Vivian v Youi Pty Ltd

1. The interlocutory application dated 17 January 2025 be dismissed.
2. The costs of the interlocutory application be costs in the cause.
3. The applicants file and serve any further expert report by 3 March 2025.
4. Leave be granted to the respondent to issue subpoenas to Mr Lindsay and to Lindsay Consulting Pty Limited in relation to files relating to 323 Upper Landershute Road. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

JACKMAN J: 1 This is an application by the respondent in the proceedings (Youi) to strike out a paragraph of the reply filed by the applicants (Mr and Mrs Vivian) pursuant to rule 16.21 of the Federal Court Rules 2011 (Cth). 2 The proceedings concerned an insurance claim by Mr and Mrs Vivian under a policy which relevantly contains cover for loss and damage to the premises (namely, 323 Upper Landershute Road, Palmwoods, Queensland) caused by a storm, or by landslip or subsidence that occurs within 72 hours of and directly because of a storm. There are exclusions in respect of damage arising from or caused by a failure to keep the premises in good condition or caused by subsidence or landslip other than where covered under the insured events. The claim is based on a storm which occurred in February 2022. 3 Paragraph 3(n) of the reply is as follows: The applicant further says that the owner of the property located at 322 Upper Landershute Road: i. had no prior landslip at his property prior to the Storm; ii. but during or immediately after the Storm, that property sustained landslip; and iii. that property has not sustained landslip since the Storm. The property at 322 Upper Landershute Road is opposite the premises on the other side of Upper Landershute Road. 4 It appears that para 3(n) was prompted by a witness statement obtained by Mr and Mrs Vivian from the occupant of number 322, Mr Benaed, which is broadly to the effect of para 3(n). 5 On 16 January 2025, Mr and Mrs Vivian's solicitors gave instructions to the expert witness retained by them, Mr Lindsay, to consider some questions relating to number 322. Mr Lindsay's report has not yet been prepared, and I am told by counsel that it is likely to be served within a month. The questions include comparing the soil profile and topography of the two properties, and whether any movement was sustained at number 322 in February 2022 which was comparable to the movement that occurred then at number 323. In the meantime, Mr and Mrs Vivian say that para 3(n) discharges their duty under rr 16.02(d) and 16.03(1)(b) to give fair notice of the case they seek to make. 6 Among the various matters raised by Youi by way of defence is the proposition that before the storm in February 2022, the land of the premises was, and continued to be, subject to translational landslip, being a landslip which tends to occur on moderate to very steep slopes where soil or weak rock overlays stronger strata, where the sliding mass is often relatively shallow and it can move or deform slowly (ie creep) over long periods of time, and where the sliding mass may accelerate after heavy rain. Youi says the landslip or ground movement had been moving slowly since at least 2013. An expert report by Mr Kenyon, dated 29 April 2022, provides support for that contention. 7 Youi's solicitor, Mr Baker, gives evidence on information and belief that Mr Kenyon regards it as "very doubtful" that what occurred at number 322 would be relevant to the claim in relation to number 323, and that to consider whether there may be sufficient similarities between the two properties to render number 322 relevant would require an investigation and report by a geotechnical engineer, which was likely to cost $10,000 to $15,000, and take about three months. A further report by Mr Kenyon may then be required at a similar cost, and a similar amount of expense may be incurred in relation to the legal representatives. 8 Youi relies on the decision of Gordon J in Andrews v Australia and New Zealand Banking Group Ltd [2011] FCA 388; (2011) 281 ALR 113 at [44]-[50], in which her Honour struck out a paragraph of ANZ's fast-track response on the basis that there was no factual basis at all for the pleading and, if allowed, the pleading would delay the preparation of the trial by at least 13 months at very considerable expense. In the present case, Mr Benaed's witness statement does provide some evidentiary basis for para 3(n) of the reply, although it would not be sufficient without expert evidence to make good the relevance of the pleading. Mr and Mrs Vivian are in the course of obtaining such expert evidence. The circumstances are thus distinguishable from Andrews where there was no factual foundation at all for ANZ's pleading. As Gordon J said, at para 57, "Strike out applications cannot and should not address questions of substance except where the result is clear beyond question". 9 In my view, it is conceivable that the circumstances in relation to number 322 may have some bearing on the causes of movement in the premises. Mr Kenyon has not ruled that out as a realistic possibility at this stage. In advance of any expert evidence on the point, it is not possible to say how strong a bearing (if any) those circumstances at number 322 may have on the issue. Accordingly, it is not possible at this stage to dismiss para 3(n) of the reply as having absolutely no bearing on or relevance to the case. That may turn out to be the case, but that is a matter appropriately left for the final hearing. Accordingly, I dismiss the interlocutory application seeking to strike out para 3(n). 10 As to costs, it may well turn out at the final hearing that the costs incurred in investigating the landslip at number 322 have been entirely wasted. It is undesirable to reserve the question of costs, which would force the trial judge to revisit the detail of this interlocutory application some months after it has occurred. But the merits of the issue are likely to be reflected in the overall result. In those circumstances, in my view, the costs of the interlocutory application should be costs in the cause. I certify that the preceding ten (10) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Jackman.