Hamcor Pty Ltd v State of Qld

[2014] QSC 224

SUPREME COURT OF QUEENSLAND

CITATION:

Hamcor Pty Ltd & Anor v State of Qld & Ors [2014] QSC 224

PARTIES:

HAMCOR PTY LTD (ACN 010 141 429)
(first plaintiff)
and
DONALD CHARLES HAYWARD and JAMES PETER COLLINS, as executors of the Estate of TERRENCE ARTHUR ARMSTRONG (deceased)
(second plaintiff)
v
THE STATE OF QUEENSLAND
(first defendant)
and
MARSH PTY LTD (ABN 86 004 651 512)
(second defendant)
and
OTAGO PTY LTD (ABN 90 010 161 501)
(third defendant)

FILE NO/S:

5764 of 2011

DIVISION:

Trial

PROCEEDING:

Trial

ORIGINATING COURT:

Supreme Court of Queensland

DELIVERED ON:

1 October 2014

DELIVERED AT:

Brisbane

HEARING DATE:

14 October-30 October 2013; 6 November-8 November 2013; 21 May 2014; last written submission received 19 June 2014

JUDGE:

Dalton J

ORDER:

Judgment for the first, second and third defendants against the first and second plaintiffs

CATCHWORDS:

Australian Securities and Investments Commission Act 2001 (Cth), s12ED(1)(a)
Civil Liability Act 2003 (Qld), s9(2)(d), s36
Corporations Act 2001 (Cth), s 912A(1)(a)
Environmental Protection Act 1994 (Qld), s391

Fire and Rescue Service Act 1990 (Qld), s8B, s53, s129

Associated Provincial Picture Houses Limited v Wednesbury Corporation [1948] 1 KB 223
Board of Fire Commissioners (NSW) v Ardouin (1961) 109 CLR 105
BP plc v AON Ltd [2006] 1 All ER (Comm) 789
Brodie v Singleton Shire Council (2001) 206 CLR 512
Burnett v Grampian Fire and Rescue Service [2007] S.L.T. 61
Caltex Oil (Australia) Pty Ltd v The Dredge “Willemstad” (1975-1976) 136 CLR 529
Capital and Counties PLC v Hampshire County Council [1997] QB 1004
Colbran v State of Queensland [2007] 2 Qd R 235
Graham Barclay Oysters Pty Ltd v Ryan (2002) 211 CLR 540
Perre v Apand (1999) 198 CLR 180
Punjab National Bank v de Boinville [1992] 3 All ER 104
Pyrenees Shire Council v Day (1998) 192 CLR 330
Roads and Traffic Authority (NSW) v Dederer (2007) 234 CLR 330
Roads and Traffic Authority of New South Wales v Refrigerated Roadways Pty Ltd (2009) 77 NSWLR 360
Stovin v Wise [1996] AC 923
Stuart v Kirkland-Veenstra (2009) 237 CLR 215
Sullivan v Moody (2001) 207 CLR 562
Sutherland Shire Council v Heyman (1985) 157 CLR 424
Sydney Water Corporation v Turano (2009) 239 CLR 51
Williams v Hutt Valley and Bays Fire Board [1967] NZLR 123

Wyong Shire Council v Shirt (1980) 146 CLR 40

TORTS – NEGLIGENCE – ESSENTIALS OF ACTION FOR NEGLIGENCE – DUTY OF CARE – IN GENERAL – – where the first defendant operates a fire brigade – where the brigade owed duties to the public at large – where the brigade may owe duties to other persons – whether a fire brigade owes a duty to take care in fighting a fire –  whether the potential for conflicting duties affects the brigade’s duty of care to the plaintiffs – whether a duty of care would be inconsistent with the brigade’s statutory functions

TORTS – NEGLIGENCE – ESSENTIALS OF ACTION FOR NEGLIGENCE – WHERE ECONOMIC OR FINANCIAL LOSS – where the plaintiffs suffered economic loss as a result of contamination of land – whether the plaintiffs’ claim is for pure economic loss

TORTS – NEGLIGENCE – ESSENTIALS OF ACTION FOR NEGLIGENCE – DUTY OF CARE – REASONABLE FORESEEABILITY OF DAMAGE – PARTICULAR CASES – AFFECTING PUBLIC AUTHORITIES – where Environmental Protection Act 1994 (Qld) requires remediation of contaminated land – whether it is necessary for the first defendant to have foreseen precisely the application of Environmental Protection Act 1994 (Qld)

TORTS – NEGLIGENCE – ESSENTIALS OF ACTION FOR NEGLIGENCE – DUTY OF CARE – RELATIONSHIP OF PROXIMITY – where the first defendant operates a fire brigade – where the officers comprising the brigade had skill and knowledge above that possessed by normal members of the community – whether the brigade was in a position to control its response to the fire – whether the plaintiffs were vulnerable to or reliant on the acts and omissions of the brigade – whether the brigade owes a common law duty of care

TORTS – NEGLIGENCE – ESSENTIALS OF ACTION FOR NEGLIGENCE – STANDARD OF CARE – EMERGENCIES – where the fire brigade applied water to a chemical fire – where the fire brigade understood that this posed an environmental hazard – whether the fire brigade breached its duty of care

STATUTES – ACTS OF PARLIAMENT – INTERPRETATION – REFERENCE TO FRAMEWORK OF ACT – HEADINGS – where Acts Interpretation Act 1954 (Qld), s 14(2) provides that a heading to a section is part of an Act – where Civil Liability Act 2003 (Qld), s 36 reduces the rights of persons to a remedy – whether Civil Liability Act 2003 (Qld), s 36 applies to modify the standard of care owed or as a defence – two stage approach considered and rejected

STATUTES – ACTS OF PARLIAMENT – INTERPRETATION – CONSIDERATION OF EXTRINSIC MATTERS – COMMISSION REPORTS – where Civil Liability Act 2003 (Qld), s 36 uses words from Associated Provincial Picture Houses Limited v Wednesbury Corporation – whether the first defendant’s actions would amount to a breach of standard of care set by Civil Liability Act 2003 (Qld), s 36

STATUTES – ACTS OF PARLIAMENT – INTERPRETATION – GENERAL APPROACHES TO INTERPRETATION – GENERALLY – whether the first defendant is a ‘person’ within the meaning of Fire and Rescue Service Act 1990 (Qld), s 129 – whether the actions of the first defendant were done pursuant to the Fire and Rescue Service Act 1990 (Qld) – whether the first defendant has immunity pursuant to Fire and Rescue Service Act 1990 (Qld), s 129

TORTS – NEGLIGENCE – ESSENTIALS OF ACTION FOR NEGLIGENCE – DAMAGE – CAUSATION – GENERALLY – where the plaintiffs came under a statutory obligation to remediate the land pursuant to Environmental Protection Act 1994 (Qld), s 391 – where no evidence about what the plaintiffs’ position would have been had there been no breach of duty

TORTS – NEGLIGENCE – CONTRIBUTORY NEGLIGENCE – GENERALLY – where the plaintiffs failed to undertake preventative measures against a fire – whether the plaintiffs’ failures contributed to the loss sustained

INSURANCE – INSURANCE AGENTS AND BROKERS – DUTY TO ENSURE EFFECTIVE INSURANCE COVER – whether broker acting pursuant to a contract owed a duty of care to third parties

TORTS – NEGLIGENCE – ESSENTIALS OF ACTION FOR NEGLIGENCE – DAMAGE – CAUSATION – GENERALLY – whether the plaintiffs would have acted in accordance with any advice brokers might hypothetically have given – whether insurance would have been available to plaintiffs

INSURANCE – THE POLICY – PRINCIPLES OF CONSTRUCTION – whether contamination of soil and ground-water is ‘debris’ – whether ‘debris’ must be remains of property which was insured property – construction of proviso – situation of proviso in policy – substance of proviso determines its application

COUNSEL:

PJ Dunning QC, with PW Telford, for the plaintiffs
M Hinson QC, with D O’Brien, for the first defendant

ID Faulkner SC for the second and third defendants

SOLICITORS:

Everingham Lawyers for the plaintiffs
Crown Solicitor for the first defendant

Thynne & Macartney for the second and third defendant

INDEX

Fire Case (summary) ………………………………….………..	6
Insurance Case (summary) ………………………………….….	6
The Site of the Fire ……………………………...…...................	7
The Fire …………………………………………………….…..	7
The Witness (Fire) ……………………………………………..	8
Expert Witness (Fire) …………………………………………..	9
The HAZCHEM Sign ………………………………...……..…	10
HAZMAT Box ……………………………………...………….	11
Foam ………………………………………………………...….	15
Use of Water by QFRS ……………………………..….………	16
Water on Solvent Tank and LPG Cylinder ………………..….	16
Water and Chemical Fires …………………..…….……..…..	18
Water Application to the Fire by QFRS ……………………...	19
Alternative Strategy: Let Burn …………………………………	24
Decision-making About Response to the Fire …………………	25
Plume …………………………………………………………..	29
Bunding ………………………………………………………...	29
Inspection by QFRS Prior to Fire ……………………………...	30
Duty of Care ……………………………………………………	31
Statutory Provisions ……………………………………………	31
The Factual Basis for Duty in this Case ………………………..	33
Case Law ……………………………………………...………..	34
Ardouin ……………………………………………………….	34
Burnett ………………………………………………………..	35
Hampshire …………………………………………………....	36
Conflicting Duties …………………………………………...…	39
Economic Loss ………………………………………………....	41
Foreseeability of Harm ………………………………………....	43
Proximity, Control, Vulnerability, Reliance ………………..….	44
Breach ………………………………………………………….	46
Section 36 of the Civil Liability Act …………………………....	49
Applicability of s 36 Civil Liability Act to this Case …………..	49
How s 36 would Apply, were it Applicable ……………………	51
Two Stage Test? ………………………………………………..	51
Wednesbury Standard of Care ………………………………….	52
Statutory Immunity …………………………………………….	55
Plaintiffs’ Proof of Causation of Loss ……...……………….….	59
Pleading ……………………………………………………...	59
Plaintiffs’ Evidence as to Loss and Causation ……………….	61
(1) Monies Spent due to Contamination of Adjoining Land ....	63
(2) Comparison with Loss After a Let Burn Strategy ………...	64
(3) Work to Maintain Site before Remediation ……………....	65
Contributory Negligence ……………………………………….	66
Insurance case ………………………………………………….	67
Duty owed to plaintiffs? ………………………………………..	67
Dr Manning ………………………………………...…………..	73
Alternative Case as to Duty ……………..……………………..	74
Causation …………………………………..…………….……..	75
Causation 1 …………………………………………………..	75
Causation 2 …………………………………………………..	75
Causation 3 …………………………………………………..	77
Causation 4 …………………………………………………..	78
Causation 5 …………………………………………………..	78
Plaintiffs on Binary Policy ……………………………………..	79
ISR Policy ……………………………………………………...	79
Debris …………………………………….…………………..	79
Debris consequent on damage to Insured Property ………….	82
Proviso to cl (f)(ii) …………………………………………....	83
Removal of Debris ………………………………………..…..	84
Extra Costs of Reinstatement ……………..……………...…..	85
Disposition ……………………………………………………..	85
Appendix A ……………………………………………….…....	86

1. On 25 August 2005, the Queensland Fire and Rescue Service (QFRS) was called to a fire in the plaintiffs’ chemical factory on an industrial estate at Narangba.  The factory and warehouse buildings were destroyed.  The brigade’s response to the fire was considerable in terms of men and machines.  Massive quantities of water were applied on and around the fire.

1. Much of this water combined with chemicals from the factory to produce a very large quantity of contaminated fluid, or fire-water, as the witnesses called it. Much of the fire-water ran onto nearby bushland or into stormwater drains and thence a local creek. This case concerns the effects of the fluid which remained on the plaintiffs’ land. It soaked into the soil and large concrete building slabs. Some of it found its way into storage dams at the back of the plaintiffs’ land (not overly much as curiously these “overflow” dams were located at the highest point of the land). As a result, the land was classified as Contaminated Land pursuant to Chapter 7 of the Environmental Protection Act 1994 (Qld) (EP Act). The plaintiffs came under a statutory obligation to remediate it – s 391 of the EP Act.  The cost of remediation was accepted to be more than $9 million, many times the value of the land before the fire.  Until it is remediated, the use of the land is lost to the plaintiffs.

Fire Case

1. The plaintiffs sue the State of Queensland, as the proper defendant in respect of the acts and omissions of the QFRS.[1]  The claim is a common law negligence action.  The basis for the claim can be shortly, and probably not simplistically, stated as being that it was negligent to attempt to extinguish this fire with water: chemical fires cannot be extinguished with water.  It was said by the plaintiffs that the proper approach to the fire on this site was to simply let it burn itself out whilst being vigilant to extinguish any spread of the fire outside the site.  It is pleaded, that without the vast quantities of water applied in an attempt to extinguish the fire, the cost of remediation of the land would have been far less than it is.  So it can be seen that the case involves significant points as to causation of loss, as well as breach, and the existence of a duty on the part of the QFRS.  Before turning to points of law I spend some time outlining the facts of the matter.  At the part of my judgment where I consider the facts I make some decisions as to the reasonableness of some actions and decisions of the QFRS.  In doing so, I assume the existence of a duty of care in terms of my later finding, and apply the law as to breach, as I state it later in my judgment.

   [1]The QFRS is not a corporation and is declared by Gazette dated 14 June 2002 to be a government entity which is part of the Department of Emergency Services; see s 8(1) of the Crown Proceedings Act 1980 (Qld).

Insurance Case

1. After the fire the plaintiffs’ property insurers effectively paid the plaintiffs the full amount for which they were insured ($3 million) – t 11.27, t 12.8 and exhibit 38.  The same insurance company refused to pay on a liability policy in the name of Binary Industries Pty Ltd as insured under a clause which promised to indemnify the insured “against their liability to pay compensation for and/or arising out of injury or damage”. 

1. The plaintiffs sued the insurance brokers who had arranged liability insurance for Binary Industries.  Binary Industries, controlled by the same human beings as the plaintiffs, ran the business of the chemical factory.[2]  It was said that the brokers knew, or ought to have made sufficient enquiries to discover, that the plaintiffs owned the land and had them named as insureds, or interested parties, on Binary Industries’ liability policy.  It was also pleaded that the brokers should have obtained an Industrial Special Risks (ISR) Policy for the plaintiffs.  The terms of such an ISR policy were pleaded to provide cover against disposal of debris and the costs of reinstatement of damaged property. 

   [2]The plaintiffs and those associated with them subscribed to the well-worn theory that it was best to separate assets from liabilities.

1. Issues arose as to whether the brokers owed a duty to the plaintiffs when their retainer was a limited one on behalf of Binary Industries; whether the plaintiffs would have purchased any additional insurance had it been recommended to them, and whether the policies pleaded would have been of advantage to the plaintiffs. 

The Site of the Fire

1. There were two main buildings on the plaintiffs’ land, one to the North and one to the South.  Both were made of material which was predominantly not flammable.  Both were rectangular in shape and their shorter sides ran parallel to the street frontage – Magnesium Street.  The Northern building was used as a factory and the Southern building as a warehouse.  There were considerable quantities of flammable chemicals in both buildings.  The area between these two buildings was concreted over, and awnings had been built extending from both buildings over the central space between the two buildings.  It is apparent from the photographs that there was a large number of drums of chemical on pallets stored under the awnings, and to the front of the awnings, at the time of the fire.[3] 

   [3]There was some dispute as to whether or not these drums were in situ at the time of the fire or moved at some time after the fire and before the photographs.  It seems to me clear that the remains of the wooden pallets supporting the drums can be seen in photographs such as exhibit 29 and I find that the drums in the photographs are shown in the position they were in during the fire, see also photographs 1 and 28 and tt 7.75-6.

1. Along the Southern side of the Northern building, at the Magnesium Street end, was a large metal tank.  It was marked as containing flammable solvent and its capacity was either 24,000 or 32,000 litres – t 5.3.  Some metres forward of both the Northern and Southern buildings (ie., towards Magnesium Street), and in about the centre of the open space between them, were an LPG cylinder of 450 kilograms capacity and two or three smaller gas cylinders.

1. Well forward of the Northern building, and separate to it, was a small brick laboratory building.  At the Magnesium Street end of the Southern building, as part of that building, but shielded from the main warehouse by a firewall, was a section used as an office.  The whole site was surrounded by a high chain-wire fence.  There were large entrance gates on a driveway from Magnesium Street.  The driveway led between the Northern and Southern buildings, closer to the Southern building.  On the fence immediately adjacent to the gates was a HAZCHEM sign, which gave the code “3XE”.  As well, about seven metres inside the gates on the Southern side of the driveway was a HAZMAT box which contained some information as to what chemicals were stored on the site and a plan of the site.

1. Toward the beginning of the case the Court visited the site on a view.

The Fire

1. The fire was the biggest, or one of the biggest, chemical fires that most of the witnesses had ever seen.[4]  By 10.35 or 10.40 pm the blaze was very fierce.  It continued to be so for several hours.  Flames extended tens of metres from the buildings.  As well, the fire was unpredictable: large (44 gallon) drums of chemicals inside the factory caused fireballs and explosions within the main fire.  Not only that, some drums with sufficient flammable vapour inside them in effect became rockets and flew out of the fire, some landing considerable distances away.  If when they landed they still contained flammable chemical, they would begin burning at the place they landed.  It was not until 5.00 am on 26 August that the fire was declared to be “under control” – t 7.25.[5]

   [4]Area Director James, t 2.32; Officer Duncan, t 6.3; Mr Manser, t 3.19.

   [5]The experts agreed that this meant a stage when the person in control of the fire “feels that he or she has all the resources they need to combat the incident and that the fire has been contained within the allotment and all exposures have been protected.” – paragraph 70 joint report.

1. The plaintiffs’ land remained in the control of the QFRS throughout the course of the fire and for some days after it, to the exclusion of the plaintiffs – t 8.8.

The Witnesses (Fire)

1. The fire began in the Northern building, which was the factory.  The call to the QFRS was just after 10.00 pm on 25 August 2005 and the response was very prompt.  First on site were officers from the Deception Bay station.  These officers were in four-wheel drive vehicles, rather than fire trucks.  At 10.14 pm the first fire truck arrived.  It was from the Petrie station and in charge of it was Station Officer Duncan.  The scheme under which QFRS manages fires is that the senior officer present at any given time becomes what is known as the Incident Controller.  So, when Officer Duncan arrived, he became the Incident Controller for the fire.  He remained so until Area Director James arrived.  Area Director James arrived on site at 22:40 hours, attended to some formalities and became Incident Controller at about 23:00 hours – see t 6.58 and t 7.32.  Area Director James remained Incident Controller until 7.38 the next morning when Officer Devitt arrived – t 7.83.  Officer Devitt remained Incident Controller until about 8.00 pm on the night of 26 August 2005.[6] 

   [6]Both Area Director James and Officer Devitt have been promoted in rank since the fire but I will refer to them by their rank at the time of the fire, as this is consistent with the contemporary documents.

1. The first defendant called three lay witnesses: the successive Incident Controllers – Duncan, James and Devitt.

1. Officer Duncan had over 20 years experience at the time of the fire, and over 30 years experience by the time he gave evidence.  He seemed to me to be a dependable and rational person who acted competently at the time of the fire and gave reliable evidence.

1. Area Director James was a senior and experienced fire officer at the time of the fire.  He had considerable practical and theoretical experience and training.  His handling of the fire was controversial at the time of the fire: there was both public criticism and criticism from within some sections of the QFRS.[7]  It was criticism of Area Director James’ conduct which formed the basis of the plaintiffs’ case.  It is hardly surprising in these circumstances that he was at times defensive in giving his evidence.  By experience and training he was qualified to give expert views about matters relevant to this case, but he was not in my view able to be impartial.  Area Director James prepared an internal report as to the conduct of the QFRS in combating the fire – Major Incident Report 28 October 2005.  That report was written well before this proceeding was instituted.  However, wider controversy, including criticism of environmental damage, had begun before it was written.  I find the report to be somewhat defensive in its tone and content.

   [7]I did not receive evidence as to the detail of this criticism and do not express any opinion as to the merits of it.  Nonetheless, the fact of it bears upon my assessment of Area Director James, as I explain.

1. Officer Devitt was a little removed from the main focus of enquiry in the case.  He steadfastly refused to be drawn into commenting on Area Director James’ decisions and actions, notwithstanding he was, I suspect, qualified to do so.

1. The QFRS has a communication system called Firecoms.  This is a system where a central agency receives calls from officers involved in a fire and sends messages to those fighting the fire.  A record of all the messages is kept.  A printed version was an exhibit.  This record made it possible for witnesses to be quite precise as to the times of certain events, notwithstanding the passage of time between the fire and the trial.

Expert Witnesses (Fire)

1. There were three expert witnesses:  Mr Manser and Dr McCracken on behalf of the plaintiffs and Mr Glover on behalf of the first defendant.  All delivered written reports:  Manser, 16 April 2012; McCracken, 7 January 2013, and Glover, 18 January 2013 and 23 August 2013.  In September 2013, ie., quite shortly before trial, the experts met for two days and as a result of that discussion produced a joint report (30 September 2013) which considerably narrowed the areas of dispute between them, very much in the plaintiffs’ favour.

1. Mr Manser was by far the most qualified to express views on the issues which mattered in the case.  He was an impressive witness.  He had around 40 years practical experience as a fire‑fighter, including in senior command positions.  As well, he had quite an interest in the theoretical approach to fire‑fighting and had undergone a considerable amount of training and what I might call academic involvement as to this – see the CV at pp 6-12 of his report.  He struck me as a very pragmatic, very capable person.  He gave responsive and rational evidence which was in my view reliable, considered and realistic.  He was attacked by the first defendant as giving a hindsight view.  At times I think that criticism was correct, but as to the main point in issue – the strategy which ought to have been adopted on the night of 25 August 2005, my view is that his evidence is not to be discounted on this basis.

1. Mr Glover, to be perfectly plain, was no match for Mr Manser: he had a Bachelor of Science degree; nine years experience with the Victorian Fire Services as a scientific officer, and other experience, say as a TAFE lecturer.  He had experience as a scientific officer as part of an incident management team.  His experience was much less than; much less relevant than, and in positions of significantly less responsibility than Mr Manser. 

1. Dr McCracken was an engineer and a rather academic gentleman whose real expertise was confined to specific issues in the case: the likely airborne toxins in the smoke plume and the likely size and nature of other specific dangers, such as the LPG cylinder.  He readily conceded he would not expect a fire‑fighter to know the things he did – t 4.6.  On the other hand, Dr McCracken had no operational fire‑fighting expertise – t 4-64.  Indeed he has never attended a fire, other than as an observer, not even in the role of a scientific advisor.  I formed the view that he offered opinions on matters which lay outside his real expertise without any real substantial knowledge to support him – eg., t 5.7 and t 5.12.  Consistently with this, he was rather brittle in giving his evidence, cavilling with semantic issues and showing an unwillingness to engage on matters of substance. 

1. I will mention that after the fire there was a report which was prepared by a Mr Brabrook.  It was not in evidence.  Both Mr Manser and Dr McCracken made reference to it.  To that extent their evidence had no foundation in fact, and I disregard anything based on the contents of the Brabrook report.

1. Before dealing with the main issue – the use of water at the site – I will deal with three matters which, as it turns out, are of little significance to my decision – the HAZCHEM sign, the HAZMAT box and the idea that foam could have been used in fighting the fire.

The HAZCHEM Sign

1. This was a sign, in familiar enough form, affixed to the front fence of the site which read, “3XE”.  In fact it ought to have read “3WE”, but for the purpose of this litigation that does not matter – Manser, t 3.27.  The idea of such a sign is that it provides brief initial information as a guide for first responders to a fire or a chemical spill.  The information is obviously limited and it is meant to assist only until more detailed information is at hand – Manser, t 3.27, and report p 4.  The joint expert report stated: “… the HAZCHEM Code is generic information until more comprehensive information systems become available.  In our opinion, to base a whole incident hazard mitigation strategy on the HAZCHEM Code would be a misinterpretation of its intent.” 

1. The numeral 3 in the code indicates that the appropriate response to a fire at the subject premises is foam, not water.  The X is really intended for situations where there is a chemical spill, not a fire – Manser, t 3.27.  Once it became evident that contaminated fire-water was being created, I accept that information was relevant here, conceptually, if not in strict terms.[8]  The letter X means that containment of a spill – ie., prevention of chemical run-off into drains or water catchments – is what should be achieved if possible.[9]  The letter E in the code gives the information that protective clothing ought to be worn.

   [8]See Glover, t 5.71.

   [9]McCracken report, p 16.

1. In this matter it was uncontroversial that full protective clothing could not be worn whilst dealing with this fire – see the joint expert report, paragraph 45.  It is also uncontroversial that from the time the first Incident Controller – Officer Duncan – arrived on the site he knew he was dealing with a chemical fire of massive proportion.  He understood from his training that this would require foam if it were to be extinguished. 

1. It was only after Area Director James arrived on the site that water was applied to the site in any quantity – joint expert report, paragraph 27 – and it is clear that from the beginning of his command that Area Director James was alert to the potential contamination caused by fire-water, not from the sign, but from his training and experience.

1. In short, the information on the sign added nothing helpful to the knowledge of Officer Duncan or anyone who came to the site after him.  In fact, almost from the beginning, and certainly from the time Area Director James assumed control, the QFRS had considerably more information about the emergency than was contained on the sign.

1. The plaintiffs plead a case that by reason of the code on the HAZCHEM sign, “it had been predetermined that the only medium of fire extinguishment appropriate was the application of foam”, and “it had been predetermined that in the event of a fire it was necessary to contain spillage, including fire water runoff”.  The plea that the first defendant breached its duty to the plaintiffs by not locating, or by failing to comply with, the HAZCHEM sign must fail.  It rests on a misunderstanding of the purpose and significance of the sign.  As explained, the sign was no measure of reasonable response to this fire.  The sign did not prescribe what ought to be done at any time, let alone during the course of this long and complicated event. 

HAZMAT Box

1. The HAZMAT box was designed to contain more detailed information than was available from the HAZCHEM sign to assist those responding to an emergency on site.  The HAZMAT box on the plaintiffs’ land contained a manifest showing detailed information about what chemicals were stored in the two large buildings.  It was on its face 14 months out of date.[10]  It contained a diagrammatic representation of the buildings on site.  This diagram was out of date: it did not show the awnings between the Northern and Southern buildings, nor did it show that chemicals were stored in the space between the Northern and Southern buildings, and forward from that space towards Magnesium Street.  The experts were critical of some of the information omitted from the manifest – joint report paragraph 75.  The manifest gave contact details for the second plaintiff as the relevant person to assist emergency services with information.

   [10]It was never definitively proved that the information as to the types and locations of chemicals in the manifest was not accurate.  It seems most unlikely that information which was 14 months old would have been accurate given the exigencies of a business which was actively making chemicals and selling them.  The chemicals listed on the manifest were many and various.  In the end I do not think this issue as to the currency of the information matters.

1. On the pleadings it appeared that the QFRS did not access the material in the HAZMAT box until after the fire was under control.  The plaintiffs criticised this, and all the experts said that the HAZMAT box was accessible at all times during the course of the fire – Manser, t 3.35 and the joint expert report, paragraph 17. 

1. Mr Manser thought that the HAZMAT box was sufficiently remote from the fire to be safe to access.  He pointed to the fact that those first on site, ie., before 10.35 pm, went well beyond the HAZMAT box, ie., closer to the fire in the Northern building, in their initial attempts to understand the likely dangers and exposures, particularly those associated with the solvent tank.  He also thought that the vehicles parked in front of the driveway to the site involved fire crew being at least as close to the fire in the Northern building as was the HAZMAT box – exhibits 11 and 12 and t 4.50 and report pp 30-31.  While Dr McCracken and Mr Glover also expressed the view that the HAZMAT box was accessible, I am inclined to discount their opinions substantially as neither has any real fire-fighting experience.

1. At about 10.35 pm Officer Duncan made a decision to pull officers back from the site (and thus away from the HAZMAT box) – t 2.29.  His evidence was that he did not recall seeing the HAZMAT box – t 2.28, but that had he seen it, he would not have approached it, as he did not consider it safe to do so – t 6.32.  It is true that officers had walked further into the site than was necessary to access the box at one stage prior to this decision to pull back at 10.35 pm.  They had done so to see the solvent tank, which they regarded as something potentially very dangerous.  The fire was growing in size between 10.00 pm and 10.35 pm, so that the risk of entering the site was increasing.  By 10.35 pm there were fireballs and projectiles coming from the Northern building.  By then it was very unlikely that the fire would be contained to the Northern building.  In those circumstances I find that it was dangerous for somebody to approach the HAZMAT box.  I think Officer Duncan’s decision to move back was reasonable.  He acted at a preliminary stage of the fire – he had few resources available to him and he was faced with the task of immediately responding to a large growing fire.

1. As to accessing the HAZMAT box at a later point than 10.35 pm, any decision to send an officer into a situation which involves danger must necessarily involve an assessment of whether the objective of the exercise is justified by the risk.  Here, by 10.35 pm, the general layout of the buildings on the site was evident to those present.  It was also evident that there was a well‑established fire of flammable chemicals.  At 10.28 pm there is a message recorded that the Queensland Ambulance Services had asked Firecoms for data on glycophosphate – Manser, report p 31.  At 10.33 pm environmental advisors had information from the “manager”, presumably the manager of the factory, the second plaintiff, that glycophosphate and 2.4 D ester were stored in the buildings – Manser, report p 32.  Somewhere between 10.45 and 11.00 pm the second plaintiff was on site, and Area Director James said that he was co-operative – t 6.70, and that he was able to speak to him early – t 7.38.  The second plaintiff was an industrial chemist, so I assume he was of assistance.[11]  It seems likely from the information which the QAS had at 10.28 pm and the environmental advisors had at 10.33 pm, that the second plaintiff had been contacted some time shortly after 10.00 pm and had provided that information and thereafter made his way to site.  There was a scientific officer on site from 10.33 pm.

   [11]The second plaintiff did not give evidence at the trial.  There was no evidence that he was unable to do so.

1. No doubt the information contained in a HAZMAT box can, in some circumstances, be useful.  Perhaps had this case concerned other aspects of this fire and this fire‑fighting operation, the material in the box may have been significant.  However, dealing with the issues relevant to this case, I find that the information from that box would have been of little, if any, value to those fighting the fire, in any way which could be relevant to the plaintiffs’ case.  There was no water in any quantity applied to this fire until after Area Director James became Incident Controller.  By that time the QFRS had information about the buildings, solvent tank, LPG cylinder and the main chemicals involved and quantities of those chemicals – t 7.21 and t 7.38, cf Mr Glover at tt 5.69-5.70 and 5.71-72.  Certainly no witness, expert or lay, suggested that things would have been done differently had material in the HAZMAT box been accessed during the course of the fire.[12]

   [12]See here Mr Manser’s evidence, eg., at tt 3.32-34.

1. When Area Director James was asked about the HAZMAT box in evidence-in-chief he said the following:

“Do you recall if there was a Hazmat box on site on the night?---  On the night I do not.  Initially because of it was dark.  It’s a small box and it was on a driveway not immediately where the major exposures were for the LPG cylinder [indistinct] didn’t have any large [indistinct].
Did you think about or make any attempt to retrieve or obtain the contents of the Hazmat box?---  No, I didn’t.
Why not?---  In my opinion it was far too dangerous to life to go onto the site to attempt to access a Hazmat box.  Part of the reason for that was I was aware, prior to my arrival, one firefighter attempted to go onto the site and was injured.  And I was not prepared, with the injury that had already occurred and with the intensity of the fire to put other people’s lives at risk to go and attempt to access any part of the site including the Hazmat box.” – tt 2.41-42. (Shaded area changed to correct obvious transcript inaccuracies.)

1. One of the appendices to the Major Incident Report (prepared by Area Director James in October 2005) was from a scientific officer who assisted the QFRS on the night of the fire.  The appendix refers to a manifest.  In cross-examination Area Director James said, whilst indicating his evidence was hearsay, that the HAZMAT box was accessed on the night of the fire, and early in the night – tt 7.26‑7.27, t 7.55.  This was contrary to the first defendant’s pleaded case, and the gist of Area Director James’ evidence-in-chief.  Under further cross-examination Area Director James said he was the person who gave the lawyers instructions that the HAZMAT box had not been accessed and was inaccessible because it was too dangerous for a fire‑fighter to go far enough into the plaintiffs’ land to get to the box.  Then he changed that position again, saying:

“...  If I’ve understood you correctly, you now come to know, from reading the report that it was obtained on the night?---  Can I just qualify, I believe a manifest was obtained.  I’m not exactly sure where the manifest was obtained from, whether it was a Hazmat box or the owner.
All right.  So you’re not – all right.  So you’re not saying that it necessarily was accessed on the night now?---  I can’t – I’m saying the manifest was obtained and I – as I qualified earlier, I’m not – unsure whether it came out of the Hazmat box, which is an assumption, or whether it was handed over by the owner.
All right.  And that assumption is from what you read in paragraph 2.2, I take it, in the second paragraph where it reads, ‘Collection of data commenced during the incident and consisted of physical evidence such as manifests of dangerous goods’?---  Correct.
So in the preparation for hearing, that caused you to think that the Hazmat box must have been accessed?---  Yes, and during the incident was over a number of days.  It wasn’t necessarily on the night in question.” – tt 7.56-57.  (Shaded area changed to correct obvious transcript inaccuracy.)

1. I am unable to determine whether or not the HAZMAT box was accessed on the night.  I am also unable to determine whether Area Director James turned his mind to accessing the box during his time as Incident Controller.  Had he done so, and decided it was too dangerous to send an officer to access the box, my finding would have been that was a reasonable decision in the circumstances.  The area was certainly dangerous.  Though it was not immediately proximate to anything on fire, there were drums and drum lids flying through the air and hitting the chain-wire fence in the vicinity of the driveway off Magnesium Street.  Dr McCracken’s report described how they posed “the very real potential … for human injury or fatality …” – p 26.  To access the HAZMAT box would have involved sending an officer quite close to the LPG cylinders.  Even if the risk of their becoming suddenly involved in the fire was very small, the consequence for the officer trying to access the HAZMAT box would likely have been fatal.  Area Director James walked down Magnesium Street towards the vicinity of the HAZMAT box as one of the first tasks he performed.  He turned back after reaching the chain-wire fence because his assessment was that it was too dangerous to enter the site – t 2.40.

1. The facts called in aid by Mr Manser: (1) that officers were in areas close to the Northern building attending to the appliances spraying water on the LPG cylinders and the solvent tank and (2) that, early on, officers went into the site to look at the solvent tank more closely, do not determine the reasonableness or otherwise of sending someone to access the HAZMAT box.  It may well be considered that the duties of attending to the monitors on the tank and cylinders, and the inspection of the solvent tank were more profitable in terms of outcome than a trip to the HAZMAT box would have been.  The trip to inspect the solvent tank was undertaken almost immediately after officers arrived on site when the fire was smaller.  Officers attending to the monitors on the LPG cylinders and tank were to some extent protected from any dangers, such as flying projectiles, by the fire trucks parked in Magnesium Street.  Even leaving all these distinctions aside, the fact that some officers performed dangerous duties does not mean it was reasonable to ask an officer or officers to perform another dangerous duty.

1. As I have endeavoured to explain, by the time Area Director James was Incident Controller, I do not think it could rationally have been expected by the QFRS that the information in the HAZMAT box would materially add to the knowledge which it then had, or needed, to deal with the fire.  That is, when the risks to human life were weighed against the benefit to be gained from the exercise of sending an officer to the box, I would regard a decision not to send an officer as reasonable.

1. What I do see in Area Director James’ evidence as to accessing the HAZMAT box is a preparedness to defend his own actions and justify them, after the fact. His initial evidence as to the dangers of accessing the HAZMAT box, extracted at [37] above, gives me concern in this regard. It seems that the real answer to the question “Why not?” in the extract above, was that Area Director James did not consider the matter, or at least could not recall considering it. But he answered as though he had considered the matter and had made a reasoned and justifiable decision about it. This is perhaps the clearest example of after-the-fact rationalisation and defensive justification in Area Director James’ evidence. However, I have similar concerns about some of the evidence he gave as to the objectives of directing water at fire and property on the site, which I discuss below.

Foam

1. Officer Duncan called into Firecoms to request foam.  Mr Manser’s view was that there was a small window of opportunity which ended around 10.35 pm where, had sufficient foam been available, it may have been an effective strategy to apply it in an attempt to extinguish the fire.  However, his view was that there was no point in attempting to extinguish the fire with foam after 10.35 or 10.40 pm – report p 5 and p 35. 

1. I am satisfied that the need for foam was recognised by Officer Duncan as early as it reasonably could have been.  Further, I find that there was no chance of transporting a sufficient quantity of foam to the site in time to use it in this window of opportunity.  No one said to the contrary of either of these propositions.  Further, I am satisfied that Mr Manser is correct in saying that there was no point in trying to extinguish the fire with foam after about 10.35 or 10.40 pm.  By this time the Northern building was well alight, the blaze was of such a size that it was most unlikely that enough foam could have been obtained to use it effectively.  As well, it was impossible by that stage to use foam.  For foam to be effective in extinguishing a fire, it must be applied to the seat of the fire, and it was not safe to go close enough to this fire to do so. 

1. Officer Devitt explained that even on 26 August 2005, foam could not have been effectively applied to extinguish the remaining small areas of smouldering fire – hot-spots – t 7.88.  This evidence was not challenged in cross-examination and I accept it.  I note that the joint expert report says, en passant, at paragraph 28 that foam “is an alternative for extinguishing hotspots”.  The experts do not say it was appropriate here, and do not consider the factual circumstances which were explained by Officer Devitt.  There is also some like comment in Dr McCracken’s report.  If there is a conflict in the evidence I prefer that of Officer Devitt – he was there and explained the pragmatic difficulties in applying foam.  Mr Glover recounted similar practical difficulties regarding the use of foam to damp down hot‑spots in the decay phase of a chemical fire he had been involved in – t 5-42.  There fire-fighters tried to use foam but reverted to water because as a matter of practicality foam could not be applied.  Foam needs to be applied by someone who is close to the fire and needs to be applied so as to smother the source of the fire.  Looking at the photos showing the considerable metal debris in the remains of the factory and warehouse here, I can readily see that it would have been too difficult for fire-fighters to get in close to the source of fire to apply foam to hot‑spots.  Further, that it would have been too difficult to apply foam in a way which would smother the fire through the metal debris.  That is just as Officer Devitt described.

1. Thus I find that at no point in fighting this fire was the application of foam an option available to the QFRS.

Use of Water by QFRS

Water on Solvent Tank and LPG Cylinder

1. This is an issue discrete to the use of water generally.  Water can be used against a fire for purposes other than extinguishing it.  It can be used to cool items which are not alight so as to prevent their catching alight.

1. Officer Duncan considered that both the LPG cylinder and the solvent tank were hazards which, if not protected, could dramatically increase the scale of the fire.  Flammable liquid in the solvent tank was hazardous because, if fire caused the tank to rupture, the flammable fluid inside would create what the witnesses called a running fire.  It takes little imagination to see that this would be very dangerous to fire-fighters and also a very rapid and effective means of spreading fire.  As well, both the solvent tank and the LPG cylinder were at risk of causing a BLEVE.  The acronym stands for boiling liquid expanding vapour explosion.[13]  It would be necessary for fire to actually impinge upon the tanks to cause such a thing, but the result would be extremely dangerous, involving a blast wave, fire-ball, intense heat, possibly a second explosion, and the potential for parts of the metal cylinders to be propelled through the air.  Had there been a BLEVE of the largest LPG cylinder, the fire-ball would have been around 36m in diameter and the risk of first degree burns would extend as far as 88m from the cylinder, according to Dr McCracken’s estimates – report p 22.

   [13]See McCracken report, p 18, for a technical description.

1. Officer Duncan decided to spray water onto both the LPG cylinder and the solvent tank.  This kept the tanks cool.  The sprays initially set up were from hand-held lines, but these were later replaced by automatic fixed spraying devices which remained in place for the duration of the fire.  The sprays were continued until the morning of 26 August 2005.

1. There was no contest that Officer Duncan’s initial response to put a spray on both tanks was reasonable – see report Manser p 33 and tt 3.13-14, and the plaintiffs’ counsel’s concessions in cross-examination – t 6.15, t 6.31 and tt 6.67‑8.

1. Mr Manser expressed the view that had he been in charge of the fire he would have discontinued sprays to both the solvent tank and the LPG cylinder at some relatively early stage in the fire-fighting exercise.  This was bound up with his idea that the best approach to this fire was to acknowledge that the buildings were lost and let the fire burn itself out within the boundaries of the site whilst protecting the buildings and land immediately surrounding the site – a let burn strategy.  Mr Manser thought that the LPG cylinder was located far enough away from both the Northern and Southern buildings, and was sufficiently isolated from any other structure, that spray to it could have been discontinued on the basis that a BLEVE, or other incident involving the LPG cylinder catching alight, was “highly unlikely” – t 4.46, 3.35 and 3.13.

1. While this was Mr Manser’s view as to how he would have handled the LPG cylinder and the solvent tank, I think the effect of his evidence was that he did not criticise the QFRS for continuing a cooling spray on these two exposures during the course of the fire.  It may not have been something he himself would have done, but he did not dispute that it was within the range of reasonable responses.  The joint expert report contained the following paragraphs:

“10.Reference 15 Glover Report:

Concern about the LPG cylinder and solvent tank becoming fully involved was such that the fire-fighters were withdrawn at 10.35 pm.  (Fire fighting activities after 10.35 pm were in defensive mode).  In prioritising the cooling of the LPG cylinder and solvent tank with water the QFRS acted prudently.”

1. In cross-examination Mr Manser was asked about paragraph 17 of Mr Glover’s report.  That paragraph read:

“17.Based on the information supplied and personal experience, water was the only logical means to fight the fire.  As stated previously, exposures such as the LPG cylinder, the solvent tank and other stocks of chemicals needed to be protected and the fire cooled/contained to:

•     Prevent the LPG cylinder and the solvent tank becoming fully involved.

•     Try to prevent the spread of the fire to other buildings and sites by rocketing drums.

•     Reduce the size of the fire and the consequent plume.

•     Try to prevent the spread of the fire to nearby bushland.

In my opinion a constant supply of water to exposures was the best means to achieve the above.”

1. Mr Manser said that he disagreed with the statement that water was the only logical means to fight the fire, but he disavowed any dispute about the protection of the LPG cylinder and solvent tank – t 3.21.  In addresses counsel for the plaintiff conceded that he made no criticism of QFRS continuing the spray for the whole seven hours – t 16.37.

1. It was Area Director James’ view that it was unwise to stop the cooling sprays to the tank and the cylinder – the significance of the risk was too great – t 7.10.  In addition to the fire coming close enough to the LPG cylinder to cause it to BLEVE, Area Director James was concerned that there was a risk that a drum or drum lid projected from the fire might land on or near the LPG cylinder so as to cause it to explode – t 7.11.  Dr McCracken’s report is that such a thing is possible – see p 18. There were drums and drum lids flying into the chain‑wire fence fronting Magnesium Street, and flying over the heads of fire-fighters stationed near that fence in Magnesium Street – t 7.18.  That is, near enough to the LPG cylinder.  Speaking of such a scenario as feared by Area Director James, Mr Manser acknowledged, “That’s quite a possibility” – t 4-47.

1. The catastrophic consequences of the LPG cylinder exploding are explained above.[14]  The authors of the joint report accept that part of Mr Glover’s statements which go to the unpredictability of modelling such events and the consequent justification of a conservative approach.  Further unpredictability was introduced by the lack of knowledge as to the contents, and volume of contents, and condition of the solvent tank: paragraph 52 joint report.

   [14]See also Glover report, paragraph 54 and the joint report, paragraph 50.

1. Dr McCracken’s view was that it was “highly unlikely” – report p 21 – that flames would have impinged on the LPG cylinder because it was so far from any building (and thus any potential fire).  He accepts that water to the gas cylinder would have been effective to cool it, but opines that even without cooling water there was no credible[15] risk of BLEVE in relation to this cylinder – p 21 report.  Dr McCracken detected paint blistering on the solvent tank as a result of the fire and concluded it was subject to high levels of heat radiation during the fire – p 22 report.  He says he did not have sufficient information to understand why the tank did not rupture or BLEVE, paragraph H, p 23 of his report.  However, he then concludes that there was not a credible risk of “a large BLEVE” of the solvent tank – p 23, paragraph I.  Having regard to the preceding paragraph H, this must be speculative, and I find it quite unconvincing, given what he says at H regarding the cooling effect of water applied by the QFRS to the solvent tank.  Further, I am suspicious of his use of the term “large BLEVE”.  His own report and evidence – tt 4.68-69 – do not allow me to understand that a small BLEVE is possible – the passage in his report at paragraph I seems to me to be temporising in favour of his client.

   [15]Dr McCracken used the terms “credible” and “non-credible” to describe risks.  By non-credible he apparently meant of low likelihood – t 5.5.

1. Further, as can be readily detected by reading Dr McCracken’s report, his analysis is technical, theoretical and often quite speculative.  It is evidence which is very much a hindsight calculation of risk.  He had no fire-fighting experience.  In any event, he appeared to concede under cross‑examination that while he thought these risks “non-credible” he allowed that others might hold different views and that cooling the tank and cylinder was a prudent thing to do – t 4.71.

1. I find that the consequences of either the solvent tank or the LPG cylinder becoming involved in the fire were so serious that even if there was a small risk of them becoming involved, it was reasonable for the QFRS to take what precautions it safely could to prevent this.  I find that there was a small, but not fanciful, risk in relation to the LPG cylinder.  I find that the risk to the solvent tank was significant and serious: it was very close to the fire in the Northern building.  In my view it was reasonable to continue a stream of water on both the cylinder and the solvent tank until the morning of 26 August 2005.  As Mr Manser’s evidence demonstrates, there may be alternative approaches, but it seems to me that the approach taken by the QFRS was within the range of what a reasonable fire-fighter would do in response to these risks and did not amount to a breach of a common law duty of care.

Water and Chemical Fires

1. Water is effective to extinguish fire because it cools the material which is burning – Manser report p 37.  There are two corollaries of this proposition relevant here.  First, water is ineffective to extinguish a chemical fire because such a fire burns at too high a temperature for water to cool the chemical sufficiently that it will not burn.[16]  Mr Manser’s evidence was:

“Now when this fire was going, no amount of water would have put that fire out.  No amount of water whatsoever.  It would have gone on just as the outcome was.” – t 3.36.

And similarly in his report he said:

“Fire fighting tactics using water towers was ineffective until the majority of fuel had been burned and the fire reached the decay phase with much lower heat release rates.” – p 3.

[16]The evidence of both Dr McCracken and Mr Manser was that applying a jet of water can actually make a chemical fire spread and intensify – see pp 31 and 32 of Dr McCracken’s report, and t 4.60.  Mr Manser’s evidence was that he thought he could see evidence of this where jets of water were applied to the fire on the video footage.

1. Secondly, to extinguish fire, water needs to be applied to the material which is burning, not to the flames.  Here the fire was so big and so unpredictable, in terms of fireballs and projectiles, that it was not safe to be close enough to apply water to the material which was on fire.  Mr Manser’s view was that it was ineffective to have a stream of water initiated at any greater distance than 4.5 metres from the fire – report p 37.[17]  It would have been unsafe to put or operate a water source at a distance of 4.5 metres or closer to the fire – t 2.29 per Duncan; tt 2-62-3, more generally, per James.

   [17]See also Duncan, t 6.35,

1. It was the unanimous expert opinion that there was no point in applying water to extinguish the fire.   

Water Application to the Fire by QFRS

1. Apart from streams onto the solvent tank and LPG cylinder, no water was applied until Area Director James became the Incident Controller – t 7.35.  I now examine the application of water other than to the solvent tank and LPG cylinder.

1. Mr Manser said that it was impossible to know how much water was applied to the site during the course of operations by the QFRS – t 4.24.  That is undoubtedly correct.  Water was applied using aerial towers.  It is impossible to know the times at which these devices were operating with any precision.  It is possible to know their maximum delivery capacity, but it is not possible to know whether any of them were operating at maximum capacity.  As well, when water is applied to a fire, a significant amount vaporises into the atmosphere and does not end up on the ground – t 3.10, t 3.12, t 4.24.  It is also impossible to know how much water fell outside the boundary of the plaintiffs’ land.

1. Nonetheless, it is very clear that an enormous amount of water was applied to the site by the QFRS.  In conference all the experts in the case estimated about 4‑5 mega-litres – t 4.76.  One of the first (22:30 hours) messages back from the site was to ask for more pumps – t 2.28.  Photographs show streams of fire-water running off the site and into the stormwater drains.  It is green as it is contaminated by the chemicals on site.  There was insufficient water for the QFRS in Magnesium Street so relay pumping was set up to access water from the mains at Potassium Street – t 2.44.  Mains water supply was considered inadequate and Area Director James charged Officer Duncan with looking for alternative supplies – t 2.30.  Councils in the vicinity were asked to assist by “redirecting water to the incident” – t 7.64.

1. The local creek was at first not flowing, then a trickle of water was noticed – t 4.19 – and by the morning of 26 August, Council workers were building a dam across the local creek some kilometres downstream from the site to contain what was by then a considerable amount of water running off the site and into the creek – t 4.18, t 4.21, and joint expert report paragraph 27.

1. Mr Manser’s analysis showed that the first aerial device on site was deployed to put an automatic water stream onto the LPG cylinder and solvent tank.  A second aerial device arrived on site at 23:13 hours and was directed at the roof of the Southern building.  Of this Mr Manser said:

“… By this time the fire was beyond the capabilities of two aerial water streams and they were too far away from the burning material to be effective which would only increase the likelihood of some of this water increasing the levels contained in the on-site water retention facilities (bunds and drains).” – report p 37.

1. As to the Northern building, Mr Manser said in his evidence that there was no point in directing water onto the Northern building after 10.25 pm – t 3.21.[18]

   [18]I wonder if Mr Manser meant 10.35 pm – see t 3-22 and t 3-26.  10.35 pm was the time when Officer Duncan removed fire-fighters from the immediate vicinity of the fire and put the operation into defensive mode in recognition of the fact that the building was effectively lost.

1. Mr Manser said that at 00:55 hours there were three aerial water towers operating and a fourth was preparing to activate – report p 42.  At 3.25 am there were three aerial water towers in action with a fourth being set up – p 42 of his report.  At 5.24 am there were still three aerial towers in operation.  At 6.22 am it is recorded that there was one aerial water tower in operation which was being used to dampen hot‑spots in the fire which was by then well into its decay phase.  Mr Manser notes that water was still being applied in some form or another well into 27 August.[19]

   [19]Page 43 of his report.  Dr McCracken’s view is at p 46 of his report and tt 4.58-59.

1. Officer Duncan was critical of the QFRS aiming aerial water devices at the fire (rather than the material on fire) and the rooves and walls of the Northern and Southern buildings – t 6.35, t 6.40, t 6.41 and t 6.42.  He was willing to agree that no competent fire-fighter should apply water in this way – t 6.44.

1. Mr Glover initially expressed views in support of the application of water to this fire.[20]  He was the only expert who did so.  He retracted those views after the experts met.[21]  Mr Glover’s view in evidence was very similar to Mr Manser’s: “But the parts of the fire that were fully involved – you weren’t going to do any good putting water onto it.” – t 5.49. 

   [20]See paragraphs 13, 16, 17, 31, 86 of his second report and paragraphs 17, 18 and 26 of his first.

   [21]See joint expert report, paragraphs 7, 13, 23, and 80, and see tt 5.45-46, 5.49, 5-54, 5.55-5.56.

1. The joint expert report contained the following passages:

“21.      Reference 29 Glover Report: In our opinion the extinction capacity of the QFRS, was dependent on the rate of heat absorption of their water attack.  The heat release rate in the southern building was greater than the heat absorption of the aerial water attack whilst the fire was in the fully developed phase.  In our opinion the defensive approach to be preferred, would have been to protect exposures beyond the allotment and allow the fire to burn out.  Mr Glover expressed the wish to highlight his experience of large fires where water application was beneficial for cooling drums of flammable/combustible liquids preventing them from becoming involved in the fire and from becoming projectile drums.  …
…

23.        Reference 30 and 31 Glover Report:  In our opinion for the reasons described in paragraphs 123 through to 129 of Mr Manser’s report, when fighting chemical fires, an evaluation of relative risks to human health and to the biophysical environment of letting the fire burn or fighting the fire with water should be made.  In general it appears to be better to let the fire burn where there is no risk of the fire spreading to other allotments.  In our opinion a let burn strategy would have been the appropriate strategy because the aerial attack was ineffective and as the fire in the northern building started to reduce in intensity so would the southern building within a few hours.  …”

1. As to Mr Glover’s separate view expressed at paragraph 21 of the joint expert report just extracted, Mr Glover gave evidence of one chemical fire where he had some involvement – Tri‑tech.  He said that water was used there to protect exposures which were not on fire.  It was also applied by way of a very fine spray to particular parts of the fire with the aim of cooling them sufficiently to allow fire-fighters to go into areas otherwise inaccessible and apply foam to extinguish parts of the fire – t 5.43 and t 5.77-78.  I do not see that this use of water is analogous to, or relevant to, the use of water by the QFRS in fighting this fire.  There was no such specific aim or objective here, other than a general, and I find misplaced, view that water applied in high volume to buildings which were well alight would somehow cool and limit the fire.

1. Fire-fighters talk in terms of offensive and defensive operations.  Offensive operations aim to directly attack and extinguish fires, while the aims of defensive operations are more limited.  Area Director James described his strategy as defensive – acknowledging he did not aim to extinguish the fire with water (t 6.84) – but with the aim of preventing catastrophe (due to involvement of the tank or cylinder); saving as much property on the plaintiffs’ site as possible; preventing involvement of uninvolved flammable items, and minimising environmental impact – t 7.5.

1. As to property which could be protected, Area Director James identified the brick laboratory in front of the Northern building, but could not say, and indeed doubted, that water was applied to it – t 7.24. 

1. He identified a small shed in front of the Southern building, which seems relatively insignificant.  There is no evidence that water was applied to it.

1. He identified the drums of chemicals sitting between the Northern and Southern buildings as saved from igniting.  Area Director James did say that water was applied with the aim of preventing these drums becoming involved in the fire – t 7.5-7.  I have some scepticism as to this evidence because I think this part of his evidence is very much hindsight justification.  What is more, he only just gave the evidence: he was agreeing with leading questions and more disposed to talk about other things in his answer than to convincingly say water was applied this way in fact pursuant to a strategy – see for example the very top of t 7.7.  At other times in his evidence he said that where water was applied was up to the Operations Controller, not him – t 7.23-24 – and that he did not remember where it was applied.

1. In the end I find that water probably was applied to the drums in front of, and under, the awning.  Supporting this conclusion is Area Director James’ evidence, albeit with its problems; the fact that these areas were visible and accessible and obviously sensible targets for water, and the fact that these two areas did survive the fire.

1. There were a considerable number of drums which did not burn and add to the conflagration, or (potentially) rocket – t 7.17 and t 7.18.  The joint expert report acknowledged Mr Glover’s view as to this, which was that it was useful to apply water to these drums – see paragraph 21 and Mr Glover at t 5.79.  Dr McCracken said in his evidence that use of water by the QFRS in this way was logical – tt 4‑58‑59. 

1. Area Director James said that applying water to the front (office end) of the Southern building would assist in maintaining the protection afforded by the firewall, which otherwise might have failed because of the duration of the fire.  Again Area Director James did not distinctly say that water was applied to the firewall – see eg., t 7.46.  As it transpired, the firewall held and the office did not burn.  Mr Glover thought it was not unreasonable for an Incident Controller to try to save the front of the Southern building, by applying water to the firewall – t 5.46.  His experience was that while businesses can replace stock and equipment lost to fire, often records, contained in the offices are not able to be replaced.  His view in this regard took account of the fact that the fire in the Southern building started in the South-West corner, remotely from the office section protected by the firewall.  This seems a rational view on all the evidence.

1. Area Director James said he thought that the front part of the Northern building was less damaged than it might have been because of the application of water – t 7.8.  There was no other opinion to this effect and I am not persuaded that it is correct having regard to the unanimous views of the experts that water applied to the Northern building was not going to extinguish the fire.

1. I have already given my view that Area Director James had a tendency to rationalise, and justify defensively, after the event, the actions of the QFRS.  I think his evidence as to property which might have been saved by the application of water involved a hindsight justification of water application.  My conclusions as to this evidence are that, looking at the matter now, useful purposes can be discerned for the application of water to the firewall in the Southern building and the drums of chemicals under and in front of the awnings.  I find water was applied to those two areas.  It may have been useful to apply water to the laboratory and small shed but there is no evidence that water was so applied. 

1. In fact there was no evidence that the QFRS did apply water to any particular part of the site because it had made the decision that these specific applications would be useful, in circumstances where there was no hope of water extinguishing the fire.  Area Director James had remarkably little knowledge of where water was in fact applied – see tt 7.23-24 – his response was that this was up to the person designated as Operations Officer, who was not called.  When pushed on the point, Area Director James said he could not remember as the fire was eight years before the trial.  In circumstances where the fighting of the fire was almost immediately contentious, and one of the criticisms was as to the fire-water run-off, I find this remarkable.  Still, he could give not evidence that there was any specific plan or purpose in applying water.  Nor could he say that he issued directives or otherwise caused water only to be applied to the few things he can now say were logical targets of water application.  In fact, when regard is had to the whole of the evidence, it is clear that there were no such specific strategies.  The evidence is to the contrary: Area Director James said so, and the photographs and video-clips show this.  I now examine this evidence.

1. There were photographs taken during the course of the fire.  There were also five pieces of video footage of the fire contained in news broadcasts.  There are limitations on the use of the footage: it is fragmented – edited highlights.  It is not known at what precise times the footage was filmed.  The sum total of footage is a matter of minutes in the context of a fire which burned for many hours. Filming took place from a safe distance, so that it is difficult in any given case to say where, for example, a stream of water from an aerial appliance is being directed – t 3.10, t 3.11, t 3.15 and t 3.18.  The same sort of limitations exist in relation to the photographs. 

1. Nonetheless I accept that from the photographs and the footage, it can be seen that streams of water are being directed from aerial appliances to the fire itself (rather than what is on fire) and to buildings which are well alight, and from well over 4.5 metres away.  It can be discerned that at various points in the footage that what is going on is an attacking operation, rather than a containing operation – tt 3.10-15, t 4.48.

1. Mr Glover said in cross-examination that from what he could see, the video footage generally did not show water being used to protect exposures, eg., the firewall, t 5.46, but showed water directed at the fire and at what was on fire, at a time when the apparent targets of the water were fully involved in the fire – tt 5.48, 5.49, 5.50 and 5.57.  The significance of this last point – water directed at structures which were fully involved – was that Mr Glover, like the other experts, could see no useful purpose in applying water to fire in the buildings which were fully involved – t 5.49.

1. I find that Area Director James viewed it as sensible to apply water to property which was fully involved in the fire as a means of limiting or cooling that fire – he said so: t 7.25, t 7.38, t 7.41, t 7.45, t 7.l46, t 7.l47, t 7.48, t 7.49, t 7.50, t 7‑66.  This is also evident in his use of the term “brought under control” in the Major Incident Report.  One of the things the conference of experts agreed upon was that the fire reached a point of control, but it was not (as Mr Glover had originally opined) brought under control. 

1. The QFRS attempted to set up an aerial water tower in the vacant land to the North of the plaintiffs’ land but found it unworkable due to the direction of the smoke – t 2-65, t 2-69.  Area Director James said the point of the aborted attempt was to “… access the fire obviously …” – t 6-49 and “we were going to commence operations there, once again with the aim of property protection and extinguishing the fire as best we could.” – t 7.28.  The position of the attempt, relative to the fire in the Northern building can be seen in photographs 3 and 4.  This shows that the QFRS were thinking there was some point in training water on the Northern building, from well over 4.5 m away at a time when the unanimous expert view is that the building was lost and water application could serve no purpose. 

1. On the evidence, I find that water was not applied to protect exposures not on fire or any other particular parts of buildings as part of a deliberate strategy.  Water was applied to the drums under the awning and the firewall in the Southern building, but the application of water was certainly not limited to this.  It was applied in great quantities to parts of the buildings which were fully involved, and to the fire itself.  There was no useful purpose to be served by application of water to parts of the buildings which were fully involved and to the fire itself.

1. I record that there was argument and evidence about the method of water application by the QFRS.  Questions arose as to whether or not water had been applied in jet streams, sprays, or hollow core streams which, at least to some observers, might appear like jet streams but act in a way more analogous to a spray.  Whether water was applied in any of these modes, the relevant question was whether or not the application was directly to fire and objects which were fully involved in the fire, which on the evidence could not have been useful, or whether it was directed at objects which were not on fire in an attempt to prevent their catching alight, which was potentially useful.  It does not matter whether the application was by jet or spray.

Alternative Strategy: Let Burn

1. Mr Manser said that had he been in charge of this incident he would have adopted a let burn strategy.  Essentially this was to remove fire crew and equipment to a safe distance from the fire and allow the fire to burn itself out.  All efforts would have been directed to containing the fire within the allotment boundaries – report p 37 and t 4.27.  This strategy would have been adopted by Mr Manser in recognition of the futility of attempting to combat the fire with water. 

1. Mr Manser’s view was that the site was isolated enough to allow a let burn strategy to be safely adopted.  I find that this is correct.  On the Southern side, and to the West, there was grassland and then some scrubby bushland.  To the immediate East of the site was quite a wide roadway and footpaths.  To the North was an area of cleared land and then a timber yard.  I think that eventually Area Director James’ conceded this point – t 2.51 – although he did express concern about the timber yard – t 2.57 and t 6.59.  It was some distance away, and the ground between the plaintiffs’ land and the timber yard was bare of vegetation – t 6.4; tt 6.59-65.  I prefer Mr Manser’s view that the timber yard was an unlikely risk and that adequate resources were available to put out any fire if a drum did rocket that far.

1. I find that weather conditions were favourable to a let burn strategy in that there was low wind, low temperature and high humidity – Manser – t 3.12, James t 6-64. 

1. There was no doubt a risk that the fire might spread.  Primarily this risk was due to the drums of chemicals rocketing from the fire.  There is evidence that some flew into the bushland to the South and West of the site.  The spot fires they created were extinguished, I infer without much difficulty, judging by the small areas of burnt grassland resulting.[22]  The QFRS had small four-wheel drive vehicles available.  One drum flew right across Magnesium Street and into the front of the metal building opposite.  It did not ignite or cause a fire where it landed.  Officer Duncan regarded the risk that a fire would spread from a rocketing drum one which was “controllable” because there were fire officers standing by waiting to extinguish any spot fires – tt 6.6-7.  Area Director James thought the QFRS was in “a very good” position to extinguish the early stages of such a spot fire – t 6.60.

   [22]See tt 6.61-63 and the photographs.  There were four-wheel drive vehicles on site which could access all relevant areas of the surrounding land.

1. All experts accepted – joint report page 19 – that a let burn strategy would, if anything, have reduced the air pollution hazard because the chemical on site would have burned at a higher temperature; risen higher in the air as a consequence, and thus dispersed further and ultimately descended in less concentrated form.  All experts accepted that a let burn strategy would have reduced the water pollution hazard from the fire-water run-off from the site – joint report page 19.

1. It was put to Mr Manser that his let burn strategy was the result of a hindsight view.  He denied that.  He said that had he been Incident Controller on the night he would have adopted the let burn strategy – t 3.37 and tt 4.31-33.  Mr Manser had very considerable practical experience, including as an Incident Controller.  I thought he was realistic and steadfast under cross-examination on this point.  I accept his evidence as to this.

1. I accept that a let burn strategy as described by Mr Manser was an appropriate response to this fire.  That does not mean that it was the only reasonable response.  As already explained I think it was reasonable for water to be applied to the solvent tank and LPG cylinder. 

1. Area Director James accepted that had the QFRS limited its actions to keeping streams on the tank and cylinder it would have been safe to monitor and deal with any spot fires – t 7.16.  However, at no point in his evidence would Area Director James countenance a let burn strategy with cooling streams on the tank and cylinder, tt 7.15-16.  He could not articulate why not in any clear way, and his view seemed based on the idea that the application of water did substantially limit this fire – eg., t 7.22 and 7.25.

1. As I have detailed, there was no evidence that there was any deliberate strategy to target water at the firewall or at the drums in front of the awning for the specific purpose of stopping those drums and the office becoming involved in the fire.  Had there been such a strategy I would have considered it reasonable.

Decision-making About Response to the Fire

1. When viewing the video footage for the first time, one cannot help be stunned by the size and ferocity of the fire.  Of course, those in charge of the fire-fighting operation were not lay people.  They had been trained both theoretically and by practical experience to deal with such events.  While the fire itself was very fierce, weather conditions were favourable and the site was relatively isolated.  No civilian lives were in danger.  There were concerns as to the toxicity of the smoke plume.  Attention was given appropriately to obtain scientific advice as to this.  Area Director James was concerned to ensure that the men under his command remained as safe as they could be.

1. It was evident, and evident from early on in the fire-fighting operation, that both the Northern building and that part of the Southern building West of the firewall were lost to the fire – they could not be saved.  Officer Duncan thought this was so – t 6.39.  Area Director James agreed that both these buildings were “highly likely” to be lost from the time each caught alight – t 6.78 and t 7.23.  In this context Mr Manser said at t 4.14, “There was no – the buildings were lost.  There was no urgency.”  His view was that once it was realised that operations could only be defensive – that is there was no point in attacking the fire with a view to extinguish it – there ought to have been a discussion involving all the senior fire-fighters on site as to the best strategies available to them.  He said, “That re-evaluation might have brought up, we’ve got water run-off problems, well what about the run-off problems; do we need to continue to apply water?” – t 4.14. 

1. Despite the large number of senior fire‑fighters on site, there was no evidence that any serious consideration was given to why water was being applied and whether that application should be reduced or stopped.

1. All emergency services in Australia are trained in something known by the acronym AIIMS – Australasian Inter-service Incident Management Scheme.  Many of the witnesses gave evidence in relation to their understanding of what this scheme, or similar schemes, or sub-schemes provide.  There were aspects of nearly all these witnesses’ evidence which struck me as a bureaucratic response: overly focussed on formal requirements in disregard of practicalities and commonsense.[23]  Some of Mr Manser’s analysis of how a strategy ought to have been considered and adopted is made in terms of the AIIMS framework.  Whilst eschewing an unthinking application of the AIIMS rules, it seems to me that in several respects, matters which Mr Manser identifies as breaches of AIIMS rules are very much matters of substance. 

   [23]One example is the criticism made by several witnesses, including Mr Manser, of the fact that while Area Director James was designated as the Incident Controller, a more senior officer – Assistant Commissioner McKenzie – was in attendance.  He arrived about an hour-and-a-half after Area Director James – t 6.50.  Under AIIMS rules, the most senior officer present ought to be the Incident Controller or designated as an observer only.  Assistant Commissioner McKenzie broke these formal requirements of AIIMS by telling people to wear breathing apparatus and rubber boots and speaking to the media – t 4-11.  He also liaised with other Government authorities and the Caboolture Shire Council – t 6.5.  That is, he did not act only as an observer.  This was said to be significant and likely to produce confusion.  No incident of confusion was cited and I cannot see how this could possibly have created confusion, or be significant otherwise.

1. Secondly, I am not persuaded that Mr Hayward would have acted in accordance with recommendations made before the fire in circumstances where he did not act to improve his position in relation to the Western Australian plant after the fire.  It is difficult to credit that he only understood the gap in insurance cover recently.  The evidence in the case was that following the fire the plaintiffs made claims on existing insurers to recover their loss in remediating the land at Narangba and that these claims had been unsuccessful.  Mr Hayward was involved in making, and compromising, these claims.  I find it very difficult to believe that in the course of those exercises he did not come to appreciate that there was inadequacy in the plaintiffs’ insurance cover.

1. The fact that the insurance inadequacy for the Western Australian plant was never addressed does not sit in isolation.  It sits against a background where Binary Industries was allowed, by Mr Armstrong and Mr Hayward, to operate without public liability insurance for just over 12 months.  As well, the Narangba plant was allowed to operate without insurance as to stock, even though the value of the stock there was high.  These were risks which Mr Armstrong and Mr Hayward were prepared to take.  The incorporation of Binary Industries in order to avoid a claim made against Binary Chemicals, and the false book-keeping entries to make the Narangba site more attractive to a potential purchaser, also show that Mr Hayward and Mr Armstrong were comfortable with assuming quite significant risk in their commercial enterprises. 

Causation 3

1. Mr Hayward’s evidence as to the ISR policy was that he would only have bought cover if Austbrokers, as well as the second and third defendants, had recommended it – t 11.64.  He named a Mr Downey as the person from whom he received advice from Austbrokers after Mr Hayden left the business.  Nobody from Austbrokers was called to give evidence as to what recommendations they might have made had they been asked.  I am not persuaded that they would have recommended an ISR policy in circumstances where they had not done so in the past.

1. Furthermore, Mr Jones, a very experienced property insurance underwriter, was called by the second and third defendants.  He said two significant things.  First, that no insurer would have provided ISR cover to the plaintiffs while their existing property cover for the Narangba site remained in place.  He gave reasons for this which I need not detail as this evidence was not challenged in cross-examination.  In fact the plaintiffs amended their statement of claim very late in the trial to plead that, had they been properly advised by the second and third defendants, they would have, inter alia, discontinued their property cover in train of acquiring ISR cover.[111]

   [111]See s 51A(a)(iv) of the amended statement of claim.

1. Secondly, Mr Jones said that covers for removal of debris and extra costs of reinstatement were available to the plaintiffs as options or extensions on their existing property insurance.  These are the types of covers which the plaintiffs say they would have had the advantage of, had the second and third defendants obtained an ISR policy for them.  The availability of these options or extensions on the plaintiffs’ property cover was not challenged when Mr Jones was cross-examined.

1. Had the second and third defendants recommended an ISR policy, and had the plaintiffs consulted Austbrokers, it may very well be that Austbrokers, rather than recommending the plaintiffs cancel their existing property policies, recommended that the plaintiffs take up options to extend cover under them.  The plaintiffs ran no alternative case that had they been advised by the second and third defendants to buy an ISR policy they would not have done so, but would have extended their property cover.  There was no evidence as to the terms of the extended property cover.

Causation 4

1. I am not persuaded that the plaintiffs proved they could have been named as insureds or interested parties on the Binary Industries’ liability policy.  Mr Munro said that could have been requested.  In response he expected that the underwriters would have required information including claims histories from the additional insureds.  The underwriters, if satisfied, may have included the plaintiffs on that policy or asked for a stand-alone policy.  There was no evidence led on behalf of the plaintiffs that if claims histories and other information from the plaintiffs had been provided to the underwriters who took on the Binary Industries’ risk, those underwriters would have named the plaintiffs as insureds or interested parties.  All the evidence was that the market was very difficult.  It cannot be assumed that insurance would have been available.  The plaintiffs simply failed to prove their case in this regard. 

1. Likewise, there was no real evidence that there was an insurer who would have provided the ISR policy to the plaintiffs had they been inclined to buy it.  Mr Manning said at t 6.26 that an ISR policy would have been available, but this was an opinion at a level of generality from someone who was not in command of all the relevant facts which should have been brought to the insurer’s attention, and was not a broker or an underwriter.  Once again, I think the plaintiffs really failed to prove their case in this regard – cf t 16.56 where I drew my concerns to the plaintiffs’ counsel in addresses.  They were not allayed.

Causation 5

1. More independent reasons as to why the plaintiffs’ claim must fail on causation are found when attention is turned to whether the policies which the plaintiffs say ought to have been obtained would have been of benefit in all the events which have occurred.

Plaintiffs on Binary Policy

1. I will deal first with the plaintiffs’ case that the second and third defendants ought to have brought about a situation where the plaintiffs were named as insureds or interested parties on the policy which was obtained for Binary Industries.  Whether the plaintiffs had been named as insureds or interested parties on that policy, the policy would not have covered their costs of complying with orders of the EPA to remediate the Narangba land.  Relevantly, the insurance obtained for Binary Industries contained a promise that, “The Insurers will indemnify the Insured against their liability to pay compensation for … damage …”.  The plaintiffs contended that orders of the Planning and Environment Court obliging the plaintiffs to remediate their land fell within the words “liability to pay compensation”.  This point as to the interpretation of the contract of insurance was heard separately in advance of the trial.  The plaintiffs lost.[112]  They lost again on appeal.[113]  Undaunted, the plaintiffs applied for special leave and that application was refused by the High Court.

   [112]Hamcor Pty Ltd and Anor v The State of Queensland and Ors [2013] QSC 9.

   [113]Hamcor Pty Ltd & Anor v Marsh Pty Ltd & Anor [2013] QCA 262.

ISR Policy

1. The type of policy the plaintiffs alleged that the defendants ought to have obtained was an Australian standard form ISR policy, Mark IV, with additional benefits and limits of cover for: (1) removal of debris at $900,000, and (2) extra cost of reinstatement at $750,000.[114]  The plaintiffs did not claim that the ISR policy would have fully indemnified them in the circumstances which have occurred, but claim that an amount of $1.65 million would have been available to them pursuant to it. 

   [114]These monetary limits were the subject of evidence, see t 11.9 ff and t 11.62, and calculation based on other policy limits, and were accepted by the second and third defendants.

1. The defendants say that even had the ISR policy pleaded by the plaintiffs been in place at the time of the fire, the plaintiffs would not have been indemnified pursuant to it in relation to the loss claimed in this proceeding.  I determine these construction issues in part based on the scheme of the ISR policy pleaded by the plaintiffs.  I set the policy out in abbreviated form in Annexure A to this judgment. 

Debris

1. I deal first with the plaintiffs’ contention that the provisions as to removal of debris would have responded to partly indemnify them in respect of the costs spent complying with the EPA’s requirements to remediate the land.

1. The ISR policy provided at section 1:

“Subject to the liability of the Insurer(s) not being increased beyond the Limit(s) of Liability already stated herein, the Insurer(s) will also indemnify the Insured for:

(a)…

…

(f)costs and expenses necessarily and reasonably incurred in respect of:

i)the removal, storage and/or disposal of debris or the demolition, dismantling, shoring up, propping, underpinning or other temporary repairs consequent upon damage to property insured by this Policy and occasioned by a peril insured against;

ii)the Insured’s legal liability in respect of removal, storage and/or disposal of debris, notwithstanding Excluded Peril 8 in relation to premises, roadways, services, railway or waterways of others, consequent upon damage to the Property Insured by a peril hereby insured against, for such costs together with the cost of cleaning provided that such liability was not assumed by the Insured under an agreement entered into after the commencement of the Period of Insurance or any renewal thereof unless liability would have attached in the absence of such agreement.

Provided that the insurance under this section does not extend to any liability that the Insured may incur as a consequence of pollution of any kind;

iii)the demolition and removal of any property belonging to the Insured which is no longer useful for the purpose it was intended, providing such demolition and removal is necessary for the purpose of the reinstatement or replacement of Property Insured under this section and is consequent upon damage to the Property Insured by a peril hereby insured against;

…” (tabulation in the original)

1. The plaintiffs’ case relied on cl (f)(i), not cl (f)(ii) – tt 9.23-24.

1. Here, chemicals mixed with water applied by the QFRS soaked into the plaintiffs’ land; the concrete floors to the large sheds and other paved areas on that land, and contaminated the ground-water.  The plaintiffs argued that their costs of remediation fell within the words “removal, storage or disposal of debris”.  The second and third defendants said that chemical contamination was not debris within the meaning of the policy.

1. There is no definition of the term debris in the policy, and surprisingly, no case law which is of assistance.  The plaintiffs argued that the Court of Appeal had determined this point in their favour when the preliminary points were argued before trial.  The relevant part of the Court of Appeal’s decision is:

“[27]     The primary judge relevantly found:

‘[53]     Those costs were also not capable of being the subject of indemnity under the ISR policy identified by the [appellants].

[54]     That policy provided indemnity in respect of costs and expenses necessarily and reasonably incurred in respect of “the removal, storage and/or disposal of debris”.  The use of the term “debris” is consistent with a requirement that any indemnity relate to the cost of the removal storage and/or disposal of accumulated physical items.  It is inconsistent with indemnity being given for the costs of remediation of pollution in respect of the insured’s own property.

[55]     This interpretation is supported by the express exclusion contained within the pleaded clause that the insurance “does not extend to any liability that the Insured may incur as a consequence of pollution of any kind”.  The position of those words is consistent with the intention of the parties being that clauses (f)(i) and (f)(ii) of the policy not extend to any liability the insured may incur as a consequence of pollution.’

[28]       I accept the appellants’ contention that the use of the term ‘debris’ is not inconsistent with an indemnity for the costs of remediation of polluted property.  The word ‘debris’ is capable of describing various forms of residue from the destruction by fire of premises: plant and goods such as ash; charred, melted or heat damaged materials; and water damaged materials.” (my underlining).

1. The Court of Appeal declined to make any rulings or declarations in relation to the ISR policy.  It set aside those which had been made by the primary judge.

1. It is fair to say that the Court of Appeal did not warmly embrace the argument that the chemical residue in the concrete, soil and ground-water of the plaintiffs’ land could not be debris within the meaning of the policy.  On the other hand, the Court of Appeal distinctly did not say that chemical residue in soil or ground‑water was debris.  The examples given at [28] of the Court of Appeal judgment are all examples of physical items separate from the soil or ground-water.  The definition of debris in the shorter Oxford English Dictionary is, “The remains of anything broken down or destroyed; ruins, wreck … any similar rubbish formed by destructive operations”.  The Macquarie Dictionary says debris is, “The remains of anything broken down or destroyed, ruins, fragments, rubbish”. 

1. Perhaps in molecular terms the chemical contamination of the soil and ground-water at the Narangba site is the remains of something broken down by the destructive operation of fire on the drums containing chemicals.  There was no scientific evidence to that effect, or to the effect that these chemicals remained, or remain, separate from the land or ground-water.  I do not think that the word debris ought to be construed in a way which hinges on a scientific or molecular analysis.  In ordinary English usage it seems to me that the effect of contaminated fire-water having soaked into the soil and ground-water is that the soil and water are contaminated or polluted, not that the land and water have become debris, or that there is debris in the land and water which cannot be seen separately from them. 

1. It is not of course determinative, but I did note that both Mr Machado, an experienced loss adjustor[115] and Mr Lee, an engineer specialising in remediation of land (eg., report p 3) both discussed removal of debris as something different from the bio‑remediation or decontamination of the plaintiffs’ land and ground-water.  They  both spoke of debris as physical rubble or remains separate from chemical pollution.  Neither of those gentlemen was addressing the construction problem I am dealing with.  However, they were discussing the after effects of the fire on the plaintiffs’ land.  I see this language use as confirming my views about the ordinary meaning of the word debris in this context.

   [115]See his first report and particularly his discussion of removal of debris and his reference to the work of the plaintiffs’ property insurer’s loss adjustor which is annexure 2 to Mr Machado’s report.

1. In the plaintiffs’ favour, however, it seems to me that pavement and concrete flooring which was soaked with fire‑water and thus contaminated may be debris within the meaning of this clause.  It is physically separate from the land and water.  If it were structurally weakened, deformed or discoloured by fire such that it could no longer be used, it would properly be regarded as debris within the ordinary meaning of the word.  As a matter of ordinary language the chemical-soaked concrete could be regarded as debris.  Of course, my view about this does not affect the outcome for the plaintiffs.

Debris consequent on damage to Insured Property

1. Independently of their arguments as to the meaning of the word debris, the defendants argued that the plaintiffs’ costs associated with chemical contamination of their land would not have been costs of removing, storing or disposing of debris under an ISR policy because any debris would not have been debris consequent on damage to insured property.  It is necessary to start with the insuring clause and look to see whether, had the ISR policy  been in place, there would have been any physical loss, destruction or damage to the “Property Insured described in section 1”.  The property insured is “all real and personal property of every kind … belonging to the Insured or for which the Insured is responsible …”. 

1. The expert opinion of both the plaintiffs’ witnesses in cross‑examination[116] was that the term “debris” in the clause under consideration was construed within the insurance industry in Australia as meaning debris which was the remains of property which was itself insured property under the policy. 

   [116]Dr Manning, t 10-21 and Mr Matteson, t 11-13.

1. The meaning given to a particular word or term in an industry is relevant if it can be shown that the parties intended that the word or term have that meaning in their contract.[117]  But this principle can only be of assistance where both the contracting parties are part of the industry and thus can both be taken to be cognisant of the meaning and to have used the word in that way.  The only relevance of a common industry meaning can be that it affects the objective intention of both parties in using the word.[118]  Insurers may well all have the same view as to what debris means in a clause such as this, but there is no reason to think that the plaintiffs had that knowledge or understanding.  Therefore I do not think the understanding of insurers is relevant when I interpret the word debris.

   [117]Lewison, K, The Interpretation of Contracts (Sweet and Maxwell), 4^th ed, 5.09.

   [118]Electricity Generation Corp v Woodside Energy Ltd [2014] HCA 7, [35]; Byrnes v Kendle (2011) 243 CLR 253, [98]-[99]; Chartbrook Ltd v Persimmon Homes Ltd [2009] 1 AC 1101, [47].

1. The issue does not end there for the defendants say, independently of industry usage, that properly construed, the word debris in this policy can mean only the broken down or destroyed components of property which was itself insured.  I accept this submission.  I think it flows from the words “consequent upon damage to the property insured” in cl (f)(i).  If an insured had two buildings on land and insured one but not the other, I cannot see that the cost of removing debris consisting of the rubble of the uninsured building could be something which fell within cl (f)(i).  If it is assumed that the plaintiffs would have insured their buildings under an ISR policy, but not the stock in them, I cannot see that the situation is any different.  That is, I cannot see that even if the chemical contamination to the land, pavement and ground-water were to be regarded as debris, it would be debris consequent on damage to property insured.  To the contrary, it would be debris consequent upon damage to property (stock) which was not insured. 

1. The chemicals which caused contamination to the plaintiffs’ land were either owned by Binary Industries itself and were uninsured[119] or were the property of customers of Binary Industries and were not insured by Binary Industries.[120]  The defendants argued that even if it were assumed that the plaintiffs purchased an ISR policy, the plaintiffs would not have insured stock pursuant to it.  Mr Hayward gave evidence in cross-examination that it was unlikely he would have insured stock if he had purchased an ISR policy – t 11.63-64.  No doubt it would very much have depended on the advice he was given.  Once again I come back to Mr Hayward’s evidence that any advice from the second and third defendants would have been taken to Austbrokers for their opinion.  Given Mr Hayward’s views about not insuring stock, and Austbrokers’ failure to change these in the past, I am not able to conclude that the plaintiffs would have insured stock, even had they bought an ISR policy.

   [119]t 11-60.

   [120]Exhibit 5, tab 144 and t 11-52.

1. By reason of the eighth exclusion under the heading Property Exclusions, land is excluded from property insured.  Also excluded are dams and their contents – see the ninth property exclusion.  There was therefore no alternative argument available to the plaintiffs that contamination of their land and dams was in some way itself damage to insured property or debris consequent on such damage.

Proviso to cl (f)(ii)

1. It was contended by the defendants that the proviso situated under cl (f)(ii) applied to cl (f)(i).  I reject this argument.

1. This proviso excludes “any liability that the insured may incur as a consequence of pollution of any kind”.  It is necessary to have regard to the setting out of the whole ISR policy in Annexure A to fully appreciate the difficulties in interpreting this proviso.  The competing arguments as to its construction are canvassed in the Court of Appeal judgment between these parties at [29]-[33].  I agree with the difficulties identified by Muir JA.  There are two Sections to the ISR policy and both before and after the proviso in question the words “this section” are used in a way which clearly mean either Section 1 or Section 2 of the policy.  An instance of this occurs just half a dozen lines below the use of the words “this section” in the proviso.  This juxtaposition favours the defendants’ argument, for one should strive to give consistent meaning to the same language. 

1. Against the defendants’ construction is the location of the proviso.  It would be remarkable to locate it below cl (f)(ii) if it were intended to apply to other clauses.  The proviso following cl (g) contrasts.  It is located at the end of the series of clauses (a)‑(g) and is expressed to apply to all of clauses (b)-(g).  Furthermore, there are memoranda which apply to every part of Section 1 grouped together under a heading to that effect situated at the end of Section 1.  Then there are exclusions, memoranda and conditions which apply to every clause in the policy grouped together at the end of Section 2 under the headings such as, “Exclusions to all Sections”.

1. A strong indication that the proviso located below cl (f)(ii) is to apply only to cl (f)(ii) is its subject matter.  Of all the matters at clauses (a)-(g), cl (f)(ii) is the only one which deals with indemnity against the insured’s legal liability to a third party.  Indeed, this is an unusual indemnity in a policy which is primarily a property policy rather than a liability policy.  Unlike any of the other clauses (a)-(g), cl (f)(ii) deals with the insured’s legal liability.  The proviso deals with a qualification on “liability that the insured may incur”.  That is, the substance of the proviso applies most logically to the substance of cl (f)(ii). 

1. I construe the proviso situated under cl (f)(ii) as applying only to that subclause and not limiting cover at cl (f)(i).

1. I note that there was expert evidence as to industry meaning of the word “liability” in cl (f)(ii) and the proviso under it.  For reasons expressed above, I do not find that relevant in interpreting the contract.

1. As noted above, the plaintiffs relied upon cl (f)(i), not cl (f)(ii), as being of benefit to them had the policy been in place at the time of the fire.  The plaintiffs’ arguments were designed to limit the operation of the proviso to cl (f)(ii).  In my opinion, that proviso means that cl (f)(ii) would not have availed the plaintiffs had the policy been in place because, having regard to the ordinary meaning of words, any liability the plaintiffs might have had in relation to the property of others was as a consequence of pollution.  Furthermore, the plaintiffs did not put their case on the ground that they had any liability in relation to the “premises, roadways, services, railway or waterways of others”.

Removal of Debris

1. As originally formulated the plaintiffs’ insurance case was that they should have been insured under Binary Industries’ liability policy and that the cost of complying with directions of the EPA was a liability to pay compensation – see paragraph 29(h) of the statement of claim at [236] above. The claim as to the ISR policy was added later, but the pleading never outlined how amounts spent by the plaintiffs were within the removal of debris or extra costs of reinstatement provisions of that policy. Nor was there any attempt at trial to isolate parts of the costs incurred by the plaintiffs as referable to these provisions.

1. When regard is had to the evidence of Mr Machado, Mr Smith and the report of Mr Lee, it is not at all clear what costs were spent on removal, storage or disposal of debris.  For example, there are invoices from Veolia for “the removal of solid waste” in amounts of over half a million dollars each, which do not allow one to tell whether or not the solid waste was soil, sludge, broken down concrete, or something which would normally fit within the ordinary meaning of debris – see tt 10.38-39.  In fact from Mr Smith’s reports it is not clear that remediation of the plaintiffs’ land involves removal of those parts of it which contain chemical residue; there seems to be a plan to keep much of it on site and bio-remediate it there, including, it seems, contaminated concrete floors and pavements.

1. In his report Mr Lee gives his understanding that perhaps 95 per cent of all debris and rubble from the fire were removed from the site to licensed landfill within a few weeks of the fire – p 3.  I do not know what that cost.

1. Mr Machado calculated that, of the amount (ca. $3 million) paid to the plaintiffs by their property insurers, an amount of $265,145 was attributable to removal of debris after the fire.  This was accepted by the second and third defendants.  Mr Machado’s calculation was based on the work of the loss adjustors for the property insurer who paid the plaintiffs.  Their report is annexure 2 to Mr Machado’s first report.  Reading it shows just how complicated issues as to the interaction between work to remove debris and to deal with contamination were, even at that early stage.  The clear inference from the report is that removal of debris would cost more than the $265,000 or so allowed.  Equally clear however is that calculation of a reliable estimate for removal of debris is complex.  It is not something I can essay without proper evidence.

1. I cannot find that the plaintiffs have proved an identifiable amount of loss which consists of removal, storage or disposal of debris.

Extra Costs of Reinstatement

1. I now deal with the plaintiffs’ claim that they would have had available to them extra costs of reinstatement pursuant to the ISR policy had that been in place.  It can be seen from Annexure A that the ISR policy contains first a memorandum called, Reinstatement or Replacement, and then a memorandum called, Extra Costs of Reinstatement.  The provisions of both these memoranda are quite inapt to indemnify the plaintiffs against the costs of remediating the land, soil and ground‑water at Narangba.  By their terms, these provisions apply to buildings, machinery and plant, as well as “all other property”.  Property must mean insured property and that excludes land other than buildings.  It does not affect my thinking in this regard that the memorandum headed Reinstatement or Replacement contains the phrase “damaged property insured” and the memorandum headed, Extra Costs etc, just says, “damaged property”.  Furthermore, when the meaning of reinstatement is examined it is apparent that reinstatement could not apply to remediation of land and ground‑water – it applies to buildings or property which can be repaired so that their condition is as they were “when new”, see the words used in the memoranda themselves and the provisions which follow them.

1. Once again, it may be that contaminated concrete flooring and pavement is to be treated differently from contaminated soil and water and, unlike soil and water, does fall within the definition of property and indeed “damaged property insured”.  And, once again, I have no evidence which would enable me to make a reliable estimate of costs incurred by the plaintiffs were they entitled to be indemnified under this clause.

Disposition

1. I give judgment for the first, second and third defendants against the first and second plaintiffs.

ANNEXURE A

“SECTION 1 – MATERIAL LOSS OR DAMAGE

THE INDEMNITY

In the event of any physical loss, destruction or damage … not otherwise excluded happening at the Situation to the Property Insured described in Section 1 the Insurer(s) will, subject to the provisions of this Policy … indemnify the Insured …

Subject to the liability of the Insurer(s) not being increased beyond the Limit(s) of Liability already stated herein, the Insurer(s) will also indemnify the Insured for:

(a)architects’, surveyors’, consulting engineers’, legal and other fees …

(b)any fee, contribution or other impost payable to any Government, Local Government or other Statutory Authority …

(c)costs and expenses necessarily and reasonably incurred for the purpose of extinguishing fire …

(d)costs and expenses … for the temporary protection and safety of property …

(e)costs of replacing locks …

(f)costs and expenses necessarily and reasonably incurred in respect of:

i)the removal, storage and/or disposal of debris or the demolition, dismantling, shoring up, propping, underpinning or other temporary repairs consequent upon damage to property insured by this Policy and occasioned by a peril insured against;

ii)the Insured’s legal liability in respect of removal, storage and/or disposal of debris, notwithstanding Excluded Peril 8 in relation to premises, roadways, services, railway or waterways of others, consequent upon damage to the Property Insured by a peril hereby insured against, for such costs together with the cost of cleaning provided that such liability was not assumed by the Insured under an agreement entered into after the commencement of the Period of Insurance or any renewal thereof unless liability would have attached in the absence of such agreement.

Provided that the insurance under this section does not extend to any liability that the Insured may incur as a consequence of pollution of any kind;

iii)the demolition and removal of any property belonging to the Insured which is no longer useful for the purpose it was intended, providing such demolition and removal is necessary for the purpose of the reinstatement or replacement of Property Insured under this section and is consequent upon damage to the Property Insured by a peril hereby insured against;

(g)damage to clothing and tools of trade …

Provided that the insurance under Clauses (b) to (g) inclusive above shall not be subject to application of any Co-insurance clause or memorandum contained in this Policy.

THE PROPERTY INSURED

All real and personal property of every kind and description (except as hereinafter excluded) belonging to the Insured or for which the Insured is responsible …

BASIS OF SETTLEMENT

(a)On buildings, machinery, plant and all other property and contents …

(b)On raw materials, supplies and other merchandise …

(c)On material in process of manufacture …

(d)On finished goods …

(e)On computer systems records, documents …

(f)On patterns, models, moulds or lasts …

(g)On glass …

(h)On directors’ and employees’ clothing …

(i)On empty premises awaiting demolition …

MEMORANDA TO SECTION 1

Except to the extent that this Policy is hereby modified under the following Memoranda the terms, Conditions and limitations of this Policy shall apply.

INTERESTS OF OTHER PARTIES

…

BRANDED GOODS

…

DECLARED VALUES

…

REINSTATEMENT OR REPLACEMENT

(Applicable to buildings, machinery, plant and all other property and contents; other than those specified in items (b) to (i) under Basis of Settlement).

The basis upon which the amount payable is to be calculated shall be the cost of reinstatement of the damaged property insured at the time of its reinstatement, subject to the following Provisions and subject also to the terms, Conditions and Limit(s) or Sub-Limit(s) of Liability of this Policy.

For the purpose of the insurance under this memorandum, “reinstatement” shall mean:

(a)Where property is lost or destroyed: in the case of a building, the rebuilding thereof or in the case of property other than a building, the replacement thereof by similar property; in either case in a condition equal to, but not better or more extensive than, its condition when new.

(b)Where property is damaged: the repair of the damage and the restoration of the damaged portion of the property to a condition substantially the same as, but not better or more extensive than, its condition when new.

Provisions

i…

ii…

iii…

iv…

v…

EXTRA COST OF REINSTATEMENT

(Applicable to buildings, machinery, plant and all other property and contents; other than those specified in items (b) to (i) under Basis of Settlement).

This Policy extends to include the extra cost of reinstatement (including demolition or dismantling) of damaged property necessarily incurred to comply with the requirements of any Act of Parliament or Regulation made thereunder or any By-Law or Regulation of any Municipal or other Statutory Authority; subject to the following Provisions and subject also to the terms, Conditions and Limit(s) or Sub-Limits of Liability of this Policy.

Provisions

i…

ii…

iii…

iv…

v…

FLOOR SPACE RATIO INDEX (PLOT RATIO)

…

ACQUIRED COMPANIES

…

CO-INSURANCE

…

SECTION 2 – CONSEQUENTIAL LOSS

THE INDEMNITY

…

EXCLUSIONS TO ALL SECTIONS

PROPERTY EXCLUSIONS

This Policy does not cover physical loss, destruction of or damage to the following property or loss under Section 2 resulting therefrom:

1.property … whilst in transit …

2.Money:

…

3.jewellery, …

4.… locomotive or rolling stock …

5.vehicles …

6.livestock, …

7.standing timber, …

8.land, provided that this exclusion shall not apply to structural improvements on or in the land if such structural improvements are not otherwise excluded in this Policy;

9.bridges, canals, roadways and tunnels, railway tracks (other than on the premises occupied or used by the Insured), dams and reservoirs (other than tanks) and their contents.

10.docks, wharves and piers …

11.mining property …

…

PERILS EXCLUSIONS

The Insurer(s) shall not be liable under Sections 1 and/or 2 in respect of:

1.… loss … occasioned by … war …

2.… loss … caused by … radioactivity …

3.… loss … occasioned by … flood …

4.… loss … occasioned by … moths, termites or other insects …

5.… loss … occasioned by … incorrect siting of buildings …

6.… loss … occasioned by … theft … spontaneous combustion …

7.… loss … occasioned by … fraudulent or dishonest acts …

8.any legal liability of whatsoever nature other than as herein provided;

9.consequential loss of any kind …

MEMORANDA APPLICABLE TO ALL SECTIONS

…

CONDITIONS – APPLICABLE TO ALL SECTIONS

…”