Allianz Australia Insurance Limited v Delor Vue Apartments CTS 39788

The facts 270 Although the general nature of the circumstances of this matter are briefly mentioned above, in order to deal with the myriad issues raised on appeal, it is necessary to set them out in substantially greater detail. A very clear and real danger would exist in assessing the operation of the principles of estoppel, election, waiver and utmost good faith by reference to only a few of the more germane facts from the total picture in which the issues arose. Those principles must be considered in their proper context. 271 The following narration of facts is largely taken from the learned primary judge's careful and close analysis, although it omits reference to those matters which were relevant to whether Delor Vue had breached its disclosure obligations pursuant to s 21 of the ICA, that issue not being challenged on appeal. Additionally, no reference is made to those facts which related only to the case advanced by Allianz at trial which alleged misrepresentation by Delor Vue's agents when negotiating the policy. The primary judge rejected that claim and, again, no challenge is made to that determination on this appeal. 272 Delor Vue, more properly described as Delor Vue Apartments CTS 39788, is the body corporate of a community title scheme created under the Body Corporate and Community Management Act 1997 (Qld) (the BCCM Act). Relevantly, from 30 May 2016, it engaged a body corporate manager, Aspire Body Corporate Management (Aspire), of which a Mr Key was director. It is convenient to refer to Mr Key, himself, as the actual body corporate manager. Prior to Aspire's appointment, the body corporate manager was a firm called Archers BCM (Whitsundays) Pty Ltd (Archers). 273 In the day-to-day operation of the Delor Vue complex, the body corporate manager reported to the committee of the body corporate which had been established in accordance with the BCCM Act. In these reasons, it is simply referred as "the Committee". 274 The community title scheme incorporated land on which 11 multistorey buildings had been erected for residential dwellings and, around them, there existed a substantial area of common property. The buildings contained around 62 apartments in total. 275 As mentioned, the apartment complex is located at Cannonvale, near Airlie Beach, in the Whitsundays area of Queensland.

The pre-existing issues with the buildings at the Delor Vue complex 276 For some time from 2014, there arose not insubstantial discontent from a number of unit owners in relation to certain building issues for which they sought to hold the developer and builder of the complex accountable and, for that purpose, a number of expert reports were obtained. In November 2014, Archers produced a report to assist Delor Vue to meet its statutory obligations in relation to safety and the maintenance of the property in a safe condition. Of particular relevance in that report was the identification of "sections of eaves lining 'missing' on two blocks". The "eaves lining" comprised largely aesthetic "soffit" sheeting or panels that lined the underside of the eaves. Recommendations were made for the repair of the missing sections and for a further inspection to be undertaken to ensure that other areas were secure and did not pose a "falling hazard". 277 In April 2015, a further report was commissioned and obtained for the purpose of seeking evidence of "Structural Damage; Conditions Conducive to Structural Damage; and Major Defect in the condition of Secondary Elements and Finishing Elements; collective (but not individual) Minor Defects; and any Serious Safety Hazard" in relation to the buildings at the Delor Vue complex. The report identified a wide range of defects but, relevantly for the issues in the present case, identified evidence of sagging soffit sheeting. The report advised that this indicated a high risk of undetected structural damage and recommended that a further inspection be undertaken of areas which were not readily accessible. 278 That report was tabled at Committee meetings on 25 May and 21 July 2015 during which the issue of the defective eaves was considered, as was the observation in the report that a further beam ought to have been installed at the time of construction onto which the eaves might have been attached. A letter was then sent to the builder, Beachside Constructions (National) Pty Ltd (Beachside) in June 2015, requiring it to provide a proposal for rectification of the defects including the identified problems with the eaves. Delor Vue also resolved at the 25 May 2015 meeting to make a claim to the Queensland Building and Construction Commission in relation to the building defects. 279 Archers prepared a further report in November 2015 in relation to the several building defects and again referred to the defective eaves which had not been rectified and the matter was further considered by the Committee at its meeting on 24 November 2015. 280 On or around 23 March 2016, Delor Vue entered into a contract of insurance with AIG in respect of the complex and its buildings. The policy period of that insurance was from 23 March 2016 to 23 March 2017. There was no disclosure to AIG of the defective condition of the buildings. 281 Archers were replaced by Aspire as the body corporate manager on 1 June 2016, partly due to the Committee's dissatisfaction with the former's failure to progress the rectification of the several building defects, including of the eaves and soffits. In that context, the issue was again raised at a Committee meeting on 20 June 2016, the minutes of which record the following: Eaves Cladding: This is a serious building defect that was requested to be repaired under the original building defects time period. It needs investigation to determine the cause and remedy. It is also a serious Work Place Health and Safety issue due to potential injury to persons if a sheet falls. The committee resolved to have the problem examined by a qualified building inspector and to obtain quotes to remedy the situation. 282 The resolution in the last sentence of that minute resulted in the engagement of a builder, Mr McNeill of McNeill Building, who prepared a report in around July 2016 (the First McNeill Report) which documented the several defects in the buildings at the complex. In relation to the eaves and soffits, Mr McNeill advised that the soffit sheeting had not been installed in accordance with the manufacturer's recommendations in relation to support and fixing spacings, and that there were other areas where the soffit sheeting was hanging out or bowing, and possibly ready to dislodge. On receipt of that report, the Committee met and resolved to secure the services of a structural engineer to prepare a report and quote to fix the eaves. Mr McNeill was also asked to provide a quote and he did so. The figure quoted was between $50,000 and $70,000, and he identified that there were eight locations around the complex where repair work was required but noted that there may be more. On 9 September 2016, another builder, a Mr Pawsey, quoted a price of $42,000. On 12 October 2016, a fee proposal was also obtained from structural engineers, GW Goddard & Associates, for the preparation of an engineering report in relation to the method of fixing the soffits. The Committee determined to obtain that report so as to allow the builders to refine their quotes, and accepted the fee proposal on 21 October 2016. 283 At around this time, being between August and October 2016, the Committee sought to ascertain the nature of any insurance claims which had previously been made with respect to the defects relating to the roof. 284 On 1 December 2016, GW Goddard & Associates produced a report (the Goddard Report), which concluded that the roof framing along the eaves had not been constructed in accordance with the relevant Australian Standard, the present construction was insufficient to support the eaves, the pine noggins were not sufficiently spaced to support the roof battens, and the soffit linings were not installed according to the manufacturer's recommendations. That report was provided to Mr McNeill who provided a quote of $9,330 for repairing the eaves on one building, a quote which was later accepted by the Committee. 285 On 25 January 2017, the Committee circulated a notice to the tenants and owners of the apartments advising them of the work which would be carried out. It mentioned that strong winds are likely to cause damage to the panels in the eaves which may dislodge and warned lot owners to avoid walking or parking in the vicinity of the defective eaves. The notice identified the dangerous areas in respect of each of the eight affected buildings. 286 On 30 January 2017, Aspire, on behalf of Delor Vue, wrote to Beachside and its director, Mr Wellard, inviting them to inspect the defective works and to propose a satisfactory repair.

The obtaining of the relevant insurance cover for the 2017 / 2018 period 287 On 3 February 2017, Ms House of Marsh Advantage Insurance Pty Ltd (Marsh), who had previously placed insurance for Delor Vue, sent an email to Allianz seeking quotes for insurance cover in respect of the buildings at the complex. Allianz responded and offered cover through its underwriting agent and subsidiary, SCI. For convenience, the nomenclature of "Allianz" will also be used in these reasons to describe the insurer, notwithstanding the involvement of SCI. Before the primary judge, a question arose as to whether Ms House or Marsh had been authorised by Delor Vue to seek insurance cover on its behalf. That gave rise to an additional issue in connection with a question of whether misrepresentations were made to Allianz on behalf of Delor Vue. Neither issue remains live on this appeal. 288 The email of Ms House to Allianz contained a document entitled "Occupier's Statement", relating to fire safety installations, a claims history from AIG revealing the absence of any claims in the three years from March 2014, and a report from Archers showing an estimated replacement value of the buildings at a cost of $26,790,500. The email also contained a printed quotation slip that included a number of questions which had been completed by Ms House, albeit without instructions from Delor Vue. One of the questions, "Are there any hazards/defects associated with the property?", was answered "No". 289 On 8 February 2017, Allianz sent a quote to Ms House at Marsh offering cover for a premium of $82,244.09. 290 At around this time, Mr Key had been discussing Delor Vue's continuous insurance needs with a Ms Gorlick of BCB Strata Insurance Brokers (BCB). In those discussions, Mr Key mentioned that there were some problems with the soffits falling out of the eaves and that this was a maintenance issue which the Committee was working to have resolved. BCB was formally appointed as the brokers for Delor Vue on 14 February 2017. 291 On 27 February 2017, Ms Gorlick sent an email to Allianz seeking a quotation in respect of the buildings at Delor Vue. This contemplated similar but not identical cover to that for which Ms House of Marsh had sought a quote. Ms Gorlick subsequently prepared a comparison of two quotations which she had received, being one from CGU with a premium of $105,444.75 and one from Allianz at $84,600.81, which she sent to Delor Vue on 5 March 2017. The comparison document also contained a statement setting out the insured's duty of disclosure and identifying the consequences of non-disclosure. 292 On 13 March 2017, the Committee determined to accept the quotation offered by Allianz through BCB.

Ongoing rectification works at Delor Vue 293 On 1 March 2017, McNeill Building had completed the rectification work on the first building and an invoice was emailed to Delor Vue for the work done. In the email, a Mr Gartrell of that company advised that additional work had been necessary as a result of the discovery of further defects during the course of the rectification work. 294 On or around 3 March 2017, Mr Gartrell sent a further report from McNeill Building (the Second McNeill Report) to Mr Key. The report identified that an expanded scope of works was required by reason of the discovery of the additional defects in the eaves, as well as the existence of other defects in the roof structure. It also advised that, given the equipment required to undertake the work and the likelihood that similar defects existed in other buildings, it would be appropriate to undertake all of the remaining work at once. It was further stated: • The rectification will be required on any soffits that were installed in manner that we encountered on the subject building - it is simply a matter of time and these soffit sheets are heavy and dangerous to be falling from any height, let alone 15 odd meters. It is our understanding that most (or all) of the complex is affected. • It would also be advised to allow in the budget and timing for rectification of damaged or incorrectly fitted roofing and roofing components (gutters /fascia/barges/capping). 295 On 13 March 2017, a Committee meeting was held where the issue of the numerous defects in the roofs was the principal topic of discussion. The Committee also considered the renewal of insurance and the letter received from BCB, a letter of demand to be sent to Beachside and the developer, Delorain Pty Ltd (Delorain), in respect of the defective building work which had been discovered, a briefing note to OMB Solicitors, and a fee proposal and costs agreement provided by that firm. It also appears that the Second McNeill Report was before the Committee, even if this was not recorded in the minutes. Those minutes do, however, record the resolution to send letters of demand to Beachside and Delorain in relation to the repair of the eaves and soffits. 296 On or shortly after 15 March 2017, OMB Solicitors sent letters of demand on behalf of Delor Vue to each of Beachside and Delorain. Those letters asserted that there were defects in the eaves and soffit sheeting, that reports had been obtained as to the scope of work required to repair the defects, and that the total estimate was over $230,000. The letters called on the developer and the builder to carry out all necessary repairs, failing which Delor Vue would undertake the work itself and recover the cost from them.

Entry into the contract of insurance 297 On 20 March 2017, Mr Key informed Ms Gorlick of BCB that the Committee had resolved to accept the Allianz quote. 298 As a result, BCB issued a closing advice dated 20 March 2017, the premium was paid, and a certificate of currency was issued on 22 March 2017 identifying the period of insurance as being from 23 March 2017 to 23 March 2018.

Cyclone Debbie and the causing of damage to Delor Vue 299 On 28 March 2017, tropical cyclone Debbie crossed the Queensland coast near Airlie Beach. It caused substantial damage to the buildings in the Delor Vue complex and to a number of individual apartments in the complex. 300 On 30 March 2017, a notification of loss was made to Allianz identifying roof damage from the cyclone.

The steps taken after the making of the claim 301 Allianz promptly retained a loss adjuster, Mr Patterson of Exigo Pty Ltd (Exigo), who undertook a site inspection of the Delor Vue complex on 4 April 2017. The following day, he sent an email to Allianz reporting his preliminary observations. In it, he identified the existence of structural damage to various buildings, being mainly to soffits, gutters, eaves and flashing, and that one section of a roof had been torn off. He raised a question as to the structural integrity of the buildings and mentioned that he had engaged an engineer to report on that issue. 302 By an email of 6 April 2017, Mr Patterson sought information from BCB (and the insured) as to whether there had been any previous issues with the roof structure of the buildings. 303 By emails of 8 and 10 April 2017, Mr Patterson of Exigo and a Ms Lander of Allianz respectively advised BCB that, in the interim, the insurer had arranged for building work to be undertaken to render the buildings safe. 304 By an email of 20 April 2017, Mr Key provided a response to Mr Patterson's enquiries in which he mentioned the issue of the soffit panels dislodging, the subsequent inspections, and the consideration by the Committee of the nature and extent of the repairs required. He outlined the nature of the defective installation of the soffit panels and the repairs which had been completed to date. He also advised that these matters had not raised any issues with the structural integrity of the roof. On that same day, he sent a further email to BCB attaching a number of documents for provision to Allianz and the loss adjuster, including the Goddard Report and the Second McNeill Report. 305 On 21 April 2017, a Mr Johnson, of Morse Building Consultancy (Morse), provided a report which had been commissioned by Allianz in relation to the structural integrity of the roofs at the Delor Vue complex (the First Morse Report). He identified a number of roof truss failures consequent upon the occurrence of the cyclone which may been due to inadequate design or tie down. As the learned primary judge observed in his reasons (at [111]), this particular defect had hitherto not been revealed. Whilst it may be true that the specificity of the defect had not been identified to that time, on 1 December 2016, the Goddard Report had identified that the "roof framing" had not been constructed in accordance with Australian Standards. 306 Subsequently, a number of discussions occurred between Mr Key and persons on behalf of Allianz, including Ms Lander, concerning the building defects of which the Committee of Delor Vue had been aware prior to the effecting of insurance with Allianz.

Non-disclosure and Allianz's statement of intention to indemnify notwithstanding 307 On 27 April 2017, Ms Lander of Allianz sent an email to Ms Macaulay of BCB in which she raised the issue of whether Delor Vue had failed to disclose the "defects in relation to the roof, specifically the soffit panels", and advised that Allianz would be undertaking an investigation in relation to potential non-disclosure. That issue was the subject of not insubstantial correspondence and discussion between Allianz and those representing Delor Vue. 308 It appears that, by 9 May 2017, Allianz had been provided with substantial information relating to the knowledge of Delor Vue's Committee concerning building defects and, in particular, the issues with the soffit panels. On that day, Ms Lander sent an email to Ms Macaulay advising that Allianz considered that Delor Vue had failed to make proper disclosure of the defects relating to the soffit panels and that it should have been aware of other defects given the concerns raised in the Goddard Report. However, the email went on to state: Despite the non-disclosure issue which is present, Strata Community Insurance (SCI) [Allianz] is pleased to confirm that we will honour the claim and provide indemnity to the Body Corporate, in line with all other relevant policy terms, conditions and exclusions. 309 As Mr McLure SC for Allianz submitted, that statement was concerned with Allianz's intention as to how it would deal with Delor Vue's claim. In the context of what followed in the email, that intention was that Allianz would provide a partial indemnity under the policy. In the ordinary course, that would involve paying an amount in respect of the cost of the repairs. 310 The email went on to categorise the damage which had, "at present", been identified: 1. Defective materials and construction of the roof, including but not limited to tie downs, rafters and timbers and soffit 2. Resultant damage including but not limited to internal water damage, fascia, guttering and roof sheeting (for those buildings which lost roof sheeting only) 311 Ms Lander's email then elaborated upon the indemnity which Allianz intended to provide: SCI will cover costs associated with the resultant damage (point 2. above), despite the policy exclusion outlined below. In respect to the repairs to the defective materials and construction of the roof (point 1. above), unfortunately the policy does not provide cover for this portion of the claim. 312 As well as the non-disclosure issue raised earlier, this division of responsibility was framed by reference to the relevant policy exclusions. These were identified as follows: We refer you to the "Exclusions" outlined on pages 28 & 29 of our Residential Strata Policy Wording, which states the following: "... 1. We will not pay for Loss or Damage: ... (c) ... (i) caused by […] inherent vice or latent defect […]; ... (d) caused by non-rectification of an Insured Property defect, error or omission that You were aware of, or should reasonably have been aware of. ..." "... 2. We will not pay for: ... (b) the cost of rectifying faulty or defective materials or faulty or defective workmanship; …" (Original emphasis). 313 Ms Lander re-emphasised Allianz's intended division of responsibility for the property damage, stating that Delor Vue would be responsible for "the costs associated with [the] portion of the claim" for which coverage was excluded by the above exclusions. 314 The email thereafter identified that Allianz had engaged solicitors, Holman Webb, to assist in a potential discovery action against the property's original builder and developer, and, to that end, Allianz had commissioned an engineering report to assist in outlining the deficiencies in the roof and the responsibility for the shortcomings in its construction. Ms Lander sought the Committee's cooperation to ensure the best possible opportunity of recovery. She also identified that Allianz was awaiting reports from Ambrose Building Pty Ltd (Ambrose Building) as to the scope of works for the remediation work which would identify the repairs which were to be paid for by Delor Vue and Allianz respectively. It was pointed out that, in relation to some of the buildings, the work rectifying the defective construction of the roofs would have to be undertaken before the work to be paid for by Allianz could be commenced.

Events following the 9 May 2017 email 315 As the learned primary judge observed, subsequent to the 9 May 2017 email, Allianz proceeded to adjust the claim. That involved taking steps, through its lawyers, to hold Beachside and Delorain responsible for the defective building work, the assessment of the damage and defects, and the division of financial responsibility as between it and the insured. His Honour observed (at [133]) that these actions reflected Allianz's "unqualified acceptance of its responsibilities under the policy, its unqualified right to have any relevant access to or possession of the site, its unqualified right to pursue third parties in vindication of the (subrogated) rights of Delor Vue and its unqualified right to full co-operation from Delor Vue in regard to these matters". That said, the steps taken in pursuit of the builder and developer did not involve the commencement of proceedings during the relevant period. 316 On 10 May 2017, Ambrose Building provided the loss adjuster with a quotation of $553,207 for the "internal resultant water damage" repairs. 317 On around 23 May 2017, Allianz received a more fulsome report from Mr Johnstone of Morse (the Second Morse Report). In it, he opined: In my professional opinion the damage to the building elements identified within this report were a function of wind loading from cyclone Debbie impacting upon inadequate construction practices engaged during the building of the units. 318 He observed that there were systemic and consistent irregularities between the nominated design and in-situ construction, and he identified the large number of them. This led him to conclude that the truss system and tie downs as a whole were structurally inadequate and could not be salvaged, with the consequence that replacement trusses would need to be redesigned and consideration given to strengthening the connection on the top of the masonry walls. The report contained a further scope of works which was provided to Ambrose Building so it could revise its quotation for the remediation work. 319 At around this time, ASIC had commenced the process of deregistering Beachside which prompted Holman Webb on behalf of Allianz to seek a deferral of that process on the basis that Delor Vue had a claim which it intended to press. Mr Wellard, the director of Beachside, objected to that deferral by letter of 7 June 2017. 320 Further investigations were undertaken in relation to the building defects at the Delor Vue complex and, on 22 June 2017, Ms Lander of Allianz sent an email to a Ms Webb of BCB advising of the increased complexity and cost of the claim, as well as the identification of certain additional defects. She advised that the cost to Delor Vue of rectifying the defects will be "in the millions" and that it would need to undertake appropriate fund raising "in order for the rectification works to proceed". She further suggested a meeting between all interested parties to discuss how the remediation work was to be done and to identify the repairs which would be covered under the policy and those which would not. 321 In a further email from Ms Lander to Ms Webb on 22 June 2017, it was recorded that, in relation to potential action by Delor Vue against Beachside and Delorain, the body corporate had engaged OMB Lawyers to act for it and Allianz had engaged Holman Webb. It was observed that, whilst there was separate representation, there would be only one court proceeding in which both insured and uninsured losses would be sought. 322 On 18 July 2017, the Committee together with its solicitor, Mr Robinson of OMB Lawyers, considered a scope of works which had been produced by Morse on 22 June 2017. It resolved to appoint independent engineers to review the defects and determine their causes. 323 On 19 July 2017, Mr Key contacted Ms Webb of BCB and informed her of the resolution. He also sought an explanation of how it had been determined that certain damage had been caused by the defective construction and why the complete replacement of the roof trusses was required. These concerns were relayed to Allianz on 20 July 2017. 324 Thereafter, further communications passed between Delor Vue, BCB and Allianz concerning the division of responsibility for the repairs and the factors which justified the attribution of responsibility by the insurer. 325 On 21 August 2017, Mr Whitehead of GHD Pty Ltd (GHD), consulting engineers, provided a report to the Committee (the First GHD Report). He had previously carried out a site inspection and considered the Goddard Report and a set of structural drawings, but, notably, he had not been provided with either Morse Report. As compared to the latter report, Mr Whitehead expressed the view that the deficiencies in the roof trusses were not as substantial. 326 As a result, on 29 August 2017, Mr Key wrote to Allianz enclosing the First GHD Report and asserted that the Morse Reports were wrong and that Delor Vue was of the view that the roof trusses did not need replacement. He further stated: We also understand that the loss assessors are indicating section 1 (d) of the exclusions to the policy applies to a significant amount of the alleged works required to be carried out. Our independent advice is such that only defects to the eaves were known to the Body Corporate, or could reasonably have been known. Therefore, the Body Corporate refutes that the exclusion referred to by the loss assessors is not [sic] applicable to any other aspect of this claim. (Emphasis added). 327 In the context, this was an assertion that Allianz was liable for the costs of repairing the defective construction of the roof (other than the defects in the eaves). This entailed a repudiation of Allianz's apportionment of liability in the 9 May 2017 email by which the insurer's representative identified that it intended to partially indemnify Delor Vue for its loss, excluding the "[d]efective materials and construction of roof". It must be recognised that there is a degree of tension between Delor Vue seeking to enforce Allianz's statement of intention not to rely upon the insured's non-disclosure in providing a partial indemnity, but earlier having rejected the terms on which the insurer stated such indemnity would be provided. 328 In the letter, Mr Key also indicated that Delor Vue requested a meeting be convened "to settle this claim and permit the works to commence to repair the damage to the building under the policy". This too is somewhat at odds with Delor Vue's assertion, which was accepted by the primary judge, that it regarded Allianz as having finally accepted the claim by the 9 May 2017 email. 329 In around late August 2017, Mr Key expressed his dissatisfaction with the progress of the claim, and this was met by the response of Mr Patterson (of Exigo) that, until the differing opinions of the engineers concerning the cause of the damage was resolved, the claim could not be advanced. 330 Nevertheless, other matters which were not thought to be affected by the defect issue, and therefore were not the subject of the above disputation, were being attended to at the Delor Vue complex and paid for by Allianz where appropriate under the policy. 331 In early September 2017, Allianz agreed to the release of all collected engineering reports to Delor Vue. Mr Key later stated that it was only upon seeing these reports, in particular the two Morse Reports, that he became aware of any issue with the trusses. 332 During September 2017, Holman Webb continued its pursuit of Beachside and Mr Wellard. The company had been deregistered by ASIC and Holman Webb sought to have it reinstated. It also engaged an engineer, on behalf of Delor Vue, in relation to an anticipated recovery action against Beachside and possibly others. 333 On 17 October 2017, Delor Vue determined to obtain a further report from GHD in an attempt to resolve the issues concerning the roof trusses at the complex so they could be certified and the insurance claim could proceed (the Second GHD Report). Unlike the First GHD Report, GHD considered the Morse Reports in preparing its further report. 334 The Second GHD Report was provided in December 2017. Unfortunately for Delor Vue, it ascertained that there were, in fact, serious deficiencies in the roof trusses. It stated that those trusses would require extensive strengthening repairs before they could be certified and, in the circumstances, they should be redesigned and replaced. It also found that the tie down capacity was insufficient and that new tie down connections should be redesigned as part of the redesign of the trusses. Similarly, the cross-bracing in the roof would also need alterations and reinstallation. In summary, the report provided: GHD and Pryda have both concluded that the current roof trusses are not adequate to withstand the design wind loads in the region. As such, the roof trusses would require extensive repairs to strengthen the timber members as well as strengthen the tie-down capacity at the masonry wall supports to gain certification. Given the level of repairs and strengthening required, GHD recommend that the roof trusses be redesigned and replaced. The tie-down modifications should also form part of the roof truss redesign. 335 On 12 January 2018, Mr Key sent the Second GHD Report to BCB for forwarding to Exigo and Allianz, and requested an urgent meeting to consider obtaining quotations and the appointment of a builder to undertake both the insured and uninsured work pursuant to "two contracts divided by funding source with different superintendents". 336 On 18 January 2018, there was an extraordinary general meeting of the Delor Vue body corporate at which approval was given for a strata loan of $750,000 for 12 years for the purpose of meeting the costs of carrying out the repairs. 337 In January and February 2018, emails were sent by Mr Key to Ms Webb of BCB concerning the disagreement as to the extent of the repair work. On 19 February 2018, Mr Key sent an email enclosing a new scope of works that drew upon the Second GHD Report. He claimed that this scope of works was far simpler, faster and less expensive than the scope of works prepared by Morse. He asked that Allianz request that the quoting builders amend their quotes in line with the new scope of works. 338 On 27 February 2018, Mr Key had a telephone conversation with Mr Patterson of Exigo in which they discussed the quotes Exigo had received. Mr Patterson advised that the quotes identified that the costs of repairing the resultant damage (for which Allianz had stated its intention to be responsible) were $3 million and the costs of remediating the pre-existing defects (for which Allianz had indicated Delor Vue would be responsible) was quoted at $3.2 million and $2.14 million. He also indicated that the quoting builders thought that the scope of work proposed based on the Second GHD Report would not lead to any real cost savings.

Renewal of the Allianz insurance 339 In March 2018, the policy period under the existing Allianz cover was approaching its conclusion. On 7 March 2018, Allianz offered a new policy for 12 months for a premium approximately 50% higher than the existing policy and on different terms. The policy was subject to the condition that the work relating to the roof defects be completed within six months. The coverage was more limited. Notably, the general excess on all claims was increased from $1,000 to $100,000 and the cyclone excess was increased from $41,350 to $2 million. Unsurprisingly, this generated some consternation for Delor Vue and some terse correspondence was exchanged. 340 As it ultimately transpired, Delor Vue obtained a six month renewal for a premium of $62,281.

Further disputes as to the responsibility for repairs 341 On 21 March 2018, the Committee engaged a specialist claims processor, LMI Group, to act on behalf of Delor Vue in the management of the claim on Allianz and, subsequently, LMI Legal was retained. 342 On 28 March 2018, Mr Johnstone of Morse produced a further report after having considered the GHD Reports (the Third Morse Report). In it, he identified the structural damage to the roof framing was caused by insufficient tie down of the trusses to the masonry walls, the failure of the truss members at connection points, the failure of the truss members due to wind uplift loading, the design of the trusses being inadequate, and issues with the truss plates. He further observed that the "[r]oof sheeting and Soffit damage was a direct consequence of the failure of the trusses and truss tie downs." 343 On 4 April 2018, Mr Key wrote to a Mr Driscoll of Allianz and advised that Delor Vue would take charge of the claims process itself through the LMI Group. In a telephone conversation shortly thereafter with a Mr Tsoukatos of Allianz, Mr Key was told that Delor Vue would be provided with an update in relation to its claim in the near future. 344 On 19 April 2018, Exigo requested a further report from Morse setting out the scope of work for each of the buildings which identified the costs of: (a) Rectifying faulty or defective workmanship and / or faulty or defective materials; (b) Rectifying any damage caused during the cyclone as a consequence of faulty or defective workmanship or faulty or defective materials to the extent such costs are not already covered by (a) above; (c) Cyclone related damage that is not covered by (a) or (b) above. 345 In around May 2018, a Mr Iconomodis of Allianz became involved in the claim. He had been aware of and copied to some of the prior correspondence, but was now directly involved.

The dispute giving rise to the proceedings 346 On 3 May 2018, LMI Legal, on behalf of Delor Vue, wrote to Allianz in relation to the claim. The letter raised a number of complaints concerning Allianz's conduct relating to an alleged failure to provide documents, an alleged lack of "transparency" in the adjustment process, and delay. In part, it provided: 20. The claim was submitted in late March 2017. Despite more than a year having elapsed, SCI has not stated its position on indemnity with any clarity. … 22. Although SCI has been provided with comprehensive details of the damage suffered, it has failed to make any clear decision on policy coverage and the extent of the indemnity available to the Insured. 23. The failure by SCI to state its position as to indemnity has caused significant delays in the progression of the claim and repairs. 24. Any extraordinary delay in making a decision as to indemnity to this extent may be tantamount to a breach of contract and an entitlement to consequential damages may arise for the Insured should SCI continue in its failure to make a decision as to indemnity. 25. Further, as SCI has been provided with all information necessary for it to make a decision as to indemnity, interest now accrues pursuant to section 57 of the Insurance Contracts Act 1984 (ICA). 26. As a signatory to the General Insurance Code of Practice, Allianz is to act in a manner which promotes better and more informed relations between itself and the Insured, and which improves consumer confidence in the general insurance industry. 27. The manner in which SCI, on behalf of Allianz, has handled the Insured's claim is in contradiction of the General Code of Practice, and of the duty of good faith owed to the Insured pursuant to section 13 of the Insurance Contracts Act 1984 (ICA). 28. The Insured is entitled to a prompt decision on indemnity and to disclosure of any unprivileged documents produced in relation to the claim. 29. SCI is called upon to articulate its position on indemnity and to make available and approve the release of the Scope of Works prepared by Morse, any tender documentation issued to Advanced Buildings and Ambrose, and any quotations provided by Advanced Buildings and Ambrose to undertake the works. (Emphasis added). 347 It might be observed that there is also a not insignificant degree of tension between these paragraphs of the letter and the case advanced by Delor Vue being founded upon Allianz having made a clear and unequivocal representation as to the granting of indemnity under the policy in the 9 May 2017 email. However, the assertions in the letter as to the lack of clarity are not without merit. There was indeed a lack of precision in the email as to which damage Allianz was indicating that it intended to remedy. It would seem to be fairly certain that the defective construction of the roof, being the most expensive element of the remediation work that needed to be undertaken, was not included. 348 Even if Allianz is taken as having stated its position on indemnity with certainty in the 9 May 2017 email, it is apparent from LMI Legal's letter that Delor Vue did not consider that question to be settled. This is consistent with the statements in Mr Key's letter of 29 August 2017 which suggested that Delor Vue did not consider Allianz as having finally stated its position on indemnity in the 9 May 2017 email or, alternatively, that it did not accept the position there stated. That correspondence might not necessarily reflect how the Committee understood the statement of intention in the email when it was received, but this merely goes to highlight the importance of and need for evidence about its understanding at that time. 349 Allianz responded by a letter of 28 May 2018 which set out its position in relation to the claim and as to what it says was covered and that which was not covered. It identified that it was prepared to pay for certain repairs at a cost of $918,709 and further identified the remediation for which it said it was not liable, being "Pre-existing defects / faulty workmanship and materials" which it valued at $3,579,432.72. It then set out the terms on which it proposed to settle Delor Vue's claim. It offered to work with the insured to cause the remediation work to be undertaken so long as it first undertook the necessary preliminary work. The offer was subject to a time limit for acceptance of 21 days. Allianz then stated that, if the offer was not accepted within that time, it would lapse and the insurer would pay nil on the basis of the insured's non-disclosure and alleged misrepresentations in relation the defective soffit panels when Marsh was negotiating the policy. Allianz also reserved its right to rely upon the exclusion clauses in the policy. 350 On 12 June 2018, LMI Legal requested that the time for accepting the offer be extended, and Allianz agreed and set a new date of 31 August 2018. 351 Delor Vue's real response to Allianz's offer of 28 May 2018 was in the form of two letters from LMI Legal in late July 2018. By a letter of 27 July 2018, LMI Legal denied Allianz's claim to be entitled to invoke s 28(3) of the ICA based on an election or waiver arising from the 9 May 2017 email. Alternatively, the letter contested the application of that section. It further claimed that invoking s 28(3) would be in breach of Allianz's duty of utmost good faith pursuant to s 13 of the ICA. A further letter of 30 July 2018 asserted that Allianz had also waived Exclusions 1(c)(i) and (d) and Exclusion 2 by the 9 May 2017 email. 352 These letters are instructive for the purposes of the issues raised in this matter. The 9 May 2017 email had indicated that Allianz was relying upon at least Exclusion 1(d) and Exclusion 2 which included within their scope the rectification of defects in the insured property and losses caused by the non-rectification of such defects of which the insured was aware or should have been aware. In particular, Allianz had indicated that the repair work in relation to the defective construction of the roofs would not be indemnified. Nevertheless, by the letters of LMI Legal, Delor Vue denied Allianz's entitlement to rely upon the non-disclosure or the exclusions with the result that it would be prevented from refusing to indemnify for the repairs required to the roofs. Indeed, it was asserted that Allianz was required to pay for all of the damage sustained to the Delor Vue complex. In effect, the letters amounted to an assertion by Delor Vue that it was entitled to accept and act upon that part of Allianz's email of 9 May 2017 which indicated that it would pay some of the claim but, simultaneously, was entitled to reject that concomitant part of the email which asserted Allianz's entitlement to deny liability to pay the remainder. 353 On 22 August 2018, Holman Webb wrote to LMI Legal advising that Allianz had reduced its liability to nil on the basis of Delor Vue's non-disclosure of the defects in the eaves and soffits, as well as the roof trusses, and the asserted misrepresentation by Marsh. 354 Delor Vue commenced these proceedings against Allianz in November 2018.

The decision of the primary judge 355 The learned primary judge undertook an exhaustive and comprehensive analysis of the substantial evidence before him and, to a significant degree, the factual conclusions reached below are not challenged on appeal. To a large extent this obviates the need to consider the underlying evidence relating to those findings.

Non-disclosure under s 21 of the ICA 356 Although Allianz pleaded a claim that Delor Vue had engaged in misrepresentation during the negotiations between Marsh and the insurer, this was not ultimately pressed. Instead, it relied only upon non-disclosure by the insured as the basis for its claimed entitlement to reduce its liability with respect to the claim to nil pursuant to s 28 of the ICA. 357 The primary judge concluded that the known circumstances relating to the eaves and soffits prior to the entry into of the policy were not material to the property damage cover being sought from Allianz: at [251] - [255]. The known facts, so it was said, did not raise any structural issues with the building and such defects as there were would be covered by the relevant exclusions. To the extent to which they amounted to defects in the buildings, they were not thought to be serious and an experienced underwriter would have expected that all buildings have some defects of a relatively minor nature. This finding is not challenged on appeal. 358 However, his Honour did conclude that the problems experienced with the eaves and soffits were material to the public liability cover which Allianz was offering under the policy, because they posed a risk of serious injury or death to persons who may come within the vicinity of the buildings: at [258] - [261]. In addition, there was not a relevant policy exclusion available in relation to such risk. His Honour said (at [261]): … I consider that a reasonable person in the position of the body corporate could be expected to foresee and be concerned by the risk, and to know that the insurer, which may have to pay compensation for death or catastrophic injury to someone hit by a falling soffit or eave, would want to know about the state of the buildings to assess the terms of the policy. The insurer might well have reasonably wanted an increase in public liability premium or a specific bespoke exclusion related to injury caused by the existing defects. 359 Later, his Honour added (at [263]): … Here the reasonable person knew that the policy covered public liability risk of injury to persons and their property; the reasonable person knew, as the body corporate did, that there was an existing danger in a number of the buildings from defective soffits and eaves which carried a real risk (ameliorated as it had been) of catastrophic injury to or death of someone if hit by a falling soffit. This was a risk of which the broker could not be expected to be aware unless told clearly. … 360 Accordingly, his Honour concluded that Delor Vue had failed to comply with its duty of disclosure pursuant to s 21(1)(b) of the ICA in relation to the public liability risk in the policy: at [264]. This conclusion was also not challenged on appeal.

Reduction of liability to nil under s 28 of the ICA 361 After careful and thorough consideration of the evidence of Allianz's practices relating to providing cover for buildings in cyclone prone areas, and of the evidence of those who made the underwriting decisions, the primary judge determined that, had the issues with the eaves and soffits been disclosed, Allianz would not have assumed the risk: at [269] - [288]. This conclusion was founded upon the finding that, had the issues been revealed, the Goddard and McNeill Reports would have been provided to Allianz and they would have revealed the likelihood of other defects in the roofs of the buildings. His Honour held (at [288]): … On balance, and accepting Mr Iconomidis [the underwriter] as an honest man, and giving weight to his contemporaneous view in May 2017 that the claim should be denied for non-disclosure (which implicitly carried with it his view that he would not have written the risk), I am persuaded on the balance of probabilities that if disclosure of the eaves and soffits problem had been made, the Goddard and McNeill Reports would have been provided to SCI, Mr Iconomidis would have become involved, and he would not have accepted the risk on behalf of SCI and Allianz. 362 The effect of this conclusion was that Allianz was entitled to reduce its liability under the policy to nil pursuant to s 28(3) of the ICA. Importantly for one of the more significant issues which arises in this case, the process by which that conclusion was reached ought not to be ignored. Necessarily, the process of reaching that conclusion involved the primary judge considering what Allianz would have done in a counterfactual scenario in which Delor Vue had not failed to comply with its duty of disclosure pursuant to s 21 of the ICA. That counterfactual scenario was no less hypothetical than what Delor Vue would have done in a scenario in which Allianz had not made the representation in the 9 May 2017 which is the focus of these proceedings.

Election, estoppel, waiver, and utmost good faith 363 Despite Allianz's liability to pay the claim having been reduced to nil, Delor Vue asserted that, by reason of Allianz's indication in its email of 9 May 2017 that it would cover the claim, it was now not entitled to deny indemnity. That assertion was underpinned by the claims based on the doctrines of election, waiver and estoppel, and the duty of the utmost good faith. 364 The primary judge observed that the present circumstances did not typify those in which notions of election, waiver and estoppel are usually invoked, being those in which there existed a breach of contract and the innocent party was required to choose between alternative, mutually exclusive and inconsistent contractual rights. He observed that the boundaries between the three related concepts were diffuse and that their operation tended to overlap. In relation to the matter before him, he observed that s 28(3) brought about a state of legal affairs in which the liability of the insurer was the reduced amount determined in accordance with that provision: at [311]. However, he rejected the submission that this had the consequence that there could be no conduct by the insurer which could engage the doctrines of election, waiver or estoppel, and thereby prevent it from relying upon its legal rights. This was because the intention of s 28(3) is to place the insurer in a position different from the duty to comply with the terms of the policy in an unqualified way and allows it to approach the question of indemnity by reference to the facts amounting to a non-disclosure and a hypothetical as to what would have occurred. His Honour held that this armed the insurer with "a body of substantive rights which it can raise in defence or answer to the contractual claim for indemnity under the policy". In this way, an insurer's statement that it will not take the position in relation to a claim for indemnity that it has that body of rights under s 28(3) is not an election between inconsistent rights. Rather, it raises the question of "whether the insurer can in law resile from the position it has taken and expressed unequivocally and without qualification in the conduct of the contractual and commercial relationship between it and its insured." 365 In the circumstances, Allianz's conduct was characterised as being a representation that it will not run an arguable defence to a claim and would deal with Delor Vue in accordance with the policy terms. His Honour then observed that the ability to resile from that position falls to be considered by reference to whether, in all the circumstances, it is just or fair that it should be permitted to adopt an entirely different position.

Election 366 In relation to election, the learned primary judge determined that, as Allianz was not confronted with a choice between inconsistent "competing, inconsistent and mutually exclusive rights", as opposed to inconsistent "positions", the doctrine was not relevant: at [312] - [317].

Estoppel 367 Turning his attention to estoppel, his Honour characterised the statement in the 9 May 2017 email, as a clear representation that Allianz would not, in dealing with the insured's claim, raise the issue of non-disclosure: at [321]. That is, that the claim would be honoured and indemnity provided in accordance with the policy terms and conditions. He rejected Allianz's submission that the letter from LMI Legal in May 2018, in which it asserted that the insurer had not clearly stated its position on indemnity or at all, revealed that no clear or unequivocal representation had been made. He found that the letter did not mean what it repeatedly said, but was "a product of the evident frustration to this point in obtaining the translation of the clear statement of acceptance of cover into the practical division of responsibility and what could be seen as some temporising in the correspondence by this time": at [322]. He further found that Allianz's representation was as to the state of its relationship with the insured in respect of a contract of utmost good faith and was in the nature of a representation which might found a promissory estoppel or an estoppel by convention. He then summarised the position as follows: [325] Here, the representation as to the conduct and dealing between the parties henceforth was clear: to the extent we (SCI and Allianz) may have, or to the extent we have, rights to rely upon s 28 of the Act we do not propose to rely upon them, and we confirm indemnity in accordance with the terms of the policy. [326] This representation and the acting under it was to adopt a conventional basis for the governance of a relationship between insurer and insured in the conduct of their mutual affairs in adjusting a large and difficult claim. … 368 The relationship "so conventionally based" was identified as continuing for over a year from May 2017 until the insurer sought to resile from it by its letter of 28 May 2018. It was further found that the parties relied upon the representation as to the basis of a relationship involving good faith and co-operation: at [331]. In particular, the primary judge observed that the represented relationship founded Allianz's entitlement to adjust the claim, to enter the property when it needed to, and to propose to sue the builder and developer in furtherance of its subrogated rights. Further, Delor Vue did not "have whatever opportunity it would have had, and may have taken, to act for and by itself in that period to deal with the property damage and to contest the insurer's assertion of rights under s 28(3)." 369 With respect to the promissory estoppel claim, his Honour held (at [333]) that the prejudice which Delor Vue would suffer as a consequence of Allianz resiling from its representation was not specific but, nevertheless, was real: at [333]. It was identified as the passage of 12 months in which Delor Vue could have taken matters into its own hands and "acted by itself in rectifying the property to the extent to which it was financially able to do so and in suing the insurer". It was further held that how that may have played out, in the sense of a counterfactual, was impossible to tell because "the parties had conducted themselves on an entirely different basis". The primary judge continued (at [334]): … Guesses in self-serving evidence as to what would have been done would not be very helpful. The obvious objective facts are that Delor Vue would have had to have taken on the repair work itself, denying to the insurer any access to the premises. How that would have taken shape in terms of funding and responsibility is impossible to tell. It is impossible because the clear choice was made by the insurer to take responsibility for the adjustment of the claim, and deny the reality of that counterfactual. … 370 Although it was accepted that there was no pleaded case by Delor Vue that it lost any opportunity as a result of relying on Allianz's representation, the primary judge held that the opening submissions and the facts themselves raised the question of Delor Vue's loss of opportunity to conduct its affairs on the correct hypothesis: at [334]. 371 He further considered the relief arising from equitable estoppel was not limited to removing or reversing, by the minimum equity necessary, the precisely-weighted prejudice or detriment suffered, and that such an approach would pay insufficient regard to the equity's concern of keeping parties to their promises. Referring to what he had said in Delaforce v Simpson-Cook [2010] NSWCA 84; (2010) 78 NSWLR 483 (Delaforce) (at 485 - 486 [3] - [5]), the primary judge noted (at [335]) that equity will look at all the relevant circumstances that touch upon the conscionability or otherwise of resiling from the representation including the nature of the detriment suffered, how it can be cured, its proportionality to the terms and character of the representation, and the conformity with good conscience of keeping a party to their representation. (It might be observed that this latter matter appears to be the very question that the consideration of the other matters seeks to answer). He added that the importance of keeping a party to their representation or encouragement is all the more stronger in cases where the representation has been relied upon by a party to abandon a course of conduct which could possibly have led to a different outcome. 372 In the result, his Honour concluded (at [337]): It would, in my view, be unjust, inequitable and unconscionable to permit Allianz to resile from its stated position in the email of 9 May 2017 by its stated course on 28 May 2018 and as slightly modified thereafter. It should be held to the representation or promise (for that, as between honest commercial parties, especially bound by the duty of the utmost good faith, was what it was - a form of promise) that it made. It is a circumstance and outcome that is proportionate and reasonable. 373 Before this Court, neither party sought to identify how the primary judge concluded that imposing a liability of possibly $3 million on Allianz when its actual liability was nil was reasonable and proportionate, either by reference to any detriment that Delor Vue had suffered consequent upon the 9 May 2017 email or otherwise.

Waiver 374 The primary judge also concluded that Allianz had waived its entitlement to rely upon Delor Vue's non-disclosure prior to entering into the policy: at [339] - [341]. He found that Allianz deliberately and knowingly took the position of confirming cover notwithstanding the possibility of the existence of a right to deny indemnity, and that it thereby obtained the consequential benefit of access to the insured property and of the insured's full cooperation. This was likened to the position which existed in Craine v Colonial Mutual Fire Insurance Co Ltd [1920] HCA 64; (1920) 28 CLR 305 (Craine v Colonial Mutual), where the intentionality of the act done with full knowledge had the consequence of preventing the party so acting from approbating and then reprobating by taking an inconsistent position. His Honour said (at [341]): The choice of position was expressed to be confirmation of cover notwithstanding the non-disclosure "issue". From that clear choice and clear act a benefit was obtained. The insurer should not be permitted to reprobate after approbating. It knew of all the facts in May 2017, including all the circumstances of the underwriting of the risk. … Here the waiver brought about by taking a position inconsistent with relying on the non-disclosure issue is rooted in the act of choice of position and the advantage obtained therefrom, not detriment. …

Duty of utmost good faith 375 His Honour then held that the foregoing conclusions were reinforced by the separate consideration of Allianz's conduct of resiling from its earlier stated position as a breach of the obligation of good faith imposed by s 13 of the ICA: at [346] - [350]. He observed that a lack of utmost good faith was not confined to circumstances occasioning dishonesty. It may require an insurer "to act, consistently with commercial standards of decency and fairness, with due regard to the interests of the insured": CGU Insurance Ltd v AMP Financial Planning Pty Ltd [2007] HCA 36; (2007) 235 CLR 1 (CGU v AMP) at 12 [15] per Gleeson CJ and Crennan J. See also the observations of Callinan and Heydon JJ at 77 - 78 [257]. In the circumstances, the primary judge held (at [346]): Here there was no dishonesty, but, in my view, the resiling from the clear representation, in effect a promise, in the 9 May 2017 email was unjust, unreasonable, unfair and did Allianz no credit as a commercial insurer by reference to expected standards of decent commercial behaviour. It was, to use the words of Gleeson CJ and Crennan J, conduct which fell below a commercial standard of decency and fairness… 376 His Honour concluded that the consequence of the breach of the duty of utmost good faith could be the issuing of an injunction to prevent the breach occurring. However, given the relief to which Delor Vue was otherwise entitled, he concluded there was no need to grant such relief.

Orders made by the primary judge 377 His Honour disposed of the matter by making a number of declarations in relation to the issues which had been raised for determination. He declared that Delor Vue had breached its duty of disclosure under s 21(1)(b) of the ICA and that Allianz was, prima facie, entitled to reduce its liability to nil pursuant to s 28(3) of the ICA. However, he also declared that Allianz was estopped from relying upon that entitlement as a result of the representation made in the 9 May 2017 email, that Allianz had also waived that entitlement, and that, in seeking to resile from its representation, Allianz had breached the duty of utmost good faith owed to Delor Vue. His Honour further ordered that the rights of the parties fell to be adjusted and determined by reference to the terms of the policy and not by reference to Delor Vue's non-disclosure.

The grounds of appeal 378 The essence of Allianz's appeal is that the learned primary judge erred in concluding that, as a result of its conduct, it was prevented from relying upon its entitlement to reduce its liability under the policy to nil pursuant to s 28(3) of the ICA on the basis of Delor Vue's non-disclosure. Specifically, Allianz submitted that his Honour erred in finding that it was estopped from doing so, had waived its entitlement to do so, or that, in attempting to do so, was in breach of its duty of utmost good faith under s 13 of the ICA. 379 By a Notice of Contention, Delor Vue asserted that the primary judge's decision ought to be upheld on the additional basis that Allianz had elected between two alternatively, mutually exclusive, and inconsistent rights by agreeing to grant indemnity and proceeding to adjust and determine the insured's claim by reference to the policy.

Ground 1: estoppel 380 Ground 1, which was the main focus of the appeal, was stated in the following terms: The primary judge erred by finding at [320] - [338] that the appellant is estopped from reducing its liability to the respondent to nil pursuant to s 28(3) of the Insurance Contract Act 1984 (Cth) (Act).

The representation 381 Allianz did not cavil with the primary judge's conclusion (at [321] - [322]) that, by its email of 9 May 2017, it represented that it would not assert an entitlement to rely upon Delor Vue's non-disclosure and would, to some extent, indemnify the insured under the policy, and that the claim would be honoured and indemnity provided in accordance with the policy terms. 382 The learned primary judge's description of Allianz's representation shows that it was promissory in nature, being to the effect that the insurer would not deny its liability to indemnify Delor Vue with respect to property damage when resolving the claim (at least not on the basis of the non-disclosure). The in futuro nature of the representation was necessitated by the fact that, at the time of its making, the claim had been neither adjusted nor quantified. 383 However, it is important to keep in mind that Allianz's indication that it would partially indemnify Delor Vue was only part of the 9 May 2017 email. Although it was not expressed in the clearest of terms, it is sufficiently apparent that Allianz was not accepting liability for defective materials and construction of the roofs. Its preparedness to indemnify was limited to assuming responsibility for what it termed "resultant damage", which generally concerned internal water damage and superficial roof items such as fascia, guttering, and sheeting. To the extent to which it erred on the side of generosity by not relying on Exclusions 1 and 2, that was only in respect of that resultant damage which, it is assumed, Allianz considered was wholly or largely a consequence of defects of which Delor Vue knew or ought to have known. 384 The context of the whole of the email in which the representation was made is also important. In it, Allianz sought to apportion responsibility for the damage sustained by identifying that for which it would pay, and that for which the insured was responsible. As discussed later, although the email does not expressly state that Allianz's acceptance of some liability was conditioned upon Delor Vue accepting that it was responsible for the remainder, that is implicit. This is important where the essence of Delor Vue's claim was that Allianz must be held unconditionally to its acceptance of liability and, indeed, must accept a greater amount of responsibility for the cost of remediation than it had indicated in its email, whilst Delor Vue, itself, was not bound to Allianz's apportionment. So much is made clear by the letters from Delor Vue's solicitors, LMI Legal, to Allianz of 3 May 2018 and 27 July 2018, as well as the relief sought (although not ultimately pressed) in these proceedings to the effect that Allianz was also not entitled to rely upon the policy exclusions in any way. The absence of any correspondence from Delor Vue after 9 May 2017 accepting Allianz's apportionment of responsibility for the cost of repairs is significant in this context. In fact, Mr Key's correspondence of 29 August 2017 was to the contrary and rejected that apportionment. 385 The 9 May 2017 email does not suggest that Allianz was asserting its final position in relation to indemnity. The letter was written on the basis of the "damages known to our office at present" and that Delor Vue's claim would progress as quickly as possible, with the indication being that the statement of position was somewhat qualified. The context of the email was Allianz making a gratuitous offer to partially indemnify Delor Vue with respect to a claim which it might have refused in its entirety consequent upon the insured's non-disclosure. Those circumstances suggest a reasonable implication that the offer might be withdrawn or might be limited to the then anticipated costs of rectification. After all, the indication to provide some cover was made at a time when those costs were relatively modest. There was no express statement that Allianz would meet those costs regardless of how much that might involve. As with the construction of all documents, they must be interpreted in their context. When a serious commercial document prepared by experts should still be construed in its circumstantial context, I have difficulty in accepting that a proper and even somewhat generous concession given in modest haste and pressure should not be given the same relaxation from a strictly literal meaning by way of mitigating implied conditions of a reasonable and intelligent order. This conclusion as to the lack of finality is supported by Mr Key's letter of 29 August 2017, as well as the letters from LMI Legal to Allianz in May and July 2018, in which complaints were made that the insurer's position on indemnity and the extent of it had not been made clear. 386 For the contrary result, it is necessary that the insurer's communication be construed as absolute, total, and unqualified, even by implication. That is, it has the insurer saying that, although it had a very strong and correct view that it could refuse to pay any indemnity at all, it would indemnify within the cover, no matter that it may amount to a sum far exceeding the amount that it contemplated on its then knowledge and understanding. That construction is not appealing and may well disregard any factor of reasonableness or the circumstantial context, matters such as the learned judge at first instance properly took into account in concluding that the communication of Delor Vue's solicitors did not truly mean what it repeatedly said. I am not satisfied that the insurer's communication was so clear and unequivocal, but unfortunately the point was not argued as to the full consequences of the alternative view and the learned primary judge treated its promise as being somewhat more definitive. In these circumstances, the matter must be dealt with on that basis.

Reliance and detriment 387 The initial part of Allianz's first ground of appeal was founded upon its submission that Delor Vue failed to plead or prove the reliance and detriment on which the primary judge's reasons were founded. 388 His Honour's findings in relation to reliance appear in paragraphs [331] to [334] of his reasons. He found that Allianz's statements were "relied upon by the parties for a year as the basis of a relationship involving good faith and cooperation", which appears to be a conclusion relevant to an estoppel by convention. He also said Allianz's statements founded the conduct of the parties, including the insurer's entitlement to adjust the claim, to enter into the complex, and to suggest pursuing third parties. This, his Honour found, meant that Delor Vue did not have the opportunity that it would have otherwise had to do what it wanted in relation to the property, to act as it would have, and to contest the liability of Allianz (including its assertion of rights under s 28(3) of the ICA). His Honour thereafter returned to considering the elements of estoppel and identified that, whilst the detriment suffered by Delor Vue was not specific, it was real and involved "the passage of 12 months in which Delor Vue could have taken its own fate in own hands and acted for itself in rectifying the property to the extent to which it was financially able to do so and in suing the insurer". Reference was also made to the benefits flowing to Allianz in that period, although how the accrual of such benefits amounted to detriment to Delor Vue is not clear. 389 In relation to Allianz's submission that Delor Vue had not pleaded any established detriment such that its claim ought to fail for that reason, the primary judge held (at [334]): The respondent submitted that the applicant did not plead or prove any detriment as to loss of opportunity and did not lead evidence as to what it would have done. The applicant's amended concise statement, concise statement in reply and its submissions and the evidence did not go into particularity of some counterfactual. The opening submissions (and the facts themselves plainly) raised the question of loss of opportunity to conduct its affairs on the correct hypothesis. Guesses in self-serving evidence as to what would have been done would not be very helpful. The obvious objective facts are that Delor Vue would have had to have taken on the repair work itself, denying to the insurer any access to the premises. How that would have taken shape in terms of funding and responsibility is impossible to tell. It is impossible because the clear choice was made by the insurer to take responsibility for the adjustment of the claim, and deny the reality of that counterfactual. There was no surprise or unfairness in how the matter was put in submissions and in argument.

The absence of any pleaded reliance 390 Allianz's primary submission is that Delor Vue failed to plead any estoppel case founded upon the reliance which the primary judge held had occurred consequent upon Allianz's representation. It submitted that the primary judge held that Delor Vue relevantly changed its position in two ways. First, by refraining from suing the insurer to challenge its reliance on s 28(3) and, second, by refraining from carrying out the repairs itself: at [331] and [333]. It further submitted that neither of these alleged acts of reliance were raised in the Delor Vue's amended Concise Statement. That latter submission is demonstrably correct. Neither were raised by Delor Vue in any of the documents by which it articulated its case prior to trial and, indeed, prior to the end of the trial. It was not in dispute during the appeal that the acts of reliance identified above were indeed those upon which the primary judge founded his decision on estoppel. 391 It was not disputed by Delor Vue that no attempt was made by it in its original Concise Statement to articulate a claim of estoppel, although it had raised, in a fashion, a claim of waiver on the basis of the 9 May 2017 email. There it was asserted that Allianz had acted consistently with a waiver in a number of respects, including by engaging engineers and building contractors and making payments for loss of rent. 392 At a case management hearing on 11 December 2018, an issue was raised as to whether Delor Vue was, in fact, seeking to agitate any claim founded upon an estoppel. Counsel for Allianz sought directions to the effect that, if Delor Vue was seeking to rely upon any estoppel founded upon detrimental reliance, it ought to be clearly pleaded. The learned primary judge agreed and indicated to Delor Vue's Counsel that, if it was seeking to rely upon a change of position to the effect that if Allianz had not done some particular thing then Delor Vue would have been in a better position, it should be properly articulated. Counsel for Delor Vue advised the Court that he would seek instructions in relation to that issue. Consequently, directions were made affording Delor Vue the opportunity to amend its Concise Statement as it saw fit. 393 Delor Vue availed itself of that opportunity and, on 21 December 2018, filed an amended Concise Statement. The drafter of that document addressed the issues of waiver, election and estoppel in a "rolled up" manner, and a general allegation was made that Allianz was estopped from relying upon Delor Vue's non-disclosure. The author of the document was apparently alive to the need to plead reliance and did so by listing five asserted acts as follows: 12. The Applicant has taken steps (or otherwise abstained from taking steps) consistent with, and in reliance on, the Waiver Email and the election and representations made by Allianz, including: a. Providing access to the premises, and individual lots, to enable Morse Building Consultancy to inspect the roofs in order to determine the scopes for claimable damage and rectification of defects. b. Providing a report to Allianz outlining an alternate method of defect repair to that proposed by Morse Building Consultancy; c. Procuring a report from GHD to establish the extent of damage to the roofs, the cause of particular damage, and the relationship between the Truss Defects and Soffit Defects and the damage; d. Abstaining from engaging or seeking scopes of works or quotations relating to damage caused by Cyclone Debbie (including resultant damage); and e. Cooperating with Allianz with respect to the potential recovery action against the original builder and developer and placing recovery in the hands of Allianz. (Emphasis added). 394 The term "Waiver Email" was a reference to the 9 May 2017 email. 395 Delor Vue further raised the issue of estoppel in the following terms: 20. Further and in the alternative, the Applicant says that Allianz is estopped from acting contrary to the Waiver Email, in that: a. The Applicant adopted the Waiver Email and the grant of indemnity; b. Both parties, following the Waiver Email and until the Offer, conducted themselves in a manner consistent with the Waiver Email; c. Allianz induced or acquiesced in the Applicant's adoption of the Waiver Email; d. The Applicant acted in a manner consistent with and in reliance of the Waiver Email; e. Allianz knew or intended that the Applicant would act or abstain from acting in reliance with the Waiver Email; and f. The Applicant will suffer detriment if the Waiver Email is not fulfilled. 396 As was submitted by Allianz, those assertions do not raise any case that Delor Vue relied upon the representations in the 9 May 2017 email by not contesting the insurer's entitlement to rely on s 28(3) or by not undertaking the repair of the complex itself. Allianz further submitted, as is the case, that sub-paragraph 20(f) appears to be an assertion that Delor Vue would suffer detriment by the non-fulfilment of the representation. 397 In accordance with the case management orders made in the proceeding, Delor Vue filed opening submissions shortly prior to the commencement of the trial. It submitted in paragraph 25 of those submissions that, as a result of the content of the 9 May 2017 email, it made certain decisions about renewing its policy with Allianz and allowed for the repair investigations and work to be handled largely by the insurer at its pace. In the context of the case to that point in time, the latter reference could, at best, only refer to the pleaded assertion in paragraph 12(d) of its amended Concise Statement that it had abstained from engaging or seeking scope of works or quotations in relation to the damage to the Delor Vue complex. 398 Mr McLure SC for Allianz further submitted that, at the commencement of the hearing before the learned primary judge, the parties handed to the Court a document which was entitled "List of Issues for Determination". As to estoppel, the document identified the following issues: 9. Did the applicant rely on the representation to its detriment, by: a) making policy renewal decisions, and by not seeking to negotiate renewed cover as if its position in relation to the claim was otherwise; b) allowing for the repair investigations and works to be handled largely by the respondent at its pace? AS [25] 10. Would it be unconscionable for the respondent to depart from the representation in the 9 May 2017 email? 11. Alternatively, by entering into the policy in 2018 in the factual context that is found to exist, was it a term of that policy that the respondent would not exercise its rights under s 28 in respect of the claim. 399 It was not contended that this document expanded the scope of the acts of reliance on which Delor Vue sought to found its claim based on estoppel. Indeed, Counsel for Delor Vue submitted to this Court that his client did not agree to the terms of that document. 400 On the first day of trial, a question was raised as to the scope of the issues which had been raised by the parties for determination. It was put to the Court, and apparently accepted by Delor Vue, that if it intended to advance a case of estoppel based upon matters which were not then the subject of the pleading, it was necessary for amendments to be made. It is apparent that this was said specifically in relation to a late allegation that Delor Vue paying approximately $62,000 for the renewal of the policy was an act of detrimental reliance. However, as Counsel for Allianz submitted, the expression of the requirement that Delor Vue raise the grounds on which the estoppel was based ought to be regarded as a general direction. At the very least, Allianz was entitled to expect that the hearing would be determined on the issues raised and that it had not agreed to permit the matters in issue to traverse the boundaries of the pleading. 401 The trial proceeded and witnesses from both sides were called, gave evidence and were cross-examined. Before this Court, Delor Vue did not attempt to contradict the proposition that neither of its witnesses gave any evidence to the effect that, had the representations in the 9 May 2017 email not been made, it would have undertaken the repairs to the complex itself or brought proceedings against Allianz to contest its reliance on s 28(3) of the ICA. It might be thought that this precluded judgment in favour of Delor Vue based on those alleged acts of reliance. 402 On the last day of the hearing before the primary judge, the parties made oral and written submissions to the Court. Allianz submitted that this was the first occasion on which Delor Vue raised an allegation that it had suffered detriment by reason of abstaining from undertaking and paying for the repairs itself. At paragraph [124] of its written submissions, Delor Vue asserted: As the correspondence makes plain (see the factual narrative schedule), there were extensive delays on the part of the respondent in progressing the repair works, such that the works remained largely untouched almost 12 months later. Had the position been otherwise, the applicant could have decided to undertake and pay for the repair work urgently, and to sue the respondent for indemnity or damages later. It did not do so in circumstances where these matters were in the hands of the respondent. 403 Delor Vue's written submissions also contended that it suffered detriment because, following the expiry of the renewed policy in circumstances where the repairs had not been effected, it was unable to obtain insurance which it was statutorily obliged to hold. It submitted that, had it known that Allianz was not intending to indemnify, it would have taken steps to ensure that the work was carried out so that it could secure further insurance cover. It submitted in subsequent paragraphs that, had the representation not been made, it would have taken the opportunity to bring proceedings against Allianz 12 months sooner than it did. 404 Mr McLure SC submitted that Allianz did not have the opportunity to meet a case based upon Delor Vue's alleged reliance in not undertaking the repair work itself or not commencing proceedings against the insurer earlier than it did.

Delor Vue's submission that the relevant case was raised 405 Mr Elliott SC for Delor Vue submitted that the reliance on which the primary judge founded an estoppel had been legitimately raised and was a live issue in the proceedings. 406 First, he referred to paragraph 20 of the amended Concise Statement and, in particular, to sub-paragraph (d) which asserted that Delor Vue had acted consistently with and in reliance on the 9 May 2017 email. However, that allegation does not raise the reliance on which the trial judge concluded the existence of an estoppel with any degree of particularity. 407 Second, reference was made to sub-paragraph 20(f) which alleged that Delor Vue will suffer detriment if "the Waiver Email was not fulfilled". Whilst that might tend to approach the relevant issue, it is far from clear whether the detriment is that which flowed from non-fulfilment of the promise or by reason of some other factors. Again, it did not articulate the reliance or detriment which the trial judge found to exist. 408 Third, Mr Elliott SC submitted that a number of acts of reliance were referred to in paragraph 12 of the amended Concise Statement and, although they did not refer to Delor Vue abstaining from undertaking repairs itself, the chapeau of that paragraph used the word "including" which thereby indicated that the matters to be relied upon were not to be confined. He also submitted that the sub-paragraphs of paragraph 12 raised the issues in question and, in particular, that sub-paragraph (d) asserted that Delor Vue abstained from engaging in work. That latter submission obviously misstates the effect of the words "[a]bstaining from engaging or seeking scopes of works or quotations", which are only concerned with obtaining scopes of works and quotations rather than undertaking works. 409 Fourth, reliance was placed on sub-paragraph 12(e) which asserted that Allianz handled the potential recovery action, although how that relates to the question of whether the matters relied upon by the primary judge as supporting the estoppel had been articulated was not clear. 410 Fifth, it was submitted that it was an "irresistible consequence" of the allegations in the amended Concise Statement that Delor Vue was advancing a case that it relied on Allianz's representations by not undertaking the repair work itself, and that the Court should not find any merit in Allianz's submission that the pleading was defective merely because it did not contain the assertion of reliance or that detriment was suffered by Delor Vue by not undertaking the repairs itself. That submission is as unmeritorious as it sounds. 411 Sixth, the Court was taken to Allianz's written submissions in opening, filed some six weeks prior to the hearing, where it was stated that "[a]n issue to be explored at the hearing will be whether the applicant relied to its detriment on any representation by the respondent." From this, it was submitted that the parties accepted that the question of detriment was "relatively open-ended". There is also no merit to that submission. Allianz's submission was not an invitation to hold an unfettered inquiry into whether Delor Vue had relied on any representation to its detriment. The submission merely articulated that an issue for determination was whether Delor Vue had acted in reliance as it claimed it had. 412 Seventh, the Court was taken to paragraph 25 of Delor Vue's written submissions in opening where, so it was said, its contentions were sufficiently expressly identified. That paragraph needs be set out in full: Even if one could assume that the respondent had not made the election it did, by its words and conduct summarised above it represented to the applicant that it accepted the claim subject to the 'prior defects' exclusion, and would not rely on the alleged non-disclosure. The applicant thereafter behaved on that basis. It made policy renewal decisions, and did not seek to negotiate renewed cover as if its position in relation to the claim was otherwise. It allowed for the repair investigations and works to be handled largely by the respondent at its pace. It is not now possible to confer upon the applicant the various opportunities it would have had to conduct itself differently had it not been led to believe that the respondent's position was as represented. As such, it is unconscionable for the respondent to depart from its representation, and it is estopped from doing so. 413 There is nothing in that paragraph that raises, with anything nearing appropriate particularity, the allegation that Delor Vue relied on the representation by refraining from undertaking the repairs itself or commencing proceedings against Allianz earlier than it did. Although Mr Elliott SC acknowledged that there was nothing in that paragraph which referred to Delor Vue relying on the representation when negotiating a new policy, that somewhat irrelevant acknowledgement tended only to distract from the issues on appeal given that such reliance was not found to have generated any detriment on which the primary judge based his decision. 414 Eighth, it was submitted that Delor Vue did not concede that the document entitled "List of Issues for Determination" which was handed to the Court contained the totality of issues to be determined at trial. The transcript of the third day of the hearing bears out that submission with Mr Elliott SC having been recorded as saying, "it [the List of Issues for Determination] certainly doesn't encapsulate the extent of the issues and arguments that we will raising [sic] in relation to estoppel, for example". Whilst it can be accepted that Delor Vue did not agree to all of the matters in the list as constituting the scope of the debate, there was nothing in his comments which identified that the case to be agitated by Delor Vue was wider than its pleading indicated. That is not insignificant given that, by that time, the hearing had reached the stage of addresses. 415 The foregoing submissions by Mr Elliott SC only serve to emphatically support the substance of Mr McLure SC's submissions that, at no appropriate time, did Delor Vue raise as an issue in the proceedings that it had relied on the 9 May 2017 email by abstaining from conducting the repairs to the complex itself, or by not commencing proceedings against Allianz sooner. That is corroborated by the oral submission made by Delor Vue to this Court that it had been placed in a position where it had been induced to conduct a relationship with its insurers over an extended period of time and that this was a difficult position from which to establish what would have occurred in one or more counterfactual universes. Mr Elliott SC thereafter described Delor Vue's "broad" case as being that "merely being put in a position of that kind was itself a form of detriment of the kind that equity would recognise". He continued: True it is we put that broad case, but equally true we did, for the purpose of seeking to make good that broad case, seek to identify a number of particular examples or illustrations of the way in which we could have acted differently, without seeking to prove in fact that had one or more of those various alternatives been taken, we would in fact have ended up in a different position. (Emphasis added). 416 He also claimed that the effect of this was that Delor Vue was entitled to assert that, subsequent to 9 May 2017, it might have acted in myriad different ways and that in enumerating them, "[o]ne just needs to let one's imagination go", and because there might have been so many various scenarios it was "unnecessary for [Delor Vue] to try and prove to any significant extent any one particular counterfactual scenario". 417 It is not possible to derive from the matters identified by Mr Elliott SC any articulation by Delor Vue of a case founded upon reliance consisting of, or detriment arising from, it refraining from carrying out the repairs itself or commencing its action against Allianz earlier. No matter how one might analyse its amended Concise Statement or any other document in which the issues for hearing were articulated, it is not possible to discern any allegation of the reliance on which the primary judge founded his decision on estoppel. This, of itself, is sufficient to allow the appeal in relation to the estoppel point. Nevertheless, there exists a further and more fundamental reason as to why the estoppel claim could not succeed.

A misconception about detriment 418 Even if it were possible to re-cast Delor Vue's articulation of its case as somehow encompassing the alleged reliance, it would nevertheless face the insurmountable difficultly that it failed to address the essential element of promissory estoppel (or an estoppel by convention), being the existence of detriment. This misappreciation was reflected in its submissions to this Court that it was not necessary for it to establish that it actually altered its position in reliance on the representation such that it would suffer detriment if Allianz were not kept to its promise. As the discussion below reveals, it is not mere reliance on a prior promise or an assumed state of affairs which justifies restraining a person from resiling from the promise or state of affairs, but the detriment which will be occasioned to the promisee who has acted in reliance on the promise consequent upon the promisor resiling from it. This appears clearly enough in the following passage from the reasons of Dixon J in Grundt v Great Boulder Pty Gold Mines Ltd [1937] HCA 58; (1937) 59 CLR 641 (Grundt), a case of estoppel by convention, at 674 - 675: [I]t is often said simply that the party asserting the estoppel must have been induced to act to his detriment. Although substantially such a statement is correct and leads to no misunderstanding, it does not bring out clearly the basal purpose of the doctrine. That purpose is to avoid or prevent a detriment to the party asserting the estoppel by compelling the opposite party to adhere to the assumption upon which the former acted or abstained from acting. This means that the real detriment or harm from which the law seeks to give protection is that which would flow from the change of position if the assumption were deserted that led to it. So long as the assumption is adhered to, the party who altered his situation upon the faith of it cannot complain. His complaint is that when afterwards the other party makes a different state of affairs the basis of an assertion of right against him then, if it is allowed, his own original change of position will operate as a detriment. His action or inaction must be such that, if the assumption upon which he proceeded were shown to be wrong and an inconsistent state of affairs were accepted as the foundation of the rights and duties of himself and the opposite party, the consequence would be to make his original act or failure to act a source of prejudice. (Emphasis added). This was later approved of by a majority of the High Court in relation to proprietary estoppel in Sidhu v Van Dyke [2014] HCA 19; (2014) 251 CLR 505 (Sidhu v Van Dyke) at 528 - 529 [80] - [81]. 419 This aspect of the nature of "detrimental reliance" is considered further in the discussion below. 420 For present purposes, it was Delor Vue's obligation to plead and prove the real detriment or harm which would flow from its change of position if the assumption created by Allianz was abandoned. This necessitates identifying the manner in which the change of position occurred (i.e. reliance), the consequence to Delor Vue of having adopted that position if the assumption on which it relied was abandoned, and that the harm or detriment was real. To say that the insured could have taken some theoretical opportunities which may have been available to it is to say no more than it acted in reliance on the representation of Allianz by not pursuing one course or another. However, that says nothing of whether it would suffer harm or detriment if the insurer were permitted to resile from its promise. 421 It follows that, whilst Delor Vue raised, albeit in a somewhat vague and nebulous way, that it relied upon Allianz's promise, it did not go further and plead (or establish) that it suffered any relevant detriment. In fact, Delor Vue failed to articulate any relevant act of reliance (being those upon which the primary judge acted) which might have had the consequence that it suffered real detriment.

The effect of not raising the relevant detriment 422 It matters not how a party articulates its claim, be it by a statement of claim, points of claim or concise statement, the principles of natural justice on which this Court is founded require each party to inform the other of the case sought to be made against them. In Banque Commerciale SA, En Liquidation v Akhil Holdings Ltd [1990] HCA 11; (1990) 169 CLR 279 (Banque Commerciale v Akhil Holdings), Mason CJ and Gaudron J said of the importance of pleadings (at 286 - 287): The function of pleadings is to state with sufficient clarity the case that must be met: Gould and Birbeck and Bacon v. Mount Oxide Mines Ltd. (In liq.). In this way, pleadings serve to ensure the basic requirement of procedural fairness that a party should have the opportunity of meeting the case against him or her and, incidentally, to define the issues for decision. The rule that, in general, relief is confined to that available on the pleadings secures a party's right to this basic requirement of procedural fairness. Accordingly, the circumstances in which a case may be decided on a basis different from that disclosed by the pleadings are limited to those in which the parties have deliberately chosen some different basis for the determination of their respective rights and liabilities. See, e.g., Browne v. Dunn; Mount Oxide Mines. (Footnotes omitted). 423 Such a view was reiterated by the Full Court in Betfair Pty Ltd v Racing New South Wales [2010] FCAFC 133; (2010) 189 FCR 356 (this point not being the subject of the appeal to the High Court), where it was said (at 373 - 374 [50]): Pleadings provide a structure for a proceeding for the purpose of the attainment of justice. The pleadings identify the material facts upon which the parties rely and the issues the parties seek to have determined. Because the pleadings require the parties to identify all material facts and issues, the pleadings provide the benchmark for discovery before trial and the admissibility of evidence at trial. Parties are required to plead the material facts upon which the party relies and the issues which that party seeks to have resolved for the further purpose of giving the opposing party fair notice of the case to be met at trial thereby minimising any risk of injustice by taking the opposing party by surprise. Pleadings incidentally are the record of the proceeding for the purpose of any subsequent arguments relating to res judicata or issue estoppel or any like issue. 424 This passage has been relied upon subsequently in Prysmian Cavi E Sistemi SRL v Australian Competition and Consumer Commission [2018] FCAFC 30 [69] and Zibara v Ultra Management (Sports) Pty Ltd [2021] FCAFC 4; (2021) 387 ALR 48 [122]. 425 In accordance with Banque Commerciale v Akhil Holdings, the relief to which Delor Vue was entitled was confined to the case agitated on the pleading. Here, no case of estoppel founded upon Delor Vue's abstaining from undertaking the repairs itself or from commencing proceedings against Allianz earlier than it did was raised in the amended Concise Statement or in any other document which articulated the matters to be determined during the course of the hearing. The first time Delor Vue sought to raise such a case was during Mr Elliott SC's address to the trial judge and, even if that were thought to be acceptable, there was nevertheless no assertion of any relevant detriment flowing from the alleged reliance. 426 It cannot be thought that Delor Vue's failure to specify the reliance or detriment on which the judgment was founded was minor or trivial in the circumstances of the case. The learned primary judge concluded that it was sufficient to warrant holding Allianz to its stated intention of not relying upon Delor Vue's breach of its disclosure obligations and to deal with the claim according to the terms of the policy. Had Delor Vue articulated the acts of reliance found to have occurred, its witnesses may well have given some evidence to the effect that it would have so acted or, in the case of the repairs, had the financial capacity to do so. Evidence might have been brought to establish even a possibility that the repair works would have proceeded faster than they had actually occurred. For the insurer's part, it would have had the opportunity to cross-examine those witnesses as to the veracity of their evidence and adduce rebutting material. As it was, none of this took place. Further, had Delor Vue articulated the suffering of some relevant detriment, that too may have been the subject of debate. 427 Mr Elliott SC submitted that it was not necessary for Delor Vue to plead detriment as that would necessitate the agitation of a hypothetical scenario, being how it would have acted and how it would be worse off if Allianz were permitted to resile from the representation in the 9 May 2017 email. He submitted, in effect, that it cannot be known how Delor Vue would have specifically acted in the absence of that representation. That submission should be rejected. In the case of an allegation that a counterfactual scenario would have existed, a party can be expected to plead or identify the material facts on which that counterfactual is founded. That this may encompass a hypothetical situation is no impediment. Such circumstances arise regularly in civil litigation involving claims for damages which include a loss of opportunity or the sustaining of damage in cases involving misrepresentation. Indeed, in matters involving statutory causes of action based on misleading or deceptive conduct, it is often necessary to identify a counterfactual circumstance when establishing the causal link between the alleged misrepresentation and the claimed loss or damage: Berry v CCL Secure Pty Ltd [2020] HCA 27; (2020) 94 ALJR 715 at 738 [72]. As French J (as his Honour then was) said in Bond Corp Pty Ltd v Thiess Contractors Pty Ltd (1987) 14 FCR 215 at 222, it is necessary that the "facts and circumstances should be set out leading to a reasonable inference that the conduct and the damage stood to each other in the relation of cause and effect". This statement has been applied on many occasions: see the authorities collected in Wyzenbeek v Australasian Marine Imports Pty Ltd [2017] FCA 1460 [84]: and, although French J's observation concerned the pleading of loss or damage arising in misrepresentation cases, its relevance here is that pleadings of the type referred to by his Honour necessitated identifying the hypothetical, counterfactual position which the plaintiff would have been in had the misleading conduct not occurred. 428 Mr Elliott SC for Delor Vue submitted that the pleading of loss or damage involving a misrepresentation and pleading detriment for an estoppel could not be equated, although he did not identify any relevant difference in principle. In each case, the pleading party is asserting reliance upon some inducement which has caused them to act in a manner which has brought about harm. In the pleading of damages, the harm is that the plaintiff is in a different position to that which they would have been in had they not acted upon the misleading conduct with the result that they are in a diminished economic position. Similarly, for a plea of estoppel, the plaintiff must assert that, having acted in reliance on the representation, promise or assurance, they have been placed in a position which they would otherwise not be in, and that if the promisor is entitled to resile from the promise they will be in a worse position than they would have been in if the promise had not been made. There is, with respect, no difference in principle in the obligation to inform the party against whom the plea is made of the causative pathway between the representation or other inducing conduct and the resulting detrimental position. 429 Here it is apt to recognise again that an issue before the primary judge was how Allianz would have acted, for the purposes of s 28(3) of the ICA, had Delor Vue not breached its duty of disclosure. That is, whether, in that hypothetical, counterfactual scenario, Allianz would have accepted the risk by issuing the policy and on what terms. Ultimately, the primary judge accepted that it would not have. There is, perhaps, some inconsistency with that conclusion and the primary judge's observations in the passages set out above, that it was "impossible" to tell how Delor Vue would have conducted itself if Allianz had not made the representation in the 9 May 2017 email because that would involve the consideration of a hypothetical scenario. As was mentioned above, courts regularly consider how a party would have conducted itself in a hypothetical scenario, for example, absent some particular representation. The real difficulty in doing so in this case was of an evidentiary nature: Delor Vue led no evidence as to what it would have done in the absence of the representation in the 9 May 2017 email. 430 In its written submissions, but conspicuously absent from its oral address, Delor Vue asserted that, although it did not raise in its amended Concise Statement any issue that it suffered detriment as a result of relying upon the representation by abstaining from undertaking repairs to the buildings at the complex or from commencing proceedings, it was not obliged to do so as a concise statement is not a pleading. That submission is devoid of merit. Regardless of the nature of the document articulating a party's claim, the recipient of it is entitled to know the case which they are required to meet. That is a fundamental requirement of the Australian legal system and an irreducible element of fundamental fairness. It is, in any event, a requirement of the processes of this Court. The Commercial and Corporations Practice Note (C&C-1) makes provision for a party to rely upon a concise statement as opposed to a statement of claim, but such a document is nevertheless required to, inter alia, "bring to the attention of the respondent and the Court the key issues and key facts at the heart of the dispute" and is further required to summarise "the important facts giving rise to the claim". It is also to be kept in mind that the burden of proof on the issue of the suffering of prejudice lay on Delor Vue as it was the party asserting the affirmative of it: et qui affirmat non ei qui negat incumbit probatio. With the greatest respect to those who might hold a different view, it would be an affront to justice to hold that a party might succeed on an estoppel claim without having alerted the opposite party to the two essential elements of one of its claims: the relevant act of reliance and the detriment which would ensue if the promisor were entitled to resile from their promise. If the Rules of Court allowing for the use of concise statements are to operate in a way which removes the basic requirement of procedural fairness referred to in Banque Commerciale v Akhil Holdings so as to permit and encourage trial by ambush, which is the logical conclusion of Delor Vue's submission, they ought to specifically so provide. 431 Here, Delor Vue's amended Concise Statement asserted steps or actions taken by it in purported reliance on the representations made. They were the matters of which Allianz was notified were to be advanced at trial in support of the estoppel, waiver and election claims, and those in respect of which Allianz might come to court prepared to contradict. Subject to its agreement, whether expressly or by its conduct, to widen the boundaries of the dispute, they were the only matters which Allianz was required to address in defending the claim against it. They were also the only matters on which judgment against Allianz might be given. Delor Vue did not advance a case that Allianz agreed to expand the issues in dispute to take into account the relevant detriment on which the primary judge relied. 432 It is, with respect, patently clear that Delor Vue led the learned trial judge into error by advancing a case in its submissions which it had neither pleaded, raised in the course of the hearing, nor established by evidence. It was not one in respect of which relief might be given. That being so, the judgment based on the alleged estoppel should be set aside.

The nature of the estoppel which Delor Vue advanced 433 The manner in which the primary judge dealt with Delor Vue's claims gives rise to some fundamental issues concerning the several forms of estoppel and the extent to which they are separate or distinct principles. Although his Honour correctly identified (at [321]) that there is, presently, no single overarching doctrine of estoppel or any general doctrine of estoppel by conduct, he, nevertheless, also observed (at [322]) that the categories of estoppel "should not be seen as taxonomically strictly divided with self-contained separate rules". Whilst there is force in the latter observation, which might be taken as simply meaning that any one factual scenario may give rise to relief by the application of more than one form of estoppel, there are many authorities which seek to differentiate between the several historically recognised types: see the extra-judicial observations of Lord Neuberger in "Thoughts on the law of equitable estoppel" (2010) 84 ALJ 225 at 236 - 238. In Zugic v Vesuvius Australia Pty Ltd [2020] NSWSC 106, Ward CJ in Eq noted (at [269]ff) the continuing distinction between promissory and proprietary estoppel and between their constituent elements. In Thorner v Major [2009] 1 WLR 776, Lord Walker observed (at 795 [61]) that the former needed to be based on an existing legal relationship (usually, but not always, a contract), whilst the latter need not be, but must relate to identified property, owned or about to be owned by the defendant. See also Moore v Aubusson [2020] NSWSC 1466 [344]. There may be doubt as to whether, in Australia, equitable estoppel (being proprietary estoppel) needs to relate to interests in land: cf. Crown Melbourne Ltd v Cosmopolitan Hotel (Vic) Pty Ltd [2016] HCA 26; (2016) 260 CLR 1 (Crown Melbourne) at 45 [145] per Keane J. However, recognition of the differences between the several forms of estoppel is not to deny that some common or, at least, similar principles are applicable to each, particularly those relating to the essential elements of representation, reliance and detriment, as well as the principles surrounding the appropriate measure of relief. 434 That aside, it should presently be accepted that there is no single unified doctrine of estoppel in Australia: Crown Melbourne at 16 - 17 [36] - [37] per French CJ, Kiefel and Bell JJ and at 43 [139] - [141] per Keane J; Giumelli v Giumelli [1999] HCA 10; (1999) 196 CLR 101 (Giumelli) at 112 - 113 [7] per Gleeson CJ, McHugh, Gummow and Callinan JJ; Compass Marinas Australia Pty Ltd v The State of Queensland [2020] QSC 375 [176] per Dalton J. Recently, in DHJPM Pty Ltd v Blackthorn Resources Ltd (formerly called AIM Resources Ltd) [2011] NSWCA 348; (2011) 83 NSWLR 728 (DHJPM v Blackthorn Resources), Meagher JA (with whom Macfarlan JA agreed) observed (at 739 [43]): The judgments in Waltons Stores v Maher accept that common law and equitable estoppel are separate doctrines although they have many ideas in common: at 398-399, 415-416, 458-459. See also Commonwealth of Australia v Verwayen (1990) 170 CLR 394 at 422, 454, 499-500; Silovi v Barbaro at 472 and S&E Promotions Pty Ltd v Tobin Brothers Pty Ltd (1994) 122 ALR 637 at 652-653. They also accept that the "familiar categories" of promissory and proprietary estoppel identify different characteristics of circumstances in which equitable estoppels will arise: at 399-400, 404, 420, 458-459. See also Legione v Hateley (1983) 152 CLR 406 at 432, 434-435 and Giumelli v Giumelli [1999] HCA 10; (1999) 196 CLR 101 at [6], [7]. Those different characteristics were described by Brennan J (at 420): "In cases of promissory estoppel, the equity binds the holder of a legal right who induces another to expect that right will not be exercised against him … . In cases of proprietary estoppel, the equity binds the owner of property who induces another to expect that an interest in the property will be conferred on him". See also Mason CJ and Wilson J at 399, 404 and Gaudron J at 458-459. 435 No submissions were made to this Court as to the taxonomical issues concerning estoppel in pais (which includes estoppel by convention), promissory estoppel and proprietary estoppel, nor as to any relevant distinction would advance either party's position. 436 The presently disorganised state of this area of the law no doubt has many causes. One may be that the academic writing, on which Courts and judges rely so heavily to clarify the existing law (see generally the observations of Kiefel CJ speaking extra-judicially in 'The academy and the courts: what do they mean to each other today?' (Australian Academy of Law Patron's Address, Brisbane, 31 October 2019)), has, in this area, been concerned with idiosyncratically reframing and developing the law rather than providing a cohesive explication of it. Two recent notable exceptions are found in the works of Professor Denis Ong (Ong DSK, Ong on Estoppel (The Federation Press, 2020) (Ong on Estoppel)) and Michael Barnes QC (Barnes M, The Law of Estoppel (Hart, 2020) (Barnes)). In each, the particular nature of promissory estoppel, as a separate and distinct form of estoppel arising in equity, is discussed and the particular rules which have been established around it are identified. These discussions are important in the present case where Delor Vue's case was identified by the primary judge as being that it acted in reliance upon Allianz's alleged promise or statement of intention not to rely upon its non-disclosure when dealing with the claim made on the policy: at [321] - [322]. 437 That being so, and while according appropriate deference to the careful and erudite reasons of the primary judge, this matter is more appropriately approached by the application of the principles of promissory estoppel, it being a case which falls within the established category of cases where a party having contractual rights and entitlements makes a promise as to the manner in which they will be applied. 438 The history of the development of promissory estoppel in both Australia and the United Kingdom is carefully chartered in the above works of Professor Ong and Mr Barnes QC respectively. For present purposes, the six elements of the principle identified by Brennan J in Waltons Stores (Interstate) Ltd v Maher [1988] HCA 7; (1988) 164 CLR 387 (Waltons Stores v Maher) provide a solid basis for its presently accepted scope. There, his Honour said (at 428 - 429): In my opinion, to establish an equitable estoppel, it is necessary for a plaintiff to prove that (1) the plaintiff assumed that a particular legal relationship then existed between the plaintiff and the defendant or expected that a particular legal relationship would exist between them and, in the latter case, that the defendant would not be free to withdraw from the expected legal relationship; (2) the defendant has induced the plaintiff to adopt that assumption or expectation; (3) the plaintiff acts or abstains from acting in reliance on the assumption or expectation; (4) the defendant knew or intended him to do so; (5) the plaintiff's action or inaction will occasion detriment if the assumption or expectation is not fulfilled; and (6) the defendant has failed to act to avoid that detriment whether by fulfilling the assumption or expectation or otherwise. 439 There is no need in this case to consider whether the party relying on promissory estoppel is required to establish the fourth element. Arguably, once the first three are established, there appears to be no reason why the promisor should be able to avoid the estoppel (assuming elements five and six are also established) by showing that they neither intended nor knew that the plaintiff would act upon the representation: see the discussion in Ong on Estoppel at 183 - 185. Further, as the estoppel fails on other grounds, there is no need in this case to consider whether promissory estoppel is confined to imposing restraint upon the exercise of legal rights - being used as a "shield" - or extends to enabling the creation of legal rights - being used as a "sword". It is noted that a number of decisions emanating from the New South Wales Court of Appeal would appear to confine the principle to the more narrow, prophylactic scope: Saleh v Romanous [2010] NSWCA 274; (2010) 79 NSWLR 453 (Saleh v Romanous) at 460 [62] per Handley AJA (with whom Giles JA and Sackville AJA agreed); DHJPM v Blackthorn Resources at 750 [93] per Handley AJA; Van Dyke v Sidhu [2013] NSWCA 198; (2013) 301 ALR 769 at 777 [39] per Barrett JA (with whom Basten JA and Tobias AJA agreed). However, it is regularly recognised that there is a significant amount of dicta in favour of the wider view: see Lopeman v WIN Corporation Pty Ltd [2020] NSWSC 1305 [70] per Sakar J and the authorities there cited. See also the discussion in Ong on Estoppel at 192 - 195. 440 Nevertheless, this being a case founded upon promissory estoppel, it was necessary for Delor Vue to plead or identify the acts done (or not done) by it in reliance on the assumption or expectation created by Allianz which would result in its suffering relevant detriment if that assumption or expectation were not fulfilled. In the context of a claim (or defence) relying upon promissory estoppel, the identified acts and anticipated resultant detriment are critical and interrelated elements. As such, the person against whom the estoppel is alleged is entitled to be made aware of their nature before any trial commences. Here, the absence of any pleading or indication of Delor Vue's reliance or detriment suffered, as found by the primary judge, had the consequence that Allianz was unaware of the case it had to meet.

What was the detrimental reliance which was required to be shown and established in this case? 441 Delor Vue's case, both before the learned primary judge and this Court, was vividly opaque. The precise manner in which any estoppel arose was vague and ill defined. On some occasions, it appeared that a promissory estoppel was being relied upon and, on others, an estoppel by convention. With respect, it is problematic to suggest that the same set of facts gives rise to both a promissory estoppel and an estoppel by convention. If the matter on which reliance is placed is the existence of a promise that something will occur in the future - in this case that Allianz will pay the claim when it is quantified - the state of affairs adopted can only be that the insurer has made a voluntary promise to do an act in the future, which promise was unsupported by consideration and therefore revocable but for the estoppel. It cannot create an existing state of affairs (of either fact or law or mixed law and fact) on which Delor Vue could rely for an estoppel by convention. That common law doctrine was never sufficiently wide to enforce a statement made by one party to another as to what they intended to do. Had it been otherwise, there would have been no need for the steps taken by Bowen LJ in Birmingham and District Land Company v London and North Western Railway Company (1888) 40 Ch D 268, by the House of Lords in Tool Metal Manufacturing Co Ltd v Tungsten Electric Co Ltd [1955] 1 WLR 761 and, subsequently, by the Privy Council in Ajay v RT Briscoe (Nigeria) Limited [1964] 1 WLR 1326 at 1330 from which the principles of promissory estoppel emerged. 442 Moreover, Mr Elliott SC did not take the Court to any case which suggested that estoppel by convention had merged with promissory estoppel and, thereby, extended itself to include mutual assumptions as to what will occur in the future as opposed to existing states of affairs. There is probably good reason for that. It would appear to be now well established that estoppel by convention is a common law doctrine, being one similar to an estoppel in pais if it is not subsumed within that concept: Saleh v Romanous at 459 [53]; Handley KR, Estoppel by Conduct and Election (2nd ed, Sweet & Maxwell, 2006) at 116 - 118. It was not contended in this Court that Saleh v Romanous ought not be followed in this respect.

Detriment required for promissory estoppel 443 In relation to the sufficiency of any detriment in this case, it is appropriate to first consider that question in relation to promissory estoppel. Here, at its best for the insured, the representation or promise by Allianz was that it would pay the claim according to the policy terms and, in doing so, would not rely upon Delor Vue's non-disclosure as a basis for declining cover. 444 In the course of the appeal, it was suggested that the question of detrimental reliance arose at two points in the application of the principles of promissory estoppel, first, by giving rise to an enforceable estoppel and, second, in determining the nature and extent of any remedy. That approach gains some credence from the manner in which the elements of estoppel by representation are regularly expressed and from the general lack of clarity in this area of law. In essence, the issue is caused by the vagueness of what is meant by "the estoppel" which arises. Given its common law origins, the reference is generally taken as meaning that the representor is estopped from denying the truth of the representation or state of affairs which they have induced the representee to assume because the representee has suffered the relevant detriment. As a rule of evidence, that would exclude the introduction of proof of that matter and would operate absolutely in relation to that issue. However, in equity, the principle has developed so that whilst an "estoppel" might arise, it will not necessarily require the making good of the promise or representation and some lesser remedy might be available. That lesser remedy may be in the nature of an order sufficient to avoid the detriment which might otherwise be suffered by the promisee. In this way, the estoppel is said to have a pro tanto operation. In such cases, detriment is initially considered when determining whether an estoppel arises and, if so, it is considered again where its nature and extent is relevant to the relief granted. In proprietary estoppel, the latter question is often framed as being whether the enforcement of the promise is out of all proportion to the detriment suffered. 445 It is an understatement to observe that there is considerable uncertainty and doubt around these principles as well as a lack of any perceivable underlying rationale guiding their development. For instance, if a representee does not suffer sufficient detriment as a result of relying on a representation to justify estopping the representor from resiling from it, what is the justification for granting any relief? Similarly, what occurs in those circumstances where, through outside intervention or otherwise, the representee is prevented from further acting on the representor's promise? If, as it appears, the principles of equitable estoppel are being driven to establish a form of equitable contract, of which Waltons Stores v Maher may be an example, there will be a need for its reconciliation with notions of mutuality, part-performance, breach, repudiation, damages and the like. 446 This issue of a supposed dual role for detriment may have been resolved to some extent by the majority decision in Sidhu v Van Dyke (at 530 [85]) where the concept of the "minimum relief necessary to 'do justice' between the parties" was largely jettisoned in favour of the view that "where the unconscionable conduct consists of resiling from a promise or assurance which has induced conduct to the other party's detriment, the relief which is necessary in this sense is usually that which reflects the value of the promise." That latter proposition tends to suggest a more absolutist approach such that, where actual detriment is suffered, the promise is enforced unless doing so require would be inequitable and out of all proportion to the promise. 447 The concept of detriment for the purposes of promissory estoppel was first fully explained in Australia in Waltons Stores v Maher. Mason CJ and Wilson J grounded promissory estoppel in unconscionability, being not merely the departure by a representor from their promise but the consequences of such departure for the representee. Their Honours said (at 406): The foregoing review of the doctrine of promissory estoppel indicates that the doctrine extends to the enforcement of voluntary promises on the footing that a departure from the basic assumptions underlying the transaction between the parties must be unconscionable. As failure to fulfil a promise does not of itself amount to unconscionable conduct, mere reliance on an executory promise to do something, resulting in the promisee changing his position or suffering detriment, does not bring promissory estoppel into play. Something more would be required. Humphreys Estate suggests that this may be found, if at all, in the creation or encouragement by the party estopped in the other party of an assumption that a contract will come into existence or a promise will be performed and that the other party relied on that assumption to his detriment to the knowledge of the first party. 448 The articulation of the nature of promissory estoppel by Brennan J in that case has been set out above. There, his Honour identified that relevant detriment as being that which will be suffered by the representee, who has acted on the assumption or expectation, which is not fulfilled and which the defendant has failed to act to avoid, whether by fulfilling the assumption or expectation or otherwise. This articulation of relevant detriment is coherent with the notion that the relief which is available is that which is the minimum to do equity or, in other words, that which will relieve the representee of the detriment which they will suffer by having acting in reliance on the representation if the representor is allowed to resile from it. This was echoed in Sidhu v Van Dyke where the majority (at 522 - 523 [58]) identified that it was not the breach of promise which justifies the holding of a party to their promise but the detrimental reliance caused by the promise. Their Honours (French CJ, Kiefel, Bell and Keane JJ) assayed the evidence of detriment, identified in that case as being the plaintiff's loss of opportunity to undertake other paths in life or other jobs, and it was in that context they considered the extent to which it was unconscionable for the representor to seek to resile from the assurances which had been made. In particular, they relied on the observations of Dixon J in Grundt (which are set out above) to the effect that the relevant detriment is not the reliance on the assumed state of affairs, but the harm which would flow if the assumption were deserted in circumstances where the promisee had acted in reliance on the promise. In Ashton v Pratt [2015] NSWCA 12; (2015) 88 NSWLR 281 (Ashton v Pratt), Bathurst CJ made the point in similar terms (at 307 [141]): The relevant detriment is that which the party asserting the estoppel would suffer, as a result of her original change of position, if the assumption which induced it was repudiated by the party estopped: Delaforce v Simpson-Cook [2010] NSWCA 84; 78 NSWLR 483 at [42], Grundt v The Great Boulder Proprietary Gold Mines Ltd (1937) 59 CLR 641 at 674-675 and Sidhu at [81]. 449 The issue was significant in that case where the plaintiff had made substantial gains as a result of acting in reliance on the representation on which she sought to found an estoppel with the consequence that no detriment was suffered. See also the discussion of Handley AJA in Delaforce at 491 [41] - [44].

The nature of "sufficient" detriment 450 The foregoing raises the issue of the nature of detriment in estoppel and, in particular, that of sufficient detriment. In this context, "sufficient" refers to the quality of detriment which justifies holding the representor to their representation or to the assumed or accepted state of affairs which it has created. 451 As the reasons of the learned primary judge reveal, any consideration of nature of sufficient detriment necessarily involves a consideration of the object of estoppel generally. In Commonwealth of Australia v Verwayen [1990] HCA 39; (1990) 170 CLR 394 (Verwayen), some members of the High Court adhered to the view expressed in Waltons Stores v Maher that relief for estoppel was determined by ascertaining the minimum equity to do justice to the plaintiff (at 411 - 412 and 416 per Mason CJ; at 429 - 430 per Brennan J) which was coherent with estoppel's object being to prevent a representee suffering detriment as a result of acting on a representor's promise. At least, in terms, the recognised general aim of estoppel seems to remain undisturbed. In Sidhu v Van Dyke, the High Court reinforced this view by citing with approval the observations of Mason CJ in Verwayen (at 409) that estoppel's fundamental purpose is to accord protection against the detriment which would flow from a representee's change of position if the assumption or expectation generated by the representor which led to it were deserted: at 511 [1]. See also the observations of Dixon J in Grundt at 674; Waltons Stores v Maher at 419; Giumelli at 124 [44]; and more recently Crown Melbourne at 43 [139]. 452 In this case, the learned primary judge adopted the approach which he had taken in Delaforce, in which prominence was given to keeping the representor to their representation, even if it was not contractual, on the basis that "equity has also had a place in keeping the parties to representations or promises": at [335]. See also the reasons of Handley AJA with whom Giles JA agreed in Delaforce (at 494 - 495 [63] - [77]). By adopting that approach in Delaforce, the Court of Appeal held that there was no basis for limiting the relief which might be granted to that which was proportionate to the detriment which the representee had sustained. Effectively, the suffering of any detriment was sufficient to render the representor's promise enforceable (in specie or by an appropriate substitute), save in those cases where the representor is able to establish that the relief is out of all proportion to the detriment. Handley AJA said (at 495 [77]): … In my opinion, and with respect there is no positive requirement for a plaintiff to prove that the relief sought is proportionate. The principle, a negative one, is that enforcement of the expectation must not be disproportionate. 453 It ought to be kept steadily in mind that Delaforce concerned a claim of proprietary estoppel, a category of estoppel which arises where the owner of property has encouraged another to alter their position in the expectation of obtaining a proprietary interest in that land and the other has changed their position to their detriment. For that reason, the numerous cases cited and referred to in the judgements of the Court of Appeal were predominantly cases where similar estoppels were raised. Here, the estoppel relied upon is promissory estoppel, being a distinct category of estoppel and one not involving the consequences of one party performing their side of a reciprocal arrangement nor the unconscionable reliance on the Statute of Frauds requirements. 454 Although the matter is not entirely free from argument, there remains a strong line of authority that the principles of estoppel do not outflank the requirement of consideration in contract and that estoppel's historical object, being to avoid detriment rather than to hold parties to their promises, remains intact. In Sidhu v Van Dyke, the majority said (at 522 - 523 [58]: In point of principle, to speak of deploying a presumption of reliance in the context of equitable estoppel is to fail to recognise that it is the conduct of the representee induced by the representor which is the very foundation for equitable intervention. Reliance is a fact to be found; it is not to be imputed on the basis of evidence which falls short of proof of the fact. It is actual reliance by the promisee, and the state of affairs so created, which answers the concern that equitable estoppel not be allowed to outflank Jorden v Money by dispensing with the need for consideration if a promise is to be enforceable as a contract. It is not the breach of promise, but the promisor's responsibility for the detrimental reliance by the promisee, which makes it unconscionable for the promisor to resile from his or her promise. In Giumelli v Giumelli, Gleeson CJ, McHugh, Gummow and Callinan JJ approved the statement of McPherson J in Riches v Hogben that: "It is not the existence of an unperformed promise that invites the intervention of equity but the conduct of the plaintiff in acting upon the expectation to which it gives rise." (Footnotes omitted). 455 Subsequently, when considering the question of the appropriate measure of relief, their Honours cited (at 528 - 529 [80] - [81]) with apparent approval the observations of Dixon J in Grundt (speaking of estoppel in pais and estoppel by convention): [I]t is often said simply that the party asserting the estoppel must have been induced to act to his detriment. Although substantially such a statement is correct and leads to no misunderstanding, it does not bring out clearly the basal purpose of the doctrine. That purpose is to avoid or prevent a detriment to the party asserting the estoppel by compelling the opposite party to adhere to the assumption upon which the former acted or abstained from acting. This means that the real detriment or harm from which the law seeks to give protection is that which would flow from the change of position if the assumption were deserted that led to it. 456 After noting that Dixon J's comments had been applied to cases of equitable estoppel such as Donis v Donis [2007] VSCA 89; (2007) 19 VR 577 (at 593 - 594 [54] per Nettle JA (with whom Maxwell ACJ and Ashley JA agreed)) and Delaforce (at 491 [42] per Handley AJA), their Honours referred (at 529 [82]) to the Court's earlier adoption of the same proposition in Giumelli (at 112 [6]) in the following manner: In Giumelli v Giumelli, Gleeson CJ, McHugh, Gummow and Callinan JJ held that, because the fundamental purpose of equitable estoppel is to protect the plaintiff from the detriment which would flow from the defendant's change of position if the defendant were to be permitted to resile from his or her promise, the relief granted may require the taking of active steps by the defendant including the performance of the promise and the performance of the expectation generated by the promise. That holding is supported by the leading decisions to which this category of equitable estoppel is usually traced [Dillwyn v Llewelyn (1862) 4 De GF & J 517 [45 ER 1285]; Ramsden v Dyson (1866) LR 1 HL 129; Riches v Hogben [1985] 2 Qd R 292; The Commonwealth v Verwayen (1990) 170 CLR 394.] (Footnotes omitted). 457 Despite endorsing the purpose of estoppel as being the protection of the plaintiff from the detriment which would flow from the defendant's change of position, the majority (at 529 - 530 [83] - [84]) nevertheless framed the principles around the measure of relief in terms akin to contractual specific performance. The exception was in those cases where the value of the promise was disproportionately greater than any detriment suffered and the detriment is easily quantifiable. Although their Honours left room for the application of the principle of the "minimum equity to do justice as between the parties", they considered that justice between the parties would not be done in the case before them other than by holding the appellant to the representation. They said (at 530 [85]): While it is true to say that "the court, as a court of conscience, goes no further than is necessary to prevent unconscionable conduct", where the unconscionable conduct consists of resiling from a promise or assurance which has induced conduct to the other party's detriment, the relief which is necessary in this sense is usually that which reflects the value of the promise. (Footnote omitted).

The relationship between the nature of the promise, reliance and detriment 458 In the consideration of the sufficiency of detriment, some attention needs to be given to the context in which the issue arises, in particular, the nature of the representation made and the extent of reliance. In relation to the former, a distinction exists between a representation or promise involving a unilateral assumption of a burden or voluntary surrender of a right on the one hand (a voluntary promise) and, on the other, one which is part of a "reciprocal arrangement" (as described by Ben McFarlane and Sir Philip Sales in "Promises, Detriment and Liability: Lessons from Propriety Estoppel" (2015) 131 LQR 610). In the latter scenario, the arrangement itself tends to provide some metric by which the sufficiency of detriment might be measured. This generally occurs in relation to claims concerning proprietary estoppel arising from family arrangements where the promisee is offered an interest in land consequent upon them performing work on the property or staying with the family business for a significant period of time. Certainly, when the bargain or arrangement has been fully executed by the promisee, there is little doubt that their "expectation interest" can only be satisfied by the performance of the promise and that nothing short of that is appropriate. Where performance by the promisee is something less, questions must arise as to the extent of the relief to which the promisee should be entitled and that may only be answered, in part, by reference to the reciprocal bargain which has given rise to the representation or expectation. 459 The above considerations have no obvious application when the representation arises from the unilateral act of the promisor such as in the present case. Here, Allianz's promise did not carry with it any stipulation by which some conduct by Delor Vue would render it irrevocable or by reference to which a metric might be discerned to determine what amount of detriment might be sufficient. In this sense, any expectation by Delor Vue is founded upon the hope that Allianz does not change its mind. See the observations of Mason CJ and Wilson in Waltons Stores v Maher at 403 and of Robert Goff LJ in Amalgamated Investment & Property Co Ltd v Texas Commerce International Bank Ltd [1982] QB 84 (Amalgamated Property Co v Texas Bank) at 107. It was not founded upon any reciprocal arrangement which carried within it the implication that Delor Vue's performance of some obligation would secure the fulfilment of Allianz's promise.

The absence of actual prejudice/detriment 460 Allianz further submitted that, even had the acts of reliance which founded the estoppel identified by the primary judge been appropriately raised, Delor Vue did not establish the existence of any actual detriment. It submitted that Delor Vue failed to establish that it would suffer detriment as a result of acting in reliance on the promise if Allianz was entitled to resile from it. For the reasons which follow, that submission should be accepted. This conclusion is not surprising. Not only did Delor Vue not plead the relevant acts of reliance, it did not attempt to plead that any actual prejudice would flow from it having changed its position if Allianz were entitled to resile from its stated intention. The necessary consequence was that it did not attempt to prove any such matter.

Omission to bring proceedings against Allianz 461 Allianz submitted that Delor Vue did not suffer detriment consequent upon its omission to commence an action to enforce its claimed rights under the policy for three reasons. First, it did not lose any entitlement to pursue Allianz. Second, contrary to the primary judge's conclusion that it was impossible to tell what the result would have been, the circumstances reveal that it would have failed in any action as the primary judge determined that Allianz was entitled to reduce its liability to nil. Third, it was not suggested that the delay which was caused altered the outcome of the disputed rights under the policy. 462 It is not unfair to say that, on the appeal, Delor Vue made no attempt to rely upon its omission to commence proceedings against Allianz as amounting to sufficient detriment which would support an estoppel in this case. It relied only on the observations of the primary judge but did not advance any argument in support of his conclusion. That is understandable given the force of Allianz's submissions. 463 Whilst in some circumstances refraining from commencing legal proceedings against a third party may well amount to detriment of such magnitude that it suffices to support an estoppel, the present case is not one of them. First, the cause of action was not lost. It was actually pursued, being the institution of these proceedings. In terms of any detriment, all that might be said is that Delor Vue did not commence them earlier. Second, whilst in some cases it might not be possible to tell what would have been the outcome of having commenced proceedings, here the outcome of that putative action is known. In these proceedings, the primary judge correctly determined that Delor Vue's non-disclosure entitled Allianz to reduce its liability to nil. Undoubtedly, that would also have been the outcome had the proceeding been commenced earlier. Third, there is nothing to suggest that, had an action against Allianz been commenced in May 2017, the result would have been different or that Delor Vue is relevantly prejudiced by not having commenced this action earlier. 464 It follows that, contrary to the conclusion of the learned primary judge, the omission to commence proceedings was not detriment of a kind which would support an estoppel.

Detriment by refraining from carrying out repairs 465 Allianz also submitted that there was insufficient evidence on which the primary judge might have concluded that Delor Vue suffered detriment as a result of it refraining from carrying out repairs to the damaged property. It supported this submission by reference to the 9 May 2017 email, which, so it said, specified that Delor Vue was obliged to undertake the repairs to the roofs before the internal damage for which Allianz had agreed to pay would be rectified and the failure of Delor Vue to undertake those repairs. It further submitted that there was no evidence to suggest that Delor Vue suffered detriment as a result of repairs not being undertaken sooner and said that, even if there were such evidence, it was not consequent upon any representation in the 9 May 2017 email. 466 Delor Vue principally submitted that the statement in the 9 May 2017 email was not to the effect that it was required to undertake the repairs to the roof prior to the commencement of the work which Allianz had agreed to indemnify. It asserted that the statement in the email was of a general nature and merely identified the sequence of repair work and that the extent to which the repair work to the roof was to be indemnified under the policy was yet to be determined. In other words, it rejects the factual foundation of Allianz's submission that there was some imperative for the insured to undertake the initial repairs and that the absence of repairs reveals that its failure to carry out repairs was not a consequence of the representation. 467 The difficulty underlying any examination of this issue is the absence of any pleading supporting the alleged detriment. Such a pleading would have articulated the proposition that, had the representation in 9 May 2017 email not been made, Delor Vue would have taken some action relating to the repairs needed at the complex. The persons who would have made the decision to undertake the work would have been identified and the capacity of Delor Vue to undertake it would necessarily have been asserted. Any properly formulated pleading would also have identified the position in relation to repairs in May 2018 which had occurred and how those repairs were less advanced than they would have been had Delor Vue pursued that task. 468 As it was, none of these matters were pleaded and, as a necessary consequence, no evidence adduced in relation to them. The persons who may have relied on the representation were not identified and nor did they give evidence about what they would have done in the counterfactual scenario. Assuming that evidence of some decisional process to that effect had been adduced, further evidence would have been required as to how the repairs may have been effected, including the obtaining of relevant engineering and building reports as well as scope of works. These are not mere side issues in this case where, in the period between May 2017 and May 2018, Allianz undertook the urgently needed repairs and sought and obtained reports on the nature and extent of the major repair work required, as well as reports from builders concerning the necessary scope of works. Whilst it is true that some of these steps also involved the attempt to categorise the work into non-indemnified and indemnified work, the steps taken would have been objectively beneficial to Delor Vue had it been required to undertake the work. At the very least, had the issue been properly articulated, this would have been a matter of contention. 469 It is necessary to reiterate that the counterfactual scenario relevant to any inquiry for the purposes of estoppel is the position in which the promisee would be had they not relied upon the assurance or representation. It is not, necessarily, the position the promisee would be in if told of the opposite of the representation. Whilst it may regularly be that the giving of an assurance or making of a promise has occurred because the circumstances were such that the representor was required to give an indication one way or another, that is not necessarily so. Here, given the difficulties with the assessment of the damage and the insurer's concern as to the extent to which the cyclone damage may have fallen within one of the exclusions, it may have been that, rather than signifying an intention to indemnify, Allianz may not have given any indication of its position until some substantial time later. True it is that the insurer was under an obligation to make a decision in a timely manner and within a reasonable time: s 57 of the ICA: but, in the circumstances of this case where issues of non-disclosure had been raised and substantial questions existed as to the defective condition of the roofs at the complex, it would not have been unreasonable for Allianz to defer making a final determination for some time. As this issue was not raised in the appeal, there is no need to consider it further. 470 As was submitted by Mr McLure SC for Allianz, the claim that, in reliance on the representation, Delor Vue abstained from undertaking the repair work was first raised in its written submissions handed to the Court in the course of addresses. It had not been pleaded, opened, and no evidence was called in support of it. Delor Vue did not submit that it called evidence in relation to this issue. Consistently with its submission that it was entitled to support an estoppel by the mere reference to the existence of possible opportunities which might have existed and had been forgone, it did not call evidence to establish that it would have undertaken the repairs itself or that it would suffer harm if Allianz were entitled to resile from its representation. That approach was misguided. As was clearly stated in Sidhu v Van Dyke, the onus is on the party propounding the estoppel to plead and prove the existence of real detrimental reliance. That did not occur here.

The meaning and import of the 9 May 2017 email 471 The foregoing renders it unnecessary to consider the meaning of the 9 May 2017 email for the purposes of the estoppel claim. However, as the Court received substantial submissions on this topic and because it is relevant to other issues on the appeal, it is appropriate to do so. 472 At least in the appeal, Delor Vue asserted that it relied upon the content of the email as constituting a representation that Allianz would indemnify in respect of the claim and, in reliance on that, it abstained from undertaking repairs to the complex itself. Allianz submitted that there could be no such reliance as the email required Delor Vue to undertake repairs before any work for which it would indemnify the insured would be commenced. Delor Vue disputed that construction. 473 On its face, the content of the 9 May 2017 email is somewhat ambiguous, although some of that uncertainty is clarified by reference to the context in which it was written. That context includes the several reports which had been obtained and passed between the parties in the period prior to the date of the email concerning the pre-existing defective condition of the roofs at the Delor Vue complex. Nevertheless, the email provided a statement of Allianz's intention to partially indemnify under the policy despite Delor Vue's non-disclosure. However, by no means did it indicate that Allianz intended to indemnify in respect of all of the repairs which had to be undertaken at the complex. It clearly specified that damage in the category of "Defective materials and construction of the roof, including but not limited to tie downs, rafters and timbers and soffit" would not be covered and that Delor Vue would be responsible for repairs of that nature. In the context of the reports obtained to that date, it was patent that such work would be considerable. On the other hand, Allianz did indicate its intention to indemnify with respect to the cost of repairing that damage referred to as "Resultant damage including but not limited to internal water damage, fascia, guttering and roof sheeting (for those buildings which lost roof sheeting only)". In the context of the communications between the parties and the background in which the issue arose, it is sufficiently clear that Allianz intended to indemnify in respect of some matters which could only be attended to once the structural or major repairs to the roofs were undertaken. It is axiomatic that fascia, guttering and roof sheeting could only be applied once the structural defects in the roof were remedied. The 9 May 2017 email then referred to the engagement of engineers to provide a scope of work for the repairs to the roof and, again, reference was made to the defective repairs which were to be paid for by Delor Vue and the resultant damage which was to be covered by Allianz. Thereafter, it was mentioned that the roof repairs would have to be undertaken before the internal repairs were started. In this respect, the letter said: In terms of the repairs, for those buildings which have not sustained damage to the roof or water is not entering the building through the roof, once the quotation has been received and approved, the internal repairs will be able to commence. However, for those buildings which have sustained damage to the roof or water is not [sic] entering the building through the roof, the roof repairs will need to be carried out first, before the internal resultant damage repairs can proceed. 474 A difficulty here is the uncertainty which existed at the time of the 9 May 2017 email and, particularly, as to the extent of the structural defects. By that date, it was apprehended by all that there were, or it was reasonably probable that there were, serious structural defects in the roofs of the buildings at the complex and, in particular, with the trusses and tie downs. It is also apparent that the structural repairs to the roofs would have to be effected prior to other repairs such as the replacement of gutters, fascia and roof sheeting. Although that would appear to be somewhat obvious, it is not possible to discern from the letter any statement to that effect or that this was what Allianz intended. The quoted paragraphs refer to the undertaking of all of the work on the roofs prior to the internal resultant damage repairs being undertaken. This is reinforced by the contrasting position stated with respect to buildings which had not sustained damage to their roofs. Nonetheless, those paragraphs do not assert that Delor Vue was required to undertake, by itself, the uninsured work prior to the commencement of the repair work for which the Allianz had accepted liability. 475 It is not possible to derive from the 9 May 2017 email the imposition of a prerequisite to Allianz indemnifying Delor Vue in respect of insured repair work that it complete the repairs to the roof structures on the buildings. However, that is not to say that the email does not provide support for the submission that it did not provide any reasonable foundation for Delor Vue's claimed inactivity. The express indication that remediation of the structural defects in the roofs were to be paid for by Delor Vue which would have to be completed prior to Allianz undertaking repair work for internal damage must surely have indicated to the insured that it would need to be either wholly or overwhelmingly involved in the undertaking of that initial work. The letter provides a strong indication that Delor Vue would need to progress its part of the repair work in order to ensure the overall remediation could occur expeditiously. 476 In cases of this nature, it is especially important to ascertain how a written representation was understood by those who received it. Here, there was no such evidence nor any opportunity for cross-examination on the issue. That might have occurred had, at the trial, Delor Vue raised as an issue prior to its final address that its detriment flowed from abstaining from undertaking repairs earlier than it did. Then the relevant persons who allegedly so relied could have been cross-examined on their understanding of the 9 May 2017 email and, in particular, the imperative that Delor Vue undertake a substantial part of the initial repair work. At best, there was only indirect evidence before the primary judge as to such understanding, being Mr Key's correspondence of 29 August 2017 and LMI Legal's letter of 3 May 2017, each of which asserted that Allianz had not finally stated its position on indemnity.

Could the alleged representation have continued? 477 Had Delor Vue properly raised the issue of detriment flowing from it abstaining from undertaking remediation work, a question would have arisen in the proceeding as to the length of time during which it might have claimed that it legitimately relied on the representation in the 9 May 2017 email as the basis for not proceeding with the work. On 22 June 2017, Ms Lander of Allianz advised Ms Webb of BCB by email that a further inspection of the roofs by Morse had identified additional defects in the buildings, including: • Truss failure due to bottom chord splitting at HD bolt locations • Truss failure due to top chord splitting at nail-plate • Gable end cladding to trusses failed as a result of inadequate fixing to supporting trusses • Soffit failure as a result of inadequate fixing to support members • Vertical wall reinforcement protruded past the top course of masonry • Gable end truss tie down inadequate • No internal bracing to high end truss members 478 This must have alerted Delor Vue to the fact that substantial repairs relating to the trusses would have to be undertaken and paid for by it. If that was not apparent by the list of defects, it was by the subsequent statement in the letter that: Whilst the Scope of Works has not been finalised as yet, given the further failures which have come to light, we believe the costs involved in rectifying the defective related items will be in the millions. The Body Corporate need to be aware of this, as funds will need to be raised and be available, in order for the rectification works to proceed. (Original emphasis). 479 Whilst the letter did say that the insured and uninsured work would need to be carried out "hand in hand", it must have been obvious that, until Delor Vue held sufficient funds to undertake the repairs for which it was responsible, the project could not proceed. There is little evidence of the funds which were available to Delor Vue, but that evidence which does exist supports the view that it was well short of "millions". It is not immediately clear how Delor Vue could claim that it would have proceeded with the entire remediation project given that it apparently only had the financial ability to fund only part of it. 480 The understanding that the work for which Delor Vue was responsible would be substantial must have also been emphasised when, at its meeting on 18 July 2017, the Committee reviewed the scope of works which had been prepared by Morse. That was further reinforced when, in December 2017, it received the report which it had commissioned from GHD confirming that the trusses needed to be replaced (at significant expense). 481 Again, had Delor Vue raised as an issue that it had abstained from undertaking repairs itself on the faith of the statements in the 9 May 2017 email, the persons claiming such reliance would have been required to respond to the substance of these letters. They would have been required to confront the issue that Delor Vue may not have had the financial ability to undertake the work at that time or for some time thereafter. As the issue was not raised, their response is unknown.

Was there evidence that Delor Vue abstained from undertaking repairs in reliance on the representation? 482 Allianz further submitted that, even if the issue of Delor Vue's reliance by abstaining from undertaking repairs had been raised, the evidence before the Court did not establish that it would have acted in that manner. Necessarily, there is a difficulty in considering this topic in the absence of any pleading, evidence or submission from Delor Vue as to the manner in which it would have acted and, importantly, its financial ability to conduct itself in that manner. 483 The conclusion as to the manner in which Delor Vue would have acted is essential to any estoppel claim as it provides the foundation for assessing the detriment which it would suffer if Allianz were allowed to resile from its prior indication that it intended to provide a partial indemnity in respect of the damage. However, as there was no pleading or indication as to the facts on which Delor Vue relied to raise the inference that Allianz's representation and any subsequent detriment stood to each other in the relation of cause and effect, no conclusion is possible. There was no evidence adduced that the relevant persons would have made the decision to undertake the repairs, how the repairs would have been effected, how they would have been financed, and the extent to which they would have been completed by May 2018. Even if the case were put as being the loss of an opportunity to undertake repairs, there was no evidence from which it was possible to conclude on the balance of probabilities that it would have been pursued, and that Delor Vue would have been better off than it was following the work which was undertaken by Allianz.

The events which occurred between May 2017 and May 2018 484 Mr McLure SC for Allianz submitted that, given the events which did occur in the period between the email of 9 May 2017 and May 2018, it could not be concluded that Delor Vue would suffer any actual prejudice from the insurer resiling from its stated intention to partially indemnify in respect of the claim. He identified that, prior to 9 May 2017, the insurer had already engaged an engineer from Morse to attend the site, inspect and provide a report on the construction of the buildings. Although the report subsequently produced undoubtedly had relevance to the insurer's interests, it was also of benefit to Delor Vue to understand the damage requiring remediation. It identified the nature and extent of the damage and its causal origins in the defective construction. On 10 May 2017, a scope of works and quote for undertaking the work was received by the insurer. Again, this document became available to Delor Vue and, on any view, would have assisted it in understanding the extent of the repair work and the likely cost. A further report was obtained by Allianz from Morse on 12 May 2017 detailing the findings from a subsequent inspection. The content of that report elaborated upon and extended the identification of the nature and extent of the cyclone damage and the existing defective construction. The author of the report also provided guidance as to the work required to rectify the existing deficiencies in the roof trusses and included a further scope of works. It was submitted that Delor Vue would have been required to obtain such a report in order to plan the remediation work and that its acquisition therefore to the insured's advantage. In that latter respect, it is worth noting that part of Delor Vue's pleaded claim is that it suffered detriment by not obtaining scopes of work for the undertaking of the repairs and, as Mr McLure SC submitted, the fact that they were obtained by Allianz must have been to Delor Vue's advantage. Additionally, in the period after 9 May 2017, Allianz caused urgent repairs to be made to buildings which were exposed to the weather, reimbursed Delor Vue for the cost of the caretaker's accommodation, and made payments in respect of loss of rental receipts for some unit owners. The evidence revealed that, by December 2017, it had expended around $192,000 in obtaining engineering and building reports, paying for various reports, temporary accommodation and loss of rent. The expenditure of this amount was largely to the benefit of Delor Vue. Allianz also sought and obtained two building quotations for the work identified in the scope of works produced by Morse which were provided to Delor Vue. These quotations identified the cost of undertaking the remediation work which Allianz indicated that it did not intend to cover and were for $2.1 million and $3.2 million. 485 Despite Delor Vue pleading that, in reliance on the 9 May 2017 email, it abstained from obtaining scopes of works or quotations, the evidence shows that it did retain GHD to undertake an inspection and to provide a report in relation to the roof trusses. The First GHD Report, produced on 21 August 2017, identified the several defects and the manner in which they might be addressed. It also identified that those defects had their origin in the construction of the buildings. An additional report was produced by GHD in December 2017 which further identified the damage sustained to the buildings, gave opinions as to the cause, and advised on methods of repair. Importantly, it also concluded that the current roof trusses were not adequate and advised that they required extensive repairs. In relation to funding the repairs which were to be undertaken by Delor Vue, it is apparent that a decision was made at the Committee meeting in December 2017 to apply the sinking fund of $250,000 towards the cost of repairs and to borrow a further $750,000. 486 On Delor Vue's unpleaded case that it suffered detriment by abstaining from undertaking repairs, Allianz submitted that it was required to identify what work it abstained from undertaking, show that it would have been accomplished sooner or differently than it was, and demonstrate how it would have been in a better position than it was in May 2018 (i.e. that it had suffered harm or detriment consequent upon its reliance). It submitted that, in the light of the above matters, Delor Vue could not, on the evidence adduced in the hearing, demonstrate any real detriment. So the submission went, the damage to the buildings was problematic and extensive. Reports and building quotes were obtained and, rather than agreeing to a path by which the work could be performed, Delor Vue spent time attempting to ascertain how it might be done more cheaply. The evidence also suggests that, at best, Delor Vue would have been able to pay for only a portion of the repairs. In summary, Allianz submitted that the evidence of the work actually done tends to establish that Delor Vue would, at least, have been in no better position had Allianz not indicated its intention to pay a portion of the claim with the result that it would not suffer detriment if Allianz does not fulfil its promise. 487 These submissions should be accepted. As far as the evidence goes, it suggests that whatever work was required to be performed in relation to undertaking of the repairs was being attended to in the 12 months following the 9 May 2017 email. The nature and extent of the damage was not immediately ascertainable and nor was the extent to which it was derivative upon the defective construction of the buildings. In circumstances where Delor Vue had contemplated proceedings against the builder and developer, it is most unlikely that, had it assumed control of effecting the repairs, it would have proceeded without identifying the liability which might be attributed to those parties. The preparatory work done by the several engineers and builders was work which had to be undertaken in any event and at no time was it suggested that that which was performed was not beneficial to Delor Vue. 488 The evidence also shows that the total remediation costs were between $4.5 million and $5.6 million and the only funds to which Delor Vue had access totalled $1 million. This strongly negates any suggestion that the body corporate could have embarked upon the project by itself. Although Mr Elliott SC submitted that the repair work might have been undertaken in a staged way, there was no evidence to support that possibility or how it might occur. Again, had the issue been legitimately raised, evidence of that nature may have been forthcoming. Allianz would then have had the opportunity to challenge such evidence and adduce its own. 489 Mr Elliott SC also submitted that Delor Vue suffered detriment by allowing Allianz access to the buildings at the complex for the purposes of inspection and the procurement of engineering reports. It was said that it suffered detriment because Allianz was able to ascertain the extent to which the damage was caused by the defective nature of the construction of the buildings and more accurately assess the extent of its liability under the policy. It was further submitted that, had the representation not been made, Delor Vue would have been in a position to demand payment of more than it was entitled to, presumably because Allianz would not have been in a position to quantify its liability in the absence of access. Whether equitable estoppel can be supported on detriment of that nature need not to be decided, although it must be strongly doubted. Nevertheless, there is no causal connection between Allianz's promise and it becoming aware of the nature and extent of the damage resulting from defects in the buildings. Had the promise not been made, Allianz may have continued to assess the claim for some time. If so, it is likely that it would have used its entitlement under the policy to enter the premises when a claim is made so as to inspect any damaged property. In that sense, the insurer's entitlement to access or take possession of the property was not founded upon the making of the representation in the 9 May 2017 email: see at [25], [326], [333], [339]; but merely the making of the claim. Even if it is assumed that, rather than expressing the intention in the 9 May 2017 email, Allianz declined cover with the consequence that litigation commenced, it is also undoubted that the litigation processes would have enabled Allianz access to the premises for the purposes of obtaining expert reports. Again, these are matters which, had the issues been properly raised, could and would have been canvassed at the trial. In any case, it is simply not possible to conclude that Delor Vue is worse off if Allianz is entitled to resile from its representation on the basis that the insurer gained access to the insured premises for the purposes of ascertaining the extent to which the relevant policy exclusion applied. 490 The evidence before the primary judge fell well short of establishing that Delor Vue suffered any real detriment by having abstained from effecting repairs in reliance on the 9 May 2017 email. Even if it is assumed that Delor Vue would have attempted to proceed in some manner, there is nothing which evidences what it would or could have achieved in the 12 months to May 2018. Moreover, as a consequence of the work undertaken by Allianz, there is nothing from which it can be determined that Delor Vue was in a worse position because the insurer indicated its intention to indemnify and proceeded to expend substantial funds preliminary to the undertaking of the remediation work.

Assessing the competing advantages and disadvantages. 491 In the analysis of whether a party propounding an estoppel has suffered detriment, any comparison of their actual position with their hypothetical counterfactual position must include an assessment of any benefits accruing to them as a result of the course they have adopted. That approach is coherent with the estoppel's object to protect against the suffering of detriment consequent upon reliance on a promise. On this issue, Allianz relied upon the recent decision of the New South Wales Court of Appeal in Q (a pseudonym) v E Co (a pseudonym) [2020] NSWCA 220; (2020) 383 ALR 469 (Q v E), which was delivered subsequently to the primary judge's judgment in this matter. In that case, the sons of Q raised a proprietary estoppel against their father when claiming an interest in the family farming businesses. They asserted their interest arose from an expectation created and encouraged by Q that they would each receive an interest in the farming properties of the businesses on his death. The sons claimed that, in reliance on that expectation they worked in the family businesses for many years, but that Q subsequently altered his will which would have the effect of denying them any interest in the properties subsequent to his death. The primary judge upheld the sons' claim on the basis that Q had, indeed, created an expectation that if they remained in the family businesses whilst he retained ownership of the family farms they would inherit them on his death. It was held that, as the sons had made "life-changing decisions" not to pursue other career options and had joined the family business, it would now be unconscionable to allow Q to act otherwise than in accordance with the sons' expectation, even though the relationships had irretrievably broken down. A central issue on appeal was whether the sons had suffered real or significant detriment as a result of relying upon the expectation created and, within that issue, was the extent to which the countervailing benefits which the sons obtained from participation in the family businesses were relevant. Meagher JA (with whom Leeming and Payne JJA agreed) relied (at 505 - 506 [145] - [155]) upon the observations of Dixon J in Grundt (at 674 - 675) in concluding that the assessment of detriment required that a comparison be made between the positions the sons currently occupy and those they would have occupied had they not changed their positions in reliance on the expectation of an inheritance. His Honour observed (at 505 [154]): There will be an estoppel if the sons would suffer prejudice or disadvantage by reason of their changes of position if Q were to depart from that expectation. The fact that each has received and retains a quarter share in E Co [being one of the family companies] is plainly a matter to be taken into account in assessing whether they would be prejudiced or disadvantaged in that event. 492 His Honour identified that there was nothing in Giumelli or Sidhu v Van Dyke which contradicts the requirement to take into account the benefits which a party asserting an estoppel has acquired in reliance on a promise. He then observed that it was possible to conceive of cases where the party relying on an expectation will have benefited so greatly through their reliance such that they would not suffer any prejudice if the expectation were departed from. On the other hand, his Honour held (at 506 [157]) that it was impermissible to undertake a precise quantification of the advantages and disadvantages flowing from reliance on an expectation when ascertaining whether any detriment was sustained. The comparison is one which may be founded upon evaluative judgments. Meagher JA also acknowledged (at 506 [158]) that occasions will arise where the party relying on an estoppel may have foregone opportunities which cannot be readily valued, but which cannot be rejected as carrying only a fanciful or unrealistic prospect that the party discouraged would not have been better off. 493 In this context, Mr McLure SC also referred to the decision of Bathurst CJ in Ashton v Pratt, where the Chief Justice (at 307 [143] - [144]) undertook an evaluation of the benefits which the appellant had received by acting in reliance on the representation on which the estoppel claim was founded. Weighing those benefits, the Chief Justice concluded that no detriment was suffered by the appellant. 494 In this matter, the above recitation of the facts which occurred in the period between May 2017 and May 2018 not only contradicts the argument that Delor Vue suffered any real or significant detriment, it rather tends to suggest that Allianz's participation in the organisation of the remediation project conferred a considerable advantages on it which would not otherwise have been obtained. It is perhaps desirable to reiterate once more that, had the detriment now relied upon been squarely pleaded, such matters would have been the subject of evidence and submission before the primary judge.

Delor Vue's claims of lost opportunities 495 As previously mentioned, Mr Elliott SC submitted that Delor Vue was able to establish detriment by identifying possible opportunities which might have been lost by reason of its reliance on the stated intention of Allianz to partially indemnify the claim. He submitted that a party in Delor Vue's position was entitled to "let its imagination go" and could rely upon any hypothesised lost opportunity so long as it was not fanciful or unrealistic. In that latter respect, he relied upon the observations in Delaforce at 486 [5] per Allsop P. 496 However, these submissions misapply the President's observations in that paragraph and are not consistent with the reasons of Meagher JA in Q v E. In that latter case, his Honour observed (at 506 [158]): Thus, the question becomes whether this was a case in which there were opportunities forgone by B and C through reliance which cannot readily be valued but which nevertheless cannot be rejected as carrying only a fanciful or unrealistic prospect that the party encouraged would have been better off. … 497 His Honour's statement indicates it is the prospect that the party encouraged would have been better off had the opportunity been pursued that needs to be not "fanciful" or "unrealistic", which was the same conclusion reached by Allsop P in Delaforce. That stands in stark contradistinction to Delor Vue's submissions that the mere existence of the opportunity can be relied upon if it is not fanciful or unrealistic. It was on this basis that the submission was advanced that it was unnecessary for Delor Vue "to try and prove to any significant extent any one particular counterfactual scenario". Necessarily, Delor Vue's submissions that it was entitled to establish detriment by merely identifying the not fanciful or not unrealistic possibility of lost opportunities was erroneous and must be rejected. 498 The error of Delor Vue's submissions in this respect is evidenced by a consideration of the matters on which it relied to support the existence of detriment. In the course of address to this Court, Mr Elliott SC sought to rely upon a number of alleged opportunities which, it was said, Delor Vue had foregone with the consequence that it suffered detriment. He submitted that Delor Vue lost the opportunity to undertake a staged repair of the buildings, initially utilising the $1 million it had raised, that it lost the opportunity to undertake the repairs in a cheaper manner, that it forewent the opportunity to pursue the developer and builder of the complex as that was in the hands of the insurer, and that it lost the opportunity to negotiate a term of the policy renewal that enshrined Allianz's position concerning non-disclosure in the 9 May 2017 email (although how that may have occurred is unclear and how the opportunity was lost because of the statement in the email is difficult to comprehend). It was submitted that it was sufficient for Delor Vue to merely raise these and that, as they were not fanciful, Delor Vue did not have to go further and establish that it would have taken up these opportunities or that it would have been better off had it done so. 499 Putting aside that there was no evidence to support a case that pursuing any of these opportunities would have resulted in Delor Vue being placed in a better position, there was no evidence before the Court than any of these opportunities were actually available to Delor Vue. Most of these matters were not pleaded, not included in the list of issues, not the subject of evidence, and not the subject of argument before the primary judge. Moreover, many were not referred to in Delor Vue's written submissions and were raised for the first time on appeal during Delor Vue's address which, coincidentally, is consistent with the manner in which it conducted its case at trial. Had those matters been raised at an appropriate stage, they may have been the subject of evidence, cross-examination and the adducing of rebutting evidence. Regardless of the fact that reliance on them will fail for the reasons referred to above, Delor Vue ought not be permitted to raise them now: Water Board v Moustakas [1988] HCA 12; (1988) 180 CLR 491. 500 In any event, Delor Vue's submission is misconceived. Raising the existence of possible alternative courses of action does not establish detriment. Even though it is not necessary to establish the actual value of the opportunities foregone, it is necessary to prove to the requisite degree that they were actually available, that they were able to be pursued, and that they would have been. To merely point to them as being potentially available does not establish detriment. Delor Vue's submissions in this respect must be rejected.

Estoppel by Convention 501 Delor Vue submitted that it also advanced its case as one of an estoppel by convention as described by Dixon J in Grundt, and that this was accepted by the primary judge. In support of this, reference was made to paragraphs [323] and [326] of the primary judge's reasons. However, those paragraphs do not suggest that an estoppel by convention was a foundation of his Honour's decision. Rather, his Honour only appears to have drawn on the principles of estoppel by convention in the context of considering a promissory estoppel. In the absence of this issue being raised in its Notice of Contention, it is inappropriate to allow Delor Vue to now agitate a different ground for upholding the primary judge's decision. That, however, is but one of the reasons why Delor Vue could not sustain the judgment below on this basis. 502 It is sufficiently clear that no estoppel by convention was raised in Delor Vue's amended Concise Statement, the list of issues handed to the Court, or the pre-trial written submissions. As with the promissory estoppel raised by Delor Vue, there is a conspicuous failure to plead or identify actual detriment. Mr Elliott SC sought to respond to the submission that no estoppel by convention was raised in the amended Concise Statement by resort to what he said were "irresistible inferences" arising from that which was pleaded. He claimed that Delor Vue's assertion in the amended Concise Statement that, in reliance on the 9 May 2017 email, it cooperated "with Allianz with respect to the potential recovery action against the original builder and developer and [placed] recovery in the hand of Allianz" contains an assertion that it would otherwise have undertaken those proceedings itself. No such inferential allegation arises. However, even if it did, it would be insufficient to raise an allegation of detriment. No adequate or appropriate pleading of detriment was raised for the purposes of estoppel by convention. 503 Mr Elliott SC further submitted that the issue was raised before the trial judge by its being mentioned in Delor Vue's written closing submissions which were handed to the Court after Mr McLure SC had addressed the Court. That is a most inappropriate basis on which to accept that it was a live issue in the proceedings. To accept otherwise is to countenance trial by ambush and would set at nought the obligations of the parties in ss 37M and 37N of the Federal Court of Australia Act 1976 (Cth). 504 Allianz's submission that Delor Vue had not appropriately raised any claim based on an estoppel by convention should be accepted. It was not raised in advance of or during the hearing before the primary judge. There is no indication that, during the hearing, Allianz acted in a manner which indicated a preparedness to contest issues not raised on the pleading, and there was no submission made on this appeal that such was the case. It may be that, for this reason, the learned primary judge did not found his decision on an estoppel by convention, but only on promissory estoppel. The absence of any appropriately pleaded case of estoppel by convention provides a second insurmountable reason as to why judgment below cannot be sustained on that ground. 505 Even had Delor Vue raised, at an appropriate time, a conventional estoppel, it was not established on the evidence before the primary judge. Most relevantly, this form of estoppel also requires that the party raising it establish that it has suffered real or substantial detriment. That conclusion is supported by the decision of the New South Wales Court of Appeal in Miller Heinman Pty Ltd v Sales Principles Pty Ltd [2017] NSWCA 106; (2017) 94 NSWLR 500. There, the parties had entered into a services agreement pursuant to which the appellant, MH, was to pay the respondent, S, a fee for sales training services provided by S to MH's clients. The agreement provided that MH might terminate the agreement for serious misconduct on the part of S. An incident occurred in which one of MH's clients claimed to have been upset by a remark made by a director of S. MH did not terminate the agreement but informed S that, as a result of the incident, it would not receive any remuneration based on the revenue derived from that client. S asserted that it did not agree, although it did not seek payment of the disputed fee. Subsequently, the services agreement expired through the effluxion of time and, thereafter, S commenced proceedings for the payment of its full fees. MH argued that S was estopped from doing so on the basis that the parties had adopted a common assumption that the calculation of fees would exclude revenue derived from the client in question and, on that basis, it had not terminated the services agreement. The trial judge held that S was entitled to the payment of its full fees although did not deal with MH's defence founded upon an estoppel. The Court of Appeal (Macfarlan JA, with whom McColl JA and Sackville AJA agreed) allowed the appeal holding MH was entitled to rely upon a conventional estoppel. Its decision primarily concerned the issue of the sufficiency of the causal connection between the assumed state of affairs and the manner in which the party raising the estoppel had acted. However, it also concluded that, as with other forms of estoppel, it was necessary in a conventional estoppel to establish the suffering of detriment. Specifically, Macfarlan JA (at 508 [37]) referred to the early statement of the principles by Dixon J in Thompson v Palmer [1933] HCA 61; (1933) 49 CLR 507 where it was observed (at 547) that a conventional estoppel will operate if the party raising it "placed himself in a position of material disadvantage if departure from the assumption be permitted". His Honour also identified (at 508 [38]) that Dixon J, in his later decision in Grundt, further referred (at 674 - 675) to the requirement of detriment in terms that the party relying on the estoppel must establish that their action or inaction was "such that, if the assumption upon which he proceeded were shown to be wrong and an inconsistent state of affairs were accepted as the foundation of the rights and duties of himself and the opposite party, the consequence would be to make his original act or failure to act a source of prejudice". Subsequently in his reasons, Macfarlan JA equated the requirements of reliance and detriment for estoppel by convention with those of promissory or proprietary estoppel. In the matter before the Court of Appeal, MH had adduced evidence that, had the parties not acted on the basis that S would not receive fees in relation to the client in question, it would have terminated the service agreement and, thereupon, not have become liable for the fees payable to S from the revenue derived from that client. That evidence was accepted and was found to be sufficient detriment to support the estoppel. 506 The requirement for conventional estoppel identified by Macfarlan JA, that real or significant prejudice has to be shown to establish detriment as is the requirement for other forms of estoppel, is well supported by the commentators in this area: see Barnes [5.77] - [5.81]; Feltham et al, Spencer Bower: Reliance-Based Estoppel (5th ed, Bloomsbury, 2017) [8.43]; Wilken and Ghaly, The Law of Waiver, Variation and Estoppel (3rd ed, Oxford University Press, 2012) [10.11] - [10.12]. 507 On the evidence before the primary judge, there was nothing which might sustain a finding that Delor Vue suffered any prejudice which might sustain a conventional estoppel. It follows that, even in the absence of any finding to that effect by the primary judge or it being raised in its Notice of Contention, Delor Vue cannot succeed on this basis.

Proportionality 508 The concept of proportionality is related to the remedy which a Court will provide where it concludes that one party is estopped from asserting or denying a right. It is closely related to the issue of whether detrimental reliance existed and the concepts sometimes overlap. Here, Allianz submitted that, if Delor Vue did suffer some detriment, holding the insurer to its representation so as to confer a benefit on Delor Vue would be disproportionate to any detriment suffered. It was submitted that the primary judge erred in making various moral judgments about Allianz's conduct when considering the issue of proportionality and, even if that were proper, failed to take all relevant considerations into account, including the behaviour of Delor Vue. 509 Whilst there is force in Allianz's submissions in this respect, given the numerous grounds on which the estoppel claim otherwise fails, there is no need to consider it. Nevertheless, it should be observed that Delor Vue's failure to plead or prove detriment had the consequence that it is impossible to even commence to attribute any notional value to whatever detriment there was, so that some comparison might be made to the $2 million to $3 million impost on Allianz which will arise if it is held to its promise.

Ground 2 - Waiver (and election) 510 The learned primary judge held that Allianz had waived any entitlement it had to rely upon s 28(3) of the ICA because it had intentionally chosen to forego its right and had obtained an advantage by doing so: at [341]. 511 As articulated in the Notice of Appeal, Ground 2 asserted: The primary judge erred by finding at [339] - [341] that the appellant waived the right to reduce its liability to the respondent to nil pursuant to s 28(3) of the Act. 512 It is convenient to deal with Delor Vue's Notice of Contention, that the decision of the primary judge could be maintained on the basis of an election, contemporaneously with this ground.

The appellant's submissions 513 Allianz's main submission is that there exists no freestanding doctrine of waiver operating in the context of contractual relations outside of election and estoppel. In support, it relied upon the decision in Freshmark Ltd v Mercantile Mutual Insurance (Australia) Ltd [1994] 2 Qd R 390 (Freshmark v Mercantile Mutual) at 404 and on the reasons for decision of Mason CJ, Brennan, Deane, Dawson and McHugh JJ in Verwayen. It submitted that contrary dicta does not displace this. It further submitted the learned primary judge erred in determining it had waived any right to rely upon Delor Vue's non-disclosure simply because it had stated that it intended not to rely on its rights pursuant to s 28(3) of the ICA and had then obtained resultant advantages over the following 12 months. 514 Alternatively, it submitted that it gained no advantage and Delor Vue suffered no detriment as a result of the making of the alleged waiver. All that relevantly occurred between the email of 9 May 2017 and the letter of 28 May 2018 was that it sent engineers and builders to the premises for the purposes of effecting temporary repairs and planning the carrying out of major repairs, and provided some financial benefits to Delor Vue and unit owners. This, it is said, was to Delor Vue's advantage.

The respondent's submissions 515 In response, Delor Vue submitted that Allianz's conduct amounted to either waiver or election and that there was little practical difference between the two doctrines. Its primary submissions were that an independent doctrine of waiver exists and that it applied in the circumstances of this case. The principle relied upon was that where "an insurer who intentionally and with knowledge indicates that it will not take a particular position and obtains something it could not if it took up an inconsistent position, may not later take up that inconsistent position". The detail of these submissions is considered more fully below. 516 In the alternative, Delor Vue submitted that the primary judge erred in concluding that Allianz's conduct had not amounted to an election between inconsistent rights.

Discussion 517 The evaluative analysis of the parties' submissions on this issue necessitates a somewhat detailed consideration of the authorities on which they relied, not in the least because one party relies on a free-standing principle of waiver while the other denies its existence.

The decision in Craine v Colonial Mutual 518 Delor Vue principally relied upon the decision of Isaacs J (delivering the judgment of the Court) in Craine v Colonial Mutual in support of the existence of a separate principle or concept of waiver. However, it is apparent that subsequent authorities have regarded Isaac J's use of the expression "waiver" as being synonymous with "election": see for example the comments of Brennan J in Verwayen at 424. The facts of Craine v Colonial Mutual may be briefly stated. In an action on a policy of insurance, the insurer asserted that the insured's claim had not been made within the period stipulated by the conditions of the policy, being a particular time after the sustaining of the insurable loss. The insured claimed the insurer had waived its entitlement to rely upon the late making of the claim or was estopped from doing so because it had, after the making of the claim, acted as if the claim had been made in time and in a manner adversely to the insured. Importantly, Isaacs J observed that, at the trial of the action, the insurer had not put into question either issue of the making of the representation or the suffering of prejudice and that these must be taken against it. His Honour identified that the insurer was not entitled to deny the contract but insist upon the rights under it, stating (at 320): They are not at liberty to deny to the insured rights given to him under the contract and at the same time insist on and exercise as against him in adversum correlative rights given to them by the contract, as a qualification or a safeguard, on the basis that the rights of the insured are in full operation. 519 In that case, after the making of the late claim by the insured, and despite in its correspondence asserting that its continuing discussions were "without prejudice and without setting up any waiver of any of the provisions or requirements of the policy conditions", the insurer had insisted that the insured perform the terms of the policy in respect of that claim. The Court's reasoning appears to have been that, whilst the insurer had sought to preserve its position it had, through a series of correspondence, positively insisted on the insured acting as if the claim was within the terms of the policy. That included the insurer exercising its rights on the basis that it had agreed to indemnify in respect of the claim by identifying that it was exercising its rights to sell the insured property, taking possession from the insured of the premises where the damage had occurred, and engaging in the salvage of damaged goods. In respect of the relief to be granted, Isaacs J observed (at 324): There being, apart from the several legal objections yet to be dealt with, evidence to support the finding, and the other elements of estoppel being uncontested, the rest is matter of pure law. 520 Thereafter, his Honour considered, inter alia, objections on the grounds that the matters in question could not give rise to an estoppel. Indeed, recognition was given to the fact that the terms of the policy excluded waiver by the insurer. Isaacs J identified (at 326), in obiter, that waiver was an intentional act, where the act constituting the waiver was distinct and done with the express or implied intention to treat a condition as if it did not exist or to proceed as though the breach of it had not occurred, and with knowledge of all the facts. It is a conclusion of law to prevent a person from approbating and reprobating. As it was, the matter was determined on the basis that the jury was entitled to uphold a case founded upon an estoppel. 521 It is not unfair to say that no subsequent authority has taken up the wide description given to waiver by Isaacs J. Indeed, the contrary is true and, in general terms, it can be said that it is confined to those circumstances where a party has been required to, and has, chosen between inconsistent rights, as in the nature of election: see Sargent v ASL Developments Ltd [1974] HCA 40; (1974) 131 CLR 634 (Sargent v ASL Developments) at 655. That view is reinforced by Isaacs J's focus upon the treatment of contractual rights, being that a condition did not exist or a breach had not occurred.

Verwayen 522 Reference was made also to the consideration of waiver in the individual judgments in Verwayen. That case is undoubtedly difficult, being one in which there was a majority against each basis for the decision ultimately reached - being waiver and estoppel - and, therefore, no majority and no ratio at all on either issue: Commonwealth v Clark [1994] 2 VR 333 at 374 - 375 (per Ormiston J with whom Fullagar J agreed); Brodie v Singleton Shire Council [2001] HCA 29; (2001) 206 CLR 512 at 562 - 563 [112]. Nevertheless, the observations of the individual justices of the Court do provide some guidance on those issues. 523 The facts of the matter are well known and do not require detailed repetition. It suffices to say that, in the course of litigation by an injured member of the Navy, the Commonwealth indicated either an intention not to rely upon a defence under the relevant Limitations of Actions Act, or that it did not relevantly owe the plaintiff a duty of care. It subsequently changed its policy and determined to amend its pleading to raise both issues. The plaintiffs sought to prevent the Commonwealth from doing so relying upon estoppel, election and waiver. Mason CJ identified (at 406) that the term "waiver" is used "to describe the result of the application of various principles rather than to designate a particular legal concept or doctrine", and that it was "an imprecise term capable of describing different legal concepts, notably election and estoppel". His Honour seemed to accept the view that it does not exist, save when used an alternative designation for some other defences such as election, estoppel or new agreement. He further accepted that "an existing legal right is not destroyed by mere waiver in the sense of an express or implied intimation that the person in whom the right is vested does not intend to enforce it". More is required, being something in the nature of election or estoppel. That view appears to be contrary to the wide definition of waiver identified by Isaacs J in Craine v Colonial Mutual. Subsequently, Mason CJ identified (at 407 - 408) waiver as being, in effect, an election, in that it occurs where a party is entitled to alternative rights which are inconsistent with one another, or an estoppel. 524 Brennan J identified the term "waiver" as a vague term with a shifting meaning and used in many senses. His Honour interpreted it as being a unilateral abandonment of a right in such a way that it cannot be asserted thereafter and, probably, because through the effluxion of time the opportunity to rely upon it ceases: at 422 - 423. The failure to take a defence such as a limitation point might be waived where a person fails to advance it before judgment is delivered. This was made clear by his Honour's reliance on Graham v Ingleby (1848) 1 Ex 651; 154 ER 277 at 279 and Wilson v McIntosh [1894] AC 129 at 133, and his subsequent discussion of the circumstances in which the entitlement to exercise a right will be lost when a new legal relationship is established: at 427. That being so, his Honour concluded that the Commonwealth, despite its prior statement not to rely upon the limitation defence, was entitled to raise it up until the pronouncement of judgment. Again, this conclusion would appear to have some tension with that of Isaacs J in Craine v Colonial Mutual. 525 The topic of waiver was also considered briefly by Deane J who confined its operation to those circumstances of a unilateral waiving of a right or entitlement which was effective despite the absence of any reliance on the part of the other person affected and which his Honour regarded as cases of "true election": at 449 - 450. 526 Dawson J also regarded the word "waiver" as being an imprecise term and as being "used to describe what is done in a variety of circumstances rather than to assert any particular legal process": at 451. His Honour regarded it as being indistinguishable from election or estoppel and noted some of the many judicial and academic criticisms of it as an independent principle. Otherwise his Honour appeared to adopt a similar view to that of Brennan J, namely that the term might be used when a party chooses not to insist on a right or entitlement and loses the right to do so by choice or default and the passing of time: at 457 - 458. 527 In his reasons, Toohey J (at 467) equated the concept of waiver with that of election and within the statement of that principle by Mason J in Sargent v ASL Developments (at 655) being "the legal grounds on which a person is precluded from asserting one legal right when he is entitled to alternative rights inconsistent with each other" and "the legal grounds on which a person is precluded from raising a particular defence to a claim against him". See also his Honour's comments at 472. His Honour held that the renunciation of the right to plead the limitation point, once taken, was apparently irretrievable although there is no explanation as to why that may be so prior to, at least, some point in the trial. 528 Gaudron J adopted a wider view of waiver holding that it extended to occasions where parties adopted inconsistent positions rather than inconsistent rights: at 484 - 485. However, it is apparent that her Honour was considering the issue in the conduct of litigation rather than some broader context. 529 Finally, McHugh J concluded that there was no independent principle of waiver outside of election and estoppel and, although there were some anomalous cases where parties were held to be entitled to waive statutory rights, there was such no principle which applied in the case before the Court. 530 It follows that a majority (in number) of the Court eschewed the existence of an independent doctrine of waiver.

Freshmark v Mercantile Mutual 531 Next, Allianz relied upon the Queensland Court of Appeal's decision in Freshmark v Mercantile Mutual as a clear decision of an intermediate appellate court to the effect that there exists no independent doctrine of waiver which was separate or distinct from estoppel or election. In that case, the insurer of an articulated vehicle authorised the making of repairs to it after it had been damaged whilst being controlled by a driver who was under the age of 25. The policy excluded cover if the vehicle was damaged whilst under the control of such a person. On the making of a claim, the insurer, which had full knowledge of the age of the driver, authorised the making of repairs to the vehicle. A week later it notified the insured that, due to the age of the driver at the time of the accident it would not indemnify and it, thereupon, directed the repairer to cease work. Dowsett J (with whom McPherson JA agreed) considered the several judgments in Verwayen, particularly those of Mason CJ and McHugh J which doubted the existence of any separate doctrine of waiver. His Honour identified that Mason CJ had further held that an existing legal right was not destroyed merely by an express or implied intimation that the person in whom it vests does not intend to enforce it. He also referred to the reasons of Dawson J who favoured the view that there was no distinction between estoppel and waiver when the latter is not used to describe election. At its highest, waiver was seen as the outcome of an election or an estoppel. The case acutely raised the efficacy of a unilateral abandonment or release of a right and, in relation to this, Dowsett J said (at 403): The better view is that a mere indication of an intention not to rely upon contractual rights will not generally constitute a waiver sufficient to bar a future action to enforce such rights. Waiver should not be seen as an alternative weapon to estoppel in the war against the doctrine of consideration. However, where a party elects between alternative rights available under a contract, such election will usually be final. 532 His Honour then identified that the mere performance of what is perceived to be one's obligations under a contract or to insist upon rights arising thereunder does not, per se, constitute an election. In this context, the mere exercising of rights by the insurer to authorise repairs was the discharging of an obligation not the exercise of a right which was inconsistent with a right to decline to indemnify. His Honour concluded his analysis by eschewing the concept of a separated doctrine of waiver in the following terms (at 404): In my view, the decision below proceeded upon the basis that there was an independent doctrine of waiver separate from estoppel or election. The better view is that there is no such doctrine. In the absence of an estoppel or election, there was no justification for depriving the appellant of the benefit of the Articulated Vehicles endorsement. 533 In the course of submissions, Mr Elliott SC submitted that the Court of Appeal in Freshmark v Mercantile Mutual had not been taken to the decision in Craine v Colonial Mutual, although reference to the report of the argument and the list of cases cited in the authorised report shows that this was not the case. It might be accepted that Dowsett J did not specifically refer to Isaacs J's decision although it is referred to three times in the passages cited by his Honour from Verwayen. It is therefore not possible to conclude that it was not considered by the Court of Appeal. In any event, one might think that the weight of a strong majority (in number) in Verwayen could be taken as overwhelming the obiter in Craine v Colonial Mutual. 534 Delor Vue was not explicit in submitting that the decision in Freshmark v Mercantile Mutual was "plainly wrong" and should not be followed: Farah Constructions Pty Ltd v Say-Dee Pty Ltd [2007] HCA 22; (2007) 230 CLR 89 at 151 - 152 [135]: although that must necessarily be the logical implication of its submissions. However, there was very little, if any, explanation as to why the decision of the Court of Appeal should be considered to be clearly in error.

Agricultural & Rural Finance Pty Ltd v Gardiner 535 The concept of waiver was considered more recently by the High Court in Agricultural & Rural Finance Pty Ltd v Gardiner [2008] HCA 57; (2008) 238 CLR 570 (Agricultural & Rural v Gardiner). There, borrowers, who were participants in an agricultural project, asserted that the financiers of the scheme had accepted late payments from them in relation to their respective loans. They claimed that, as a result, a related party who had agreed to indemnify them in respect of those loans, so long as they had punctually complied with their obligations under them, had thereby waived its entitlement to rely upon the lack of timeliness of those payments to refuse indemnity. The majority (Gummow, Hayne and Kiefel JJ) noted the uncertainties surrounding the concept of waiver, the criticisms of it as a separate doctrine, the use of the expression as a synonym for estoppel or election, and that it is sometimes considered as a conclusory description of the outcome of the application of different principles: at 586 - 587 [50] - [51]. However, they also noted that there were cases where the expression "waiver" was used outside of election, estoppel and variation of contract, including to describe the entire abandonment of a contract, a party not insisting on the performance of a term of a contract which was for that party's sole benefit, and where a party entitled to claim legal professional privilege chooses not to stand on that right: at 587 [52] - [53]. Without attempting to identify any taxonomy around the circumstances in which the expression waiver had been used, it was decided that the word was used to refer to either election, forbearance, abandonment or renunciation. However, their Honours observed that the circumstances in which there is an election between inconsistent rights is vastly different from cases founded upon a waiver of rights as occurred in Verwayen, and they identified the waiver in that case as being limited to conduct in the course of litigation: at 590 [61] - [62]. Their Honours added there would be "evident danger in divorcing what is said in that case from that context". It would appear that, save in respect of diverse minor categories, the majority considered waiver to have no operation in the context of the matter before the Court. 536 The result in Agricultural & Rural v Gardiner was that, whilst the financier may have made an election between existing rights in that it could not accept the late payments and then chose to rely upon an acceleration clause in the loan agreement, that was irrelevant to the entitlement of the indemnifier who had not been required to and did not make such an election. The majority also considered whether there existed separate doctrines of forbearance, abandonment or renunciation, however, as none were relied upon by Delor Vue in this matter, there is no need to consider that discussion. 537 It is undoubtedly the case that there still exists uncertainty as to the nature and extent of any doctrine of "waiver". For example, in Federal Commissioner of Taxation v Tasman Group Services Pty Ltd [2009] FCAFC 148; (2009) 180 FCR 128, the Full Court considered (at 141 [44]) the nature of waiver, albeit that the decision in Freshmark v Mercantile Mutual had not been cited to it and nor was it considered. The Court observed that Craine v Colonial Mutual recognised that there can be an effective waiver by conduct which was distinguishable from estoppel, however it is apparent that their Honours were there equating the principle with election and holding the party in question to have "elected" between inconsistent rights.

Conclusion as to waiver 538 There is much force in Allianz's submissions that no separate principle of "waiver" (other than in the nature of forbearance, abandonment or renunciation) which prevents a party who has indicated an intention not to rely upon a particular contractual right from changing their mind. From one perspective, if there were such a principle in terms as wide as Delor Vue contends, there would be no need for the separate principles of election or estoppel which would necessarily be subsumed within the wider concept. 539 Very little was advanced by Delor Vue in its written submissions in defence of the primary judge's reasons concerning waiver. Rather, it relied upon the principles of election in relation to this aspect of its case. Nevertheless, it sought to advance the principle as articulated by the primary judge (at [339]) in reliance on the decision of Isaacs J in Craine v Colonial Mutual. The primary judge identified that Allianz had deliberately and knowingly taken a position confirming cover notwithstanding that there was a position which it might take with respect to those rights to deny liability and thereby obtained certain benefits, being the access to the insured property and the cooperation of the insured. His Honour continued (at [339]): All the elements of the circumstances that led to a conclusion of waiver in Craine v Colonial Mutual were present here: full knowledge, the deliberate act and intention to take a position inconsistent with any assertion of a right under s 28(3), that is the deliberate act to confirm cover, the intention being to treat the relationship as if there had been no non-disclosure, whereby Allianz was thereafter entitled to the advantage (that it thereafter had) of adjusting the claim and thereby assessing its own position by free and full access to the property and the co-operation of Delor Vue, an advantage which it would not have had had it asserted its entitlement under s 28(3) to act on the basis that its liability was nil because it would never have issued the policy. 540 With the greatest respect, it must be doubted that a stage will have been reached whereby contractual rights are lost merely because a party adopts inconsistent positions with respect to them in circumstances which do not amount to an election. Although the various judgments in Verwayen did not, in the unique circumstances of that case, give rise to any binding ratio in relation to the existence or otherwise of a doctrine of waiver, the carefully considered dicta of Mason CJ, Dawson, Deane and McHugh JJ, as well as Brennan J to a certain extent, rejected the existence of a separate principle of waiver which might operate in circumstances such as the present. Their Honours indicated that it is the doctrine of election, whereby the choice manifested by one party effects an unalterable transformation of the rights of the respective parties for the future performance of an agreement which governs the rights of the parties. It is probable that this is the underlying rationale of the subsequent authorities which have declined to accept waiver as a standalone principle in circumstances akin to the present case. So much was said expressly in Freshmark v Mercantile Mutual and nothing advanced by Delor Vue on this appeal suggested that decision was plainly wrong. In those circumstances, this Court is bound to apply it here and, indeed, it is consistent with the observations of a majority of the judgments in Verwayen and with the comments of the majority in Agricultural & Rural v Gardiner. 541 To the above it might be added that in the work, The Law of Waiver, Variation and Estoppel, the identification by the learned authors of the several varieties of waiver does not include the principle which was relied upon in this case. The closest derivative may be the concept of unilateral waiver which is suggested may only arise in very limited circumstances. 542 It follows that the learned primary judge erred in accepting Delor Vue's submission that Allianz had, in the circumstances of this case, waived its right to rely upon Delor Vue's non-disclosure and, to the extent to which his Honour's decision was founded upon waiver, it ought to be set aside. 543 It should also be noted that Delor Vue avoided any precision as to the right which was allegedly waived and how that occurred. Its submissions were advanced at a high level of generality and abstraction. In relation to the first issue, the discussion in these reasons under the following heading, "Election", identifies that there was no such right in respect of which an election or waiver might occur, but merely a purported assumption of liability. In relation to the second issue, Delor Vue omitted to identify the clearly adopted position which Allianz was said to have taken. In this respect, it seems that the position taken by Allianz in its email of 9 May 2017 was that it would pay for the repairs referred to as the resultant damage despite the non-disclosure and that Delor Vue would be responsible for paying for the "Defective materials and construction of the roof, including but not limited to tie downs, rafters and timbers and soffit". It must be kept in mind that at no time did Delor Vue accept that it was responsible for undertaking those latter repairs. Indeed, it later explicitly denied that any of the damage is not covered by the policy. Whilst the email did not expressly state that Allianz's intention to indemnify in respect of the "resultant damage" was conditional upon Delor Vue's acceptance of responsibility to undertake the remaining repairs, it is necessarily implicit. That is particularly so in the context of the allegation that it had, for the purposes of the alleged principles of waiver, "taken a position" in relation to indemnity. Its position, to the extent to which it is possible to state that it took one (as opposed to stating an intention to take one), concerned, inter alia, an intended division of responsibility for the cost of repairs and that was something the insured both did not expressly accept and later emphatically denied.

Election 544 By its Notice of Contention, Delor Vue challenged the primary judge's conclusion that no election arose in the present case by reason of Allianz acting as if the policy remained on foot in relation to the claim. The primary judge's analysis was, in substance, based upon the unique effect of the operation of s 28(3) of the ICA which, he said, gave the insurer an entitlement to avail itself of a state of affairs to reduce its liability by reason of the insured's non-disclosure. Perhaps slightly inconsistently, his Honour then concluded that s 28(3) did not create a right to be exercised or activated in some manner. That being so, the circumstances of this case were substantially different to those which arise where a breach of contract has occurred giving rise to a right in the innocent counterparty to either accept repudiation and terminate the agreement or to affirm it. In such cases, the innocent party is faced with a choice between inconsistent rights. His Honour correctly observed that, in order for an election to arise, the "rights must be alternative, mutually exclusive and inconsistent: one cannot say that the contract exists and does not exist at the same time": at [309]. 545 It is undoubted that his Honour's rejection of election rested upon his conclusion as to the nature of the relationship between the parties consequent upon the operation of s 28(3). His Honour seemed to accept that although the wording of the section created a state of affairs - being a reduced liability on the insurer to pay a claim - by its operation it placed the insurer in a position whereby it was entitled to approach the claim by reference, not to the terms of the policy, but by reference to an hypothesis. This, so his Honour said (at [311]): arms the insurer with a body of substantive rights which it can raise in defence or answer to the contractual claim for indemnity under the policy. Thus understood, if the insurer says, unequivocally and without qualification, that it will not thereafter take the position in response to the claim for indemnity that it has that body of rights by way of answer or defence or that it will treat the insured as if it had not breached its duty of disclosure such that the body of rights can be taken not to have arisen, the proper characterisation of the governing legal rights is not an election between two alternative, mutually exclusive and inconsistent, rights but whether the insurer can in law resile from the position it has taken and expressed unequivocally and without qualification in the conduct of the contractual and commercial relationship between it and its insured. 546 Whether the insurer might subsequently assume an inconsistent position, so his Honour concluded, was not to be resolved by the application of principles of election. In this respect, his Honour referred to the following observations of Dowsett J in Freshmark v Mercantile Mutual (at 403): Obviously, a contracting party always has the right to insist or not insist upon his rights and conversely, to accept or not accept alleged liability. Such a choice is not accurately described as an election in the sense intended in Verwayen. There, the Commonwealth chose not to rely on available defences, but that was not, relevantly, an election. 547 His Honour also relied upon the consideration of the issue of election by Handley JA in Nigel Watts Fashion Agencies Pty Ltd v GIO General Ltd (1994) 8 ANZ Ins Cas 61-235 (Nigel Watts Fashion) and Handley JA's conclusion that what is required for an election is the existence of competing, inconsistent and mutually exclusive rights - such as a right to avoid or affirm a contract and a right to rely upon a repudiatory breach and terminate a contract or to affirm it. 548 Mr Elliott SC submitted that the primary judge accepted that the observations of Handley JA in Nigel Watts Fashion purported to extend the concept of election in relation to insurance contracts to those situations where the insurer made a choice between inconsistent positions, which is substantially broader than the concept of choosing between inconsistent rights. He also submitted the primary judge endorsed the view that election applied in circumstances where a party chose between inconsistent "courses of action". With respect, those submissions cannot be accepted. It is clear that the primary judge accepted (at [317]) that the correct view was, as advanced by Handley JA, that election requires a choice between alternative, inconsistent and mutually exclusive rights, being a position entirely coherent with the authoritative reasons of Mason J in Sargent v ASL Developments at 655. 549 Alternatively, Mr Elliott SC submitted that Allianz was faced with an election between inconsistent rights. Although he accepted that the operation of s 28(3) gave rise to a statutorily imposed state of affairs, he submitted that this gave rise to an entitlement in the insurer to say to the insured that it would not pay anything under the policy, and that this was a right for the purposes of the narrower view of election. The alternative right, so the submissions went, was the right to say that the policy responds. The culmination of this submission was that there existed a choice between inconsistent rights for the purpose of the doctrine of election. 550 With respect, that is not the correct analysis. Here, the right in question, if it can be considered a right, is not one which will found an election. It is not one the acceptance of which will, of itself, determine the nature of the contract for the future between the parties. In Sargent v ASL Developments, Stephen J spoke (at 646) of the exercise of one of two sets of rights and each being inconsistent with the other in the sense that the exercise of one of the rights altered the legal foundation such that the other could not exist. This was described by Mason J in the same case in the following terms (at 656): A person confronted with a choice between the exercise of alternative and inconsistent rights is not bound to elect at once. He may keep the question open, so long as he does not affirm the contract or continuance of the estate and so long as the delay does not cause prejudice to the other side. An election takes place when the conduct of the party is such that it would be justifiable only if an election had been made one way or the other (Tropical Traders Ltd. v. Goonan). So, words or conduct which do not constitute the exercise of a right conferred by or under a contract and merely involve a recognition of the contract may not amount to an election to affirm the contract. (Footnote omitted). 551 The above principles were succinctly summarised by the Hon. KR Handley in Estoppel by Conduct and Election in the following terms (at 255): It will be seen that the so-called right of election is not a right in the strict sense with a corresponding duty in another, but a power. An elector has the power to change the legal rights and duties of another vis-à-vis himself or a third person with a corresponding liability of the first to submit to the change. An election does not involve a choice between two sets of rights which presently co-exist but between an existing set of rights and a new set which does not yet exist. (Footnotes omitted). 552 See also the statement of principle by Lord Goff in Motor Oil Hellas (Corinth) Refineries SA v Shipping Corporation of India (The Kanchenjunga) [1990] 1 Lloyds Rep 391 at 397 - 398 and the commentary in The Law of Waiver, Variation and Estoppel [4.02] - [4.06]. 553 The above statements of principles identify two important characteristics of the rights which might be the subject of an election. One is temporal, the other qualitative. The latter is concerned with the legal consequence of the exercise of a right; that of effecting the establishment of a new legal relationship which is legally inconsistent with the alternative right. The paradigm case is the position of an innocent party to a contract faced with a repudiatory breach by the other party. There, immediately prior to acceptance of repudiation and the contract's termination, the parties' rights and obligations are determined by the bargain agreed between them and the legal consequences of their conduct. If the innocent party chooses not to accept the repudiation, the contract remains on foot and the parties' obligations are to further perform their agreed covenants together with the innocent party's right to recover damages for breach although not their expectation losses. The non-acceptance of the repudiation confirms the continuance of the contract which is then inconsistent with the innocent party subsequently claiming to be free of any obligation in reliance on the repudiatory conduct. Alternatively, acceptance of the repudiation and the termination of the agreement has the consequence that parties are no longer legally bound to perform the contractual stipulations further (save to the extent they might survive termination). The election to terminate, of itself, establishes a separate set of rights between the parties for the future, being one in which the parties are not bound by their former agreement save to the extent to which residual rights - such as a claim to damages - exist. The choice as to which set of facts will control the parties' rights and obligations inter se may be made expressly or by conduct consistent only with one choice or the other. 554 The rights which may give rise to an election also have a temporal characteristic in the sense that, in the fulfilment of the respective contractual obligations, a point is reached at which the further efficacious operation of the contract requires the party to determine whether a right is exercised one way or another. It may happen that, if that point is reached and the party does not elect one way or the other, they will in law be taken to have chosen to have elected not to exercise the right or to have done so. 555 In the present matter, the circumstances confronting Allianz did not require it to choose whether to terminate the contract of insurance or to excuse the breach and allow it to continue on foot so as to regulate the rights between the parties for the future. The change wrought to the rights of insurers by Part IV of the ICA, and especially s 33, had the consequence that an insured's innocent non-disclosure prior to entering into a contract did not afford the insurer any right to avoid the policy. The erstwhile right to that effect was deliberately abolished and the statutory scheme modified the common law position by limiting the insurer's liability to the prescribed extent. Section 28, by its terms, reduces the insurer's liability to "the amount that would place the insurer in a position in which the insurer would have been if" the insured had not failed to comply with its duty of disclosure. Mr Elliott SC accepted, as was found by the primary judge, that the section itself creates a state of affairs, being the reduction of insurer's liability on the policy. The resulting position in this case was that the parties remained bound to the contract of insurance, but Allianz's liability to Delor Vue on the claim in respect of the cyclone damage was nil. All that occurred by Allianz's statement in the 9 May 2017 email was the equivalent of the making of a voluntary offer to partially indemnify in respect of the damage which had been suffered. 556 However, for the purposes of the claimed election, Delor Vue submitted that the right in question was, "a right on the part of the insurer to rely upon the state of affairs created by s 28, the right to say the policy does not respond." Such a right, if it be properly so called, is not one which arises by reason of the contractual terms existing between the parties. A party to any contract whose obligations are limited may voluntarily indicate an intention to confer on the other party benefits which it is not contractually bound to provide. To paraphrase the observations of the Hon. KR Handley AO QC referred to above, the power of one party to inform the other that they will confer such a benefit is not one which, of itself, changes the legal rights and duties between them with a corresponding liability on the other to submit to the change. The absence of any contractual mechanism to give such a statement immediate effect to change the set of rights governing the parties' obligations inter se renders it inchoate. It will remain so unless and until given enforceability by the provision of consideration or a change of position by the other party acting in reliance on it to such an extent that they will suffer detriment if the promise is not fulfilled. 557 In this case, nothing occurred which accorded Allianz the power to make a choice which, of itself, had the effect of altering the legal rights between it and Delor Vue. The events had not put it into the position whereby it might determine the agreement and set the parties rights at naught on the one hand or, on the other, elect to continue the agreement and, thereby, create a new set of rights. All that could occur was the unilateral and voluntary indication by the insurer to pay more in relation to the claim than it was obliged to do. Necessarily, no election can arise. 558 Whilst it may be that if Allianz subsequently paid the claim under the policy once adjusted on the basis that its liability was not affected by non-disclosure, it would be bound by that act. However, that would not be due to any election but by reason of it submitting to an honest claim made by Delor Vue and the parties having agreed to compromise their rights under the agreement in that way. 559 Further, it must be kept steadily in mind that if the insurer consistently informed the insured that it would pay the claim notwithstanding it was not liable to do so, there may come a time prior to actual payment when the insurer is estopped from resiling from that indication. However, whether that is so depends upon the suffering of actual detriment which was not established in this case.

Conclusion with respect to Ground 2 560 Allianz is also entitled to succeed with respect to the primary judge's conclusion as to waiver. That principle, to the extent that it might exist, has no application in the present case. 561 Delor Vue's Notice of Cross-Contention fails. The circumstances in this matter did not give rise to a situation in which Allianz was entitled or required to choose between inconsistent rights causing the creation of new sets of rights. Its voluntary act of indicating that it would deal with Delor Vue's claim as if the non-disclosure had not occurred did not, of itself, create new rights between itself and Delor Vue. The primary judge was correct to reject the claim based on election.

Ground 3: duty of utmost good faith 562 Ground 3 concerns the alleged breach of the duty of good faith and was articulated as follows: The primary judge erred by finding at [342] - [350] that the appellant breached its duty of utmost good faith under s 13 of the Act and that as a consequence, the appellant was unable to reduce its liability to the respondent to nil pursuant to s 28(3) of the Act.

The conclusions of the primary judge 563 The primary judge found that, although there was no dishonesty, the resiling from the clear representation in the 9 May 2017 email was "unjust, unreasonable, unfair and did Allianz no credit as a commercial insurer by reference to expected standards of decent commercial behaviour", and was "conduct which fell below a commercial standard of decency and fairness": at [346]. However, it appears that his Honour was concerned to identify that the breach of good faith was not merely resiling from the indication of an intention to honour the claim but, further, the making of the offer - or ultimatum - that Delor take an amount in settlement of it. His Honour added (at [346]): Whatever the apparent civility of the references to internal dispute resolution (see [186]), this was a clear renunciation of a representation, in effect a promise, to confirm cover in accordance with policy terms: take the money that we say is due under the policy, or take nothing because we will assert the statutory rights that we said we would not assert. 564 Subsequently, his Honour said (at [347]) that the terseness which had crept into the correspondence from the insured's solicitors did not justify Allianz going back on its representation or promise made a year earlier that gave it the benefit of full possession of the site and cooperation of the insured in which to assess its own position. To these issues, his Honour added that the people who stood behind Delor Vue were "ordinary people", that the damage to their properties will be expensive to repair, that a year had been taken to adjust the claim, the promise to honour the claim was probably to the benefit of Allianz, and that, even if the amount offered in the letter of 28 May 2018 was the correct amount, there was a lack of decency and fairness in the position taken. His Honour identified the appropriate approach for Allianz in the circumstance was as follows (at [347]): If that was Allianz's view, a view reached after all the advantages of access to the property, adjusting the claim, and expecting and being given the co-operation of the insured, decency and fairness required an offer to arbitrate or litigate the loss in some acceptable dispute resolution forum on the basis that the 9 May 2017 email represented or promised: the policy terms. Decency and fairness were not displayed by threatening an approach previously clearly disavowed which involved further significant personal strain and financial risk to these people, unless a take-it-or-leave-it offer was accepted. 565 His Honour further stated that Delor Vue's assertion to the insurer that it had waived its right to rely upon the defective work exclusion in the policy was incorrect but it was not dishonest and did not entitle the insurer to resile from its previous promise: at [348]. 566 In the result, his Honour would have granted an injunction had the defences of estoppel and waiver not been sustained. He nevertheless made a declaration as to Allianz's breach of the duty of good faith.

Allianz's submissions 567 Allianz submitted that the obligation of utmost good faith does not condition its entitlement to rely upon the operation of s 28(3) and there was nothing in its conduct indicating its intention to rely on that entitlement which contravened its duty of utmost good faith. It also submitted that a consideration of the circumstances, including the interaction between it and Delor Vue immediately prior to the letter of 28 May 2018, disclose that its actions in negotiating with Delor Vue were not unreasonable or not lacking in good faith.

Delor Vue's submissions 568 In the course of submissions to this Court, Delor Vue did not elaborate upon its written submissions as to the question of utmost good faith. In relation to the identification of the correct principle, it submitted that a higher standard is required of the duty of utmost good faith than of the relatively cognate principle of good faith and reasonableness in commercial contracts. It particularly referred to the observations of Kirby J in CGU v AMP at 42 - 43 [130], 43 [131], 45 [139], 54 [176] and 54 [178] to the effect that good faith alone is not sufficient, it must be good faith in its utmost quality. The obligations imposed are of a stringent kind in respect of the conduct of the insurer and insured with each other wherever that conduct has legal consequences. It also relied upon the views of Emmett J in the Full Court decision in that case that "the concept of utmost good faith involves something more than mere good faith" and that "the precise content of the concept of utmost good faith depends upon the legal context in which it is used. In the context of insurance, the phrase encompasses notions of fairness, reasonableness and community standards of decency and fair dealings". 569 Delor Vue's submissions suffer from a lack of precision as to the conduct in respect of which it is claimed that Allianz failed to perform its obligation of utmost good faith. In substance, it seemed to submit that the lack of good faith arises in Allianz's attempt to settle the claim at its figure while threatening to pay nothing in reliance on its rights under s 28(3) when the parties had relied upon Allianz's earlier promise that it would not rely on Delor Vue's non-disclosure. In other words, the complaint concerned Allianz's attempt in negotiations with Delor Vue to utilise its superior bargaining position. 570 Further, Delor Vue asserted that the mere fact that it did not capitulate in the face of Allianz's conduct does not render the conduct lacking in good faith. It also submitted that the assertions which it made to Allianz as to the extent of insurer's liability, which may not have been correct, were not relevant to characterising Allianz's conduct in the circumstances. 571 Finally, it submitted that, if Allianz is successful in relation to the other grounds of appeal and that it is unsuccessful in relation to the election issue, it should succeed on this issue and an injunction ought to be granted to prevent Allianz from further breaching its duty.

Consideration of utmost good faith 572 It is, with the greatest respect, somewhat difficult to identify the gravamen of Allianz's conduct which was characterised as offending the duty of utmost good faith. As was submitted by Mr McLure SC, neither Delor Vue nor the primary judge expressly considered it to be the mere reliance on the operation of s 28(3) of the ICA. It seems to have encompassed the original intimation that it would not rely upon that section in dealing with the claim, the benefit which the insurer obtained from Delor Vue's acquiescence in it investigating the damage to the buildings at the complex, the hardship which unit holders will suffer if cover is not provided, and Allianz's alleged high-handed approach in its letter of 28 May 2018. However, as Mr McLure SC further submitted, by its letter of 28 May 2018, Allianz was offering to pay the amount which it considered that it would pay if it had adhered to its earlier intimation not to rely upon Delor Vue's non-disclosure.

The content of the duty of utmost good faith 573 Both parties were content to accept the general identification of the content of the duty of utmost good faith articulated by the learned primary judge (at [342] - [345]). His Honour observed that the statutory obligation of utmost good faith is not breached only where there is an evident lack of honesty: CGU v AMP [15]: and the obligation may require the insurer to act with due regard to the legitimate interests of the insured as well as to its own interests. This was explicitly stated by Gleeson CJ and Crennan J in CGU v AMP [15], where their Honours held that the insurer may be required to act consistently with commercial standards of decency and fairness, with due regard to the interests of the insured. In that case, Callinan and Heydon JJ (at 77 - 78 [257]) agreed that a breach of the duty is not to be equated with dishonesty only and that conduct falling short of actual impropriety might constitute an absence of utmost good faith within the meaning of the ICA. Kirby J endorsed the proposition that dishonesty is not an essential hallmark of a lack of utmost good faith and indicated that it involved notions of capriciousness and unreasonableness. 574 The various statements in the reasons of the members of the High Court in CGU v AMP referenced the observations of Emmett J in AMP Financial Planning Pty Ltd v CGU Insurance Ltd [2005] FCAFC 185; (2005) 146 FCR 447, the decision of the Full Court from which the appeal was taken. There, his Honour (with whose reasons Moore J agreed) said (at 475 [87] and [89]): 87. While a want of honesty will constitute a failure to act with the utmost good faith, want of honesty is not necessary in order to establish a failure to act with the utmost good faith in the context of a contract of insurance. The notion of acting in good faith entails acting with honesty and propriety. Lack of propriety does not necessarily entail lack of honesty. Further, the concept of utmost good faith involves something more than mere good faith. … 89. The precise content of the concept of utmost good faith depends on the legal context in which it is used. In the context of insurance, the phrase encompasses notions of fairness, reasonableness and community standards of decency and fair dealing. While dishonest conduct will constitute a breach of the duty of utmost good faith, so will capricious or unreasonable conduct. While an essential element of honesty may be at the head of the concept of utmost good faith, dishonesty is not a prerequisite for a breach of the duty (see, eg, Kelly v New Zealand Insurance Co Ltd (1996) 130 FLR 97 at 111-12). (Original emphasis). 575 Allianz submitted that, in the context of post-contractual conduct, the duty of utmost good faith was substantially the same as an implied duty of good faith and reasonableness in commercial contracts, assuming that any such implication is appropriate (as to which no comment is needed here). In particular, where a power or right in a contract exists for the benefit of only one of the parties, any duty of good faith does not extend to acting with altruism or without regard to the interests of the acting party: Australian Co-operative Foods Ltd v Norco Co-operative Ltd [1999] NSWSC 274; (1999) 46 NSWLR 267 at 282 - 283 [62] per Bryson J. It further submitted that it cannot be thought that the party with a right to promote its legitimate interests can be restrained by the duty of good faith: Beerens v Bluescope Distribution Pty Ltd [2012] VSCA 209; (2012) 39 VR 1 at 13 [55]; as it is not a fiduciary duty to act in the interests of another party: CGU Workers Compensation (NSW) Ltd v Garcia [2007] NSWCA 193; (2007) 69 NSWLR 680 at 693 [60]; although there may be some similarities on occasion: Maksimovic v Royal and Sun Alliance Life Assurance Australia Ltd [2003] WASC 46; (2003) 12 ANZ Ins Cas 90-115 [18]. These latter submissions should be accepted. Neither party to an insurance contract is obliged to sacrifice their interests under a policy for the benefit of the other. 576 Nevertheless, it is apparent from the identification of the principle and the authorities that whether or not a duty is breached in a particular case requires an evaluation of all of the circumstances relevant to the conduct in question.

The conduct said to be in breach of the duty and the circumstances in which it arose 577 The essence of the conduct which the primary judge found to be in breach of the duty of good faith must necessarily be Allianz's statement in the letter of 28 May 2018 that its actual liability under the policy was nil and later asserting the same. In other words, its abandonment of its earlier intimation to partially honour the claim. Merely offering to pay a large gratuitous amount in respect of a liability which did not exist, even if the offer was open for a limited duration, does not amount to a breach of the duty. Whether the resiling from the earlier promise will amount to a breach of the duty will depend upon the circumstances existing between the parties at the time.

Legal rights of the parties 578 From the above discussions of Grounds 1 and 2 and the Notice of Contention, the legal position between the parties was that Allianz's liability under the policy in respect of Delor Vue's claim was nil. The latter's non-disclosure had the result that, by its promise in the 9 May 2017 email, Allianz offered to cover a risk in circumstances where it was not otherwise obliged to. Although Allianz had nevertheless said it would pay part of the claim (specifically excluding the defective construction of the roofs), the circumstances were such that its voluntary assumption of that liability, unsupported by consideration as it was, did not give rise to any estoppel, waiver or election which prevented it from withdrawing the promise. 579 Therefore, apart from any obligation of good faith, as at 28 May 2018, Allianz did not have, and did not believe it had, any obligation to provide a partial indemnity in relation to Delor Vue's claim. 580 The legal rights of the parties in relation to the remainder of Delor Vue's claim seem to have remained unsettled at least as far as Delor Vue was concerned. Allianz's intention to provide an indemnity was expressly limited by reference to Exclusion 1(c)(i) and (d) and Exclusion 2 of the policy. It expressly rejected any liability relating to the defective construction of the roofs. However, as appears by the letter from its solicitors of 30 July 2018, it is apparent that Delor Vue did not accept that there were any relevant limitations on Allianz's obligation to indemnify, that there were any relevant operative exclusions in the policy, or that Allianz might exclude liability to pay for the defective construction of the roofs. It should be noted that, in the course of this litigation, Delor Vue accepted that Allianz had not waived its entitlement to rely upon the exclusions, although it continued to assert that the exclusions are not operative in the circumstances with the result that Allianz must indemnify in respect of all of the damage. 581 The effect of this is that Delor Vue is forced to adopt the position that the duty of utmost good faith in the circumstances of this case required Allianz to accept liability for a significant claim of between $4 million and $6 million where it is not otherwise obliged to indemnify. Such cases, if they exist, must necessarily be extremely rare as they require an insurer to sacrifice its actual legal rights for the benefit of the insured. In effect, to act solely in the insured's interests. That imposes a substantially greater obligation on an insurer than one which requires only that it act in the interests of both the insured and itself when exercising its rights under the policy as identified by Gleeson CJ and Crennan J in CGU v AMP.

Delor Vue's position in respect of the claim. 582 It is relevant in the characterisation of Allianz's conduct towards Delor Vue to ascertain the latter's expressed view of the relationship between them. For present purposes, that is most relevantly ascertained from the letter from Delor Vue's solicitors of 3 May 2018 which is set out above. That unequivocally and repeatedly asserted that Allianz, amongst other things, had not stated its position on indemnity with any clarity, had failed to make clear any decision on the policy coverage and the extent to the indemnity available, and had failed to state its position as to indemnity. Indeed, it went further and asserted that the delay by Allianz in making a decision on indemnity was so great that it may well be in breach of the policy. As has been mentioned above, there is significant tension between the assertions in this letter and Delor Vue's claim that it had relied upon some clear and unequivocal representation by Allianz in its email of 9 May 2017 that it would indemnify part of the claim. At paragraph [322] of the primary judge's reasons, he said of Delor Vue's solicitor's letter, which I repeat for convenience: The applicant's solicitors' position by May 2018 that Allianz was not stating its "position on indemnity" either at all or clearly (see [182] above) can be seen as a product of the evident frustration to this point in obtaining the translation of the clear statement of acceptance of cover into the practical division of responsibility and what could be seen as some temporising in the correspondence by this time. 583 With respect, it is difficult to see how the repeated assertions that Allianz had failed to make a decision on indemnity can be seen as some form of posturing. The context, known to both parties, in which Allianz's concession was made included that the amount required to repair the damage was unknown and it would have been obvious to any reasonable person in the circumstances that Allianz's concession would have been qualified at least to that extent. This is consistent with the content of 9 May 2017 email which was ambiguous, especially as to the extent of indemnity which might be provided. That ambiguity increased over time as the nature and extent of the structural defects in the roofs became more evident. In any event, absent some disavowing of the statements made in the letter, there is no reason why Allianz ought not to have taken Delor Vue at its word and treated it as an insured which believed that no final determination had been made as to whether its claim would be indemnified and which was demanding that a decision be made. With respect, it is difficult to see how, in the face of Delor Vue's demand that Allianz make a decision on indemnity, it amounted to breach of the duty of good faith for Allianz to do as requested. By its letter of 3 May 2018, Delor Vue wanted to know whether it had to litigate its claim and Allianz's response provided it with a choice to do so or to accept a sizeable sum in settlement of the claim.

Delor Vue's position with respect to its responsibility for repairs 584 Mr McLure SC submitted that Allianz was entitled to press Delor Vue to take a position as to its responsibility for the repairs which Allianz had maintained were not within the scope of the policy in any event. It is to be recalled that the 9 May 2017 email identified that Delor Vue was responsible for a substantial portion of the cost of repair and it was evident that Delor Vue would need to financially commit to effecting those repairs before they could be commenced. The import of that was emphasised in the email of 22 June 2017 to Delor Vue which advised that its costs would be "in the millions" and it would need to arrange sufficient funding. The material before the Court reveals that, despite the passing of approximately 11 months, Delor Vue had not taken any substantial step towards arranging that funding. Instead, it had made repeated, albeit failed, attempts to minimise the cost of the work for which it would be responsible and would not commit to any particular position. That is, perhaps, not surprising in the light of the letter of 30 July 2018 where it alleged that Allianz was responsible for the total costs of remediation. Despite that, Allianz was not required to wait for any extended period of time for Delor Vue to meaningfully engage in the remediation process.

The benefits obtained by Delor Vue 585 In the 12 months following Allianz's statement of intention to partially indemnify, a considerable amount of work was undertaken by it to advance the work needed to repair the damaged buildings. That has been referred to above with the conclusion reached that Delor Vue would not be in any worse position if Allianz were entitled to withdraw from its prior representation. In fact, it is likely that Delor Vue benefited from the not insignificant amount of money spent by Allianz in undertaking the necessary preparatory steps and providing direct payments to unit owners, the total cost of which was around $192,000.

The benefits obtained by Allianz 586 As the primary judge determined, Allianz obtained the benefit of Delor Vue's cooperation in relation to the assessment of the damage, including the conducting of inspections by engineers and experts and that put it into a position whereby it was able to obtain an accurate assessment of the damage and understanding of the cost of repairs. Whilst it is true that the same level of cooperation from the insured may not have been forthcoming had Allianz not indicated that it would partially indemnify, as has been discussed previously one way or another the insurer would have been entitled to access to the premises for the purposes of undertaking inspections.

The position if Allianz is required to indemnify 587 In ascertaining whether Allianz breached its duty of good faith, some consideration needs to be given to the consequences of it being held to its statement that it would partially indemnify. On the assumption that Allianz was entitled to rely upon Delor Vue's non-disclosure, its liability would be nil. On the other hand, if Allianz were held to the original intimation in the 9 May 2017 email, it would, on Delor Vue's submission, be liable for the whole of the claim in the amount of approximately $6 million. Whilst that might not ultimately be the correct sum, much will depend on ascertaining the manner in which the several exclusion clauses operate. On the figures calculated by Allianz, its liability would be somewhere between $2 million to $3 million. 588 Given the above, Delor Vue's case is that, in order to perform its obligation to act with utmost good faith, Allianz was required to assume a liability of between $2 million to $6 million in circumstances where it was not otherwise liable on the claim and where Delor Vue has suffered no ascertainable damage or detriment from relying on the prior representation. 589 The primary judge took into account that the persons who stand behind Delor Vue were "ordinary people" and that the damage to the apartment complex was significant. Whilst that is no doubt true, it does not affect the legitimacy of Allianz's conduct. In the circumstances of the present matter where an insurer is called upon to pay a claim for which it has no liability, the perceived financial standing of the insured (or the insurer) can have no relevance. It is difficult to envisage a case where the duty of utmost good faith will impose upon an insurer an obligation to make a gratuitous payment depending upon the apprehended wealth of the insured. Were it so, it would necessarily follow that the insurer's current financial position would also affect the content of the duty. It would mean that where an insurer is called upon to act in a manner which is said to be in accordance with its duty and detrimental to it, it may be entitled to rely upon its extant financial position in deciding whether it will act or not. Although it can be accepted that the financial position of the insured may be relevant where the insurer's decision or proposed conduct affects the insured's ability to have their claim properly adjudicated, that is not the present case. 590 Even if it be true that, as a result of Allianz resiling from its stated preparedness or intention to partially indemnify, the "ordinary persons" who stand behind Delor Vue will be required to fund the substantial remediation expenses on their own, their obligation in that respect was the consequence of Delor Vue's non-disclosure and not the withdrawal of Allianz's indication that it would indemnify part of the claim. In that regard, it can be mentioned that it is rather astonishing that Delor Vue, which had the professional assistance of a body corporate manager and an insurance broker, might find itself in a position where it had so blatantly breached its duty of disclosure to its insurer.

Allianz did not breach its duty of utmost good faith 591 When considered in the light of the surrounding circumstances, Allianz's conduct does not bespeak of a failure on its part to comply with its duty of good faith. One must start with its willingness to overlook the insured's breach of duty of disclosure and to gratuitously agree to partially indemnify in respect of a claim. It would be naïve to think that Allianz's conduct in this respect was solely altruistic. No doubt it believed that to partially honour the claim made good business sense, although that ought not to diminish the propriety of its conduct. Common sense also dictates the conclusion that, when it offered to pay a portion of the claim, it did so in the belief that the amount in question would be modest. It is not suggested that, as at 9 May 2017, either of the parties were aware of the magnitude of the remediation work which would actually be required to restore the premises. In that respect, it was not reasonable to assume that the insurer who agreed to indemnify part of a modest claim when not obliged to do so should be required to indemnify in respect of the claim when it transpires that the amount which it would be required to pay is much greater. 592 Additionally, it is not possible to conclude that, by offering to pay Delor Vue the sum of $918,709 so long as the offer was accepted within 21 days when its actual liability was nil, Allianz contravened community standards of honesty, fairness or reasonableness and thereby breached its duty of good faith. Nor did Allianz breach any duty by resiling from its previously stated intention. 593 It was in those circumstances of the crystallisation of a substantive claim that Delor Vue asserted that Allianz had not made a decision on indemnity and its delay in doing so was a breach of its duty of utmost good faith. Allianz was entitled to respond to Delor Vue's demand that it make a decision on indemnity and, in doing so, it was also entitled to assume that Delor Vue believed that it had not previously made any final decision. Indeed, given the vagueness of the 9 May 2017 email, that may well have been the case. The correspondence shows that the position in relation to indemnity was far from settled and Delor Vue's solicitors' assertion in their letter of 30 July 2018 that Allianz was liable to indemnify in respect of the whole loss, and not just that part which had been accepted in the 9 May 2017 email, shows this to be so. That stance, indicated in earlier correspondence sent on behalf of Delor Vue, also revealed that insured did not accept the totality of the content of the 9 May 2017 email, which included Allianz's apportionment of part of the responsibility for the repairs remained with the insured. 594 Even if Delor Vue's solicitors were engaging some form of temporising in their letter of 3 May 2018, Allianz was nevertheless of the opinion that it had no liability in respect of Delor Vue's claim and it was correct to believe that to be the case. Pursuant to s 28(3) of the ICA, its liability was nil and its statement of intention in the 9 May 2017 email that it would partially indemnify did not give rise to any liability by way of estoppel, waiver or election. That earlier intimation to provide some indemnity could only reasonably have been seen by Delor Vue as being a gratuitous or voluntary promise which, just as easily, might be withdrawn at any stage: Waltons Stores v Maher at 403; Amalgamated Property Co v Texas Bank at 107 per Robert Goff J. 595 If the duty of good faith prevents Allianz from withdrawing its earlier intimation, it follows that the insurer must assume an obligation to pay up to $6 million in respect of a claim for which it had no liability, in circumstances where the insured will not suffer harm or detriment by reason of Allianz's change of attitude (as opposed to the operation of s 28(3)). Even if the prospective liability would be only $2 million to $3 million, that too is a significant amount when weighed against the absence of any detriment to which Delor Vue might be exposed. 596 The mere fact that the parties had worked over the previous 12 months to advance the project to remediate the damage caused by the cyclone did not have the consequence that Allianz was required to sacrifice its own interests for the benefit of Delor Vue. The contrary is true. That 12 months of work and the expenditure of nearly $200,000 by Allianz almost certainly enured for Delor Vue's benefit. 597 It also cannot be said that the benefit to Allianz of having obtained of access to the buildings at the Delor Vue complex consequent upon its intimation that it would indemnify were such that it ought to assume a liability of up to $6 million. This has been dealt with above in the discussion on detriment. It suffices to say that, in the face of the claim for indemnity, Allianz would have been entitled to access the property for the purposes of ascertaining the scope of its alleged liability. As an advantage to Allianz arising from its intimation that it would provide a partial indemnity, it is more chimerical than real. It might also be odd, in the context of considering the mutual and reciprocal obligations of utmost good faith, for Delor Vue to assert that Allianz gained an advantage, being a more precise understanding of the actual quantum of its assumed liability. That suggests Delor Vue was entitled to prevent or hinder Allianz in ascertaining the true nature and extent of the damage, so that it might secure payment of a greater sum under the policy than it was entitled. 598 Moreover, Allianz did not immediately and without warning resile from its previously stated intention. Rather, it offered to pay the quantified sum of $918,709 towards the cost of remediation, subject to certain conditions and the acceptance of the offer within 21 days. It was only if that was not accepted that Allianz would rely upon its lack of liability which arose as a result of s 28(3). The primary judge relied on this as Allianz indicating to Delor Vue that the offer was in the nature of a "take it or leave it" offer and, in that respect, it applied undue pressure on the insured. However, at that time, Delor Vue had placed the insurance claim in the hand of professional insurance advisers and solicitors who were able to advise them and act in the protection of their rights. It is unlikely that any relevant pressure was applied to Delor Vue by the letter of 28 May 2018 and that is particularly apparent by its rejection of the offer and the commencement of proceedings. It is, with respect, one thing to identify the effective application of undue pressure which has forced a weaker party to enter an agreement, but it is difficult to identify it when the attempted exertion of pressure has had no effect at all. 599 The conditioning of the offer of payment of $918,709 on acceptance within a period of three weeks in circumstances where Allianz's actual liability was nil (and believed to be nil), hardly appears to be conduct which lacks commercial standards of decency and fairness. In circumstances where it was not obliged to indemnify at all, the offer to pay that amount, being in addition to the approximately $192,000 already paid, was an appropriate display of commerciality rather than being parsimonious, unfair or unethical. Additionally, Allianz was prepared to extend the time in which Delor Vue might accept the offer. 600 It can be accepted that Allianz's withdrawal of its voluntary intimation that it would partially indemnify under the policy would be disappointing for the unit owners in the Delor Vue complex and leave them in a financially unfortunate position. However, those consequences do not justify imposing upon an insurer an obligation to provide an indemnity which does not otherwise exist. Whilst Allianz's indication that it would partially indemnify for the losses suffered may have provided some comfort for a period of time, the insurer disabusing the insured of any belief it had engendered and thereby returning the insured to the position which it would have been in had the intimation not been made will cause it no real detriment. Moreover, in making its decision to resile, Allianz is entitled to act in the protection of its interests. It did not breach its duty of utmost good faith in doing so and it is entitled to succeed on this ground as well.

Nature of the remedy assuming a breach of the duty of good faith 601 The learned primary judge indicated that he would have granted an injunction to restrain Allianz from resiling from its indication that it would grant an indemnity in respect of a portion of the damage suffered by Delor Vue but that, in the circumstances of the case, it was unnecessary to do so. 602 Mr McLure SC submitted that the granting of an injunction would have been inappropriate in circumstances where it was not relief sought in the originating application, mentioned by Delor Vue in its submissions, or raised in the course of the hearing. Those matters taken together provide a substantial, if not insurmountable, reason for refusing the grant of an injunction in the circumstances of this case. It might also be said that the granting of a mandatory injunction to require a party to perform a positive stipulation in a contract is somewhat unusual, and relief in the nature of specific performance, if it is available, is the orthodox remedy. This may provide an additional reason for rejecting relief in the nature of an injunction as would the fact that a Court would be required to engage in continual supervision of the performance of the injunction if it were granted. 603 Although Delor Vue had claimed damages for breach of the duty of utmost good faith, there may be doubt as to whether such relief is available to an insured: but see Lomsargis v National Mutual Life Association of Australasia Limited [2005] QSC 199; [2005] 2 Qd R 295 at 314 [56] per McMurdo J. Before this Court, Delor Vue submitted damages for breach of the implied obligation would, effectively, have the same result as an injunction because Allianz would be required to put it into the same position as if it did not breach the duty; namely, the position it would be in if Allianz did not resile from its earlier intimation and paid the claim according to the terms of the policy. 604 It would seem that, because the primary judge did not reach any final conclusion in relation to the question of whether an injunction should issue or whether damages was an appropriate remedy, the parties on appeal paid them little attention. In relation to the duty of utmost good faith, the only actual relief granted was the making of a declaration and, that being so, the only orders which ought to be made on this appeal is that the primary judge's declaration be set aside.

Orders on appeal 605 As a result of the foregoing, the orders which should be made are: (1) The appeal be allowed. (2) The declarations made by the learned primary judge on 24 July 2020 numbered 1 to 6 be set aside and in lieu thereof: (a) it be declared that, pursuant to s 28(3) of the Insurance Contracts Act 1984 (Cth), the respondent, Allianz Australia Insurance Ltd, is entitled to reduce its liability to nil for the claim made consequent on damage caused to the property of the applicant, Delor Vue Apartments CTS 39788, by Tropical Cyclone Debbie in March 2017; and (b) it be ordered that: (i) the proceedings NSD 2094 of 2018 are otherwise dismissed; and (ii) the respondent to the appeal is to pay the appellant's costs of the proceedings before the primary judge. (3) The respondent is to pay the appellant's costs of the appeal. I certify that the preceding three hundred and forty-five (345) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Derrington.