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[2025] QCA 178
procedural. Appeal dismissed. The parties were to provide any written submissions on costs below and on appeal within seven days. The respondents were to provide a draft amended counterclaim concerning any cl...
The Court of Appeal rejected Cleanaway’s argument that Shamrock’s indemnity automatically covered damage simply because it happened at the work site while the contract was still in force. The damage needed a sufficient connection with the execution of the works. But the Court did not end Cleanaway’s indemnity claim: possible claims about deficient performance had not been properly pleaded or supported, and the relevant facts might be examined at trial. The appeal was therefore dismissed, with directions allowing Cleanaway to propose an amended claim and supporting evidence.
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2,112 words · generated 07/10/2026
Shamrock Civil Engineering Pty Ltd was engaged by Cleanaway under a master agreement, a Statement of Works and a later variation to carry out earthworks and related construction at Cleanaway’s New Chum landfill site. The project involved three components: Cell 3B West, Cell 3B East North and Cell 3B East South. Cell 3B East North was the last component being constructed by Shamrock, and it had not been completed when the weather events occurred [4]-[5].
1 cited instrument linked from this judgment.
Heavy rainfall occurred in February to May 2022. Cleanaway alleged that rainfall and run-off caused water to pond in Cell 3B East North, damaged an interim batter wall and the lining already installed, caused seepage between cells, and produced leachate through interaction with landfill in other cells [24]. Cleanaway said it had incurred almost $31 million draining the area, dealing with odours and treating contaminated water [6].
Cleanaway claimed an indemnity under cl 10(a) of the master agreement. That clause made Shamrock liable for, and required it to indemnify Cleanaway against, specified liabilities and losses concerning property damage “arising out of or in the course of or by reason of the execution of the Works” [11]. Shamrock applied for summary judgment, arguing that the clause did not cover the alleged flooding and other impacts [8], [26]. The primary judge refused that application. Shamrock appealed, challenging the construction of the “in the course of” limb [27], [30].
The Court of Appeal dismissed the appeal. It rejected Cleanaway’s wide argument that the required connection could consist merely of the damage occurring at the Site while the Works remained incomplete. But it did not grant summary judgment. The Court considered that trial-related facts could potentially support a differently framed indemnity claim, and made directions allowing Cleanaway to propose amendments and provide supporting evidence [95]-[99].
The Court treated the agreement as a commercial contract and asked what a reasonable businessperson would understand its terms to mean in context [41]. It identified a problem with the primary judge’s approach: after concluding that “in the course of” did not require a causal nexus, the primary judge treated proximity in time and place as enough. The Court of Appeal considered that the clause still required some connection with the “execution” of the Works [41]-[43].
Doyle JA explained that “execution” refers to carrying out or performing the work, not merely the existence of an obligation to do it [43]. The clause therefore connected the damage to performance of the Works, rather than simply to the period during which the contract operated or the location under Shamrock’s control.
The Court considered decisions using “in the course of” in other settings, including statutory employment compensation cases. Those authorities could be informative, but arose in different legal and policy contexts [44]-[48]. The Court also examined commercial and contractual authorities. In Smith v South Wales Switchgear Ltd, the House of Lords treated “in the course of” as requiring a connection with execution beyond the merely temporal [51]-[52]. Jarrad v Silver Top Taxi Service similarly described the phrase “in the course of his duty” as requiring more than a temporal connection [53]-[54]. Doyle JA cautioned that those cases could not be mechanically transferred to the present contract, but considered them supportive of rejecting the mere-time-and-place approach [55].
On the facts, the rainfall and flooding were widespread and affected areas beyond the Site. Although the Works had not been completed and the Site was part of the affected area, construction activity was not taking place in Cell 3B East North when the relevant weather events occurred. The connection between the flooding and execution of the Works, on Cleanaway’s wide argument, was coincidental [5], [56]. The Court concluded that the clause required a “sufficient association” with execution, but did not say that association always had to be causal [68].
The contract’s other provisions supported caution about treating Shamrock as an unlimited insurer. The Court considered that Shamrock’s acceptance of “all risk in connection with construction of the Works” did not expressly amount to acceptance of every external risk that might damage Cleanaway’s property during the project period [12], [58]. Nor did the stormwater provisions, without more, establish an unqualified assumption of every risk of damage [58]. The Court also noted that the insurance provision concerning property damage referred to damage “occurring in the performance of the Works”, language it considered suggestive of a connection with performance [63].
However, rejecting the wide construction did not resolve every possible construction of cl 10(a). Cleanaway advanced an “obligations construction”, relying on ongoing duties to manage stormwater and protect the Works. It also sought to rely on possible guarantees or failures to meet contractual standards. The Court considered that the obligations construction, as put, still relied on the timing and location of the obligations without explaining the necessary additional connection [73]-[75]. It did not decide the final scope of cl 10(a), because the clause’s proper construction should be determined at trial and might be affected by other questions about the clause’s opening words [70]-[72].
The possible performance-failure cases presented a different issue. Shamrock accepted that a properly pleaded and evidentially supported case that its failure to perform caused or materially contributed to the damage could provide an arguable basis for indemnity [76]. But the case had not been adequately pleaded or supported: the material did not identify what steps Shamrock should have taken, what it failed to do, or how that failure related to the damage [78]-[90].
The judgment addressed the meaning of one contractual phrase in the context of this particular agreement. It did not purport to establish a universal definition of “in the course of” for all contracts. It drew on cases from employment, statutory compensation and other contractual settings, while expressly warning that their contexts differed [48], [55].
Before the appeal, the primary judge had treated the “in the course of” limb as not requiring a causal connection and as satisfied by proximity in time and place [29]. The Court of Appeal rejected that as an adequate reading of this clause. The judgment’s central statement is that mere coincidence of time and place is insufficient, and damage must have a sufficient association with execution of the Works [55], [68].
The Court did not equate “sufficient association” with causation in every case. Its formulation expressly allows for a connection that is not causal, while requiring something beyond the coincidence of place and time [68]. The Court did not define a complete test for identifying every connection that would be sufficient. It explained that the answer depends on construction of the particular contract and its context.
The judgment also illustrates the procedural distinction between rejecting a pleaded basis and ending a claim altogether. The wide construction did not have a real prospect of success on the material, but the Court considered that facts to be explored in a trial of possible damages claims might support a differently framed indemnity claim [89]-[98]. The refusal of summary judgment was therefore not a finding that Cleanaway had established an entitlement under cl 10(a).
At [43], Doyle JA explained that “execution” of works means carrying them out. In plain English, the clause is concerned with a relationship to performance, rather than just the existence of a contract or the contractor’s obligation to do work.
At [55], the Court said that “the mere coincidental nexus of time and place” was not enough. Put simply, damage does not fall within the indemnity just because it happens at the project location while the project is still underway.
At [56], the Court applied that reasoning to the flooding. Rain and flooding affected more than the work site, and the fact that the events happened while the Works remained incomplete did not itself connect them to execution of the Works.
At [68], the Court stated that damage must have a “sufficient association with the execution of the Works”, “whether or not” it was caused by that execution. This is the judgment’s most useful summary of the connection it required. It rejects pure coincidence but does not establish that causation is invariably essential.
At [76], the Court recorded Shamrock’s acceptance that a properly pleaded and supported case of damage caused or materially contributed to by a failure to perform could provide an arguable basis for indemnity. The important qualification is that the failure and its relationship to the damage needed a factual and evidentiary foundation.
At [95], the Court explained why it did not grant summary judgment: doing so might impair Cleanaway’s ability to advance an indemnity claim on a new factual foundation. In plain English, the Court considered that the potential claim should not be shut out before the relevant performance issues were examined, even though the argument based only on time and place failed.
The judgment is most directly relevant where a contract indemnifies one party for property damage arising “in the course of” executing works, and the alleged damage occurs at the work site during the contract period but not while work is actively being carried out. It signals that those circumstances alone do not establish the required connection [42]-[43], [55]-[56].
The decision also matters where the claimed damage is caused by a wider event, such as widespread rainfall, that affects the work site along with surrounding areas. The Court considered it significant that the rain and flooding were not confined to the Site and that the alleged damage was not linked, on the wide construction, to performance of the Works [56].
A different analysis may arise where the claim identifies a particular act or omission in performing the work and alleges that it caused or materially contributed to the damage. The Court considered such a claim potentially arguable if properly pleaded and supported by evidence [76], [89]. The decision does not establish that every alleged failure will satisfy the clause; it leaves the ultimate construction and factual questions to trial where appropriate.
The decision is also relevant in summary-judgment applications concerning counterclaims. It shows that a court may reject one basis for a claim yet refuse summary judgment if other potential bases may emerge from facts likely to be tried, particularly where judgment could impair those claims [87]-[98].
The judgment supplied here was delivered on 23 September 2025. It contains no subsequent judicial decisions applying or distinguishing Shamrock Civil Engineering Pty Ltd v Cleanaway Solid Waste Pty Ltd. Accordingly, later treatment cannot be assessed from the provided material.
The judgment itself relied on earlier authorities, including Comcare v PVYW, Smith v South Wales Switchgear Ltd, Jarrad v Silver Top Taxi Service, Willmott v McLeay and Aklia Holdings Pty Ltd v The Carter Group Pty Ltd (in liq). It used those decisions for particular propositions about connection, contractual interpretation and summary judgment; their discussion does not establish how courts have treated Shamrock after its delivery.
The Court did not finally determine the proper construction of cl 10(a). It expressly said the scope and operation of the clause should be determined at trial, and noted that interpretation might be affected by the meaning of the clause’s opening words concerning liability “in respect of” property damage [70]-[72].
The judgment does not identify a comprehensive test for when an association with execution is “sufficient” but not causal. It rejects mere coincidence and supplies examples and contextual considerations, but leaves the boundary to be worked out through construction of the contract and the facts [55]-[68].
The Court did not decide whether the stormwater and protection provisions imposed a guarantee of effective protection, or instead allocated responsibilities without guaranteeing an outcome. It noted that the relevant provisions had not been shown in sufficient detail to resolve the issue and that Variation 59 could be read as allocating tasks rather than promising a guaranteed result [81]-[82].
Nor did the Court decide whether Shamrock failed to meet the contractual standards in cl 7.1, or whether any failure caused or contributed to the flooding-related damage. The material before the Court did not identify the steps allegedly required, the relevant failures, or their causal connection to the claimed loss [89]-[90].
Finally, the Court left open whether Cleanaway could amend its counterclaim and whether any proposed amendment would survive opposition or a further summary-judgment application. The orders expressly preserve Shamrock’s ability to oppose amendments and to bring another summary-judgment application [98].
This is general legal information, not legal advice. Zoe can make mistakes. Before acting on this, relying on it, or using any draft, have a qualified Australian lawyer check it.
Source: Queensland Judgments (Supreme Court Library Queensland) (www.queenslandjudgments.com.au). Converted to plain text by ZoeLaw. Not the official version.
SUPREME COURT OF QUEENSLAND
CITATION: Shamrock Civil Engineering Pty Ltd v Cleanaway Solid Waste Pty Ltd [2025] QCA 178
PARTIES: SHAMROCK CIVIL ENGINEERING PTY LTD / ABN 68 066 655 856 / (appellant) / v / CLEANAWAY SOLID WASTE PTY LTD / ACN 120 175 635 / (first respondent) / CLEANAWAY PTY LTD / ACN 000 164 938 / (second respondent)
FILE NO/S: Appeal No 97 of 2025 / SC No 6807 of 2023
DIVISION: Court of Appeal
PROCEEDING: General Civil Appeal
ORIGINATING COURT: Supreme Court at Brisbane – [2024] QSC 313 (Freeburn J)
DELIVERED ON: 23 September 2025
DELIVERED AT: Brisbane
HEARING DATE: 15 August 2025
JUDGES: Bond, Brown and Doyle JJA
ORDERS: The appeal is dismissed. The parties are to provide any written submissions as to the costs below and of the appeal within 7 days. The respondents are - to provide a draft of an amended counterclaim making such amendments as it may be advised concerning a claim or claims for the indemnity under cl 10(a) of the agreement together with supporting affidavit material deposing to the matters of fact or opinion sufficient to plead its claim or claims for indemnity under cl 10(a) of the agreement by an agreed date or failing agreement as may be directed by the applications court;promptly thereafter to list the proceedings for directions in the applications court concerning the making of such amendments and the leave if any required to do so.
CATCHWORDS: CONTRACTS – GENERAL CONTRACTUAL PRINCIPLES – CONSTRUCTION AND INTERPRETATION OF CONTRACTS – where the respondents own and operate a waste disposal site – where pursuant to the Contract the respondents engaged the appellant to undertake earthworks and other related works at the site which progressed in three components – where the last component, Cell 3B East North, had not yet been completed – where, during a period in which no activity was occurring in the area, Cell 3B East North was affected by heavy rainfall leading to flooding, run-off seepage into the cell and the production of leachate – where the respondents alleged they incurred almost $31m to drain the area – where the respondents asserted a right of indemnity in respect of the whole or part of those sums pursuant to cl 10(a) of the Contract whereby the appellant agreed to be liable for and indemnify the respondents against any “loss, destruction or damage to any property, real or personal… arising out of or in the course of or by reason of the execution of the Works” – where the appellant contends that the primary judge erred in his construction of cl 10(a) – where the parties advance competing constructions of the meaning of the expression “arising out of or in the course of or by reason of” – whether a mere coincidental nexus of time and place is sufficient to bring the damage suffered within the ambit of the expression “arising out of or in the course of the execution” of the Works – whether the damage arose out of or in the course of or by reason of the execution of the Works / PROCEDURE – CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS – ENDING PROCEEDINGS EARLY – SUMMARY DISPOSAL – where the respondents claimed $31m to drain the area of Cell 3B East North following the weather events – where the appellant applied for summary judgment on the basis that cl 10(a) of the Contract did not provide the pleaded indemnity in respect of the flooding and other impacts – where the primary judge refused to enter summary judgment in favour of the appellant – where the appellant contended below that cl 10(a) could not apply because on its proper construction no “loss, destruction or damage to any property, real or personal” had occurred and even if it had, it could not be described as “arising out of or in the course of or by reason of the execution of the Works” – where the primary judge found that both points were sufficiently arguable – where the appellant contends that the second of these points is not arguable – where the appellant contends that summary judgment ought to have been granted because, absent some identified and pleaded nexus between the course of the execution of the Works and the event giving rise to the damage claimed, the indemnity under cl 10 is not engaged – whether the respondents have no real prospect of succeeding on its claim – whether there is no need for a trial of the claim – whether in any case summary judgment should be refused / APPEAL AND NEW TRIAL – APPEAL – GENERAL PRINCIPLES – QUESTIONS NOT RAISED ON PLEADINGS OR IN ARGUMENT BELOW – where the respondents did not urge before the primary judge that the terms of the Contract contained a promise by the appellant in materially unqualified terms to guarantee that effective stormwater management or works protection measures were implemented – where the respondents contend on appeal that the appellant guaranteed the protection of works, including implicitly at least against the impacts on Cell 3B East North – where the respondents contend, alternatively, the damage was caused in part at least by the appellant’s failures to provide its required Work to the standards required by cl 7.1 – where neither these contentions nor any material facts alleging a failure to perform causing or contributing to the damage have been pleaded – where the as yet unpleaded contentions arise out of facts likely to otherwise be the subject of the trial – whether the respondents have a real prospect of succeeding on this part of its claim – whether the respondents should be given further opportunities to set out its case / Uniform Civil Procedure Rules 1999 (Qld), r 293 / Aklia Holdings Pty Ltd v The Carter Group Pty Ltd (in liq) [2017] QSC 75, applied / Beaufort Developments (NI) Ltd v Gilbert-Ash NI Ltd [1999] 1 AC 266; [1998] UKHL 19, cited / Comcare v PVYW (2013) 250 CLR 246; [2013] HCA 41, applied / FKP Commercial Developments Pty Ltd v Zurich Australian Insurance Limited (No 2) [2023] FCA 582, cited / Haggarty v Wood (No 2) [2015] QSC 244, explained / Jarrad v Silver Top Taxi Service (1980) 29 ALR 53; [1980] FCA 44, applied / Kavanagh v The Commonwealth (1960) 103 CLR 547; [1960] HCA 25, cited / Mango Boulevard Pty Ltd v Mio Art Pty Ltd [2016] QCA 148, cited / Mundy v Lambert Investments Pty Ltd (1990) 19 NSWLR 577, cited / Richardson v Buckinghamshire County Council [1971] 1 Lloyd’s Rep 533, cited / Santos Limited v Fluor Australia Pty Ltd [2021] QCA 204, cited / SMEC Australia Pty Ltd v Valentine Falls Estate Pty Ltd [2011] WASCA 138, cited / Smith v South Wales Switchgear Ltd [1978] 1 All ER 18; [1977] UKHL 7, applied / Willmott v McLeay [2013] QCA 84, applied / Zurich Australian Insurance Ltd v FKP Commercial Developments Pty Ltd (2023) 415 ALR 163; [2023] FCAFC 188, cited
COUNSEL: D B O'Sullivan KC, with B A Reading, for the appellant / D P O'Brien KC, with S M McLeod, for the respondents
SOLICITORS: McCullough Robertson Lawyers for the appellant / Gadens Lawyers for the respondents
BOND JA: I agree with the reasons for judgment of Doyle JA and with the orders proposed by his Honour.
BROWN JA: I agree with the reasons and proposed orders of Doyle JA.
DOYLE JA: This is an appeal from the primary judge’s refusal to enter summary judgment in favour of the appellant (Shamrock) in respect of certain relief claimed against it in the second further amended defence and counterclaim of the first and second respondents (Cleanaway).
Cleanaway owns and operates a waste disposal site at New Chum, Ipswich. Pursuant to a master agreement and some associated documents to which reference will shortly be made, Cleanaway engaged Shamrock to undertake earthworks and other related works at the Site in connection with the New Chum Cell 3B1 construction works. That work progressed in three components, called Cell 3B West, Cell 3B East North and Cell 3B East South. The last of them being constructed by Shamrock was Cell 3B East North; the other Cell components had been completed.
Before Cell 3B East North was completed, though not on dates when activity was being conducted to construct Cell 3B East North, the area was affected by heavy rainfall leading to flooding, including of Cell 3B East North by rainfall and run-off, seepage into that Cell and the production of leachate from the interaction of water in that Cell with the landfill in other Cells.
Cleanaway alleges it has incurred almost $31m to drain the area of Cell 3B East North, deal with the noxious odours which the stagnant water had produced and treat contaminated water arising from that leachate.
By its counterclaim, it asserts a right of indemnity in respect of the whole of those sums or alternately part of them pursuant to cl 10(a) of the master agreement.
Shamrock applied for summary judgment on the basis that clause 10(a) of the master agreement did not provide the pleaded indemnity in respect of the damage from that flooding and other impacts.
The Contractual Arrangements
The initial contractual document between the parties is a master agreement. The agreement is variously (including internally) referred to as a deed or agreement. Nothing materially turns on this and for convenience it will be referred to as an agreement save when a quoted passage uses the descriptor ‘deed’.
It was made in November 2015. It provides for Shamrock (the Contractor) to perform work in accordance with that agreement and the terms of a “Statement of Works” to be issued by Cleanaway (the Principal). The term of the agreement was: to commence upon the execution date: cl 2.1(a); and continue for at least two years with facility for it to be extended by agreement between the parties: cls 2.1(a) and (b).
The principal provision relied upon by Cleanaway to claim its indemnity is cl 10 which provides as follows:
“The Contractor shall be liable for and shall indemnify the Principal against:
any liability, loss, claim or proceeding whatsoever in respect of loss, destruction or damage to any property, real or personal, arising out of or in the course of or by reason of the execution of the Works; and
any liability, loss, claim or proceeding whatsoever arising at common law or under statute in respect of personal injury or the death of any person whomsoever arising out of or in the course of or by reason of the execution of the Works,
but the Contractor's liability under this Clause shall be reduced proportionately to the extent that an act or omission of the Principal, or its employees or agents contributed to the loss, damage, death or injury. For the purposes of this Clause the Project Manager, any quantity surveyor or other consultant shall be an agent of the Principal but tenants, their visitors, invitees, and contractors shall not be agents of the Principal.
This clause shall not apply to:
the extent that the liability of the Contractor is limited by another provision of this Deed;
claims in respect of the right of the Principal to construct the Works on the Site; and
damage which is the unavoidable result of the construction of the Works in accordance with this Deed.”
“The Contractor shall subject to the terms of this Deed undertake, construct and as appropriate commission the Works the subject of a Statement of Work given by the Principal to the Contractor pursuant to and in accordance with this Deed. The Contractor acknowledges that in accordance with this Deed the Contractor has accepted all risk in connection with construction of the Works and shall ensure the Works are completed by the Date for Practical Completion.”
To carry out its obligations Shamrock –was to be given access to the Site sufficient for Shamrock’s purposes: cl 4.2.was to have control of the Site: cls 21.3 and 21.4.
The Site is the land to be identified in the Statement of Works: cl 1.1.
Clause 7.1 obliged Shamrock to execute and complete the Works: (i) in accordance with the agreement (cl 7.1(a)); (ii) in a proper and workmanlike manner (cl 7.1(b)); and (iii) adopting best practices of the respective trades carrying out the Works and meeting Australian Standards (cls 7.1(e) and (f)).
By clause 11.2 Shamrock was obliged to effect certain insurance. It provides (relevantly) –
“The Contractor must take out or cause to be taken out before commencing any work on the Site and must maintain or caused to be maintained for the term of the Agreement, and for a 7 year period following Practical Completion, the following policies of insurance:
Contract Works insurance in respect of any loss or damage to the Works, materials or things stored on or off the Site for the Works, consultants’ fees and the cost of any demolition and removal of debris or materials from the Site.
…
Combined Public and Products Liability Insurance for the Works in the joint names of all contractors and Subcontractors, all consultants and sub-consultants in respect of liability at law for damages in respect of the death of or injury to any person and damage to property occurring in the performance of the Works, with a limit as specified in the Annexure A of a Statement of Work per claim which is to be reinstated if a claim is made and subject to deductibles acceptable to the Principal…”
“Establishment, operation and maintenance of environmental controls including erosion and sediment control measures, storm water management and a float switch pump for storm events.”
“The Contractor must ensure that all stormwater management actions as required by the Design Drawings, this [Statement of Works], the agreed Stormwater Management Plan Rev l or other actions reasonably required have been undertaken to sufficiently protect the works area have been completed to the satisfaction of the Principal. This includes, but is not limited to, upgradient diversion drains, set up of a pump system with a float switch. All stormwater mitigation and management instated by the Contractor must be maintained for the entirety of the project.”
Under the heading ‘Principal Contractor’ Shamrock is appointed Principal Contractor for these Works and this is followed by the identification of responsibilities assigned to Principal and Contractor. The Principal is to be responsible for design documentation and both parties addressed this Court on the basis that this was the role of Cleanaway (at least other than for any temporary works).
Clause 7 of the Statement of Works is headed ‘Assumptions and Qualifications’. By subclause 7(b) it is provided:
“b. Inclement Weather
…
The Contractor takes full responsibility for all Cell 3B1 work fronts and phasing of these works. The Contractor will manage the scheduling of the works to consider weather sensitive components of the works and deems themselves to be wholly competent to manage all Inclement Weather events and acknowledges they will not be compensated for delays damage or destruction of the works or client supplied materials that are affected by Inclement Weather or the effects there of.
…
For the purpose of this clause, ‘Inclement Weather’ shall mean the existence of rain, wind or any weather events (including [but] not limited to hail, snow, cold, high wind, severe dust storm, extreme high temperature or the like or any combination thereof) by virtue of which it is either not reasonable or not safe for employees exposed thereto to continue working whilst the same prevail.”
“● SCE will undertake necessary earthworks to divert the major flow of stormwater currently entering the cell from the south.
● SCE have made some allowance for stormwater entering the cell from the North, down the existing haul road. Agreed further works to achieve the approved stormwater management sketch from the north will be carried out as a variation.
● SCE have made no allowance for stormwater entering the cell from the West on the basis that CWY have indicated that sufficient capacity will be maintained behind the existing Cell 3A containment bund.”
“The qualifications provided within Contractor's Variation Request 59 are approved and accepted with the following notes:
…
–Qualification no 3: The Principal is responsible for groundwater management. The Contractor is responsible for all stormwater management and protection of works in any rain or storm event excluding 1) Runoff from basin 2 spillway, 2) Run off from RRA onto the northern access ramp, 3) Leachate over-flow from the neighbouring Cells due to rainfall events.
…”
The Flooding and its Impact
There were significant periods of rainfall in February to May 2022 with heavy falls on 25, 26 and 27 February and again between 11 and 13 May 2022. That rainfall collectively is said to have produced –Ponding in Cell 3B East North including from runoff from other parts of the New Chum Site;Damage to an interim batter wall between Cell 3B East North and Cell 3B West;Damage to the lining already placed in Cell 3B East North;Seepage between various cells; andThe production of leachate from the interaction between ponded water in Cell 3B East North and landfill in Cell 3B West, Cell 3B East South and Cell 2B.
Cleanaway relied on an affidavit of its solicitor, Simon Theodore which deposed to the opinion expressed by the Cleanaway Head of Engineering – Landfill and Remediation. His opinion was to the effect that stormwater would most likely have flowed into Cell 3B East North from other parts of the New Chum Site, some of which were and some of which were not those falling within the scope of the ‘exclusions’ (the excluded sources) identified in Qualification no 3 to Variation 59. The extent of the respective contributions could not be ascertained without more analysis.
The Judgment Below
At first instance, Shamrock contended that cl 10(a) of the agreement could not apply for two reasons: first that on its proper construction there had not occurred any “loss, destruction or damage to any property, real or personal”; and second, that if such loss, destruction or damage occurred it was not able to be described as “arising out of or in the course of or by reason of the execution of the Works”.
The primary judge found that both points were sufficiently arguable to warrant the refusal of the application for summary judgment. Only the second of these is the subject of the appeal.
Shamrock accepted (for the purposes of the application for summary judgment and on this appeal) that it was arguable that the requirement of the opening words of cl 10 were satisfied, namely that what was in issue was something which was a “liability, loss, claim or proceeding whatsoever in respect of loss, destruction or damage to any property” (being Cleanaway’s property).
The primary judge turned to consider the second of the above issues and at [34]-[36] stated:
“[34] The expression ‘arising out of or in the course of or by reason of the execution of the Works’ has three components. The damage can arise:
out of the execution of the work; or
in the course of the execution of the work; or
by reason of the execution of the work.
[35] Component (c) certainly involves what could be described as a causal nexus between the damage and the execution of the work. Component (a) requires that the damage arise from the actual execution of the work. Component (b) is the least stringent of the alternatives. It merely requires that the damage arise during the course of the work. Understandably, the argument focussed on component (b).
[36] The ordinary and literal meaning of component (b) does not require a causal nexus with the execution of the works. All it requires is that the damage arise in the course of the work. As counsel for Cleanaway described it, the requirement is for some proximity to the work in time and place.”
The reasoning in [36] is the focus of Shamrock’s contentions on the appeal. In substance it contends that summary judgment ought to have been granted because, absent some identified and pleaded nexus between the ‘course of the execution of the Works’ and the event giving rise to the damage claimed, beyond the mere proximity of place and time identified by the primary judge, the indemnity under cl 10 is not engaged.
Both parties have approached the reading of cl 10(a) of the agreement on the basis that the word ‘arising’ is only to be read in conjunction with the words ‘out of’, and that the phrases ‘in the course of’ and ‘by reason of’ are not read as qualified by the word ‘arising’. That is not a grammatically attractive approach. Rather the clause involves consideration of whether the damage can be said to be something arising out of, or arising in the course of or arising by reason of the execution of the Works. That is the way the primary judge expressed himself in paragraph [36] of his Honour’s reasons.
The Tests
The primary judge identified, at [6] of his reasons, that before entering summary judgment, the Court must be satisfied of the two matters described in UCPR rule 293, namely: that Cleanaway has no real prospect of succeeding on its claim; and that there was no need for a trial of the claim. Neither party contended for any different test. It should be added that even if both of these matters were resolved in favour of Shamrock, the rule does not dictate that summary judgment must be given. Rather it states the court may do so; there being a discretion whether or not to give summary judgment: Willmott v McLeay [2013] QCA 84 [17] per Holmes JA (with whom Fraser and White JJA agreed).
As well, the primary judge when considering the issue of construction of the Contract identified the leading modern statement on the interpretation of commercial contracts to be the statement in Mount Bruce Mining Pty Ltd v Wright Prospecting Pty Ltd (2015) 256 CLR 104 at [46]-[49]. Again, whilst there is debate as to whether that was correctly applied by the primary judge, neither party contends for a different approach to construction.
The Competing Contentions
The competing contentions of the parties can be summarised broadly as follows.
Shamrock contends the primary judge was wrong in his construction of cl 10(a).It contends that the indemnity conferred relevantly requires some pleaded (and arguable) nexus between the loss or damage and the course of execution of the Works, and that the circumstance of the accepted proximity of place and time identified by the primary judge is not sufficient.Further Shamrock contends that to construe the indemnity clause as not involving a requirement for some additional nexus does not reflect commercial sense (and it was put that it would be commercially absurd).The primary judge found there was nothing uncommercial in the construction he adopted. In particular having regard to the context, his Honour concluded that the parties would expect the insurance effected by Shamrock pursuant to cl 11.2 would insure it against the liability under cl 10(a). Shamrock urges the primary judge was in error in particular in his consideration of the scope of the insurance to be effected under cl 11.2.
Cleanaway has advanced or seeks to advance in effect three broad approaches to the construction of cl 10(a) which, it submits, show why it has real prospects of succeeding on its claim or otherwise there is a need for a trial of the claim.
First, it adopts the construction of the primary judge that there were real prospects of the case succeeding on the basis that, in cl 10(a), the required nexus is established by the mere relationship of time and place. For convenience this is referred to in these reasons as the ‘wide construction’.It supports this construction by reference to the language used and by considering various provisions of the arrangements between the parties which show that Shamrock had undertaken all risks, even if not controllable by it by the use of skill and care.It points out that the construction adopted by the primary judge is more nuanced than the stark approach Shamrock contends it to be. The construction recognises that cl 10 itself has exclusions which must be taken into account in addition to the connection between the Work and damage constituted by the coincidence of time and place. I do not read the primary judge’s reasons as not embracing this nuanced approach. His Honour’s reasoning does not fail to recognise the existing relevance of those exclusions.
Second, it suggests that there is a real prospect of succeeding on its claim on the basis that some additional (and sufficient) nexus is established by correctly identifying the Works as involving a continuing obligation on Shamrock to undertake stormwater management and protection of the Works pursuant to a number of different provisions of the arrangements between the parties. This proposition is raised in its Notice of Contention, and also by a third amended counterclaim which it filed after the application for summary judgment was dismissed. Properly, no objection is taken to Cleanaway making reference to this pleading on the appeal. For convenience this construction will be referred to as ‘the obligations construction’.
For convenience these will be referred to as the ‘default nexus construction’.
The Wide Construction
This is a commercial contract, and it is necessary to ask what a reasonable businessperson would have understood the terms to mean (in their context). The difficulty with the primary judge’s approach is that, having identified that what he referred to as component (b) did not require a causal nexus between the damage and the course of the execution of the Works, his Honour concluded that the mere coincidence of time and place was sufficient without considering whether the language requires some connection beyond that. There are powerful reasons for not adopting the wide construction.
First, each of the three components of cl 10 identified by the primary judge requires that there be some relationship between the damage and the ‘execution’ of the Works. There is no doubt a degree of overlap between each of the components because of the imprecision of the scope of the expressions arising ‘out of’ or ‘by reason of’ or ‘in the course of’. But whatever the scope for overlap or divergence in the operation of these words, the language employed by the parties requires that the connection must be that the damage arises out of, by reason of, or in the course of, the thing which is described as execution of the Works. An occurrence which produces damage may have a connection with the Works and occur during the period when the Works are undertaken or ought to be undertaken, but that is not the language employed by the parties. They referred to that connection being with the ‘execution’ of the Works.
The word ‘execution’ when referring to works means the activity of performance of the works.1 It is not language which is apt to refer to merely the existence of an obligation to do something as distinct from its performance. That is not to say that, for example, damage resulting from a fire caused by equipment left on a site over a period of break cannot be said to be something arising in the course of execution of the works, but that is likely to be so if the equipment was left there in the course of performance of the works. Any such kind of required nexus with the execution of the Works is missing on the wide construction.
Often in the different context of statutory schemes for compensation of injured employees, expressions which include the language ‘in the course of’ the employment (or similar), have been given an operation which has not demanded a causal nexus between the cause of the injury and performance of the employment activity.
So, for example, in Kavanagh v The Commonwealth (1960) 103 CLR 547 an unexplained injury occurred to the employee unrelated to any performance of his work but occurring at his place of employment and during his work hours. It was held to have been an accident arising out of or in the course of his employment and accordingly his widow was entitled to certain statutory compensation. At 556 Dixon CJ stated –
“Few, if any, expressions had received so much judicial consideration and in so many jurisdictions as had the words ‘personal injury by accident arising out of and in the course of the employment’. Repeatedly the contrast had been made between the effect of the words ‘out of’ and the effect of the words ‘in the course of’. Whatever language was chosen to institute the contrast the first expression was treated as requiring a causal connexion between the employment or its incidents and the second as requiring that the pursuit of the employment should be an accompanying condition. I have seen nothing to suggest that within the expression ‘in the course of the employment’ there had been discovered any element of causal relation with the employment and its incidents. To prescribe that element was considered to be the work of the words’ arising out of ‘. It was thus natural for this Court to say … that the words ‘arising in the course of the employment’ describe a condition which is satisfied if the accident happens while the workman is doing something in the exercise of his functions although it is no more than an adjunct to or an incident of his service.”
Other members of the Court expressed like views: Fullagar J at 558 and Menzies J at 570. Similar statements of approach are found in many subsequent decisions: Commonwealth v Oliver (1962) 107 CLR 353 at 355 (Dixon CJ), 360 (Menzies J), 366 (Owen J); Hatzimanolis v ANI Corporation Ltd (1992) 173 CLR 473 at 479 (Mason CJ, Deane, Dawson and McHugh JJ); Comcare v PVYW (2013) 250 CLR 246 at 280 [94] (Bell J).
But even in such a statutory context, what is required is “a connection between the injury, the circumstances in which it occurred and the employment itself. It achieves that connection by the fact of the employer’s inducement or encouragement”: Comcare v PVYW per French CJ, Hayne, Crennan and Kiefel JJ at [36]. As the factual setting for and the reasoning in Comcare v PVYW demonstrates, mere association of time and place will not be sufficient where, as in that case, the activity engaged in which led to the injury was not one the employer encouraged the employee to engage in: per French CJ, Hayne, Crennan and Kiefel JJ at [50].
Of course, these cases, and the discussion of the expressions used, arose in the context of construing legislation designed to confer benefits on employees who are injured and meet a social policy not reflected in individual contracts of the kind under consideration here: Samways v Workcover Queensland [2010] QSC 127 at [71]. They are instructive but not directly relevant.
Even in commercial contexts authorities can readily be found which affirm that the expression ‘in the course of’ is typically employed so as to contemplate a connecting factor which does not require that the damage be caused by the event in the course of which it occurs: FKP Commercial Developments Pty Ltd v Zurich Australian Insurance Limited (No 2) [2023] FCA 582 at [16] (and on appeal at [2023] FCAFC 188); Mundy v Lambert Investments Pty Ltd (1990) 19 NSWLR 577 at 579-580. These discussions, while generally disavowing that a causal relationship is needed, often fall short of identifying what relationship is sufficient to satisfy the connecting factor.
Of more assistance is the House of Lords decision in Smith v South Wales Switchgear Ltd [1978] 1 All ER 18. The dispute in that case arose out of an equipment overhaul contract between the supplier and the respondent where an employee of the supplier engaged in the overhaul activities was injured as a result of the respondent’s own negligence. The issue presently of concern was whether under cl 23 of that contract the supplier had to indemnify the respondent against its (the respondent’s own) liability to the employee. The indemnity clause provided (bold added):
“23. In the event of [the] order involving the carrying out of work by the Supplier and its sub-contractors on land and/or premises of the [respondents], the Supplier will keep the [respondents] indemnified against … (b) Any liability, loss, claim or proceedings whatsoever under Statute or Common Law (i) in respect of personal injury to, or death of, any person whomsoever, (ii) in respect of any injury or damage whatsoever to any property, real or personal, arising out of or in the course of … the execution of [the order for the work].”
“Moreover, the indemnity is, in the final words of para (b), in respect of injuries etc ‘arising out of or in the course of or caused by the execution of this order’ and the only parties who will be concerned in ‘execution’ of the order are the appellants and any sub-contractors. ‘In the course of’ must convey some connection with execution of the order beyond the merely temporal; and thus they appropriately apply to activities of the party who is carrying out work under the order.”
“The words ‘out of or in the course of’ go together with ‘arising’. What then, is the extent of the limit so set? In my opinion the words ‘execution of this order’ mean ‘the doing by the suppliers of the contractual work’. … It was accepted by counsel for [the respondent] that the significance of ‘in the course of’ could not reasonably be purely temporal, otherwise the suppliers would have to indemnify the purchasers against some negligent act of the latter done in a part of the factory where no contractual work was going on, or even in some other factory. He submitted that ‘in the course of’ meant ‘connected with’. Accepting that as sound, I am of opinion that a liability incurred by the [respondent] by reason of a breach by them of their common law duty of care towards a servant of the suppliers who is in the factory for the purpose of the contractual work is not, in a sufficiently proximate sense, connected with the doing by the suppliers of the contractual work. Any connection between the liability and the doing of the contractual work is purely fortuitous, resting merely on the circumstance that the doing of the contractual work led to the presence in the factory of the suppliers’ servant and thus exposed him to the possibility of injury through the purchasers’ negligence.”
A similar approach is found in Jarrad v Silver Top Taxi Service (1980) 29 ALR 533. An award permitted petrol station owners to deduct from the employees’ pay cash shortages incurred ‘in the course of the employees’ duties’. The employees’ union representative brought proceedings for the imposition of penalties on the employers for underpayment of their workers and the scope of the entitlement to make deductions was discussed.
The Full Court of the Federal Court (Sweeney, Evatt and St John JJ) at 537-538 stated –
“The phrase ‘in the course of his duty’ involves more than a temporal connection but requires the shortage to have arisen by reason of some action or actions which the employee was employed to perform and either did not perform or did not perform properly.
…
During argument instances were discussed of possible liability of an attendant in the case of robbery at the petrol station, but it could not, in our view, be said that the robbery caused a shortage to be incurred in the course of his duty.”
The observations in all of these cases must be treated with caution given that the process of construction of cl 10(a) in the present case cannot be assimilated with the context or construction of the provisions in the other contracts or awards. But they do suggest that the mere coincidental nexus of time and place is not sufficient to bring the damage suffered within the ambit of the expression ‘arising out of or in the course of the execution’ of the Works.
Cleanaway has urged that it is fairly arguable that the cause of the damage need not be the performance of the Work in order to satisfy the requirement of arising in the course of the execution of the Works. Accepting that, nonetheless mere connection of time and place is not readily described as arising in the course of the execution of the Works without something more (whether a causal or some other nexus). The rain event and flooding were widespread. Their impacts affected more that the Site of the Works. Yes, they occurred at a time when the Works had not been completed and also the Site of the Works was part of the affected area. But to that scenario the course of the execution of the Works is entirely coincidental. Whatever nexus is sufficient to satisfy the language of the damage ‘arising… in the course of execution of the Works’ it requires, in my view, more than the mere coincidence of the damage arising at the place or during the time when the contractor has control of the Site and an obligation to execute the Works.
Second, if the wide construction was intended, it would mean Shamrock would be exposed to an uncertain liability for events over which it has no control and indeed those outside the scope of construction work at all. If that were so, Shamrock has moved from contractor to unlimited insurer.
Cleanaway contended that this is wholly unsurprising in the Contract because Shamrock has undertaken all risk or otherwise accepted unqualified obligations which it has to perform even if faced with events over which it has no control. It points to a number of provisions (some of which are set out above).It is said to be significant that, by cl 2.3 of the agreement, Shamrock has accepted all risks in connection with the construction of the Works. However, this does not point in favour of the wide construction. Rather, it points in the other direction. Shamrock has not explicitly, in cl 2.3, accepted all risks which may affect, so as to impose damage on, the Works at the Site occurring during the period of the Works. Its acceptance is of risk in connection with the construction of the Works which language would not include the risk of external events (unrelated to the construction of the Works) causing loss or damage to Cleanaway.By cl 4.1(a) Shamrock promised to complete the Works by the Date for Practical Completion. But a willingness to assume that obligation and to be exposed to damages for breach is not to be assimilated with assuming the liability to indemnify the principal for loss caused not by the delay in completion but an external weather event. In any event, cl 14.3 of the agreement provides for an extension of time for the Date for Practical Completion in certain events, including inclement weather (albeit for inclement weather its only relief is an extension). The risk it assumed therefore is significantly not an unqualified one.The Statement of Works in both table 1 and clause 6 refers to stormwater management actions. The former merely identifies the scope of works generally. The latter requires the stormwater management actions to be as required, inter alia, by the Design Drawings and the Statement of Works or as may be ‘reasonably required’ to protect the work areas. Clause 7(b) of the Statement of Works limits Shamrock’s entitlement for the costs of dealing with the impacts of inclement weather. The general qualifications in cl 7(f) of the Statement of Works may well impose some stormwater obligations on Shamrock. None of these references support a view that Shamrock had assumed all kinds of unqualified and unspecified risk of damage affecting Cleanaway.
“[42] Shamrock contends that it would be commercially absurd to construe clause 10(b) as giving an indemnity for injury or death to any person who happened to be injured or killed on the site during the currency of Shamrock’s contract and:
irrespective of whether Shamrock was on site at the time;
irrespective of whether Shamrock was carrying out work at the time; and
irrespective of whether Shamrock had any connection at all to the incident;
[43] I am unable to see the commercial absurdity in circumstances where the contract contemplates that Shamrock will have control of the site during construction and where the contract expressly contemplates that Shamrock will take out four different types of insurance policies, including in the name of Cleanaway as well as the subcontractors and consultants. It is likely that the parties contemplated that any liability Shamrock is concerned would fall within those policies.”
However, a comparison of the language of cl 10(a) and (b) with cl 11.2(a) and (c) shows that there is far from complete symmetry between the liability to which, on Cleanaway’s construction, Shamrock would be exposed under cl 10 and the required coverage of the insurance. Indeed the insurance required by cl 11.2(c) is against liability at law for damages in respect of damage to property “occurring in the performance of the Works” an expression which suggests a causal connection which would not cover the kind of claim now being advanced against Shamrock if Cleanaway was to succeed on the wide construction.
Sixthly, both parties relied on a contention that the opposing construction leads to a redundancy in cl 10 itself.Shamrock submitted that if the primary judge’s construction of the nexus required for component (b) was adopted, then the other components will have no work to do.On the other hand, Cleanaway contends it is Shamrock’s construction that leaves component (b) with no work to do. If, it submits, the expression ‘in the course of execution’ calls up some causal nexus then the resultant damage would also be said to arise out of or by reason of the execution of the Works.Neither is plainly right. There may well be scope for all three components to require some causal nexus but the reach of the connecting words ‘arising out of’ and ‘by reason of’ differ from the reach of ‘in the course of’. Alternatively, and in any event, the expression ‘arising… in the course of the execution of the Works’ can properly be said to require a connection between the damage and the execution of the Works beyond the mere coincidence of time and place without the required connection being causal.Even if there was redundancy in one way or the other, that does not lead to a conclusion that the objectively intended meaning of the language requires overcoming that redundancy. It remains necessary to give the Contract a coherent construction in accordance with the parties’ presumed intentions. It is possible (indeed often encountered) the parties chose superfluous language out of an abundance of caution when referring to damage arising out of, by reason of, or in the course of, the execution of the Works. As Lord Hoffmann put it in Beaufort Developments (NI) Ltd v Gilbert-Ash NI Ltd [1999] 1 AC 266 at 273 –
“…the argument from redundancy is seldom an entirely secure one. The fact is that even in legal documents (or, some might say, especially in legal documents) people often use superfluous words. Sometimes the draftmanship is clumsy; more often the cause is a lawyer’s desire to be certain that every conceivable point has been covered.”
This sentiment is not only common experience, but also oft repeated in other decisions: e.g. Mango Boulevard Pty Ltd v Mio Art Pty Ltd [2016] QCA 148 at [37].
Finally, the Court was referred to Richardson v Buckinghamshire County Council [1971] 1 Lloyd’s Rep 533 as affording some guidance suggesting the primary judge’s approach was incorrect. In that case, the Court of Appeal of England and Wales had to consider a provision somewhat analogous to cl 10 of the agreement. A local authority had engaged a contractor to construct certain roads. By cl 2 of that contract the Contractor indemnified the council against claims for injury to any person which may arise out of or in consequence of the construction and maintenance of the Works. The contractor in turn engaged a subcontractor from which it obtained, by cl 3 of the subcontract, an indemnity for any loss ‘arising out of or in the course of or caused by the execution of the sub-contract works’. Richardson, the plaintiff, was injured while riding a motor scooter on the road under repair. He alleged the surface of the road adjacent to a manhole cover was unsafe but failed to establish that case. The council sought to recover from the contractor under the indemnity in cl 22 of its agreement its costs of defending that claim. In turn the contractor sought to recover those costs and its own costs from its subcontractor under cl 3 of the subcontract.
Buckley LJ (with whom Widgery and Edmund Davies LJJ agreed) said, of a contention not unlike the construction adopted here by the primary judge, commencing at 536:
“Mr. Stocker has, rightly I think, conceded that neither the claim nor proceedings nor the plaintiff’s injuries arose out of or were caused by the sub-contract works. He placed reliance upon the words ‘in the course of’. Mr. Stocker suggested that the words ‘in the course of’ should be given a temporal sense equivalent to ‘while the sub-contract works are in course of execution’. I cannot myself accept this argument, which would extend the indemnity to all sorts of risks unconnected with the execution of the sub-contract works.”
The reasoning in that decision is brief but provides some further support for rejecting the wide construction.
For these reasons, a construction which seeks to attribute liability to Shamrock to indemnify Cleanaway under cl 10(a) on the basis of the mere coincidence of the Site of the Works and during the period when the Works are to be conducted, is misplaced. It gives no effect to the language employed of the damage ‘arising in the course of execution’ of the Works. To adapt the language of Comcare, the damage sustained has to have a sufficient association with the execution of the Works to be said to arise in the course of the execution of the Works, whether or not it can be said to be caused by the execution of the Works.
Having regard to this conclusion it is not possible to describe Cleanaway as enjoying a real prospect of success in its claim for indemnity under cl 10(a) on this first of the bases on which it is advanced.
Approach to Other Construction Questions
Despite it being necessary to have embarked on the construction of cl 10(a) of the agreement to reject the wide construction adopted by the primary judge, for reasons discussed below I am of the view there is a need for a trial in which the proper construction of cl 10(a) will likely be in issue. In those circumstances, this Court should be circumspect in expressing any concluded views as to the remaining possible constructions of that clause. The scope and operation of cl 10(a) of the agreement should be determined at trial: SMEC Australia Pty Ltd v Valentine Falls Estate Pty Ltd [2011] WASCA 138 at [30]; Santos Limited v Fluor Australia Pty Ltd [2021] QCA 204 at [76].
In addition, which of the remaining constructions of the clause is to be preferred might potentially at least be affected by the view taken as to the proper construction of the opening words of cl 10(a) which were assumed (without being decided) against Shamrock. That is, whether the indemnity the clause provides is limited in some relevant way by the words “any liability, loss claim or proceedings … in respect of loss, destruction or damage to any property”? This is a further reason to be circumspect in expressing views as to the proper construction of the clause.
The discussion which follows should be read in that context.
The Obligations Construction
The second way Cleanaway seeks to put its case is to submit that the expression “in the course of… the execution of the Works” requires recognition of the ongoing obligation to manage stormwater and storm events and otherwise to protect the Works from them. If, contrary to the primary judge’s position, some nexus is required beyond the coincidence of time and place, Cleanaway submits it is found in the Works requiring ongoing management of stormwater and protection against storm damage.2
On this approach, as was put by Cleanaway in its written submissions, it is not necessary to plead or prove that there has been some failure by Shamrock to fulfil its contractual promise to manage these stormwater and storm events and otherwise to protect the Works from them.3 The Notice of Contention states that the damage occurred in the course of execution of the Works because it occurred during Shamrock’s ongoing obligation to undertake stormwater management and to protect the Works.
So understood this construction confronts the same difficulties as the wide construction. The only nexus between the damage and the execution of the Works is an association in time and place the time over which the Works are to be conducted, and the place is the Site. If causation is not a requirement, then it should not matter (and it adds nothing to consider) what the nature of the as yet unperformed work activities might be. If some connection short of a causal nexus between the damage and course of execution of the Works is said to be sufficient, as yet no logical basis has been advanced for concluding that the fact of the Contract requiring Shamrock to undertake generically described stormwater management or protection of the Works may suffice.
Default Nexus Construction
It is unnecessary to dwell on issues of construction of cl 10(a) as concerns the default nexus construction. It was fairly accepted by Mr O'Sullivan KC for Shamrock that if Cleanaway had pleaded and provided some evidential basis for its claim, that part of cl 10(a) presently being considered would afford an arguable basis for an indemnity for damage caused or materially contributed to by the failure of Shamrock to perform its work which guaranteed the effectiveness of, or to any lower contractual standard as concerns, stormwater management or protection of works.
However, there are various other reasons advanced for these issues not being a bar to the grant of summary judgment. They will be addressed in turn.
The Guarantee Basis
It was no part of Cleanaway’s case before the primary judge, or indeed in the counterclaim as it was at the time of that application, to claim that the terms of the Contract contained a promise by Shamrock in materially unqualified terms to guarantee that effective stormwater management or works protection measures were implemented.
Nor does the Third Further Amended Defence and Counterclaim filed after the application for summary judgment was dismissed raise that case specifically. The pleading was amended to plead the relevant contractual terms but does not go so far as to allege their effect is as a guarantee of the efficacy of the stormwater or protection measures to be taken. Nor is it explicitly pleaded that there has been any relevant failure to take those measures leading to or contributing to the occurrence of the damage asserted by Cleanaway. It was submitted by Cleanaway that such an allegation is made in paragraph 16(c) of the counterclaim as now amended. It provides –
“In the premises of paragraphs 3, 4(f), 10 to 12D, 15A, and 15B above, the Cell 3B East (North) Damage constitutes loss, destruction, or damage to property ‘arising out of’, or ‘in the course of’, the execution of the Cell 3B East (North) Works, within the meaning of clause 10(a) of the Master Agreement, in that:
…
further. or in the alternative. to subparagraphs (a) and (b) above, it concerns the area of Cell 3B East (North), and was caused by stormwater, in circumstances where Shamrock had assumed the risk of inclement weather, and the scope of the ‘Works’ and ‘Services’ it was required to perform under the Cell 3B1 Agreement included stormwater management, as pleaded in paragraphs 7(da) to (de), 9BA, and 15A(a) above.”
That submission cannot be accepted. What is missing is the pleading of material facts relied on for an allegation, or indeed even the allegation, of the failure of performance of the guarantee causing or contributing to the damage.
Even if this case was pleaded, Shamrock contends it cannot succeed as the Contract cannot be read as providing that guarantee. There is real force in this submission.At a general level, the promise made by Shamrock is to execute and complete the Works in accordance with the requirements and standards specified in cl 7 of the agreement; which include an obligation to do so in a proper and workmanlike manner. This is against a construction which would mean Shamrock guarantees an outcome with respect to part of the Works, whether or not it has complied with those standards.The Statement of Works identifies the services to be provided in cl 5, including item 2 of table 1 to which reference has already been made. The project scope is further described in cl 6 including that identified under the heading Stormwater Management. No part of that description of the scope assists Cleanaway in relation to the present issue without it being identified what are the contents of the Design Drawings, the Statement of Works itself, the agreed Stormwater Management Plan Rev 1 or actions reasonably required by Cleanaway to be taken. That has not been done.Qualification no 3 in Variation 59 contains the words: “The Contractor is responsible for all stormwater management and protection of works in any rain or storm event” excluding specified matters. This could be construed as merely an allocation of tasks rather than as providing a guarantee as to the effectiveness of the steps taken in discharge of that responsibility.
On the other hand, Cleanaway, by its Senior Counsel, submits (in the context of the agreement, Statement of Works and Variation 59 as a whole) the stormwater management obligations do provide the foundation for its contention that Shamrock has guaranteed the protection of works and (implicitly) that includes, at least, as against the impacts on Cell 3B East North.
The Breach of Standards
Rule 293 Considerations
Shamrock sought summary judgment in respect of “the claim for indemnity under clause 10 of the Master Agreement which is claimed in paragraphs 1(a) and 2 of the prayer for relief in the Second Further Amended Defence and Counterclaim filed 20 November 2024… and in paragraphs 16 to 21 of the Counterclaim”.
The primary judge refused that summary judgment based on his Honour’s erroneous construction of cl 10(a). It remains for this Court to determine what follows from this.
To grant summary judgment the Court needs to be satisfied of the two things mentioned in r 293.
The first, is whether Cleanaway has no real prospects of succeeding on that part of its claim. The difficulty for Cleanaway is that neither of the cases which adopt the default nexus construction has been pleaded.
That is not always a difficulty. The guiding approach to be taken by courts in applications for summary judgment by a defendant to a counterclaim was stated in Aklia Holdings Pty Ltd v The Carter Group Pty Ltd (in liq) [2017] QSC 75 at [17], adopting the statement of principle in Edington v Board of Trustees of the State Public Sector Superannuation Scheme [2012] QSC 211 at [54]. The power to enter summary judgment should be exercised only where it can be said there is no real prospect of success on the claim, and not merely because that real prospect only appears from the material and not necessarily from the pleading. The observations of Jackson J in Haggarty v Wood (No 2) [2015] QSC 244 at [81] should not be applied in a way inconsistent with this approach. There his Honour stated –
“[81] …an application under r 293 UCPR presupposes that the defendant has filed a defence in response to a properly prepared and filed claim and statement of claim, so the court should not be too wary of treating a plaintiff as having nailed their colours to the mast. That approach is all the more justified where the plaintiff has had numerous attempts to articulate their case over a lengthy period.”
However, as mentioned, there is no material which identifies the steps which it is said Shamrock ought to have taken under cl 7.1 of the agreement, but in breach did not take, which are to be relied on as causally connected with the damages claimed by Cleanaway. On the material filed it could not be said Cleanaway has established that it has real prospect of success, quite apart from the deficiencies in its pleadings.
As to the guarantee contention, the reader of the material is left to guess what case is being advanced, but it seems to be that because damage was sustained it must be inferred that some default in the provision of stormwater management and protection of the works contributed as a cause. It is not a case which, on the material, it can be said Cleanaway has established that it has real prospect of success.
Need for a Trial as to Part of Claim
Cleanaway separately seeks damages for breach of cls 11.2 and 11.4 (related to effecting insurance) and Shamrock did not seek summary judgment as to that part of the counterclaim.
However, Cleanaway has not sought to mount any claim for damages for breach of the guarantee said to arise under Variation 59, or for breach of the obligations in cl 7.1 of the agreement. It was accepted on behalf of Shamrock that such claims would be open to be pleaded and pressed by Cleanaway even if Shamrock was to succeed in its application for summary judgment (without conceding that it might not oppose leave to amend for other reasons, or that one or other of them might not be susceptible to being struck out).
Senior Counsel for Cleanaway informed the Court that he would wish to seek to amend the counterclaim to raise these contentions and to claim damages.
The history of the steps in this case does not assist Cleanaway in suggesting it should be given further opportunities to set out its case.The proceedings were commenced in June 2023. Shamrock amended its statement of claim, but not in material respects, on 20 September 2024.Its second amended defence and counterclaim was filed on 20 November 2024. The application for summary judgment was filed on 22 November 2024.At the same time, it filed its outline of argument. That squarely raised the contention that cl 10(a) of the agreement properly constructed required some nexus with the performance of the Works.Cleanaway filed its submissions on 9 December 2024 which sought to support the wide construction. The submissions for Cleanaway touched on the provisions of the Contract now relied on by it, and suggested that if some additional nexus was required for the operation of cl 10(a) it was established by pointing to the terms of Variation 59 and Qualification no 3 and contending that Shamrock had not sought to prove that the stormwater fell within the exclusions to that qualification.The application was heard on 10 December 2024.It was only after the judgment dismissing the application that Cleanaway amended its counterclaim in the confined way mentioned above.The appeal was commenced on 9 January 2025, and a Notice of Contention filed 24 June 2025. The latter did not raise the default nexus construction (except on the most generous of readings of paragraph 2(e)). Written submissions were provided which framed the scope of the submissions made by Shamrock on the hearing of the appeal.While Cleanaway may wish to seek to amend the counterclaim to raise these contentions, no amendment has been made, and no material was sought to be filed to support doing so.
There may well be special cases where a litigant is to be taken to have its colours immovably nailed to the mast, but in the end, this is not one of them. Both because it can be said there is a need for a trial and in exercise of the court’s residual discretion, the appeal in my opinion should be dismissed. My reasons are –Cleanaway has an arguable claim for damages for breach of the Contract and its Senior Counsel has stated that it wishes to agitate such a claim.It is accepted by Shamrock that summary judgment on the part of the counterclaim which arises under cl 10 would not preclude Cleanaway mounting such a damages claim.Accordingly, there will be a trial in which the nature of the steps Shamrock ought to have taken but it is said failed to take, and their relationship to the damage suffered will need to be explored.The factual foundation for such a claim would also arguably enliven a right of indemnity (not currently pleaded) under cl 10(a).While Shamrock contended there was no utility in preserving such a potential claim for indemnity in addition to a damages claim, that cannot be said to be so with confidence at this stage. Issues of remoteness and mitigation may affect recovery of damages in a way not relevant to the claim for indemnity.In my view, the justice of the case is such that a summary judgment ought not be given which might impair the ability of Cleanaway to advance its claim for indemnity on this new factual foundation.Summary judgment in the terms sought by Shamrock would have the potential to do just that as it would be judgment on the claim for indemnity under cl 10(a) which would or could preclude reliance on that clause at trial relying on the various possible approaches discussed above (other than the wide construction rejected above).
Disposition
The appeal is dismissed.
The parties are to provide any written submissions as to the costs below and of the appeal within 7 days.
The Court orders the respondents are –
to provide a draft of an amended counterclaim making such amendments as it may be advised concerning a claim or claims for the indemnity under cl 10(a) of the agreement together with supporting affidavit material deposing to the matters of fact or opinion sufficient to plead its claim or claims for indemnity under cl 10(a) of the agreement by an agreed date or failing agreement as may be directed by the applications court;
promptly thereafter to list the proceedings for directions in the applications court concerning the making of such amendments and the leave if any required to do so.
The Oxford Dictionary of English (3rd ed) defines it as meaning ‘the carrying out of a plan, order, or course of action’. Macquarie gives as its primary meaning ‘the act or process of’ execution. ↩
Cleanaway has acknowledged that this contention was not pleaded at the time of the application for summary judgment but it has since filed an amended counterclaim to do so. ↩
Cleanaway’s Outline in Reply on the Notice of Contention at [23]. ↩
McGregor on Damages (22 ed) at [1-005] and [3-021]. ↩
Shamrock Civil Engineering Pty Ltd
Cleanaway Solid Waste Pty Ltd [2025] QCA 178
(2013) 250 CLR 246
(1980) 29 ALR 53
(1960) 103 CLR 547
(1990) 19 NSWLR 577
(2023) 415 ALR 163
(2015) 256 CLR 104
(1962) 107 CLR 353
(1992) 173 CLR 473
(1980) 29 ALR 533
Appeal dismissed. The parties were to provide any written submissions on costs below and on appeal within seven days. The respondents were to provide a draft amended counterclaim concerning any cl 10(a) indemnity claim, with supporting affidavit material, by an agreed date or as directed. They were then to list the proceedings for directions concerning amendment and any required leave. Shamrock remained able to oppose the amendments or bring a further summary-judgment application: [98]-[99].
Third, and more controversially, Cleanaway seeks to advance a contention (as giving rise to a real prospect of success on the claim for indemnity) that if some nexus which is causal is required between ‘loss, destruction or damage arising’ and ‘in the course of… the execution of the Works’ it can establish that in one of two ways.The first, which it urges is adequately pleaded, is that Shamrock undertook an unqualified obligation to effect any required stormwater management and to protect the Work from storm events. Thus, it argues, if as a result of storms the Works were flooded and that has led to damage it follows Shamrock has not done what (indeed whatever) was needed to protect the Works. In the course of argument this was variously referred to as a guarantee, assurance or warranty and for convenience the description guarantee will be used to differentiate it from the other basis upon which Cleanaway seeks to rely.The second is a more orthodox contention that the damage was caused, in part at least, by failures of Shamrock to provide its required Work to the standards required by cl 7.1 (that is in a proper and workmanlike manner and so on).
Third, some significance (albeit slight) is to be given to the words ‘arising in’ when used in cl 10(a). Despite the approach of the parties, the clause ought to be read so the composite expression of significance is that the damage is something ‘arising in the course of the execution of the Works”. There is a difference between damage which occurs during or even arises during the period of the Contract and affects the Site of the Works, and damage which can fairly be said to be something ‘arising in’ the course of the execution of the Works. This suggests some connection more than mere coincidence of time and place.
Fourth, cl 10 does not extend to damage which is the unavoidable result of the construction of the Works. It is not obvious why, objectively, commercial entities would contract on terms that made the contractor expressly not liable in such cases (damage which is the unavoidable result of the construction of the Works) but liable for damage which arises from unavoidable risks untethered to the construction of the Works (weather events, or other natural disasters) that might occur during the period of the Works.
The expression ‘in the course of execution of the Works’ must be construed in light of this exclusion that the clause does not apply to damage which is an unavoidable consequence of the construction of the Works. The combination of the location of the Site and the time specified to carry out the Works might be said to carry with them unavoidably the risk of damage occurring due to weather events of the kind under consideration here. It is unnecessary to express any concluded view about the scope of this exclusion however, in particular recognising that the language ‘construction of the Works’ is not identical with the expression ‘in the course of the execution of the Works’.
Fifth, the reliance placed by the primary judge on the language of cl 11.2 and the obligation it imposed on Shamrock to effect and maintain insurance is misplaced. His Honour was dealing with a submission by Shamrock that the wide construction was commercially absurd. That submission and his Honour’s treatment of the terms of cl 11.2 are as follows –
The factor which weighs most significantly against giving Cleanaway a further opportunity to agitate its claim under cl 10(a) of the agreement is that no draft pleading and no supporting material have been proffered to Shamrock and the Court.
To deal with that, it would be appropriate to order that Cleanaway is –to provide a draft of an amended counterclaim making such amendments as it may be advised concerning a claim or claims for the indemnity under cl 10(a) of the agreement together with supporting affidavit material deposing to the matters of fact or opinion sufficient to plead its claim or claims for indemnity under cl 10(a) of the agreement by an agreed date or failing agreement as may be directed by the applications court;promptly thereafter to list the proceedings for directions in the applications court concerning the making of such amendments and the leave if any required to do so.
The making of these directions does not preclude Shamrock from opposing the proposed amendments on any such grounds as it considers fit, or from bringing any further application for summary judgment in respect of the claim for indemnity whether as amended or not on any such grounds as it considers fit.