Seymour Whyte Construction Pty Ltd v Liberty Mutual Insurance Company t/as Liberty Specialty Markets

1. [1]

   The plaintiff (Seymour) sues the defendant (Liberty) for damages for breach of contract or indemnity under an insurance policy styled “Contractor’s Pollution Legal Liability Policy” (the Policy) issued by Liberty to Seymour on 7 December 2016 for the period 1 December 2016 to 1 December 2017. Seymour claims that the Policy covers what amount to Seymour’s costs of safely dealing with a large volume of asbestos-contaminated soil in the course of performing its obligations under a construction contract with VicRoads.

2. [2]

   The central issue is whether various types of “Loss” which Seymour claims “arose from” what the Policy calls “Pollution Conditions” caused by Seymour’s operations.

Background

1. [3]

   The evidence consists of:

   1. (1)

      the affidavit of Courtney Hoops made 22 September 2023, which was admitted subject to my ruling on Liberty’s objections to part of par 36 and the whole of pars 37 and 38 (addressed below in the context of the discussion of quantum); and

   2. (2)

      tabs 7-11, 13-26 and 28-33 of the Court Book, which were admitted without objection together as Exhibit 1.

2. [4]

   The Court Book also contained at tab 12 a document, tendered by Seymour, which had been Ex CH17 referred to at par 37 of Mr Hoops’ affidavit. I deferred ruling on Liberty’s objection to this document, which is again addressed below in the context of the discussion of quantum.

3. [5]

   Exhibit 1 included expert reports of Prof Phillip Parente, Medical Oncologist, and Mr Stephen Maxwell, Certified Environmental Practitioner, both tendered by Seymour, and an expert report of Ms Suzanne Walker, Geo-Environmental Engineer, tendered by Liberty. Ms Walker substantially agreed with Mr Maxwell’s opinions and reasons, and answered some additional questions.

4. [6]

   There was no oral evidence. Nor was the lay or expert evidence contradicted or criticised. Nor was it suggested that any assumption made by any expert was not made out. In the circumstances, I accept the evidence of Mr Hoops (subject to ruling on the objections) and the opinions of Prof Parente, Mr Maxwell and Ms Walker.

5. [7]

   Exhibit 1 also included a statement of agreed facts which helpfully addressed the primary facts. The findings which follow are largely drawn from that statement of agreed facts.

6. [8]

   On 22 February 2017, Seymour entered into a contract with VicRoads for works associated with an upgrade of a section of the Chandler Highway in Melbourne (the Contract). The work required Seymour to excavate a large quantity of fill for the purpose of constructing pier foundations near the northern bank of the Yarra River. Construction works commenced on site in May 2017.

7. [9]

   Under the Contract, Seymour was liable to pay the costs of investigating, removing, remediating and disposing of contaminated soil on the Chandler Highway site. Section 1200.09(b) of the Standard Specification included a list of sites of known asbestos contaminated sites. This list did not include the sites that were later discovered to contain asbestos-contaminated soil which form the subject of these proceedings.

8. [10]

   An area adjacent to the project site which had previously formed part of the Alphington Paper Mill (the Alphington Site) was being redeveloped. The remainder of the paper mill site had been acquired by VicRoads as part of the Chandler Highway development. As material could not be stockpiled in the flood zone of the Yarra River, an arrangement was made with the developer of the Alphington Site (Glenvill) for material to be stockpiled on that site and for Seymour to use an access road on that site to facilitate transport of the material.

9. [11]

   Between 8 and 14 August 2017, Seymour loaded excavated soil onto trucks in an area known as Pier 1, and transported it to the Alphington Site.

10. [12]

    Some but not all of the fill material was placed in two stockpiles. One stockpile was placed on the Alphington Site and the other stockpile was placed substantially on VicRoads land but partly encroaching on the Alphington Site.

11. [13]

    On 14 August 2017, Glenvill informed VicRoads of the suspected presence of asbestos in the excavated stockpiles. VicRoads shared this news with Seymour’s Superintendent, and requested that Seymour arrange for the stockpile to be relocated.

12. [14]

    At approximately 2:00pm on the same day, Glenvill informed VicRoads that its hygienist had identified bonded asbestos material in the stockpile earlier that morning. VicRoads immediately informed Seymour’s Superintendent, and requested that Seymour engage its own hygienist to verify whether there was any bonded asbestos material in the stockpile. Neither Seymour’s Superintendent, nor Seymour’s Environmental Manager detected any contamination.

13. [15]

    On 15 August 2017, Seymour engaged a hygienist, Bureau Veritas, to undertake testing of the stockpiles at the former paper mill site and in fill material in the vicinity of Pier 1. Bureau Veritas’ assessments included both visual inspections of the surface of the sites and assessment of the subsurface using soil samples.

14. [16]

    The scope of Bureau Veritas’ engagement later expanded to include the development of an Asbestos Management Plan.

15. [17]

    Seymour engaged a licenced contractor, AAH Contracting Pty Ltd (AAH) to handle and dispose of contaminated fill to be excavated in the course of the project works consistently with Bureau Veritas’ recommendations.

16. [18]

    At approximately 12:00pm on 15 August 2017, all work was stopped north of the river. At or shortly after this time, Seymour installed Airborne Dust Monitoring equipment to monitor air quality at the site.

17. [19]

    On 15 and 16 August 2017, Bureau Veritas inspected the site. On 16 August 2017, it reported that “[a]sbestos cement sheet debris was located along the north side of the Yarra River construction area”. On 18 August 2017, Bureau Veritas inspected the site and reported that “there is no visible asbestos residue on the surface soils within the [north side of the Yarra River construction area]” and “the visual inspection was limited to the surface soils only and does not extend to any buried asbestos containing materials that may be uncovered during on-going excavation works”.

18. [20]

    On 17 August 2017, inspectors from WorkSafe Victoria attended the site to make enquiries in accordance with s 99(a) and (b) of the Occupational Health and Safety Act 2004 (Vic) (OHS Act) into a complaint that asbestos contaminated soil was being relocated from one workplace to another workplace.

19. [21]

    On the same day, WorkSafe Victoria issued an “Entry Report” (the Entry Report) in respect of the Chandler Highway Site. The Entry Report records information provided to one of the inspectors that:

    1. (1)

       “the incident occurred when multiple stockpiles of asbestos contaminated soil had been excavated and relocated East approximately 80m on the construction vehicle track located underneath the existing Chandler Hwy bridge, then North into the former Amcor Paper Mills construction site and dumped into area 2A of that construction site”;

    2. (2)

       “soil stockpiles believed to be clean fill have been inadvertently relocated to another construction site located adjacent to this workplace”;

    3. (3)

       “the asbestos contaminated soil stockpiles had been excavated from the North abutment located on the North West side of the Yarra River”; and

    4. (4)

       “[Seymour was] informed by the site hygienists employed at the former Amcor Paper Mills construction site that the soil dumped at their workplace in fact was contaminated with a mixture of friable and non friable asbestos which was verified via bulk sample analysis.”

20. [22]

    The Entry Report also noted that “[f]ailure to control risks associated with [asbestos containing material] in the workplace may lead to employee exposure to asbestos fibres and the potential adverse health effects associated with asbestos related diseases.”

21. [23]

    On 17 August 2017, WorkSafe Victoria issued an “Improvement Notice” to Seymour pursuant to s 111 of the OHS Act (the Notice). The Notice gave “directions as to measures to be taken” to remedy a contravention of ss 21(1) and 21(2)(a) of that Act with respect to “the management and removal of asbestos contaminated soils within the entire construction site located at 2-6 Chandler Hwy, Kew”.

22. [24]

    The Notice included the following:

23. [25]

    The Notice also included a notification that a “person to whom an improvement notice is issued and who does not comply with the improvement notice shall be guilty of an indictable offence against the Act.”

24. [26]

    Also on 17 August 2017, WorkSafe Victoria issued a second Improvement Notice “in relation to asbestos containing piping.” That notice included that “One means of compliance may be, but not limited to … engaging a licensed asbestos removalist to remove the asbestos contaminated piping”.

25. [27]

    On 22 August 2017, Bureau Veritas advised Seymour that friable asbestos had been found in soil samples taken from the site.

26. [28]

    On 22 August 2017, WorkSafe Victoria inspectors attended the site and issued an Entry Report “in relation to asbestos containing piping” which was “exposed from beneath the ground”.

27. [29]

    On 5 September 2017, Bureau Veritas provided an assessment report “regarding asbestos in soils assessment sampling undertaken on the northern and southern banks of the Yarra River within the alignment of the proposed Chandler Highway bridge upgrade works, Kew and Alphington, Victoria.”. That report noted “[f]riable asbestos [was identified] within fill on the northern river bank”; “[a]sbestos in the forms of free fibre in soils, friable & bonded asbestos containing materials is present in the lower portion of the North works area. Bonded asbestos containing materials are present in fill material along the batter wall” and that “[t]he presence of asbestos, in fibre and bonded form exceeds the EPA Victoria IWRG 621 fill material upper limits”.

28. [30]

    On 6 September 2017, Bureau Veritas provided another assessment report indicating that the fill material at the Northern Abutment was classified as Category C Contaminated soils with asbestos containing material. The report stated that

    1. (1)

       “[n]umerous pieces of asbestos containing cement sheet debris was observed in surface soils and within fill in the northern assessment area i.e. in the batter area and adjacent to the Yarra River”;

    2. (2)

       “[s]everal pieces of friable asbestos were also observed during the assessment in the lower areas northern assessment area”;

    3. (3)

       “[t]esting of cement sheet debris samples by Bureau Veritas HSE has confirmed the material contains asbestos. In addition, asbestos fibres have been detected in waste cement like materials, and as free bundles in soil samples. As the waste soils are generally similar in fill soils across the site, fill material (insitu) is classified as being contaminated with asbestos containing materials”;

    4. (4)

       “[i]n summary, any fill soils excavated from the northern side would classify as ‘Category C’ contaminated soils”; and

    5. (5)

       “[w]here natural soils are mixed with fill soils during soil disturbance works, cross contamination of the natural soils is likely to occur. Such cross contaminated soils are to be managed/disposed offsite as per the fill soils in the area where cross contamination occurs. Natural soils excavated and managed to prevent cross contamination may be considered fill material. Bureau Veritas HSE recommends in areas where natural soils are to be bulked out, excavation proceeds into natural soils to remove all fill, then an inspection of the exposed soils is conducted of the surface to confirm no asbestos containing materials/fill soils are present.”

29. [31]

    The report advised “[a]ll onsite in-situ soils in the northern area between the Yarra River and Rex Avenue … have been deemed to contain both bonded and friable asbestos, unless it is removed in accordance with Occupational Health and Safety Regulations 2017 (and associated guidance documents)” and “[t]he transportation and disposal of asbestos contaminated soils must be undertaken in accordance with EPA Victoria Publication IWRG 611 and WorkSafe Guidance Note Asbestos-contaminated Soil.”

30. [32]

    On 3 October 2017, Bureau Veritas provided a further report. One objective of the assessment the subject of the report was to “[c]hemically and visually characterise the soils for off-site disposal purposes in general accordance with requirements of the Victorian Environment Protection (Industrial Waste Resource) Regulations (2009)”. The report noted that “[n]umerous pieces of asbestos containing cement sheet debris was observed in surface soils and within fill in the northern assessment area i.e. in the batter area and adjacent to the Yarra River. Much of this material that is visible on the sites surface has been removed by an appointed Class ‘A’ removalist.”

31. [33]

    During the period between August 2017 and April 2018, Seymour incurred expense in connection with the management and removal of contaminated fill on the project site and in connection with the removal of the material stockpiled on the former paper mill site. It made a claim for the recovery of those direct costs and associated costs from VicRoads on the basis that they were costs arising from latent conditions.

32. [34]

    On or about 1 July 2018, VicRoads transferred delivery of major roads projects in Victoria to the newly formed “Major Project Authority” (MRPA). MRPA accepted liability for that part of the direct costs that was associated with the removal and handling of contaminated material on the part of the paper mill site that was owned by VicRoads.

33. [35]

    The costs incurred by Seymour in safely managing and removing contaminated fill that were not paid by MRPA included the following:

    1. (1)

       Bureau Veritas costs associated with inspection, monitoring and testing, analysis and validation services in an amount of $366,766.89 (excluding GST);

    2. (2)

       the costs of the licensed contractor, AAH, engaged by Seymour to handle and dispose of contaminated fill to be excavated in the course of the project works consistently with Bureau Veritas' recommendations in an amount of $2,448,147.10 (excluding GST);

    3. (3)

       the removal of stockpiled material from the Alphington Site at a cost of $252,502.16 (excluding GST); and

    4. (4)

       Further expenses relating to the rental of equipment, machinery and personnel needed in an amount of $176,255.73 (excluding GST).

34. [36]

    Seymour and MRPA eventually concluded a settlement deed.

35. [37]

    Seymour attempted to claim $3,456,057.00 under the Policy. Liberty declined to indemnify Seymour for the whole of those costs.

The statutory regime

1. [38]

   Seymour had pre-existing statutory obligations in relation to the presence, or potential presence, of asbestos at the site where it was undertaking work. Section 21 of the OHS Act relevantly provides:

2. [39]

   Seymour’s obligations included those in the Occupational Health and Safety Regulations 2017 (Vic) (OHS Regulations). Regulation 210 provides:

3. [40]

   Regulation 214 of the OHS Regulations provides:

4. [41]

   Regulation 233 provides:

5. [42]

   Regulation 238 provides:

6. [43]

   Finally, r 264 in Div 7, provides:

7. [44]

   Class A asbestos removal work is defined in r 5 as follows:

8. [45]

   The power exercised by the inspectors when they entered the site on 17 August 2017 was conferred by s 98 of the OHS Act. That section relevantly provides:

9. [46]

   The improvement notices were issued by WorkSafe Victoria pursuant to s 111 of the OHS Act, which relevantly provides:

Seymour’s argument

1. [47]

   The insuring clause provides:

2. [48]

   “Loss” is defined by reference to various other defined terms, the most significant of which for present purposes is “Clean-up Costs”. This is defined as follows:

3. [49]

   Liberty does not dispute:

   1. (1)

      that the operations Seymour performed of excavating, removing and stockpiling soil were “Covered Operations” as defined;

   2. (2)

      that asbestos may be a “Pollutant” within the meaning of the Policy in circumstances where it is a “contaminant” within the meaning of the definition;

   3. (3)

      that on the balance of probabilities, Seymour’s operations (which involved the excavation, transportation and stockpiling of contaminated soil) caused asbestos fibres to be released into the air;

   4. (4)

      that the release of asbestos fibres into the air fell within “Pollution Conditions” as defined;

   5. (5)

      accordingly, that that constituted “Pollution Conditions caused by Covered Operations” for the purposes of the insuring clause;

   6. (6)

      that the Notice fell within the definition of “Environmental Laws”, which means “any legislatively or administratively enacted law, rule, regulation or order …”

4. [50]

   However, Liberty denies that any of the amounts Seymour claims constituted “Loss arising from” those Pollution Conditions. One aspect of Liberty’s submission in this regard is that neither the Notice, nor any other Environmental Law, required Seymour to remove asbestos contaminated soil from the site. What the Notice required instead was that Seymour implement a safe system of work when it removed the soil pursuant to the contract with VicRoads.

5. [51]

   Seymour relied on two distinct sets of Pollution Conditions to found its claim. The first set is not disputed: that Seymour’s activities resulted in airborne asbestos fibres. The second, which has more than one aspect, is controversial. Seymour submits that the excavation and/or transportation and/or stockpiling of contaminated soil moved or exposed or rendered uncontained asbestos that had previously been contained within the soil, and that doing so also amounted to “Pollution Conditions”, even if asbestos fibres were not released into the air. Liberty denies that the excavation, transportation or stockpiling of contaminated soil without more constituted Pollution Conditions. Liberty again submits that, in any event, the amounts Seymour claims were not “Loss arising from” any such Pollution Conditions.

6. [52]

   As I understood Seymour’s basic argument, it may be summarised as follows.

   1. (1)

      Its Covered Operations “caused” both (a) the (admitted) Pollution Conditions consisting of the release into the air of asbestos fibres, and (b) the (disputed) Pollution Conditions consisting of excavating and/or transporting and/or stockpiling contaminated soil, where those activities moved or exposed the asbestos or rendered it uncontained. In each case, that occurred prior to 17 August 2017.

   2. (2)

      The Notice “arose from” either or both of those Pollution Conditions, in that it was issued in response to those Conditions.

   3. (3)

      The Notice (or alternatively statutory “Environmental Laws”) required Seymour to become legally obliged to incur various costs of removing asbestos contaminated soil from the site, such that those costs also “arose from” the Pollution Conditions (via the Notice or statutory Environmental Laws). (Seymour’s reliance on statutory “Environmental Laws” appears to stand outside the Commercial List statement).

   4. (4)

      Those costs were a species of “Loss”: “Clean-up Costs”, being costs “to investigate, test, neutralise, remove, remediate, monitor or dispose of Pollutants to the extent required by Environmental Laws …”.

   5. (5)

      Accordingly, those costs were “sums the Insured becomes legally obliged to pay for Loss arising from Pollution Conditions caused by Covered Operations performed by the Insured” within the meaning of the insuring clause.

7. [53]

   It should be noted that the effect of Seymour’s argument would be to render Liberty liable to indemnify Seymour for Seymour’s costs of performing work (excavation or removal of contaminated fill) which Seymour was required to perform under its Contract with VicRoads. That is a somewhat surprising proposition in light of the Policy language.

8. [54]

   Seymour submits that the words “arising from” require a less close causal connection than the words in the same sentence “caused by”. Liberty does not dispute that proposition in general terms. The parties were in agreement that (although particular language used in one policy cannot be assumed to have an identical meaning in another policy) some guidance may be obtained from the meaning given to words and phrases in other policies in other cases. The parties referred to Derrington and Ashton, The Law of Liability Insurance (Lexis Nexis, 4th ed, 2025) at [8-279] and Government Insurance Office of New South Wales v RJ Green and Lloyd Pty Limited (1966) 114 CLR 437; [1966] HCA 6 at 442 per Barwick CJ, 445 per Menzies J. That case suggests that the phrase “arising from” does not impose a requirement that the source be the proximate cause of the result. (As to proximate causes see: National & General Insurance Co Ltd v Chick (1984) 2 NSWLR 86 per Samuels JA at 97-98 and Dickinson v Motor Vehicle Insurance Trust (1987) CLR 500; [1987] HCA 49 at 505.)

9. [55]

   Derrington and Ashton posit that it is enough that there be a sufficient contributing cause that is more than tenuous. As Windeyer J said in RJ Green at 447:

10. [56]

    Seymour relied on various parts of the Policy as affording textual indications said to support its argument that the words “arising from” should be given an undemanding interpretation. Most prominent were the following.

11. [57]

    First, that “Loss” as defined includes “Environmental Damage”. “Environmental Damage” is in turn defined to mean “the injurious presence of Pollutants resulting in Clean-up Costs”. It was submitted:

12. [58]

    This argument amounts to an attempt to jump over an important requirement of the insuring clause. In order to bring the Loss (i.e., on this argument, the injurious presence of Pollutants resulting in Clean-up Costs) within the insuring clause, it is necessary that the Loss (and therefore that the injurious presence of Pollutants) arise from Pollution Conditions caused by the insured’s operations. As discussed further below, the Pollution Conditions themselves entail some physical change involving the Pollutant. The mere presence of Pollutants that had always been there is not enough; their presence must be caused by the insured’s operations.

13. [59]

    Secondly, Seymour points to the definition of “Clean-up Costs”, which refers to Pollutants, rather than to Pollution Conditions. Again, that makes no difference to the substance of the insuring clause, which is engaged only where there have been Pollution Conditions. Such Conditions will always involve Pollutants, by definition.

14. [60]

    Thirdly, Seymour submits: “There is no exclusion [for] pre-existing contractual obligation[s], although that is a common feature of many liability policies. Once something has some causal significance then it comes within ‘arising from’.” Tcpt, 17 November 2025, 54.36-38. It might as easily be said that there is no language expressly contemplating unforeseen environmental conditions, such as the presence of asbestos in the soil. Ultimately what is important is not what is missing from the Policy but what is contained within it.

15. [61]

    No doubt Loss could “arise from” more than one circumstance or cause. But the context here is important. The insuring clause covers sums the insured becomes legally obliged to pay for Loss, and the Pollution Conditions from which the Loss arises must be caused by operations performed by the insured. The word “becomes” assists in giving content to the words “arising from”. It is difficult to see how any sums the insured becomes legally obliged to pay for Loss could sensibly be said to “arise from” such Conditions, in the sense of being in any way a “consequence” of those Conditions, if the insured would have been legally obliged to pay those sums in any event. Seymour’s submission that the word “becomes” in the insuring clause extends to situations in which an insured, although already liable to pay certain costs, “becomes again” liable to pay the same costs for a different reason is contrary to the ordinary meaning of the word, and to the apparent purpose of the clause.

Determination

1. [62]

   As noted above, Seymour identified two distinct candidates for “Pollution Conditions”. First, the release of asbestos fibres into the air (which it is common ground constituted Pollution Conditions). Secondly, excavation and/or transportation and/or stockpiling of contaminated soil, on the basis that those activities moved or exposed the asbestos or rendered it uncontained (which Liberty denies would be Pollution Conditions). It is convenient to address whether the second matter falls within the definition of Pollution Conditions, before turning to address the question whether any Loss “arose from” either set of Pollution Conditions.

2. [63]

   The mere presence of “Pollutants” — the fact that some part of the environment is contaminated — does not constitute “Pollution Conditions”. Instead, Pollution Conditions as defined involve actions or processes in which there is some kind of physical change involving a Pollutant. The main part of the definition is fundamentally concerned with changes in the physical form or, particularly, the location of Pollutants: “‘Pollution Conditions’ means the emission, discharge, dispersal, migration, release or escape of Pollutants. …”. Each of those nouns has a corresponding verb, some of which are transitive and some intransitive: emit, discharge, disperse, migrate, release or escape. The definition also includes the growth of Biological Contaminants and the exacerbation of naturally occurring Pollutants, both of which suggest physical changes of some kind. All parts of the definition involve polluting (i.e., introducing pollution into a physical space) or making existing pollution worse.

3. [64]

   Care must be taken to construe the agreement as a whole, rather than extracting words or phrases and attempting to construe them in isolation. In particular, the definition at issue here must be read in the context of the insuring clause, where it appears as follows: “… Loss arising from Pollution Conditions caused by Covered Operations performed by the Insured …” The circumstance to which the Policy responds is not pollution; it is polluting. It is not enough that the Loss arises from the presence or the discovery of Pollutants. What the Policy responds to is Loss arising from some act on the part of the insured that causes Pollution Conditions, which as defined involve actions or processes in which there is some kind of physical change involving a Pollutant.

4. [65]

   In this case, the Pollutant, asbestos, was already in the soil. Liberty accepts, correctly, that disturbance of the soil (e.g., by excavation) which caused asbestos fibres to be released (or to be discharged or emitted or dispersed or to escape) from the soil into the air was a Pollution Condition. In other words, Seymour’s activities caused a kind of local atmospheric pollution.

5. [66]

   However, Liberty denies that “lifting contaminated fill out of the soil in a bucket, or placing it in the back of a truck or placing it on the ground in the stockpile, is itself a [P]ollution [C]ondition” because “a change in location of the soil, in which pollutants are contained, doesn't involve an emission, a dispersal or discharge of the kind that is contemplated by the definition of ‘[P]ollution [C]onditions’”: Tcpt, 17 November 2025, 37.5-11. Liberty acknowledges that particularly the word “dispersal” is capable of a wide interpretation, but submits that that word must be read in light of its context and in particular its association with the other words of the definition.

6. [67]

   Adopting language used by Seymour, part of Liberty’s argument turned on the notion that the definition of Pollution Conditions was directed to situations in which pollutants become “uncontained”, such that asbestos which remained within the soil and was thereby relevantly “contained” fell outside the definition. Liberty acknowledged that it was hard to see how, if an insured put a pile of asbestos which was not contained in soil on the back of a truck and drove it somewhere else to stockpile it, that would not come within what the Policy was intended to capture. Tcpt, 38.12-38. However, on the basis of this distinction between contained and uncontained Pollutants, Liberty maintained that asbestos contained in soil which had been transported and stockpiled elsewhere was in a different position.

7. [68]

   I do not accept Liberty’s submission that transporting and stockpiling asbestos-contaminated soil did not cause Pollution Conditions.

8. [69]

   It may well be the case that, so long as it remained in the soil, the asbestos was not immediately dangerous to health, and that it became dangerous only when airborne and capable of being inhaled. But the fact that the asbestos was contained in the soil did not make it any less a Pollutant as defined. Put another way, asbestos does not become a Pollutant only when fibres are released into the air.

9. [70]

   Assume that construction activities broke up what had been asbestos containing material in good condition under the soil (such as a fibre cement sheet), and spread asbestos fibres through the soil. Those construction activities would have made any remediation of the land far more difficult. The asbestos would still be “contained” in the soil, and no asbestos fibres would have become airborne. But it is difficult to resist the conclusion that the construction activities had caused Pollution Conditions. Such activities would have brought about a change in both the form and the immediate location of the asbestos amounting to “dispersal” of a Pollutant.

10. [71]

    Similarly, assume that a volatile hydrocarbon Pollutant was present in soil. If an act of an insured, such as permitting wastewater to enter the soil as a byproduct of some construction activity, caused that Pollutant to “migrate” or “disperse” through the soil into the soil of a neighbouring property, or into the water table, that would again be to cause Pollution Conditions.

11. [72]

    It is difficult to see any reason why the far more direct mechanism of excavating Pollutant-contaminated soil, loading it onto a truck, transporting it to another location and stockpiling it would not also properly be described as causing the dispersal or migration of the Pollutant (be it a volatile hydrocarbon or asbestos). While the Pollutant would still be “contained” within the soil, the soil and the Pollutant in it would now be in a new location. What might previously have been uncontaminated land would now be contaminated with the Pollutant. As a matter of ordinary English, the land would now be described as “polluted” because of the insured’s construction activity. To adopt the language of the definition of “Environmental Damage”, the insured’s conduct would have brought about “the injurious presence of Pollutants” on the land.

12. [73]

    On that view, to transport and stockpile contaminated soil is to cause Pollution Conditions for the purposes of the insuring clause.

13. [74]

    That construction is consistent with exclusion 16, which relevantly provides:

14. [75]

    That exclusion would cover, for example, a situation where the insured causes Pollution Conditions because hydrocarbon Pollutants contained in a cylinder that the insured had transported to a location beyond the boundaries of the job site escaped from the cylinder at the new location. But the exclusion also appears to contemplate that the transportation of Pollutant-contaminated waste or materials would otherwise itself be capable of constituting Pollution Conditions. Exclusion 16 would operate to exclude the insurer’s liability with respect to Loss arising from such Pollution Conditions.

15. [76]

    That is in turn consistent with the carve-out from exclusion 16 for Loss covered by Insuring Agreement 1.b., which is the subject of Endorsement 3. This inserted at the end of “Section I — Coverage, 1. Insuring Agreement” a further insuring clause covering Loss arising from Claims for, among other things, Clean-up Costs “caused by Pollution Conditions at or emanating from a Non-owned Disposal Site.” That term is defined to mean “any waste disposal facility which are used by the Named Insured for the treatment, storage or disposal of waste or material, provided that” certain conditions are met. The conditions include that the Non-Owned Disposal site is permitted and/or licensed by the applicable Federal, State or Local authorities to accept such waste or material.

16. [77]

    In the result, Seymour’s transportation and stockpiling of asbestos-contaminated soil constituted “Pollution Conditions” as defined. That conclusion may not generally give rise to a significant expansion in the insurer’s liability, given the presence of exclusion 16. But that exclusion was not relied on in this case.

17. [78]

    Seymour also put its case on a wider basis: that there are Pollution Conditions “When there is excavation and it exposes the asbestos which was previously covered and then there is a risk of fibres being released and the risk of serious health consequences for anyone who happens to breathe in even a very small amount of fibre”: Tcpt, 17 November 2025, 5.16-19. Seymour submitted on that basis that “digging something up and exposing it, even if there is no release of fibres still meets the concept of this definition”, i.e., “Pollution Conditions” (Tcpt, 9.37-38), because the “words discharge, release, escape are capable of including exposing something which is a pollutant which was previously contained in some way” (Tcpt, 14.30-32). See also Tcpt, 49.41-50.3.

18. [79]

    On the language of the definition, this argument is more difficult for Seymour than the argument about transportation. The proposition is ultimately that excavation of contaminated soil itself causes Pollution Conditions, because the mere uncovering and exposure to the air of asbestos held within the soil, as distinct from the escape of asbestos fibres from the soil into the air, would meet the definition of Pollution Conditions.

19. [80]

    A difficulty with this argument is that so long as the asbestos remained in the soil in the same form and location it had been in before it was uncovered, there would be no physical change to the Pollutant itself. So long as the asbestos remained in the soil in the same form and location, it would be difficult to describe that situation as involving the emission, discharge, dispersal, migration, or escape of a Pollutant.

20. [81]

    On the other hand, it might be possible to describe uncovering asbestos as the “release” of a Pollutant, in the sense that asbestos which had previously been contained by covering soil was now uncontained. To that extent, although the construction activity would not have changed the physical form or location of the Pollutant, it would have changed a physical circumstance of the Pollutant that is relevant to its risk to health. Particularly to the extent that the asbestos was in the form of fines or otherwise friable, it would be more dangerous once uncovered than it had been before, because of the greater risk that asbestos fibres would get into the air. That is implicit in the report of Ms Walker, tendered by Liberty, which referred to the wet conditions on site. She opined at par 18:

21. [82]

    Once asbestos is exposed to the air, there may be a risk that dust and airborne fine particles such as asbestos fibres will be generated. That being so, it would be consistent with what is arguably one of the purposes of the definition of Pollution Conditions (to capture conduct or processes that make existing pollution worse) for Pollution Conditions to include exposing asbestos to the air.

22. [83]

    Tending against that conclusion is the submission made on behalf of Liberty that the word “release” should be understood in the context of the words that surround it. Those words generally involve some change in the form or location of the Pollutant. On this view, more is required than unscrewing the lid on a bottle containing a Pollutant; it is necessary that the contents in some way emerge.

23. [84]

    Liberty also submits that if excavation itself amounts to a Pollution Condition (on the mere basis that it exposes asbestos), that would result in an extraordinary conclusion, namely, that “we have effectively insured Seymour Whyte for the cost of any excavations to be carried out in contaminated soil”: Tcpt, 30.33-4. I do not accept that construing the definition of Pollution Conditions as extending to exposing asbestos would have the sweeping consequence that Liberty asserts. Liberty’s liability to cover Loss is confined to Loss “arising from Pollution Conditions” (as to which, see below). Let it be assumed in Seymour’s favour that merely excavating contaminated soil so as to expose asbestos to the air caused Pollution Conditions. On that assumption, if Seymour’s excavation unexpectedly exposed asbestos on site, such that it had to take steps to render the site safe (e.g., by containing the exposed asbestos), the costs of doing so might fairly be described as “arising from” the excavation. But the costs of excavating the rest of the soil safely in light of the presence of pre-existing asbestos contamination would not be costs “arising from” the initial excavation that exposed the asbestos. (To the extent that those costs “arose from” anything, it would be the fact that Seymour was contracted to excavate land that was contaminated with asbestos.)

24. [85]

    Although Liberty’s submission about the consequences of Seymour’s construction should not be accepted, the question whether Seymour’s construction is correct remains finely balanced.

25. [86]

    The better view is that the mere excavation of contaminated soil so as to expose asbestos to the air does not itself cause “the … release … of Pollutants” or otherwise engaged the definition of Pollution Conditions. That is the better view on the ordinary meaning of the language of the definition read as a whole. It is also consistent with the operation of the insuring clause, which requires the Pollution Conditions to be caused by the insured’s activities. As noted above, the circumstance to which the Policy responds is not Loss arising from the presence or discovery of Pollutants. The language of the Policy is not directed to the cost of dealing with unexpected conditions. What the Policy responds to is not pollution; it is polluting.

26. [87]

    The primary way in which Seymour puts its case as to Loss is that the Notice issued on 17 August 2017 arose from Pollution Conditions caused by Seymour’s operations; that the Notice required Seymour to do various things, and thus to become legally obliged to incur the cost of doing them; and that those costs therefore arose from the Pollution Conditions.

27. [88]

    It is convenient to address this question separately for both sets of identified Pollution Conditions. But it should be noted at the outset that even if the Notice “arose from” a particular circumstance, in the sense that that circumstance was the thing which immediately prompted the issuing of the Notice, it would not necessarily follow that everything that the Notice then required Seymour to do “arose from” the circumstance which prompted the Notice.

28. [89]

    The first question is whether any Loss arose from the admitted Pollution Conditions caused by Seymour’s operations, namely the release of asbestos fibres into the air before 17 August 2017. The first step in Seymour’s argument requires that the Notice itself have arisen from those Pollution Conditions. The argument fails at this first hurdle.

29. [90]

    As Liberty submitted, there was no suggestion in the Notice, which was dated 17 August 2017, that as at that date asbestos fibres had in fact been released into the air, still less that the Notice was issued in response to that having occurred. The other contemporaneous evidence does not suggest otherwise. The report given by Bureau Veritas on 16 August 2017 stated: “The inspection confirmed that there is no visible asbestos residue on the surface soils and haul road within the above areas.” The report given by Bureau Veritas on 17 August 2017 stated that although asbestos cement sheet debris was located along the north side of the Yarra River construction area, “No friable asbestos containing materials were observed.”

30. [91]

    The Notice itself identified what led to its being issued. The WorkSafe inspector stated: “I reasonably believe that SEYMOUR WHYTE CONSTRUCTIONS PTY LTD is in contravention of Section 21(1) and 21(2)(a) of the Occupational Health and Safety Act 2004”. The “Basis for this belief” was then stated:

31. [92]

    Stopping there, it cannot sensibly be said that the issuing of the Notice itself arose from any Pollution Conditions consisting of the release of asbestos fibres into the air before 17 August 2017. Nor was the other improvement notice issued on the same day, directed to asbestos containing piping, prompted by the release of any asbestos fibres into the air.

32. [93]

    Nor was there any such connection between those pre-17 August Pollution Conditions and what the Notice required Seymour to do. The Notice gave the following “Directions as to the measures to be taken to remedy the contravention”:

33. [94]

    The Notice also gave the following “Interim directions or conditions on the carrying on of an activity(s) to which this notice relates”:

34. [95]

    None of those matters was directed to the fact that asbestos fibres had been released into the air before 17 August 2017. They were not measures directed to remedying the consequences of those Pollution Conditions. They were instead directed to requiring Seymour to provide a safe system of work, into the future.

35. [96]

    Accordingly, Seymour’s submission that the Notice “arose from” the admitted Pollution Conditions consisting of the release of asbestos fibres into the air before 17 August 2017 should be rejected. Not only was it not suggested in the Notice that any asbestos fibres had been released into the air, there is no reason to think that the issuing of the Notice was the consequence of the release into the air of asbestos fibres. Even if one accepts that the causal threshold conveyed by the words in the insuring clause (“arising from Pollution Conditions”) is relatively undemanding, that threshold is not met with respect to the case based on the release of asbestos fibres into the air. That is to say, the Notice itself did not arise from those Pollution Conditions. That being so, any costs flowing from the Notice also did not arise from those Pollution Conditions.

36. [97]

    As discussed above, the transportation and stockpiling of asbestos-contaminated soil before 17 August 2017 caused Pollution Conditions.

37. [98]

    Seymour’s claim is that it incurred substantial costs in dealing with asbestos-contaminated soil; that the Notice directed Seymour to take steps which made Seymour become legally obliged to pay those costs; and that those costs arose from the Pollution Conditions because the Notice arose from the Pollution Conditions.

38. [99]

    It is true that the Notice referred to those Pollution Conditions: an “incident” involving the relocation of excavated asbestos-contaminated soil stockpiles. In a loose sense, that “incident” might be seen as the first step in a series of events (including someone informing WorkSafe Victoria of the incident, the WorkSafe inspectors attending the site, and the inspectors deciding to exercise a statutory power) that led to the issuing of a notice.

39. [100]

    However, it does not follow from the fact that those Pollution Conditions prompted the issuing of a notice that what the Notice specifically required Seymour to do “arose from” the Pollution Conditions — still less that Seymour’s legal obligation to pay the amounts it claims as Loss “arose from” those Pollution Conditions.

40. [101]

    In order to answer the question posed by the insuring clause, it is necessary to consider specifically what the Notice required Seymour to do, and to determine what relationship each requirement bore to the Pollution Conditions.

41. [102]

    One matter that the Notice required, on an interim basis, was that Seymour cease “further works … on the North abutment work zone” pending implementation of an asbestos management plan. Plainly enough, that interim direction “arose from” the “incident” involving the relocation of the stockpiles. But the Clean-up Costs Seymour claims are not the costs of not doing work.

42. [103]

    Importantly, beyond that, the Notice was not concerned with what had happened prior to 17 August 2017. The problem to which the Notice was directed was not remedying the Pollution Conditions. As the Notice itself made clear, its concern was instead with the future conduct of Seymour’s operations. The problem was that there was asbestos in the soil; that Seymour intended to disturb that soil “by future excavation work”; yet there was no safe system of work yet in place for doing so. The absence of a safe system was the specific thing Seymour was directed to remedy: to “provide a safe system of work associated with the management and removal of asbestos contaminated soils”.

43. [104]

    The Notice suggested potential means of compliance that were all directed to construction activities in the future, whatever they might be: the “asbestos contaminated soil that will be disturbed by future excavation work”; “an asbestos management plan for the remainder of the works”; a licensed asbestos removalist “to remove asbestos contaminated soils”; and “a procedure for dealing with the inadvertent discovery of asbestos contamination in the soil”.

44. [105]

    None of the suggested means of compliance was directed to cleaning up or remediating, or otherwise addressing, the “incident” involving excavation and relocation of contaminated soil before 17 August 2017. The suggested means of compliance were not directed to the existing stockpiles. Although the third bullet point referred to engaging a licensed asbestos removalist “to remove asbestos contaminated soils”, read in the context of what preceded and followed it, that was not a requirement that the stockpiles be removed, still less that all asbestos contaminated soils across the whole site be removed. It was instead a suggestion that, to the extent asbestos contaminated soils were to be removed as part of the construction works, those soils should be removed by a licensed asbestos removalist.

45. [106]

    The question posed by the insuring clause is whether the claimed Loss arose from the Pollution Conditions, being the transportation and stockpiling of asbestos-contaminated soil before 17 August 2017. Even treating the Notice as imposing a standalone requirement (i.e., putting aside the operation of any statute or the Contract with VicRoads), the requirement was to provide a safe system for future construction work involving the disturbance of asbestos-contaminated soil. That future requirement did not depend on whether Seymour had excavated or relocated contaminated soil in the past. Neither the requirement in the Notice to provide a safe system of work, nor Seymour’s costs of complying with that requirement, “arose from” the Pollution Conditions consisting of the transportation and stockpiling of asbestos-contaminated soil before 17 August 2017. The obligation to provide a safe system of work, and any costs incurred by Seymour in doing so, arose from the nature of the work itself: that it would involve excavating and relocating asbestos-contaminated soil.

46. [107]

    Thus, even on the assumption that the Notice imposed a standalone requirement on Seymour which caused it to “become[] legally obliged to pay” the substantial costs of dealing with asbestos-contaminated soil which it claimed as Clean-up Costs, Seymour has not established that that Loss arose from the Pollution Conditions consisting of Seymour’s having transported and stockpiled contaminated soil before 17 August 2017.

47. [108]

    That is sufficient to dispose of this aspect of the claim (that is, the claim based on costs incurred in complying with the Notice).

48. [109]

    But it would be highly artificial to treat the Notice as imposing a standalone requirement to provide a safe system of work. By s 21 of the OHS Act, Seymour was subject to a pre-existing free-standing requirement to provide, so far as was reasonably practicable, a system of work that was safe and without risks to health. The Notice was issued under s 111 of that same Act. The s 111 power to issue the Notice, described in the OHS Act as an “improvement notice”, was only engaged because of the reasonable suspicion of the WorkSafe Victoria inspector that Seymour “is in contravention of Section 21(1) and 21(2)(a)” of the OHS Act. The Notice did no more than require Seymour to comply with the existing and ongoing statutory obligation to provide a safe system of work in respect of its construction operations. Whether or not Seymour had transported or stockpiled asbestos-contaminated soil in the past was incapable of having any bearing on the existence of that statutory requirement. It is unreal to say that the obligation to provide a safe system of work arose (via the Notice) from Pollution Conditions caused by Seymour before 17 August 2017.

49. [110]

    It is still more unreal to describe any sums that Seymour became legally obliged to pay in providing a safe system of work as Loss “arising from” Pollution Conditions caused by Seymour before 17 August 2017. This is not a case where there were multiple proximate or “effective” causes of, for example, a particular loss — some covered and some not. (Cf. J.J. Lloyd Instruments Ltd. v Northern Star Insurance Co. Ltd. (The “Miss Jay Jay”) [1987] 1 Lloyd’s Law Reports 32 at 36-7 per Lawton LJ; 40-1 per Slade LJ (Croom-Johnson LJ agreeing); City Centre Cold Store Pty Limited v Preservative Skandia Insurance Limited (1985) 3 NSWLR 739 at 744-745.)

50. [111]

    In light of the way in which Seymour puts its case (that the Notice imposed a requirement on Seymour which in turn caused it to incur the alleged Loss), the question posed by the insuring clause is not whether a particular act caused a particular injury. It is, in the first instance, whether the ongoing requirement that Seymour provide a safe system of work arose from Pollution Conditions caused by the transportation and stockpiling of asbestos-contaminated soil before 17 August 2017. Given that s 21 of the OHS Act imposed an ongoing requirement that Seymour provide a safe system of work at all times, independently of whether Seymour had transported or stockpiled contaminated soil before 17 August 2017, and independently of the Notice, the conclusion is not available that Seymour “[became] legally obliged to pay for Loss arising from” those “Pollution Conditions”. To the extent that Seymour incurred costs in providing a safe system of work, it cannot sensibly be said that those were costs for which it became liable as a consequence of (that is, “arising from”) the Notice, still less as a consequence of the Pollution Conditions. The fact that Seymour had caused the Pollution Conditions made no material contribution to the fact that Seymour was obliged to provide a safe system of work. Section 21 would have required Seymour to provide the same safe system of work, and Seymour would have incurred the same costs of providing it, in any event.

51. [112]

    It is true that the excavation and relocation of contaminated soil before 17 August provided the occasion for WorkSafe Victoria to become aware that the soil was contaminated and that Seymour’s future operations would disturb that soil. But for the reasons given above, that is very different from saying that any costs which Seymour incurred after the Notice in putting in place a safe system of work for conducting future construction operations “arose from” the Pollution Conditions caused by the transportation and stockpiling of contaminated soil that had occurred before the Notice was issued.

52. [113]

    Any costs Seymour incurred in implementing a safe system of work to excavate and remove contaminated soil after 17 August 2017 thus did not “arise from” the Pollution Conditions caused by the transportation and stockpiling of contaminated soil before 17 August 2017.

53. [114]

    In the result, the substantial part of Seymour’s claim based on the Notice fails.

54. [115]

    However, a separate part of Seymour’s claim based on the Notice was for the sum of $252,502.16 (exclusive of GST), paid to Alphington Developments, with respect to what was described as “Pier One Northern Abutment Remediation of Asbestos Stockpiles”. As Mr Hoops said at par 32 of his affidavit, this claim concerned:

55. [116]

    That being so, whatever costs were charged by Alphington Development to Seymour, those costs were not Seymour’s costs of providing a safe system of work as directed in the Notice. This aspect of Seymour’s claim cannot be supported based on the Notice.

56. [117]

    On the findings above, Seymour’s “Covered Operations” (i.e., excavating and transporting contaminated soil and stockpiling it on the Alphington Site) caused Pollution Conditions. The question is whether the $252,502.16 which Seymour paid Alphington Developments was a “sum[] the Insured [became] legally obliged to pay for Loss arising from” those Pollution Conditions. That raises three issues:

    1. (1)

       On what basis did Seymour become liable to pay that sum?

    2. (2)

       Was that sum “Loss”?

    3. (3)

       Did the Loss arise from the Pollution Conditions?

57. [118]

    It is not clear on what basis Seymour became liable to pay that sum. The bases of liability identified in the Commercial List Statement were confined to the Contract with VicRoads and the Notice. It is difficult to see how the Contract with VicRoads could create a liability in Seymour to Alphington Developments. And, as noted above, the Notice did not require Seymour to do anything in relation to the stockpile on the Alphington Site.

58. [119]

    As noted above, Glenville, as developer, consented to the stockpiling of material on the Alphington Site. The circumstances in which that consent was given are not explained in the agreed facts. Seymour submits that it was legally liable to pay for the costs of the removal of the contaminated stockpiles on the Alphington Site “by application of the principles of nuisance and/or trespass to land”. There is no evidence or agreed fact to establish that proposition. But it is not an improbable one, in circumstances in which (at least absent some kind of contract) it is unlikely that that Glenville consented to the stockpiling of contaminated material.

59. [120]

    However, even making that assumption in Seymour’s favour and putting to one side that such a basis of liability was not pleaded, Seymour has not established that a liability of that kind was “Loss” within the meaning of the Policy.

60. [121]

    The relevant category of Loss is “Clean-up Costs”. Central to the definition of Clean-up Costs are the qualifications “to the extent required by Environmental Laws” and “duly acting under the authority of Environmental Laws”. Although the definition also refers to “costs … that have actually been incurred by third parties”, in the context, such costs must be qualified by the words which precede them (“costs … to the extent required by Environmental Laws”) and the words omitted by the ellipses (“duly acting under the authority of Environmental Laws”). Otherwise the definition of Clean-up Costs would be at large. The difficulty for Seymour is that “Environmental Laws” are defined to mean “any legislatively or administratively enacted law, rule, regulation or order applicable within the jurisdiction …” Any liability Seymour may have had in tort at common law stands outside that definition. It follows that any such obligation to pay is not “for Loss”.

61. [122]

    However, if such a liability had been Loss it seems clear that it arose from Pollution Conditions caused by Seymour’s operations.

62. [123]

    In the result, Seymour has not established that the sum of the $252,502.16 falls within the insuring clause.

63. [124]

    It is important to note that the position might have been different if, for example, the Environment Protection Authority had issued a remedial environmental action notice that required Seymour to clean up the asbestos-contaminated stockpiles including that on the Alphington Site. The costs of complying with such a notice would have fallen squarely within the definition of Clean-up Costs. But there is no suggestion that any such notice was issued.

64. [125]

    I note one final matter in relation to Seymour’s claim based on the Notice. As discussed above, the “incident” involving the transportation and stockpiling of contaminated material appears to have prompted the issuing of the Notice. To that extent, the fact of the Notice itself (as opposed to the various things the Notice required Seymour to do) might fairly be said to have arisen from Pollution Conditions caused by Seymour’s operations.

65. [126]

    On its face, the Notice gave an interim direction to cease works on the North abutment work zone and directed the implementation of a safe system of work. The first step in complying with the Notice was understanding what those directions required. As will be seen below, it appears that Seymour incurred at least some legal costs in obtaining advice on that subject. The need to take legal advice about the Notice followed directly from the fact that it was issued, such that the costs of that advice may fairly be said to have arisen from the Pollution Conditions. The same is true with respect to the second notice issued by WorkSafe Victoria on 17 August 2017.

66. [127]

    Such costs are within the definition of “Loss”, which includes “Clean-up Costs”. “Clean-up Costs” as defined “includ[e] reasonable and necessary legal expense incurred … to investigate, test, neutralise, remove, remediate, monitor or dispose of Pollutants to the extent required by Environmental Laws”. Investigation, testing, etc., are all aspects of complying with Environmental Laws, which are defined to include “any … administratively enacted … order”. The Notice was such an order. What the definition of Clean-up Costs thus contemplates is that legal costs reasonably and necessarily incurred in understanding what is required to comply with such a Notice are a type of “Loss”.

67. [128]

    On that basis, Seymour’s costs of taking legal advice in order to determine what the Notice required were Loss arising from Pollution Conditions caused by Seymour’s Covered Operations within the meaning of the insuring clause. Seymour was in principle entitled to be paid those costs by Liberty. Such costs are to be distinguished from legal costs incurred in the course of actually complying with the Notice (that is, in doing the things the Notice required). The question whether the latter costs are covered by the Policy would depend on whether the costs of complying with the Notice were themselves covered. Here, it has been determined that they were not.

68. [129]

    Although there was a dispute about quantification of Seymour’s legal costs (see below), I did not understand any point to be taken that Liberty could not breach its contract in that respect in the absence of a properly quantified demand.

69. [130]

    I understood Seymour to advance an alternative case based on costs incurred arising not from the Notice, but from the operation of the OHS Act or statutory environmental laws. That case appears to stand outside the basis on which Seymour alleged in the Commercial List Statement that it became legally obliged to pay for Loss. But the argument may be addressed on the merits.

70. [131]

    The difficulty with this formulation of the case is that in order to come within the insuring clause, it remains necessary to show that the Loss arose from Pollution Conditions caused by Seymour’s operations. The s 21 requirement to take the steps necessary to provide a safe system of work arose not from the escape of asbestos fibres into the air or from the transportation or stockpiling of contaminated soil before 17 August 2017. Instead, the obligation to take those steps arose from a combination of s 21, the presence of asbestos in the soil, and the fact that Seymour was conducting construction operations involving excavation of a large amount of that soil. That obligation was completely independent of the two identified Pollution Conditions.

71. [132]

    To the extent that Seymour submitted that the mere excavation of contaminated soil exposed asbestos so as to cause Pollution Conditions for the purposes of the Policy, I have rejected that submission above.

72. [133]

    One final point should be noted as to liability. The insuring clause requires that the Loss claimed be referable to Pollution Conditions caused by the insured’s Covered Operations. The Pollution Conditions must have already happened. The Policy does not cover costs of avoiding causing Pollution Conditions which have not yet occurred. That is consistent with exclusion 7, which provides that the Policy does not apply to “Loss arising from any Responsible Insured’s intentional, wilful or deliberate non-compliance with any statute …” etc. “Responsible Insured” as defined includes the manager or supervisor of any insured responsible for environmental affairs, control or compliance.

Damages

1. [134]

   In light of the conclusions reached above as to liability, the question of damages does not arise. However, in the interests of completeness I will state my conclusions on two issues on which the parties were not in agreement.

2. [135]

   Questions of quantum were largely agreed, save for those two matters. The first was Seymour’s claim for $84,626.58 (exclusive of GST) (Tcpt, 17 November 2025, 22.20) in legal costs incurred in obtaining legal advice from K & L Gates, solicitors, said to come within the definition of “Clean-up Costs” (which, as noted above, refers to “reasonable and necessary legal expense incurred”). The second was Seymour’s claim, in addition to costs paid to sub-contractors, for an amount on account of corporate management and administration costs; that is, overhead. I was informed in the course of argument that the amount claimed was $244,248.49.

3. [136]

   For the reasons given above, I am satisfied that Seymour suffered Loss in the form of costs incurred in taking legal advice in order to determine what the two notices required, and that the Loss arose from Pollution Conditions caused by Seymour’s Covered Operations within the meaning of the insuring clause. Seymour was in principle entitled to be paid those costs by Liberty.

4. [137]

   K & L Gates’ tax invoices were in evidence. The narrative identifies with the usual (that is, variable) level of detail the activities that were performed. Some entries, for example, one on 23 August 2017 that involved “reviewing improvement notice and materials from regulator”, appear to relate largely or perhaps exclusively to advice as to what one or the other of the notices required. Others, such as an entry on 24 August 2017 which recorded “Review construction contract, review draft notices prepared by Seymour Whyte, amend notices prepared by Seymour Whyte, draft Notice of Delay, consider timeframes under the contract for key notices …”, appear to relate largely or perhaps exclusively to the Contract with VicRoads. However, many other entries appear capable of being relevant to both advice as to what one or the other of the notices required and performance of the Contract, which, it will be remembered, imposed environmental obligations on Seymour.

5. [138]

   Senior Counsel for Seymour submitted, and Senior Counsel for Liberty did not dispute, to the extent that the claim was one for damages, if the Court was satisfied that Seymour had suffered loss in the form of legal costs incurred, it would be for the Court to do the best it could to quantify the loss, taking a broad brush approach. Seymour nominated a discount of 10%. It was submitted for Liberty that the reduction would have to be far more radical than that. Liberty offered to provide a document identifying which of the entries could clearly be seen to relate to Clean-up Costs: Tcpt, 17 November 2025, 44.3-7. In reply, Senior Counsel for Seymour did not oppose that course, and indicated that quantum in this respect was “probably capable of being agreed if there is an indication that those type of legal costs which I think my learned friend accepted are recoverable”: Tcpt, 56.14-16.

6. [139]

   I will make directions for the parties to attempt to reach agreement on a figure, failing which they should provide short submissions as to the appropriate way to quantify the costs having regard to the evidence before the Court.

7. [140]

   Paragraphs 36, 37 and 38 of Mr Hoops’ affidavit are as follows:

8. [141]

   Objection was taken to the second sentence of par 36 and the whole of pars 37 and 38.

9. [142]

   There is a difficulty in the assertion in par 36 that the figure of “6% of revenue” “reflect[s] [Seymour’s] actual corporate costs of management and administration” (apparently, in the period in which the costs claimed as Loss under the Policy were incurred). The proposition that Seymour’s actual corporate costs of management and administration were equivalent to 6% of its revenue is in the nature of an opinion. Mr Hoops may well be in a position to have acquired sufficient specialised knowledge based on his training (he holds a Master of Business Administration degree) and experience (he is Seymour’s General Manager for the Southern Region) to express an opinion on this issue. But his qualifications are not the issue. The difficulty is that the reasoning process is obscure, raising a question whether it has been shown that the opinion is wholly or substantially based on Mr Hoops’ specialised knowledge: see Evidence Act 1995 (NSW), s 79(1).

10. [143]

    In the course of submissions, Senior Counsel for Seymour sought to explain how the 6% was derived by reference to two documents to which Mr Hoops refers. I understand the steps in the reasoning to be as follows.

    1. (1)

       Paragraph 37 of Mr Hoops’ affidavit refers to CH16, an audited financial report for Seymour, and CH17, which is described as “Overhead Calc for Chandler Claim”. No objection is taken to the audited financial report, CH16. The audited financial report includes a Statement of Profit & Loss and Other Comprehensive Income for the period of 18 months ending on 31 December 2018 which shows a loss of $1,517,000.

    2. (2)

       The P&L page of the audited financial statements is reproduced in CH17 (to the whole of which objection is taken). CH17 then includes a spreadsheet headed “December 2018 G/L Numbers 18 mths”. I was informed from the bar table without objection that this is a copy or an extract of a business record, being the General Ledger. There is no direct evidence to that effect, but it may be inferred from the document itself. The final figure in the spreadsheet is a “Loss” of $1,516,268. The proposition appears to be that this figure corresponds with the figure in the audited 31 December 2018 P&L.

    3. (3)

       CH17 next includes a spreadsheet headed “Summary of Overheads pulled from Dec 18 - 18 months - 1 July 2017 to 31 December 2018”, which concludes with a total of $46,570,256. I was informed from the bar table that the figures in this spreadsheet are extracted from (that is, a subset of) the General Ledger spreadsheet; again there is no evidence to that effect. The line item numbers and the figures appear to correspond to those in the General Ledger spreadsheet. I note, however, that how the line items were chosen to be extracted is not explained; still less is it the subject of evidence. Nor is the person who decided which line items to extract identified. How some of the line items, such as “254 Design and Construct $4,491,677”, concern activities relevant to managing or administering the subcontracts which gave rise to the Clean-up Costs claimed here is not obvious.

    4. (4)

       The final entry in the “Summary of Overheads” spreadsheet is: “Revenue Total 781,549,767 6.0%”. The figure of $46,570,256 (said to represent the total for overheads in the 18 months to 31 December 2018) is 5.956% of $781,549,767. But the source of the figure of $781,549,767 for revenue is obscure. The figure does not appear to correspond with any of the figures elsewhere in CH17. The figure for revenue in the audited 31 December 2018 P&L (itself reproduced in CH17) is instead $848,419,000.

    5. (5)

       Mr Hoops deposes at par 38 that CH17 “extracts from the Financial Report [i.e., CH16] overheads totalling $781,549,767, comprising 6% of [Seymour] revenue”. So expressed, that statement appears to be in error: it is the revenue, rather than the overheads, which total $781,549,767. But to the extent that this is to be taken as evidence that the figure for revenue of $781,549,767 was extracted from the audited Financial Report, how the figure was extracted is not explained.

11. [144]

    In the result, the proposition in par 36 that overheads were equivalent to 6% of revenue is an opinion for which pars 37 and 38 should be read as providing, by reference to CH16 and CH17, calculations. However, important integers in the calculations, including the selection of the line items in the General Ledger from which the total figure for overheads of $46,570,256 is derived and the source of the figure for revenue of $781,549,767, are not satisfactorily explained or established. Some elements in the total for overheads appear to bear no relationship to the administration and management of the subcontracts relevant to the Clean-up Costs claimed. Why the relevant percentage is one calculated upon revenue, as opposed to costs, is also not explained, somewhat surprisingly given that the issue is Seymour’s costs of managing and administering subcontracts.

12. [145]

    The reference in Mr Hoops’ par 36 to “a further 1% of revenue as fee to [Seymour’s] parent company” (to which objection is taken) anticipates the evidence given at par 39. There Mr Hoops deposes that Seymour pays Vinci Construction France a fee charged at 1% of Seymour’s annual revenue for “[u]tilisation of the Vinci intangibles”, “including brands and trademarks”. It is not apparent in what way any Clean-up Costs incurred involved the utilisation of Vinci’s brands and trademarks, given that the lion’s share of the work was done by a specialist licensed sub-contractor, AAH (pars 24 and 28 of Mr Hoops’ affidavit). It is thus unclear how the 1% fee is properly characterised as a Clean-up Cost.

13. [146]

    No objection was taken to the sentence which follows, which appears to state that 7% of revenue (i.e., 6% +1%) “is equivalent to a total mark up on costs of a total of 7.53%”. Senior Counsel for Seymour submitted: “There is no revenue here, which is why it had to be converted into a mark-up on costs, so it is 7.35% [sic — 7.53%] mark-up on costs”: Tcpt, 17 November 2025, 27.34-5. While there is obvious sense in the basic point, it calls into question the premise of the calculations in CH17, which proceed by reference to revenue. In any event, the basis for the opinion that the two numbers (7% of revenue and 7.53% of costs) are “equivalent” is not stated. Presumably, it involved some kind of calculation by reference to figures in Seymour’s accounts. It does not appear to be a result of the calculations in CH17. Nevertheless, no objection was taken to this sentence.

14. [147]

    The final sentence of par 36 identifies the “amount claimed in respect of [Seymour’s] margin for the corporate management and administration office costs on the ACM removal works” as the figure of $318,044.44. No objection is taken to this sentence. But it follows from the analysis above that the process of reasoning (including at least some of the calculations) which led to that figure is somewhat obscure.

15. [148]

    In any event, $318,044.44 is not in fact the amount claimed. I was informed from the bar table as follows (Tcpt, 26.30-6):

16. [149]

    That is a reference to par 33 of the statement of agreed facts, which provides figures for four items of costs incurred in carrying out the relevant work, totalling $3,243,672. 7.53% of that figure is $244,248.

17. [150]

    All that being so, with some hesitation, I rule as follows with respect to the affidavit itself, remembering that the grounds of objection to the second sentence of par 36 and the whole of pars 37 and 38 of the affidavit are opinion/conclusion.

    1. (1)

       As to the second sentence of par 36, I admit the sentence as evidence explaining the structure of the claim for overhead. But I reject the sentence as inadmissible opinion to prove the existence of the fact about which the opinion was expressed, namely, that Seymour’s actual corporate costs of management and administration were equivalent to 6% of revenue in the relevant period: s 76(1).

    2. (2)

       As to par 37, I again admit the paragraph as evidence explaining the structure of the claim for overhead. But I reject the paragraph as inadmissible opinion to prove (a) that Seymour’s actual corporate costs of management and administration were equivalent to 6% of revenue in the relevant period; or (b) that those costs were derived from the audited financial report, being CH16.

    3. (3)

       As to par 38, I reject the paragraph. It plainly contains an error, and attempting to correct the error is speculative. In any event, if the paragraph were to be taken as expressing an opinion that the figure for revenue of $781,549,767 was extracted from the audited Financial Report, I would reject the paragraph as inadmissible to prove that fact. If the paragraph were to be taken as expressing an opinion that the figure for overheads was 6% of $781,549,767, I would again reject the paragraph as inadmissible to prove that fact.

18. [151]

    As to CH17 (i.e. tab 12 of the Court Book), the objections were hearsay and opinion.

    1. (1)

       To the extent that par 37 in effect adopts CH17 for this purpose, I admit the document as evidence explaining the structure of the claim for overhead (and in particular the calculations). To that extent the hearsay objection falls away.

    2. (2)

       To the extent that part of CH17 is put forward for the hearsay purpose of establishing the contents of the General Ledger, I admit the document on the basis that I accept that the General Ledger itself is a business record for the purposes of s 69 of the Evidence Act; that the relevant part of CH17 is, or purports to be, a copy of the General Ledger; that that part of CH17 has been, or purports to have been, produced by a device that reproduces the contents of documents (i.e., a computer); and that that part of CH17 is identical to the General Ledger in all relevant respects: see ss 47(2) and 48(1)(b).

    3. (3)

       Otherwise, to the extent that Seymour seeks to rely on CH17 as itself containing any opinions, I reject the document as inadmissible to prove the existence of any fact about which the opinion was expressed. Those facts include:

19. [152]

    The weight to be given to that evidence, given the very limited basis on which it has been admitted, is not great. In particular, I do not accept that the figure of $244,248, which depends on the figure for overheads of 7.53% of costs, correctly identifies Seymour’s costs incurred in managing and administering the works at issue.

20. [153]

    Nevertheless, I accept that Seymour incurred some costs of that nature, and that this is a situation in which the Court would be required to do the best that it could in awarding damages: see, recently, Birch v Bunbury [2025] NSWCA 244 at [24] per Ball JA (Mitchelmore and McHugh JJA agreeing). If it had been necessary to do so, I would have discounted the figure claimed by a significant margin. But I would have sought further submissions from the parties before doing so, including as to whether a rational foundation for at least part of that exercise would be by reference to the line items in the overheads spreadsheet contained within CH17.

21. [154]

    It was not in dispute that the calculation of interest at the prescribed rates would be a matter to be determined following judgment.

Conclusion and orders

1. [155]

   The orders of the Court are as follows:

   1. (1)

      Direct the parties to attempt to agree, by 2 February 2026, (i) the quantum of the plaintiff’s costs referable to taking legal advice as to what the “Improvement Notices” issued to the plaintiff by WorkSafe Victoria on 17 August 2017 required, and (ii) any interest on those amounts; failing which the parties are directed to file and serve written submissions on those issues not exceeding 3 pages in length as follows:

   2. (2)

      Direct the parties to file and serve written submissions not exceeding 3 pages in length as to the costs of these proceedings as follows:

   3. (3)

      Subject to any application, the issues arising pursuant to orders 1 and 2 above be determined on the papers.

   4. (4)

      Save in respect of the issues arising pursuant to orders 1 and 2 above, the summons is dismissed.