FAI Properties P/L v MLC Life Ltd
[1994] FCA 686
•20 Sep 1994
JUDGMENT No. 686 9
THE FEDERAL COURT OF AUSTRALIA ) 1
WTRALIAN CAPITAL TERRITORY 1 No. ACT G 16 of 1992
ICT REGISTRY ) 'DIVISION
BETWEEN: FA1 PROPERTIES PTY LIMITED
Applicant
AND: MLC LIFE LIMITED
Third respondent
THE COMMONWEALTH OF AUSTRALIA
Fourth respondent
MINUTE OF ORDER
JuDW MAKING ORDER Neaves J . RECEIVED
OF ORDER 20 September 1994 2 3 SEP 1994
=RAL COURT OF
E MADE Canberra AUBTRAUA PRlNClPU
Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. 1. Pursuant to Order 20, rule 2 of the Federal Court Rules, the proceeding against the third and fourth respondents be dismissed.
2. The applicant pay the costs of the third and fourth respondents of and incidental to the proceeding, including any reserved costs.
\
JN THE FEDERAL COURT OF AUSTRALIA
) )
D T R A L I A N CAPITAL TERRITORY )
) No. ACT G 16 of 1992 PISTRICT REGISTRY j 1 BNERAL DIVISION ) ' BETWEEN: FA1 PROPERTIES PTY LIMITED
Applicant
AND: MLC LIFE LIMITED
Third respondent
THE COMMONWEALTH OF AUSTRALIA
Fourth respondent
GORlry: Neaves J.
m: 20 September 1994
REASONS FOR JUDGMENT
| , .; ;-. | ,('l * |
. .
| , .i | , ' - | 1 Before the Court are two motions. | One is a motion |
I ( bv HfX'fA&e Limited ("MLC") for orders that the proceeding
| h , | , abainst ' &C, (the third respondent to the proceeding) be dismissed either wholly or in so far as it claims damages pursuant to 8.82 of the Trade Practices Act 1974 (Cth) or, | alternatively, that there be summary judgment for MLC against | the applicant in so far as the proceeding claims damages for |
| breach of duty and/or negligence against MLC. The other is a motion by the Commonwealth of Australia ("the Commonwealth") for orders that the proceeding against the Commonwealth (the fourth respondent to the proceeding) be dismissed or, alternatively, that there be summary judgment for the Commonwealth or, in the further alternative, that the further amended statement of claim filed on 26 August 1993 be struck | |||
| out so far as it seeks relief against the Commonwealth. Consequential orders are also sought. | |||
| The proceeding in which the motions are made was commenced by the filing of an application on behalf of FA1 Properties Pty Limited ("FA1 Properties") on 8 May 1992. The respondents named in the application were Richard Stanton (NSW) Pty-Limited as first respondent, JLW (ACT) Pty Limited as second respondent, MLC as third respondent and the Commonwealth as fourth respondent. On 29 July 1993, the proceeding was wholly discontinued as against the first and second respondents and in what follows I will refer only to the claims made against MLC and the Commonwealth. Those respondents continue to be referred to in the proceeding as the third and fourth respondents respectively. | |||
| The application filed on 8 May 1992, which was accompanied by a statement of claim, states that FA1 | |||
| |||
| and/or negligence". On 12 May 1992, an amended statement of claim was filed, that document containing paragraphs in support of a claim against MLC for damages "for breach of duty and/or negligence" although such relief was not sought in the application. On 15 June 1992, an amended application was filed, the effect of the amendment being to add a claim against MLC for damages "for breach of duty and/or negligence". It is also to be noted that, although the application and the amended application include a claim against the Commonwealth for damages under the Trade Practices Act, such a claim is not, in fact, being pursued. | |||
| The proceeding arises out of the purchase by FA1 Properties from MLC of the unexpired residue of the Crown lease of csrtain land which has a frontage to London Circuit, Canberra City, Australian Capital Territory and on which is erected a building which, at the time of the purchase, was known as Qantas House. The purchase was effected by the exchange of contracts on 3 June 1986, settlement taking place on 4 July 1986. | |||
| It is unnecessary for present purposes to trace the tortuous path which the proceeding has followed. Suffice it to note that the further amended statement of claim which is the subject of the motions at present before the Court is the | |||
| |||
| In support of the motion on its behalf, MLC relies on two affidavits .%worn by Graeme Edward James Johnson to which various documents are annexed. No additional material has been put before the Court on behalf of the Commonwealth. An affidavit sworn by Robert Scott Smith is relied upon by FA1 Properties. | |||
| I shall deal first with the motion on behalf of MLC in so far as it seeks an order dismissing the proceeding as against it. That order is sought under Order 20, rule 2 of the Federal Court Rules which provides: |
"2. (1) Where in any proceeding it appears to the Court that in relation to the proceeding generally or in relation to any claim for relief in the proceeding:
-(a) no reasonable cause of action is disclosed; (b) the proceeding is frivolous or vexatious; or
(c) the proceeding is an abuse of the process of the Court;
the Court may order that the proceeding be stayed or dismissed generally or in relation to any claim for relief in the proceeding.
(2) The Court may receive evidence on the hearing of an application for an order under subrule (l)."
The further amended statement of claim alleges that
MLC, a trading corporation within the meaning of the TradePractices Act, in trade or commerce, by making certain
House, engaged in conduct that was misleading or deceptive or representations to FA1 Properties as to the absence of asbestos or asbestos material in the building known as Qantas was likely to mislead or deceive and thus in contravention of 6.52 of the Trade Practices Act and falsely represented the characteristics of Qantas House in contravention of s.53A of that Act. The conduct relied upon is alleged to have been in contravention of 66.52 and 53A of the Trade Practices Act by reason of the circumstance that there was "extensive asbestos and asbestos material in Qantas House in addition to the asbestos and asbestos material referred to in paragraphs 4 and 5 " of the further amended statement of claim (par.9). The
particulars appended to par.9 refer, inter alia, to asbestos being located on levels 7 - 10 and the ground floor. The further amended statement of claim alleges (par.8) that, acting and relying on those representations and induced thereby, FA1 Properties entered into the purchase agreement. It is further alleged (par. 12) that, as a consequence of the conduct of MLC, FA1 Properties suffered loss and damage particularised as being "the difference in value between Qantas House purchased as represented and Qantas House with extensive asbestos and asbestos material in addition to the areas represented to FA1 Properties".
The representation relied upon is set out in par.6 of the further amended statement of claim in the following terms :
"6. By its conduct referred to in paragraphs 4 and 5 MLC
referred to therein there was no other asbestos or
asbestos material in Qantas House.apart from the asbestos and asbestos material represented to, and/or advised, FA1 Properties that PARTICULARS Such representation is implied from the representations and advice referred to in paragraphs 4 and 5."
Paragraphs 4 and 5 of the further amended statement
of claim read:
"4. On or about 1 May 1986 MLC represented to, and/or advised, FA1 Properties that:
(a)
all asbestos material approved by the Department of Territories for removal from level 10 Qantas House and as indicated on approved plans A/003 and A003/A had, where practicable, been removed in accordance with the requirements of the Department's Asbestos
Removal Manual ; (b)
those areas where removal was not practicable had been recorded on plan and placed on Departmental File for future reference.
PARTICULARS
The representations and advice were in writing and contained in documents provided to FA1 Properties by MLC under cover of its letter dated 1 May, 1986.
Copies of these documents are in the possession of the solicitors for FA1 Properties at whose offices the same may be inspected during normal office hours by appointment.
5. Further, on or about 8 May 1986 MLC represented to, and/or advised, FA1 Properties that:
(a)
all asbestos material approved by the Department of Territories for removal from Level 10 Qantas House and as indicated on approved plans A/003 and A003/A had, where practicable, been removed in accordance with the requirements of the Department's Asbestos Removal Manual;
(b)
those areas where removal was not practicable had been recorded on plan and placed on Department File for future reference.
(c)
a Final Inspection Record of the Department of Territories stated that inspection of Level 10 Qantas House indicated that the work referred to in paragraph 4(a) appeared to be substantially complete in accordance with the approved plans and that all plant, equipment and asbestos waste had been removed from site;
(d)
Plant [sic] A/003 dated 7 May 1986 marked by the Building Section showed the areas of the 10th Floor of Qantas House where asbestos had not been removed and that those areas were as
follows : asbestos in hollow block wall to plant
room;
asbestos fibre inaccessible between laps
of ribs of roof decking over plant room;
. asbestos to beam between brickwork and fascia (near tank room); asbestos sprayed to roof deck between
exhaust duct and deck.PARTICULARS
The representations and advice were in writing and contained in documents provided to FA1 Properties by MLC under cover of its letter dated 8 May, 1986.
Copies of these documents are in the possession of the solicitors for FA1 Properties at whose offices the same may be inspected during normal office hours by appointment.
Copies of the letters dated 1 and 8 May 1986 referred to in the particulars set out in pars 4 and 5 of the further amended statement of claim, and the documents referred to therein, are in evidence, as is other correspondence to which it is necessary to refer in order to put the letters
dated 1 and 8 May 1986 in context. Mr Robert Scott Smith, Group Property Manager, FA1 Insurances Limited, forwarded to Richard Stanton (NSW) Pty Limited, a company carrying on business as estate agents, consultants, auctioneers and valuers, a letter dated 26 March
1986. The letter began:
"As you know, we have inspected the above property and have obtained from you information relating to the purchase of it. As a result of these enquiries, we are
keen to purchase the property and would be prepared to
pay a price of $9.775 million ($9,775,000)."
The reference to "the above property" is a reference to Qantas House. The letter then stated that the offer was conditional upon five matters, only part of the first of which is of significance for present purposes. The relevant part of the first of the conditions was in the following terms:
"1) That we gain a warranty or guarantee . . . . that the building now complies with the government guidelines in relation to asbestos removal."
By letter dated 21 April 1986, Landerer & Co., Solicitors for FA1 Insurance Group, commented upon the proposed contract for the purchase of the property. Paragraph
5 of the letter confirmed to Messrs Freehill, Hollingdale &
Page, Solicitors for MLC, that it was a term of the offer to purchase Qantas House "that the vendor give a warranty ... that the asbestos has been removed in accordance with such
be a reference to what the author of the letter referred to as
regulations". The reference to "such regulations" appears to
"fire regulations" but it may be assumed that the author was intending to refer to what had been referred to in the earlier letter as "the government guidelines in relation to asbestos
removal " . A letter dated 23 April 1986 with reference to Qantas House, addressed by Freehill, Hollingdale & Page to the Building Controller, Building Section, Department of Territories of the Commonwealth contained the following paragraph:
"We hereby authorise Messrs Sly & Russell or its agents to inspect the building file and obtain at its cost copies of plans and documents on the file as required by
them. "
Messrs Sly & Russell were the Canberra agents of Landerer &
CO.The letter dated 1 May 1986 referred to in the particulars set out in par.4 of the further amended statement of claim was a letter addressed by Freehill, Hollingdale h Page to Messrs Landerer h Co. The relevant part of that letter read:
"We refer to your letter to us dated 21 April, 1986.
Our client is unable to give the warranties referred to in paragraph 5 of your letter. Our client is able to supply the following letters which we hope satisfy your
client's requirement:- 1. Copy letter from Bowser Asphalt to United Asbestos Abatement dated 15 April, 1986.
2. Copy letter from the Department of Territories to Lend Lease Investments dated 16 April, 1986.
We intend to annex the two letters to the contract and include the following special condition.
'Annexed to this Agreement and marked with the letter "X" and "Y" respectively are a photocopy of a letter from Bowser Asphalt to United Asbetos Abatement dated 15 April, 1986 and a photocopy of a letter from the Department of Territories to Lend Lease Investments dated
16 April 1986. The Buyer agrees that it shall not be
entitled to make any objection requisition or claim for compensation in respect of any matter disclosed or referred to in the said annexures "X" and "Y". The
Seller makes no warranty or representation as to their accuracy, completeness or currency.'"
It may be interpolated that a special condition in those terms was not included 'in the contract for the purchase of the property.
The letter dated 15 April 1986 from Bowser Asphalt to United A~bestos Abatement dealt with another topic and is not relevant for present purposes. The letter dated 16 April
1986 from the Department of Territories to Lend Lease
Investments read:
"As requested by you on 7 April 1986 I confirm without prejudice that all asbestos material approved by the Department for removal from level 10 Qantas House and as indicated on approved plans A003 and A003/A has, where practicable, been removed in accordance with the requirements of the Departments Asbestos Removal Manual.
Those areas where removal was not practicable have been recorded on plan and placed on Departmental File for future reference."
The letter was signed by Glen Chambers who was apparently employed in the Asbestos Control Inspection - Building Section of the Department of Territories. Landerer & Co. forwarded to Messrs Sly & Russell, their agents, a letter dated 5 May 1986 containing the following paragraphs:
"Our client is concerned with relation to the asbestos position in the building. We enclose herewith letter which has been forwarded to us by the Vendor.
Would you please have your building consultant confirm in writing as to the asbestos position in the building. This is quite urgent."
On 5 May 1986 M r Robert Smith, Group Property
Manager, FA1 Insurances Limited conveyed a message to Landerer& CO. by. facsimile transmission, the relevant part of the
message reading:
"Reference is made to the letter dated 16 April 1986 to Lend Lease from the Department of Territories in relation to Mr Chambers of the Department, who informed me of the followingr-
1. Prior to any asbestos removal, application must be made to the Department by a licenced asbestos remover.
2. A permit is then issued in accordance with the plans
and specifications in the application.
3. The Department inspect the work during and after the removal programme.
Mr Chambers informs me that asbestos does remain in
various parts of the building predominantly where it poses no threat to tenants. These areas relate to plant room areas, a roof beam which is again in the plant room area and so on. He states the building thus does not jeopardize any lease renewals to Government Departments. This is basically the crux of the whole question and thus we would be satisfied from this aspect.
Mr Chambers stated however, that should we alter or renovate any of those areas where the asbestos remains
they would require removal then.I therefore believe that we should view the application lodged as in Item (l), the permit issued in Item (2) and any inspection reports as in Item (3), together with the plans referred to in Chambers' letter showing those areas where the removal was not practical. To this end, I have spoken with Ian Bailey of Lend Lease in Canberra direct and asked him to assemble the appropriate information and forward it to Freehills. Notwithstanding
this, would you also request Freehills to supply this
information."
Sly h Russell forwarded to Messrs Landerer h Co. a letter dated 6 May'1986 which relevantly read:
"We refer to your letter dated May 5, 1986.
In relation to the asbestos position in the building, Mr Mangion, Building Consultant, advises that he has discussed this matter with a technical officer of the Building Section, who advised that asbestos had been removed from the 10th floor a few years ago. As far as the rest of the building, there would be a small proportion of asbestos but this would only be damaging if there was a lot of disruption to the building. The Building Consultant further advises that no building in Canberra is completely clear of asbestos where it is mainly used for coating steel beams for fire control. However, Qantas House is mainly concrete."
The letter dated 8 May 1986 referred to in the particulars set out in par.5 of the further amended statement of claim was a letter addressed by Freehill, Hollingdale h Page to Messrs Landerer h Co. The letter referred to a
conference between the solicitors that had been held on 2 May 1986 and stated that various documents requested by Messrs Landerer & Co. were enclosed with the letter. Relevantly, the letter referred to the following documents as part of the
enclosures:
" 7 . Copy of documents from the building file (including plans) relating to the removal of asbestos and the certification for fire rating of beams and purlins including inspection records and permits to carry out building work."
An examination of those documents shows that none of them emanated from MLC or any one for whom it is or was responsible.
Reference should be made to other material on which
counsel for MLC relied.
-On 14 May 1986, the Group Property Manager (Mr R.
Smith) conveyed a message to Landerer & Co. which began:
"Thank you for your letter dated 10 May 1986, together with the letter from Freehills dated 8 May 1986 and copies of various documents."
The message then dealt with various items under the same item number as in the letter dated 8 May 1986 from Freehill, Hollingdale & Page. Dealing with item 7 in that letter, the message stated:
" 7 . Esbestoe removal & Fire ratinq
It appears that our interests are covered as well as they could be in this respect, and therefore we accept that our requirements in these areas are satisfied. This comment is made without having seen our building consultant's report, which I understand is forthcoming. I do not imagine he will say anything to the contrary, however in the remote case that he does, I would like to review our latter
comment. "
By letter dated 16 May 1986, Landerer & Co. forwarded to FA1 Insurances Limited a copy of a letter dated 14 May 1986 from Sly & Russell and the annexures named therein. The recipient of the letter was asked to give advice in relation to the report of the building consultant which was one of the documents annexed to the letter from Sly & Russell. The report of the building consultant, Joseph Mangion, which is dated 14 May 1986, contained the following:
"We confirm that we have examined the building file on the above address on the 2nd May, '86 at the Department of Territories, and that we have also examined the physical configeration of the property and we report our findings as follows.
J.S. Mangion [was] at the Department of Territories on the 8th May, '86 to have discussions with Mr Glen Chamber [sic] (asbestos section) regarding the 10th floor aebestos removal which was carried out.
Please find enclosed copy of a plan where asbestos is still present and inaccessible.
CONCLUSION
We found the structure layout of the building to be as close as possible to the approved plans and acceptable.
Copies of plans regarding asbestos layout, survey certificate have already [been] hand delivered to your office."
As previously mentioned, the contract of purchase was dated 3 June 1986. Clause 33 provided:
"33. (a) The Buyer acknowledges and declares that the Buyer has purchased the property hereby sold (including all improvements erected thereon and all the Seller's plant and equipment contained therein (including that listed in the Schedule) as a result of the Buyer's own inspection and enquiries and that the Buyer does not rely on any representation or warranty as to the state of the said property including (but without limiting the generality thereof) any engineering mechanical or electrical systems whether made or given by the Seller or otherwise;
(b)
without limiting the generality of subclause (a), the Buyer acknowledges and declares that the Buyer has entered lnto this contract as a result of the Buyer's own enquiries and that the Buyer does not rely upon any representation or warranty of any nature made by or on behalf of the Seller or its consultants and the Seller and Buyer agree that the whole of their agreement is contained in this Agreement for
Sale. "
The claim for damages under the Trade Practices Act as pleaded against MLC can succeed only if it can be inferred from the contents of the letters dated 1 and 8 May 1986 forwarded by Freehill, Hollingdale & Page to Landerer & Co. and the documents referred to therein that MLC was representing to FA1 Properties, in terms of par.6 of the further amended statement of claim, that "apart from the asbestos and asbestos material referred to therein there was
my opinion, that inference is not open upon a fair reading of no other asbestos or asbestos material in Qantas House". In those letters and documents, with the consequence that the claim against MLC for damages under the Trade Practices Act,
as pleaded, cannot succeed.Counsel for FA1 Properties submitted that, in the event that the Court should reach that conclusion, leave should be granted to allow a further amendment of the statement of claim to confine the representation alleged in
par.6 of the further amended statement of claim so as to confine it to a representation, arising from the conduct referred to in pars 4 and 5 of that document, that "apart from the asbestos and asbestos material referred to therein there was no other asbestos or asbestos material on level 10 of Qantas House" and a consequential amendment to par.9 of the further amended statement of claim to confine the allegation there made to an allegation that there was on level 10 asbestos and asbestos material in addition to that referred to in pars 4 and 5 of the further amended statement of claim.
In my opinion, leave should not be granted to FA1 Properties to further amend the further amended statement of claim in the manner suggested. To succeed on a claim in the proposed amended form it would be necessary to establish that the contents of the letters dated 1 and 8 May 1986 and the documents referred to therein were such as to support an inference that MLC was itself making a representation in the
material relied upon cannot support such an inference. terms alleged. In my opinion, it is beyond argument that the Clearly, all that was being done by MLC was to provide to FA1 a copy of a letter which an associated company had received from the Department of Territories and material which MLC had obtained from the files of that Department. There is nothing in the letters dated 1 and 8 May 1986 which would support the
conclusion that MLC was giving its imprimatur to what was stated in those documents. FA1 Properties could have been left in no doubt that MLC was not making any representation or giving any warranty as to the presence or otherwise of asbestos or asbestos material in the building.
The proceeding in so far as it claims against MLC damages under the Trade Practices Act is, therefore, dismissed.
The proceeding in so far as it claims against MLC damages for "breach of duty and/or negligence" must, in my opinion, suffer the same fate.
Paragraphs 13 and 14 of the further amended statement of claim are in the following terms:
"13. Prior to the date on which MLC and FA1 Properties
entered into the agreement and at all times material
to the agreement, MLC:
(a) knew that FA1 Properties was relying upon MLC's knowledge of Qantas House in relation to the extent of asbestos and asbestos material in it in determining whether to purchase Qantas House
and, if so, on what terms; (b) assumed the responsibility to MLC [sic] to give it accurate information in relation to the extent of asbetos and asbestos material in Qantas House. 14. In the premises MLC owed FA1 [Properties] a duty to exercise due care and skill in the giving of information to FA1 in relation to the extent of asbestos and asbestos material in Qantas House."
The reference in par.l3(b) to "MLC" is clearly an error. The reference should be to "FA1 Properties".
Paragraph 15 substantially repeats the language of par.4, the text of which is set out earlier in these reasons. The particulars appended to the paragraph are, however, somewhat different. The particulars appended to par.15 read:
"PARTICULARS
The representation and advice was in writing and contained in a letter dated 16 April 1986 from Glen Chambers, Asbestos Control Inspection, Building Section, Department of Territories to Lend Lease Investments dated 16 April 1986. This letter was provided to FA1 Properties by MLC under cover of its letter dated 1 May, 1986.
Copies of these letters are in the possession of the solicitors for FA1 Properties at whose offices the same may be inspected during normal office hours by appointment."
The relevant parts of the letter dated 16 April 1986 are set out earlier in these reasons.
Paragraph 16 of the further amended statement of claim substantially, though not precisely, reproduces what is
alleged in par. 5, including the particulars appended thereto. The text of par.5 is set out earlier in these reasons.
Paragraph 17 makes a similar allegation to that in par.6 (as to which see above).
Paragraph 19 alleges that in breach of the duty referred to in par.14, MLC failed to exercise due care and akill in the making of the representations and the giving of the advice referred to in pars 15, 16 and 17. The following particulars of negligence are given:
"PARTICULARS OF NEGLIGENCE
(a) Failing to make all necessary and proper enquiries as to the existence of asbestos and asbestos material in Qantas House. (b) Failing to make all necessary and proper investigations as to the existence of asbestos and asbestos material in Qantas House. (c) Failing to provide FA1 Properties with all relevant information in its possession, power, custody or control in relation to the existence of asbestos or asbestos material in Qantas House. (d) Making the said representations and giving the said advice without taking all necessary and proper steps to determine whether such representations and advice were true."
In my opinion, none of the facts alleged in the further amended statement of claim support the conclusion alleged in par. l3 (b) that MLC "assumed the responsibility to [FA1 Properties] to give it accurate information in relation
House". In support of the order sought in the motion that the to the extent of asbestos and asbestos material in Qantas proceeding against MLC be dismissed in so far as it claims damages "for breach of duty and/or negligence", counsel for
MLC relied on the material referred to in the affidavits of Graeme Edward James Johnson, to the substance of which reference has already been made. Counsel for FA1 Properties did not dispute the accuracy of that material and referred to
no other material that would bear on the issue. The material before the Court satisfies me that FA1 Properties could have been left in no doubt that MLC was not assuming the responsibility alleged in par.l3(b). It follows that the conclusion pleaded in par.14 that, in the premises, MLC owed FA1 Properties a duty in the terms there alleged cannot be sustained. The proceeding in so far as it claims against MLC damages for "breach of duty and/or negligence" is, therefore, dismissed.
In the light of the conclusions to which I have come, it is unnecessary to consider the other submissions advanced on behalf of MLC, in particular those relating to the issue whether the causes of action alleged against it are statute-barred.
I turn now to the motion on behalf of the Commonwealth in so far as it seeks an order dismissing the proceeding against it.
Paragraph 3 of the further amended statement of
claim refers to the Commonwealth as being, at all relevant
times -"(a) responsible for the administration of, and compliance with, the Buildina Ordinance (ACT) and the ACT Building Manual by the Building Controller, Building Section of the Department of Territories;
(b)
responsible for the inspection of and approval of asbestos removal works to be conducted on the 10th Floor of Qantas House pursuant to Permits to Carry Out Building Work granted by the Deputy Building Controller on 28 May 1984 and 22 March 1985 ("the
Permits " ) . " Paragraphs 21 to 27 of the further amended statement
of claim read:
"21. Further, or in the alternative, prior to the date on which MLC and FA1 Properties entered into the agreement and at all times material to the
,agreement, the Commonwealth: (a) knew that FA1 Properties was relying upon the Commonwealth's knowledge of Qantas House in relation to the extent of asbestos and asbestos material in it in determining whether to purchase Qantas House and, if so, on what terms ; (b) assumed the responsibility to the Commonwealth [sic] to give it accurate information in relation to the extent of asbestos and asbestos material in Qantas House. 22. In the premises the Commonwealth owed FA1 [Properties] a duty to exercise due care and skill in the giving of information to FA1 [Properties] in relation to the extent of asbestos and asbestos material in Qantas House.
23. On or about 5 May 1986 the Commonwealth advised FA1 Properties that:-
(a)
prior to any removal of asbestos from Qantas House, application must be made to the Department by a licensed asbestos remover;
(b) a permit is then ~ssued in accordance with the plans and specifications in the application;
(c)
the Department inspected the work during and after the removal programme;
(d)
asbestos did remain in various parts of Qantas House predominantly where it posed no threat to tenants which areas were in the plant room and beams in the plant room area (level 10) which did not jeopardise any lease renewals to Government Departments;
(e)
should FA1 Properties alter or renovate any of these areas [where] asbestos remains, the Commonwealth would then require asbestos
removal.
PARTICULARS
The said advice was oral and given by Mr G Charpbers on behalf of the Commonwealth to Mr R Smith on behalf of FA1 Properties, the substance of which was as alleged.
24. Further, on or about 8 May 1986 the Commonwealth advised FA1 Properties:
(a)
asbestos removal from Qantas House had been properly carried out;
(b)
the areas where asbestos was still present but inaccessible on the 10th Floor of Qantas House were recorded on the plan dated 7 May 1986 provided by MLC to FA1 Properties;
(c)
there was no other asbestos or asbestos material in Qantas House.
PARTICULARS
The advice was partly in writing, partly oral and partly to be implied. Insofar as it was in writing it was comprised by plan No. A/003 with handwritten notations and colouring identifying the areae where asbestos remained in the 10th Floor of Qantas House. Insofar as it was oral it was contained in a conversation between Mr Chambers on behalf of the Commonwealth and Mr J Mangion on behalf of FA1 Properties, the substance of which is as alleged. Insofar as
it was implied, such implication arises from the said plan and the said conversation.
25. Acting and relying on the advice of the Commonwealth referred to in paragraphs 22 and 23 herein and induced thereby FA1 Properties entered into the agreement.
26. In breach of the duty referred to in paragraph 14 and negligently the Commonwealth failed to exercise due care and skill in the giving of the advice referred to in paragraphs 23 and 24.
PARTICULARS
(a)
Failing to exercise due and proper care and skill in its inspections and record keeping of the asbestos removal works carried out up to May 1986 at Qantas House;
(b)
Failing to ensure that asbestos removal carried out up to May 1986 at Qantas House was carried out in accordance with the provisions of the Building Ordinance (ACT) and the ACT Building Manual ;
(c)
Failing to exercise due and proper care and skill in its inspections and record keeping of the asbestos removal works the subject of the Permits issued by it;
(d)
Failing to take all necessary and proper steps to ensure that the existence of asbestos and asbestos material in Qantas House was identified;
(e)
Giving the advice to FA1 Properties without taking any or any proper steps to ensure that such advice was accurate.
27. By reason of the said breach of duty and/or negligence of the Commonwealth, FA1 Properties has suffered loss and damage.
PARTICULARS
FA1 Properties refers to and repeats the
particulars subjoined to paragraph 12 herein."
The reference to "the Commonwealth" in par.2l(b) is clearly an error. The paragraph should refer to "FA1 Properties".
Essential elements of the claim as pleaded against the Commonwealth are that the Commonwealth, through Mr Chambers, knew that FA1 Properties was relying upon the Commonwealth's knowledge of Qantas House "in relation to the extent of asbestos and asbestos material in it" and that the Commonwealth assumed responsibility to give to FA1 Properties accurate information upon that subject. What is relied upon to support those elements of the claim are the letter dated 16 April 1986 from the Department of Territories signed by Mr
Chambers to Lend Lease Investments and two conversations with
Mr Chambers, one by Mr R. Smith, the Group Property Manager of
FA1 Insurances Limited, and the other by Mr J. Mangion,
Building Consultant. Mr Smith's version of his conversation with Mr Chambers is recorded in his facsimile message to Landerer & Co. on 5 May 1986. Mr Mangion records his conversation with Mr Chambers in his report dated 14 May 1986 forwarded .by Sly & Russell to Landerer h Co. under cover of the letter of that date.
For present purposes, those versions of the conversations must be accepted as accurately recording what was said. But the conversations as so recorded go no distance towards establishing that Mr Chambers, or other representative of the Commonwealth, was requested to give advice or information to FA1 Properties as to the presence or otherwise of asbestos or asbestos material in the building as a whole or, indeed, on level 10 of the building, or that Mr Chambers
or other representative of the Commonwealth assumed responsibility to provide accurate advice or information on those matters. The topics upon which advice or information was sought was the removal of asbestos or asbestos material that had taken place on level 10 of the building and whether that removal had been properly carried out in accordance with the relevant guidelines. Advice or information on those topics was given but both Mr Smith and Mr Mangion concede that they were informed by Mr Chambers that asbestos or asbestos material remained in the building. Mr Smith goes on to say that Mr Chambers informed him that the extent to which asbestos or asbestos material was present in the building would not "jeopardize any lease renewals to Government Departments". It is clear that Mr Smith regarded the latter ae the crucial question. Similarly, the letter dated 16 April 1986 clearly dealt only with the topic of the asbestos material that had been "approved by the Department for removal from levek 10 Qantas House and as indicated on approved plans A003 and A003/An. It was made clear in the letter that some asbestos or asbestos material remained on level 10. The letter said nothing as to the presence or otherwise of asbestos or asbestos material in other parts of the building and there is nothing in the letter, or the context in which it was written, to suggest that Mr Chambers was, by implication, stating there was no asbestos or asbestos material on the levels of the building other than level 10. The documents "from the building file" referred to in the letter dated 8 May 1986 from Freehill, Hollingdale & Page to Messrs Landerer &
Co. carry the matter no further. In my opinion, the claim against the Commonwealth for damages for breach of duty and/or negligence cannot succeed. I, therefore, order, pursuant to Order 20, rule 2 of the
Federal Court Rules that the proceeding against MLC and the
Commonwealth be dismissed. FA1 Properties must pay the costs
of m C and the Commonwealth of and incidental to theproceeding, including any reserved costs. I certify that this and the preceding
25 pages are a true copy of the Reasons for Judgment herein of the Honourable Mr Justice Neaves.
Dated: 20 September 1994
Counsel for the applicant : Mr A.H. Goldberg QC
and Mr R.J. Manly
Solicitors for the applicant : Sly and Weigall Counsel for the third respondent : Mr R.C. Macaw QC
and Mr J. Thomson
Solicitors for the third respondent: Freehill, Hollingdale &
Counsel for the fourth respondent : Mr B.A. Meagher Page Solicitor for the fourth respondent: Australian Government
Solicitor
Date of hearing : 9 December 1993
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