Candy v GIO General Limited

Supreme Court of NSW|2013-06-17|Before: Campbell J

-Pacific Carriers Ltd v. BNP Paribas [2004] HCA 35; 218 CLR 451 -Rigato Farms Pty Ltd v Ridolfi [2001] 2 Qd R 455 -Sevic v Roarty (1998) 44 NSWLR 287 -Stevens v. Brodribb Sawmilling Co. Pty Ltd [1986] HCA 1; 160 CLR 16 -The Nominal Defendant v. Gabriel [2007] NSWCA 52; 71 NSWLR 150 -Toll (FGCT) Pty Ltd v. Alphapharm Pty Ltd [2004] HCA 52; 219 CLR 165 -Yu v Speirs [2001] NSWCA 373 -Waltons Stores (Interstate) Ltd v. Maher [1988] HCA 7; 164 CLR 387 -Western Export Services Inc. v. Jireh International Pty Ltd [2011] HCA 45 -Zuijs v. Wirth Bros. Pty Ltd (1955) 93 CLR 561 Texts Cited: K.R. Handley, Estoppel by Conduct and Election, (2006) Thompson Sweet & Maxwell Category: Interlocutory applications Parties: Gregory William Candy (plaintiff) GIO General Limited (first defendant, second cross-claimant) Zurich Australian Insurance Limited (second defendant, cross-defendant, cross-claimant) John Peter Papadellis (second-cross defendant) Representation: Counsel: P.S. Jones (plaintiff) N.E. Chen with J. Lee (first defendant, second cross-claimant) R.C. Cavanagh SC (second defendant, cross-defendant, cross claimant) J.J. Loofs (second cross-defendant) Solicitors: Matthews Dooley & Gibson (plaintiff) Holman Webb (first defendant, second cross-claimant) Curwoods Lawyers (second defendant, cross-defendant, cross-claimant) Marsdens Law Group (second cross-defendant) File Number(s): 2010/117912

Judgment 1The first notice of motion, filed on 17th April 2013 on behalf of the second cross-defendant, claims specific enforcement of a settlement reached with the second cross-claimant. The second cross-defendant is a party only at the suit of the second cross-claimant. By the second notice of motion, the second defendant seeks leave to withdraw an admission made under Rule 17.3 Uniform Civil Procedure Rules 2005 (NSW) for the purpose of the proceedings only, in favour of the first defendant, that the second cross-defendant was an employee of the second defendant's insured. The first defendant is the second cross-claimant. 2The applications arise in the context of the plaintiff's claim for damages for personal injury arising out of a work accident on a building site. The accident occurred on 10th July 2008. 3The plaintiff's claims are framed as actions to enforce the statutory charge imposed by s.6 Law Reform Miscellaneous Provisions Act 1946 (NSW) ("LRA") on each of two general insurers, leave under s.6(4) having been granted previously in each case.

Brief background facts 4The defendant to the fourth cross-claim employed the plaintiff, Mr. Candy, as a dogman. He alleges that on 10th July 2008 he was descending a ladder when an article of his clothing snagged on a protruding brick-tie causing him to fall backwards from the ladder and through a void in the concrete floor below. He suffered significant injuries, including to his back. 5He avers that immediately before his attempted descent of the ladder he had been assisting an employee of the second defendant's insured to position steel channelling on the roof of the building under construction. The putative employee is the person I have referred to as the second cross-defendant.

Designation of the parties 6The plaintiff's employer, joined by a cross-claim filed 14th June 2013, took no part in the proceedings before me and I will make no further reference to it. The other parties will be referred to as follows: (a)The plaintiff, Mr. Candy; (b)The first defendant, GIO General Limited ("GIO"); (c)The second defendant, Zurich Australian Insurance Limited ("Zurich"); (d)The second cross-defendant, Mr. Papadellis. GIO's insured was a company named Edeck Group Pty Ltd ("Edeck Group"), alleged to be the builder of the residential building project in Rose Bay, as well as the party in control of the building site. GIO is its public liability insurer. Zurich's insured was Jando Steel Pty Ltd, the contractor responsible for carrying out the steel work at the premises including "the erection of the roof structure" (second ASOC filed 24th September 2012). 7There is no issue that Mr. Papadellis performed work for Jando Steel Pty Ltd ("Jando Steel") on this project and on many others. A question which has arisen in the proceedings concerns his status: did he perform work pursuant to a contract of service rather than a contract for services? In other words, was he an employee or an independent contractor? To determine the applications it is necessary to set out more of the history of the matter.

Narrative of relevant facts 8I understand that the facts I am about to set out are not disputed by any party for the purpose of these applications. They are derived from the following affidavits read before me: (a)Affidavit of Jane-Elise Harabopoulos sworn 17th April 2013. Ms. Harabopoulos is the solicitor with the carriage of the proceedings on behalf of Mr. Papadellis; (b)Affidavit of Peter John Ford sworn 13th May 2013. Mr. Ford is the solicitor for Zurich; (c)Affidavit of Nicholas John Gordon sworn 29th May 2013. Mr. Gordon is the solicitor with the carriage of the matter on behalf of GIO. 9On 4th May 2010 Mr. Candy was granted leave to commence proceedings against GIO pursuant to s.6(4) LRA. He relied upon the alleged negligence of Edeck Group in its capacity of builder and controller of the building site. 10Rothman J granted leave to Mr. Candy to amend his statement of claim to join Mr. Papadellis as a defendant on 28th June 2011. He averred that Mr. Papadellis was working at the site "as an independent contractor, project manager... erecting the roof structure". 11Mr. Papadellis produced documents to the Court on 17th November 2011, including a copy of a statement he had made on 31st January 2009 to the workers compensation insurer paying compensation to Mr. Candy. In that statement, Mr. Papadellis described himself as "a contractor" for Jando Steel. At the same time he produced a safe work method statement prepared by a Mr. Andonakis - whom other evidence shows was the guiding mind and will of Jando Steel - and a note, I infer prepared in or about November 2011, in which Mr. Papadellis asserted that he "was employed as a project manager and working for" Jando Steel. 12Mr. Papadellis instructed Marsdens Law Group to act as his solicitors on 9th January 2012. Marsdens obtained a letter from Mr. Andonakis dated 15 February 2012 which is in the following terms: I am writing to confirm that John Papadellis was at ail times between March 2007 and December 2010 an employee of Jando Steel Pty Limited t/as The Steel Specialist. At no time during his employment was a contract in place that referred to John as an independent contractor. There was an ongoing expectation of work and he began his day at 6am, as would any other employee of The Steel Specialist. John was at all times a representative of The Steel Specialist, not of his own business. He performed all duties at the required site and time as directed by our company. All expenses and equipment were seen to by The Steel Specialist If John did incur any expense, our company would reimburse him. John was a draftsman, he did not act as a site supervisor or a foreman for our company. Edeck Group were contracted to erect the building and were responsible for site safety. John was sent to the site to look over the drawings and make sure the steel was fabricated to the drawings. John was not employed to give any instructions in relation to the erection process or to give instructions to the crane operator. 13Marsdens wrote to the plaintiff's solicitors, Messrs. Matthews, Dooley and Gibson, on 1st March 2012 enclosing a copy of Mr. Andonakis' letter suggesting that the plaintiff discontinue proceedings because Mr. Papadellis was an employee at the time of the incident, had never been an independent contractor, and was not separately insured. 14GIO had issued a cross-claim against Jando Steel on 29th October 2010, but no appearance was ever entered on behalf of that company, perhaps because a liquidator had been appointed on 19th November 2010. 15After receiving Marsdens' letter, the plaintiff's solicitors attempted to contact the liquidator of Jando Steel seeking details of its public liability insurance. Despite diligently making appropriate inquiries it was not until 7th June 2012 that the solicitors were able to ascertain, through GIO's solicitors (Holman Webb), that Zurich was the insurer. This information was supported by the production of a certificate of currency dated 2nd May 2008 over the hand of an officer of Zurich. 16On the same day, Matthews, Dooley and Gibson wrote to Marsdens offering to release Mr. Papadellis from the proceedings "in the event that Zurich are joined, and in the event that each party pay their own costs of and incidental to the notice of motion". Mr. Papadellis consented to the discontinuance of the claim against him on the basis that each party bear his own costs. 17On 17th July 2012, Mr. Candy's solicitors filed a notice of motion seeking leave to substitute Zurich as a second defendant instead of Mr. Papadellis, and leave to proceed against the insurer under s.6(4) LRA. 18The motion came before Schmidt J on 10 September 2012. A solicitor in the employ of Mr. Ford appeared on behalf of Zurich "and consented to the substitution and its joinder to the proceedings as the new second defendant" (Mr. Gordon's affidavit [10]). Nonetheless, GIO maintained its cross-claim against Mr. Papadellis. However on 12th October 2012 GIO obtained leave from Adamson J to substitute Zurich as the defendant to its amended first cross-claim pursuant to s.6(4), the cross-claim issued on 29th October 2010. 19Only GIO were now maintaining a claim against Mr. Papadellis, and I infer for the purpose of clarifying his position its solicitors served a notice to admit facts under Rule 17.3 on each of the solicitors for Mr. Papadellis and Zurich on 20th December 2012. Relevantly, for present purposes, each of them were required to admit the following: (4)As at 10 July 2008, John Peter Papadellis, the cross-defendant to the second cross-claim, was an employee of Jando Steel Pty Ltd; (5)On 10 July 2008, John Peter Papadellis undertook work at 2 XXXXXXX, Rose Bay (the premises) as part of his employment with Jando Steel Pty Ltd. By notice served under cover of letter of 25th January 2013, Mr. Papadellis "admitted' these facts. 20In its notice served under cover of its solicitor's letter dated 11th January 2013, Zurich disputed those facts. 21During the course of a conversation about case management issues on 30th January 2013, Mr. Gordon, for GIO, raised with Mr. Ford, for Zurich, the notice disputing facts. Mr. Gordon pointed out that Mr. Papadellis said he was an employee and not an independent contractor. He asked Mr. Ford to "take further instructions, particularly in relation to fact 1 as to whether or not John Papadellis was an employee". Mr. Ford agreed to consider the matter further. 22Mr. Ford reviewed his file. In the process he came upon Mr. Andonakis' statement of 15th February 2012, being part of the material that had been before Schmidt J in September 2012. From it he informed himself that Mr. Andonakis was formerly a director of Jando Steel and that Mr. Andonakis was maintaining that Mr. Papadellis was an employee of the company. At that time no separate factual investigation had been undertaken on behalf of Zurich and Mr. Ford does not mention having seen the documents produced by Mr. Papadellis. 23Mr. Ford swears, and I accept, that having regard to his professional obligations to the Court including the obligation to facilitate the just, quick and cheap resolution of the real issues in dispute, and doubtless upon the instructions of his client, he wrote a letter to Holman Webb on 15th February 2013 including the following statement: We refer to your recent telephone conversation with the writer and confirm at the time of the plaintiff's accident, John Papadellis was an employee of Jando Steel Pty Ltd. Before me Mr. R.C. Cavanagh SC, who appeared for Zurich, accepted, as did all other parties, that I should understand that statement to be a formal admission made for the purpose of Rule 17.3 which could not be withdrawn by Zurich without the leave of the Court, rather than a merely evidential admission made out of Court: The Nominal Defendant v. Gabriel [2007] NSWCA 52; 71 NSWLR 150, 170 [103] - 172 [113]; Lustre Hosiery Limited v. York [1935] HCA 71, 54 CLR 134; Dovuro Pty Ltd v. Wilkins [2003] HCA 51; 215 CLR 317 at 340 [69]. 24Mr. Ford said of the admission (Ford Affidavit [10]), and I accept: The statement made... was based solely on the signed statement of Mr. Andonakis. As I had no reason to doubt Mr. Andonakis at that time, I considered that I should accede to the request of the other parties and write the letter of 15 February 2013. I did not consider that I should merely maintain a position which was inconsistent with the statement of the director of Jando Steel. I infer that, after this, Mr. Ford appointed an investigator to carry out a factual investigation, probably prior to 8th April 2013: see Ford affidavit [11] - [14]. 25Zurich's defence, presumably drafted previously, was filed on the same day as the admission was made. It did not admit that Mr. Papadellis was an employee of Jando Steel. By dint of Rule 14.26 UCPR, the statement of non-admission operated as a traverse of the averment that Mr. Papadellis was an employee. Most practitioners would regard a traverse in this form as merely putting the other-side to proof, rather than as a strong denial of the matter. However, I repeat, it was common ground before me that the admission made by the letter of 15th February 2013 was a formal admission under the rules of court overtaking the pleading, to that extent. 26On 18th March 2013 Mr. Gordon emailed Ms. Harabopoulos referring to Mr. Papadellis' notice in response to the notice to admit facts. In part, he wrote: We note that it is now conceded that at the time of the Plaintiffs accident your client was an employee of Jando Steel Pty Limited. Jando Steel Pty Ltd/Zurich Australian Insurance Limited have also now conceded that Mr Papadellis was an employee of Jando Steel Pty Ltd. Mr. Gordon raised with his opposite number the statement dated 31st January 2009 and pointed out that some of the facts disputed by Mr Papadellis were not consistent with that statement. He made no reference to the statement attributed to Mr. Papadellis that he was "a contractor". 27Ms. Harabopoulos' principal replied on 21st March 2013 "without prejudice save as to costs" in the following terms, again in part: As noted in your correspondence dated 18 March 2013, both the Plaintiff and Jando Steel/Zurich accept that our client was an employee. On that basis the Plaintiff no longer pursues the claim as against our client A proposal was pitched for the purpose of resolving the second cross-claim, being the only extant pleading against Mr. Papadellis. 28Further correspondence passed between Holman Webb and Marsdens until on Friday, 5th April 2013, Mr. Gordon wrote to Ms. Harabopoulos' principal: On the basis of your client's admission that at all material times he was an employee of Jando Steel Pty Ltd, and that Jando Steel Pty Ltd/Zurich Australian Insurance Limited acknowledges and accepts this to be the case, we are instructed that our client will agree to dismiss the Amended Second Cross Claim against your client with each party bearing their own costs We attach consent orders reflecting the above. If the consent orders are acceptable we ask that you please execute the original copy and return same to us as soon as possible so we can attend to filing. Please be advised that we anticipate that your client will be required to attend any hearing to give evidence. As a result of our client releasing your client from the proceedings we expect his full co-operation in this regard. The proposed consent orders were in the following terms: By consent and without admission of liability, the second cross-claimant and the second cross-defendant agree to the following orders: 1. Amended second cross claim dismissed; 2. Each party is to bear their own costs of the amended statement of cross claim. On the same day Marsdens returned the "executed consent orders" by email which was received by Mr. Gordon at 4:30 p.m. A covering letter and the executed terms in PDF form were an attachment to the email. The covering letter said "[t]he original will follow via post". I infer, however, as much of the correspondence passing between Holman Webb and Marsdens was by electronic means, including by facsimile transmission, that acceptance in electronic form was open to Mr. Papadellis. 29At 6:26 a.m. on Monday, 8th April 2013, Mr. Ford wrote to Mr. Gordon by email the following: Hi Nick, could you please confirm that John Papadellis is no longer a party to the proceedings as Marsdens still think he is. Please advise what orders were made removing him as a party and when they were made. Cheers. Peter From this I infer that to the extent to which it may be relevant, Zurich expected that GIO would act on the admission to release Mr. Papadellis. Although there is no direct evidence, the question may have been discussed between Mr. Gordon and Mr. Ford at some stage on or after 30th January 2012. 30I infer that Mr. Ford had prior to 6:26 a.m., doubtless on another day, been speaking to Ms. Harabopoulos about securing the co-operation of Mr. Papadellis in the factual investigation that Mr. Ford had commissioned. Probably, that co-operation had been refused because Mr. Papadellis was still a party legally represented by Marsdens, and this was contrary to Mr. Ford's expectation. I draw this inference not only from the content of the 6:26 a.m. email but also from paragraph 12 of Mr. Ford's affidavit where, following his recitation of the necessity to appoint investigators, he said: 12. On the morning of 8 April 2013 I spoke to the Solicitor representing Mr Papadellis, Jane-Elise Harabopoulos in which she said words to the following effect: "I have been acting for Mr Papadellis as he signed a Statement in 2010 (sic) in which he said he was an independent contractor but he was in fact an employee. I told Mr Miller from your office and the First Defendant's Solicitor but they have only now agreed to discontinue proceedings against my client. I'll ring Mr Papadellis and tell him it is okay to talk to your investigator." I would understand the first two sentences of the words attributed to Ms. Harabopoulos as an explanation for previous obdurateness. The final sentence is an expression of a new willingness to advise Mr. Papadellis to co-operate with the investigator, and I would infer, because he is now "off the hook". 31Ms. Harabopoulos must have provided Mr Ford with Mr. Papadellis' phone number, because next, probably not immediately, he phoned Mr. Papadellis and obtained from him Mr. Andonakis' phone number, which he passed on to his investigator. 32At 10:37 a.m. Mr Gordon replied to the 6:26 a.m. email advising Mr Ford "[w]e have today signed consent orders" dismissing the amended second cross-claim, which he expected to file during the day. 33At 10:40 a.m. Mr. Ford responded: Thanks Nick do you know why Marsdens have been acting for him and did not make a claim on the Zurich policy? I suggest you withhold filing the Consent Orders as there is one further piece of Information I need to confirm his employment status. As the company is in liquidation it has been difficult obtaining all information. Cheers, Peter 34Mr. Gordon wrote back at 11:12 a.m. After referring to the admission contained in the letter of 15th February 2013, he stated: In light of this admission, and in reliance upon the admission, our client agreed to dismiss the Amended Second Cross Claim against John Papadellis and to release John Papadellis from the proceedings. In the circumstances, your client is estopped from now advancing a case that is inconsistent with John Papadellis being an employee of Jando Steel Pty Limited at the time of the plaintiff's accident 35The precise chronology of all relevant events of the 8th of April 2013 is unclear from the evidence read before me. But Mr. Ford did not respond immediately to this email. Doing the best I can with the evidence, I infer that some time during the afternoon (see Ford affidavit [15]), the investigator informed Mr. Ford that Mr. Andonakis had "initially informed him Mr. Papadellis was an employee but then Mr. Andonakis phoned him again that afternoon and advised Mr. Papadellis was in fact an independent contractor and had his own ABN number". Mr. Ford telephoned Ms. Harabopoulos saying: We are unable to act for Mr. Papadellis on the basis of the information provided by the director of Jando today that Mr. Papadellis was a contractor and not an employee. There is no suggestion in the evidence that anyone had asked that Zurich take over conduct of Mr. Papadellis' defence. Indeed, to the contrary, the agreement was that he would be "released". I infer, however, that Mr. Ford was of the view that if Mr Papadellis had been a direct employee, Zurich's policy may have covered any liability he might incur in that capacity: c.f. s3 Employees Liability Act 1991 (NSW). 36At 4:38 p.m. Mr. Ford emailed Mr. Gordon as follows: Hi Nick, As a result of information provided by a director of our client today we formally withdraw the admission in our letter dated 15 February 2013. Our investigator was only able to make contact with him today and was informed Papadellis had his own ABN number and paid his own tax. In the circumstances we suggest Marsdens be present at the mediation. We can discuss further at our meeting on Friday. Regards, Peter 37Mr. Andonakis provided a signed statement to the investigator on 9th April 2010. As is usual, it is not in the form of a proper proof of evidence. For present purposes it is unnecessary to descend into the detail of it. It goes into some detail about the indicia generally considered when gauging whether the relationship between parties to a contract is one of employment or otherwise: Stevens v. Brodribb Sawmilling Co. Pty Ltd [1986] HCA 1; 160 CLR 16 at [23] - [24]. It is enough to say that, as is frequently the case, many of the indicia, or groups of indicia, point in opposite directions on that score. On Mr. Andonakis' statement of 9th April 2013, in my judgment, no clear answer presents itself. Absent the admission there could be a lively debate on the question. 38As might be expected, there was further to-ing and fro-ing amongst the solicitors. For reasons that are not explained or otherwise made clear, Holman Webb did not file the signed consent orders in the registry. On the afternoon of Monday 8 April, some time after 4:38pm, Mr. Gordon said to Ms. Harabopoulos, "in the circumstances we will not be filing the consent orders". It is not clear to me what circumstances are said to justify that stance, although he was probably referring to Zurich's purported change of position. The failure to file the consent orders is curious as by letter dated 10th April 2013, Holman Webb reiterated the contents of Mr. Gordon's email of 11:12 a.m, 8th April 2013 asserting an estoppel. 39Mr. Ford responded on 11th April 2013 setting out the circumstances in which the admission was made, the fact that his understanding of Mr. Andonakis' earlier statement was contrary to what he now believed to be the facts, and purporting to withdraw the admission. Mr. Ford said that "new evidence has come to our client that was not available to it when the admission was made, this new evidence is clearly contrary to the facts previously understood to be the case". He submitted that these circumstances justified the change of position particularly as "this application [will be] made only a very short time after the making of the admission and your client will suffer no prejudice that cannot be compensated by appropriate orders". 40On 10th April Holman Webb also wrote to Marsdens purporting to resile from the agreement. Marsdens wrote back promptly on the same day denying GIO's entitlement to withdraw and demanding "an irrevocable undertaking to file the consent order", and stating that otherwise orders would be sought under s.73 Civil Procedure Act 2005 (NSW), as has now occurred. Clearly no such undertaking was given.

The submissions of the parties 41By common assent, Mr. Cavanagh addressed first. Learned senior counsel pointed out that, although made after a review of the file, the admission of 15th February 2013 was made at a time when not all relevant information was available. When additional information was obtained, Zurich moved promptly to withdraw the admission and in any event the admission had been on foot for less than two months. The admission was made on behalf of a s.6 defendant, whose insured had gone into liquidation. Such a defendant is necessarily at least one step removed from the action and to that extent at a significant disadvantage. There was no case management or efficiency consideration which stood in the way of a grant leave to withdraw. 42Mr. Cavanagh relied upon the five principles set out by Santow J (as his Honour then was) in Drabsch v. Switzerland General Insurance Co. Limited (Unreported, 16th October 1996; BC9604909), applied by Sackville J in Deangrove Pty Ltd v. Commonwealth Bank of Australia [2003] FCA 268) at [31] - [35]. Particular emphasis was placed on Cropper v. Smith (1884) 26 Ch D 700 at 710 - 11, applied in Clough & Rogers v. Frog (1974) 48 ALJR 481 at 482. In the application of the Drabsch principles to the circumstances of the case, Mr. Cavanagh faced up to that part of principle four, expressed in the following terms: Irrespective of whether the admission has or has not been formally made, leave may be refused if the other party has changed its position in reliance upon the admission; H Clark (Doncaster) Ltd v Wilkinson [[1965] Ch 694], in that respect not doubted. Senior counsel argued that no estoppel arose in the case. I understood him to accept that the admission was capable of characterisation as a representation to the first defendant which it was reasonable to expect the first defendant might act on. Rather, senior counsel's point was on its proper construction the contract between GIO and Mr. Papadellis was subject to a condition subsequent, namely Zurich holding fast to its admission, and Zurich telegraphed its position on the morning of 8th April 2013 and withdrew the admission in the afternoon, before the terms were filed. On this approach no contract had arisen. 43Moreover, and more importantly, GIO and Mr. Papadellis had agreed only to a dismissal and the dismissal did not prevent GIO from bringing fresh proceedings or claiming the same relief in fresh proceedings: s.91 Civil Procedure Act. Accordingly, it could not be said that GIO had acted to its detriment in reliance on Zurich's representation. There could be no question of any estoppel available to Mr. Papadellis as no representation was made to him, and to the extent to which it had been relayed to him by GIO, he had not relied upon it to his detriment. First because GIO could always start again. And secondly if Zurich was wrong about the effect of a dismissal, a release from the proceedings was a positive advantage to Mr. Papadellis rather than a detriment. To the extent to which a detriment to either sounded in additional costs, the Court had power to cure that prejudice by making an appropriate costs order as a condition of leave to withdraw the admission. 44Mr. J.J.T. Loofs, who appeared for Mr. Papadellis, argued that by the application of orthodox, objective, contractual theory there could be no question that Holman Webb's letter of 5th April 2013 was an offer which was accepted by Marsdens letter and signed consent order transmitted by email on the same day. Upon its receipt, by application of the instantaneous communications rule, a legally binding contract came into existence: Pacific Carriers Ltd v. BNP Paribas [2004] HCA 35; 218 CLR 451 at 461 - 462; Entores Ltd v. Miles Far East Corporation [1955] 2 QB 327; Flemming v. Marshall [2011] NSWCA 86 at [72]. The same objective approach governs the construction of the contract: Toll (FGCT) Pty Ltd v. Alphapharm Pty Ltd [2004] HCA 52; 219 CLR 165 at [40]. On this basis, the reference that Zurich "acknowledges and accepts" that Mr. Papadellis was an employee is not a condition subsequent but simply the basis of the offer, "rather as recitals to a deed might record stated positions of parties". The references to the return of the signed consent orders "as soon as possible so we can attend to filing" and "releasing" Mr. Papadellis "from the proceedings" provide context strongly against the construction advanced by Zurich. 45Learned counsel argued that the ordinary and natural meaning of the language in context was that Mr. Papadellis would be released from the proceedings. This plain language was inconsistent with a provisional arrangement. Notwithstanding s.91, a dismissal is a means of giving effect to the notion that the parties' agreement was a final order. Reference was made to Lee & Ors. v. Keddie & Ors. [2009] NSWSC 777 at [18] and Beck v. Weinstock [2012] NSWCA 289 at [67]. Moreover, s.91 itself contemplated circumstances where a dismissal was a final order giving rise to res judicata. 46Mr. Loofs argued that his client may be entitled to raise an estoppel by representation precluding Zurich from withdrawing its admission. The admission was not made directly to Mr. Papadellis, but it was conveyed to him and there is some evidence from which it can be inferred that it was reasonable to expect that Mr. Papadellis would be induced to rely upon the representation to his detriment by entering into the agreement with GIO. Contrary to the argument of Mr. Cavanagh, Mr. Loofs says that there was detriment: Mr. Papadellis forewent a costs order to which he may have been entitled if GIO gave up on its cross-claim against him. There is no rule that relief for equitable estoppel is confined to what is necessary to avoid the detriment: Giumelli v. Giumelli [1999] HCA 10; 196 CLR 101 at 120. Counsel was flagging this point to counter a suggestion that specific enforcement under s.73 might be denied in any event because there would be an element of futility about granting relief under s.73 if Zurich may yet be entitled to issue a cross-claim against Mr. Papadellis: Bowcliff Pty Ltd v. QBE Insurance (Aust) Limited [2011] NSWCA 18. 47Mr. N.E. Chen, who appeared with Mr. J. Lee for GIO, accepted that the question of whether there was a contract between GIO and Papadellis turned upon ascertainment of the objective intention of the parties, in this case, by reference to three letters: Marsdens' letter of 4th April; Holman Webb's letter of 5th April and Marsdens' response, also of 5th April 2013. In written submissions counsel put the question as: "whether or not the content of that which was conveyed [by Holman Webb on 5th April 2013] was conditional. If it was, then there is no binding agreement". Counsel acknowledged that GIO was somewhat uncomfortably perched on a fence. It did not wish to resile from any agreement with Mr. Papadellis, but on the other hand it was diffident about committing to it lest Mr. Cavanagh's arguments prevail and it was caught betwixt and between. The middle road is not always an easy path. I rather deduced from this that GIO was happy to be bound by any agreement provided Zurich was not granted leave to withdraw its admission. 48Mr. Chen accepted that Santow J stated the correct principles in Drabsch. He made four points. First, Zurich's explanation for wishing to withdraw the admission was not satisfactory. Secondly, the evidence indicated that this was a case of a deliberate decision to make the admission and it could not be shown that the admission was "contrary to the actual facts". Thirdly, although there was no decisive case management or efficiency issue, Zurich had been directly involved in the proceedings since September 2012 and viewed from that prospective delay was a relevant consideration. Fourthly, Mr. Chen contended that there was an absolute, as it were, prohibition against allowing a withdrawal of the admission because Zurich was precluded from resiling from it by reference to the doctrine of estoppel by representation, if GIO was by an agreement with Mr Papadellis. GIO had clearly relied upon the representation contained in the admission to its disadvantage by entering into any binding agreement with Mr. Papadellis releasing him from the proceedings, assuming Mr. Papadellis had made that latter proposition good. 49Mr. P.S. Jones appeared for Mr. Candy. Mr. Candy has no interest in Mr. Papadellis' application. He opposes Zurich having leave to withdraw the admission of 15th February 2013. Counsel argued that Mr. Candy relied upon Mr. Andonakis' earlier admission to release Mr. Papadellis as a defendant (by way of discontinuance, not judgment). Permitting the withdrawal of the formal admission would irredeemably prejudice Mr Candy as fresh proceedings against Mr Papadellis, if not precluded by their previous agreement, would be out of time. Mr. Candy also argues that the formulation of Santow J in Drabsch, that "[i]t will usually be appropriate to grant leave to withdraw an admission where it is shown that the admission is contrary to the actual facts", means what it says. It should not be read down. It is not sufficient that further investigations show the matter admitted is in truth contestable. Counsel argued that this requirement was a necessary condition of leave to withdraw an admission formally made. 50Mr Jones said, if its formal admission stands, Zurich would not be entitled to litigate the employment issue in the present proceedings. Counsel submitted that case management is an important consideration. Allowing the withdrawal will encourage laxity in the conduct of litigation of this type. And, as the plaintiff's injury occurred as long ago as 10th July 2008, acceding to Zurich's application will further delay the allocation of a hearing date. 51Mr Loofs, with leave, filed some supplementary written submissions on the finality point, to which each of Mr Cavanagh and Mr Chen responded. With respect to counsel, these contained further elaboration of points already made.

Relevant statutory provisions 52The following statutory provisions are relevant: Section 56 Civil Procedure Act (1) The overriding purpose of this Act and of rules of court, in their application to civil proceedings, is to facilitate the just, quick and cheap resolution of the real issues in the proceedings. (2) The court must seek to give effect to the overriding purpose when it exercises any power given to it by this Act or by rules of court and when it interprets any provision of this Act or of any such rule. (3) A party to civil proceedings is under a duty to assist the court to further the overriding purpose and, to that effect, to participate in the processes of the court and to comply with directions and orders of the court. (4) Each of the following persons must not, by their conduct, cause a party to civil proceedings to be put in breach of a duty identified in subsection (3): (a) any solicitor or barrister representing the party in the proceedings, (b) any person with a relevant interest in the proceedings commenced by the party. Section 73 Civil Procedure Act (1) In any proceedings, the court: (a) has and may exercise jurisdiction to determine any question in dispute between the parties to the proceedings as to whether, and on what terms, the proceedings have been compromised or settled between them, and (b) may make such orders as it considers appropriate to give effect to any such determination. (2) This section does not limit the jurisdiction that the court may otherwise have in relation to the determination of any such question. Section 91 Civil Procedure Act (1) Dismissal of: (a) any proceedings, either generally or in relation to any cause of action, or (b) the whole or any part of a claim for relief in any proceedings, does not, subject to the terms on which any order for dismissal was made, prevent the plaintiff from bringing fresh proceedings or claiming the same relief in fresh proceedings. (2) Despite subsection (1), if, following a determination on the merits in any proceedings, the court dismisses the proceedings, or any claim for relief in the proceedings, the plaintiff is not entitled to claim any relief in respect of the same cause of action in any subsequent proceedings commenced in that or any other court Rules 17.3 and 17.6 Uniform Civil Procedure Rules: 17.3 (1) The requesting party may, by a notice served on the admitting party (the requesting party's notice), require the admitting party to admit, for the purposes of the proceedings only, the facts specified in the notice. (2) If, as to any fact specified in the requesting party's notice, the admitting party does not, within 14 days after service on the admitting party of the requesting party's notice, serve on the requesting party a notice disputing that fact, that fact is, for the purposes of the proceedings only, taken to have been admitted by the admitting party in favour of the requesting party only. (3) The admitting party may, with the leave of the court, withdraw any such admission. 17.6 An admission made under this Part in connection with any proceedings: (a) may not be used in those proceedings except in favour of the party in whose favour it was made, and (b) is taken to have been made for the purposes of those proceedings only.

Determination of Zurich's motion 53In Drabsch Santow J said (pp. 7 - 8): I set these principles out as follows: 1. Where a party under no apparent disability makes a clear and distinct admission which is accepted by its opponent and acted upon, for reasons of policy and the due conduct of the business of the court, an application to withdraw the admission, especially at appeal, should not be freely granted; Coopers Brewery Ltd v Panfida Foods Ltd (1992) 26 NSWLR 738 per Rogers CJ Comm D, followed in IOL Petroleum Ltd v O'Neill per Young J (Young J, 17 November 1995, unreported) and Apex Pallett Hire Pty Ltd v Brambles Holdings Ltd (full Supreme Court of Victoria, 8 April 1988, unreported), and in that respect not following H Clark (Doncaster) Ltd v Wilkinson [1965] Ch 694 at 703. 2. The question is one for the reviewing judge to consider in the context of each particular appeal, with the general guideline being that the person seeking on a review to withdraw a concession made should provide some good reason why the judge should disturb what was previously common ground or conceded; IOL Petroleum Ltd v O'Neill (supra), in the context of withdrawing a concession made before the Registrar. 3. Where a court is satisfied that admissions have been made after consideration and advice such as from the parties' expert and after a full opportunity to consider its case and whether the admissions should be made, admissions so made with deliberateness and formality would ordinarily not be permitted to be withdrawn; Coopers Brewery Ltd v Panfida Foods Ltd (supra) at 745 and 748. Thus a court will not lend its approval to the withdrawal of admissions where, by analogy with the making of amendments, this is actuated by purely tactical reasons; compare Devae Prufcoat Pty Ltd v Altex Industrial Paints Ltd (Cole J, 15 March 1989, unreported). 4. It will usually be appropriate to grant leave to withdraw an admission where it is shown that the admission is contrary to the actual facts. Leave may also be appropriate where circumstances show that the admission was made inadvertently or without due consideration of material matters. Irrespective of whether the admission has or has not been formally made, leave may be refused if the other party has changed its position in reliance upon the admission; H Clark (Doncaster) Ltd v Wilkinson (supra), in that respect not doubted. 5. Following Cohen v Mc William and Anor (1995) 38 NSWLR 476, a court is not obliged to give decisive weight to court efficiency, such that a party who wishes to defend its claim is entitled to a hearing on the merits, with cost orders being available as a means of compensating the other party for any costs thereby unnecessarily incurred or not fairly visited on the other party. 54In Deangrove at [35] Sackville J said: Consistent with what was said by Santow J in Drabsch v Switzerland Insurance, a party who makes a clear and distinct admission on a factual question, which is accepted and acted upon by the opponent, should not be permitted freely to withdraw that admission. Whether or not it is appropriate to grant leave will depend upon the particular circumstances of the case and an assessment of the interests of justice. The relevant circumstances include the nature of the admission, how it came to be made (for example, whether it was made deliberately or inadvertently), when and why the party seeks to withdraw the admission and the impact of any withdrawal on the other parties to the litigation. 55In Clark v. Wilkinson at 703 Lord Denning MR said: An admission made by counsel in the course of proceedings can be withdrawn, unless the circumstances are such as to give rise to an estoppel. If the other party has acted to his prejudice on the faith of it, it may not be allowed to be withdrawn (citations omitted). 56And at 704 Salmon LJ said: No doubt a statement made by counsel, just like a statement made by the client, if acted on by the other side to their prejudice, cannot be withdrawn. This is because an estoppel would then arise. 57As Santow J pointed out in Drabsch, other statements of their Lordships in Clark v. Wilkinson have been perceived to be too lenient in more modern Australian cases: eg. Coopers Brewery Limited v. Panfida Foods Limited (1992) 26 NSWLR 738; Rigato Farms Pty Ltd v Ridolfi [2001] 2 Qd R 455; Deangrove at [29] - [30]. However, it cannot be doubted that where the circumstances of the case engage the legal principles of estoppel by representation (for example) the party will be precluded from withdrawing the admission. 58Albeit in dissent, in Cropper v. Smith at 710 Bowen LJ said: Now, I think it is a well established principle that the object of Courts is to decide the rights of the parties, and not to punish them for mistakes they make in the conduct of their cases by deciding otherwise than in accordance with their rights. Speaking for myself, and in conformity with what I have heard laid down by the other division of the Court of Appeal and by myself as a member of it, I know of no kind of error or mistake which, if not fraudulent or intended to overreach, the Court ought not to correct, if it can be done without injustice to the other party. 59All of these statements of principle, of course, precede the enactment and commencement of the Civil Procedure Act and the discussion of the legal effect of similar efficiency provisions of the Court Procedure Rules 2006 (ACT) in Aon Risk Services Australia Limited v. Australian National University [2009] HCA 27; 239 CLR 175. The principle enunciated by Bowen LJ in the passage I have quoted has survived the realignment of relevant considerations effected by ss.56 - 58 Civil Procedure Act. Later comments by his Lordship about the curative effect of costs orders have not (AON at 189[25] per French CJ; at 211[93] and 213[99] - 214[101]). 60The statutory imperative, and the High Court's explanation of it in AON, may require an approach somewhat different from that explained by Santow J. In particular, his reference to case management considerations not being decisive obviously needs to be reviewed; clearly in some, perhaps many, cases such considerations will be decisive. AON provides a clear example. However, only the plaintiff, of all the parties opposing Zurich's application, argued case management considerations were of other than some, not decisive, relevance. GIO, the party entitled to the benefit of the admission, as it were, did not argue that such considerations were decisive in the present case. 61Too much should not be read into Santow J's observations about admissions "contrary to the actual facts". An application for leave to withdraw will most often be made before the facts have actually been determined following a trial. Sometimes at an interlocutory stage, the true facts will appear with certainty. But usually, the best that can be said is that they are contestable. Consistently with the approach taken to other instances of interlocutory relief, it may be sufficient if it appears from the material presented in support of the application that there is a reasonable prospect that evidence will be lead at the trial which, if accepted, will support a finding which contradicts the admitted fact: Yu v Speirs [2001] NSWCA 373. Naturally, a consideration expressed this way could rarely be decisive. 62But for one matter I would have been persuaded that Zurich ought to be given leave to withdraw its admission. The one matter which stands in the way of that leave is the question of whether Zurich is estopped in the circumstances from denying to GIO that Mr. Papadellis was the direct employee of Zurich's insured as at 10th July 2008. 63I have framed the question that way because to my mind, Rules 17.3 and 17.6 make it clear that an admission formally made under Part 17 UCPR has a restricted effect. 64The restriction arises out of the considerations that the admission is taken to have been made for the purposes of the proceedings only and, more importantly, may not be used in the proceedings except in favour of the party in whose favour it was made: Rule 17.6. The restricted effect of formal admissions under the UCPR is consistent with the effect of s.83 Evidence Act 1995 (NSW). An evidential admission may only be used in respect of the case of a third party if that party consents. 65Mr. Candy made his forensic decision on the basis of the evidential admission made by Mr. Andonakis in the statement dated 15th February 2012, together with the assertions contained in Marsdens letter of 1st March 2012. That was prior to Zurich being identified as the insurer of Jando Steel. In this respect the case is clear: it cannot be said that Mr Candy changed his position in reliance upon anything said or done by Zurich. It may be that Mr. Candy could suffer difficulty if Zurich were allowed to contest the employment issue at the trial, but it cannot be said Mr. Candy would be prejudiced because of an order allowing Zurich to contest that issue at the trial. 66The question is not quite so clear in the case of Mr. Papadellis. Currently he is only a party at the suit of GIO. If I accede to his application under s.73, he will no longer be a party, at least for the time being. Certainly he is not the party in whose favour the admission was made. But it was clearly relayed to him and there is some evidence to suggest that Zurich had that expectation. This inference arises from the manner of expression of Mr. Ford's email of 6:26 a.m. on 8th April 2013. It should also be said, given that Mr. Papadellis is seeking to be dismissed from the proceedings, other than his foregone costs he has suffered no obvious detriment or prejudice by reason of the admission, now sought to be withdrawn. As I have recorded in relation to the arguments advanced on his behalf, costs may be detriment enough notwithstanding the Court's power to cure that prejudice: Giumelli at 120. Despite the great desirability of avoiding a multiplicity of applications, I consider that the question of whether Mr. Papadellis can successfully raise an estoppel against Zurich is best determined if and when the need arises. However, Mr. Loofs arguments persuade me that it would not be futile to grant Mr. Papadellis the relief he seeks under s.73 only because of the legal possibility that Zurich may seek leave to issue its own cross-claim against him. 67Before dealing with the question of whether GIO has changed its position in reliance upon the admission, I will consider other matters relevant to the exercise of my discretion as discussed by Santow J. First, the admission made on 15th February 2013 was clear and distinct. It was accepted and acted upon by GIO, who sought it. It was made in circumstances of formality under the rules of court. For these reasons alone, the application "should not be freely granted". 68Secondly, I consider that the explanation proffered by Mr. Ford is satisfactory. I do not apply a counsel of perfection. I accept his evidence that he relied solely on the statement of Mr. Andonakis of 15th February 2012. Considering that Zurich had been a party since September 2012, and had had notice of the proceedings prior to that date, it can perhaps be said that a factual investigation should have been commissioned earlier or that a close inspection of the subpoenaed documents would have uncovered Mr. Papadellis' 2009 statement, which at the very least would have raised the question about his status. But it is understandable that upon reviewing his own file and bringing to bear his own professional obligations conscientiously, Mr. Ford, on instructions, decided to make the admission on the basis of the information then available to him. In this way Zurich may have made a mistake in the nature of an error of judgment. However, nothing about its conduct, or that of Mr. Ford, suggests any element of overreaching whatsoever. 69Thirdly, it is clear that the admission was made without full investigation even if it was made after consideration and with deliberateness and formality. Normally, this is a strong consideration against permitting the admission to be withdrawn. But as the admission was made on less than reasonably complete material, and without full investigation, I am of the view that the normal rule ought not apply. 70Fourthly, I am not satisfied that the admission is contrary to the actual facts, but I am satisfied that it may be. The question of determining the employment status of an individual is frequently difficult, involving at least a mixed question of fact and law about which minds may differ: see for example Connelly v. Wells (1994) 55 IR 73 at 74 per Gleeson CJ. I interpolate that it was not suggested that for that reason the admission made was not one of fact: cf Dovuro at [69]; and Zuijs v. Wirth Bros. Pty Ltd (1955) 93 CLR 561 at 568-9. 71On the basis of Mr. Andonakis' statement of 9th April 2013, I am satisfied that the admission may be "contrary to the actual facts". That is to say from the material before me there may be a real issue about Mr. Papadellis' employment status as at 10th July 2008. 72Fifthly, I have already pointed out that in the current era a court may be obliged to give decisive weight to considerations of court efficiency, without derogating from the right of a party to have a fair hearing on the merits on the pleadings as they stand, augmented by the product of other procedural steps such as those provided for by Part 17. But as I have said most parties accepted that, particularly because of the relatively short time during which Zurich adhered to the admission, court efficiency considerations were not decisive in the present case. It might be said that Zurich should have taken steps earlier to ascertain the true facts. And given that the drafter of the defence did not feel able to frankly deny the employment of Mr. Papadellis, as opposed to putting the plaintiff to proof about it, it may be argued that the admission should have been withheld until more was known. However those matters may be, I am not satisfied in the circumstances of this case that this consideration ought to be treated as decisive. 73Subject then to the question of GIO's change of position, I would have been satisfied, on balance, that a proper exercise of my discretion called for a grant of leave for Zurich to withdraw its admission.

Is there an estoppel? 74The form of estoppel contended for by GIO is an estoppel by representation. 75There can be no doubt that the admission of 15th February 2013 was also a representation in the sense of a statement made by Zurich to GIO which relates to a past fact i.e. the relationship between Jando Steel and Mr. Papadellis as at 10th July 2008. That the statement that Mr. Papadellis was employed by Jando Steel is one of mixed fact and law does not deprive it of its quality as a representation of fact. In Eaglesfield v. Marquis of Londonderry (1876) 4 Ch D 693 at 702 - 3 Sir George Jessel MR said: There is not a single fact connected with personal status that does not, more or less, involve a question of law ... it is not the lesser fact because the fact involves some knowledge or relation of law. See also Waltons Stores (Interstate) Ltd v. Maher [1988] HCA 7; 164 CLR 387 at 415 per Brennan J; K.R. Handley, Estoppel by Conduct and Election (2006) pp 34 - 36 [2 - 014]). 76The representation was clear and unambiguous. It was communicated to GIO given the latter's invocation of Rule 17.3. 77The central question in the present case is that of causation which Handley (page 75 [5 - 001]) says "comprises of 3 elements: (a) An inducement - the representee must have accepted the truth of the representation; (b) Change of position - the representee must have changed his position in reliance, wholly or in part, on the truth of the representation. His belief in this truth is not enough because he may have acted for other reasons; (c) Detriment - the representee would be materially disadvantaged by his change of position if the representor was allowed to contradict his representation." (Emphasis added.) 78I am persuaded that in making the representation Zurich acted voluntarily. There was no suggestion of compulsion in the present circumstances. I would not regard the Sevic v Roarty (1998) 44 NSWLR 287 line of cases as extending to this area of discourse. Originally Zurich had responded to the notice to admit facts by denying employment. After further discussion with the representatives of GIO and a review of its own file, the admission was freely made. It would be artificial to regard these circumstances as compulsion, even accepting as I do the involvement of the Civil Procedure Act and Rules as providing the context in which the admission was made. 79On the basis of the admission it was entirely reasonable for GIO to seek to extricate itself from its cross-claim against Mr. Papadellis. It may not be possible to equate a s.6 insurer with its insured for all purposes, s.6(4) notwithstanding. Given the possible disadvantage of its position, one would understand if an insurer chose to say to a forensic opponent "you must prove my insured's liability"; and that might have been difficult if the act or omission constituting negligence was that of an independent contractor. The admission of employment in these circumstances makes it understandable that GIO acted upon it. Indeed, as I have already pointed out there seems at least to have been an expectation that, in the light of the admission, steps would be taken which meant Mr. Papadellis was no longer a party. 80In taking steps to remove Mr. Papadellis from the proceedings, GIO, as Holman Webb's letter of 5th April 2013 makes clear, acted on the basis of two considerations. One was Mr. Papadellis' own insistence that he was an employee and the other was the admission. But the representation need not be the only condition necessitating the change of position. 81Zurich has argued that GIO did not change its position in reliance upon the admission at all. To explain this argument I need to set out again part of the letter of the 5th of April 2013: On the basis of your client's admission that at all material times he was an employee of Jando Steel Pty Ltd, and that Jando Steel Pty Ltd/Zurich Australia Insurance Limited acknowledges and accepts this to be the case, we are instructed that our client will agree to dismiss the amended second cross claim against your client with each party bearing their own costs. (Emphasis added) Zurich argued that the emphasised portion of the passage set out above is not a reference to the admission of the 15th of February 2013, but rather a stipulation requiring Zurich to (again) acknowledge its acceptance of that state of affairs. On this basis, the stipulation is a condition required to be satisfied before any agreement created by Mr. Papadellis' acceptance of the offer comes into effect. This was said to have significance at a number of different levels. First, it demonstrated, according to the argument, that there was no reliance upon the admission at all. Secondly, as Zurich purported to withdraw the admission before the consent orders were filed, and they are yet to be filed, GIO was not bound by the consent orders because the condition stipulated in its offer, accepted by Mr. Papadellis, was never satisfied. Accordingly there could be no detriment. 82I reject these arguments. The emphasised portion of the passage and the clause preceding it were not propounded as contractual stipulations or conditions. Rather they were a recitation of the basis on which the offer was put. The syntax is not entirely clear, but the expression of the desire in the following paragraph (set out at [28] above) to file the consent orders very promptly is inconsistent with the idea that the agreement then proposed was to be conditional upon the extraction of a further "acknowledgment and acceptance" from Zurich. 83In express terms, Zurich's admission was "we ... confirm ... John Papadellis was an employee". "Acknowledge and accept" is within the ordinary meaning of "confirm". If the contract consists of the exchange of correspondence on 5th April 2013, in my judgment a reasonable person would have understood that portion of Holman Webb's letter under discussion as doing no more than reciting the basis of the parties' agreement. 84I conclude that by entering into the agreement with Mr. Papadellis, GIO altered its position partly in reliance upon its acceptance of the truth of the admission/representation. Subject to what follows, I am also of the view that the GIO would suffer detriment in the sense of being materially disadvantaged by its change of position if Zurich was allowed to contradict its representation by being granted leave to withdraw the admission. The relevant detriment is that GIO has released Mr. Papadellis from the proceedings and foregone any right it may otherwise have had to contribution from Mr Papadellis. 85The qualification of the finding I have just expressed relates to Mr. Cavanagh's argument concerning s.91 Civil Procedure Act. Mr. Cavanagh argues that s.91 provides an important part of the context in which GIO and Mr. Papadellis made their agreement, if it be such. They are involved in civil litigation. The Civil Procedure Act governs civil litigation. And under s.91 a dismissal does not prevent the moving party from bringing fresh proceedings or claiming the same relief in fresh proceedings. Accordingly, so the argument goes, permitting Zurich to withdraw its admission can give rise to no detriment or disadvantage to GIO that cannot be cured by an appropriate order for costs, which is within the Court's power. 86Section 91(1) creates a general rule only. By express words that general rule is "subject to the terms on which any order for dismissal was made". By way of further exception created by sub section (2), the general rule does not apply to an order for dismissal made "following a determination on the merits". This makes it clear that as a matter of law an order that proceedings be dismissed is capable of being a final disposition of the proceedings, following which fresh proceedings would be stayed or dismissed as an abuse of process. 87When the relevant dismissal is a consent order "the terms on which any order for dismissal is made" will fall to be ascertained, so far as they can be, by reference to the terms of the parties' agreement. In Lee v. Keddie Nicholas J, after observing that the effect of dismissal of proceedings is provided for by s.91, said at [18]: As the right or ability to bring fresh proceedings is qualified, in each case attention must be given to the terms on which the order was made. As Santow J explained in Minero Pty Ltd v Redero Pty Ltd (Supreme Court of New South Wales, 29 July 1998 Unreported; BC9803546 (p 18)) whether a dismissal order precludes the institution of fresh proceedings will depend on the intention of the parties manifested by the order made considered in its forensic context. He said (p 19): That consequence will also depend on determining from that same forensic context precisely what questions were concluded by those earlier proceedings. Thus Spencer Bower, Turner and Handley at 39-40 [Third Edition (1996) at pp 21 - 22] concludes that resort may be had to the material before the court to the extent there is any. This is in order to determine what the parties recognised was the subject matter of their litigation and was fundamental to the judgment or order made: Though consent judgments and orders are decisions and their operative parts binding, it may not be clear what questions were concluded. The court will examine the available evidence to ascertain the matters in dispute. Any issue which the parties recognised was the subject of the litigation and was fundamental to the judgment or order will be conclusively determined. Where, however, there are no such materials neither party is estopped from disputing anything but the actual judgment or order. The proper approach to determining the scope of a consent judgment was stated by Lord Herschell LC: ... a judgment by consent is intended to put a stop to litigation between the parties, just as much as is a judgment which results from the decision of the court after the matter has been fought out to the end. And I think it would be very mischievous if one were not to give a fair and reasonable interpretation to such judgments and were to allow questions that were really involved in the action to be fought over again in a subsequent action. 88Nicholas J also referred to Isaacs v Ocean Accident and Guarantee Corporation Ltd (1958) 58 SR (NSW) 69 at 75 where Street CJ and Roper CJ in Eq. referred to an earlier edition of Res Judicata with approval. From these authorities, it is evident that a court is entitled to look beyond the bare form of the order "in order to ascertain what, if any, decision of particular questions or issues was impliedly consented or submitted to by the party against whom such consent ... judgment or order was made". 89From the analysis of Nicholas J at [25] - [28] it is clear that in ascertaining the terms on which the consent dismissal in the present case was proposed, it is proper to consider the contract made by the parties to the consent orders, applying the "well established principles of construction" of contracts. 90As the High Court said in Toll v. Alphapharm at 179 [40]: The meaning of the terms of a contractual document is to be determined by what a reasonable person would have understood them to mean. 91In construing the contract, Mr. Cavanagh argued that I should have regard to Marsdens letter to Holman Webb of 21st March 2013, where "verdict and judgment" in favour of Mr. Papadellis with no order as to costs was offered. He argued that Holman Webb's counter offer of 5th April 2013 was a rejection reflecting a descending hierarchy of finality. Had the short minutes provided for a judgment in favour of Mr. Papadellis there could be no question about finality of the order. But that form of order had been eschewed for something lesser, a dismissal, not precluding fresh proceedings. 92The parol evidence rule excludes a court from receiving evidence of the prior negotiations of the parties to a contract: e.g. Australian Medic-Care Co. Limited v. Hamilton Pharmaceutical Pty Ltd [2009] FCA 1220; 261 ALR 501 at [118]. I understand Mr. Cavanagh's argument to be that to the extent to which "dismissed" might be ambiguous because s.91 did not establish an inflexible rule, "the true rule" established by Codelfa Construction Pty Ltd v. State Rail Authority of New South Wales [1982] HCA 24; 149 CLR 337 at 352 would permit regard to be had to Marsdens letter of 21st March 2013 as evidence of "objective background facts which were known to both parties". There are authorities that may support such an approach. But as the purity of the "true rule" was recently reiterated in Western Export Services Inc. v. Jireh International Pty Ltd [2011] HCA 45 at [3] - [5], I would reject the argument. As Mason J explained, evidence of prior negotiations "are reflective of ... actual intentions and expectations". Evidence of subjective intent is firmly rejected, except in the case of rectification. The same exclusionary rule is applied in England: Chartbrook Limited v. Persimmon Homes Ltd (2009) 1 AC 1101. I have disregarded the earlier correspondence for this purpose. 93Looking at the terms of the contractual documents objectively, I conclude that the proposed order for dismissal should be understood as being intended by the parties to be a final order. The recitation of what I have described as the basis of the contract was a statement of objective facts known to both parties: Mr. Papadellis maintained that he was an employee, and by its admission, Zurich had acknowledged and accepted (confirmed) this. The dismissal was intended to give legal effect to these facts. If he was an employee, Mr. Papadellis could hardly be personally liable. The element of compromise was that each party would bear its or his own costs. 94The common intention of the parties was that GIO would release Mr. Papadellis from the proceedings. The language of release from the controversy is a strong pointer to the intention of finality. 95I conclude that the parties intended that the entry of an order dismissing the cross-claim was to be final in its legal effect. 96Accordingly, if Zurich is not precluded from resiling from its representation by being given leave to withdraw its admission, GIO would be materially disadvantaged by its change of position in that it would be prevented from seeking contribution from Mr. Papadellis as a joint tortfeasor. 97Whilst other considerations point in the direction of a grant leave, applying Clark v. Wilkinson I refuse leave to Zurich to withdraw its admission. 98I acknowledge that normally the question of whether there is an estoppel preventing a party from withdrawing an admission will be decided after a trial. However, it was necessary to decide this question now to deal with the application for withdrawal of an admission formally made in accordance with the established principles to which I have referred. There seems to be no other practical way of deciding the outcome of the interlocutory application. All the relevant documentary evidence was introduced without objection and to the extent to which relevant facts depended upon evidence of oral communications, no party sought to cross examine any of the deponents of the affidavits which were read. Moreover, the appropriate time for GIO to raise the estoppel was in answer to the application for leave to withdraw the admission.

Mr. Papadellis' section 73 application 99It follows from my findings in relation to the estoppel question that the legal effect of the agreement made between Mr. Papadellis and GIO is that he was to be released from any liability he might otherwise have had to contribute to any damages for which GIO may be adjudged liable to pay in discharge of the statutory charge in due course. On the terms on which they agreed, that result was to be achieved by an order for dismissal having final effect, preventing GIO from bringing fresh proceedings claiming the same relief. 100As I have said, this follows from an objective reading of the language actually used by the parties in making their agreement. Given what I have said about the statement of the basis of their agreement contained in Holman Webb's letter of 5th April 2013, if I am wrong in my interpretation, Mr. Papadellis may be entitled to raise an estoppel by convention should GIO seek to commence fresh contribution proceedings, detriment not being an essential ingredient of an estoppel of that kind. 101I make the following orders: (1)The second defendant's notice of motion filed on 30th April 2013 seeking leave to withdraw its admission made on 15th February 2013 is dismissed. (2)The second defendant to pay the costs of the plaintiff and the first defendant of, and incidental to, the motion as agreed or assessed; (3)Pursuant to s.73 Civil Procedure Act 2005: (a) Order that the amended second cross-claim be dismissed with no order as to costs; (b) Declare that the cross-claimant to the amended second cross-claim, GIO General Limited, is prevented by the agreement made by the exchange of correspondence on 5th April 2013 from bringing fresh proceedings claiming contribution from John Peter Papadellis, (4)GIO General Limited to pay John Peter Papadellis' costs of, and incidental to, the notice of motion filed on 17th April 2013 forthwith after they have been agreed or assessed.

DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 25 June 2013

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