notify the defendants of particular matters before any costs and expenses were incurred. The plaintiffs submitted that if they were entitled to be excused under s 54 from obtaining consent before incurring expenses, then they are not going to be out of time because notification was late. I am not at all sure that follows. The plaintiffs will have to confront cases such as Antico v Heath Fielding Australia Pty Ltd (1997) 188 CLR 652; [1997] HCA 35. But this is not something I can decide on this application.

15. [15]

    The defendants say that s 54 is irrelevant for present purposes because both questions 1 and 2 commence with words along the following lines: “If an insured is otherwise entitled to indemnity…”, which, they say, carries with it the hypothesis that the plaintiffs will successfully rely on s 54. What that means is that the issue that I have just identified, concerning the interplay between s 54 and any limitation defence, will arise for consideration on the hearing of any separate question. The plaintiffs contend that success on s 54 will somehow bear upon the limitation question. How that may work may be complex and raise various factual hypotheses that have not been exposed.

16. [16]

    The plaintiffs’ new submissions may all have easy answers, but it seems to me that they raise some uncertainty about precisely what is to be addressed by questions 1 and 2. They point up a risk at the exercise of answering separate questions will misfire or prove to be a path of limited utility, and may end up causing delay.

17. [17]

    The new submission provides additional reasons why I would decline to order questions 1 and 2 as separate questions.

18. [18]

    Proposed questions 3 and 4 are not appropriate separate questions because there is no dispute about the proper answer to them. All the parties (and SJV) told me that they considered the answer to question 3 is “yes” and the answer to question 4 is “no”. I am not going to make orders that the 4 questions propounded by the defendants be answered separately.

19. [19]

    I move now to the question of the joinder of SJV.

20. [20]

    The defendants submitted that the application for joinder is independent of whether the Court makes orders for separate questions.

21. [21]

    I do not consider that a case for joinder has been made out, at least at this stage.

22. [22]

    On the last occasion, the plaintiffs acknowledged that it was possible that SJV is a necessary party to the proceedings if there is a real contest between the plaintiffs and SJV as to the principles of priority to be applied. However, it does not appear that there is a contest. Proposed questions 3 and 4 were intended to draw out that contest but, as I have said, everyone agrees about how those questions should be answered.

23. [23]

    SJV has an interest in the plaintiffs failing in its claim against the defendants because they are insured by the same policy and, if the plaintiffs are wholly successful, it seems to be common ground that any cover available to SJV would be greatly diminished compared with the outcome if the defendants succeed. But it does not seem to me that it follows that SJV’s legal interests are affected in a way that means it is a necessary party to the proceedings: see John Alexander’s Clubs Pty Ltd v White City Tennis Club Ltd; Walker Corp Pty Ltd v White City Tennis Club Ltd (2010) 241 CLR 1; [2010] HCA 19 at [131]. Their interest is really a commercial one.

24. [24]

    The defendants seek leave to file and serve a cross‑summons against the plaintiffs and SJV seeking the following substantive relief:

25. [25]

    As to the first proposed declaration, that issue already arises between the plaintiffs and the defendants on the existing claims. I do not understand that the defendants and SJV take different positions on that issue. The 2nd and 3rd declarations effectively mirror proposed questions 3 and 4. There is no dispute about these matters between anyone. It follows that I do not understand that there is any controversy between the defendants and SJV reflected in the cross‑summons. The absence of any apparent controversy between them indicates that joinder is not necessary in order to adjudicate any controversy between them.

26. [26]

    The defendants submitted that they are in a conundrum because there are competing claims by insureds against a finite insurance fund. They refer to the peril faced by the insurer in Chubb Insurance Co of Australia Ltd v Moore [2013] NSWCA 212; 302 ALR 101. The insurer in that case could not safely pay any insurance money otherwise than in accordance with the charge imposed by what was s 6 of the Law Reform (Miscellaneous Provisions) Act 1946 (NSW).

27. [27]

    The plaintiffs in this case accepted that the defendants should not be placed in a conundrum of being required to pay insurance money to them against the possibility that SJV’s claim has priority. However, they submit that the defendants are not in that conundrum (and may never be in it) because the defendants are not proposing, voluntarily, to pay out any insurance money to the plaintiffs under the policy. They submit that so little is known about the SJV claim that it is too early to say that there will be any relevant competition - especially as there is no contest about the principles as to priority.

28. [28]

    At present, the defendants do not contend that there is an impediment to payment of insurance money to the plaintiffs because there is a competing claim that has priority. The defendants have formulated some proposed amendments to their list response. However, those amendments do not plead any position it takes in response to the SJV claim. The only substantive proposed amendment is a contention about the principles determining priority (see [238A (gg)]). But there is not dispute about those principles.

29. [29]

    I consider that too little is known about SJV’s claim and the defendants’ response to it to justify joinder of SJV to these proceedings, at least at this stage. There is no apparent contest between SJV and the defendants. I do not see at the moment how SJV’s rights could be relevantly affected by the current proceedings. If there is a difficulty in failing to join SJV, it seems to me that is a problem for the plaintiffs. In opposing joinder, they are willing to take that risk.

30. [30]

    For these reasons, I do not propose to make orders that the SJV be joined.

31. [31]

    It follows that the further amended notice of motion is dismissed.

32. [32]

    The orders of the Court are:

    1. (1)

       The defendants’ further amended notice of motion filed on 17 November 2025 is dismissed.

    2. (2)

       The defendants are to pay the plaintiffs’ costs on the further amended notice of motion, including the costs of the earlier iterations of the further amended notice of motion.

    3. (3)

       The defendants are to file and serve a list response to the plaintiffs’ further amended list statement on or before 30 January 2026.

    4. (4)

       List the matter for directions in the Technology and Construction List on 20 March 2026.

    5. (5)

       Direct that the defendants to file and serve their evidence, both lay and expert, on or before 11 September 2026.

Addendum

1. [33]

   There is evidence from the solicitor for the defendants that he expects that it will take at least 12 months for the defendants to prepare their evidence. His evidence was that he expects the defendants to call evidence from experts from at least 11 disciplines. The plaintiffs proposed that the defendants have until 1 May 2026 to file and serve their evidence.

2. [34]

   For reasons canvassed in my earlier judgment, there is a basis to anticipate that the approach to be taken by the defendants to the proceedings, and to the evidence, may not be as burdensome as the defendants currently expect. That is something they will now have to confront and make their forensic decisions.

3. [35]

   I fixed 11 September 2026 as the date for the filing and serving of evidence in anticipation that the work to be done will turn out to be less than is presently anticipated. I fixed the matter for directions on 20 March 2026 so that the defendants could provide the Court, if necessary, with a more considered explanation as to why any additional time beyond 11 September 2026 is needed. In the meantime, the defendants should proceed on the basis that they will be required to comply with the direction to file and serve their evidence by 11 September 2026.