The Corporation of the Franciscan Sisters of the Heart of Jesus (Qld) v FERM Engineering Pty Ltd [2022] QSC 102

• [1] The plaintiff is the operator of a nursing home. It contracted with the defendant for the provision of mechanical engineering services including mechanical air conditioning design for an extension to its nursing home. The plaintiff alleges that soon after its construction, excessive condensation was observed in and about the new air conditioning system and that has subsequently caused mould to grow in and about its nursing home.
• [2] On 7 October 2020, the plaintiff filed a claim and statement of claim against the defendant seeking damages for breach of contract, negligence, and an action under s 60 of the Australian Consumer Law alleging the defendant failed to provide its services with due care and skill.
• [3] The plaintiff alleges the air conditioning system needs to be removed and a new system installed which has the size and capacity of units and systems listed in Column H of Schedule A to the statement of claim.
• [4] The plaintiff has, by its request of 18 May 2021, sought further and better particulars of paragraphs 9(e), 9(i), 11, 16 and 24 of the defence.[1] As that has not been supplied, the plaintiff filed an application for further and better particulars on 7 April 2022.
• [5] The defendant filed an application for further and better particulars of paragraphs 16, 18 and 19 of the statement of claim on 3 May 2022.
• [6] The plaintiff's detailed written submissions first addressed the defendant's application and then the plaintiff's application. Similarly, the defendant argued its application before responding to the plaintiff's application.
• [7] As the defendant's application seeks further particulars of the plaintiff's case in respect of causation, it is appropriate to consider that application prior to the plaintiff's application.

• [8] By its request for particulars dated 14 September 2021, the defendant sought further and better particulars of paragraphs 16, 17, 18, 19, 21 and 23 of the statement of claim.[2] However, in its application filed 3 May 2022, the defendant sought further and better particulars of paragraphs 16, 18 and 19 of the statement of claim but not paragraph 17 of the statement of claim.[3]
• [9] In paragraph 29 of the defendant's written submissions filed on the application,[4] the defendants sought leave to amend the application to refer to both 16 and 17 of the statement of claim. As the parties enjoined in an argument concerning the proper pleading of causation, I do grant leave to amend paragraph 1(a) of the defendant's application, so it refers to paragraphs 16 and 17 of the statement of claim.
• [10] Paragraphs 16 to 20 of the statement of claim provide:

16. The mould is a consequence of the heavy condensation pleaded in paragraph 14 above.

17. The condensation has been caused by the fact that the air conditioning systems installed in the Nursing Home in accordance with the Defendant's design specifications (as per Schedule A to this pleading) were significantly oversized, with 56 out of 61 of the systems being between 130% and 240% of the required sensible capacity such that their dehumidifying capacity was compromised.

18. The mould cannot be eradicated by ad hoc treatment methodologies and its remediation has been resistant to the same.

19. By reason of the condensation and mould, the plaintiff has suffered damages to its premises and consequential loss and damage, as pleaded in paragraph 23 below.

20. The only means of remedying the damage to the Plaintiff's premises caused by the condensation and mould is to remove the air conditioning units and systems and replace them with units and systems of appropriate size and capacity, being those units and systems listed in column H of Schedule A to this pleading."

• [11] The Uniform Civil Procedure Rules 1999 (Qld) (UCPR) contain the following relevant rules:

(a) be as brief as the nature of the case permits; and

(b) contain a statement of all the material facts on which the party relies but not the evidence by which the facts are to be proved; and

(c) state specifically any matter that if not stated specifically may take another party by surprise; and

(d) subject to rule 156, state specifically any relief the party claims; and

(e) if a claim or defence under an Act is relied on - identify the specific provision under the Act.

(2) In a pleading, a party may plead a conclusion of law or raise a point of law if the party also pleads the material facts in support of the conclusion or point.

A party must include in a pleading particulars necessary to -

(a) define the issues for, and prevent surprise at, the trial; and

(b) enable the opposite party to plead; and

(c) support a matter specifically pleaded under rule 150.

(1) A party may apply to the court for an order for further and better particulars of the opposite party's pleading.

(2) The court may, on an application under subrule (1), make the consequential orders and give the directions for the conduct of the proceeding the court considers appropriate.

(3) The making of an application under this rule does not extend the time for pleading.

(4) Particulars required under an order under this rule must repeat the relevant part of the order so the particulars are self-explanatory."

• [12] In Lee v Abedian & Ors [2016] QSC 92, Bond J said at paragraphs 81(e) and (f):

"81(e) The present form of the pleading deals with causation by some combination of [81], [84] and [85]. I do not think that is adequate. The pleading at [81] for example calls up a number of parts of the story of what occurred which, at first blush, do not seem to be relevant to the requisite pleading hypothesis because they refer to conduct which did not involve alleging that the plaintiff was a participant in fraud and, indeed, they refer to conduct not pleaded anywhere to be unlawful means. If such events can be demonstrated to be part of the requisite causation hypothesis, then that is not apparent on the face of the pleading. And the introductory words of [85] are not confined in any way, and they must be.

81(f) The defendants are entitled to have the plaintiff pinned down to a causation hypothesis which is not characterised by imprecision and ambiguity and which, at least arguably, establishes the requisite causal connection between the implementation of the conspiracy and the suffering of loss. If there is more than one causation hypothesis, then the statement just made must apply to each one. The pleading device of merely cross-referring back to events alleged to have happened is unlikely to be a satisfactory way of addressing a proper plea of causation. There must be a direct and unambiguous identification of the material facts relied on to establish the causal link which the law requires. And it must be something which makes narrative sense. The defendants should not be required to cherry pick through the pleading to work out what the case is that they have to meet in this regard."

• [13] It can be observed through an analysis of paragraphs 16 to 20 of the statement of claim that the plaintiff's case on causation has the following steps in a chain of reasoning in a narrative sense:

1. The defendant designed an air conditioning system which was significantly oversized (56 out of 61 systems being between 130% and 240% of required sensible capacity) (paragraph 17);

2. The oversized air conditioning system compromised the dehumidifying capacity of the air conditioning (paragraph 17);

3. The compromised dehumidifying capacity of the air conditioning system caused condensation (paragraph 16);

4. The heavy condensation caused mould (paragraph 16);

5. The mould cannot be eradicated by ad hoc treatment methodologies (paragraph 18);

6. The only means of remedying the damage is to replace the air conditioning system with a system of a capacity listed in Column H of Schedule A of the pleading (paragraph 20);

7. The replacement of the system has caused the plaintiff to suffer damage (paragraph 19).

• [14] In my view, but for step 2, the plaintiff's pleading with respect of causation does meet the requirements of r 149 and 157 of the UCPR. The difficulty with step 2 is a lack of narrative sense in accepting that, as a non-expert, an air conditioning system which is larger and more powerful (being oversized), has in fact a reduced dehumidifying capacity. That, as Senior Counsel for the plaintiff put it, is counter intuitive.
• [15] In the first expert report obtained from GHD Engineers dated February 2019,[5] which must be viewed as a preliminary report, the expert retained by the plaintiff advised at paragraph 6.1 in part:

"In instances where the supply of air quantities are not able to be achieved by balancing or controls, it may be that the units are undersized and other methods will need to be adopted. These might include strategies such as; unit replacement or installation of supplementary systems that can introduce additional air into the supply air stream from the room while bypassing the fan coil units."

• [16] GHD Engineers, it would seem from their subsequent report of September 2019,[6] then performed a far more thorough investigation. At page 10 in paragraph 5.1 of the September 2019 report, it records:

"In an air conditioning system, this condensation process occurs inside the unit. Dehumidification is accomplished, by cooling air below the dew point, so that the moisture condenses on the cooling coil within the air conditioning unit installed in the ceiling space. It is then drained appropriately to the nearest tundish. If the temperature of supply air is low enough, and the system runs long enough, the resulting conditioned air will be dry enough to maintain the humidity in the room at a satisfactory level.

The primary finding from our analysis is that it appears that many of the air conditioning systems are significantly oversized (refer Appendix A). Out of 61 air conditioning systems 56 systems were between 130% and 240% of the required sensible capacity.

The consequence of an oversized system is that the ability to dehumidify is compromised. An oversized air conditioning system provides more (but warmer) supply air than a correctly sized system. The warmer supply air is not cooled enough to provide any significant dehumidification.

When the cooling load is less than system capacity, the air conditioning system will run at "part load" (i.e., not at its full capacity) under all conditions. At part load the system can maintain temperature set points, but has almost no dehumidifying capability.

With little or no dehumidification capacity, the result is, moisture levels in the spaces are high enough to cause local condensation and support mould growth."

• [17] The above extract provides logical sequence and narrative that explains the counter-intuitive proposition that a larger capacity air conditioning system has or may have a compromised dehumidification capacity.
• [18] The pleadings, which must be self-contained so as to define the issues for trial, do not attempt to explain why a larger air conditioning system impairs the dehumidifying ability of that air conditioning system which is an essential part of the plaintiff's causal allegations.
• [19] Whilst it may be said that the defendant can glean the plaintiff's case from reading paragraph 5.1 of the September 2019 GHD report, that is no answer to the defendant's application.
• [20] Rules 149 and 157 UCPR require the issues to be defined in the pleading, not in an expert's report. I conclude therefore that paragraphs 16 to 20 of the statement of claim do not adequately plead the plaintiff's case in causation. In its current form, the natural reading of paragraph 17 of the statement of claim raises in the reader's mind the query: how does a larger or oversized air conditioning system reduce the system's dehumidifying capacity?
• [21] As Bond J pointed out in Lee v Abedian at paragraph 81(f), the plaintiff's causation hypothesis must be apparent on the face of the pleading and must be precise, unambiguous and make narrative sense.
• [22] As set out above, but for the lack of causal link between the oversized air-conditioning system and the lack of dehumidification, it seems to me that there is a proper causal link pleaded in the statement of claim. Accordingly, I dismiss the defendant's application in respect for further and better particulars of paragraph 16. I further observe that the request in the application at paragraph 1(a)(ii),[7] seeking full and precise particulars of the relationship of cause and effect of the mould (indicating the type of mould), that is alleged to have been a consequence of the heavy condensation, does not form a part of the defendant's requests on 14 September 2021. Had it done so, it seems to me in any event that, but for the causal link of the oversizing of the air conditioning and the formation of the mould, as discussed above, there is a sufficient causal nexus alleged in the statement of claim.
• [23] The request for further and better particulars of the statement of claim by the defendant, dated 14 September 2021, sought further and better particulars of paragraph 17 of the statement of claim including the request to see "full and precise particulars of [...] how, and in what way, the dehumidifying capacity of those systems was compromised by 56 out of 61 of the systems being between 130% and 240% of their required sensible capacity".[8]
• [24] In its detailed six-page response to the request for further and better particulars dated 29 November 2021,[9] the plaintiff's response at paragraph 4 was as follows:

"The plaintiff objects to paragraph 2(c) of the Request regarding paragraph 17 of the Statement of Claim because it is not a proper request for particulars because:

(a) the particulars requested have been provided in paragraph 17 and Schedule A of the Statement of Claim; and

(b) no further particulars are required in order to satisfy r 149 of the Uniform Civil Procedure Rules 1999.

Without prejudice to this objection, the dehumidifying capacity was compromised (that is, reduced) by each of the said 56 systems being oversized to the extent of 130% to 240% of their required sensible capacity such that the warm air capacity produced by the same was too great for the systems to be able to cool the air to the extent necessary to provide adequate dehumidification (that is, adequate to prevent condensation as pleaded)."

• [25] It is argued on behalf of the plaintiff that the plaintiff's response to the request in paragraph 2(c) meets the deficiency raised by the defendant in respect to the plaintiff's pleading. I accept that the response to some degree does meet the deficiency identified by the defendant, but it does not provide a direct unambiguous and precise causative hypothesis. Nor does it make that causative hypothesis apparent on the face of the pleading. The provision of particulars does not cure a defective pleading.[10]
• [26] In any event, there is a logical step missing in the further and better particulars that have been supplied. The particular that an oversized air conditioning system produces a warm air capacity which was too great for the systems to be able to cool the air to the extent necessary to be able to provide adequate dehumidification is a partial explanation. This leads the reader to question firstly, why a higher capacity air conditioning system increases the warm air capacity, and secondly, how that, in turn, reduces the dehumidification capacity. As observed above, the expert report of GHD of September 2019 provides the answer to these questions, namely a causative thesis that:

(a) As the larger or oversized air conditioning unit provides a greater air supply, it does so at a higher temperature than a smaller system and so in the larger system, the temperature of the supply air is higher.

(b) The difficulty caused by the higher supply air temperature is that the air is not cooled below its dew point.

(c) As the air is not cooled below its dew point, moisture does not condense on the cooling coil and is not removed.

(d) As moisture is not removed, the dehumidifying capacity of the air conditioner is compromised.

• [27] If the above does represent the GHD causal thesis which the plaintiff relies upon, then that has not been adequately pleaded in the plaintiff's response to further and better particulars request 2(c), which on its face, contains the deficiencies as outlined above.
• [28] By paragraph 1(b) of its application, the defendant seeks "full and precise particulars of the resistance of the mould to remediation by each of the ad hoc treatment methodologies including why the mould (specifying the type of mould) was resistant to the methods adopted".[11]
• [29] It can be observed from paragraph 18 of the statement of claim, this is a pleading which is not part of the plaintiff's breach of duty of care. It is however a necessary step in the plaintiff's causal case linking the deficiencies with the air conditioning system causing mould and the solution for which the plaintiff claims damages, namely the removal of the air conditioning system. The request in paragraph 1(b) essentially mirrors the defendant's original request in paragraph 3 of its request for further and better particulars to which the plaintiff responded:[12]

"As to paragraph 3 of the Request regarding paragraph 18 of the Statement of Claim:

(a) the ad hoc treatment methodologies:

(i) comprised of the plaintiff's cleaning the mould, and re-cleaning it as soon as the mould reappeared;

(ii) were performed, as required as the mould appeared or reappeared from December 2016 onwards;

(b) the plaintiff objects to paragraph 3(b) of the Request it is not a proper request for particulars because the pleading is plain on its face and no further particulars are required in order to satisfy rule 149 and rule 157 of the Uniform Civil Procedure Rules 1999; and

(c) the treatment methodologies were "ad hoc" because they were not performed as part of scheduled maintenance, but rather, as indicated in paragraph 6(a)(i) above, as the mould appeared or reappeared from December 2016 onwards."

• [30] In my view the provision of the plaintiff's response sufficiently met the request in respect of paragraph 18. As the defendant is fairly informed as to the plaintiff's case in respect of the ad hoc treatment methodologies, it cannot be taken by surprise at trial.
• [31] By paragraph 1(c) of the application,[13] the defendant seeks further and better particulars:

"As to paragraph 19 of the SOC, full and precise particulars of how the loss and damage claimed at paragraph 23 of the SOC was caused by reason of the condensation and mould including each and every respect in which that condensation and mould was a necessary condition of the occurrence of each head of the loss and damage claimed."

• [32] Paragraph 1(c) of the application mirrors paragraph 4 of the defendant's request for further and better particulars dated 14 September 2021 to which the plaintiff responded that "...but for the condensation and mould none of the heads of loss pleaded at paragraph 23 would have been suffered or incurred, and, accordingly, the condensation and mould (separately and together) are a necessary condition of the occurrence of the loss".[14]
• [33] In my view, the plaintiff's response was a proper response to the request for further and better particulars of paragraph 19. Paragraph 19 of the statement of claim cannot be read on its own in order to provide a sensible narrative of the plaintiff's causation case but together with paragraphs 16 to 20 and the damages pleaded at paragraph 23, the narrative is clear. With the clarification provided by the plaintiff in its further and better particulars, it is plain that the plaintiff's case is that the high condensation caused the mould, the plaintiff attempted to eradicate the mould by ad hoc treatment, being constant cleaning of the mould when it appeared, however, the "only means of remedying the damages" was to remove the air conditioning system,[15] and the alleged removal costs may be seen at paragraph 23. That is an adequate and proper provision of the explanation of the plaintiff's case so as not to allow the defendant to be embarrassed or caught by surprise at trial.
• [34] My conclusion in respect of the defendant's application is that in its original form, the defendant's application ought to be dismissed, however, by granting leave to amend the application to include paragraph 17, the defendant has succeeded in respect of paragraph 17. The appropriate remedy is to grant leave to the plaintiff to re-plead the plaintiff's case in respect of causation, to remedy the deficiencies which have been identified, as it is necessary that the plaintiff's case be put clearly on the pleading rather than in any further particulars in respect of the essential element of causation.

• [35] On 7 April 2022, the plaintiff applied for an order that the defendant provide further and better particulars of paragraphs 9(e), 9(i), 11, 16 and 24 of the defence.[16] In response to the request for particulars dated 18 May 2021, Counsel for the defendant argues that the plaintiff's application ought to be adjourned and then dealt with following the plaintiff properly particularising its case in respect of causation. On balance, I think that it is appropriate to accept defence counsel's submissions in respect to the response for particulars of paragraphs 16 and 24 of the defence. Paragraph 16 of the defence is a denial of paragraph 16 of the plaintiff's statement of claim, but with a setting up of a positive case that mould formed in the extension for a number of reasons. I accept the argument of Senior Counsel for the plaintiff that it is a positive case which requires particularisation, however, as paragraph 16 is a defence with respect to causation, and as I have concluded, causation has not yet been properly pled, I consider it reasonable for the defendant to be allowed to reconsider its pleading, if it is so advised, following the re-pleading of the plaintiff's case. The deficiencies in paragraph 16 of the defence may then be addressed.
• [36] By paragraph 24 of the defence,[17] the defendant raises a concurrent liability defence as an apportionable claim under s 28(1) of the Civil Liability Act 2003 (Qld). Paragraph 24 alleges a positive case of several concurrent wrongdoers. It is a necessary element of a defence of concurrent wrongdoing and apportionment claim for the defendant to adequately plead causation of the harm caused by the concurrent wrongdoers. It is possible that the defendant may wish to alter its defence in paragraph 24 upon the further particularisation of the plaintiff's claim in causation. Absent that, I accept the submission of Senior Counsel for the plaintiff that paragraph 24 of the Defence is not adequately plead.
• [37] In these circumstances, I accept defence counsel's submission that it is premature to order further and better particulars in respect of paragraphs 16 and 24 until the plaintiff's claim in respect of causation is complete. It therefore remains to be seen what, if any, alterations the defendant may wish to make to paragraphs 16 and 24 and therefore what, if any, further particulars the defendant ought to provide in respect of paragraphs 16 and 24.
• [38] The plaintiff's request in respect of paragraphs 16 and 24 of the defence ought to therefore be adjourned to a date to be fixed.
• [39] The same cannot be said for the request for further and better particulars for paragraphs 9 and 11 of the defence. By paragraphs 9 and 11 of the defence, the defence raises a positive case. In paragraphs 9(e)(i) and 9(i)(i), the defence alleges that the "capacity of the air conditioning units had already been accepted on or about 7 April 2015 by the Plaintiff and Thomson Adsett...". The request for particulars that the plaintiff seeks is further particulars on the basis upon which that statement is contended. That, in my view, is a reasonable request, and absent that information it is difficult to understand what is being alleged by the defence in respect of the acceptance. Those further and better particulars ought to therefore be provided, and that is a matter independent of the causative issue.
• [40] The request for further and better particulars in respect of paragraph 11 of the defence is more extensive. Paragraph 11 of the defence is a troubled paragraph. Paragraph 11 of the statement of claim alleges six features of the construction of the extension to the nursing home. Paragraph 11 of the defence denies those six features but also positively asserts that those six features (which it denies) exist because of four factors it asserts. The four identified factors do not provide any factual basis to deny paragraph 11 of the statement of claim and are not a direct explanation of the defendant's belief why the allegation is untrue as required by rule 166(4) UCPR. It may be that paragraph 11 of the defence was intended to be some type of confession and avoidance plea, however it is far from clear. It could be that the further and better particulars of paragraph 11 of the defence could shed light on the meaning or intent of this paragraph, but I doubt it. The better course of action, in order to reasonably appreciate what paragraph 11 means and therefore not be caught by surprise, is to strike out paragraph 11 of the defence with leave to re-plead to allow the defendant to consider its position and plead properly as is required by rule 166(4). This matter is independent of the causal issue and therefore can be answered prior to the causal issue.
• [41] The plaintiff succeeds in respect to its request for further and better particulars of paragraphs 9(e), 9(i) and 11 of the defence with the requests in respect of paragraphs 16 and 24 being adjourned to a date to be fixed.
• [42] The defendant's application in respect to further and better particulars in respect of paragraphs 1(a), (b), and (c) of its application is dismissed, however, the plaintiff, having been granted leave to seek further and better particulars of paragraph 17, the defence application has to that extent succeeded.
• [43] The parties are directed to bring in minutes of order reflecting these reasons and reflecting any agreement on costs which can be reached prior to 3 June 2022. If an agreement on the minute of the order or costs cannot be reached, the matter can be listed for further argument with appearances by telephone at 9am on 3 June 2022.

[1] Affidavit of S Naylor filed 7 April 2022, Exhibit SGN 1, exhibit pages 1-6 (Court document 9).

[2] Affidavit of R Leahy filed 3 May 2022, Exhibit RJL-6, exhibit pages 50-54 (Court document 11)

[4] Submissions titled 'Submissions on Behalf of the Applicant Defendant'

[5] Affidavit of R Leahy filed 3 May 2022, Exhibit RJL4, exhibit pages 18-30 (Court document 11).

[6] Affidavit of R Leahy filed 3 May 2022, Exhibit RJL5, exhibit pages 31-49 (Court document 11).

[7] Application filed by defendant on 3 May 2022 (Court document 10).

[8] Affidavit of R Leahy filed 3 May 2022, Exhibit RJL5, exhibit pages 51-52 (Court document 11).

[9] Affidavit of R Leahy filed 3 May 2022, Exhibit RJL7, exhibit pages 57 (Court document 11).

[10] Northpine Pty Ltd v Jezer Constructions Group [1997] 2 Qd R 253 at 264.

[11] Application filed by defendant on 3 May 2022 (Court document 10)

[12] Affidavit of R Leahy filed 3 May 2022, Exhibit RJL7, exhibit page 58 (Court document 11).

[13] Application filed by defendant on 3 May 2022 (Court document 10)

[14] Affidavit of R Leahy filed 3 May 2022, Exhibit RJL7, exhibit page 59 (Court document 11).

[15] Statement of Claim filed 7 October 2020, paragraph 20 (Court document 2).

[16] Application filed by plaintiff on 7 April 2022 (Court document 7).

[17] Defence filed by defendant on 18 December 2020 (Court document 4).