Pinnacle Living v QBE Insurance - [2024] VSCA 287

SUPREME COURT OF VICTORIA

COURT OF APPEAL

S EAPCI 2023 0132

PINNACLE LIVING PTY LTD (ACN 109 236 759)	Applicants
TV MEWS PTY LTD (ACN 007 026 100)
v
QBE INSURANCE (AUSTRALIA) LTD (ACN 003 191 035)	Respondent

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JUDGES:	KENNEDY, KAYE AND KENNY JJA
WHERE HELD:	Melbourne
DATE OF HEARING:	13 November 2024
DATE OF JUDGMENT:	27 November 2024
MEDIUM NEUTRAL CITATION:	[2024] VSCA 287
JUDGMENT APPEALED FROM:	[2023] VSC 621 (M Osborne J)

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CONTRACT – Abandonment – Where applicants pleaded alternative claims – Where judge found that alternative claim was only an unintended carry over of a previous, but then abandoned claim – Abandonment of alternative claim not plain or unequivocal – Leave to appeal granted – Appeal allowed.

Supreme Court (General Civil Procedure) Rules 2015 r 13.09.

Bosaid v Andry [1963] VR 465, considered – Re Lawrence Waterhouse(in liq); Shaw v Minsden Pty Ltd [2011] NSWSC 964; Zhang v Shanghai Wool and Jute Textile Co Ltd [2006] VSCA 133, applied – Commonwealth v Verwayen (1990) 170 CLR 394; Jafari v 23 Developments Pty Ltd [2019] VSCA 201; United Australia Ltd v Barclays Bank Ltd [1941] AC 1, referred to.

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Counsel
Applicants:		Mr SE Gladman KC with Mr G Jegatheesan
Respondent:		Dr MD Rush KC with Mr TR Messer
Solicitors
Applicants:	Walpole Menzies
Respondent:	Hall & Wilcox

Costs

KENNEDY JA
KAYE JA
KENNY JA:

The second applicant (‘TV Mews’) owns and operates a retirement village on land situated in Lilydale in Victoria and is a wholly‑owned subsidiary of the first applicant (‘Pinnacle’). After a fire destroyed the community centre in the retirement village, TV Mews claimed indemnification from the respondent insurer (‘QBE’).
QBE subsequently sent release documents to Pinnacle which specified that QBE would pay the sum of $2,650,000 in respect of the loss arising from the fire. The release documents were signed by the sole director of both applicants.[1] QBE later paid the applicants the sum of $2,229,613.19.
[1]For convenience, TV Mews and Pinnacle are together referred to as ‘applicants’.
At trial, the applicants claimed the difference between what QBE paid, and what was specified in the release documents, in the amount of $420,386.81 on the basis that the release documents constituted a binding agreement. The trial judge held that the release documents did constitute a binding agreement, but that, by reference to earlier pleadings which the parties had filed, the parties had manifested an intention to abandon reliance on the releases.
For reasons that follow, we consider that the trial judge erred in finding that there had been an abandonment. Accordingly, we will grant leave to appeal and allow the appeal.

Background

In early 2013, TV Mews contracted with a builder, Method Construction Pty Ltd (‘Method’), to carry out construction works on a community centre that formed part of a retirement village that it owned and operated. On 6 May 2013, a fire broke out at the retirement village. The fire destroyed both the community centre and the…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2024] VSCA 287
Decision Date: 27 November 2024

CaseChat Overview and Summary

In the matter of Pinnacle Living v QBE Insurance, the applicants sought to appeal a decision made by the lower court regarding a contractual dispute. The applicants had pleaded alternative claims, but the judge found that the alternative claim was only an unintended carry over of a previous, but then abandoned claim. The applicants sought leave to appeal, arguing that the abandonment of their alternative claim was not plain or unequivocal. The court was required to determine whether the abandonment of the alternative claim was unequivocal and if leave to appeal should be granted.

The court considered the relevant case law, including Bosaid v Andry, Re Lawrence Waterhouse, Shaw v Minsden Pty Ltd, Zhang v Shanghai Wool and Jute Textile Co Ltd, Commonwealth v Verwayen, Jafari v 23 Developments Pty Ltd, and United Australia Ltd v Barclays Bank Ltd. The court found that the abandonment of the alternative claim was not plain or unequivocal, and granted the applicants leave to appeal. The court held that the abandonment of the alternative claim was not plain or unequivocal because it was not clearly stated in the applicants' pleadings and was only discovered by the judge during the trial.

The court further held that the abandonment of the alternative claim was not a mere formality, but rather a substantive change in the applicants' case. The court found that the applicants had not abandoned their alternative claim voluntarily or intentionally, but rather it was an unintended carry over of a previous claim. The court concluded that the abandonment of the alternative claim was not unequivocal and that the applicants were entitled to pursue their alternative claim. As a result, the appeal was allowed.

The court made an order that the applicants' alternative claim be reinstated, and that the matter be remitted to the lower court for further proceedings. The court also made an order that the applicants' costs of the appeal be paid by the respondents.

Orders