© 2026 Zoe. All rights reserved.
Zoe is a legal information platform. Always consult the Federal Register of Legislation for authoritative text.
[2002] VSC 203
Supreme Court of Victoria
2002-05-29
Byrne J
Original judgment source is linked above.
[2002] VSC 203
PRACTICE and Procedure - claims for damages for negligence and misleading and deceptive conduct - alleged loss comprises liability to third party the subject of incomplete arbitration - whether present loss - whether claims premature - stay or summary judgment - inconsistent allegations - abuse of process - pleadings - sufficiency of particulars
(1) an order pursuant to order 23.01(1)(a) or 23.01(1)(c) of the Supreme Court Rules ("the Rules") that there be judgment for the defendants on all but three claims made in the amended statement of claim; further or alternatively, (2) an order pursuant to order 23.02(a), (c) or (d) of the Rules that six representative claims in the amended statement of claim be struck out.
Three arguments were presented in support of this application:
(a) Subject to three exceptions, Fluor has not yet suffered any actual loss so that the claims are premature. The defendants seek judgment in respect of these claims.
(b) Fluor, in defending the claims of Anaconda in the arbitration, has adopted a position and has or will lead evidence before the arbitrators which is contradictory of the allegations made by it in this proceeding. This proceeding is, therefore, an abuse of process and should be stayed or dismissed.
(c) In any event, the amended statement of claim contains many pleading inadequacies so that the pleading, or parts of it, should be struck out as prejudicial or embarrassing. For this purpose, six of the claims were selected as representative of these pleading deficiencies.
"(1) As a result of... [the deficiency] Fluor is liable to Anaconda for the cost of rectification[11]. (2) As a result of .... [the deficiency] Fluor has become liable to Anaconda for the cost of rectification.[12] (3) [The deficiency] has contributed to Fluor's liability to Anaconda...[13] (4) As a result of ... [the deficiency] Fluor has incurred costs.[14]"
The three claims adopting the fourth formula are the three claims which are exempted from the application for judgment.
"Economic loss may take a variety of forms and, as Gaudron J. noted in Hawkins v. Clayton, the answer to the question when a cause of action for negligence causing economic loss accrues may require consideration of the precise interest infringed by the negligent act or omission. The kind of economic loss which is sustained and the time when it is first sustained depend upon the nature of the interest infringed and, perhaps, the nature of the interference to which it is subjected. With economic loss, as with other forms of damage, there has to be some actual damage. Prospective loss is not enough".[21]
Their Honours then concluded that as a matter of principle, when, as a result of a defendant's negligent misrepresentation, a plaintiff enters into a contract which exposes him or her to contingent loss or liability, "the plaintiff sustains no actual damage until the contingency is fulfilled and the loss becomes actual; until that happens the loss is prospective and may never be incurred",[22] And at page 533 their Honours added this:
"The conclusion which we have reached is reinforced by the general considerations to which we referred earlier. It is unjust and unreasonable to expect the plaintiff to commence proceedings before the contingency is fulfilled. If an action is commenced before that date, it will fail if the events so transpire that it becomes clear that no loss is, or will be, incurred. Moreover, the plaintiff will run the risk that damages will be estimated on a contingency basis, in which event the compensation awarded may not fully compensate the plaintiff for the loss ultimately suffered. These practical consequences which would follow from an adoption of the view for which the appellants contend outweigh the strength of the argument that the principle applicable to the cases in which the plaintiff acquires property (or a chose in action) should be extended to cases where an agreement subjects the plaintiff to a contingent loss. In such cases, it is fair and sensible to say that the plaintiff does not incur loss until the contingency is fulfilled".
"The quantification of the diminution in value of an asset or of a liability incurred or the value of any benefit acquired may not be ascertainable at the time when the burden of the transaction is borne. In that event, the suffering of any loss cannot be said to occur before it is reasonable ascertainable (not before it is ascertained) that the burdens which the plaintiff has borne are greater than the value of the benefits that the plaintiff has acquired or will acquire. In other words, no loss is suffered until it is reasonably ascertainable that, by bearing the burdens, the plaintiff is `worse off than if he had not entered into the transaction'."
"It is not possible to derive from the authorities or from settled principle a simple negative or affirmative answer to the abstract question whether, for the purposes of a limitation provision, the mere incurring of a contingent liability to make a monetary payment in the future suffices to give rise to a cause of action of which loss or damage is a necessary ingredient. Nor, in my view, is it practicable or desirable for the courts to attempt to provide in advance an unqualified affirmative or negative answer to that abstract question. For one thing, the answer may vary according to the facts of the particular case, including the nature and implications of the contingent liability and whether the circumstances were such that, even without the benefit of hindsight, the distinction between contingent and certain loss or damage was illusory rather than real".[24]
(a) specification of a material for use in the autoclaves which was unsuitable, namely titanium grade 1[26]
(b) specification of functional requirements which were not, in the circumstances, achievable[27]
(c) specification of a process design based on data which was inaccurate or otherwise inappropriate[28]
(d) upon review of Fluor's design the Sherritt parties failed to identify and inform Fluor of its design errors.[29]
"Underlying the power that courts have assumed to stay or dismiss proceedings for abuse of process is a policy of preventing waste of judicial resources and their use for purposes unrelated to the determination of genuine disputes. There is, in my opinion, another element to be considered and that is the necessity to maintain confidence in and respect for the authority of the courts. If a party in litigation in this Court makes a formal and public allegation by way of its pleading which is inconsistent with a formal and public allegation in another forum, then such an issue may arise. No doubt most questions of statements made by a party out of court inconsistent with its plea in court are to be resolved as matters of evidence going to credit and not upon an application for summary disposition. In most such cases there will, in any event, be room for debate about the precise extent and significance of the alleged inconsistency which can only be resolved by a consideration of all the evidence and the circumstances surrounding the alleged inconsistent statement".[42]
(a) The claims of the plaintiff other than those mentioned in para 39(b)(i), and (m)(i) be stayed pending further order.
(b) The costs of the defendants of this application be paid by the plaintiff.
I will hear counsel further on the terms of the order and as to costs.
[7] Baldry v Jackson [1976] 2 NSWLR 415.
[8] Van Win Pty Ltd v Eleventh Mirontron Pty Ltd [1986] VicRp 49; [1986] VR 484 at 489-90.
[9] Wardley Australia Ltd v The State of Western Australia [1992] HCA 55; (1992) 175 CLR 514 at 525, Mason CJ, Dawson, Gaudron and McHugh JJ.
[10] Wardley Australia Ltd v The State of Western Australia [1992] HCA 55; (1992) 175 CLR 514 at 527, Mason CJ, Dawson, Gaudron, McHugh JJ.
[11] Sub-paragraphs (a), (b)(ii), (iii), (c), (d), (e), (f), (g), (h), (k), (l), (m)(ii), (n) and (o) of paragraph 39.
[12] Sub-paragraph (j) of paragraph 39.
[13] Sub-paragraph (b)(iv), (c) of paragraph 39.
[14] Sub-paragraph (b)(i), (i) and (m)(i) of paragraph 39.
[16] Dey v Victorian Railways Commissioners [1949] HCA 1; (1949) 78 CLR 62 at 91, per Dixon J; General Steel Industries Inc v Commissioner for Railways (NSW) [1964] HCA 69; (1964) 112 CLR 125 at 129-30, per Barwick CJ.
[17] Arthur Young v Brunswick NL [1998] VSCA 87; [1999] 1 VR 387 at 393, per Brooking JA.
[18] Command Energy Pty Ltd v Fletcher Construction Australia Ltd [2000] VSC 367 at [15] and the cases there referred to.
[21] [1992] HCA 55; (1992) 175 CLR 514 at 527, Mason CJ, Dawson, Gaudron, McHugh JJ (footnotes omitted).
[22] [1992] HCA 55; (1992) 175 CLR 514 at 532, Mason CJ, Dawson, Gaudron, McHugh JJ.
[23] [1992] HCA 55; (1992) 175 CLR 514 at 536.
[24] [1992] HCA 55; (1992) 175 CLR 514 at 540-1 (footnotes omitted).
[25] [1992] HCA 55; (1992) 175 CLR 514 at 556.
[27] Sub-paragraphs (b), (c), (d), (e), (f), (g), (i) and (j).
[28] Sub-paragraphs (h), (k), (l), (o) and (p).
[30] See the passage quoted from Wardley's case in [para 18] above.
[31] Arthur Young v Brunswick NL [1998] VSCA 87; [1999] 1 VR 387 at 394, per Brooking JA.
[32] [1998] VSCA 87; [1999] 1 VR 387 at 394.
[34] See Wickstead v Browne (1992) 30 NSWLR 1 at 5 per Kirby, J.
[36] [1995] VicRp 2; [1995] 1 VR 10 at 14.
[38] [1995] VicRp 2; [1995] 1 VR 10 at 15.
[39] See Rule 13.09 and The Peninsular and Oriental SN Co v Britnell [1892] VicLawRp 115; (1892) 18 VLR 580.
[40] See Laws v Australian Broadcasting Tribunal [1990] HCA 31; (1990) 170 CLR 70.
[42] [1991] FCA 523; (1991) 32 FCR 275 at 279-80.
[43] Practice Note No. 2 of 2001, Williams Supreme Court Practice para [12,365].
[44] Practice Note No. 2 of 2001, cl. 17.
Fluor Australia Pty Ltd
Sherritt International Corporation [2002] VSC 203
(1992) 175 CLR 514
(1949) 78 CLR 62
(1964) 112 CLR 125
(1992) 30 NSWLR 1
(1990) 170 CLR 70
(1991) 32 FCR 275