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QBE Insurance (Australia) Ltd v Cape York Airlines Pty Ltd


[2008] QCA 400






No 12468 of 2008





(ACN 000 627 010)




DATE 10/12/2008




MUIR JA:  The applicant/appellant seeks a stay of orders made by a Judge of the Trial Division of 24 November 2008, striking out the applicant's sixth further amended defence, ordering that the applicant file and serve a seventh amended defence by 24 December 2008 and making other orders for the conduct of the proceeding.


Before the primary Judge, the parties elected to treat paragraph 8(b) of the current statement of claim and paragraph 5 of the current defence as representative of vices alleged to exist in other parts of the pleading.


Accordingly, the argument before the primary Judge focused on those provisions and not surprisingly his Honour's reasons do so as well.


Mr Couper QC, who appears for the applicant, submits that the appeal raises an issue of general importance for the profession, namely the proper construction of r 166 of the Uniform Civil Procedure Rules 1999 (Qld).


The point in issue is quite a short one.  Rule 166(4) requires a party's denial of an allegation of fact to be accompanied by a direct explanation for the party's belief that the allegation is untrue, or cannot be admitted.


The allegation in the statement of claim is:


"As a consequence of the ditching, the aircraft:


(b)  immediately incurred, and is continuing to incur, a process of corrosion;"

That allegation is addressed by paragraph 5(c) of the current defence, which provides relevantly


"5.  As to paragraph 8 of the statement of claim, the defendant: ..

(c)  denies the allegations contained in sub-paragraph 8(b) on the grounds that:"

There are then set out two matters in sub-paragraphs (i) and (ii) which, if accepted, might lead to the conclusion that corrosion did not occur and was not continuing to occur.


There is then paragraph (iii) which provides:


"Further, if the whole of the aircraft has incurred and is continuing to incur a process of corrosion, that is not a consequence of the ditching, but a consequence of the plaintiff's failure to authorise repairs to the aircraft as requested by the defendant in letters dated 26 February 2004, 22 March 2004 and 24 March 2004."


Under that, are paragraphs A, B & C, all three of which appear under a bold heading "Particulars".


To avoid confusion, I will avoid referring to the other Mr Cooper and refer to counsel for the respondent.


Counsel for the respondent submitted that the most significant problem with the pleading is that one cannot tell whether paragraph (c), including its particulars, is merely a direct explanation in terms of r 166(4) or whether it is part of the pleading and, moreover, a part of the pleading which signals that the applicant has a positive case.


That there is at least a degree of confusion as to what is intended, is apparent I think from the particulars which seems to me to be particulars of (iii).  Why one would have particulars of a direct explanation of a party's belief escapes me.  I suppose it is possible, but I think it more likely that paragraph 5(c) should be construed as allegations which form part of the denial and part of the pleading proper.


If I'm wrong about that, there is no harm in clarifying the position.  That can be done by a relatively minor exercise in re-pleading.  If the applicant wishes to persist with its appeal and if it is successful, no particular harm will have been done.  Certainly the applicant will find itself in the position of having had to deliver an amended pleading which it should not have had to deliver, but a costs order can substantially alleviate any harm suffered.


It will be apparent from what I have said that I do not regard the applicant's case as a strong one.  There is, of course, another consideration.  In In Re the Will of Gilbert (deceased) (1946) 46 SR (NSW) 318, Sir Frederick Jordan, with whom the other members of the Court agreed, said at pages 322-323:


"It is only in the most exceptional circumstances that a Court of Appeal could regard itself as justified in interfering with the exercise of a discretion by a Judge of first instance - only where he has misapplied the law, or his order is likely to lead to a miscarriage of justice:  Evans v. Bartlam.  In this connection, however, I am of opinion that, as was pointed out by this Court in In Re Ryan, there is a material difference between an exercise of discretion on a point of practice or procedure and the exercise of a discretion which determines substantive rights.  In the former class of case, if a tight rein were not kept on interference with the orders of Judges of first instance, the result would be disastrous to the proper administration of justice.  The disposal of cases could be delayed interminably, and costs heaped up indefinitely if a litigant with a long purse or a litigious disposition could, at will, in effect transfer all exercises of discretion in interlocutory applications from a Judge in Chambers to a Court of Appeal."


I do not suggest that the observations about the long pocket enter into it, but much of what Sir Frederick Jordan said resonates today, particularly as there is undiminished concern about the duration and cost of litigation.


For these reasons, I order that the application be dismissed and that the applicant pay the respondent's costs of the application to be assessed on the standard basis.


Editorial Notes

  • Published Case Name:

    QBE Insurance (Australia) Ltd v Cape York Airlines Pty Ltd

  • Shortened Case Name:

    QBE Insurance (Australia) Ltd v Cape York Airlines Pty Ltd

  • MNC:

    [2008] QCA 400

  • Court:


  • Judge(s):

    Muir JA

  • Date:

    10 Dec 2008

Litigation History

No Litigation History

Appeal Status

No Status