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[2026] ACTSC 143
Supreme Court of the ACT
2026-05-14
Mossop J
Original judgment source is linked above.
Source: the ACT Courts (www.courts.act.gov.au). Converted to plain text by ZoeLaw. Not the official version.
SUPREME COURT OF THE AUSTRALIAN CAPITAL TERRITORY
Case Title: Australian National University v Lendlease Construction Pty Ltd (No 2) Citation: [2026] ACTSC 143 Hearing Date: 14 May 2026 Decision Date: 14 May 2026 Before: Mossop J Decision: (1) Note that the document headed “Reply to defence” filed by the defendant on Thursday, 7 May 2026 was its “Proposed Reply to defence” filed in accordance with directions made on Wednesday, 6 May 2026, and will be annotated to that effect. (2) The defendant has leave to file the Further Amended Statement of Claim in relation to its third-party claim against the first third party substantially in the form of the document dated 5 May 2026. (3) Note that the Defence to Further Amended Statement of Claim filed and dated 4 March 2026 shall stand as the first third party’s defence to that claim. (4) The defendant has leave to file a reply to that Defence substantially in the form of the Proposed Reply to defence filed 7 May 2026, except that it shall not include the allegations at paragraph 26(b)(ii) and 26(b)(iv). (5) Direct that the claims in paragraph 26(b)(i) and 26(b)(iii) of the Reply filed in accordance with the previous order are confined to the breaches of contract alleged in paragraph 25 of the Further Amended Statement of Claim filed in accordance with order 2. (6) The defendant is to pay the first third party’s costs of the hearing on Wednesday, 13 May 2026, including the costs of the preparation of evidence and written submissions. (7) Adjourn the proceedings until 10am on Monday, 18 May 2026. Catchwords: PRACTICE AND PROCEDURE – PLEADINGS – Leave to file proposed reply – where third party argues reply introduces new claims of breach of contract – where proceedings ready for trial – where permitting new allegations at late stage would amount to significant prejudice to third party – where proceedings had been on foot for years and no clear explanation given as to why claims introduced at late stage – leave granted excluding new claims Legislation Cited: Competition and Consumer Act 2010 (Cth), Sch 2 – Australian Consumer Law Work Health and Safety Act 2011 (ACT), ss 18, 19, 275(4) Cases Cited: Australian National University v Lendlease Construction Pty Ltd [2026] ACTSC 72 Waterman v Gerling Australia Insurance Company Pty Ltd [2005] NSWSC 1066; 65 NSWLR 300 Parties: Lendlease Construction Pty Ltd (Defendant) DECC Pty Ltd (First Third Party) Representation: Counsel D Miller SC with T Marskell (Defendant) J Neal (First Third Party) Solicitors Lander & Rogers (Defendant) Barry Nilsson (First Third Party) File Number: SC 269 of 2023 MOSSOP J: Introduction
These proceedings arise from a claim by the Australian National University (ANU) against Lendlease Construction Pty Ltd (Lendlease) arising out of flood damage caused to ANU’s property during construction works undertaken by Lendlease in February 2018.
Lendlease made third-party claims against DECC Pty Ltd (DECC) and Cardno (NSW/ACT) Pty Ltd (Cardno).
The final hearing of the proceedings was listed to commence on 4 May 2026. Shortly prior to the commencement of the hearing of the claim, ANU and Lendlease settled the proceedings on a without admissions basis, requiring Lendlease to pay ANU $34 million. The claim between Lendlease and Cardno was also settled on the basis that Cardno pay Lendlease $500,000. The claim as between Lendlease and DECC was not resolved. The net result of the settlements meant that Lendlease now seeks to recover against DECC $33.5 million.
In the lead up to the listed hearing date, there was considerable manoeuvring in relation to the pleadings. Lendlease sought to file a Further Amended Statement of Claim dated 20 February 2026 (the 20 February Claim) in relation to its third-party claims against Cardno and DECC. DECC did not object to the filing of the 20 February Claim, but Cardno did. Cardno’s objection was the subject of argument, and I did not permit the claim to be filed so far as it related to Cardno: Australian National University v Lendlease Construction Pty Ltd [2026] ACTSC 72.
Notwithstanding that the 20 February Claim had not been filed, DECC, which had not objected to its filing, filed its Proposed Defence to the claim on 4 March 2026. On 31 March 2026, the court ordered that DECC had leave to rely on its defence to the 20 February Claim in the form of its Proposed Defence (the Defence), subject to any amendments arising out of the amendments made consequent upon the court’s decision in relation to the pleading against Cardno.
The orders disposing of the claims by ANU and against Cardno were made on 4 May 2026, the day which would otherwise have been the first day of the trial. Following the settlement between ANU and Lendlease and Lendlease and Cardno, Lendlease sought to pursue its claim against DECC on the basis that it would press only its claim that DECC was required to indemnify Lendlease pursuant to cl 13.3 of the subcontract between Lendlease and DECC. Senior counsel for Lendlease said “having now had a settlement with a party that was alleging breach and negligence against me, there’s no need for me to pass down a positive breach and negligence case to DECC because I have a 13.3 non-negligent indemnity that operates so long as there is loss and damage flowing from DECC’s works under contract” (Transcript, 4 May 2026 at 5.18). That statement appears to have been modified subsequently during the course of what was said on that day, and is a issue that I return to later in these reasons.
Clause 13.3 required DECC to indemnify Lendlease against “Losses which Lendlease suffers, or is liable for, arising out of, or in connection with, an act or omission [of DECC] … or the carrying out of [work under contract]”. The clause provides that the liability to indemnify would be reduced “proportionally, to the extent that such Losses are caused by … the negligence of Lendlease”.
Subject to any questions of interpretation of the clause, that change of position had the effect of placing the burden upon DECC to establish that the losses were caused by negligence of Lendlease in order to avoid any liability that might arise pursuant to the indemnity.
On 4 May 2026, I determined that, notwithstanding the position adopted by Lendlease and the change in the case arising from the settlement, and the fact that ANU and Cardno were no longer involved, the case should proceed in the manner in which the parties had prepared to run it, with expert witnesses giving evidence concurrently.
Lendlease then circulated a revised version of its proposed Further Amended Statement of Claim dated 5 May 2026 (the 5 May Claim) which, consistent with the approach that I understood had been articulated by senior counsel on 4 May 2026, only alleged the failure to indemnify pursuant to cl 13.3 of the subcontract. The amended document also pleaded the settlement of the claim with ANU so as to crystallise Lendlease’s liability. On 6 May 2026, counsel for DECC indicated that the reasonableness of the settlement was not in issue, and that as a consequence, DECC intended to rely upon the 4 March 2026 Defence.
The present issue relates to the scope of the Proposed Reply which Lendlease seeks to file in response to DECC’s Defence. The issue arises because DECC apprehends that Lendlease is seeking to introduce new claims of breach of the terms of DECC’s contract with Lendlease.
The parts of the Proposed Reply which are objected to are paragraphs 6(i), 6(j)(i), 22(g), 26(b)(ii) and 26(b)(iv).
In order to understand the objection, it is necessary to say a little more about the 5 May Claim, the Defence, and the Proposed Reply.
Clause 15 of the subcontract contained a range of provisions relating to the quality of materials and work.
The subcontract also included: 12.1 Compliance with Statutory Requirements (a) The Subcontractor must comply with, and give all notices (including providing copies to Lendlease, upon request) required by, all Statutory Requirements …
“Statutory Requirements” are defined as including “legislation, including EHS Legislation, ordinance, regulation, by-law, code, order, award or proclamation”. “EHS Legislation” is then defined as “all applicable Statutory Requirements relating to [environment, health and safety], including environmental protection and work, health and safety, together with any directions or notices issued by any relevant Authority, or any code of practice or compliance code appropriate or relevant to the performance of WUC or the Project.”
More significant for the 5 May claim was cl 1.8 of the Letter of Variation dated 16 November 2017, which required that: (a) the Works and the Project must be carried out efficiently in accordance with Statutory Requirements and Industry Best Practice …
“Industry Best Practices” (presumably the plural is an error) was defined as meaning “the degree of professional skill, care and diligence expected of a subcontractor experienced in providing the same or similar services”.
The 5 May Claim alleges various breaches of contract by DECC. As indicated earlier, on 4 May 2026, senior counsel indicated, as I understood it, that those claims will not be pressed other than in reply against DECC. However, they include allegations which are subsequently picked up in the Proposed Reply. The 5 May Claim also includes at paragraphs 28-30 the claim for indemnity arising from cl 13.3 of the subcontract. That is the claim which it presses against DECC.
Amongst the factual allegations made against DECC in the 5 May Claim are various allegations contained in paragraph 14C. This includes paragraph 14C.f, which picks up paragraph 18(d)(vi) that DECC knew of the Excavation Code of Conduct (the Code). The relevant allegation includes that: … DECC knew, or ought reasonably have known, of the Excavation Code of Conduct and, in particular, its requirements under section 2.2 (that it would not be able to satisfy if it proceeded with its works in the way that it did) that, inter alia, when assessing the risks associated with excavation work the party performing such work should consider such things as “adjacent buildings and structures”, “water courses” and the “depth of excavation” …
The state of knowledge pleaded in paragraph 14C is then relied upon to plead certain matters which it is said that DECC needed to undertake in order to discharge its contractual duty of care to ANU. These include avoiding increasing the flood risk from Sullivans Creek and implementing reasonable precautions, including a temporary embankment barrier or other works.
That then is used as a foundation for an allegation in paragraph 18 that DECC failed to comply with its contractual obligations and that had it done so, the flood event would not have caused damage or Lendlease would have undertaken steps so that the flood did not cause damage: paragraph 18(g).
In DECC’s Defence, it responds to the allegation about knowledge of the Code and, in particular, section 2.2 by pleading at paragraph 14C.6 that it: i. admits that it knew of the Excavation Code of Conduct; ii. says that Clause 2.2 of the Excavation Code of Conduct concerns risks under Work Health and Safety Regulations, and had nothing to do with the Flood Risk to Existing Buildings during Construction; iii. says that the Excavation Code of Conduct has nothing to do with the Flood Risk to Existing Buildings during Construction …
At paragraph 29 of the Defence, DECC responds to the claim for indemnity made under cl 13.3 of the subcontract. It relies upon the provision that reduces DECC’s liability proportionally to the extent that the losses were caused by the negligence of Lendlease. It pleads facts which it says should reduce DECC’s liability to indemnify to zero. Those facts are pleaded in paragraphs 29.2.i-29.2.xxiii.
The first two objected to parts of the Proposed Reply are paragraphs 6(i) and 6(j)i which are as follows: 6. In reply to paragraph 14C.6 of the Defence, Lendlease repeats the pleaded terms of the Major Works Subcontract, and further says that: … (i) the Excavation Work Code of Practice dated March 2015 (the previous iteration being dated July 2012) issued by Safe Work Australia (the Excavation Code), was in force and was a ‘code’ within the meaning of the definition of Statutory Requirement under the Subcontract, and a Statutory Requirement which DECC must comply with under clause 12.1(a) of the Subcontract; (j) the Excavation Code was; (i) an approved code under section 274 of the Work Health and Safety Act 2011 (ACT) by way of the Work Health and Safety (Excavation Work Code of Practice) Approval 2015 (ACT); and … (Footnotes omitted.)
Taken at face value, these pleadings in reply are simply responsive to the claim that the Code had “nothing to do with” flood risk to “Existing Buildings” during construction. While they do not address the connection between what is said in the Code and flood risk to existing buildings, they plead legal matters which could undermine the contention that the Code “had nothing to do with” the relevant flood risk. However, they are linked to the other objected to parts of the Proposed Reply.
The pleading in 22.g of the Proposed Reply is in response to paragraph 14C.6. It alleges that DECC “knew or ought to have known” various matters about the Code and the terms of the Work Health and Safety Act 2011 (ACT) and the regulation made under that Act. This pleading falls into the same category as paragraphs 6(i) and 6(j)i in that, in terms, the pleading is responsive to the claim that the Code had nothing to do with the flood risk to “Existing Buildings”. However, it too is linked to the subsequently objected to paragraphs.
The other two objected to parts of the Proposed Reply are paragraph 26(b)(ii) and 26(b)(iv). Those provide: 26. In reply to paragraphs 29.1 and 29.2, and in the event the Flood Event was caused by the matters alleged in paragraph 29.2 of the Defence (which is denied), Lendlease: … (b) says that DECC; … (ii) in breach of clause 1.8(a) of the Letter of Variation failed to carry out the Works and the Project in accordance with Statutory Requirements; and (or) … (iv) in breach of clause 1.8(a) of the Letter of Variation failed to comply with the Excavation Code which was a Statutory Requirement under clause 12.1(a) of the Subcontract, and which if not, was a document that was to be complied with consistently with Industry Best Practice);
Those allegations are relied upon in paragraph 26(c) of the Proposed Reply which provides that Lendlease: says in the premises that the Flood Event (and resultant damage) was “not entirely caused by Lendlease’s negligence”, and rather was also caused by DECC such that DECC’s clause 13.3 Major Works Subcontract indemnity to Lendlease should be apportioned at least 50% to DECC, or such other percentage as the Court considers just.
For the sake of simplicity, I have only set out those portions of paragraph 26 which are objected to. The balance of paragraph 26 picks up and repeats the allegations in paragraphs 18(c) to 18(g) of the 5 May Claim, which in turn repeat paragraphs 14 to 14D of that claim. It thereby repeats the allegations of a causally relevant breach of contract by DECC.
In that context, it can be seen that what the objected to paragraphs seek to do is to add an additional, previously unpleaded, breach of contract by DECC as a matter to be taken into account for the purposes of the assessment of the extent to which Lendlease is proportionally responsible for the damage.
Decision on Proposed Reply
The pleadings in these proceedings are quite complex, reflecting the different claims that were in play, the complexity of the contractual documents that are relevant, and their application to the issues in this case. The complexity is added to by the number of iterations of pleadings or proposed pleadings that have been circulated.
So far as any breach of obligations by DECC was concerned, the only allegation that was made was that relating to section 2.2 of the Code. That involved alleging that knowledge of the requirements of section 2.2 of the Code would have resulted in DECC identifying certain particularised measures and advising Lendlease in order to meet the contractual standard of reasonable care and skill (5 May Claim, paragraphs 18(e)(v) and 18(e)(vi)). It did not separately allege that the Code itself was a Statutory Requirement for the purposes of cl 12.1(a) of the subcontract. I do not accept the submissions that the reference in this paragraph to the Code should be treated as going beyond section 2.2 of the Code. If the pleadings intended to rely upon other provisions of the Code, then they should have said so. It is not a case where the faint footprints in the sand should have been interpreted as raising other specific provisions of the Code.
The evidence contained in the affidavit of a solicitor acting for DECC, Brian Trist, dated 11 May 2026, usefully summarises the issues in contention. It also provides evidence as to what he would have done had he had earlier notice of the intention to allege that the Code was a Statutory Requirement for the purposes of the subcontract and was breached. In addition to some research about the legal issues raised, he says he would have undertaken discovery searches in relation to the Code, and obtained other documents referred to in it.
He also says he would have investigated whether there was an estoppel defence available in relation to the obligation to undertake temporary works to prevent flooding of the existing buildings. That issue arises in the context of the Scope of Work which is said to have made no mention of DECC having to undertake temporary works to prevent flooding to the ANU’s existing buildings. Investigating that issue would involve enquiries of two DECC witnesses. He would wish to investigate whether or not DECC assumed that it was not responsible for undertaking those temporary works and, I infer, that Lendlease was aware of that state of mind. One of those witnesses is no longer employed by DECC, although he was at the time he swore or affirmed an affidavit. Counsel for DECC made specific reference to the articulation of the requirements for promissory estoppel as helpfully explained by Brereton J in Waterman v Gerling Australia Insurance Company Pty Ltd [2005] NSWSC 1066; 65 NSWLR 300 at [83]. The articulation there indicates that it is open to establish an estoppel based upon an assumption arising from a course of conduct, rather than from a specific representation, so long as the defendant has induced or acquiesced in the plaintiff’s adoption of that assumption, and that the defendant knew or intended the plaintiff to act in reliance upon that assumption.
Issue about particulars
Issue as to change of position by Lendlease
Orders
I certify that the preceding forty-seven [47] numbered paragraphs are a true copy of the Reasons for Judgment of his Honour Justice Mossop. Associate: Date:
Australian National University
Lendlease Construction Pty Ltd (No 2)
My conclusion is that to permit the new allegations at this stage of the proceedings would prejudice DECC to a significant degree.
There are a number of reasons for that conclusion.
First, there are the factual issues raised by DECC identified in the affidavit of Mr Trist. I accept, as Lendlease submitted, those factual issues are not, on their face, of great significance. However, for the reasons I will explain in a moment, they do not encapsulate all of what would be required to be done.
Second, so far as the claim of estoppel, or an equivalent claim under the Australian Consumer Law, I consider that that is certainly a matter which cannot be ruled out as a possibility, and is not something which DECC ought to be required to abandon or deal with “on the run”.
Third, there are particular difficulties with the manner in which the operation of the Code has been pleaded. It has been articulated simply that because it exists, its terms, devoid of context or statutory operation, must be complied with. That is certainly not self-evident. It would certainly be open to plead the provisions of the Work Health and Safety Act which give only limited effect for the purposes of the statute to such codes. They include the proposition that codes only provide evidence of compliance with obligations under the Act, may be relied upon in determining what is “reasonably practicable” for the purposes of ss 18 and 19 of the Act, and do not prevent a person from introducing evidence of compliance with the Act in a manner different from the code that provides a standard of work health and safety equivalent or higher to the standard required in a code: Work Health and Safety Act s 275(4). It has not been pleaded by Lendlease that DECC infringed any occupational health and safety duty under the Act. It would certainly be open to DECC to allege in response to this claim that its contractual obligations arising from the existence of the Code were limited to compliance with occupational health and safety laws that gave them effect, and that having regard to particular pleaded factual matters, it complied with its occupational health and safety duties in a context where there was a head contractor specifying its obligations and having overall control of the site and surrounding buildings. These issues may have been able to be explored had the pleading been articulated at some reasonable time months prior to the hearing. Once again, there is a significant degree of unfairness in requiring DECC to address these matters “on the run” in the context of an imminent contested hearing over a very substantial claim.
Fourth, there is no clear explanation as to why these claims were introduced at this late stage when the proceedings have been on foot for years and the matter has no doubt been poured over for years by Lendlease’s legal representatives. I infer, from the absence of any clear explanation, that the proposed amendments arise from the enthusiasm and industry of counsel who, having crystallised Lendlease’s liability, have been freed from the burden of fighting multiple adversaries, have now been able to focus their energies upon their single remaining one. That does not provide any persuasive reason why such claims should be permitted at this stage.
In summary, to allow those pleadings would introduce a variety of legal and factual issues which it is unfair to require DECC to deal with at this stage of the proceedings. The effect of permitting new allegations at this stage would be to prejudice to a significant degree DECC as a result of distracting it from the orderly preparation of the case in circumstances which have substantially changed in any event, preventing it from investigating the potential of further defences which may have been available had the claims been made at an earlier stage. The permitting of the amendments would require DECC to run an inadequately investigated case, or, alternatively, settle on unfavourable terms reflecting the prejudice to it arising from its inability to properly investigate and run its defence.
Lendlease may suffer some prejudice as a result of not being able to include these additional allegations. I infer from the tenacity with which the amendments have been pursued that it sees forensic advantage in them. However, it has had years in which to formulate the claims that it wished to pursue against DECC and, even though it did deploy the Code in its pleadings, it did not make any claim that it involved a breach of the Statutory Requirements. In those circumstances, it is not unfair to Lendlease to confine it to the case that everyone thought it was running at the point when opening submissions were filed.
For those reasons, I will not permit Lendlease to pursue the claims articulated at paragraphs 26(b)(ii) or 26(b)(iv) of the Proposed Reply. Shorn of those claims, the other paragraphs objected to have limited effect, and fall within the scope of what may legitimately be raised by way of reply, and will therefore be permitted.