IN THE SUPREME COURT OF VICTORIA	Not Restricted	
AT MELBOURNE
Commercial Court
Commercial List
S ECI 2022 03803

WADREN PTY LTD (ACN 005 537 235)
in its capacity as trustee for the HOPPERS CROSSING UNIT TRUST (ABN 83 405 769 465)		
	First Appellant	
		
QIC WERRIBEE PTY LTD (ACN 624 121 204)
in its capacity as trustee for the QIC WERRIBEE TRUST (ABN 76 994 021 211)		
	Second Appellant	
		
v		
		
AIG AUSTRALIA LIMITED (ACN 004 727 753)		
	Respondent	

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JUDGE:	Sloss J	
WHERE HELD:	Melbourne	
DATE OF HEARING:	21 February 2024	
DATE OF JUDGMENT:	19 December 2024	
CASE MAY BE CITED AS:	Wadren Pty Ltd & Anor v AIG Australia Limited	
MEDIUM NEUTRAL CITATION:	[2024] VSC 807 (First Revision: 23 January 2025)	

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APPEAL – Appeal from decision of an Associate Judge – Appeal pursuant to rule 77.06 of the Supreme Court (General Civil Procedure) Rules 2015 (Vic) conducted by way of rehearing – Whether legal, factual or discretionary error on the part of the Associate Judge – Decision regarding preliminary discovery is one of an interlocutory nature to be determined in the exercise of discretion – No exceptional circumstances shown to permit fresh evidence – No error by the Associate Judge demonstrated – Appeal dismissed.

PRACTICE AND PROCEDURE – Preliminary discovery pursuant to rule 32.05 of the Supreme Court (General Civil Procedure) Rules 2015 (Vic) – Consideration of the purpose of rule 32.05 of the Supreme Court (General Civil Procedure) Rules 2015 (Vic) – Documents sought were documents evidencing confirmation of indemnity or denial of indemnity under one or more professional indemnity insurance policies and “recovery style documents” concerning whether insurance funds would be available in the event any claim made were successful – In refusing to order preliminary discovery of such documents, the Associate Judge correctly exercised his discretion.
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APPEARANCES:
	Counsel	Solicitors	
For the Appellants	Mr J J Gleeson KC and
Mr R Chaile	Allens	
			
For the Respondent	Ms G Crafti SC and
Ms A Crittenden	Clyde & Co	

TABLE OF CONTENTS

Introduction	1
The Co-Owners’ application for preliminary discovery	1
The ‘Stage 7 Works’ for Pacific Werribee Shopping Centre undertaken by Probuild	2
The Co-Owners allege there were a range of defects in the Stage 7 Works	2
Probuild was placed in voluntary administration in February 2022	6
Co-Owners request that Probuild provide documents and information	8
The Co-Owners believe that they may have a right to obtain relief	11
Application for preliminary discovery (as sought in the Originating Motion and Amended Originating Motion)	13
Prior to the hearing before the primary judge, AIG consented to preliminary discovery of certain policy documents and notifications and disclosed the identity of the Primary Layer Insurers	14
Prior to the hearing the deed administrators of Probuild indicated that they would consent to orders proposed by the Co-Owners for preliminary discovery of certain documents relating to Probuild's insurance arrangements including those with AIG and/or its co-insurers	18
The Co-Owners sought and obtained leave to file and serve an Amended Originating Motion at the hearing on 25 November 2022	19
The gist of AIG’s opposition to the Co-Owners’ application for preliminary discovery	22
The Principal Ruling	24
The August Ruling	31
The Insurance Policies	33
Certificates of Currency for the Primary PI Insurance policies	33
The Primary PI Insurers and the Primary PI Policies	35
2020 policy year	38
2021 policy year	40
2022 policy year	41
The ‘Excess Layer’ insurers	42
The Co-Owners’ commenced a new proceeding in March 2023 seeking relief against Probuild (amongst others) associated with the Structural Defects	44
Applicable law and principles	45
Appeals from an Associate Judge	45
Appeal pursuant to r 77.06 is conducted by way of a rehearing	45
An appellate court will exercise particular caution in reviewing a decision that relates to a matter of practice and procedure	45
Once error is established, the judge hearing the appeal has all the same powers as those of the Associate Judge that heard the matter at first instance	50
Admission of further evidence on appeal	50
Preliminary discovery	51
Co-Owners’ Notice of Appeal	58
AIG’s response and notice of contention	59
Appeal Book and Supplementary Appeal Book	61
Argument on Grounds of Appeal	61
Ground One:	The primary judge erred by requiring the appellants to establish relevance as a pre-condition to the grant of preliminary discovery	61
The appellants’ argument	63
The respondent’s argument	67
The appellants’ reply submissions	71
Appellants’ oral submissions	73
AIG’s oral submissions	82
Role of s 54 of the Insurance Contracts Act and scope for its operation in the present case	92
Consideration and disposition	99
Ground Two:	The primary judge erred by departing from his previous judgment without justification	115
The appellants’ submissions	118
The respondent’s submissions	120
The appellants’ reply submissions	121
Appellants’ oral submissions	121
AIG’s oral submissions	122
Consideration and disposition	123
Ground Three:	The primary judge erred by holding that the Court did not have the power to order preliminary discovery	125
The appellants’ submissions	133
The respondent’s submissions	136
The appellants’ reply submissions	140
Appellants’ oral submissions	141
AIG’s oral submissions	145
Consideration and disposition	147
Background to the introduction of r 32.05	148
The appellants’ potential claim under s 562 seeking relief directly against AIG – could a statement of claim be properly drawn on the material currently available?	159
Ground Four:	The primary judge erred by prohibiting the second appellant [QIC] from accessing the discovered documents	165
The appellants’ submissions	169
The respondent’s submissions	172
The appellants’ reply submissions	174
Appellants’ oral submissions	174
AIG’s oral submissions	175
Consideration and disposition	175
Arguments on AIG’s notice of contention	193
Contention One:	The appellants have no entitlement to notifications under later policy periods	195
AIG’s submissions	195
The appellants’ submissions	196
AIG’s reply submissions	197
Contention Two:  QIC is not entitled to preliminary discovery	199
AIG’s submissions	199
The appellants’ submissions	202
AIG’s reply submissions	203
Conclusion	206

HER HONOUR:
Introduction
1	This appeal is brought pursuant to r 77.06 of the Supreme Court (General Civil Procedure) Rules 2015 (Vic) (Rules) from parts of two interlocutory rulings concerning an application for preliminary discovery delivered by an Associate Judge on 29 June 2023 (Principal Ruling) and 17 August 2023 (August Ruling) respectively.
The Co-Owners’ application for preliminary discovery
2	Each of the rulings was given by the Associate Judge in the context of an application made by the first applicant, Wadren Pty Ltd (ACN 005 537 235) in its capacity as trustee for the Hoppers Crossing Unit Trust (ABN 83 405 769 465) (Wadren), and the second applicant, QIC Werribee Pty Ltd (ACN 624 121 204) in its capacity as trustee for the QIC Werribee Trust (ABN 76 994 021 211) (QIC), (collectively, the Co-Owners), seeking preliminary discovery under rr 32.03 and 32.05 of the Rules from (inter alia) an insurer, AIG Australia Limited (ACN 004 727 753) (AIG).  In essence, the Co-Owners were seeking preliminary discovery from AIG, as a prospective defendant, of documents evidencing confirmation of indemnity or denial of indemnity under one or more professional indemnity insurance policies and also documents relevant to whether insurance funds would be available if a claim by the Co-Owners were successful.
3	AIG is the sole respondent to this appeal.  Relevantly, AIG is the lead insurer in the group described in the proceeding as the ‘Primary PI Insurers’.  The ‘Primary PI Insurers’ are the primary layer professional indemnity insurers of Probuild Constructions (Aust) Pty Ltd (Probuild) (Subject to a Deed of Company Arrangement) under contracts of insurance for the 2019/20, 2020/21 and 2021/22 policy years (collectively, the Primary PI Policies).
4	The Co-Owners are the owners of the land and buildings located at Heaths Road, Hoppers Crossing, Victoria, otherwise known as the Pacific Werribee Shopping Centre (Lot 1 on Plan of Subdivision 721777M) (Pacific Werribee Shopping Centre).  QIC acquired a 50% interest in Pacific Werribee Shopping Centre from Wadren on or around 19 February 2018.  Prior to this time, Wadren owned 100% of Pacific Werribee Shopping Centre.
The ‘Stage 7 Works’ for Pacific Werribee Shopping Centre undertaken by Probuild
5	On or about 21 March 2014, Wadren entered into an agreement with Probuild titled the ‘Werribee Plaza Shopping Centre Design and Construction Contract’ (the Contract).  Pursuant to the Contract, Probuild agreed to undertake the ‘Stage 7 Works’, which were part of the works for the staged expansion of Pacific Werribee.  The ‘Stage 7 Works’ commenced in 2014 and reached practical completion in 2017.
6	Under the Contract, Probuild had certain insurance obligations including:
•	by General Conditions 18 and 19 and Annexure Part A, Probuild was required to maintain insurance of the work under the Contract and public and products liability insurance in the joint names of Wadren and Probuild; and
•	by General Condition 21 and Annexure Part A, Probuild was required to maintain a professional indemnity insurance policy with a total aggregate cover of not less than $50 million for six years after the issue of the Final Certificate.
7	As QIC did not acquire its 50% interest in Pacific Werribee Shopping Centre from Wadren until February 2018, which was after the Stage 7 Works had been completed, the insurance obligations imposed under the Contract made no reference to QIC.
The Co-Owners allege there were a range of defects in the Stage 7 Works
8	Since the completion of the Stage 7 Works, the Co-Owners have alleged that there are significant and wide-ranging defects in the Stage 7 Works carried out by Probuild.
9	By letter dated 10 October 2019, the Co-Owners issued a notification of claim to Probuild in respect of alleged defects in the Stage 7 Works (Claim).  The Claim letter, which was prepared on the letterhead of QIC, was headed ‘Structural Defects’ and set out a list of ‘concerns/issues’ that QIC said had been revealed following an inspection of the Stage 7 Works and a review of the relevant design documents on behalf of the Centre Owners, as follows:
•	Spalling, loose, and drummy concrete in many slab to slab, band on band, slab on band, and beam on band expansion joints.
•	Concrete sprawling to parapet walls.
•	Cracking to floor finishes either side of some joint covers at their top surface.
•	Concrete spalling and corrosion of Danley dowels accompanied by localised delamination of "Condek" sheeting along some slab to slab expansion joints.
•	Poor placement of bearing pads i.e. too close to nib edges or where the supported nib has been poured onto the supporting nib, in band on band, slab on band, and beam on band expansion joints.
•	Poor placement of nib reinforcement where spalling was observed.
•	Water ingress with the risk of consequent corrosion of steel reinforcement with respect to band on band, slab on band, and beam on band expansion joints.
•	Insufficient concrete cover for some exposed slabs;
•	Non-compliance with applicable Australian Standards.  Relevantly:
o	Inadequate allowance for seismic movements at joints at level 1;
o	The geometrical design of the carpark bearing joint nib concrete struts;
•	Overstressing of critical struts, ties, and hangers in carpark, retail, and storage (at the joint nibs).
•	Incorrect upstand reinforcement for lateral loads in ramps and void edges leading to potential failure under car impact loads.
•	Block walls along some void edges are non-load bearing and, accordingly, are not designed to address the risk of potential vehicle impact.
•	Car park stair shaft walls (shear walls) have failed, ie: have cracks and/or spalling.
•	At car park façade screen connections to structure, there is cracking to the structure.
10	In the letter QIC also informed Probuild that a review of other ‘at risk elements of the Stage 7 Works is underway, and we will update you in due course as to any further defects identified’.
11	The Co-Owners have obtained reports from consultants, MPN Group, dated 25 September 2019 and 7 September 2021 identifying various structural defects including (a) the failure to design and construct the Stage 7 Works to withstand earthquake actions; and (b) errors in the design and construction of the corbel (or movement) joints in the Stage 7 Works (together, the Structural Defects).  In addition to the Structural Defects, MPN Group has identified particular design and construction defects in the Stage 7 Works (Other Defects).  The Co-Owners have also obtained a report prepared by Kusch Consulting Engineers dated 15 June 2021, which identifies various defects in the non-structural services installed as part of the Stage 7 Works (Non-structural Defects).
12	According to the Co-Owners, in respect of the Structural Defects, Other Defects and Non-structural Defects (together, the Defects) their preliminary estimate of their loss and damage is between $331,800,000 and $356,800,000, comprised as follows:
(a)	the costs of the temporary make safe measures have, to date, exceeded $11,300,000.  Costs associated with the temporary make safe measures continue to be incurred;
(b)	the anticipated total cost of the permanent rectification works is in excess of $245,500,000; and
(c)	the losses consequent upon the defects and/or rectification work are estimated to be between $75,000,000 and $100,000,000,
totalling between $331,800,000 and $356,800,000.  Identification of other defects relating to the Stage 7 Works remains ongoing.  The amounts identified do not represent the maximum costs that the Co-Owners may incur, but represent only an indicative calculation of costs relating to the three categories identified above.
13	Ms Corin Morcom, the Co-Owners’ solicitor having the day-to-day carriage of this matter, deposes, in her first affidavit, that:
49.	The Co-Owners (including through Allens) have exchanged correspondence with Probuild and AIG Australia (including through Clyde & Co, who have been variously acting as solicitors for Probuild and AIG Australia) in respect of the defects in the Stage 7 Works, including:
(a)	a letter from QIC to Probuild dated 10 October 2019;
(b)	a letter from Allens to Clyde & Co dated 4 May 2021;
(c)	a letter from Allens to Clyde & Co dated 10 May 2021;
(d)	a letter from Allens to Clyde & Co dated 7 June 2021;
(e)	a letter from Clyde & Co to Allens dated 8 June 2021;
(f)	a letter from Clyde & Co to Allens dated 15 June 2021;
(g)	a letter from Allens to Clyde & Co dated 18 June 2021;
(h)	a letter from Clyde & Co to Allens dated 30 June 2021;
(i)	a letter from Allens to Clyde & Co dated 29 July 2021;
(j)	a letter from Allens to Clyde & Co dated 7 September 2021;
(k)	a letter from Clyde & Co to Allens dated 13 September 2021;
(I)	a letter from Allens to Clyde & Co dated 23 February 2022; and
(m)	a letter from Allens to Clyde & Co dated 26 May 2022.
Copies of the correspondence are contained at pages '1266-1721' of Exhibit CEM-1. The attachments to the letter dated 7 September 2021 have not been exhibited except for the Draft Major Project D&C Contract (Project Definition): Stage 7 Defects Rectification Project dated 31 May 2021.
50.	The Co-Owners have also exchanged correspondence with the Administrators, including:
(a)	. . .
14	It is relevant to note at this point that, in their written submissions filed in the appeal, the Co-Owners contend that the two letters shown in bold italics above constituted evidence that was before the primary judge ‘that the Co-Owners had made notifications to Probuild of the non-structural defects and the other defects in the 2020-2021 and 2021-2022 policy years’.  However, having regard to the date of those letters, both of them would fall within the 2021-2022 policy year.  At the hearing of the appeal, counsel for the Co-Owners also made reference to the letter from Allens to Clyde & Co dated 10 May 2021 (shown in underlined text above) and submitted that it was evidence of a notification in the 2020-2021 policy year.  And, as is discussed further below in the context of ground one of the notice of appeal, the Co-Owners have filed an additional affidavit of Ms Morcom, in the appeal, in which she deposes that defects were notified to Probuild in the 2020-2021 and 2021-2022 policy years ‘that had not previously, to [her] knowledge, been the subject of a claim by the Co-Owners against Probuild, for example the Non-Structural Defects.’
Probuild was placed in voluntary administration in February 2022
15	On 23 February 2022, Sal Algeri, Jason Tracy, Matt Donnelly and David Orr of Deloitte (the Administrators) were appointed as the joint and several voluntary administrators of Probuild pursuant to the provisions of s 436A of the Corporations Act 2001 (Cth) (Corporations Act).  By circular letter dated 23 June 2022, the Administrators issued the report to creditors pursuant to s 75-225 of the Insolvency Practice Rules (Corporations) 2016 (Cth) in respect of Probuild and other entities (the Report to Creditors).  On 30 June 2022, at a meeting convened pursuant to s 439A of the Corporations Act (Second Creditors Meeting), the creditors of Probuild resolved under s 439C of the Corporations Act that a Deed of Company Arrangement be executed (DOCA).
16	On about 21 July 2022, the DOCA was executed and the Administrators became the Deed Administrators.  As at the present date, Probuild is subject to the DOCA.
17	By cl 12.1(b)(xviii) of the DOCA, the Administrators retain the power to access, control and retain custody of the books and records of Probuild.
18	By cl 10.6 of the DOCA, if the DOCA fails for any of the reasons outlined in cl 10.2, Probuild will be wound up and the Administrators will be Probuild’s liquidators.
19	Clause 8.5 of the DOCA incorporates se 562 of the Corporations Act, which affords creditors priority to insurance proceeds where available.
20	By cl 14.2 of the DOCA, any creditors who have not submitted a proof of debt who wish to claim must submit a proof of debt within 14 days of being requested by the deed administrators or otherwise before payment of dividends.
21	With the appointment of the Administrators to Probuild, the plaintiffs recognised that any claim which they may have against Probuild would be complicated by the Administrators having been appointed.  That is because in circumstances where Probuild is in administration and a DOCA has been approved, any proceeding against Probuild requires a grant of leave under s 444E of the Corporations Act.  And if any proceeding were commenced by them to obtain relief in respect of the alleged Defects in the Stage 7 Works ‘it is likely to be controlled and determined by whether there are insurance policies which respond to the circumstances of the plaintiffs’ claims.’  They contended that ‘[b]oth the availability and extent of insurance assume significance by reason of these circumstances’.  Further, they submitted:
in the context of a company in deed administration, where the only pool of funds available to satisfy claims is insurance proceeds (such claims having been extinguished under the DOCA), the Plaintiffs need to know whether the extent of indemnity would go in some way to meeting their claims in order to determine whether to commence proceedings.
22	Accordingly, in those circumstances, the Co-Owners embarked on an information gathering process which culminated in them seeking orders before the primary judge for preliminary discovery of documents under rr 32.05 and 32.03 of the Rules.
Co-Owners request that Probuild provide documents and information
23	By letter dated 7 June 2021, the solicitors for the Co-Owners, Allens, requested that Probuild provide:
1	copies of the insurance policies effected under General Conditions 18 and 19 for the duration of the Contract works;
2	a certificate of currency relating to Probuild's professional indemnity insurance policy that was current at the date Wadren first notified Probuild of the Dispute, being October 2019.
24	In response to this request, by letter dated 15 June 2021 Probuild provided a certificate of currency (prepared by its broker) for Probuild's professional indemnity insurance policy AU000179PI covering the period of insurance from 30 June 2019 to 30 June 2020 (the AIG Australia Policy).
25	By letter dated 26 May 2022, the Co-Owners requested that, among other things, AIG provide the following in respect of the AIG Australia Policy:
(A)	Confirmation that [the Co-Owners’] Claim (as defined in our letter dated 23 February 2022) was notified to the insurers in the 2019/2020 policy;
(B)	A copy of Probuild’s notification of the claim to its insurers;
(C)	A copy of any confirmation from the insurers of indemnity or any denial of indemnity (if that is the case).
(As will be noted further below, in the appeal the Co-Owners rely on the letter from Allens to Clyde & Co dated 23 February 2022 as constituting notification of a claim in respect of the 2021/2022 policy year, yet here they are seeking confirmation that their Claim as defined in that letter ‘was notified to the insurers in the 2019/2020 policy’).
26	By 3 June 2022, AIG failed to provide any of the requested information, and by letter stated that:
Plainly enough no decision in relation to indemnity can be made when the relevant document comprising the Claim has not been provided and as far as we know may not exist.
27	Based on that response, at that time the Co-Owners’ solicitors inferred that ‘AIG has not confirmed indemnity in respect of any claim that may be brought by the Co-Owners.’  (It appears, however, that in the meantime the position has changed as counsel for AIG informed the Court on the hearing of the appeal that, in the new proceeding that was issued by the Co-Owners against Probuild and others in March 2023, AIG has the conduct of the defence on behalf of the insurers.)
28	In June 2021, the Co-Owners had also sought to ascertain details of any excess professional indemnity insurance policies and the identity of such insurers.  By letter dated 7 June 2021, their solicitors, Allens, wrote and requested that, among other things, Probuild provide:
3.	details of any excess professional indemnity insurance policies held by Probuild as at October 2019, that may respond to the Claim.
29	In response to this request, by letter dated 15 June 2021, Probuild failed to provide details of any excess professional indemnity insurance policies, including the identity of such insurers (the Professional Indemnity Insurers).
30	Further enquiries made in May 2022 also failed to elicit such details.  By letter dated 26 May 2022, the Co-Owners wrote and requested that the Administrators provide:
(ii)	details of any excess professional indemnity insurance policies held by Probuild in the relevant year that respond to the Claim or pursuant to which indemnity has been denied (if that is the case) . . .
31	By letter dated 3 June 2022, the Administrators responded and relevantly advised:
1	The Administrators are not at liberty to voluntarily disclose the requested documents.
2	Many of the requests are for information (rather than documents) and the Administrators do not consider that they are at liberty to respond to such requests.
32	By their letter dated 26 May 2022, issued to Clyde & Co and to the Administrators, the Co-Owners requested that Probuild, AIG and any other insurers for whom Clyde & Co were acting provide the Co-Owners with the following documents:
(a)	in respect of the AIG Australia Policy (the AIG Australia Policy Documents):
(i)	confirmation that the Co-Owners' Claim was notified to the insurers in the 2019/2020 policy year;
(ii)	a copy of Probuild’s notification of the claim to its insurers;
(iii)	a copy of any confirmation from the insurers of indemnity or any denial of indemnity (if that is the case);
(iv)	the relevant professional indemnity policy itself; and
(v)	the details of all insurers under the policy;
(b)	details of any excess professional indemnity insurance policies held by Probuild in the relevant year that respond to the Claim or pursuant to which indemnity has been denied (if that is the case), including the details of all insurers under those policy/ies and copies of (the Other Professional Indemnity Policy Documents):
(i)	certificate/s of currency;
(ii)	Probuild's notifications of the claim to its insurers;
(iii)	confirmation from any insurer/s of indemnity or any denial of indemnity (if that is the case): and
(iv)	the relevant professional indemnity insurance policy/ies;
(c)	confirmation of whether any other claims have been made upon the applicable professional indemnity insurance policy/ies, including details of any settlements of such claims (the Past Claim Documents); and
(d)	in respect of Probuild's directors and officers insurance policy (the D&O Policy Documents):
(i)	confirmation that the Co-Owners' claim against Mr Gray and potentially other directors or former directors of Probuild was notified under that policy;
(ii)	details of all insurers under that policy; and
(iii)	copies of:
(A)	the certificate of currency for the relevant year;
(B)	Probuild's notification of the claim to the insurer;
(C)	confirmation from the insurer of indemnity or any denial of indemnity (if that is the case); and
(D)	the relevant directors and officers insurance policy, 
(together, the Policy Documents).
33	Ms Morcom deposes that by a further letter issued to the Administrators dated 31 May 2022, the Co-Owners requested that Probuild provide the Co-Owners with the Policy Documents pursuant to Schedule 2 - Insolvency Practice Schedule of the Corporations Act.
34	For the most part, however, their requests for documentation were unsuccessful.  Accordingly, in addition to this proceeding for preliminary discovery, the Co-Owners commenced a proceeding against the deed administrators of Probuild in the Supreme Court of Queensland, proceeding No 13331 of 2023, which is mentioned later in these reasons, seeking orders that the Administrators produce certain documents which overlap with the documents the subject of this appeal.
The Co-Owners believe that they may have a right to obtain relief
35	The Co-Owners’ solicitor deposes, in her first affidavit, that:
57.	I am instructed that:
(a)	Wadren considers it may have the right to obtain relief against Probuild on the following grounds:
(i)	for breach of Probuild's design and construction obligations and warranties under the Contract, on the basis that Probuild failed to comply with those obligations and warranties in the course of completing the Stage 7 Works, including as described in the letter from Allens to Probuild dated 10 May 2021 (a copy of which is contained at pages '1272-1442' of Exhibit 
CEM-1); and
(ii)	under the indemnities in the Contract, on the basis that as a result of the Defects, Wadren has suffered loss or damage to which those indemnities respond; and
(b)	the Co-owners consider that they may have the right to obtain relief against Probuild for misleading or deceptive conduct contrary to section 18 of Schedule 2 of the Competition and Consumer Act 2010 (Cth) (the Australian Consumer Law), on the basis of representations made by Probuild.
58.	I am instructed that the Co-Owners consider that they may have the right to obtain relief against AIG Australia, the AIG Australia Co-Insurers and any other Professional Indemnity Insurers on the following grounds:
(a)	the Defects identified by the Co-Owners, and the grounds identified in paragraph 57(a) above, concern the services provided to Wadren by Probuild, which if proven to be defective, would be matters to which a professional indemnity insurance policy would ordinarily respond (subject to any applicable exclusions and limitations);
(b)	for the proceeds of each such responsive insurance policy:
(i)	section 562 of the Corporations Act 2001 (Cth) entitles the Co-Owners to priority to such proceeds in any liquidation of Probuild; and
(ii)	the DOCA expressly makes provision for the priority otherwise afforded by section 562 of the Corporations Act 2001 (Cth), relevantly stating at clause 8.5:
Subject to the terms of this Deed, section 562 of the Corporations Act is to be incorporated into this Deed as if references to a liquidator were references to the Deed Administrators and with any other amendments as necessary in the context of this Deed.
(c)	in circumstances where AIG Australia, the AIG Australia Co-Insurers and any other Professional Indemnity Insurer has denied or failed to confirm indemnity which ought to have been admitted, and section 562 of the Corporations Act 2001 (Cth) applies, the Co-Owners have the right to obtain relief in the form of a declaration that those insurers must give indemnity under the respective policy.
Application for preliminary discovery (as sought in the Originating Motion and Amended Originating Motion)
36	Against this background, by Originating Motion filed on 21 September 2022, the Co-Owners sought relief by way of preliminary discovery pursuant to rr 32.03 and 32.05 of the Rules against Probuild, AIG and Simon James Gray, a director of Probuild from 7 September 2012 to 23 March 2021.
37	Relevantly, in the Originating Motion, the orders the Co-Owners sought by way of preliminary discovery were effectively:
(a)	an order pursuant to r 32.05 ―
(i)	that Probuild give discovery of all Documents that are or have been in its possession, custody or power relating to the Policy Documents (as that term is defined in the First Morcom Affidavit);
(ii)	that AIG give discovery of all Documents that are or have been in its possession, custody or power relating to the AIG Australia Policy Documents and the Past Claim Documents (as that term is defined in the First Morcom Affidavit);
(iii)	that Mr Gray [a director of Probuild] give discovery of all Documents . . .  [no longer relevant].
(b)	 an order pursuant to r 32.03 ―
(i)	that Probuild give discovery of all Documents that are or have been in its possession, custody or power relating to the identity or description of the Other Insurers (as that term is defined in the First Morcom Affidavit);
(ii)	that AIG give discovery of all Documents that are or have been in its possession, custody or power relating to the identity or description of the AIG Australia Co-Other Insurers (as that term is defined in the First Morcom Affidavit);
(iii)	that Mr Gray [a director of Probuild] give discovery of all Documents . . .  [no longer relevant].
38	It will be noted that the relief sought in the Originating Motion is not framed explicitly by reference to the ‘Claim’ as defined in the affidavit of Corin Eileen Morcom dated 14 September 2022 (First Morcom Affidavit), being the notification of claim issued by the Co-Owners to Probuild by letter dated 10 October 2019.  However, because the relief sought against AIG is framed by reference to the ‘AIG Australia Policy Documents’ as defined in the First Morcom Affidavit, the concept of the ‘Claim’ that was notified in the 2019/2020 policy year is, and continues to be, a relevant touchpoint for consideration of the documents sought from AIG.
Prior to the hearing before the primary judge, AIG consented to preliminary discovery of certain policy documents and notifications and disclosed the identity of the Primary Layer Insurers
39	On 12 October 2022, AIG’s solicitors emailed to the Co-Owners’ solicitor, a letter written on an ‘open’ basis, providing notice that:
(a)	AIG is prepared to consent to orders that it make preliminary discovery of, amongst other things, the professional indemnity insurance policies which insure Probuild for the policy years 2019 to 2020 and 2020 to 2022 (inclusive) (the Later Policy Years) and the written notifications under those policies in respect of the Claim, the (alleged) Structural Defects and the (alleged) Non-Structural Defects; and
(b)	the Primary Layer Insurers for the AIG Australia Policy and the Later Policy Years are (as set out in paragraph 3(a) of the letter from Clyde & Co):
(A)	AIG;
(B)	Starr Underwriting Agents Limited (Starr) for and on behalf of Lloyd’s Underwriter Syndicate No. 1919 CVS; and
(C)	HCC International Insurance Company PLC (HCC). 
40	The letter from AIG’s solicitors also stated (in paragraph 3):
(b)	AIG has not made any unconditional grant of indemnity to Probuild under any of the AIG policies referred to in paragraph 3(a) above (AIG Policies) in respect of the “Claim” (as defined in paragraph 10 of the Affidavit of Corin Morcom dated 14 September 2022 (Morcom Affidavit)).
(c)	As at the date of this letter the limits of indemnity under the AIG Policies have not been exhausted.
(d)	AIG is not in possession, custody or control of any notifications that Probuild may have made to Starr or HCC or excess insurers.
41	(It will be recalled that the ‘Claim’ as defined in the First Morcom Affidavit is a reference to the notification of claim issued by the Co-Owners to Probuild by letter dated 10 October 2019.  That is to say, in September 2022 when the proceeding was commenced, the Co-Owners did not contend for more than the one notification of claim in respect of the alleged significant and wide-ranging defects in the Stage 7 Works carried out by Probuild.)
42	The Co-Owners’ solicitor, Ms Morcom, deposed that based on this correspondence from AIG’s solicitors, she inferred that, ‘in addition to the policy for the policy year 30 June 2019 to 30 June 2020, the policies for the Later Policy Years respond, or may respond, to the potential claims of the Co-Owners described in paragraphs 57 and 58 of [her] First Affidavit.’
43	Further, on 9 November 2022, Ms Morcom says she received, on behalf of the Co-Owners, a letter by way of email from the solicitors acting for the deed administrators of Probuild enclosing copies of ‘the three certificates of currency relating to Probuild’s professional indemnity insurance policy for each of the 2020 to 2022 policy years, dated 11 July 2019, 22 July 2020 and 25 June 2021 respectively.’  The three certificates were each prepared on the letterhead of the broker, Willis Towers Watson, and styled ‘Certificate of Placement – Professional Indemnity’, and for the most part were in a common form with a ‘Covering’ clause and ‘Combined Limit of Indemnity’ clause as set out below:
Covering:	The Insurer agrees to indemnify the Named Insured against any Claim for civil liability first made against the Named Insured during the Period of Insurance and notified to the Insurer during the Period of Insurance arising from the performance of Professional Services.	
Combined Limit of Indemnity:	$50,000,000 any one occurrence and in the aggregate for all claims made during the Period of Insurance.	
Automatic Reinstatement:	One	
Expiry Date:	4.00pm, 30 June 202#	
44	After exhibiting this correspondence from the solicitors acting for the deed administrators of Probuild, Ms Morcom deposed that:
11.	I am instructed that the Co-Owners do not possess, and have not had access to, in respect of the Later Policy Years:
(i)	confirmation that the Co-Owners' Claim was notified to the insurers in the 2020 to 2022 (inclusive) policy years;
(ii)	a copy of Probuild's notification of the claim to its insurers;
(iii)	a copy of any confirmation from the insurers of indemnity or any denial of indemnity (if that is the case);
(iv)	the relevant professional indemnity policy itself; and
(v)	the details and identity of all insurers under the policies, save for as notified by the second defendant [AIG] in its letter dated 12 October 2022 as described in paragraph 8(b) and by the documents enclosed with the letter of the first defendant [Probuild] dated 9 November 2022 as described in paragraph 10.
45	In an affidavit filed by the solicitor acting for AIG, Ms Nicole Wearne of Clyde & Co, sworn on 10 November 2022 (First Wearne Affidavit), Ms Wearne confirmed that the Co-Owners had been informed of the identity of the Primary PI Insurers of the primary layer professional indemnity policies for the policy years 2019 to 2022, as being AIG, Starr and HCC.  However, she also deposed that:
16.	The Primary Pl Insurers do not account for the full amount of the “combined limit of indemnity” referred to in the Certificate of Currency.  That additional amount is made up by excess insurers.
17.	Ms Mitchell [Major Loss at AIG] has informed me that AIG does not have copies of the excess policies or any notifications made under those policies.
46	Further, by reference to the letter from Clyde & Co to Allens dated 12 October 2022, Ms Wearne stated:
26.	In a letter from Clyde & Co to Allens dated 12 October 2022, AIG told the plaintiffs [appellants] that AIG has not made any unconditional grant of indemnity to Probuild under any of the AIG Policies for the years 2019 to 2022 in respect of the “Claim”.  . . .
27.	Ms Mitchell has instructed me that the Primary PI Insurers have not made any unconditional grant of indemnity to Probuild under the Primary PI Policies in respect of the Claim.
28.	Decisions about indemnity are always a function of the state of information provided to an insurer, are generally subject to a reservation of rights and are often subject to change.
B.1.3	Copy of relevant professional indemnity policy
29.	In a letter from Clyde & Co to Allens dated 12 October 2022, the plaintiffs [appellants] were informed that AIG consents to an order that it make preliminary discovery of the AIG Policies.  . . .
. . .
B.2	Past Claim Documents
32.	‘Past Claim Documents’ is defined in the Morcom Affidavit (para 51(c)) as all documents relating to confirmation of whether any other claims have been made upon the applicable professional indemnity insurance policy/ies, including details of any settlements of such claims.
33.	By letter from Clyde & Co to Allens dated 12 October 2022, AIG has informed the plaintiffs [appellants] that the limit of indemnity under the AIG Policy for the 2019/20 year has not been exhausted.  . . .  I am informed by Ms Mitchell that is still the case as at the date of this affidavit.
34.	I am informed by Ms Mitchell that the limit of indemnity under the Primary Pl Policy for the 2019/20 year has not been exhausted.
35.	AIG otherwise objects to being ordered to make preliminary discovery of Past Claim Documents.
. . .
Prior to the hearing the deed administrators of Probuild indicated that they would consent to orders proposed by the Co-Owners for preliminary discovery of certain documents relating to Probuild's insurance arrangements including those with AIG and/or its co-insurers
47	Prior to the hearing before the primary judge, in correspondence between the solicitors for the Co-Owners and the solicitors for the deed administrators of Probuild, the solicitors for the deed administrators indicated that they would consent to orders proposed by the Co-Owners for preliminary discovery of certain documents relating to Probuild’s insurance arrangements including those with AIG and/or its co-insurers.  This was so notwithstanding that AIG had previously notified the solicitors for the deed administrators of AIG’s objections to Probuild discovering certain documents relating to Probuild’s Primary PI insurance policies.
48	Once AIG became apprised of this proposal, AIG’s solicitors sent a letter to the solicitors for the deed administrators by email dated 4 November 2022, notifying them of AIG’s opposition, and re-stating AIG’s position, relevantly as follows:
2	AIG considers that any/all documents meeting the description of the “AIG Australia Policy Documents” and the “Past Claim Documents” (as those terms are defined in paragraph 51 of the Affidavit of Corin Morcom dated 14 September 2022), as they relate to the primary professional indemnity insurance policies, are confidential between the primary insurers and Probuild and contain commercially sensitive information.
3	We confirm, for the avoidance of any doubt, that AIG and its co-insurers maintain confidentiality over the above-mentioned documents and object to Probuild consenting to orders requiring Probuild to discover them, in circumstances where Probuild can make valid objections to the orders sought by the plaintiffs [appellants].
4	Notwithstanding that AIG maintains that all of the “AIG Australia Policy Documents” and the “Past Claim Documents” are confidential and contain commercially sensitive information, AIG will not object to Probuild producing to the plaintiffs [appellants] the documents set out in paragraph 2 of the proposed consent orders attached to our letter to Allens of 21 October 2022, in response to any Court order made to that effect at the appropriate time.
. . .
49	The solicitors for the deed administrators responded to AIG’s solicitors letter of 4 November 2022, by a letter sent by email dated 11 November 2022, relevantly stating:
In response to [4] of your letter, we confirm that the Deed Administrators will not disclose copies of the “AIG Australia Policy Documents” and the “Past Claim Documents” to the plaintiffs [appellants] in the Pre-Action Discovery Application without Probuild or the Deed Administrators being ordered to do so by the court.
In accordance with their duties to creditors of Probuild and the other entities in the Probuild group of companies as a whole, the Deed Administrators do not oppose the Pre-Action Discovery Application.  The reasons for this include that it is not in the interests of creditors as a whole to incur costs (and spend funds that might otherwise be available to creditors) opposing the Pre-Action Discovery Application.
If your client holds serious concerns regarding the Pre-Action Discovery Application, then the proper course is for your client is [sic] to continue to submit this position to the Court in the Pre-Action Discovery Application and appear at the hearing of the application.
The Deed Administrators do not intend to incur further costs in respect of the Pre-Action Discovery Application.  The Court has recognised the Deed Administrators' position and has excused further attendance at hearings.
We respectfully request that you put this correspondence before the Court in the Pre-Action Discovery Application should your client choose to make any submissions/oppose the application.
The Co-Owners sought and obtained leave to file and serve an Amended Originating Motion at the hearing on 25 November 2022
50	Against that background, the substantive hearing of the Co-Owners’ application took place on 25 November 2022 before the primary judge.  At the hearing, as there was no objection to the amendment of the Originating Motion, the Co-Owners sought and obtained leave to file and serve an amended originating motion in the form exhibited to the affidavit of Corin Eileen Morcom dated 14 November 2022 (Second Morcom Affidavit).
51	Relevantly, by their Amended Originating Motion (which was not filed until 9 March 2023), the Co-Owners effectively sought the following orders:
(a)	an order pursuant to r 32.05 of the Rules that Probuild give discovery of all documents (including letters, emails, faxes, file notes and other written communications, whether electronic or hard copy) (‘Discoverable Documents’), that are or have been in the possession, custody or power of Probuild relating to the Policy Documents, as that term is defined in the affidavit of Corin Eileen Morcom affirmed on 14 September 2022 (‘First Morcom affidavit’), save that the reference to the ‘AIG Australia Policy’ in para 26 [of the First Morcom affidavit] (and thereafter) should be read as covering the 2019–2022 policy years (inclusive);[]
(b)	an order pursuant to r 32.05 of the Rules that AIG give discovery of all Discoverable Documents, that are or have been in the possession, custody or power of AIG relating to the AIG Australia Policy Documents and the Past Claim Documents, as those terms are defined in the First Morcom affidavit, save that the reference to the ‘AIG Australia Policy’ in para 26 [of the First Morcom affidavit] (and thereafter) should be read as covering the 2019–2022 policy years (inclusive);
(c)	an order pursuant to r 32.03 of the Rules that Probuild give discovery of all Discoverable Documents, that are or have been in the possession, custody or power of Probuild relating to the identity or description of the Other Insurers, as that term is defined in the First Morcom affidavit, save that the reference to the ‘AIG Australia Co-Insurers’ in para 61(a)(i) [of the First Morcom affidavit] should be read as the other insurers on the panels for each of the AIG Australia Policies;
(d)	an order pursuant to r 32.03 of the Rules that AIG give discovery of all Discoverable Documents, that are or have been in the possession, custody or power of AIG relating to the identity or description of the AIG Australia Co-Insurers, as that term is defined in the First Morcom affidavit, save that the reference to the ‘AIG Australia Co-Insurers’ in para 27 [of the First Morcom affidavit] (and thereafter) should be read as the other insurers on the panels for each of the AIG Australia Policies.
52	The various Policy Documents referred to above as being defined in the ‘First Morcom affidavit’, which are relevant to the current application, are defined therein as follows:
(a)	in respect of the AIG Australia Policy (the AIG Australia Policy Documents):
(i)	confirmation that the Co-Owners’ [the plaintiffs’] Claim was notified to the insurers in the 2019/2020 policy year;
(ii)	a copy of Probuild’s [the first defendant’s] notification of the claim to its insurers;
(iii)	a copy of any confirmation from the insurers of indemnity or any denial of indemnity (if that is the case);
(iv)	the relevant professional indemnity policy itself; and
(v)	the details of all insurers under the policy;
(b)	details of any excess professional indemnity insurance policies held by Probuild in the relevant year that respond to the Claim or pursuant to which indemnity has been denied (if that is the case), including the details of all insurers under those policy/ies and copies of (the Other Professional Indemnity Policy Documents):
(i)	certificate/s of currency;
(ii)	Probuild’s notifications of the claim to its insurers;
(iii)	confirmation from any insurer/s of indemnity or any denial of indemnity (if that is the case); and
(iv)	the relevant professional indemnity insurance policy/ies;
(c)	confirmation of whether any other claims have been made upon the applicable professional indemnity insurance policy/ies, including details of any settlements of such claims (the Past Claim Documents); and
(d)	…
(together, the Policy Documents).
The gist of AIG’s opposition to the Co-Owners’ application for preliminary discovery
53	The dispute before the primary judge concerned AIG’s opposition to the Co-Owners’ application for preliminary discovery, and including AIG’s opposition to the proposed consent orders agreed as between the Co-Owners and Probuild.  As noted above, in that regard, AIG opposed the production by Probuild of certain categories of documents in relation to the Primary PI Policies, but did not oppose the production of documents in relation to other professional indemnity insurance policies that may be held by Probuild (in context, a reference to the excess layer professional indemnity insurance policies held by Probuild).
54	Relevantly, before the primary judge, in relation to the documents that constitute the ‘AIG Australia Policy Documents’, AIG consented to an order that it make preliminary discovery of the following documents:
(a)	the ‘Primary PI Policies’ (being the policies that insure Probuild issued by AIG, Starr and HCC for the 2019 to 2022 policy years); and
(b)	the ‘AIG Notifications’ (being notifications made by Probuild to AIG under the AIG Policies in respect of the Claim, the Structural Defects and the Non-structural Defects).
55	Before the primary judge, the specific categories of documents for which AIG opposed preliminary discovery were:
(a)	all documents relating to any confirmation from the Primary PI Insurers of indemnity or any denial of indemnity (‘Disputed Primary PI Indemnity Documents’), which are sought pursuant to r 32.05 of the Rules;
(b)	all documents relating to the confirmation of other claims made upon the Primary PI Policies, including details of any settlements of such claims (‘Disputed Primary PI Past Claims Documents’), which are sought pursuant to r 32.05 of the Rules; and
(c)	all documents relating to the identity or description of the AIG Australia Co-Insurers (‘Disputed AIG Australia Co-Insurer Documents’), which are sought from AIG pursuant to r 32.03 of the Rules.
56	The parties presented their respective factual cases by way of the affidavit material that had been filed.  None of the deponents was cross-examined.
57	The relevant task before the primary judge was to ascertain whether, on the facts as presented:
•	The plaintiffs have reasonable cause to believe that they may have a right to relief in the Court against the defendants;
•	Whether the plaintiffs have made all reasonable enquiries;
•	Whether, having made those enquiries, the plaintiffs do not have sufficient information to enable them to decide whether to commence proceedings;
•	Whether there is reasonable cause for the plaintiffs to believe that the defendants have or have had or are likely to have been in possession of the documents sought and that inspection of those documents would assist the plaintiffs to make the decision whether to commence proceedings.
58	Rule 32.05 of the Rules provides that where those conditions are satisfied, ‘the Court may order that that person shall make discovery … of any document of the kind described in paragraph (c)’ of r 32.05.
59	With respect to the preliminary discovery sought under r 32.05, AIG contended that in the circumstances, the Co-Owners know, or upon receipt of the preliminary discovery to which AIG consents, will know:
(a)	the identity of the Primary PI Insurers;
(b)	the terms of the potentially relevant Primary PI Policies;
(c)	the dates on which relevant notifications were made under the AIG Policies, which will enable the Co-Owners to determine which is the relevant policy year;
(d)	that AIG has not made any unconditional grant of indemnity to Probuild under the AIG Policies which, had it been made, could potentially have provided a complete defence to any proceedings against AIG; and
(e)	the limits of indemnity under the Primary PI Policies had not been exhausted.
60	AIG submitted that the information concerning the matters set out above is all the information the Co-Owners reasonably need in order to decide whether to commence a proceeding against Probuild and/or the Primary PI Insurers.  Further, AIG maintained that if the Court were to require that further information be provided, it would give the Co-Owners an unfair asymmetric commercial advantage in any subsequent proceeding they may choose to commence.
The Principal Ruling
61	In the Principal Ruling, delivered by the primary judge on 29 June 2023, the Co-Owners succeeded in obtaining an order for preliminary discovery but of some only of the categories of documents sought in their application.  In those circumstances, his Honour directed the parties to confer and provide the Court with appropriate orders.  However, when the Court was informed that the Co-Owners and AIG could not agree on the scope of the discoverable material and costs, and therefore could not agree on a form of orders giving effect to the judgment, a further hearing was listed before his Honour on 15 August 2023 to resolve these issues.  In advance of the hearing, the Co-Owners and AIG each filed a short outline of submissions.
62	Relevantly, it appears that there was some disagreement between the parties as to whether the preliminary discovery his Honour proposed in the Principal Ruling be given by AIG was limited to the 2019-2020 policy year or whether it extended to each of the 2020-2021 and 2021-2022 policy years (as sought in the Amended Originating Motion), and also as to the orders that should be made as to the disposition of the proceeding.
63	Apropos the first issue, whether the preliminary discovery to be given by AIG in respect of documents pertaining to, or evidencing, confirmation of indemnity or denial of indemnity was to be given for the first policy year only or for all three policy years, the Co-Owners submitted at the further hearing on 15 August 2023 that it was all three years whereas AIG contended that it ought be confined to one year.  In essence, at the further hearing before the primary judge, counsel for the Co-Owners submitted that there was no inconsistency between his Honour’s reasons in paragraphs 78 and 79 of the Principal Ruling (where he was dealing with documents evidencing notifications in the later years) and paragraphs 80 to 83 (where he was dealing with confirmation of indemnity or denial of indemnity in the later years) as follows:
[MR GLEESON:]  . . .   But, happily, there’s no inconsistency.  Let me explain.  In 78 and 79, where you found that it wasn’t sufficiently clear why documents evidencing notification under the later two policy years was relevant, was dealing with a different category of documents we were seeking.  This is the important point.
An insured can obviously bring notification under year one of a policy that suffices for notification under the subsequent policy years.  If, in the ordinary course of events, an insured sticks with the same insurer year in, year out for a number of years, it doesn’t have to keep giving fresh notifications just because the policy year rolls over.
It might, but if it gives a notification in year one, and you’ve found, and AIG conceded, that they ought give disclosure of the notification documents for year one, it doesn’t follow, and you found it doesn’t follow, that there ought be discovery of notification in subsequent years.  But it’s a different question as to whether there was confirmation or denial of indemnity under the subsequent policy years.
So it's quite consistent for you to say, I’m not going to give you three years of notification documents, but I will give you three years of indemnity, denial or confirmation documents.  It doesn’t have to be the case that there was only notification in one year.  All we’re addressing here is whether there is inconsistency in your conclusions and there’s not.
64	Counsel for the Co-Owners then referred his Honour to the 12 October 2022 letter from Clyde & Co, the solicitors for AIG, where Ms Wearne informed the Co-Owners about the primary layer insurers of the professional indemnity insurance policies for the three policy years 2019/2020, 2020/2021 and 2021/2022, and stated:
[3(a)]	The primary layer insurers of the professional indemnity insurance policies which insure Probuild Constructions (Aust) Pty Ltd (Probuild) for the policy years:
(i)	30 June 2019 to 30 June 2020;
(ii)	30 June 2020 to 30 June 2021; and
(iii)	30 June 2020 to 30 June 2022,
are:
(A)	AIG;
(B)	Starr Underwriting Agents Limited (Starr) for and on behalf of Lloyd's Underwriter Syndicate No. 1919 CVS; and
(C)	HCC International Insurance Company PLC (HCC).
[3(b)]	AIG has not made any unconditional grant of indemnity to Probuild under any of the AIG policies referred to in paragraph 3(a) above (AIG Policies) in respect of the “Claim” (as defined in paragraph 10 of the Affidavit of Corin Morcom dated 14 September 2022 (Morcom Affidavit)).
65	Against that background, counsel for the Co-Owners submitted that it was actually AIG’s solicitors ‘who introduced the relevance of indemnity being granted or not granted under not one year of the policies but all three’, adding that ‘they have alerted us to the existence of the subsequent year policies‘.  The following exchange then took place between the primary judge and counsel for the Co-Owners:
HIS HONOUR: I'd need to look, but from memory, I think – I recall Mr Slattery [counsel for AIG] being fairly firm of the view that while they were talking about these other policies and had agreed to produce some documents in relation to them, they didn’t concede that they were relevant in the circumstances, and did it under the interests of the Civil Procedure Act and their obligations.
MR GLEESON: Well, that’s thoroughly decent of them.  But the point is that they have alerted us to the existence of the subsequent year policies and it brings us back to our fundamental proposition.  Well, the starting point is it doesn’t matter if it’s inconsistent, but it’s not inconsistent because it could well be documents pertaining to denial or confirmation of indemnity under those subsequent years.  It’s as simple as that.
And you found it to be so, but you don’t get to that process of reasoning because the language of 80 to 83 is clear.  . . .
66	When time came for AIG’s counsel, Ms Crafti, to address his Honour, she responded by returning to the transcript of the substantive hearing on 25 November 2022 and focused on the oral submissions counsel for AIG, (then) Mr Slattery KC, made in relation to AIG’s consent to the discovery of the Primary PI Policies for the three policy years, (for convenience reproduced below) as follows:
[MR SLATTERY:]  The second point that I wish to make in relation to what I’ll call the quality of nature of our consent, and this is a point that’s not made in our written submissions due to the way in which matters unfolded, is that although we’ve offered to permit preliminary discovery of the primary PI policies for the 2021 and 21-22 policy years, as well as 2019-20, and we remain prepared to do so for the sake of consistency, again we say that none of the plaintiffs have established any reason to believe that they may have the right obtain to relief under the 2020 and – sorry, 2020, 2021 and 22 policy years, so the second and third policy years such as would entitle them to preliminary discovery of any of the disputed documents for those policy years.
And again, Your Honour, this is not a pedantic point without any significance, because, for example, the plaintiff seeks all documents relating to past claims under each of these three policies.  So Your Honour can well imagine that in each policy year, it’s possible that there may have been other claims, it’s possible that there may have been settlements, it’s possible that there may be many documents relating to them.
And as I’ll develop in due course, we say that that category that the plaintiff seeks is an extremely broad category, and when it’s rolled out over three years it becomes even broader.  So we say that they’ve actually only established reasonable cause to believe that they may have a cause of action in respect of the 2019-20 policy years [sic].  The easiest way to demonstrate that is that the application as originally filed only sought access to the documents concerning the 2019 and 20 policy years.  Now, I think Mr Pane [counsel for the Co-Owners] said a couple of times that originally they sought two years and now they’re seeking a third.  In my submission, that’s not correct.  They originally sought it in relation to one year which is 2019-20 policy year, and then now by their amendment they seek it in relation to the following two years.
And that’s evident - I can just give Your Honour the reference for this, that’s evident from Ms Morcombe’s (sic) first affidavit at paragraph 36 where that’s where she defines the relevant AIG Australia policy as being the 2019-20 policy year.  And that would appear to have been chosen sensibly, we say, on the basis that that’s when the plaintiffs say they first notified their claim to Probuild.
And again, for the sake of not having to go back into Ms Morcombe’s (sic) electronic affidavit, and it’s not the most critical reference, I’ll just give Your Honour that reference.  That’s Ms Morcombe's (sic) first affidavit at paragraph 10.  That’s where she says the claim was made in October 2019.  And it’s also evident from one of the letters that my learned friend took Your Honour to, which was in Exhibit CEM1 at p1445[].
So we accept that there’s a reasonable basis for concluding that they may have a cause of action in relation to 2019-20 policy years on the basis that that’s when the claim was first notified.  The basis for the change that they now seek to include those other two years is in Ms Morcombe’s (sic) second affidavit, and perhaps I will have to ask Your Honour to wrestle with that one.
So that’s the second affidavit of November, and it’s at paragraphs 8 and 9.
. . .
MR SLATTERY: And that’s paragraphs 8 and 9.  Essentially, what Ms Morcombe (sic) says, she refers to our letter of 12 October, which Your Honour has been taken to a couple of times already, where we say we’re prepared to allow preliminary discovery of those three policy years.  And then Ms Morcombe (sic) says in paragraph 9, ‘Based on this correspondence I infer that in addition to the policy for the policy year 2019-20, the policies for the later year policies respond, or may respond, to the potential claims of the co-owners’.
Now, we say the mere fact that we’ve been prepared to allow access to those policies for all the three policy year[s] doesn’t provide a sound basis to infer that the policies respond or may respond to the potential claims raised by the plaintiffs so as to sustain, for example, an entitlement to preliminary discovery of the disputed claim to all past claim documents under each of those later year policies.
Our consent to providing the policy documents for those additional two years was simply done to promote the overarching purpose by showing the plaintiffs the complete suite of policies and relevant notifications so they can make their own assessment of which policies apply or may apply.  The simple fact of making the offer, we say, says nothing about those matters and no such inference should be drawn.
HIS HONOUR: Yes, I follow that.
67	Accordingly, at the further hearing on 15 August 2023, Ms Crafti submitted that paragraphs 78 and 79 of the Principal Ruling fall to be interpreted against the background of those oral submissions made on behalf of AIG at the substantive hearing and, in particular, the preliminary discovery that AIG had already provided or consented to provide.  She submitted:
[MS CRAFTI:]  What’s really critical about paragraphs 78-79, Your Honour, is that yes it falls under a different heading, but Your Honour was making those findings in respect of a category of documents in respect of which AIG had already provided consent.
So in our submission, what Your Honour was doing there - without trying to tell Your Honour what you were doing, but I am - Your Honour was confining your decision to the 19-20 policy year.  Your Honour wasn’t making a decision in respect of whether AIG needed to provide the relevant notifications because of course, AIG had already agreed to do that.  Your Honour can see that from – I’m just about to jump to that. Your Honour can see that – I don’t know if Your Honour has – well, it’s summarised in our submissions from 10 November, but I can – without taking Your Honour back to Ms Wearne’s affidavit - - -
HIS HONOUR: Yes, I have those submissions.
MS CRAFTI: Yes.  So at paragraph 2, ‘AIG has informed the plaintiffs that it consents to the court order in the preliminary discovery of the following’.  At B you can see the written notifications made by Probuild to AIG under the AIG policies in respect of the claim, the structural defects and the non-structural defects – the AIG notifications.  What I’m trying to submit here, Your Honour, is Your Honour wasn’t making a decision in respect of the notifications.
Your Honour was, I suppose, leveraging off the consent that had already been given to address squarely what Mr Slattery raised, which was there’s no basis – set aside for one moment what AIG agreed to hand over to the plaintiffs back in October, but the purposes of the preliminary discovery application – part of the preliminary discovery application as Your Honour has correctly identified is that the cause of action and entitlement to plead a cause of action have to be established.  That’s the bedrock of an application for preliminary discovery.
Your Honour, we say, correctly found that there was no basis for preliminary discovery in respect of the subsequent two years.  Now, when Your Honour reads Your Honour’s judgment from beginning to end and in context, as Mr Gleeson submitted at paragraph 5 of his submissions, we say it’s tolerably clear from Your Honour’s reasons that Your Honour was confining the order for discovery that you ultimately were effectively making to the 19-20 policy year and not beyond that.
68	Counsel for the Co-Owners then responded briefly to AIG’s submission, relevantly as follows:
MR GLEESON: Thanks, Your Honour.  Few points in reply, as to the policy years for which confirmation or refusal documents might be provided, Ms Crafti started with a reference to paragraph 5 of our submissions and our statement that the court’s reasons must be read and understood in their context.  And that’s precisely the point we were endeavouring, perhaps in a ham-fisted way, to make when we took you to your reasons and their context, and in particular to what you were doing in 78 and 79 as distinct from what you were doing in 80 through 83.
And far from seeking to walk away from the proposition that the reasons need to be read in context, we walk towards it.  What you are doing in 78 and 79 is clearly and explicitly addressing whether the plaintiffs have sufficient information about whether relevant notifications were made.  And we know that for this reason; in 79 you say, in the last sentence, ‘Accordingly I'm not satisfied that the plaintiffs lack sufficient information in this regard’.
What does ‘in this regard’ mean?  Information, if you go back to the heading, do the plaintiffs have sufficient information, and the phrase in the regard from 79 is at the next bit.  Sufficient information in relation to the dates on which the relevant notifications were made under  the relevant insurance policies.  That’s what you’re addressing there, now, Ms Crafti says yes, but you really didn’t have to address that, because it was the subject of consent.  Well, whether it was the subject of consent or contested, the explicit language you’ve used confines your conclusion there to a lack of satisfaction about notification.
Now, what Ms Crafti was intimating, although she dare not say it out loud, is that you ought make orders inconsistent with the express language you use in 80, 81, 82 and 83.  We put as our primary submission, both in writing and orally, that that defined phrase captures all three years, and you not only ought not, but with great respect, cannot depart from it.  AIG doesn't today say anything about that, it just says well, really it would be inconsistent with what you did in 78 and 79, and as we’ve already said to you, it's not inconsistent, but even if it were, it doesn't matter.
If there were some looseness in the language in 80 through 83, potentially there would be scope for you to do something different than what the substance of 80 to 83 indicated, but there’s no looseness of language.  If a court in its reasons defines a term and uses that defined term it ought not be thought that it did so other than intentionally.  And what are the parties to make of reasons for judgment if the contrary is the position.  The parties are left to guess whether on this occasion the court meant to use the defined term and on another occasion it didn’t.  It creates problems.
The August Ruling
69	Against that background, on 22 August 2023, the primary judge issued the August Ruling, in which he held, inter alia, that the Co-Owners were not entitled to preliminary discovery of documents concerning the confirmation or denials of indemnity for the insurance policies for the 2020-2021 and 2021-2022 policy years.
70	Relevantly for present purposes, the primary judge made orders on 22 August 2023, as follows:
THE COURT ORDERS BY CONSENT THAT:
1	The second defendant [AIG] make discovery to the first and second plaintiffs [Wadren and QIC] of:
(a)	the professional indemnity insurance policies which insure Probuild Constructions (Aust) Pty Ltd issued by the second defendant [AIG], Starr Underwriting Agents Limited for and on behalf of Lloyd’s Underwriter Syndicate No. 1919 CVS and HCC International Insurance Company PLC (collectively, the ‘Primary PI Insurers’) for the policy years:
(i)	30 June 2019 to 30 June 2020;
(ii)	30 June 2020 to 30 June 2021; and
(iii)	30 June 2021 to 30 June 2022,
(the ‘Primary PI Policies’);
(b)	the written notifications made by the first defendant [Probuild] to the Primary PI Insurers under the Primary PI Policies for the policy year 30 June 2019 to 30 June 2020 in respect of:
(i)	the Claim (as defined in paragraph 10 of the affidavit of Corin Eileen Morcom affirmed on 14 September 2022 (‘Morcom Affidavit’));
(ii)	the Structural Defects (as defined in paragraph 11 of the Morcom Affidavit); and
(iii)	the Non-structural Defects (as defined in paragraph 13 of the Morcom Affidavit);
that are in the possession, custody or power of the second defendant [AIG] at the date of this Order.
THE COURT ORDERS THAT:
2	The first defendant [Probuild] make discovery to the first and second plaintiffs [Wadren and QIC] of the excess professional indemnity policies which insure the first defendant and which identify the excess insurers for the policy years:
(a)	30 June 2019 to 30 June 2020;
(b)	30 June 2020 to 30 June 2021; and
(c)	30 June 2021 to 30 June 2022,
that are in the possession, custody or power of the first defendant at the date of this Order.
. . .
6	The second defendant [AIG] make discovery to the first plaintiff [Wadren] of all documents (including letters, emails, faxes, file notes and other written communications, whether electronic or hard copy) comprising confirmation of indemnity or denial of indemnity from the Primary PI Insurers to the first defendant [Probuild] in respect of the Primary PI Policies for the period 30 June 2019 to 30 June 2020 that are in the possession, custody or power of the second defendant [AIG] at the date of this Order.
7	The first defendant [Probuild] must make discovery in accordance with, and produce for inspection the documents identified in, paragraph 2 within 2 business days of the date of this Order.
8	The second defendant [AIG] must:
(a)	make discovery in accordance with paragraphs 1 and 6 above within 14 business days of the date of this Order; and
(b)	produce for the inspection of the plaintiffs [Wadren and QIC] copies of the documents identified in paragraph 1(a) above within 2 business days of the date of this Order.
. . .
11	Inspection of documents ordered to be discovered under paragraphs 1 and 2 above is limited to nominated representatives of the plaintiffs [Wadren and QIC] on terms that, prior to inspecting those documents, they sign the confidentiality undertaking attached in Annexure A.
11A	Inspection of documents ordered to be discovered under paragraph 6 above is limited to nominated representatives of the first plaintiff [Wadren] on terms that, prior to inspecting those documents, they sign the confidentiality undertaking attached in Annexure A.
. . .
71	As will be noted, in those orders, the primary judge has confined the ambit of the preliminary discovery to be given, and to whom, and his Honour has also declined to order AIG to make preliminary discovery to the Co-Owners of certain other documents that were requested, such as those concerning whether the limits of indemnity had been eroded under the relevant insurance policies.
The Insurance Policies
Certificates of Currency for the Primary PI Insurance policies
72	As noted earlier, in the proceeding before the primary judge, the Co-Owners’ solicitors had received on 9 November 2022, by way of email, a letter from the solicitors acting for the deed administrators of Probuild enclosing copies of ‘the three certificates of currency relating to Probuild’s professional indemnity insurance policy for each of the 2020 to 2022 policy years, dated 11 July 2019, 22 July 2020 and 25 June 2021 respectively.’
73	Each of the three certificates of currency was prepared on letterhead of the insurance broker, Willis Towers Watson (WTW), addressed to Probuild Constructions (Aust) Pty Ltd and styled as a ‘Certificate of Placement – Professional Indemnity’.  While each of the three certificates bore different dates of issue – 11 July 2019, 22 July 2020 and 25 June 2021 - the substantive wording for each certificate was for the most part, common, as follows:
Certificate of Placement -Professional Indemnity
In our capacity as Insurance Broker to the Named Insured shown below, we confirm having arranged the following insurance, the details of which are correct as at the Issue Date:
Named Insured:	Probuild Constructions (Aust) Pty Ltd [and any subsidiary Companies as defined in the Policy Wording]	
Insurers:	A Panel of Insurers led by AIG Australia Limited	
Policy Number:	AU000179PI	
Professional Services:	“Professional Services” means the performance of professional work in the following categories conducted by a tertiary qualified engineer, or person(s) with similar qualifications by reason of education and/or experience:
(a) 	design or specification;
(b) 	advice in relation to design or specification;
(c) 	drafting;
(d) 	feasibility study;
(e) 	technical information calculation;
(f) 	surveying;
(g) 	inspection; 
(h) 	project management; or
(i) 	construction management.
“Professional Services” does not mean the performance or supervision of construction, installation, fabrication, assembly, erection, treatment, services, repair or maintenance which would normally be undertaken by a building contractor or building foreman.	
Covering:	The Insurer agrees to indemnify the Named Insured against any Claim for civil liability first made against the Named Insured during the Period of Insurance and notified to the Insurer during the Period of Insurance arising from the performance of Professional Services.	
Combined Limit of Indemnity:	$50,000,000 any one occurrence and in the aggregate for all claims made during the Period of Insurance.	
Automatic Reinstatement:  	One	
Expiry Date:	4.00pm, 30 June 202[#]	
74	The ‘Policy Number’ shown on each of the certificates of currency is the same as the ‘Policy Number’ recorded on each of the AIG ‘Design & Construct Professional Indemnity’ Policies issued in each of the 2020, 2021 and 2022 policy years.  However, in Ms Wearne’s First Affidavit, she deposed that:
16.	The Primary Pl Insurers do not account for the full amount of the “combined limit of indemnity” referred to in the Certificate of Currency.  That additional amount is made up by excess insurers.
75	Ms Wearne deposes in the First Wearne Affidavit that she is instructed that the Certificate(s) of Currency were prepared by WTW, without AIG’s involvement, and that AIG does not know what is meant by the expression used in the Certificate to describe the Insurers, namely ‘A Panel of Insurers led by AIG Australia Limited’.
The Primary PI Insurers and the Primary PI Policies
76	In the First Wearne Affidavit, Ms Wearne deposed that she was instructed by Ms Mitchell, Major Loss, at AIG, that the ‘co-insurers of the primary professional indemnity insurance policy that insures Probuild for the 2019/20 policy year’ are AIG, Starr and HCC.  She added that, for convenience, in her affidavit she would refer to ‘AIG, Starr and HCC as the Primary PI Insurers of the primary layer professional indemnity insurance policies for the policy years 2019 to 2022 (collectively, the Primary PI Policies).’
77	Ms Wearne also deposed that the Co-Owners had been informed of the identity of the Primary PI Insurers for the 2019/2020 year in a letter from Clyde & Co to Allens dated 12 October 2022.  In that letter, a portion of which has been reproduced above, Clyde & Co stated relevantly:
3 	We are instructed by AIG to inform your clients as follows:
(a)	The primary layer insurers of the professional indemnity insurance policies which insure Probuild Constructions (Aust) Pty Ltd (Probuild) for the policy years:
(i)	 30 June 2019 to 30 June 2020;
(ii)	 30 June 2020 to 30 June 2021; and
(ii)	 30 June 2020 to 30 June 2022,
are:
(A) 	AIG;
(B) 	Starr Underwriting Agents Limited (Starr) for and on behalf of Lloyd's Underwriter Syndicate No. 1919 CVS; and
(C) 	HCC International Insurance Company PLC (HCC).
78	In that letter, Clyde & Co also informed the appellants’ solicitors that:
3 	We are instructed by AIG to inform your clients as follows:
. .  .
(b)	AIG has not made any unconditional grant of indemnity to Probuild under any of the AIG policies referred to in paragraph 3(a) above (AIG Policies) in respect of the “Claim” (as defined in paragraph 10 of the Affidavit of Corin Morcom dated 14 September 2022 (Morcom Affidavit)[]).
(c) 	As at the date of this letter the limits of indemnity under the AIG Policies have not been exhausted.
(d) 	AIG is not in possession, custody or control of any notifications that Probuild may have made to Starr or HCC or excess insurers.
79	The Primary PI Policies covering Probuild in each of the (three) 2020, 2021 and 2022 policy years appear as part of Exhibit NJW-3 to the third affidavit of Nicole Joy Wearne dated 24 November 2023 (Third Wearne Affidavit), which was filed in the appeal (and was not before the primary judge).  In the Third Wearne Affidavit, Ms Wearne refers to these policy documents under the heading ‘Additional documents that AIG seeks to rely on’, as follows:
Additional documents that AIG seeks to rely on
6.	On or about 29 August 2023, pursuant to order 1 made by [the primary judge] on 22 August 2023, AIG made discovery to the appellants of the professional indemnity insurance policies for Probuild Constructions (Aust) Pty Ltd (subject to a deed of company arrangement) (ACN 095 250 945) issued by AIG, Starr Underwriting Agents Limited for an [sic] on behalf of Lloyd's Underwriting Syndicate No. 1919 CVS and HCC International Insurance Company (together, the Primary PI Insurers), for the policy years 30 June 2019 to 30 June 2020, 30 June 2020 to 30 June 2021 and 30 June 2021 to 30 June 2022.
7.	In respect of the policy year 30 June 2019 to 30 June 2020, now exhibited at pages 7 to 86 of NJW-3 are copies of:
(a)	the Policy Wording for the 2019-20 Design & Construction Professional Indemnity insurance Policy Number AU00179PI issued by AIG; and
(b)	the Contract of Insurance issued by Starr.
8.	In respect of the policy year 30 June 2020 to 30 June 2021, now exhibited at pages 87 to 166 of NJW-3 are copies of:
(a)	the Design & Construct Professional Indemnity Schedule and Policy Wording issued by AIG; and
(b)	the Contract of Insurance issued by Starr.
9.	In respect of the policy year 30 June 2021 to 30 June 2022, now exhibited at pages 167 to 250 of NJW-3 are copies of:
(a)	the Design & Construct Professional Indemnity Schedule and Policy Wording issued by AIG; and
(b)	the Contract of Insurance issued by Starr and HCC.
80	During the course of oral submissions on the appeal, in response to a question from the Court about the Primary PI Policies, counsel for the appellants confirmed that ‘[t]he policies for the 2020 and 2021 year appear to have limit of liability of 20 million and 2022 to have a limit of 17 million’.
81	In those circumstances, it is useful to review the policy documentation provided by Ms Wearne in Exhibit NJW-3 to understand the cover provided in each year and the relevant limit of liability.
2020 policy year
82	In respect of the policy year 30 June 2019 to 30 June 2020, the ‘Policy Wording’ of AIG’s ‘Design & Construction Professional Indemnity’ Policy Number AU000179PI makes clear that the policy is a ‘Claims-made and Notified’ policy.  On the inside cover of the ‘Policy Wording’ document, under the heading ‘Important Notices’, the ‘Duty of Disclosure’ is the first-mentioned item, and the next is ‘Claims Made and Notified’, which states as follows:

83	The ‘Prior Claims/Circumstances’ Exclusion, which is set out in part 5 of the ‘Policy 

Wording’ document, is framed as follows:

The Insurer shall not be liable to make any payment under this Policy for or arising out of:
. . .
Prior Claims and Circumstances
(i)	any Claim made prior to or pending at the inception of this Policy;
(ii)	any circumstance that, as of the inception of this Policy, may reasonably have been expected by any Insured to give rise to a Claim, Inquiry or Fine & Penalty; or
(iii)	any matter disclosed to an Insurer or on any proposal form prior to the inception of this Policy.
84	The Schedule to AIG’s policy document records the Policyholder as being ‘WBHO Australia Pty Ltd’.  Ms Wearne deposes that she is instructed by Ms Mitchell of AIG that ‘the AIG Policies were issued to Probuild as part of the wider insurance arrangements of WBHO Australia Pty Ltd’ and she explains that position further by stating that in addition to Probuild, ‘other related bodies corporate of WBHO were able to notify claims or circumstances under the AIG Policies.’  The Schedule to AIG’s policy records the ‘Limit of Liability’ as being $20,000,000, and Endorsement No 6 headed ‘Co-Insurance Agreement with Claims Control’ (effective 30 June 2019) records AIG as the ‘Lead Insurer’ and as having agreed to provide ‘65%’ of the cover as detailed in the policy. 
85	In respect of the policy year 30 June 2019 to 30 June 2020, the ‘Policy Wording’ of the other primary layer policy pertaining to Starr and HCC is set out in a Contract of Insurance prepared on the letterhead of Willis Limited and WTW with the Unique Market Reference of B080134037P19.  The Schedule to the Contract of Insurance records the ‘Limit of Liability’ as being $20,000,000, and the ‘Security Details’ page records under ‘Signed Underwriters’ that Starr is providing cover of ‘25%’ and HCC is providing cover for the remaining ‘10%’. 
2021 policy year
86	In respect of the policy year 30 June 2020 to 30 June 2021, the relevant ‘Policy Wording’ of AIG’s ‘Design & Construct Professional Indemnity’ Policy Number AU000179PI is similar to that of the 2020 policy year.  That is to say, the ‘Policy Wording’ makes clear that the policy is a ‘Claims-made and Notified’ policy, the ‘Policy Structure Provisions’ schedule records the ‘Limit of Liability’ as being $20,000,000, and Endorsement No 7 headed ‘Co-Insurance Agreement with Claims Control’ (effective 30 June 2020) records AIG as the ‘Lead Insurer’ and as having agreed to provide ‘65%’ of the cover as detailed in the policy.  
87	In respect of the 2021 policy year, the ‘Policy Wording’ of the other primary layer policy pertaining to Starr (and possibly HCC also) is set out in a Contract of Insurance prepared on the letterhead of Willis Limited and WTW with the Unique Market Reference of B080134037P20.  The Schedule to the Contract of Insurance records the ‘Limit of Liability’ as being $20,000,000, and the ‘Security Details’ page records under ‘Signed Underwriters’ that Starr is providing cover of ‘25%’.  I note that HCC is not recorded (or at least not in the version of the Contract of Insurance included in the Supplementary Appeal Book (SAB)) as providing cover for the remaining ‘10%’.  That is to say, HCC is not listed as a ‘Signed Underwriter’ along Starr, in respect of Contract of Insurance B080134037P20, as shown in the extract from the Contract of Insurance below:

. . .

2022 policy year
88	In respect of the policy year 30 June 2021 to 30 June 2022, the relevant ‘Policy Wording’ of AIG’s ‘Design & Construct Professional Indemnity’ Policy Number AU000179PI is similar to that of the 2020 and 2021 policy years.  Once again, the ‘Policy Wording’ makes clear that the policy is a ‘Claims-made and Notified’ policy; however, the ‘Policy Structure Provisions’ schedule records the ‘Limit of Liability’ as being $17,000,000  (rather than $20,000,000), and Endorsement No 7 headed ‘Co-Insurance Agreement with Claims Control’ (effective 30 June 2021) records AIG as the ‘Lead Insurer’ and as having agreed to provide ’58.82%’ (rather than ‘65%’ as in earlier years) of the cover as detailed in the policy.  
89	In respect of the 2022 policy year, the ‘Policy Wording’ of the other primary layer policy pertaining to Starr and HCC is set out in a Contract of Insurance prepared on the letterhead of Willis Limited and WTW with the Unique Market Reference of B080134037P21.  The Schedule to the Contract of Insurance records the ‘Limit of Liability’ as being $17,000,000 (rather than $20,000,000 as in earlier years) and the ‘Security Details’ record that HCC is providing cover of ’16.18%’ and Starr is providing cover of ‘25%’.  
The ‘Excess Layer’ insurers
90	While reference has been made in the affidavit material before the Court to the ‘Excess Layer’ insurers, they are not part of this proceeding.  As counsel for the respondent observed at the hearing of the appeal on 21 February 2024, no application for preliminary discovery has been brought against any of the excess layer insurers,  and accordingly, no documents are being sought from them in this proceeding.  Counsel for the respondent also confirmed that it was the broker, WTW, that arranged the excess layer cover for Probuild, and not just the primary professional indemnity cover.
91	In the Third Wearne Affidavit, Ms Wearne made reference to a proceeding against the deed administrators of Probuild in the Supreme Court of Queensland, proceeding No 13331 of 2023, before Justice Brown (the IPS Application).  Ms Wearne deposed that:
12.	. . .   . By those proceedings, the applicants, who are the appellants in this proceeding, applied for orders pursuant to s 70-90 of the Insolvency Practitioners Schedule (Corporations), Schedule 2 to the Corporations Act 2001 (Cth), that the deed administrators of Probuild produce certain documents which overlap with the documents the subject of this appeal (IPS Application).  A copy of the originating application in the IPS Application is exhibited at pages 533 to 541 of NJW-3.  The Primary Pl Insurers intervened in those proceedings, and Clyde acted for them.  I attended the hearing on 20 November 2023 to instruct counsel.  I have read the transcript, and it is accurate to the best of my recollection.  Her Honour reserved judgment on 20 November 2023 and, as at the swearing of this affidavit, the IPS Application has not been decided.
92	The transcript of the hearing in the IPS Application records that the ‘Excess Layer’ insurers include the following entities:
(a)	Chubb Insurance Australia Limited;
(b)	Insurance Australia Limited trading as CGU Insurance;
(c)	Allianz Australia Insurance Limited;
(d)	XL Insurance Company SE;
(e)	Swiss Re International SE Australia branch;
(f)	Liberty Mutual Insurance Company Australia [branch and] trading as Liberty Specialist – Specialty Markets;
(g)	Allied World Assurance Company Limited;
(h)	HDI Global Specialty SE; and
(i)	Convex Insurance UK Limited.
93	None of the entities listed above are parties to this proceeding. 
94	It will be recalled that the orders made by the primary judge on 22 August 2023 required Probuild to make discovery to Wadren and QIC of the excess professional indemnity policies which insure Probuild and which identify the excess insurers, in each of the three years.  
95	In the circumstances, given his Honour’s order for production, it is assumed that the appellants have access to the excess layer professional indemnity policies.  
96	In reply submissions, when addressing the position that applies in the case of the excess layer insurers, counsel for the appellants confirmed that it is, as counsel for respondents, Ms Crafti SC, had stated, ‘only when the primary layer is exhausted that the excess layer insurers are triggered and involved’. 
The Co-Owners’ commenced a new proceeding in March 2023 seeking relief against Probuild (amongst others) associated with the Structural Defects
97	By way of background, it is also relevant to note that, pursuant to leave granted by Matthews AsJ (as her Honour then was), the Co-Owners filed a writ in this Court on 14 March 2023, commencing proceeding S ECI 2023 00960 (the new proceeding), on which was indorsed a claim against Probuild (amongst others) for:
(1)	breaches of the Contract;
(2)	loss recoverable under contractual indemnities; and
(3)	misleading or deceptive conduct,
associated with the Structural Defects.
98	The writ has been served on the following defendants:
(1)	Gardner Group Pty Ltd and Darren John Slatter, on 6 October 2023;
(2)	Calibre Consulting (Melb) Pty Ltd, on 9 October 2023;
(3)	Probuild, on 10 October 2023; and
(4)	Anthony Gerard Cesarello, on 12 October 2023.
99	In the Principal Ruling, the primary judge held that the issuing of a proceeding against Probuild alone does not preclude the Co-Owners from pursuing their application for preliminary discovery against AIG.  Relevantly, his Honour was of the view that:
Their application was made on the basis that the documents sought are relevant to the question whether to bring proceedings against Probuild and AIG.  The fact that proceedings have now been issued against Probuild does not resolve the issue regarding AIG.  
Applicable law and principles
Appeals from an Associate Judge
Appeal pursuant to r 77.06 is conducted by way of a rehearing
100	The Co-Owners’ right to appeal arises under s 17(3) of the Supreme Court Act 1986 (Vic) and is further governed by r 77.06 of the Rules.  Nowadays, an appeal brought pursuant to r 77.06 of the Rules is conducted by way of a ‘rehearing’, rather than by way of ‘rehearing de novo’ as was formerly the case.  This means that in order to enliven appellate power, the applicant must establish a legal, factual or discretionary error on the part of the primary judge.
An appellate court will exercise particular caution in reviewing a decision that relates to a matter of practice and procedure
101	In Oswal v Carson, Ferguson J (as her Honour then was) explained the position that applies to an appeal from the decision of an Associate Judge under r 77.06 following the amendments that came into effect in January 2013, by stating: 
Such appeals … are rehearings which, in the absence of further evidence or a change in the law, ordinarily require the appellant to show error on the part of the Associate Judge before appellate power may be exercised.  In addition, if the orders from which an appeal is brought relate to a matter of practice and procedure … an appellate court will exercise particular caution in reviewing the decision.
102	Further, discretionary decisions of the primary judge are to be treated in accordance with the principles discussed in Re IPO Wealth Holdings No 2 Pty Ltd (in liq); Mawhinney v Giasoumi, where Elliott J stated:
54.	However, before a discretionary decision of a court may be overturned, the appellant must show an error of the kind identified in House v The King.  In that case, it was stated: 
It is not enough that the judges composing the appellate court consider that, if they had been in the position of the primary judge, they would have taken a different course.  It must appear that some error has been made in exercising the discretion.  If the judge acts upon a wrong principle, if [she or] he allows extraneous or irrelevant matters to guide or affect [her or] him, if [she or] he mistakes the facts, if [she or] he does not take into account some material consideration, then [her or] his determination should be reviewed and the appellate court may exercise its own discretion in substitution for [her or] his if it has the materials for doing so.  It may not appear how the primary judge has reached the result embodied in [her or] his order, but, if upon the facts it is unreasonable or plainly unjust, the appellate court may infer that in some way there has been a failure properly to exercise the discretion which the law reposes in the court of first instance.
55.	In some instances, it may not be possible to identify with sufficient certainty the exact class of error made by the trial judge.  Nevertheless, where the decision is so unreasonable or plainly unjust, the appellate court may infer that an error of the kind described in House v The King has occurred and that the decision should be overturned.
56.	However, there is a strong presumption in favour of the correctness of a discretionary decision and the authorities make clear that the judgment the subject of rehearing should be overturned only if it is “clearly” or “plainly” wrong.  In other words, an appellate court must be persuaded that the order stands outside the limits of “sound discretionary judgment” before it intervenes.
57.	Indeed, insofar as the 4 classes of error identified in House v The King are concerned:
(1)	Acting upon a wrong principle will only invalidate a decision where the principle is a “binding rule rather than a guideline”.  A failure to apply a guideline will not, of itself, amount to error.  This is because there may be instances where it is inappropriate to follow a guideline or, regardless of the failure to apply it, the overall decision is still the product of a sound discretionary judgment.
(2)	A mistake of fact must be “clearly wrong”.
(3)	Considering an irrelevant factor or failing to consider a relevant factor will only warrant setting aside a discretionary decision if it “really amounts to a failure to exercise the discretion actually entrusted to the court”.
58.	Further, the court will be slow to overturn a discretionary decision on the grounds that the primary judge failed to give appropriate weight to various factors.  The “constant emphasis” of the authorities is that an appellate court should not overturn a decision merely because it would have accorded the factors different weight.  This is especially so where the assessment of weight is likely to have been affected by seeing and hearing the parties at first instance, which only the primary judge has had the opportunity to witness.  Although there has been no trial in this proceeding, this principle remains relevant to the extent that her Honour observed and then took into account Mawhinney’s conduct during the previous examination hearings in arriving at the conclusions that she did on this particular issue.
59.	In short, the onus borne by an appellant seeking to disturb a discretionary decision is heavy. 
103	In Freeman v Rabinov, the Full Court of the Supreme Court held that the Court also has the power to vary an order if the order can be said to have ‘worked an injustice’.  In that case, the plaintiff was found to have suffered an injustice in circumstances where a self-executing order made by the primary judge for interlocutory judgment on a counterclaim, operated to render the plaintiff at risk of suffering a large judgment in damages without a trial, even though the defendant had obtained information which it needed, although still not in proper form, about a month after it should have been delivered pursuant to the self-executing order.  Accordingly, the Full Court held that the appeal should be allowed and the original order varied to extend the time for delivering a supplementary affidavit of documents.
104	In my view, a decision to order (or not order) preliminary discovery is one of an interlocutory nature to be determined in the exercise of discretion.  Accordingly, being an order of a discretionary nature, any appeal against the primary judge’s order must be determined upon House v The King principles discussed above.  Further, as an application for preliminary discovery is demonstrably a matter of practice and procedure, particular caution will be exercised by the Court in reviewing the decision.  
105	In a recent decision of the Court of Appeal, Fei v Hexin Pty Ltd, which involved an appeal from a decision of a judge of the Trial Division concerning preliminary discovery, the Court explained the policy considerations that apply to appeals from interlocutory decisions involving the exercise of a discretion and the ‘tight rein’ that is to be applied to appeals on matters of practice and procedure.  Their Honours stated:
(1)	Appeals from interlocutory decisions involving the exercise of a discretion
67	Like any civil appeal, in these matters Shen and Fei must, respectively, obtain leave to appeal and such leave will only be granted if there is a real as opposed to fanciful prospect of success.  Even where such prospects are shown, the court retains a residual discretion to refuse leave.  Factors which bear upon the exercise of the residual discretion include that the matter in question is one of practice and procedure and whether the applicant would suffer any substantial injustice if the decision was left to stand. 
68	It was not in dispute that a decision to order (or not order) preliminary discovery is one of an interlocutory nature to be determined in the exercise of a discretion.  Being an order of a discretionary nature, it was also not in dispute that any appeal against the order must be determined upon principles as laid down in House v The King.  That is, it must be shown that the decision was made in error by acting on a wrong principle, or giving weight to extraneous or irrelevant matters, or failing to give weight to relevant considerations or making a mistake as to the facts.  In addition, the result may be so unreasonable or plainly unjust that the appellate court may infer that there has been some failure to properly exercise the discretion.  Finally, it was common ground that an application for preliminary discovery is a matter of practice and procedure. 
69	It has been held in numerous cases over many years that to succeed in obtaining leave to appeal an interlocutory order made in the exercise of a discretion, the applicant must not only show that the decision may have been made in error in a House sense, but must also show that they would suffer a substantial injustice if the decision was left undisturbed.  For policy reasons, this two-fold test is to be applied stringently. 
70	In the context of an application for leave to appeal against an order for security for costs, the effect of these authorities was conveniently stated in Livingspring Pty Ltd v Kliger Partners  by Maxwell P and Buchanan JA as follows:
As applicant for leave, LS has several hurdles to clear. First, there is a clear legislative policy against interlocutory appeals.  In Niemann, the Full Court adopted and applied — as an earlier Full Court had done in Darrell Lea (Vic) Pty Ltd v Union Assurance Society of Australia Ltd — the following statement of principle from the 1901 judgment of the Full Court in Perry v Smith:
Parliament evidently desired to cut down these appeals from interlocutory orders as much as possible, and with that object have made this provision [that there be no appeal from such an order except by leave] … We think that the object which Parliament had should be recognised by this Court in a liberal manner, and not begrudgingly.
In Niemann, Murphy J added:
It is plain, as [the Full Court] said, from the terms of the section that the legislature was expressing an intention in the words used that appeals from interlocutory orders should not be permitted except in special circumstances.
Secondly, the power to order security for costs is discretionary.  An appeal from such a decision is subject to the well-known limitations identified by the High Court in House v R.  Thirdly, the exercise of this particular discretion does not determine substantive rights, but concerns a matter of practice and procedure.  That being so, we are guided (as was the Full Court in Niemann) by what Sir Frederick Jordan said in Re Will of Gilbert:
[I]f a tight rein were not kept upon 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.
The Full Court drew on these earlier authorities to articulate the two-part test for leave to appeal which has been applied ever since:
We ought to address ourselves to the question whether the order … is attended with sufficient doubt to warrant its being reconsidered on appeal and secondly whether substantial injustice will be caused to the applicant if the order … is allowed to stand.
These are, as Murphy J said in Niemann, stringent requirements.  Given that modern litigation takes longer and costs more than those earlier Full Courts could ever have imagined, there is a case for even greater stringency today.  Particularly must this be so when — as here — the decision of the trial judge is itself a decision on appeal from a master.
If appellate intervention in interlocutory decision-making is to become truly exceptional, as Parliament intended, the tests to be applied at first instance must be as clear and straightforward as possible, to minimise both the scope for error and the scope for argument about whether error has occurred. 
71	In summary, there is a clear legislative policy against interlocutory appeals; appeals from discretionary decisions are determined by the principles in House; a tight rein is to be applied to appeals on matters of practice and procedure so that, in addition to demonstrating sufficient doubt concerning the original decision, to obtain leave to appeal the applicant must show that substantial injustice will be caused if the decision is allowed to stand; and these requirements are to be regarded as ‘stringent’.  The ‘tight rein’ is mediated through the exercise of the residual discretion to refuse leave even if a real prospect of success in establishing error is demonstrated.
Once error is established, the judge hearing the appeal has all the same powers as those of the Associate Judge that heard the matter at first instance
106	Once an appealable error is established, the judge hearing the appeal has all the same powers as those of the Associate Judge that heard the matter at first instance.  These powers include the power to receive further evidence upon questions of fact, draw inferences of fact, give any judgment or make any order which ought to have been made, and make any further or other order as the case may require.
Admission of further evidence on appeal
107	Rule 77.06.9 permits the Court to receive further evidence on an appeal brought pursuant to r 77.06.  It is common ground that the admission of further evidence on appeal is a matter for the judge, rather than an entitlement to the appealing parties, and will be allowed only in exceptional circumstances.  
108	In Chiodo Investments Pty Ltd v Rilac Pty Ltd, John Dixon J stated:
26	Rule 77.06.9 does not grant to a party to an appeal the right to reconstitute the evidentiary base of the application.  The power of the court under r 77.06.9 is to be construed, and exercised, by reference to two considerations set out above.  The first is the provisions of the Civil Procedure Act to which I have referred and the second is the observation by Chernov JA in Foody v Horewood,  as recited in Apostolidis v Kalenik (No 2), set out above at [14].  Reading in the quoted passage in place of ‘the public interest in finality of litigation’, a reference to the public interest in the court giving effect to the overarching purpose of the Civil Procedure Act, Chernov JA’s statement of the underlying principles is apposite to condition the discretion whether to permit fresh evidence on an appeal from an associate judge.  
27	In the ordinary case, an appeal will be determined on the evidence that was before the associate judge, but there will be exceptional cases where to refuse to admit fresh evidence would affront common sense or a sense of justice and would not further the overarching purpose of civil litigation.  The need for that assessment explains why the admission of further evidence on appeal is a matter for the judge rather than an entitlement of the appealing parties.
109	Thus, the general position is that fresh evidence ought not be admitted when it relates to matters of uncertainty already dealt with by the primary or trial judge, but may be admitted where some basic assumption, common to both sides, has been falsified by a subsequent event.  Further, the Court’s discretion to permit fresh evidence ought to be applied in a manner consistent with the public interest in the finality of litigation and the overarching purpose of the Civil Procedure Act 2010 (Vic) (Civil Procedure Act) to facilitate the just, efficient, timely and cost-effective resolution of the real issues in dispute.
Preliminary discovery
110	Rule 32.05 of the Rules provides for discovery from a prospective defendant, as follows:
Where –  
(a)	there is reasonable cause to believe that the applicant has or may have the right to obtain relief in the Court from a person whose description the applicant has ascertained;
(b)	after making all reasonable inquiries, the applicant has not sufficient information to enable the applicant to decide whether to commence a proceeding in the Court to obtain that relief; and
(c)	there is reasonable cause to believe that that person has or is likely to have or has had or is likely to have had in that person’s possession any document relating to the question whether the applicant has the right to obtain the relief and that inspection of the document by the applicant would assist the applicant to make the decision – 
the Court may order that that the person shall make discovery to the applicant of any document of the kind described in paragraph (c). 
111	Before turning to consider the grounds of appeal advanced by the Co-Owners, it is useful to outline, by way of background, the relevant principles governing the application of r 32.05, which were collated and conveniently summarised by Matthews AsJ (as she then was) in Trofeo Pty Ltd v Confederation of Australian Motor Sport Ltd, as follows:
In Pandolfo v Finadri, Derham AsJ summarised the relevant principles governing the application of r 32.05, as set out below: 
18.	The rule must be given the fullest scope its language will reasonably allow.
19.	An applicant does not have to prove that there will be a real benefit in making the order, but simply that there may be some benefit.  The benefit may be the preparation of an appropriate pleading and the avoidance of substantial amendments following discovery.  Alternatively, the avoidance of unnecessary litigation. 
20.	The principles relevant to the first criterion are as follows:
(a)	the applicant is not required to show it [sic] that [it] has a prima facie case that it has a right to relief; 
(b)	it is also not necessary to show precisely what cause of action the applicant may have; such a requirement would defeat the object of the rule; 
(c)	rather, it merely needs be shown that the facts are such that it may reasonably be believed that the applicant may have a right to obtain relief; 
(d)	the test for determining whether the applicant has ‘reasonable cause to believe’ is an objective test; 
(e)	the word “may” indicates that the applicant’s belief does not have to amount to a firm view that there is a right to relief. 
21.	The second criterion is governed by the following principles:
(a)	the requirement is primarily concerned with whether, as an objective fact, an applicant has sufficient information to determine whether to commence proceedings.  The fact that an applicant for preliminary discovery already has enough evidence to establish a prima facie case against a proposed defendant does not mean that the applicant has sufficient information to enable it to decide whether to commence a proceeding.  An applicant in that position may nevertheless ‘need information to know whether the cost and risk of litigation is worthwhile.’  For example, an applicant with sufficient information to plead a prima facie case may prudently wish to obtain preliminary discovery about ‘what defences are available to the respondent and the possible strength of those defences, or to determine the extent of the respondent’s breach and the likely quantum of any damages award’.  
(b)	it is for the court to determine whether an applicant has sufficient information available to it; the applicant’s own assertion that it does not is neither determinative nor strictly necessary; 
(c)	accordingly, an application cannot succeed if the applicant has sufficient information (objectively assessed) but is unable to determine whether to commence proceedings due to subjective factors, for example, an overly cautious nature; 
(d)	courts have, however, approved litigants taking a cautious, conservative or prudent approach by applying for preliminary discovery under the rule.  This approach is consistent with the policy underlying the rule.  It is also consistent with the policy underlying the Civil Procedure Act 2010 (Vic) (‘CPA’) generally, and the ‘proper basis certification’ requirements in s 42 of the CPA in particular.  
(e)	if there is evidence that an applicant has in fact decided to commence proceedings, the application must fail.  In determining whether an applicant has in fact already decided to commence a proceeding, irrespective of the outcome of the application, the Court should not give too much weight to posturing in correspondence prior to the making of the application, particularly correspondence alleging the existence of a strong case but nevertheless seeking preliminary discovery by letter prior to making a formal application to the Court;  
(f)	what constitutes ‘reasonable inquiries’ is a question of fact, to be considered in all the circumstances of the particular case.
22.	For the purpose of the third criteria, ‘possession’ means ‘possession, custody or power’.  Little more need be said about the third criteria, which sets out express requirements, the satisfaction of which will turn on the particular facts. 
23.	Where each element of the rule is satisfied, the Court will ordinarily exercise its discretion in favour of the applicant. 
In Alex Fraser Pty Ltd v Minister for Planning, Riordan J observed that: 
53.	The proper test is revealed by the words of r 32.05(a).  What is required is the following:
(a)	There is cause for a belief in the relevant proposition - a belief being an inclination of the mind towards assenting to a proposition. 
(b)	The relevant proposition is (on the second limb) that there ‘may be the right’ to relevant relief.  The use of the word ‘may’ bespeaks possibility.  Given the purpose of the Rule is to advance the administration of justice, r 32.05 should be interpreted as requiring a real (as opposed to a fanciful or remote possibility).  However, even a real possibility may be highly improbable. 
(c)	The test is qualified by a requirement that the cause for the belief in the proposition must be reasonable.  It is trite to say that what is reasonable in a particular case will depend upon all of the circumstances of the case.
54.	Accordingly, the jurisdictional threshold under r 32.05 is low.  This is consistent with the following: 
(a)	The primary purpose of the rule is to advance the administration of justice by allowing a prospective plaintiff to make an informed decision on proper material about whether or not to bring a claim.  The importance of this rule to the advancement of the administration of justice has been accentuated by the certification requirements on filing of civil proceedings under Part 4.1 of the Civil Procedure Act 2010.  It is well established that the rule should be interpreted benevolently. 
(b)	It would be incongruous if the jurisdiction to order preliminary discovery could not be enlivened because of the lack of evidence, which is the very cause of the application.  The purpose of the Rule is to allow an applicant, who has inadequate proof of any cause of action, to discover whether or not evidence is available that will impact (positively or negatively) on the possible proceeding.  
Riordan J also considered principles relevant to the exercise of the Court’s discretion in respect of r 32.05.  In Alex Fraser, his Honour stated: 
Although the jurisdictional threshold is low, its satisfaction only empowers the Court to exercise its discretion.  In the exercise of its discretion, the Court can control any excesses; and assess whether there may be real benefit in making the order.  It will be entitled to weigh the full range of relevant matters in determining whether an order is in the interests of justice – including the following: 
(i)	The level of inconvenience and cost that will be caused to the respondent.
(ii)	Whether discovery may cause commercial or other damage to the respondent.
(iii)	Whether the respondent will be reimbursed for its costs.
(iv)	Whether an order would be inutile because the documents are privileged. 
(v)	The prospect of the documents sought providing the information required by the applicant.
(vi)	Whether the fact that there is no real prospect of success is apparent or discovery will not serve any useful purpose.  However, delving extensively in the merits of the existence of a possible cause of action will usually not be appropriate. 
112	It is also helpful to set out some further authorities upon which the appellants rely in relation to sub-paragraph (b) of r 32.05 of the Rules.
113	Relevantly, the appellants relied on observations made by the Full Federal Court in Optiver Australia Pty Ltd v Tibra Trading Pty Ltd and Hely J in St George Bank v Rabo Australia Ltd (St George Bank), concerning (the former rule) Order 15A, r 6 of the Federal Court Rules 1979 (Cth) which was framed in similar terms to r 32.05 of the Rules.  (The text of the respective rules is reproduced in a side-by-side comparison in Annexure A to these Reasons).
114	The Full Federal Court in Optiver said:
The concept of a “bare pleadable case” is not only a gloss on the text of the rule but is fundamentally inconsistent with its purpose.  The policy behind the rule is that even where there is a reasonable cause to believe that a person may have a right to relief, nevertheless that person may need information to know whether the cost and risk of litigation is worthwhile.  As Hely J pointed out in St George Bank Ltd v Rabo Australia Ltd (2004) 211 ALR 147 at [26], the question does not concern the right to relief but rather “whether to commence proceedings”.  Inspection of documents in the possession of the proposed defendant may enable a properly informed decision to be made whether to commence a proceeding to obtain the relief.  The “bare pleadable case” approach diverts attention from the true purpose of the rule.  A person may have a pleadable case, but still not sufficient information upon which to decide whether to embark upon litigation.  We are satisfied that his Honour asked himself the wrong question on this ground and that his conclusion cannot stand.  There is ample material upon which this Court can consider the ground for itself.
115	In St George Bank, Hely J said:
the question posed by sub-paragraph (b) of the rule is not whether the applicant has sufficient information to decide if a cause of action is available against the prospective respondent.  The question is whether the applicant has sufficient information to make a decision whether to commence proceedings in the Court…  Accordingly, an applicant for preliminary discovery may be entitled to discovery in order to determine what defences are available to the respondent and the possible strength of those defences, or to determine the extent of the respondent’s breach and the likely quantum of any damages award…
116	While the above judicial re-statements and approximations of r 32.05 of the Rules (or counterpart provisions in other jurisdictions which for present purposes are comparable) provide a helpful interpretive tool, it is nevertheless important to note here that the focal point remains the actual text of the rule.
Co-Owners’ Notice of Appeal
117	By way of their Notice of Appeal filed on 13 September 2023, the Co-Owners, now seek to appeal certain of the findings made by the primary judge which they contend were made in error.  AIG is the sole respondent to the Notice of Appeal.
118	The relevant findings made by the primary judge, which the Co-Owners seek to challenge by way of appeal are to the effect that:
(1)	the Co-Owners were not entitled to preliminary discovery of written notifications under insurance policies for the 2020-2021 and 2021-2022 policy years;
(2)	the Co-Owners were not entitled to preliminary discovery of documents concerning the confirmation or denials of indemnity for the insurance policies for the 2020-2021 and 2021-2022 policy years;
(3)	the Co-Owners were not entitled to preliminary discovery of documents concerning whether the limits of indemnity had been eroded under the relevant insurance policies;
(4)	the Co-Owners did not have reasonable cause to believe that they may be entitled to relief in the court against Probuild for misleading or deceptive conduct and, therefore, QIC was not entitled to preliminary discovery or access to documents ordered to be produced by AIG.
119	That is to say, the Co-Owners bring this appeal with a view to obtaining orders requiring AIG to produce documents falling within categories (1), (2) and (3) described above, and to permit preliminary discovery to be made of these and other documents, to each of Wadren and QIC.
120	In their outline, the Co-Owners summarised their four grounds of appeal as follows:
(1)	Ground One: The primary judge erred by requiring the appellants to establish relevance as a pre-condition to the grant of preliminary discovery.
(2)	Ground Two: [In the August Ruling,] the primary judge erred by departing from his previous judgment [i.e., the Principal Ruling] without justification.
(3)	Ground Three: The primary judge erred by holding that the Court did not have the power to order preliminary discovery.
(4)	Ground Four: The primary judge erred by prohibiting the second appellant [QIC] from accessing the discovered documents.
121	In support of their appeal, the Co-Owners rely on the affidavits of Corin Eileen Morcom dated 14 September 2022 (First Morcom Affidavit), 14 November 2022 (Second Morcom Affidavit) and 2 November 2023 (Third Morcom Affidavit) and Genevieve Niree Moxon Lester filed on 29 November 2022.  (It will be noted that the Third Morcom Affidavit, which was filed on 2 November 2023, post-dates the Notice of Appeal, which is dated 5 September 2023).  
122	The Co-Owners rely upon their Outline of Written Submissions (in support of the Notice of Appeal) dated 30 November 2023 (Appellants’ outline (30.11.2023)), their Submissions in reply to AIG’s notice of contention dated 14 December 2023 (Appellants’ reply re notice of contention (14.12.2023)) (discussed below), and their Submissions in reply to AIG’s submissions in respect of the Notice of Appeal dated 21 December 2023 (Appellants’ reply submissions (21.12.2023)).
AIG’s response and notice of contention
123	AIG relies on the affidavits of Nicole Joy Wearne dated 10 November 2022 (First Wearne Affidavit), 2 December 2022 (Second Wearne Affidavit) and 24 November 2023 (Third Wearne Affidavit) in opposition to the appeal.  (It will be noted that the Third Wearne Affidavit, which was filed on 24 November 2023, post-dates the Notice of Appeal, which is dated 5 September 2023).  
124	AIG does not seek to cross-appeal from any part of the judgment of the primary judge.
125	AIG filed a notice of contention on 1 December 2023, in which it contends that the judgment of the primary judge made in the Principal Ruling and August Ruling ‘should be affirmed on a ground of fact or law which was not decided in the Court.’  That is, AIG contends that if the Court considers that either of the first or fourth of the Co-Owners’ grounds of appeal should be allowed, the judgment of the primary judge should be affirmed on alternative grounds.  
126	The alternative grounds advanced by AIG are as follows:
Grounds:
1	If Ground One of the appeal is allowed, the Court should nonetheless affirm the Associate Judge’s finding on the basis that the appellants [Wadren and QIC] have sufficient information to enable them to decide whether to commence a proceeding in the Court to obtain relief against AIG in respect of the 2020-2021 and 2021-2022 Primary PI Policies.
2	If Ground Four of the appeal is allowed, the Court should nonetheless affirm the Associate Judge’s finding that the documents concerning the confirmation or denial of indemnity by Primary PI Insurers under the Primary PI Policies should not be produced to the second appellant [QIC] on the basis that the second appellant has not, by its statement of claim filed in proceeding S ECI 2023 00960 [the new proceeding], or otherwise, established that it: (a) has reasonable cause to believe that it may be entitled to relief against Probuild Constructions (Aust) Pty Ltd (Subject to a Deed of Company Arrangement); (b) further or alternatively, does not have sufficient information to enable it to decide whether to commence a proceeding to obtain that relief.
127	If neither of the first or fourth grounds of appeal is allowed, AIG is content for the Court to disregard its notice of contention, unless the Court considers it appropriate to determine the matters raised in the notice of contention.
128	AIG also relies on its written case in support of the notice of contention dated 1 December 2023 (AIG’s outline re notice of contention (1.12.2023)), its Submissions in Reply to the Notice of Appeal dated 14 December 2023 (AIG’s NoA submissions (14.12.2023)) and its Submissions in reply to the Co-Owners’ Submissions in respect of the Notice of Contention dated 21 December 2023 (AIG’s reply re notice of contention (21.12.2023)).
Appeal Book and Supplementary Appeal Book
129	The Appeal Book and Supplementary Appeal Book together comprises almost 3,000 pages and occupies 12 volumes of lever arch folders.  The cases set out in the parties’ Joint List of Authorities occupy a further seven volumes of lever arch folders.
Argument on Grounds of Appeal
Ground One:	The primary judge erred by requiring the appellants to establish relevance as a pre-condition to the grant of preliminary discovery
130	In the Notice of Appeal, Ground One is framed as follows:
1.	The Associate Judge erred in holding, at Principal Ruling [79] and August Ruling [15], that written notifications and confirmations or denials of indemnity under the Primary PI Policies for the 2020-2021 and 2021-2022 policy years should not be discovered because it was not “clear” to him “why documents relating to these later years were relevant” and, therefore, he could not be satisfied that the Appellants lacked sufficient information in circumstances where:
(a)	the Associate Judge was aware that it was not contested that the Appellants “need to know the dates on which relevant notifications were made under the relevant insurance policies in order to determine whether to bring a proceeding”;
(b)	the relevant test under r 32.05 of the Supreme Court (General Civil Procedure) Rules 2015 (Rules) does not require the Appellants to satisfy the Court that written notifications and confirmations or denials of indemnity under the Primary PI Policies for the 2020-2021 and 2021-2022 policy years were in fact relevant because, in the absence of their discovery, the Appellants do not know, and, therefore, could not identify, the relevance of those documents;
(c)	if relevance was required to be established, the evidence before the Court was that the correspondence between the parties permitted an inference that the Primary PI Policies for the 2020-2021 and 2021-2022 policy years may be responsive to the Appellants’ right to obtain relief and, therefore, the written notifications and confirmations or denials of indemnity for the 2020-2021 and 2021-2022 policy years would be relevant for the same reasons as found in relation to the 2019-2020 policy year;
(d)	the relevant test under r 32.05 of the Rules is whether the Appellants have not sufficient information to enable them to make a decision to commence a proceeding which may include claims or allegations in respect of years beyond 2020, or in reliance upon the Primary PI Policies for the 2020-2021 and 2021-2022 policy years, which test is plainly satisfied in circumstances where the Appellants lack knowledge of the notifications and the confirmations or denials of indemnity, which notifications and confirmations or denials for the 2020-2021 and 2021-2022 policy years would be relevant and necessary for the same reasons as found in relation to the 2019-2020 policy year.
131	Ground One concerns the reasoning of the primary judge as set out in paragraphs 78 and 79 of the Principal Ruling, and as elaborated upon in paragraphs 13 to 15 of the August Ruling, as follows:
[Principal Ruling]
Do the plaintiffs have sufficient information in relation to the dates on which relevant notifications were made under the relevant insurance policies?
78	It does not appear to be contested that the plaintiffs need to know the dates on which relevant notifications were made under the relevant insurance policies in order to determine whether to bring a proceeding.  It appears that the plaintiffs know, or will know upon discovery of consented documents, the dates on which relevant notifications were made under the insurance policies applicable to the 2019–2020 policy year.  While AIG is prepared to provide or permit preliminary discovery of the Primary PI Policies for the 2020–2021 and 2021–2022 policy years, they submit that the plaintiffs have not established any reason to believe that they may have the right to obtain relief under those policy years.  In particular, AIG relies on the First Morcom affidavit where Ms Morcombe [sic] defines the relevant policy as being the 2019–2020 policy and where she states that the claim was made in October 2019. 
79	It is not sufficiently clear to me why documents relating to these later years are relevant.  Accordingly, I am not satisfied that the plaintiffs lack sufficient information in this regard.
[August Ruling]
Consideration of Scope of Discovery
13	As discussed in the reasons at paras 51–57 and 84–87, to obtain an order for preliminary discovery under r 32.05, one of the matters the plaintiffs must establish is that there is reasonable cause to believe they have, or may have, the right to obtain relief against Probuild.  If that, and the other requisite matters, are established, the Court has power to order discovery of documents ‘relating to the question whether the applicant has the right to obtain … relief’.
14	I consider that, on its face, and in context, para 79 of the reasons is only consistent with the conclusion that the plaintiffs failed to establish that they have, or may have, the right to obtain relief in respect of the 2020-2022 policy years.  The highest that the case for relevance was put was the inference Ms Morcom drew from the fact that AIG consented to production of policies and notifications for the policy years 2020-2022.  But there was no evidence from Ms Morcom, or the plaintiffs directly, of any notification actually given from which a decision concerning indemnity would follow.  The strength of Ms Morcom’s inference is also diluted by the fact that AIG’s consent was contained in a letter that expressly maintained objection to the discovery of disputed documents, which included the confirmation or denial of coverage documents now sought.
15	If the 2020-2022 policy years are not relevant, then I do not consider that confirmation or denial of coverage documents relating to any policies for those years can be relevant.  And if those documents are not relevant then I do not consider that the Court has power to, or should, order their discovery.  As noted in the reasons at paras 84 – 87, the power of the Court is limited to ordering documents ‘relating to the question whether the plaintiffs have the right to obtain … relief’.  Having failed to establish the relevance of the 2020–2022 policy years, I do not consider that the documents sought can be said to ‘relate to the question whether the plaintiffs have the right to obtain … relief’ which describes the limits of a discovery order.
The appellants’ argument
132	Against that background, the appellants contend that the primary judge erred in his application of r 32.05 by requiring them to establish that the documents that they sought were in fact ‘relevant’ as a pre-condition to the Court granting preliminary discovery.  
133	The appellants submit that the concept of ‘relevance’, which is germane to the question of admissibility under ss 55 and 56 of the Evidence Act 2008 (Vic), is not a concept that bears upon, or conditions, the Court’s discretion to grant preliminary discovery under r 32.05.  Further, they say that the primary judge’s invocation of such a concept of ‘relevance’ introduces an impermissible gloss on the language of r 32.05, involves an impermissible departure from the text, context and purpose of r 32.05, and is not consistent with the beneficial purpose of the rule. 
134	The appellants submit that it is ‘significant, if not determinative, that r 32.05 does not, on its terms, refer to the concept of “relevance”’.  Rather, referring to the criteria set out in paragraphs (a), (b) and (c) of r 32.05, they observe:
None of these concepts [i.e. embodied in the criteria in paragraphs (a), (b) and (c) of r 32.05] expressly requires an applicant for an order under r 32.05 to satisfy the Court that the documents sought are in fact relevant to the relief that they might be able to obtain.  Nor would the words of r 32.05 extend to impliedly tolerate such a requirement.  To the extent that the rule requires a relationship between the documents sought and the existence of a belief, it only requires that a document be one “relating to” the question whether the applicant has the right to obtain the relief.  . . .
135	Accordingly, the appellants contend that his Honour’s reasoning, to the effect that in the absence of (established) relevance the Court does not have the power to order preliminary discovery under r 32.05, ‘involves a fetter or qualification on the Court’s wide discretion that finds no basis, support or justification in the text of r 32.05.’
136	But even if, contrary to their argument, the concept of ‘relevance’ does apply in the way suggested by the primary judge, the appellants contend that they met that requirement, and written notifications given under the Primary PI Policies for the 2020-2021 and 2021-2022 policy years were relevant for the same reason as notifications for the 2019-2020 years were found by his Honour to be relevant.  The appellants submit that the evidence filed on their behalf that was before the primary judge establishes that:
(1)	on 12 October 2022, the Co-Owners’ solicitors received a letter from AIG’s solicitors which stated that AIG was prepared to consent to orders that AIG make preliminary discovery of the professional indemnity insurance policies which insure Probuild for the 2019-2020, 2020-2021 and 2021-2022 policy years (defined as the Later Policy Years) and the written notifications under those policies;
(2)	based on this correspondence, the Co-Owners’ solicitors “inferred” that, in addition to the policy for the policy year 2019-2020, the policies for the Later Policy Years may respond to the potential claims of the Co-Owners which had been set out in First Morcom Affidavit;
(3)	the Co-Owners did not relevantly have confirmation that the Co-Owners’ claims were notified to AIG in the Later Policy Years and/or a copy of any confirmation or denial of indemnity for those Later Policy Years;
(4)	certain matters identified in the First Morcom Affidavit applied equally to the Later Policy Years.
137	The appellants submit these matters are sufficient to demonstrate that there was ‘a real possibility that written notifications for the Later Policy Years (i.e. the 2020-2021 and 2021-2022 policy years) were likely to be relevant for the same reason as the primary judge found in relation to the 2019-2020 policy year’, particularly in circumstances where there was evidence before his Honour ‘that the Co-Owners had made notifications to Probuild of the non-structural defects and the other defects in the 2020-2021 and 2021-2022 policy years.’  In that regard, the First Morcom Affidavit exhibited both the letter from Allens to Clyde & Co dated 7 September 2021 (enclosing reports with respect to the structural defects and also the non-structural building services defects) and the letter from Allens to Clyde & Co dated 23 February 2022 (concerning claims to be included in a notice of dispute to be issued pursuant to GC47 of the Design and Construction Contract).  
138	Furthermore, the appellants have filed additional ‘new’ evidence in the appeal before this Court (that was not before the primary judge) confirming that ‘the defects notified to Probuild in the 2020-2021 and 2021-2022 policy years had not previously been the subject of a claim by the Co-Owners against Probuild.’  In the Third Morcom Affidavit, Ms Morcom deposes:
Notifications to Probuild

13.	In addition to the notification made by the Co-Owners to Probuild in the 2019-2020 policy year referred to in paragraph 10 of my First Affidavit [being QIC’s ‘Claim’ letter dated 10 October 2019], I am aware that the Co-Owners notified Probuild of the Co-Owners’ claims in each of the 2020-2021 and 2021-2022 policy years by causing Allens, on their behalf, to issue the following correspondence:
(a)	Letter dated 14 August 2020 from Allens to Probuild notifying of the Structural Defects;
(b)	Letter dated 10 May 2021 from Allens to Clyde & Co on behalf of Probuild, which annexes an updated list of Structural Defects;
(c)	Letter dated 7 September 2021 from Allens to Clyde & Co on behalf of Probuild notifying of the Non-Structural Defects and enclosing the MPN report which identified the Other Defects; and
(d)	Letter dated 23 February 2022 from Allens to Clyde & Co on behalf of Probuild notifying of the Co-owners' claim.
14.	Copies of the letters referred to in paragraph 7 [sic] are contained at pages 67 - 101 of exhibit CEM-3.  The MPN Report dated 7 September 2021 referred to in paragraph 13(c) has not been exhibited to this affidavit, as it is contained at pages 434 - 635 of Exhibit CEM-1 to my First Affidavit.
15.	Certain of the letters referred to in paragraph 13 notified defects that had not previously, to my knowledge, been the subject of a claim by the Co-Owners against Probuild, for example the Non-Structural Defects.
16.	I am instructed that the Co-Owners are not aware, and I am not aware, whether Probuild notified the Primary PI Insurers under the Primary PI Policies for the policy years 2020- 2021 and 2021-2022 in respect of the Co-Owners' claims.
139	The appellants submit that the Court, in the proper exercise of its discretion, should admit the new evidence and order preliminary discovery of the written notifications given under the Primary PI Policies for each of the 2020-2021 and 2021-2022 policy years in essence because:
(a)	the notification documents sought in the appeal go squarely to the purpose of r 32.05, when properly construed; and
(b)	the notification documents will identify whether Probuild has satisfied the requirements of the policies as to notification such as to enliven coverage or whether a defence may be available to the insurers by reason of a failure to notify – being matters which bear directly on whether the appellants have a right to obtain relief against the insurers and the appellants’ decision as to whether to commence proceedings against the insurers.
The respondent’s argument
140	The respondent contends that Ground One is not made out for three reasons.  First, AIG says Ground One evinces a misconception of the primary judge’s reasons, when read together and properly construed in their context, and does not establish any misapplication of the correct statutory test.  
141	Secondly, AIG submits that his Honour’s conclusion at paragraph 79 of the Principal Ruling, that he was not satisfied the requirements of r 32.05 were met due to an absence of evidence of the Contested Policies, was open to be made.  Further, insofar as the appellants seek to rely on new evidence from Ms Morcom, filed for the first time in this appeal, to establish that the defects in the 2020-2021 and 2021-2022 policy years had not previously been the subject of a claim by them against Probuild, AIG submits that ‘[i]n the absence of any demonstrated factual, legal or discretionary error in the Associate Judge’s relevant reasons, and any exceptional circumstances, there is no cause for the Court to exercise its discretion to admit the Third Morcom Affidavit or, at least [15] of that affidavit.’  But if, contrary to AIG’s submissions, the Court nevertheless determines to admit the new evidence and the correspondence referred to, AIG submits that it ‘does not assist the appellants to establish a proper basis to order AIG to make preliminary discovery of the written notifications under the ‘Contested PI Policies’ in any event.’  In addressing this issue AIG relies on the Third Wearne Affidavit, sworn on 24 November 2023 and filed in this appeal, wherein reference is made to:
(a)	the four letters from the appellants’ solicitors to the solicitors for Probuild referred to in paragraph 13 of the Third Morcom affidavit, and a letter from QIC (on behalf of the Co-Owners) to Probuild dated 18 February 2020;
(b)	the statement of claim filed on 26 October 2023 by the appellants in the new (Victorian) proceeding, S ECI 2023 00960, seeking relief against Probuild and others as defendants for alleged structural defects in the Pacific Werribee shopping centre; and
(c)	the transcript of the hearing of the IPS Application held on 20 November 2023 in the Supreme Court of Queensland, in which the appellants applied for orders pursuant to s 70-90 of the Insolvency Practice Schedule (Corporations), Schedule 2 to the Corporations Act 2001 (Cth), that the deed administrators of Probuild produce certain documents which overlap with the documents the subject of this appeal.
142	AIG relies on the Third Wearne Affidavit and the material exhibited thereto to foreshadow that it will rely upon a ‘Prior Claims and Circumstances’ exclusion contained in each of the Later Years Policies so as to exclude any liability on the part of the Primary PI Insurers for those periods.  
143	In essence, AIG says that in August 2023 it made discovery of the Primary PI Policies, by consent.  In each of the policy periods, the Primary PI Policy contains a ‘Prior Claims and Circumstances’ exclusion, which provides that the Primary PI Insurers are not liable to make any payment under the Primary PI Policies for or arising out of:
(i)	any Claim made prior to or pending at the inception of this Policy;
(ii)	any circumstance that, as of the inception of this Policy, may reasonably have been expected by any Insured to give rise to a Claim, Inquiry or Fine & Penalty; or
(iii)	any matter disclosed to an Insurer or on any proposal form prior to the inception of this Policy.
144	The appellants filed their notice of appeal on 13 September 2023.  Almost two months later, on 10 November 2023, in the course of the IPS Application proceeding, AIG asked the appellants to produce a letter from QIC (on behalf of the Co-Owners) to Probuild dated 18 February 2020, which they did.  AIG says that:
It [the 18 February 2020 letter] refers to defects that had been notified to Probuild in October 2019 and January 2020 and identifies further defects in the works.  The letter concludes by stating:
The Co-Owners continue to reserve their rights against Probuild regarding the deficiencies and defects in the Stage 7 Works.
145	AIG submits that it is clear from the 18 February 2020 letter that ‘QIC was reserving all of its rights, and those of Wadren, in respect of defects and deficiencies in the Stage 7 Works’ and ‘QIC did not confine that reservation to structural defects or to any other particular kind of defects’.  Further, it says:
Patently, upon receipt of the 18 February 2020 letter, Probuild was on notice and aware of circumstances that it could reasonably expect to give rise to a claim “regarding the deficiencies and defects in the Stage 7 Works”.
146	Against that background, AIG contends that any notifications that Probuild may have made to the Primary PI Insurers in the 2020-2021 or 2021-2022 policy years cannot assist the appellants in deciding whether to commence a proceeding against the Primary PI Insurers in respect of cover for those two policy periods ‘because the “Prior Claims and Circumstances” exclusion operates to exclude any liability on the part of the Primary PI Insurers for those periods.’  
147	Further, relying upon the decision of the High Court in FAI General Insurance Co Ltd v Australian Hospital Care Pty Ltd, AIG submits that that position applies even if the appellants can demonstrate that they made a claim upon Probuild after the 2019-2020 policy period for ‘non-structural defects’, as follows:
35.	That is to say that even if the appellants can demonstrate that they made a claim upon Probuild after the 2019-2020 policy period for non-structural defects, and Probuild subsequently notified the Primary PI Insurers of that claim, such notification to the Primary PI Insurers would not give rise to cover under the Primary PI Policies in those later policy years.  As the majority (McHugh, Gummow and Hayne JJ) said in FAI General Insurance Co Ltd v Australian Hospital Care Pty Ltd, a ‘claims made and notified policy’, such [sic] Primary PI Policies, can be more accurately described as a ‘discovery policy’ because:
…the critical facts under the contract [of insurance] are the insured’s discovery of the making of a claim on it or its discovery (its “becom[ing] aware”) of an occurrence which may give rise to a claim.
36.	Their Honours went on to say:
If an insured “become[s] aware of any occurrence which may subsequently give rise to a claim” during the period of cover, an event of the type contemplated by the contract of insurance has occurred.  Any subsequent claim would be for indemnity against a demand of a type covered by the contract.
37.	In the circumstances, the 18 February 2020 letter, combined with the terms of the Contested PI Policies – specifically, the “Prior Claims and Circumstances” exclusion – demonstrate that the appellants do not have reasonable cause to believe that they may be entitled to relief against the Primary PI Insurers in respect of the two policy periods covered by the Contested PI Policies.  Accordingly, the appellants cannot establish any entitlement to an order for discovery of documents insofar as they relate to the 2020-2021 or 2021-2022 policy periods regardless of whether they are notifications made by Probuild to the Primary PI Insurers or confirmations or denials of indemnity by those insurers under the 2020-2021 or 2021-2022 Primary PI Policies.
148	Thirdly, AIG submits that even if error is established by Ground One, there are two alternative bases on which the judgments should be affirmed.  The first is his Honour’s ruling that he would exercise his residual discretion to refuse production of the documents the subject of Ground One (amongst others), on the basis of confidentiality.  AIG notes that it is no part of the appellants’ appeal that the primary judge erred in this respect.  The second basis is as AIG contends by ground one of its notice of contention, for the reasons set out in its corresponding notice of contention submissions.
The appellants’ reply submissions
149	The appellants responded to AIG’s NoA submissions in their Appellants’ reply submissions (21.12.2023).  First, they took issue with AIG’s attempt to ‘impute retrospectively a clarity of reasoning which is not apparent on the face of the primary judge’s reasons for judgment, and which cannot be maintained in the light of those reasons for judgment.’  They contended that:
3.	Whatever alternative meaning AIG seeks to attribute to the primary judge’s reasoning and conclusion, by applying a patchwork of other paragraphs in his Reasons and his later August Ruling, the plain words of the Reasons disclose that the primary judge imported, without warrant, the concept of relevance as a further qualification on the scope of the Court’s power to order preliminary discovery under r 32.05.  That approach was in error for the reasons outlined in the Co-Owners’ principal written submissions.
150	Secondly, in respect of the ‘Prior Claims and Circumstances’ exclusion argument advanced by AIG in respect of the 2020-2021 and 2021-2022 policy years, the appellants submit the Court should reject AIG’s invitation to resolve such an issue on a summary basis on an application for preliminary discovery.  That is because AIG’s assertion that the ‘Prior Claims and Circumstances’ exclusion operates to exclude any liability on the part of the Primary PI Insurers in respect of cover for those two policy periods rests upon AIG’s view as to the effect of the relevant exclusion.  But, as the appellants observe, ‘[w]hether the exclusion operates in such a way so as to deprive the documents in relation to the 2020-2021 and 2021-2022 policy years of relevance is a matter to be determined if proceedings are commenced by the Co-Owners against AIG.’ 
151	The appellants raise three further matters in response to AIG’s submissions in respect of Ground One:
(a)	First, the appellants refer to footnote 12 of AIG’s NoA submissions (14.12.2023), where AIG states:
AIG notes that, as framed in the notice of appeal, ground one is also directed to “confirmations or denials of indemnity”, but this sub-class of documents is not addressed in the appellants’ written submissions.  AIG assumes that the appellants have abandoned ground one insofar as it addressed “confirmations or denials of indemnity”.  If that assumption is incorrect, AIG reserves the right to further address the Court on that issue.
The appellants state that AIG’s assumption is incorrect, adding that the ‘scope of the appeal is marked or delimited by the grounds of appeal’ and that they ‘have not amended or abandoned any of their grounds of appeal.’  They confirm that:
The Co-Owners [appellants] rely on their principal written submissions dated 30 November 2023 as to Ground One of the appeal with respect to discovery of the confirmations or denials of indemnity under the Primary PI Policies for the 2020-2021 and 2021-2022 policy years.  As stated in paragraphs 48 and 49 of those principal written submissions, the reasoning in relation to the written notification documents applies equally [to] those documents and they ought be discovered.
(b)	Secondly, they point out that, contrary to AIG’s submissions to the effect that the appellants seek to rely on new evidence filed for the first time in this appeal, the true position is that:
four of the five documents referred to in the Third Morcom Affidavit were in evidence before the primary judge as part of the First Morcom Affidavit, including:
(a)	the 10 May 2021 letter, which is found at AB1367;
(b)	the 7 September 2021 letter, which is found at AB1554;
(c)	the 23 February 2022 letter, which is found at AB1812;
(d)	the MPN Report, which is found at AB527,
and the Third Morcom Affidavit explains its basis and the purpose for which it has been made. 
(c)	Thirdly, as to AIG’s submission about confidentiality, and the primary judge’s exercise of his residual discretion to refuse production of the documents the subject of Ground One (amongst others) on the basis of confidentiality, AIG contends that, contrary to AIG’s submission:
the documents now sought by the Co-Owners are not immune or precluded from production on the basis of confidentiality because, if the primary judge had not erred, they would properly have formed part of the documents that the primary judge should have ordered to be produced such that they fall within the primary judge’s identified exception to the application of confidentiality.
Appellants’ oral submissions
152	In oral submissions, counsel for the appellants commenced by informing the Court that, in the present case, the potential claim that the appellants are considering commencing is a claim made directly against the insurer, AIG, pursuant to s 562 of the Corporations Act, along the lines of the claim that was made in CGU Insurance Ltd v Blakeley by the liquidator against the insurer of the former directors.
153	Section 562 of the Corporations Act deals with the application of the proceeds of contracts of insurance in the context of a winding up and provides:
562	Application of proceeds of contracts of insurance
(1)	Where a company is, under a contract of insurance (not being a contract of reinsurance) entered into before the relevant date, insured against liability to third parties, then, if such a liability is incurred by the company (whether before or after the relevant date) and an amount in respect of that liability has been or is received by the company or the liquidator from the insurer, the amount must, after deducting any expenses of or incidental to getting in that amount, be paid by the liquidator to the third party in respect of whom the liability was incurred to the extent necessary to discharge that liability, or any part of that liability remaining undischarged, in priority to all payments in respect of the debts mentioned in section 556.
(2)	If the liability of the insurer to the company is less than the liability of the company to the third party, subsection (1) does not limit the rights of the third party in respect of the balance.
(3)	This section has effect notwithstanding any agreement to the contrary.
154	In CGU Insurance, the liquidators of Akron Roads Pty Ltd (Akron) commenced proceedings in the Supreme Court of Victoria against three former directors of the company, together with another company, Crewe Sharp Pty Ltd (In liq) (Crewe Sharp) which was alleged to have been a director of Akron Roads Pty Ltd within the extended meaning of ‘director’ under s 9 of the Corporations Act.  The liquidators alleged that the directors had breached their duties under s 588G of the Corporations Act by failing to prevent the company incurring debts when it was insolvent.  The liquidators sought an order under s 588M(2) that the former directors pay the liquidators, as a debt due to Akron, an amount equal to the amount of the loss or damage suffered by the creditors of Akron because of Akron’s insolvency.  Crewe Sharp and one of its directors, who was also a director of Akron, held professional indemnity insurance with CGU Insurance Ltd (CGU Insurance) and made a claim for indemnity in relation to the claim brought by the liquidators.  As CGU Insurance denied Crewe Sharp and its director cover under the insurance policy, the liquidators applied to this Court for an order that CGU Insurance be joined as a defendant to the proceeding and for leave to file and serve an amended points of claim seeking a declaration that CGU Insurance was liable to indemnify Crewe Sharp in respect of any judgment obtained by the liquidators against them, relying on s 562 of the Corporations Act.
155	At first instance, leave was granted to join CGU Insurance as a defendant.  CGU Insurance subsequently applied for leave to appeal to the Court of Appeal, who granted leave to appeal and dismissed the appeal.  CGU Insurance then applied for special leave to appeal to the High Court on the ground that the Supreme Court had no jurisdiction to grant the declaratory relief sought.  
156	The question posed before the High Court was whether federal jurisdiction invested in the Supreme Court of Victoria authorises it to entertain a claim for a declaration, by a plaintiff against a defendant’s insurer, that the insurer is liable to indemnify the defendant.  The High Court dismissed the appeal, deciding that the question raised by the liquidators’ claim was one within the subject matter of federal jurisdiction.  Secondly, the High Court held that the claim reflected a justiciable controversy between the liquidators and CGU Insurance, noting that the claim for declaratory relief brought by the liquidators would be the only occasion on which CGU Insurance’s denial of liability is contested given the application of preclusive doctrines against re-litigation. 
157	In their joint judgment in CGU Insurance, French CJ, Kiefel, Bell and Keane JJ stated:
66	If the Akron liquidators made good their claim against Crewe Sharp and Mr Crewe, and established the liability of CGU to indemnify its insured, the proceeds of the policy so far as they related to Crewe Sharp would have been payable by the liquidators of Crewe Sharp to the Akron liquidators subject to the deductions mentioned in s 562 of the Act.  If Mr Crewe himself became a bankrupt then s 117 of the Bankruptcy Act could apply to similar effect with respect to his trustee in bankruptcy.
67	As the Akron liquidators have submitted, their claim does not depend upon any incursion upon principles of contract law or privity of contract.  They are not claiming as a party to the insurance contract nor as persons otherwise entitled to the benefit of that contract.  Their claim is based upon the legal consequence created by s 562 of the Act in the event that CGU is liable to indemnify Crewe Sharp and, more contingently, s 117 of the Bankruptcy Act in the event that CGU is liable to indemnify Mr Crewe and he becomes a bankrupt.  That legal consequence would be the bringing into existence, in favour of the Akron liquidators, of a right to the proceeds of the insurance policy payable to Crewe Sharp in respect of its liability to Akron.  The interest upon which the claim for declaratory relief is based and CGU's denial of liability under the policy are sufficient to constitute a justiciable controversy between the Akron liquidators and CGU involving a question arising under a law of the Commonwealth.  . . .
158	Counsel for the Co-Owner appellants submitted that here, as in CGU Insurance, their claim, or at least Wadren’s claim, is based upon the legal consequence created by s 562 of the Corporations Act and, in the event that it is established that AIG as the insurer is liable to indemnify Probuild, the effect of s 562 is to create a separate pool of moneys that is available to meet the appellants’ claim, or at least Wadren’s claim, as a priority.  That is to say, counsel acknowledged that because the primary judge was not satisfied that there was sufficient material before him to demonstrate that ‘QIC had a good claim against anyone because of a timing issue’, it might be said that QIC was in a different category to Wadren, being the original owner of the shopping centre, but he submitted that s 562 ‘is the route home for the [appellants] if there is a route home at all.’  Further, he said:
MR GLEESON:  . . .  No points made against us that there's a fatal impediment to a 562 claim and I think Your Honour can proceed on the assumption that if we pass through some other hoops then – and our friends say we don't get to pass through those hoops.  I accept that.  But if we do then 562 is the pathway that we're travelling on.
159	Turning to r 32.05 and the rationale underlying it, counsel for the appellants then proceeded to outline what the appellants do know about whether to commence a proceeding against AIG, and what they don’t know.  First, counsel said, they knew that Probuild had professional indemnity policies for each of the three relevant years.  Secondly, they know that Probuild was notified by the owner of defects claimed in the first policy year (2020) and that Probuild notified AIG in the 2020 policy year and AIG has not unconditionally granted indemnity for that year.  However Wadren has received, but QIC has not received, the documents comprising the confirmation or denial of indemnity for that 2020 year.  Neither Wadren nor QIC has documents for the 2021 and 2022 policy years.  Thirdly, Wadren and QIC know that Probuild was notified of a defects claim in the 2021 and 2022 policy years.  (As noted below, they say ‘[t]hat’s the mistake His Honour made’.)  But they don’t know whether Probuild notified its insurer of claims in those policy years, and AIG won’t tell them or provide the documents that will reveal the position (about notification to AIG and if so, whether there has been a grant of indemnity – conditional or otherwise) and his Honour did not order AIG to do so.  Lastly, for all three policy years, neither Wadren nor QIC knows if there is any money left under the policy in any of those years; whether in fact any claim was made by Probuild under the policy in any of the 2021 and 2022 policy years, or if the policy is admitted by the insurer to respond. The documents that would reveal whether the insured sum has been eroded in any of those three years have not been provided.  Later in the course of oral submissions, counsel for the appellants acknowledged that the letter from AIG’s solicitors to the appellants’ solicitors dated 12 October 2022 informed them that as of the date of the letter ‘the limits of indemnity under the AIG Policies have not been exhausted’.  However, he said ‘[t]hey didn’t go on and say how much is left and we don’t know.’
160	The appellants contend that in circumstances, where all indications are that litigation of the kind under consideration against AIG will likely be hard fought and expensive, neither Wadren nor QIC knows whether it would be futile to embark on such litigation because the limits of indemnity have been eroded.  Counsel observed that AIG won’t tell the appellants and has declined to provide the documents that would reveal what is the position.
161	Counsel for the appellants then turned to address the error contended for in the first ground of appeal being first, the ‘mistake’ his Honour made in thinking that he did not have evidence before him about notifications of defects in the second and third policy years and secondly, the ‘important threshold error’ surrounding his use of the word ‘relevant’ in the Principal Ruling when framing the questions: ‘Do the plaintiffs have sufficient information in relation to the terms of the relevant insurance policies?’ and ‘Do the plaintiffs have sufficient information in relation to the dates on which the relevant notifications were made under the policies?’.   
162	As to the first alleged ‘mistake’ about evidence of notifications of defects in the second and third policy years, counsel for the appellant Co-Owners submitted:
MR GLEESON:  . . .  Now His Honour made a mistake, and I'll take you to this, and it's clearly a mistake.  He thought he didn't have evidence before him of notices of defects in year two and year three.  So it's not controversial, it's accepted by parties that there's a policy for each of those years.  And His Honour said, all right well, I can see that the owner made a claim against the builder in the first year so I will allow preliminary discovery, and I think this is by consent, of notification by builder to its insurer in that first year but I won't for the next two years because I don't think there's any evidence before [sic - me] that the owner made a claim against the builder in each of those next years.  That was a mistake and it ought follow very readily that once that mistake is recognised that we get the relevant documents going to whether and how Probuild notified its insurers in year two and year three and the response to the notification.  
. . .
MR GLEESON:  . . . 
. . .  My clients know that Probuild was notified of a defects claim in 2021 and 2022 policy years.  That's the mistake His Honour made.  There was evidence before him and there is evidence before Your Honour of those notifications to defects.  But my clients don't know the next parts.  They don't know whether having received those defect notices Probuild notified its insurer of claims in those policy years and AIG won't tell them and they won't provide the documents that will reveal.  And His Honour didn't order it.  
So they don't know if there was notification and they don't know whether there's been a grant of indemnity – conditional or otherwise – and AIG won't tell them.  And they won't provide the documents that will reveal [it] [a]nd His Honour didn't order it.  . . .
163	Secondly, the appellants contend that the primary judge erred in his application of r 32.05 by requiring them to establish that the documents they sought were in fact ‘relevant’ as a pre-condition to the Court granting preliminary discovery.  They observe that r 32.05 could have used the language ‘relevant’ but chose not to, and instead adopted (what the courts have recognised as) the ‘more general or far reaching’ expression ‘relating to’.  
164	Counsel submitted that in circumstances where the Rules have adopted the more general or far reaching expression, it is the broader meaning that must be given effect:
[MR GLEESON:] . . . We say that clearly a document may relate to a question where the applicant has the right to obtain relief without it being a relevant document in the evidentiary sense or in any sense that could be contemplated by His Honour's use of the word.  The problem with using the word, relevant, is that it's got nothing to fasten onto.  
All the dictionary definitions of relevant define it in terms of something being connected to something.  But what is it to be connected to when we don't have a pleading, we don't have a defence, and that's the very raison d'être for the rule.  Relevant to what.  The language of the rule itself, 32.05, is any document relating to the question whether the applicant has the right to obtain relief.   So there the legislature has identified what we fasten onto.  What's it relate to?  It relates to the question whether the applicant has the right to obtain the relief.  
. . .
And we know that His Honour has not used shorthand to really capture what he truly understands to be the correct question, because of the way he implemented his interpretation.  When he moved to determine whether the documents that were being sought were relevant, he did so in that narrow way.  The point's easily illustrated, there was evidence before His Honour about the first year, 2020, there being a defect claim.  
And that motivated His Honour to say yes, well, there has to be the documents about whether the insurer was notified and what followed thereafter for that year.  But the fact that there was a defect notified in one of three years, in which it is known that each of those years there is a policy, should of itself have been enough to, on the proper broad interpretation, yield the response that documents for the next two years under those policies could relate to the question as to whether there's the right to obtain relief.  
165	Counsel then proceeded to track through a chronology of events as a precursor to explaining the ‘mistake’ they contend the primary judge made in limiting the preliminary discovery to be given to the appellants for the first policy year, 2020, because there was some evidence before him from Ms Morcom about Probuild being notified in that year, but finding that as there is nothing of that nature for policy years two and three, 2021 and 2022, no documents should be given.
166	When the Originating Motion was filed on 21 September 2022, the documents sought from Probuild and AIG were framed (inter alia) as follows:
3.	An order pursuant to rule 32.05 of the Rules that the First Defendant [Probuild] give discovery of all documents (including letters, emails, faxes, file notes and other written communications, whether electronic or hard copy) (Documents), that are or have been in the possession, custody or power of the First Defendant [Probuild] relating to the Policy Documents (as that term is defined in the affidavit of Corin Eileen Morcom affirmed on 14 September 2022).
4.	An order pursuant to rule 32.05 of the Rules that the Second Defendant give discovery of all Documents, that are or have been in the possession, custody or power of the Second Defendant [AIG] relating to the AIG Australia Policy Documents and the Past Claim Documents (as those terms are defined in the affidavit of Corin Eileen Morcom affirmed on 14 September 2022).
167	Ms Morcom’s first affidavit, which was filed on 21 September 2022, defines the relevant expressions by reference to the ‘AIG Australia Policy’ which is the professional indemnity policy for the 2019/2020 policy year.  
168	In the Second Morcom Affidavit, which was filed in support of the Co-Owner’s application for leave to file an amended originating motion on 14 November 2022, shortly before the hearing of the preliminary discovery application, Ms Morcom deposed that in light of recent correspondence from AIG’s solicitors dated 12 October 2022, she ‘inferred’ that in addition to the policy for the 2019/2020 policy year, the policies for the Later Policy Years, 2021 and 2022, ‘respond or may respond, to the potential claims of the Co-Owners’.  Further, she said:
11.	I am instructed that the Co-Owners do not possess, and have not had access to, in respect of the Later Policy Years:
(i)	confirmation that the Co-Owners' Claim was notified to the insurers in the 2020 to 2022 (inclusive) policy years;
(ii)	a copy of Probuild's notification of the claim to its insurers;
(iii)	a copy of any confirmation from the insurers of indemnity or any denial of indemnity (if that is the case);
(iv)	the relevant professional indemnity policy itself; and
(v)	the details and identity of all insurers under the policies, save for as notified by the second defendant in its letter dated 12 October 2022 as described in paragraph 8(b) and by the documents enclosed with the letter of the first defendant dated 9 November 2022 as described in paragraph 10.
12.	The matters stated in paragraphs 62 and 63 of my First Affidavit apply equally to the policies and the insurers for the Later Policy Years.
169	Accordingly, the appellants sought leave to amend (inter alia) paragraphs 3 and 4 of the originating motion to add in the words ‘save that the reference to the “AIG Australia Policy” in para 26 [of the First Morcom affidavit] (and thereafter) should be read as covering the 2019–2022 policy years (inclusive)’.
170	Counsel for the appellants submitted that his Honour ‘appears to have overlooked that evidence when he wrote what he did in the last sentence of [paragraph] 78 [of the Principal Ruling], and he also overlooked the fact that there was in evidence before him notifications under the subsequent years.’  That is because the First Morcom Affidavit filed on 21 September 2022 had actually exhibited (what the appellants contend are) notifications given on behalf of the Co-Owners to Probuild in each of the Later Policy Years, 2021 and 2022. 
171	Against that background, counsel submitted:
[MR GLEESON:]  There might be all sorts of arguments in due course in litigation between the owners and the builder's insurers about whether and how these notices fit under the claims made [sic] notified policy.  But for the purpose of this Rule 32.05 it's sufficient for Your Honour to note that there is – there was evidence before His Honour that he didn't appreciate he had of the notices that enliven a reasonable cause to believe that there may be an entitlement to relief.  
So to conclude on appeal ground one – yes, thank you, yes.  If you be in any doubt that His Honour made the mistake that I've mentioned, the factual mistake, it's confirmed in his subsequent ruling.  You'll remember that there was a second ruling, that's in Volume 1 at p62.
172	Counsel for the appellants then referred to paragraph 3 of the August Ruling, where they say his Honour made a ‘factual mistake’ in failing to recall the evidence before him, given by Ms Morcom in the First Morcom Affidavit, about notifications of defects that were given to Probuild in the second and third policy years, as follows:
Relevant policy year
3	In support of their application for preliminary discovery, the plaintiffs relied on an affidavit of Corin Morcom affirmed on 14 September 2022.  Ms Morcom is the plaintiffs’ solicitor and says that the plaintiffs ‘issued a notification of claim to Probuild by letter dated 10 October 2019’. There is no evidence from Ms Morcom, or the plaintiffs, or anyone else indicating that there was any other notification in subsequent policy years.
173	Further, counsel submitted, that aside from the ‘factual mistake’, the appellants continue to rely on the ‘important threshold error that his Honour makes’, demonstrated by his Honour having ‘misconstrued’ r 32.05 by using the word ‘relevant’, instead of the more general and far reaching expression that is used in the rule of ‘relating to’.  Further, Mr Gleeson KC said:
[MR GLEESON:]  We don't have to get there to the factual mistake, Your Honour, because even if those, the further notifications, weren't in and there's only the first one His Honour has misconstrued by using the word 'relevant'.  But it's crystal clear that even by his own – more onerous definition the evidence was there.   So that would – if Your Honour is with us on that point that would give us the notifications for the second and third years and the responses in relation to indemnity.   So what we've got for year one we would get for years two and three.  
AIG’s oral submissions
174	At the hearing of the appeal, counsel for the respondent adopted their written submissions and contended that if ground one of the appeal is allowed the Court should nonetheless affirm his Honour’s finding ‘on the basis that the appellants have sufficient information to enable them to decide whether to commence a proceeding in the Court to obtain relief against AIG in respect of the …primary professional indemnity insurance policies.’  Counsel submitted that the question of whether the appellants have sufficient information is an objective one, as Hollingworth J made clear in Beston Parks Management Pty Ltd v Sexton (Beston Parks).  In that case, her Honour said ‘[i]t is for the court to determine whether or not an applicant has sufficient information available to it; the applicant’s own assertion that it does not is not determinative (nor strictly necessary, although such an assertion is commonly made in a supporting affidavit).’  Further, counsel said that AIG accepts that the appellants did not have to prove the cause of action ‘[b]ut they did have to establish the reasonableness of their belief.’
175	When developing AIG’s first proposition, that the appellants have sufficient information, counsel observed that the present application concerns only AIG, albeit that AIG does represent the other primary layer professional indemnity insurers.  That is to say, no application for preliminary discovery has been brought against the excess layer insurers, who together apparently provide cover in the range between $20+ million and $50 million.  Counsel for AIG, Ms Crafti SC, submitted, somewhat rhetorically:
But a question that may continuously arise over the course of the next few hours Your Honour is where are the excess insurers.  And why has no application been brought against them for preliminary discovery.  I'll just plant that flag in the sand Your Honour and come back to it.  
176	Counsel then reiterated and emphasised what AIG contends the appellants relevantly do know.  She submitted:
They know that the primary professional indemnity insurers have granted indemnity to Probuild under the 2020 policy.  And that's [sic] its conducting the defence of the proceeding that the appellants commenced against Probuild and others in this court.  The appellants have all three primary professional indemnity policies.  . . .
177	Further, counsel said:
MS CRAFTI:  . . .  But the point really here, Your Honour, in terms of why does all this matter, the point is this; the appellants have been told that in each of the three policies the primary layer has not been eroded.  Sorry, has not been exhausted.
178	In that regard, counsel referred back to the letter from Clyde & Co to the appellants’ solicitors dated 12 October 2022 which stated that ‘[a]s at the date of this letter the limits of indemnity under the AIG Policies have not been exhausted.’  Counsel for AIG also referred to the transcript of the hearing in the IPS Application proceeding before Brown J, and called in aid information in the oral submissions made that day by Mr D Collins KC, counsel for six of the excess layer insurers, when outlining to her Honour what was known by the Co-Owners, as follows:
MR COLLINS: Look, before I go to the substance, a couple of things that aren’t in dispute that are important.  The first is that, under the orders made by [the primary judge] on the 22nd of August 2023, paragraph 2 provided that the first defendant, which was ProBuild, make discovery to the first and second plaintiffs – so both plaintiffs - of the Excess Professional Indemnity policies.  I won’t go to the rest of it.  And it’s for the three relevant years that are the subject of this application.  So we know they’ve got the whole of the policy documents relating to the excess insurance for the period that they seek.
The second is that we know, because my learned friend invited your Honour to draw an inference of fact about the cover provided by those policies that it was not less than $100 million in aggregate of the primary insurance.  And he wouldn’t have invited you to make that inference if it was contrary to what was known from the documents that’ve been produced.
The third thing is that we know, because Ms Wearne has sworn it, that the primary insurance hasn’t been exhausted.  And there’s no real precision about the primary insurance, but we know it’s not less than 50 million.  At least your Honour knows that.  And others know that it’s not necessarily that much.  Now, I’m not going to say what it is, but others do because it’s in the documents.  So it’s $50 million or more untouched in the Excess insurance cover for each year.
We then want to turn to what is it that’s sought in the originating motion.  And the first category of documents that’s of relevance to the excess insurance is in paragraph 1(b).  And it’s the written notifications by the first defendant - I’m sorry.  It shouldn’t be 1(b).  That’s in relation to the primary insurance, the written notifications.  But in respect of notifications, there can be no relevance for the reason advanced by Ms Crafti of whether there were notifications by the insured to the excess insurers.  The relevance is what claims were made during each relevant period.  And the applicants know what claims they made.
Now, whether or not there were notifications by the insured to the excess insurers is not relevant to whether cover should be provided because of the decision in Antico.[]  If the claim was made during the policy year, then, save for some prejudice, the failure to notify the insurer during that year won’t prevent the insured in obtaining the indemnity.  And in a sense, paragraph 1(b), it’s not relevant to address it from the excess insurers’ point of view.  But the broad language in which the order sought are framed as to use language such as “relating to”.  And if it’s notifications, then it should be communications constituting any notification of the claims, not “relating to” because it would make it a potentially much broader inquiry.
The next category of documents which are at paragraph 1 - 1(c).  So I’ve dealt with 1(b) which sought notification in respect of each of the years under the Excess policies are documents or information relating to the remaining limit of indemnity. And they are dealt with in paragraphs 1(c), 1(d) and (g) of the originating application and, for the reasons I’ve advanced, no reason for making any orders in relation to the Excess policies because we know, for the reasons I’ve advanced as to the applicants, that the whole of the cover provided by the Excess PI policies remains extant.  So there have been no diminution by payments to other claimants.  We then get what is the most ambitious claim - - -
HER HONOUR: Is that true of the 2020 and ’21 policy and the 2021, ’22 policy?
MR COLLINS: Yes.  All three years.
HER HONOUR: So as I understand it - so I just make sure I’m right on this – the AIG has - - -
MR COLLINS: As Ms Wearne - - -
HER HONOUR: - - - stated the - that the policy for the 2019-2020 year hasn’t been exhausted.
MR COLLINS: In her affidavit, it does - - -
HER HONOUR: But I don’t know there’s anything in relation to subsequent years.
MR COLLINS: No, there isn’t.  I understand, in her affidavit - I think it’s paragraph 13 - she confirms that the primary layer insurance has not been exhausted for any of the three relevant years.  If that’s correct - if that’s incorrect, I’d invite Ms Crafti to say so because I - that would’ve misled the court.  But that’s my reading of the affidavit.  I’ll come back to that, your Honour.
HER HONOUR: Come back to the point.
. . .
[MR COLLINS:]  . . . Yes, and Ms Crafti confirms that my reading of Ms Wearne’s affidavit is correct.  I think it’s paragraph 13, from recollection.
MS CRAFTI: Paragraphs 9 and 10, I think, of - paragraphs 9 and 10 of the third Wearne affidavit [in the IPS Application proceeding], your Honour, and MJW10.
179	Counsel for AIG confirmed that the reference before Brown J to ‘the third Wearne affidavit’ was a reference to Ms Wearne’s third affidavit in the IPS Application proceeding.  Ms Crafti SC then returned to continue her submissions in respect of Ground One, and added:
MS CRAFTI:  But, Your Honour, unless there's an objection, I will just - I don't think it's controversial because it's confirmed, but what those paragraphs of Ms Wearne's affidavit in that proceeding said was that it updated what she had said on 12 October 2022, so the date of her affidavit - the third affidavit in the Queensland proceeding being 14 November 2023, that the limits of indemnity under the AIG policies still have not been exhausted.  
And why does all this matter?  Because what the appellants know, Your Honour, is that there is at least $30m available in professional indemnity insurance and it could be up to 50 million.  Per year, yes.  Per year.  So they know that.  They have the excess policies, Your Honour, because [the primary judge] ordered the deed administrators to discover them and that was in his order of 22 August 2023.  We assume that's been done.  The appellants would be in a better position to know.  We assume they've got the excess policies because an order was made for them to receive them.
HER HONOUR:  And from what you've said, Mr Collins has said there's been no drawing on the excess policies. 
MS CRAFTI:  No and there couldn't be, Your Honour, because you only get to the excess later [sic] - - - 
HER HONOUR:  When you've exhausted the - - - 
MS CRAFTI: - - - if the primary layer's exhausted.  So it stands to reason that the whole of the excess layer is available in each of the three policy years.  
HER HONOUR:  So if the primary policies are not exhausted then essentially the excess cover is untouched. 
MS CRAFTI:  Correct.  That is relevant, we say, Your Honour, to this question of this purporting needing to know how much is available.  I'm still focusing on sufficiency of information.  They know - when I say 'they', the appellants know when they corresponded with Probuild about the alleged defects in the stage 7 works and if and when they put Probuild on notice of any supposed separate and distinct claims.
HER HONOUR:  So this is after 2019 or some other date?
MS CRAFTI:  From 2019 onwards.  They know when they corresponded with Probuild, they know when - they would say Probuild was on notice of some kind of separate category of defects or some separate claim that wasn't made in 2019-2020, if there is any.  They are the best placed party to know that information and I'll come back to why that's critical in terms of sufficiency shortly.  . . .
180	Counsel for AIG then turned to the appellant’s contention that his Honour was mistaken in thinking that he did not have evidence before him about notifications of defects in the second and third policy years.  Counsel submitted:
[MS CRAFTI:]  There really was no focus at all before [the primary judge] on the material that now forms the material exhibited to the third Morcombe [sic] affidavit which is in supplementary appeal book 2249.  So the criticism of His Honour is that he said there wasn't enough or there was no or not enough information before him to have any real understanding as to why the two later year policies may be in play at all and why there could potentially be a claim for relief as against AIG in respect of those later two policy years and Mr Gleeson has today said His Honour was wrong, that material was before him.  
But I think it is a fair observation that not much, if anything, was made of that before His Honour.  But in any event, the evidence of the letters from the appellants to Probuild outside of – sorry, beyond 30 June 2020 - sorry, I withdraw that.  If those letters in the later policy years are said to constitute claims on Probuild that are separate and distinct from the claim made in the first policy year, then they have all they need to know in terms of whether or not to commence against AIG for its proportion of liability under the primary professional indemnity insurance policies.
181	At that point, because of the lack of clarity around the interrelationship between the policies for the primary and excess layers and the primary layer insurers and also the excess layer insurers inter se, the Court sought to better understand how any proposed claim against AIG might be framed and what limit of liability might be enlivened by making such a claim.  The following exchange ensued:
HER HONOUR:  I just want to understand what you just said because I was thinking, and obviously wrongly again, that if you sued the lead insurer, for example, you were picking up the policy which the lead insurer has and the others you've now said have effectively subscribed to those policy terms.  If you're wanting to claim the whole of the $20m that's available as the limit of the liability under the policy, do you have to commence a proceeding against, not just AIG, but also each of the two other insurers that are party to that group? 
MS CRAFTI:  Yes, Your Honour.  And if you want to go above the limit of liability in the primary layer, you also would seek to join the excess layer insurers.
HER HONOUR:  So what we're talking about is you'd have to have - as part of your proceeding you'd have to have not just AIG, but also HCC and whatever they're called, the other entity. 
MS CRAFTI:  Yes.  Star [sic], yes. 
HER HONOUR:  Star  - - - 
MS CRAFTI:  Star, yes. 
HER HONOUR:  - - - and they'd have to be parties  - - -
MS CRAFTI:  That's right.
HER HONOUR:  - - -  but then you'd also have to pick up also all of these excess layer insurers individually, you don't sue one representative.
MS CRAFTI:  Correct, Your Honour.  Correct.  And you might recall when I started my submissions I put a flag in the sand to say, where are they? 
HER HONOUR:  No, I understood that, but again, I wasn't thinking you had to have separate claims against each of the individual insurers.
MS CRAFTI:  Yes, Your Honour, you do.  Each of them has its own liability to the insured.
HER HONOUR:  I can understand they've got their own liability but I was assuming that, under the policy, there would be some arrangement where you only have to sue one of them, you don't have to sue three of them. 
MS CRAFTI:  No, Your Honour.  
HER HONOUR:  Or six or nine of them or whatever and do it. 
MS CRAFTI:  No, unfortunately, for better or for worse, that is not the case.  All of them have to be - let me put it this way, Your Honour; if you're only going to seek - if you only need to seek to recover, for example, 65 per cent of 20 million, you might only sue one of the insurers, in this case AIG.  That might say something about what the appellants think the quantum of its claim is.  I don't know. 
HER HONOUR:  Well, that's what I just want to – I'm just processing this now because the only person who's been mentioned as someone to be sued is AIG and AIG are sitting at 65 per cent of 20 million which doesn't come anywhere near the figures that have been talked about in the material by His Honour about the potential liability under the claims. 
MS CRAFTI:  That's right, Your Honour.  Which begs the question; what is the point of this application for preliminary discovery.  Is it actually to ascertain whether a claim can be brought against the insurers, the PI insurers of Probuild for coverage under the respective policies or is this a fact finding mission to work out how to cobble a claim together against them.  
Now, it goes beyond sort of now traversing, Your Honour, into what is the - the question of what is this claim against AIG, what is the nature of the claim against AIG.  Is [it] in relation to mechanical defects, is it in relation to structural defects.  It's just purported to be a claim against AIG.  But AIG doesn't know what that claim is. 
HER HONOUR:  Well, the notification, the letter from 2019 that QIC sent said structural defects, non-structural defects, other defects. 
MS CRAFTI:  Yes. 
HER HONOUR:  With some description of what that meant. 
MS CRAFTI:  Yes and that was a notification from Probuild to - - - 
HER HONOUR:  No, from QIC to Probuild. 
MS CRAFTI:  Sorry, sorry, sorry, I beg your pardon.  So from QIC to Probuild in that first policy year.
HER HONOUR:  First policy year, that's right. 
MS CRAFTI:  So what is the claim to be made in respect of – I'm asking this rhetorically - what is the claim that is sought to be made against AIG in respect of which defects in the later policy years.
HER HONOUR:  Well, the other limbs that Mr Gleeson took me to which was what I was asking you about which you went through, they were letters from, I think, Allens to your instructing solicitors.  . . .         
MS CRAFTI:  Yes. 
HER HONOUR:  . . . - there are a couple of letters that he took me to this morning. 
MS CRAFTI:  Thank you.  It might be these, Your Honour.  At p1367 which might be appeal book 6, Your Honour.  
HER HONOUR:  10 May 2021, yes, that's that was one of them. 
MS CRAFTI:  And then 1554, volume 7 and 1812 in volume 8.
HER HONOUR:  I understood them to be saying they were notifications  - - - 
MS CRAFTI:  Yes. 
HER HONOUR:  - - - made in the later policy years which the judge had overlooked.
MS CRAFTI:  So they being notifications to Probuild. 
HER HONOUR:  To Probuild, yes. 
MS CRAFTI:  So if the appellants are able to articulate to Your Honour what would be the - they don't have to particularise it, they don't have to tell us necessarily what the cause of action is, although presumably it would have something to do with s562 and perhaps a breach of the contract or a failure or refusal to indemnify or something to that effect. [sic] but what is the claim about; is it about mechanical defects, is it about structural defects, non-structural services defects.  They haven't told us.  
182	Counsel for AIG continued, to submit by reference to the letters that were sent to Probuild in the later policy years, that insofar as the appellants say that those ‘notifications’ constitute a new or a ‘separate and distinct claim’ in respect of each of the later policy years, that does not stem from the claim made in the first policy year, the appellants ‘should spell that out’ and articulate ‘what it is they say is going to be claimed against AIG’  ̶  ‘[r]elief in respect of what when it comes to the second policy year and the third policy year’.  Counsel submitted that until that has been done ‘there can be no warrant for ordering AIG to produce the documents that His Honour ordered did not require to be discovered.’
183	Counsel also informed the Court that, in respect of the new proceeding that was issued by the Co-Owners in March 2023 seeking relief (damages) against Probuild (amongst others) associated with the Structural Defects, ‘cover has been granted to defend.’  That response prompted further questioning from the Court about the nature and extent of the coverage under the AIG policy, as follows:
HER HONOUR:  Can I just go back to the point before this.  I'm still not sure I understand.
MS CRAFTI:  Yes.
HER HONOUR:  If a proceeding is commenced against AIG in respect of the two appellants, they can claim up to the 65 per cent of the $20 million theoretically in each of the years that the policy would be available and they've got claims for the excess.  But if they've only commenced the proceeding against AIG they are limited to the limit under the AIG policy which would be the 65 per cent of the $20 million in each of those years.
MS CRAFTI:  That's right Your Honour.
HER HONOUR:  Now if AIG is conducting Probuild's defence, what does that mean in respect of the other insurers.  Does that mean the other insurers have got – I'm just trying to understand how all this works because the other two insurers have been notified of a claim under the first policy for the 2020 year.  And yet, AIG is conducting Probuild's defence in the proceeding that's been issued for damages.  What does this mean for the other two insurers who have been notified of the claim but they're not conducting – is [AIG] conducting the defence on behalf of the others as well or is it just on behalf of AIG.  I just don't understand how this works.
MS CRAFTI:  Yes, my instructions are all three Your Honour.  The defence in the damages proceeding for Probuild is being conducted – sorry Your Honour, just one moment.  I am instructed to say Your Honour all three of the primary PI insurers have granted indemnity under the 2019/2020 policy to Probuild and have picked up the defence – the conduct of the defence on that basis.
HER HONOUR:  So that means what I said earlier was not correct because it's not just the 65 per cent of the $20 million that's available.  It's the whole 20 million or however much of it is left and hasn't been exhausted already.
MS CRAFTI:  That's right.
HER HONOUR:  Because each of the three insurers, even though the claims are made against Probuild with AIG conducting the defence, the defence is being conducted in relation to the whole of the policy that might respond so far as it's able to respond.
MS CRAFTI:  Yes.
HER HONOUR:  Which means it's the whole $20 million that's being called on or so much as is available not just so much as is available of 54 per cent of $20 million which is what I thought had earlier been said was the position.  
MS CRAFTI:  I don't – if someone said it I don't think it was me – but Your Honour is right that indemnity has been granted under the entire armoury [sic] layer of the, in relation to the 2019/2020 policy and the primary indemnity, sorry the primary professional indemnity insurers have picked up the conduct of Probuild's defence in the damages proceeding pursuant to that first policy.  That means, yes, that's what's left of the 20 is notionally available subject to proof of the claim.
HER HONOUR:  Right, and so it's not bringing a claim against AIG.
MS CRAFTI:  No.
HER HONOUR:  It's bringing a claim against Probuild.
MS CRAFTI:  Correct.
HER HONOUR:  Which will call on the policy to the extent that the policy is available and that layer will be available to the extent that it hasn't already been called on.
MS CRAFTI:  Precisely.  That this [sic] a different scenario to what is being proposed here.  Here what's being proposed is that the appellants would bring a proceeding directly against AIG - - - 
HER HONOUR:  This is where I got confused.
MS CRAFTI:  Yes.
HER HONOUR:  The difference between bringing your proceeding directly against AIG as opposed to what's already happened which is a proceeding against Probuild where the policy, the primary layer policy has responded.  That's what I'm trying to clarify.  Because that's what I’m not understanding.
MS CRAFTI:  But Your Honour raises an excellent point and it's this.  Any documents relating to the 2019/2020 policy can't properly be the subject of a preliminary discovery application because indemnity has been granted under that policy.  So there's no, there is no, it is impossible for us to conjure up what it is the appellants say they would claim against AIG in respect of that policy year given that indemnity has been granted.  My instructor is right there is no controversy in respect of that policy year.  So any of the material that the appellant seeks before Your Honour in respect of that policy year - - -
HER HONOUR:  But that was the basis His Honour used to grant access to the additional documents.  The fact that that was a distinction between the 2020 policy and the 2021 and the 2022 policy that the claim had actually been made and that was then said to be wrong because actually a claim was made in respect of each of the three years of policy.
MS CRAFTI:  Well, the appellants say they have made claims on Probuild that are separate and distinct claims under each of the three policies.  That's not a proposition that AIG necessarily accepts or accepts at all.  That is something that would need to be contested.  In respect of what, we don't, as I said we don't know.  But certainly in respect of the first year there is no controversy.  There can be no direct claim on the policy by the appellants because indemnity has been granted.  So that policy falls away entirely.  
184	Counsel for AIG contended that in the present case ‘the appellants know when they corresponded with Probuild about the alleged defects in the stage 7 works and if and when they put Probuild on notice of any supposed separate and distinct claims.’  She submitted that the appellants ‘would say Probuild was on notice of some kind of separate category of defects or some separate claim that wasn’t made in 2019-2020, if there is any’ and added that ‘[t]hey [the appellants] are the best placed party to know that information…’   
Role of s 54 of the Insurance Contracts Act and scope for its operation in the present case
185	During AIG’s oral submissions, counsel for AIG addressed the Court on the role of s 54 of the Insurance Contracts Act 1984 (Cth) (Insurance Contracts Act) and sought to explain the scope for its operation in the context of the present case by reference to the authorities that have considered s 54.  
186	Section 54 of the Insurance Contracts Act, which appears in Part V headed ‘The Contract’ and under Division 3 - ‘Remedies’, provides as follows:
54  Insurer may not refuse to pay claims in certain circumstances
(1)	Subject to this section, where the effect of a contract of insurance would, but for this section, be that the insurer may refuse to pay a claim, either in whole or in part, by reason of some act of the insured or of some other person, being an act that occurred after the contract was entered into but not being an act in respect of which subsection (2) applies, the insurer may not refuse to pay the claim by reason only of that act but the insurer’s liability in respect of the claim is reduced by the amount that fairly represents the extent to which the insurer’s interests were prejudiced as a result of that act.
(2)	Subject to the succeeding provisions of this section, where the act could reasonably be regarded as being capable of causing or contributing to a loss in respect of which insurance cover is provided by the contract, the insurer may refuse to pay the claim.
(3)	Where the insured proves that no part of the loss that gave rise to the claim was caused by the act, the insurer may not refuse to pay the claim by reason only of the act.
(4)	Where the insured proves that some part of the loss that gave rise to the claim was not caused by the act, the insurer may not refuse to pay the claim, so far as it concerns that part of the loss, by reason only of the act.
(5)	Where:
(a)	the act was necessary to protect the safety of a person or to preserve property; or
(b)	it was not reasonably possible for the insured or other person not to do the act;
the insurer may not refuse to pay the claim by reason only of the act.
(6)	A reference in this section to an act includes a reference to:
(a)	an omission; and
(b)	an act or omission that has the effect of altering the state or condition of the subject matter of the contract or of allowing the state or condition of that subject-matter to alter.
187	Counsel for AIG started with the most recent of the cases in the joint list, being the decision of the Full Court of the Federal Court in Watkins Syndicate 0457 at Lloyds v Pantaenius Australia Pty Ltd, which canvasses the jurisprudence distilled through earlier cases such as FAI General Insurance Co Limited v Australian Hospital Care Pty Limited, Maxwell v Highway Hauliers Pty Ltd  and Prepaid Services Pty Ltd v Atradius Credit Insurance NV.
188	In Watkins Syndicate, when dealing with the first issue of whether or not s 54 was engaged the Full Court of the Federal Court (Allsop CJ, Rares and Besanko JJ) in a joint judgment said that there was a significant degree of agreement between the parties on the approach to resolving this question that ‘reflected the gradual distillation of the jurisprudence on s 54 over nearly 20 years of litigation’.
189	Counsel for AIG then proceeded to summarise the jurisprudence on s 54 and explain the gist of the relevant cases as they might apply in the context of the AIG policy, which (as was noted earlier) is a ‘claims made and notified’ policy, as follows:
[MS CRAFTI:] …  The gist of it is this; in the context of this policy, the way it would work is like this; if a third party makes a claim against an insured.
HER HONOUR:  So, for example, QIC makes a claim against Probuild.
MS CRAFTI:  Correct.  In the policy year.
HER HONOUR:  In year 2021.
MS CRAFTI:  Sure.  But Probuild doesn't notify the insurers that that claim was made in that policy - doesn't notify the insurers in that policy year, but does it six months after, or a year after, or 18 months after.   Strictly speaking, that claim was not - it wasn't a claim made and notified in that policy year.  But s54(1) operates to forgive the lateness of the notification.  That is the effect of s54(1).
HER HONOUR:  Which means it effectively overrides the terms of the policy.
MS CRAFTI:  Yes.  That's right, Your Honour.  I think perhaps the most helpful traversing of this is there's consideration at paragraphs 36 to 38 [of Watkins Syndicate] of a decision of Justice of Appeal Meagher in a case called Prepaid, which is also in the joint book of authorities.  ...  
And then at paragraph 39, the Full Court says ‘The conclusion reached by Justice of Appeal Meagher as to the correctness of Maxwell in the Court of Appeal’, that's the Western Australian Court of Appeal, Maxwell being a decision - Maxwell v Highway Hauliers, ‘was vindicated in the High Court appeal in Maxwell.  Though the High Court in the Maxwell appeal referred to Prepaid, it did not expressly comment on Justice of Appeal Meagher's reasons.  Nevertheless, in somewhat shorter terms essentially the same approach to the question of the engagement of s54 was taken.  This can be seen [in the judgment in the Maxwell appeal] at 252 CLR 590 at paragraphs 23 to 27 as follows’.  
190	Counsel then pointed to passages in the High Court’s judgment in the Maxwell appeal, that were adopted by the Full Court of the Federal Court in Watkins Syndicate, concerning the approach to engagement of s 54 in the context of a ‘claims made and notified’ policy of the kind under consideration here.  Relevantly, for present purposes, in the Maxwell appeal, the High Court stated, as follows:
[23]	The Insurers sought support for their argument from a statement of the plurality in FAI [i.e., Australian Hospital Care] that the section “does not operate to relieve the insured of restrictions or limitations that are inherent in [the] claim”.  They misapply that statement in equating its reference to restrictions or limitations that are inherent in a claim with any restriction or limitation on the scope of the cover that is provided under the contract.  A restriction or limitation that is inherent in the claim which an insured has in fact made, in the sense in which the plurality in FAI used that terminology, is a restriction or limitation which must necessarily be acknowledged in the making of a claim, having regard to the type of insurance contract under which that claim is made.
[24]	Thus, as explained in FAI, the making of a claim under a “claims made and notified” contract necessarily acknowledges that the indemnity sought can only be in relation to a demand made on the insured by a third party during the period of cover.  The section does not operate to permit indemnity to be sought in relation to a demand which the third party omitted to make on the insured during the period of cover but made after that period expired.   Similarly, the making of a claim under a "discovery" contract, of the type in issue in FAI itself, necessarily acknowledges that the indemnity sought can only be in relation to an occurrence of which the insured became aware during the period of cover.
. . .
191	Counsel for AIG also called in aid the additional comment that the Full Court in Watkins Syndicate made about the analysis of Meagher JA in Prepaid, which was expressed as follows:
[40]	These paragraphs [i.e. a reference to paragraphs [23]-[27] of the High Court’s judgment in the Maxwell appeal, a portion of which is set out above], lead to our additional comment to the analysis of Meagher JA in Prepaid.  The process of understanding what are the restrictions or limitations that are inherent in the claim is one that involves the construction of the policy, not merely as to what its constituent words mean, but in a broad sense so as to characterise as a matter of substance what is the essential character of the policy.  Once that essential character is decided upon, the restrictions or limitations that necessarily inhere in any claim under such a policy (to which s 54 does not apply) and the restrictions or limitations that do not necessarily inhere in any claim under such a policy (to which s 54 may apply) can be ascertained.
192	Against that background, counsel for AIG submitted that, in effect, the position is that ‘if the claim is made on the insured in the policy period, the late notification by the insured to the insurer will not be a ground for refusing cover.’  Accordingly, it is for that reason that AIG contends ‘the appellants do not need discovery of documents constituting notifications from Probuild to AIG.’  Further, counsel for AIG submitted:
…none of them [i.e. documents constituting notifications from Probuild to AIG] can assist the appellants in making a decision whether to commence against AIG, or anyone else.  They are immaterial, there is no nexus between them, and any right that the appellants might have to obtain relief against AIG.  The nexus, if any, has been established, or will be established, if it can be, by whether the notifications that the appellants made to Probuild constitute separate and distinct claims on Probuild in the later policy years.  
From there, if they can articulate what it is that they would make a claim for under the later policy years, that might be something to work with.  The best we can guess at the moment is that they would seek to bring a proceeding against AIG in respect of the later two policy years for a breach of the insurance contract.  But what that breach relates to, we don't know.  They haven't said.
193	Counsel for AIG confirmed that AIG’s position is that indemnity has been granted under the primary PI policy for the 2019/2020 year in respect of the (damages) claim that has been made by the Co-Owners against Probuild in the new proceeding notwithstanding that ‘that claim was made outside the policy period, but it is accepted that it relates to the defects that were first notified to Probuild.’  Counsel noted that following the first notification letter dated 10 October 2019, QIC, on behalf of the Co-Owners, sent a letter to Probuild dated 18 February 2020, which was headed ‘[Werribee Plaza]-Structural Defects’, and referred to ‘Make-Safe Works’ and ‘additional defects’ identified with respect to the Stage 7 Works which were set out in Annexure 1.  QIC’s letter concluded by stating:
Please note that the works described in this letter are temporary works only, and do not address the underlying defects in Probuild’s work.  The Co-Owners continue to reserve their rights against Probuild regarding the deficiencies and defects in the Stage 7 Works.
194	As to that reservation of rights by QIC on behalf of the Co-Owners, counsel for AIG submitted:
[MS CRAFTI:]  That is a broad reservation of rights in respect of defects and deficiencies.  That is a notification from QIC to Probuild.  The claim that is made on Probuild, for the purposes of the policy, has to either be a letter of demand or a proceeding.  
The [new (damages)] proceeding was instituted, primary insurers were able to make an assessment of coverage, granted indemnity under the 2019 to 2020 policy.  If the appellants commenced an action against Probuild in respect of some category of defect that’s not captured by that general reservation of rights that was first notified to Probuild in the second policy year or the third policy year then the professional indemnity insurers of Probuild would have to assess whether coverage would be granted to Probuild to respond to that claim.  
But until that claim is before Probuild, and therefore the insurers, it can’t make an assessment.  It could be a letter of demand, there has been none.  It is not possible for the primary PI insurers to determine coverage in respect of a claim if a claim’s not been made.  
195	That is to say, AIG contends that before the Court could proceed to consider whether there is any preliminary discovery required to be given in respect of any claim in the second year (i.e., the 2020/2021 policy year), that is separate and distinct from the claim made in the first policy year, there must first be some articulation to Probuild, and thereby to the insurer, of what it is that constitutes the claim.  Counsel for AIG submitted that the letters counsel for the appellants had referenced and relied upon fell short of what was required, stating:
MS CRAFTI:  But they don't constitute a claim, Your Honour, so it has to be a letter of demand or it has to be a claim made, so it doesn't have to be the institution of proceedings.
HER HONOUR:  No.
MS CRAFTI:  It has to be more than what is in those letters, Your Honour, they have to be new, they are continuations of the updating of the defects that were - the defects and deficiencies that were identified in the Stage 7 works.  These are updates.
. . .
MR GLEESON:  I've got my note, Your Honour, if it helps.  [Mr Gleeson KC provided the Court with references to the three letters that the Co-Owners rely on in the later years: being the 10 May 2021 letter (AB volume 6, p1367), the 7 September 2021 letter (AB volume 7, p1554), and the 23 February 2022 letter (AB volume8 p1812)]
. . .
MS CRAFTI:  The highest I can put it, Your Honour, is if the appellants consider that these notify of new claims in the manner that Your Honour has identified, and that they are claims that can be assessed by the insurer as separate and distinct claims, then it should go ahead and pursue Probuild and/or its insurers in respect of those claims.  And why I say that it is not – they are not entitled to know how much is left in the limit of indemnity under the primary layer, is because no plaintiff is entitled to know that kind of information.  
196	The Court noted that the letter from Clyde & Co to Allens dated 12 October 2022, that was provided after this proceeding seeking preliminary discovery had been commenced, referred to ‘the AIG Policies’ (which were defined in that letter to mean ‘any of the policies referred to in paragraph 3(a)’) and stated in paragraph 3(c) that:  
3 	We are instructed by AIG to inform your clients as follows:
. . . 
(c) 	As at the date of this letter the limits of indemnity under the AIG Policies have not been exhausted.
197	The following exchange then ensued with counsel for AIG:
HER HONOUR:  . . . As at the date of this letter [i.e. 12 October 2022], the limits of the indemnity under the AIG policies have not been exhausted.  So, notification was given before the proceeding was commenced, so the notification must have arisen from that first letter in 2019, which notified the claim.  
MS CRAFTI:  Yes, the circumstances that give rise to the claim.
HER HONOUR:  So, all I'm trying to understand is what is the difference between that situation and just taking the letters that Mr Gleeson's referred [to], the later letters, in respect of what he says are fresh notifications, what would be the difference with those?
MS CRAFTI:  But they're not fresh notifications, they're updates to the original notification.
HER HONOUR:  Well, I think he's saying they're fresh notifications for the new policy years of different – claims of a different – distinct claims, I think that's the way he put it this morning.
MS CRAFTI:  And the insurer doesn't accept that.  
Consideration and disposition
198	In my view, the appellants’ contention that the primary judge erred in his application of r 32.05 by requiring them to establish that the documents they sought were in fact ‘relevant’ as a pre-condition to the Court granting preliminary discovery, misstates or mischaracterises the approach his Honour adopted.  Furthermore, in my view, it is also not correct to regard or treat his Honour’s use of a concept of ‘relevance’ as having introduced an ‘impermissible gloss on the language of r32.05’ or involving ‘an impermissible departure from the text, context and purpose of r 32.05’ or as being ‘not consistent with the beneficial purpose of the rule’ as the appellants contend. 
199	Rather, his Honour approached the question of what preliminary discovery should be ordered, by considering and applying the requirements of the rule to the case the Co-Owners presented before him.  When the proceeding was commenced, their case was predicated on a ‘Claim’ having been notified to Probuild by letter dated 10 October 2019, alleging ‘defects’ in the Stage 7 Works that Probuild was engaged to construct and design at the Pacific Werribee Shopping Centre.  
200	In the First Morcom Affidavit, filed in support of their originating motion, Ms Morcom outlined the background to the Co-Owners’ identification of significant and wide-ranging defects in the Stage 7 Works carried out by Probuild, and the notification of their Claim to Probuild.  She then made reference to reports the Co-Owners had obtained from:
•	MPN Group ― regarding ‘structural defects’ (dated 25 September 2019 and 7 September 2021) and ‘other defects’ being other particular design and construction defects in the Stage 7 Works that MPN had identified; and
•	Kusch Consulting Engineers ― identifying various defects in the ‘non-structural’ services installed as part of the Stage 7 Works (dated 15 June 2021).
201	She explained that while ‘[i]dentification of other defects relating to the Stage 7 Works remains ongoing’, ‘[i]n respect of the Structural Defects, Other Defects and Non-structural Defects (together, the Defects), she is instructed by the Co-Owners that:
(a)	the costs of the temporary make safe measures have, to date, exceeded $11,300,000.  Costs associated with the temporary make safe measures continue to be incurred;
(b)	the anticipated total cost of the permanent rectification works is in excess of $245,500,000; and
(c)	the losses consequent upon the defects and/or rectification work are estimated to be between $75,000,000 and $100,000,000,
totalling between $331,800,000 and $356,800,000.  Identification of other defects relating to the Stage 7 Works remains ongoing.  The amounts identified do not represent the maximum costs that the Co-Owners may incur, but represent only an indicative calculation of costs relating to the three categories identified above.
202	Ms Morcom referred to a body of correspondence that was exchanged between the Co-Owners (including through Allens) with Probuild and AIG (including through Clyde & Co, who had been variously acting as solicitors for Probuild and AIG) in respect of the defects in the Stage 7 Works, including between 10 October 2019 and 26 May 2022, and between the Co-Owners (including through Allens) and the Administrators (including through King & Wood Mallesons) between 1 March 2022 and 12 July 2022.
203	In the First Morcom Affidavit, Ms Morcom also stated that in the letter Allens sent to Clyde & Co and the Administrators dated 26 May 2022, the Co-Owners requested, among other things, that Probuild and AIG provide the following documents in respect of the AIG Australia Policy (which she defined to mean ‘Probuild's professional indemnity insurance policy covering the period of insurance from 30 June 2019 to 30 June 2020, which relates to professional indemnity insurance policy AU000179PI’):
(i)	confirmation that the Co-Owners' Claim was notified to the insurers in the 2019/2020 policy year;
(ii)	a copy of Probuild's notification of the claim to its insurers;
(iii)	a copy of any confirmation from the insurers of indemnity or any denial of indemnity (if that is the case);
(iv)	the relevant professional indemnity policy itself; and
(v)	the details of all insurers under the policy;
204	When it came to addressing the requirement in r 32.05(a) that ‘there is cause to believe that’ the Co-Owners have or may have the right to obtain relief in the Court from a person whose description they have ascertained, Ms Morcom deposed in Section C of the First Morcom Affidavit as follows:
C.	The Co-Owners may have right to obtain relief
57.	I am instructed that:
(a)	Wadren considers it may have the right to obtain relief against Probuild on the following grounds:
(i)	for breach of Probuild's design and construction obligations and warranties under the Contract, on the basis that Probuild failed to comply with those obligations and warranties in the course of completing the Stage 7 Works, including as described in the letter from Allens to Probuild dated 10 May 2021 (a copy of which is contained at pages ‘1272-1442’[] of 
Exhibit CEM-1); and
(ii)	under the indemnities in the Contract, on the basis that as a result of the Defects, [] Wadren has suffered loss or damage to which those indemnities respond; and
(b)	the Co-owners consider that they may have the right to obtain relief against Probuild for misleading or deceptive conduct contrary to section 18 of Schedule 2 of the Competition and Consumer Act 2010 (Cth) (the Australian Consumer Law), on the basis of representations made by Probuild.
58.	I am instructed that the Co-Owners consider that they may have the right to obtain relief against AIG Australia, the AIG Australia Co-Insurers and any other Professional Indemnity Insurers on the following grounds:
(a)	the Defects identified by the Co-Owners, and the grounds identified in paragraph 57(a) above, concern the services provided to Wadren by Probuild, which if proven to be defective, would be matters to which a professional indemnity insurance policy would ordinarily respond (subject to any applicable exclusions and limitations);
(b)	for the proceeds of each such responsive insurance policy:
(i)	section 562 of the Corporations Act 2001 (Cth) entitles the Co-Owners to priority to such proceeds in any liquidation of Probuild; and
(ii)	the DOCA expressly makes provision for the priority otherwise afforded by section 562 of the Corporations Act 2001 (Cth), relevantly stating at clause 8.5:
Subject to the terms of this Deed, section 562 of the Corporations Act is to be incorporated into this Deed as if references to a liquidator were references to the Deed Administrators and with any other amendments as necessary in the context of this Deed.
(c)	in circumstances where AIG Australia, the AIG Australia Co-Insurers and any other Professional Indemnity Insurer has denied or failed to confirm indemnity which ought to have been admitted, and section 562 of the Corporations Act 2001 (Cth) applies, the Co-Owners have the right to obtain relief in the form of a declaration that those insurers must give indemnity under the respective policy.
205	Further, Ms Morcom deposed that in the case of the Policy Documents, the Co-Owners’ application for the preliminary discovery is made on the following basis:
D.	Application for preliminary discovery
. . .
63.	The Co-Owners seek the Policy Documents because, I am instructed, they believe:
(a)	they may have a right to obtain relief against Probuild and Mr Gray for the reasons set out in Section C but, in light of Probuild's and Mr Gray's respective asset positions and apparent inability to satisfy any substantial part of any judgment other than by recourse to proceeds of an insurance policy, have been unable to decide without access to the Policy Documents whether to start a proceeding in the Court to obtain that relief.  Inspection of the Policy Documents would assist the Co-Owners in making that decision by enabling them to make a prudent commercial assessment as to whether the cost and risk of the contemplated litigation would be worthwhile;
(b)	they may have a right to obtain relief against AIG Australia and the Other Insurers (once their descriptions have been ascertained) for the reasons set out in Section C but, having made reasonable enquiries of Probuild, AIG Australia and Mr Gray, have been unable to decide without access to the Policy Documents whether to start a proceeding in the Court to obtain that relief;
(c)	Probuild has or is likely to have or has had or is likely to have had in its control the Policy Documents, because the Policy Documents would ordinarily form part of the books and records of Probuild, concerning agreements to which Probuild is a party;
(d)	AIG Australia has or is likely to have or has had or is likely to have had in its control the Past Claim Documents (in respect of the AIG Australia Policy) and the AIG Australia Policy Documents, because those documents form part of the books and records of AIG Australia, concerning an agreement to which AIG Australia is a party;
(e)	[no longer sought] Mr Gray has or is likely to have or has had or is likely to have had in his control the D&O Policy Documents, because the D&O Policy Documents directly concern Mr Gray, and are documents which a director would ordinarily have access to in the course of a directorship; and
(f)	at no time has Probuild, AIG Australia or Mr Gray denied the existence of the documents referred to at paragraphs A.63(c), A.63(d) or A.63(e) above, or denied that those documents are within their possession.
206	To that point, the Co-Owners’ application was focused on seeking preliminary discovery pertaining to the Co-Owners' Claim that was notified to the insurers in the 2019/2020 policy year.  However, following receipt of ‘open’ correspondence from AIG’s solicitors on 12 October 2022 notifying the Co-Owners’ solicitors that AIG was prepared to consent to (conditional) orders for preliminary discovery of, amongst other things, the professional indemnity insurance policies which insure Probuild for (not only) 2019-2020 but also the later policy years 2020-2021 and 2021-2022, ‘and the written notifications under those policies in respect of the Claim (as defined in paragraph 10 of [the First Morcom] Affidavit), the Structural Defects (as defined in paragraph 11 of [the First Morcom] Affidavit), and the Non-structural Defects (as defined in paragraph 12 of [the First Morcom] Affidavit), the Co-Owners sought to widen the net (so to speak).  
207	In the Second Morcom Affidavit, filed on 14 November 2022, shortly before the hearing before the primary judge, Ms Morcom deposed:
9.	Based on this correspondence, I infer that, in addition to the policy for the policy year 30 June 2019 to 30 June 2020, the policies for the Later Policy Years respond, or may respond, to the potential claims of the Co-Owners described in paragraphs 57 and 58 of my First Affidavit.
10.	On 9 November 2022, I received, on behalf of the Co-Owners, a letter by way of email from the first defendant's solicitors enclosing copies of the certificates of currency for the Later Policy Years.  A copy of the correspondence is exhibited at pages 14 to 20 of Exhibit CEM- 2.
11.	I am instructed that the Co-Owners do not possess, and have not had access to, in respect of the Later Policy Years:
(i)	confirmation that the Co-Owners' Claim was notified to the insurers in the 2020 to 2022 (inclusive) policy years;
(ii)	a copy of Probuild's notification of the claim to its insurers;
(iii)	a copy of any confirmation from the insurers of indemnity or any denial of indemnity (if that is the case);
(iv)	the relevant professional indemnity policy itself; and
(v)	the details and identity of all insurers under the policies, save for as notified by the second defendant in its letter dated 12 October 2022 as described in paragraph 8(b) and by the documents enclosed with the letter of the first defendant dated 9 November 2022 as described in paragraph 10.
12.	The matters stated in paragraphs 62 and 63 of my First Affidavit apply equally to the policies and the insurers for the Later Policy Years.
208	At that time, the Co-Owners also sought to amend their originating motion to seek Policy Documents by expanding the reference to the Policy Documents (as that term is defined in the First Morcom Affidavit) such that (inter alia) the “AIG Australia Policy” in paragraph 26 (and thereafter)  should be read as covering the 2019 to 2022 policy years (inclusive).  Apart from Ms Morcom’s inference (as noted above) there was no articulation of the Co-Owner’s ‘reasonable cause to believe’ that AIG has or is likely to have documents in its possession relating to the question whether the Co-Owners have the right to obtain relief in the Later Policy Years and that inspection of those documents would assist them to make the decision, as per r 32.05(c).  Furthermore, it is unclear whether the references to the ‘Co-Owners’ Claim’ in paragraph 11(i) and to ‘the claim’ in paragraph 11(ii) of the Second Morcom Affidavit are to the ‘Claim’ (as defined in paragraph 10 of the First Morcom Affidavit) or to some other unspecified claim.
209	It will be recalled that at the substantive hearing before the primary judge on 25 November 2022, counsel for AIG (then, Mr Slattery KC) submitted that the mere fact that AIG had been prepared to allow access to the policies for all three policy years – essentially in furtherance of its obligations under the Civil Procedure Act, to promote the overarching purpose – does not provide ‘a sound basis to infer that the policies respond or may respond to the potential claims raised by the [Co-Owner] plaintiffs so as to sustain, for example, an entitlement to preliminary discovery of the disputed claim to all past claim documents under each of those later year policies.’
210	When the matter returned before his Honour in August 2023, for further hearing about the orders to be made, it remained the case that there was no added clarity about the Co-Owner’s ‘reasonable cause to believe’ that AIG has or is likely to have documents in its possession relating to the question whether the Co-Owners have the right to obtain relief in the Later Policy Years and that inspection of those documents would assist them to make the decision, as per r 32.05(c).
211	It is in that context that his Honour’s use of the word ‘relevant’ falls to be considered.  As his Honour discussed in his Principal Ruling, to obtain an order for preliminary discovery under r 32.05, one of the matters the Co-Owners must establish is that there is reasonable cause to believe they have, or may have, the right to obtain relief against Probuild.  And if that, and the other requisite matters are established, the Court has power to order discovery of any document of the kind described in r 32.05(c) ‘relating to the question whether the applicant has the right to obtain the relief.’
212	The application before his Honour was predicated on the ‘Claim’ (as defined in paragraph 10 of the First Morcom Affidavit) and the preliminary discovery sought from AIG was in relation to that Claim having been notified to Probuild by letter dated 10 October 2019, alleging defects in the Stage 7 Works that Probuild was engaged to construct and design at the Pacific Werribee Shopping Centre.  
213	In my view, it is clear that his Honour used the word ‘relevant’ to describe that Claim.  In so doing, he was not introducing ‘an impermissible gloss on the language of r 32.05’, or departing ‘from the text, context and purpose of r 32.05’, in a manner that ‘is not consistent with the beneficial purpose of the rule’, as contended for by the appellants.  Rather, his Honour was confining himself to the case as presented by the Co-Owners as demonstrating a reasonable cause to believe they have, or may have, the right to obtain relief against Probuild.  That is to say, in circumstances where the Co-Owners had not advanced a case contending that they notified Probuild of claims in each of the 2020-2021 and 2021-2022 policy years that were separate and distinct claims from the Claim that was notified to Probuild by letter dated 10 October 2019, there was no reasonable cause to believe that the Co-Owners had established that they have, or may have, the right to obtain relief against Probuild in either of the 2020-2021 and 2021-2022 policy years.
214	Apart from Ms Morcom’s inference that AIG’s preparedness to allow the Co-Owners to have access to the policies for the later policy years somehow manifested grounds for, or enlivened, some other (unspecified) potential claim(s) of the Co-Owners to which the policies for those later policy years respond, or may respond, neither Ms Morcom nor the Co-Owners deposes as to why there is reasonable cause to believe that the Co-Owners have those potential claim(s) in each of the later policy years, and what those claim(s) are, and what constitutes them.  In those circumstances, in his August Ruling (at [14]) his Honour observed, correctly in my view, that:
14	I consider that, on its face, and in context, para 79 of the reasons is only consistent with the conclusion that the plaintiffs failed to establish that they have, or may have, the right to obtain relief in respect of the 2020-2022 policy years.  The highest that the case for relevance was put was the inference Ms Morcom drew from the fact that AIG consented to production of policies and notifications for the policy years 2020-2022.  But there was no evidence from Ms Morcom, or the plaintiffs directly, of any notification actually given from which a decision concerning indemnity would follow.  The strength of Ms Morcom’s inference is also diluted by the fact that AIG’s consent was contained in a letter that expressly maintained objection to the discovery of disputed documents, which included the confirmation or denial of coverage documents now sought.
215	On the material before his Honour, the Co-Owners failed to demonstrate that there was any reasonable cause to believe that the Co-Owners have or may have the right to obtain relief in either of the later policy years.  Thus there was no basis for his Honour to consider or find that any written notifications and confirmations or denials of indemnity for the 2020-2021 and 2021-2022 policy years would (as the Co-Owners contend) ‘be relevant and necessary for the same reasons as found in relation to the 2019-2020 policy year’.  
216	In that regard, I would add that I do not agree with the submission advanced by counsel for the Co-Owners on the appeal to the effect that:
…the fact that there was a defect notified in one of three years, in which it is known that each of those years there is a policy, should of itself have been enough to, on the proper broad interpretation, yield the response that documents for the next two years under those policies could relate to the question as to whether there's the right to obtain relief.
217	Following the making of that submission on the hearing of the appeal, the Court returned to the ‘mistake’ that counsel for the Co-Owners alleged his Honour had made in failing to recall that there was evidence before him of notifications in each of the later policy years.  The following exchange took place with counsel for the Co-Owners during which he acknowledged that ‘probably there wasn’t a huge amount of emphasis on notifications to Probuild for each of the three years’, as follows:
HER HONOUR:  But didn't you say earlier that was a mistake that you say he made, that he didn't recall that there was actually notification in respect to later years, so where do I find that.
MR GLEESON:  Let's go to that now, Your Honour.  
HER HONOUR:  I don't want to take you off where you're going - - -   
MR GLEESON:  No.
HER HONOUR:  - - -  I just want to make sure I'm understanding what you're saying, because you said a couple of times that that was an error that he made.
MR GLEESON:  Yes.
HER HONOUR:  But I just wanted to know how it's said it is an error and where the material is to be found.
MR GLEESON:  Yes.
HER HONOUR:  If you want to do that after the break, you can do it after the break.
MR GLEESON:  No, I was going to move to it now, Your Honour.  The way in which the case was argued, and Your Honour will no doubt want to work out why His Honour made the mistake, and how to give some context to the mistake.  It's probably explicable this way, there wasn't enormous emphasis, I don't think, I wasn't in it at first instance, but it doesn't seem to have been enormous emphasis on the notifications because for all three years AIG had indicated yes, we'll give you those documents for all three years, conditionally.  Conditionally they had.  
And His Honour noted that it was an open letter, and they've said that.  So I think probably there wasn't a huge amount of emphasis on notifications to Probuild for each of the three years, and I'll just take you to the letter that I'm calling the conditional offer.  If Your Honour has appeal book p1916, it's in 
 - - -
HER HONOUR:  Eight, is it?  Eight?
MR GLEESON:  Thank you.  
. . .
MR GLEESON:  Thank you.  That's at 1916, a letter from my learned friend's instructor's Clyde & Co and it's dated 12 October 2022.  You'll see in paragraph 2 we confirm this letter is written on an open basis.  ‘I'm instructed by AIG to inform your client as follows.  The primary layer insurers of the PI policies which insure Probuild for the policy years’ and the three years are set out.
HER HONOUR:  Yes.
MR GLEESON:  Now it's my understanding that that revelation of there being, not only a policy for 19, 20 but also 20, 21, and 20 – should be 21 and 22.  That that revelation motivated the amendment to the originating motion.
HER HONOUR:  Yes, I recall that.
MR GLEESON:  And the timing works because the originating motion preceded this letter and then my instructors saw, all right well, there's three policy years we'll enlarge it.  At any event if you go over the page, the second page, paragraph 4, ‘AIG is prepared to consent to the orders for the following effect.  A), that it makes preliminary discovery of the following documents.  1), the AIG policies.  2)’.  And this is the important one.  'The written notification made by Probuild to AIG under the AIG policies in respect of those things that are set out’.  
And we know that it's for all three years because of the defined phrase in their letter 'AIG policies'.  That's [sic] definition appears in paragraph 3(b) on the preceding page which throws us back to 3(a) which is all three years.
. . .
218	A little later on, counsel returned to the topic and said ‘Now I’ve been promising I’ll take you to the mistake. . . .’  Mr Gleeson KC then tracked back through the amendments made to the originating motion shortly before the hearing, and submitted as follows:
[MR GLEESON:]  So let me just pause for a moment and point out the chronology of this little part of the story.
Originating motion filed 21 September 22 and the first Morcombe [sic] affidavit which essentially and largely confined itself to the one policy because that's all they knew about was dated about a week before that.  In September 22.  The hearing comes on on 22 November 2022 and this second Morcombe [sic] affidavit that I'm about to take you to was filed about a week before that.  What happened in between times of course was the Clyde & Co letter that revealed there was more than one policy.  
And so before the hearing had commenced before His Honour, about a week before it, Ms Morcombe [sic] said this at 1907, in paragraph 8.  She refers to the letter that I've taken you to of Clyde & Co in paragraph 8.  Refers to the fact that there's a conditional consent.  In paragraph 9 she says, ‘Based on the correspondence I infer that in addition to the policy for the first year, the policies for the later years respond, or may respond’.  And she says in 11, ‘I'm instructed that the co-owners do not possess and have not had access to in respect of the later policy years’, the second and third years, ‘confirmation that they notified their insurer or a copy of that claim, or notification, or copy of any confirmation’ et cetera.  
So His Honour appears to have overlooked that evidence when he wrote what he did in the last sentence of 78, and he also overlooked the fact that there was in evidence before him notifications under the subsequent years.  If you go back to the first Morcombe [sic] affidavit and exhibits to it, you'll find these later notifications in Years 2 and 3, first of all at p1367.
HER HONOUR:  Volume 6?
MR GLEESON:  Volume 6.  So at p1367 Your Honour should see a letter from my instructors to the solicitors for the insurer of 10 May 2021?
. . .
HER HONOUR:  Allens Linklaters, yes.  
MR GLEESON:  And the letter goes to Clyde & Co, it says who Allens act for, it says, ‘We note that you act for Probuild.  We refer to the design and construction contract in relation to the Stage 7 works.  As you are aware, the owners have identified significant and wide-ranging defects.  In our letter of 14 August we provided your client with a list.  Subsequent investigations revealed additional defects, an updated list is contained’.  
So here we are with a notification by owner to builder in the second year, May 2021 falls in the second year of notification of further defects.  Bear in mind His Honour was prepared to give the relevant documents vis-à-vis the insurer for Year 1 because he understood there’d been an owner to builder notification, but not for the subsequent years, because he didn’t think he had that, but he did have it.  And then at p1554, which must be in - - - 
HER HONOUR:  In volume 7.
MR GLEESON:  Volume 7.  This is a letter dated 7 September 2022 - no, sorry, 7 September 2021.  It encloses a report from MPN Group with respect to structural defects.  And requires a response in writing confirming its intention to carry out the works on the basis set out within 21 days.  There's a further one at 1812, which is in volume 8.
Not strictly necessary because I've now referred you to a notification in each of the years but 1812 there's a letter from Allens to Clyde & Co of 23 February 2022 and it refers to the intention to shortly issue a notice of dispute.  That notice of dispute concerns Waldren's [sic] claims against Probuild et cetera.  
There might be all sorts of arguments in due course in litigation between the owners and the builder’s insurers about whether and how these notices fit under the claims made notified policy.  But for the purpose of this Rule 32.05 it’s sufficient for Your Honour to note that there is – there was evidence before His Honour that he didn’t appreciate he had of the notices that enliven a reasonable cause to believe that there may be an entitlement to relief.  
So to conclude on appeal ground one – yes, thank you, yes.  If you be in any doubt that His Honour made the mistake that I've mentioned, the factual mistake, it's confirmed in his subsequent ruling.  You'll remember that there was a second ruling, that's in Volume 1 at p62.
HER HONOUR:  Yes.
MR GLEESON:  A bit of a tidy up here.  Thank you.  Can you put those three back.  If Your Honour turns to paragraph 3 relevant policy is further application plaintiffs rely on affidavit of Corinne Morcombe [sic] of 14 September.  That's the first affidavit.  She says that the plaintiffs issued a notification to claim for Probuild by letter dated 10 October 2019.  There is no evidence from Ms Morcombe [sic] or the plaintiffs or anyone else indicating that there was any other notification in subsequent policy years, so His Honour has made that mistake.
We don't have to get there to the factual mistake, Your Honour, because even if those, the further notifications, weren't in and there's only the first one His Honour has misconstrued by using the word 'relevant'.  But it's crystal clear that even by his own – more onerous definition the evidence was there.  So that would – if Your Honour is with us on that point that would give us the notifications for the second and third years and the responses in relation to indemnity.  So what we've got for year one we would get for years two and three.  I'm paraphrasing, the details are set out in the precise documents we seek but in substance that's what they relate to.
219	Perusal of the transcript of the hearing before his Honour on 25 November 2022 confirms that the rival submission made by counsel for AIG, to the effect that ‘[t]here really was no focus at all’ before his Honour on the material that now forms the material that is exhibited to the Third Morcom Affidavit, is, in my view, a more accurate description of what took place.
220	The Co-Owners contend that the mistake his Honour made was in thinking that he did not have evidence before him about notifications of defects in the second and third policy years.  But in circumstances where the letters from the Co-Owners’ solicitors dated 10 May 2021, 7 September 2021 and 23 February 2022 were not (a) referenced by Ms Morcom as constituting separate and discrete notifications to Probuild or as demonstrating that there was reasonable cause to believe that Probuild or AIG has or is likely to have had documents relating to the question of whether one or more of the Co-Owners has or may have the right to obtain relief in respect of them, or (b) made the subject of submissions advanced before his Honour as constituting claims that were separate and discrete from the 10 October 2019 Claim, I do not accept that his Honour made the mistake contended for.  
221	As was noted by Ferguson J (as her Honour then was) in Oswal v Carson:
49	The Associate Judges in this Court are required to deal with a heavy workload.  In part, their role involves determination of procedural applications of the type in question here.  It is very important for the efficient operation of the Court in the administration of justice that they deal with such applications in a timely and efficient manner.   There is no need for them to be burdened with an expectation that they must produce word perfect, lengthy and impeccable reasons in respect of every application that they hear.  It is simply unnecessary.  The additional time that would be required to produce flawless reasons is not available if the Associate Judges are to perform their important role efficiently.
222	On a procedural application of this kind, an Associate Judge is required to respond to the case as presented by the respective parties.  It is not incumbent on the Associate Judge to peruse every page of voluminous exhibits and distil or identify for him or herself afresh some other case that an applicant might later decide to run.   
223	In my view, the additional material set out in the Third Morcom Affidavit, filed in the appeal on 2 November 2023, upon which the Co-Owners now seek to rely, serves to confirm the correctness of the primary judge’s decision.  Therein, effectively for the first time, reference was made to what the Co-Owners now contend were ‘additional notifications’ of defects to Probuild in each of the later policy years, as follows:
Notifications to Probuild
13.	In addition to the notification made by the Co-Owners to Probuild in the 2019-2020 policy year referred to in paragraph 10 of my First Affidavit, I am aware that the Co-Owners notified Probuild of the Co-Owners' claims in each of the 2020-2021 and 2021-2022 policy years by causing Allens, on their behalf, to issue the following correspondence:
(a)	Letter dated 14 August 2020 from Allens to Probuild notifying of the Structural Defects;
(b)	Letter dated 10 May 2021 from Allens to Clyde & Co on behalf of Probuild, which annexes an updated list of Structural Defects;
(c)	Letter dated 7 September 2021 from Allens to Clyde & Co on behalf of Probuild notifying of the Non-Structural Defects and enclosing the MPN report which identified the Other Defects; and
(d)	Letter dated 23 February 2022 from Allens to Clyde & Co on behalf of Probuild notifying of the Co-owners' claim.
14.	Copies of the letters referred to in paragraph 7 are contained at pages 67 - 101 of exhibit CEM-3.  The MPN Report dated 7 September 2021 referred to in paragraph 13(c) has not been exhibited to this affidavit, as it is contained at pages 434 - 635 of Exhibit CEM-1 to my First Affidavit.
15.	Certain of the letters referred to in paragraph 13 notified defects that had not previously, to my knowledge, been the subject of a claim by the Co-Owners against Probuild, for example the Non-Structural Defects.
16.	I am instructed that the Co-Owners are not aware, and I am not aware, whether Probuild notified the Primary Pl Insurers under the Primary Pl Policies for the policy years 2020-2021 and 2021-2022 in respect of the Co-Owners' claims.
224	As was noted earlier, AIG objected to the Court receiving and acting upon this new evidence on the hearing of the appeal, submitting that ‘[i]n the absence of any demonstrated factual, legal or discretionary error in the Associate Judge’s relevant reasons, and any exceptional circumstances, there is no cause for the Court to exercise its discretion to admit the Third Morcom Affidavit or, at least [15] of that affidavit’.  
225	In my view, the Co-Owners have not demonstrated any basis for the Court to admit the new evidence, and in particular the words emphasised (in bold italics) in paragraphs 13 and 15 of the above extract from the Third Morcom Affidavit.  Furthermore, while it may be correct to say that several of the letters referred to in the Third Morcom Affidavit were already in evidence before the primary judge, it was not contended by the Co-Owners at that point (before the primary judge) that any of those letters constituted ‘notifications’ in either the 2020-2021 or 2021-2022  policy years that were ‘additional notifications’ (i.e. to the ‘Claim’ that was notified on 10 October 2019) and notified defects that had not previously been the subject of a claim by the Co-Owners against Probuild.  Further, Ms Morcom’s reference (in paragraph 15 of her Third Affidavit, set out above) to ‘Non-Structural Defects’ as an example of defects not having previously been the subject of a claim by the Co-Owners against Probuild is curious, because as was noted earlier, in paragraph 14 of the First Morcom Affidavit she defined the expression ‘Defects’ as comprising (together) ‘the Structural Defects, Other Defects and Non-structural Defects’ (emphasis in bold italics added).
226	The present application concerns what is demonstrably a matter of practice and procedure.  Accordingly, the decided cases make clear that ‘a tight rein is to be applied’ and an appellate court is required to exercise particular caution in reviewing the decision.  In the ordinary course, an appeal from an Associate Judge will be determined on the evidence that was before the Associate Judge.  Here, no exceptional circumstances have been demonstrated that would permit the Court to depart from that course.  
227	Further, under the Civil Procedure Act, in exercising its powers, the Court is required to give effect to the overarching purpose ‘to facilitate the just, efficient, timely and cost-effective resolution of the real issues in dispute’ when making any orders or giving any directions in a civil proceeding.  In the present case, based upon the fresh evidence of their solicitor, the Co-Owners are seeking to advance a different case to that which was presented before the primary judge.  In my view, the overarching purpose, and in particular the objectives of facilitating the efficient conduct of the business of the Court and the public interest in the finality of litigation would not be furthered or advanced by the Court exercising its discretion to permit the fresh evidence to be admitted. 
228	For the foregoing reasons I would dismiss ground one of the notice of appeal.
Ground Two:	The primary judge erred by departing from his previous judgment without justification
229	In the Notice of Appeal, Ground Two is framed as follows:
2.	The Associate Judge erred in holding, at August Ruling [15], that confirmations or denials of indemnity under the Primary PI Policies for the 2020-2021 and 2021-2022 policy years should not be discovered in circumstances where the Associate Judge previously held, at Principal Ruling [80]-[84], that the Respondent should make discovery of confirmations or denials of indemnity under the Primary PI Policies where those policies were defined, at Principal Ruling [8], to refer to the policies for the 2019-2020, 2020-2021 and 2021-2022 policy year and the Associate Judge failed to address this finding made in his Principal Ruling, his reliance on the concept of “Primary PI Policies” as defined by him, or otherwise to explain why his earlier holding was wrong and justified the making of orders which were, on their face, inconsistent with his Principal Ruling.
230	Ground Two effectively concerns the findings and reasoning of the primary judge in the Principal Ruling (at paragraphs 78 and 79 (concerning ‘relevance’ – discussed under Ground One above) and at paragraphs 80 – 83 (that it was appropriate in the circumstances to order preliminary discovery of coverage documents evidencing confirmation of indemnity or denial of indemnity under the Primary PI Policies), and his subsequent elaboration and determination in paragraphs 14 and 15 of the August Ruling (confining the preliminary discovery of the coverage documents to be ordered to the 2019-2020 policy year only and thereby excluding the coverage documents for the 2020-2021 and 2021-2022 policy years).
231	For convenience, the relevant paragraphs of the Principal Ruling, and of the August Ruling, are reproduced below:
[Principal Ruling]
Background
8	Although the certificates of currency stated that AIG led a panel of insurers, those insurers were not identified.  Subsequently, in October 2022, AIG informed the plaintiffs that AIG’s co-insurers for the AIG Australia Policy, being Probuild’s primary professional indemnity insurance policy, for each of the 2019–2022 policy years (collectively, the ‘Primary PI Policies’) are: Starr Underwriting Agents Limited (‘Starr’) for and on behalf of Lloyd’s Underwriter Syndicate No 1919 CVS, and HCC International Insurance Company PLC (‘HCC’).
. . .
Do the plaintiffs have sufficient information in relation to the dates on which relevant notifications were made under the relevant insurance policies?
78	It does not appear to be contested that the plaintiffs need to know the dates on which relevant notifications were made under the relevant insurance policies in order to determine whether to bring a proceeding.  It appears that the plaintiffs know, or will know upon discovery of consented documents, the dates on which relevant notifications were made under the insurance policies applicable to the 2019–2020 policy year.  While AIG is prepared to provide or permit preliminary discovery of the Primary PI Policies for the 2020–2021 and 2021–2022 policy years, they submit that the plaintiffs have not established any reason to believe that they may have the right to obtain relief under those policy years.  In particular, AIG relies on the First Morcom affidavit where Ms Morcombe [sic] defines the relevant policy as being the 2019–2020 policy and where she states that the claim was made in October 2019. 
79	It is not sufficiently clear to me why documents relating to these later years are relevant.  Accordingly, I am not satisfied that the plaintiffs lack sufficient information in this regard.
Do the plaintiffs have sufficient information regarding whether AIG has made any unconditional grant of indemnity to Probuild under the Primary PI Policies?
80	The plaintiffs seek any documents evidencing confirmation or denial of indemnity.  The plaintiffs submitted that merely being informed that AIG has not made any unconditional grant of indemnity provides very little information to assist the plaintiffs to assess the prospects of any action.  Such information does not inform the plaintiffs whether there has been an outright denial of indemnity or whether indemnity has been granted subject to conditions, and if so what those conditions are.  For example, if indemnity has been granted subject to the condition of the excess being paid, then the plaintiffs may elect to pay the excess and seek to exercise the right of subrogation, thus potentially avoiding the very expensive and time-consuming exercise of issuing a proceeding against AIG. 
81	AIG has informed the plaintiffs that the Primary PI Insurers have not made any unconditional grant of indemnity to Probuild under the Primary PI Policies, but opposes the production of further documentation in relation to this issue on the basis that the plaintiffs have, or will have upon production of consent categories of documents, sufficient information to decide whether to bring a proceeding or not.  That is, the plaintiffs will be able to consider the terms of the policy, and decide for themselves whether the facts of the case respond to it.  AIG submits that the plaintiffs, having been told that AIG has not made any unconditional grant of indemnity, have sufficient information to decide whether to bring a claim.
82	I agree with the plaintiffs.  The class of documents sought arguably go to what defences may be available to AIG.  In that sense, they are documents relating to the question whether the plaintiffs have ‘the right to obtain relief’ as discussed in Optiver Australia Pty Ltd v Tibra Trading Pty Ltd (‘Optiver’).   If the reason an unconditional grant of indemnity has not been given is because a premium has not been paid, then the proceeding may be unnecessary.  Other reasons may lead to other decisions by the plaintiffs.  The observations by Hargrave J in B J Bearings are apposite:
An applicant for preliminary discovery is entitled to be cautious before making a decision to embark upon costly litigation.  This approach is consistent with the policy underlying the rule.  It is also, of course, consistent with the policy underlying the Civil Procedure Act 2010 generally, and the ‘proper basis certification’ requirements in s 42 of that Act in particular. 
83	Accordingly, I consider that it is appropriate in the circumstances to order preliminary discovery of documents evidencing confirmation of indemnity or denial of indemnity.
[August Ruling]
Consideration of Scope of Discovery
13	. . .
14	I consider that, on its face, and in context, para 79 of the reasons is only consistent with the conclusion that the plaintiffs failed to establish that they have, or may have, the right to obtain relief in respect of the 2020-2022 policy years.  The highest that the case for relevance was put was the inference Ms Morcom drew from the fact that AIG consented to production of policies and notifications for the policy years 2020-2022.  But there was no evidence from Ms Morcom, or the plaintiffs directly, of any notification actually given from which a decision concerning indemnity would follow.  The strength of Ms Morcom’s inference is also diluted by the fact that AIG’s consent was contained in a letter that expressly maintained objection to the discovery of disputed documents, which included the confirmation or denial of coverage documents now sought.
15	If the 2020-2022 policy years are not relevant, then I do not consider that confirmation or denial of coverage documents relating to any policies for those years can be relevant.  And if those documents are not relevant then I do not consider that the Court has power to, or should, order their discovery.  As noted in the reasons at paras 84– 87, the power of the Court is limited to ordering documents ‘relating to the question whether the plaintiffs have the right to obtain … relief’.  Having failed to establish the relevance of the 2020–2022 policy years, I do not consider that the documents sought can be said to ‘relate to the question whether the plaintiffs have the right to obtain … relief’ which describes the limits of a discovery order.
The appellants’ submissions
232	The appellants contend that when the primary judge’s reasons in the Principal Ruling are read and properly understood and viewed in the context of his definition (in paragraph 8) of Probuild’s primary professional indemnity insurance policy, for each of the 2019–2022 policy years as being ‘(collectively, the ‘Primary PI Policies’)’ and the question posed in the heading preceding paragraph 80, it is clear that his Honour’s reasons required AIG to make discovery of coverage or denial of coverage documents relevant to the policies for each of the 2019–2022 policy years.  
233	Accordingly, they submit that when his Honour returned to and re-visited the matter in his August Ruling, as a precursor to making the (contested) orders, he imposed a limitation which was inconsistent with the text and context of his reasons as recorded in the Principal Ruling and also the reasoning which led him to order that AIG give preliminary discovery.  Further, they submit that in so doing, his Honour effectively rejected the submission made by the (then) plaintiffs in respect of the orders to be made, namely ‘that the documents will go to any defences AIG may have and, therefore, are relevant to any decision whether to commence proceedings [as this] rationale applies for the 2019 to 2022 policy years collectively and not solely in relation to the 2019 year)’.  
234	Further, the appellants submit, with respect to the primary judge, that his Honour ‘failed to discharge his judicial task’ and provide adequate reasons, in that he:
did not address, acknowledge or engage with any of these submissions, including the obvious incongruity between his determination that the coverage documents should be discovered for the “Primary PI Policies” (which were defined by the primary judge to include policies for the 2019-2022 policy years) and his subsequent determination that such documents should not be discovered for the 2020-2022 policy years.
235	The appellants submit that as the ‘submissions made by the Co-Owners were neither considered nor referred to by the primary judge in his reasoning’, his Honour erred in failing to address or engage with them.
236	Against that background, having established error, the appellants invite the Court to exercise its discretion.  They submit that the discretion weighs in favour of the grant of preliminary discovery for essentially the same reasons as applied to Ground One of their appeal.  Further, they say:
48	In any event, the Court should, in the exercise of its discretion, order preliminary discovery of the confirmation of indemnity or denial of indemnity for the policies for the 2020-2021 and 2021-2022 policy years.  The confirmation of indemnity documents sought in the appeal go squarely to the purpose of the rule, when properly construed.  These documents will identify whether Probuild has satisfied the requirements of the policies as to notification such as to enliven coverage or whether any defences may be available to the insurers.  That bears directly on whether the Co-owners have a right to obtain relief against the insurers and the Co-Owners' decision as to whether to commence proceedings against the insurers.
The respondent’s submissions
237	AIG contends that, contrary to the appellants’ submissions, it is clear that his Honour did acknowledge and engage with their submissions relevant to the August Ruling.  In that regard, AIG refers to paragraph 8 of the August Ruling, where his Honour referred to the Co-Owners’ submissions about the definition of ‘Primary PI Policies’ in paragraph 8 of the Principal Ruling, and paragraphs 80 - 83 of the Principal Ruling, which was the cause of disagreement as to the appropriate orders.  Further, AIG submitted:
40.	. . . At [10]-[12] of the August Ruling, the Associate Judge stated the following, expressly addressing the appellants’ submissions:
10	The plaintiffs submit that a fair and objective reading of paras 8 and 80-83 require orders to be made that AIG discover all confirmation or denial of indemnity documents for the three policy years.  The plaintiffs submit that is particularly the case having regard to the definition of Primary PI Policies in para 8 and its use in paras 80 to 82.  The plaintiffs submit that although the defined term is not used in para 83, the correct reading is that the conclusion refers to all policy years.  The plaintiffs submit that the limitation of discovery to the 2019-2020 policy year would be inconsistent with the text and the reasoning upon which an order for discovery ought be made.
11	AIG submits that, on a fair and objective reading of the reasons, the relevant order for discovery should be limited to the 2019–2020 policy, particularly having regard to the findings in paras 78 and 79 of the reasons.  AIG submits that para 79 constitutes a finding that the plaintiffs had not established the relevance of the 2020–2021 and 2021–2022 policy years.  That being the case, it cannot be that it would be appropriate to order discovery of documents relating to confirmation or denial of indemnity in relation to those policies.
12	The plaintiffs submit in response that the issue dealt with in paras 78 and 79 relate to notifications and not to the granting or denial of indemnity and in that sense they are different issues and the resolution of the first does not in any way constrain the resolution of the second.
41.	At August Ruling [13]-[15], having set out the parties’ respective submissions, and quite evidently considered them, the Associate Judge recorded his conclusion by which he rejected the appellants’ submissions.  The reasons provided were clear and adequate.  His refusal to order preliminary discovery of any confirmation or denial of indemnity under the Contested PI Policies was sound for the same reasons addressed in Ground One – and the appellants accept that the reasoning for written notifications the subject of Ground One applies equally to the documents the subject of Ground Two.
238	In the circumstances, AIG submits that the appellants have not established ‘error’ and accordingly there is no basis for the Court to exercise its appellate powers.  But if, contrary to AIG’s submissions, Ground Two is made out, AIG submits the Court should decline to exercise its discretion to order preliminary discovery of the confirmation or denial of indemnity documents under the ‘Contested PI Policies’ (being the Primary PI Policies for the 2020/21 and 2021/22 policy years) for the same reasons as were addressed in Ground One. 
The appellants’ reply submissions
239	In their reply submissions, the appellants submit that AIG misunderstands their Ground Two.  The appellants contend:
6.	AIG misunderstands this ground. The error in the primary judge’s approach is not that he was unaware or failed to understand the Co-Owners’ submissions (Cf RS[40]).  The vitiating error is that the primary judge did not engage or address those submissions in making his ruling.  Nothing in AIG’s submissions gainsays this error.
Appellants’ oral submissions
240	In oral submissions, counsel for the appellants summarised Ground Two by saying that it deals with the ‘disconnect’ between the Principal Ruling and the August Ruling and the appellants’ contention that his Honour should have ordered that the same kind of documents as were required to be provided to the appellants for the 2020 policy year be provided to them for each of the 2021 and 2022 policy years.
241	The appellants refer to the Principal Ruling where, in discussing the class of documents sought, his Honour effectively agrees with the Co-Owners’ submission that the class of documents sought ‘arguably go to what defences may be available to AIG’ and [i]n that sense, they are documents relating to the question whether the [Co-Owners] have “the right to obtain relief” as discussed in Optiver’, and accordingly considered that ‘it is appropriate in the circumstances to order preliminary discovery of documents evidencing confirmation of indemnity or denial of indemnity’ for the Primary PI Policies.  As the expression ‘Primary PI Policies’ was defined in the Principal Ruling to mean ‘Probuild’s primary professional indemnity insurance policy for each of the 2019-2022 policy years’, the appellants sought orders for the provision of the documents for all three years, but AIG opposed that, seeking to limit the preliminary discovery to be given to the documents about the response to [Probuild’s] notification for the first policy year.  The matter returned for further argument before his Honour, which culminated in the August Ruling where his Honour said that the appellants were only to receive the documents pertaining to the first policy year.
242	The appellants take issue with his Honour’s approach, as embodied in the August Ruling, for the reasons set out in their written submissions.  In essence, they say that his Honour’s reasons are unsatisfactory because they failed to deal with the appellants’ point and the fact that the expression ‘Primary PI Policies’ was a defined term that his Honour had adopted and used.  Counsel for the appellants submitted:
There was no explanation that's a mistake and I'm not going to implement a mistake.  There was a complete turning away from the issue other than to say at a substantive level, I'm not giving you those documents for these reasons.
We set out in our written submissions why we say that that is an error, and I won't repeat them here, but Your Honour there's ample authority for the proposition that the reasons need to grapple with the very point that's being made by the party when it's the point.
AIG’s oral submissions
243	AIG effectively relied on its written submissions on ground two and the related oral submissions it made in respect of ground one.
Consideration and disposition
244	In my view, essentially for the reasons advanced by AIG, I do not accept that the Co-Owners have established ‘error’ in his Honour’s Principal Ruling when read with the August Ruling.  
245	Under ground one above, I have set out my reasons as to why, having regard to the case that was presented before the primary judge, I consider his Honour was correct in confining the Co-Owners to preliminary discovery of documents which relate to the question of whether they have the right to obtain relief in respect of the 2019-2020 policy year.  I am not satisfied, on the material presented before the primary judge, that the Co-Owners demonstrated that there was any ‘reasonable cause to believe’ that they have, or may have the right to obtain relief in the Court in respect of either the 2021 or 2022 policy years; whereas ‘reasonable cause to believe’ was demonstrated in respect of the 2020 policy year. 
246	The fact that his Honour defined the expression ‘Primary PI Policies’ in the Principal Ruling to mean ‘Probuild’s primary professional indemnity insurance policy for each of the 2019-2022 policy years’, and later ‘adopted and used’ that expression (as defined) in his ruling does not supply the missing link – or fill the void in the Co-Owners’ evidence – and thereby manifest a ‘reasonable cause to believe’ that the Co-Owners have, or may have the right to obtain relief in the Court in respect of either the 2021 or 2022 policy years.  
247	Correspondence from the Co-Owners’ solicitors that his Honour was taken to at the hearing on 25 November 2022, such as the letter from Allens to Deloitte (Probuild Administrators) dated 1 March 2022, serves to confirm that the letters that were sent to Probuild’s solicitors (being, at that point in time, relevantly Clyde & Co) dated 10 May 2021 and 7 September 2021, that the Co-Owners now seek to rely upon, were not presented as being ‘claims’ that were ‘separate and distinct’ from the ‘Claim’ QIC first notified to Probuild by letter dated 10 October 2019.
248	Relevantly, in Allens’ letter of 1 March 2022, after outlining the background, they stated:
2 	Our clients' claim
(a)	The Stage 7 Works are seriously defective.
(b)	Our clients have notified Probuild that our clients consider the rectification costs and other losses (for example, tenant compensation) to be incurred by our clients to rectify the Centre will exceed $240m.
(c)	The most significant of the defects are:
(i)	the failure to design and construct the Stage 7 Works to withstand earthquake actions; and
(ii)	errors in the design and construction of the corbel (or movement) joints in the Stage 7 Works.
(d)	Full details of our clients' claim (including supporting expert opinions) are contained in the following enclosures:
(i)	our clients' notification of the claim to Probuild in October 2019;
(ii)	our correspondence to Probuild's solicitors with respect to this matter (being Clyde & Co) of 10 May 2021 and 7 September 2021.
(e)	As you will see from the enclosures, our clients invited Probuild to rectify the defects, but it refused to do so.
(f)	Our clients are now proceeding with works to rectify the Stage 7 Works.
3	Insurance and requests of administrators
(a)	The Owners were informed by Probuild that its insurers were notified of the Claim in 2019.  We enclose a copy of the Certificate of Placement of Probuild's professional indemnity insurance policy for the period 30 June 2019 to 30 June 2020.
(b)	Given the administration of Probuild and WBHO and the operation of s562 of the Corporations Act, and to enable our clients to further assess their loss for proving purposes, our clients request that you urgently provide the following information.
(i)	Please provide confirmation that our clients' claim was notified to insurers in the 2019/2020 policy year as per the enclosed certificate of placement.
(ii)	Please confirm whether insurers have confirmed indemnity.
(iii)	Are the insurers conducting the defence of the claim?
(iv)	Please provide copies of the following:
(A)	A copy of the insurance policy that responds to the claim or pursuant to which indemnity has been declined (if that is the case);
(B)	A copy of any excess professional indemnity policy held in the relevant year.
(v)	Please confirm whether any other claims have been made upon the applicable policy, including details of any settlements of such claims.
(vi)	Please confirm whether Clyde and Co act for you in relation to our clients' claim.
(vii)	Please provide a copy of the parent company guarantee signed by WBHO in the form of Annexure AD of the Contract.
We would appreciate a response at your earliest convenience.
249	Further, as was noted under ground one above, when counsel for the Co-Owners took his Honour to the ‘key items’ of correspondence relied upon, and referred to Allens’ letter of 1 March 2022, his Honour was not referred to paragraph 2(d) of that letter, which mentions the letters of 10 May 2021 and 7 September 2021.  His Honour was not referred to either of those letters.  And it was not contended that each of those letters were ‘claims’ that were ‘separate and distinct’ notifications from the ‘Claim’ QIC notified to Probuild by letter dated 10 October 2019.
250	Accordingly, I would dismiss ground two of the notice of appeal.
Ground Three:	The primary judge erred by holding that the Court did not have the power to order preliminary discovery
251	In their application for preliminary discovery before the primary judge, the categories of documents for which the Co-Owners sought preliminary discovery included documents which  may disclose or indicate whether relief, if granted, is likely to be met.  His Honour held that the Court did not have power to order preliminary discovery of documents of that kind because the power in r 32.05 is limited to documents ‘relating to the question whether the applicant has the right to obtain the relief’ and he did not consider that the language of the rule could be extended to include the contested documents sought.
252	In Ground Three, the appellants contend the primary judge erred in holding that the Court does not have power under r 32.05 to order preliminary discovery of documents relevant to the question whether, if the claim is successful, there will be proceeds available to satisfy any judgment debt.  They submit that a document of that kind falls within the ambit of r 32.05 because it is a document that will bear upon the decision whether to commence proceedings.  Further, they say, the approach of the primary judge introduces a fetter or limitation on the Court’s power in r 32.05 that has no justification, as a matter of logic or principle.
253	In the Notice of Appeal, Ground Three is framed as follows:
3.	The Associate Judge erred in holding, at Principal Ruling [119], that the Court did not have power to order preliminary discovery of the contested documents because r 32.05 does not include documents relevant to the question whether, if the claim is successful, there will be proceeds available to satisfy any judgment debt because:
(a)	in making that holding, the Associate Judge introduced, at Principal Ruling [85]-[86], a limitation into, or a gloss upon, r 32.05 that is inconsistent with the text, context and purpose of the rule;
(b)	in making that holding, the Associate Judge failed properly to give effect to, or, alternatively, erroneously distinguished, authorities of intermediate appellate courts which were binding upon him;
(c)	in any event, regardless of the scope of the Court’s power under r 32.05, documents which may disclose or indicate whether relief, if granted, is likely to be met are documents which are relevant to the question whether an applicant has the right to obtain the relief and/or the question whether an applicant lacks sufficient information to enable them to decide whether to commence proceedings, and disclosure of documents of that kind is consistent with the text, context and purpose of the rule.
254	For convenience, the relevant paragraphs of the Principal Ruling are reproduced below:
[Principal Ruling]
Are the plaintiffs entitled to disclosure of information in relation to whether the limits of indemnity available under the Primary PI Policies have been eroded?
84	The plaintiffs submit that in order to decide whether it should commence a proceeding, it needs to know the extent to which there are likely to be proceeds available to satisfy any judgment debt; that is, there needs to be disclosure of any claims made and details of any settlements of such claims.  AIG has informed the plaintiffs, and it seems not to be contested, that the limits of indemnity under the Primary PI Policies have not been exhausted.  AIG says that the plaintiffs are not entitled to preliminary discovery of any information beyond that. 
85	There is a distinction to be drawn between:
(a)	what information is sufficient to enable the plaintiffs to decide whether to commence a proceeding; and
(b)	documents relating to the question whether the plaintiffs have the right to obtain relief.
86	The former is a precondition (set out in r 32.05(b)) to the Court exercising its discretion to order preliminary discovery.  I will refer to this as ‘the paragraph (b) precondition’.  The latter is the description (in the final words of r 32.05) of the documents that may be ordered to be discovered in the exercise of that discretion.  I will refer to this as ‘the power of the Court’.  They are not, in their terms, necessarily the same thing, because a plaintiff may want to know information well beyond that relating to the question whether it has a ‘right to obtain relief’ before it makes a decision as to whether to commence a proceeding.   
87	The structure of the rule is such that the jurisdiction of the Court is limited to ordering production of ‘any document relating to the question whether the applicant has the right to obtain the relief’.  If the documents sought do not meet that description, that is the end of the matter as the Court has no power to order production of any other types of documents.   Accordingly, a critical question is whether documents evidencing the proceeds available under insurance policies to satisfy a claim in the event judgment is obtained are documents ‘relating to the question whether the applicant has the right to obtain the relief’.
88	It is sufficiently clear from the authorities on this point that the policy underlying the rule favours a broad interpretation of this power.  [His Honour then considered the applicable authorities concerning r 32.05 in Victoria and the (current) counterpart under r 7.23 of the Federal Court Rules 2011 (Cth) and its predecessor, Order 15A r 6 of the Federal Court Rules 1979 (Cth)]  . . .
. . .
96	The ‘question … whether to commence proceedings’ referred to by Hely J [in St George Bank] and the Full Court in Optiver, is the equivalent of the question set out in r 32.05(b).  Undoubtedly, the inspection of such documents ‘may enable a properly informed decision to be made whether to commence a proceeding’.  But as noted above, that state of knowledge is a precondition to the Court exercising its discretion to order preliminary discovery; it is in different terms to the description of the documents that the Court has power to order to be discovered in the exercise of that discretion.  Whether or not the policy of the rule is as described, the language used by the legislature is that in certain circumstances (including satisfaction of the condition in r 32.05(b)), the Court may order preliminary discovery of documents ‘of the kind described in paragraph (c)’; that is of ‘any document relating to the question whether the applicant has the right to obtain the relief’.  The legislature could have expressed the rule in terms that the Court may order preliminary discovery of all documents described in sub-para (b) — that is, relevant to the question whether the applicant should bring proceedings — but it chose (c).
97	Ultimately, the Full Court in Optiver held that:
[a]t present, as his Honour [Tamberlin J] observed, the case that Optiver has is a purely circumstantial one relying upon inference.  For all it knows, there may be facts and circumstances which make it equally likely, or more probable than not, that Tibra obtained its software in ways that did not infringe any of Optiver’[s] rights.  In our opinion, Optiver has not sufficient information to enable a decision to be made whether to commence a proceeding. 
98	It appears from this quote that the class of information that the Full Court considered the applicant was entitled to, for the purposes of deciding whether to commence a proceeding, extended to information about the way in which the competitor (Tibra) obtained its software.  That potentially goes to the sustainability of any claim.  Such information could potentially be a complete answer to any claim, and in that sense, be sufficient to preclude any right to relief.  In that sense, documents going to these questions could be said to ‘relate to’ the question ‘whether the applicant has a right to obtain the relief’.  But I do not read the decision as expanding the class of documents that may be obtained by preliminary discovery beyond those relating to ‘whether it has a right to obtain relief’ to include documents relating to the financial viability of a potential defendant, or the plaintiff’s  ability ultimately to recover such relief as may be ordered.  In my opinion, the language of r 32.05 cannot sustain such an interpretation.
99	The Full Court in Optiver also expressed the broad principle that ‘there may be real uncertainty as to the quantum of provable damage, such as to throw doubt on the practical wisdom of issuing proceedings’.   In support of that proposition, it cited three cases.  It is necessary to consider those cases more closely to determine the extent to which ‘practical wisdom’ can be taken into account.  Does it mean the evidence, while supporting the existence of a right to obtain the relief, is not sufficiently compelling to warrant issuing a proceeding?   Or does it extend to the questions around the practical likelihood of recovery, for example, whether a potential defendant is impecunious, or, as in this case, whether there is any insurance coverage?
. . .	[His Honour then discussed the authorities: Hughes Aircraft Systems International v Civil Aviation Authority, Western Bulk Carriers (Australia) Pty Ltd v Cosco Bulk Carrier Company Co Ltd and Minister for Health and Aged Care v Harrington Associates Ltd.]
106	Each of these three cases focussed on whether the applicant had sufficient information relating to the availability or strength of the claim to enable a decision to be made whether to bring a claim.  Consistently with those authorities, it has been held that documents ‘relating to the question whether the applicant has the right to obtain the relief’, being the only documents in relation to which the Court has power to order preliminary discovery, include documents going to:
(a)	what defences are available to the respondent; 
(b)	the possible strength of those defences;
(c)	the extent of the respondent’s breach; and 
(d)	the likely quantum of any damages award. 
107	The plaintiffs submit broadly that ‘rule [32.05] enables an applicant who believes that he or she may have a cause of action to obtain sufficient information to know whether the risk of litigation is worthwhile’.  In support of this proposition, the plaintiffs rely on the decision of Hargrave J in B J Bearings.  Read in isolation, that proposition may support very broad powers to order preliminary discovery going well beyond those particular matters identified in Optiver.  But the decision in B J Bearings relies heavily on the decision in Optiver, and I do not read it as an extension of anything said in Optiver as summarised above. 
108	In my opinion, documents relating to the extent to which there are likely to be proceeds available to satisfy judgment debt do not fall within the scope of documents relating to ‘the right to obtain relief’ even on the broad interpretation in Optiver. 
109	The plaintiffs submit that as Probuild is in administration and leave to bring a proceeding is required, the question of what funds would be available to satisfy judgment debt is relevant to the question of whether leave should be granted to bring a proceeding, and indeed whether to bring the proceeding against Probuild and AIG,  and is properly subject to an order for preliminary discovery.  In support of that proposition, the plaintiffs rely on a number of decisions which are each considered below.
110	The first case is The Hancock Family Memorial Foundation Ltd v Fieldhouse (No 2) (‘Hancock’) in which the plaintiff alleged that it had a claim against Mr Fieldhouse, a lawyer, in respect of legal services he had provided.  Mr Fieldhouse was covered by professional indemnity insurance.  Upon his death, the plaintiff sought to proceed under s 51 of the Insurance Contracts Act 1984 (Cth), which provided a statutory right directly against the insurer.  The plaintiff asserted that it did not have sufficient information to bring a claim.  It sought preliminary discovery broadly of insurance contracts, certificates, schedules, and documents relating to whether there had been an admission or denial of cover.  It does not appear that documents were sought relating to whether there had been any payments made on the policy or the amount that may be available for satisfaction of any judgment debt.  Ultimately, the Court held:
The plaintiff needs to establish the claims that are covered by the terms of insurance and the extent of cover provided under the contract of insurance.  I find that the plaintiff does not have sufficient information to enable a decision to be made as to whether to take proceedings against SMIF.
111	I consider that the ‘extent of cover’ referred to is a reference to the terms of the contract of insurance as to coverage provided by it, and not a reference to the amount that may in fact be available to satisfy any judgment debt, having regard to claims that have been made. 
112	The next case is BCI Media Group Pty Ltd v Corelogic Australia Pty Ltd (‘BCI Media’) in which the relevant question was whether r 7.23(2) of the Federal Court Rules 2011 (Cth) authorised the Court to make an order for preliminary discovery of documents relevant only to the quantum of monetary remedies.  Charlesworth J expressed the opinion that such documents were not documents relating to the ‘right to obtain relief’, and therefore the language of the rule suggested that the Court was not empowered to order preliminary discovery of them.  But Charlesworth J considered herself bound by the decision in Quanta Software International Pty Ltd v Computer Management Services Pty Ltd, which held otherwise and which has been followed, including in that regard, in Optiver.  In my opinion, the decision in BCI Media does not assist the plaintiffs in the present case.  Even accepting, as the authorities do, that documents relevant only to quantum may be subject to orders for preliminary discovery, such questions are distinct from questions of the ability to recover should judgment be obtained.  And it is the latter type of documents that the plaintiffs seek.
113	In Seven Network v Cricket Australia, Anastassiou J quoted from the decision in BCI Media at length and held that preliminary discovery was appropriate because there was ‘uncertainty regarding both: (i) whether [the plaintiff] has a right to obtain relief … and (ii) the quantum of any relief that may be obtained’.  The separation of these two suggests that questions of quantum are distinct from questions of the right to obtain relief.  If that is what is meant, then I do not agree with that construction.  As discussed above, the Court only has power to order preliminary discovery of documents relating to ‘the right to obtain relief’ and that question has been interpreted consistently with the policy underlying it, as including questions of quantum.  In any case, I do not consider that this decision advances the plaintiffs’ submission that it should have preliminary discovery of documents relating to the prospects of recovery of any judgment debt ultimately obtained.
114	In Lopez v Star World Enterprises Pty Ltd (‘Lopez’), Olney J held that the question whether or not there was any insurance indemnity available in the event of liability being established was a proper matter to take into account for the purposes of s 440D(1) of the Corporations Act in determining whether or not leave to proceed should be given to institute proceedings against a company in administration.  In the result, he ordered that the company produce for inspection ‘any contract of insurance that is applicable to any liability the respondent may subsequently be found to have in respect of the claims made in this proceeding’.  Olney J did not go so far as to order that evidence of prior claims be produced, nor apparently was that raised. 
115	The next case relied on is Wingecarribee Shire Council v Lehman Brothers Australia Ltd (‘Wingecarribee’) which involved a complex administration.  The administrators of Lehman Brothers had indicated to the Council that they could only give limited advice as to what claims against Lehman Brothers were responded to by which insurance cover.  In those circumstances, the Council was in doubt as to whether any claim it had was covered by any insurance policy.  The creditors meeting voted to instruct solicitors to bring an application for leave to proceed against the company to the extent necessary for the Court to determine whether the Court should make an order for production of insurance policies and ‘correspondence … relating to claims notifications under the relevant policies or notification of circumstances giving rise to a claim’.  It appears that information sought related to ‘which claims were responded to by which insurance cover’.  More particularly, the information sought was ‘insurance policies’ and ‘ancillary correspondence between Lehman Brothers and insurance brokers or insurers relating to claims notifications under the relevant policies’.  It does not appear that the application was for preliminary discovery going to the extent of funds available to satisfy any judgment debt.  Notwithstanding the limited discovery sought, Rares J expressed the principle broadly as follows:
In my opinion, the question whether a respondent or defendant has assets that are available to satisfy a judgment and whether there is another party who may be liable, such as an insurer the subject of a charge under s 6 of the Law Reform (Miscellaneous Provisions) Act are matters which are within the power of the Court to require to be disclosed in the proceedings themselves: see Jackson v Sterling Industries Limited [1987] HCA 23; (1987) 162 CLR 612 at 622–623 per Deane J, where he discussed the ambit of s 23 of the Federal Court of Australia Act and the power of the court to grant relief in the nature of Mareva orders, including the disclosure of assets by a defendant or respondent. 
116	The case of Jackson v Sterling Industries Ltd, cited in the above extract from Wingecarribee, was a case involving a Mareva injunction to preserve assets as security for the satisfaction of any judgment.  In that case, Deane J discusses the broad power to make orders, in the proceedings themselves, for the disclosure of assets available for the satisfaction of any judgment.  The Court undoubtedly has broad powers in that context where the subject matter is the preservation of assets that may otherwise be dissipated, but it is a different inquiry to preliminary discovery where the power of the Court is constrained by the words ‘relating to … the right to obtain the relief’.  That is particularly so where, should proceedings be instituted in the present case, the documents sought by way of preliminary discovery would not be discoverable in the proceeding because, as conceded by senior counsel for the plaintiffs, they would not be relevant to any issue in the proceeding. 
117	I note also that AIG submits that the provision of information about what claims have been made in the past would not necessarily result in the plaintiffs having information as to how much would be available to satisfy judgment debt.  The reason that is said is because the number of claims and the number of payments at any point in time are subject to change in the future, and the present situation says little about what may be the situation between now and execution on any judgment that may be obtained several years in the future.  The plaintiffs accept that that is so, but say that does not mean there is no utility in knowing what the claims situation is at present for the purposes of deciding whether to bring a claim.  Further, the plaintiffs submit that AIG’s argument that the disclosure of past claims would be of little utility is an answer to AIG’s submissions that the information would give the plaintiffs an unfair asymmetric advantage in settlement negotiations. 
118	The plaintiffs responded  that ‘it’s the difference between putting your toe into the water and the water being clear, and putting your toe into the water and there being ten sharks swimming around’.
119	In my opinion, neither the language of the rule, nor the authorities that have considered it, support the proposition that documents ‘relating to the question whether the applicant has the right to obtain the relief’ include documents relevant to the question whether, if the claim is successful, there will be proceeds available to satisfy any judgment debt.  The legislature could have extended the power to order preliminary discovery to documents ‘relating to whether a plaintiff should bring a claim’, or even documents ‘relating to the claim’ broadly, but it did not.  It limited the power of the Court to order preliminary discovery to documents ‘relating to the question whether the applicant has the right to obtain the relief’.  While the words ‘relating to’ are broad, and the provision is to be given a broad interpretation, I do not consider that the language can be extended to include the contested documents sought in this application.  In those circumstances, I do not consider that the Court has power to order preliminary discovery of the contested documents.
120	That is sufficient to dispose of the application for discovery of the contested documents.
The appellants’ submissions
255	In their written outline, the appellants identified and canvassed a number of (what they contended were) ‘errors in the primary judge’s reasoning’.  
256	First, they say the ‘vice of the primary judge’s reasoning’ is that he failed to interpret r 32.05 by reference to its text, context and purpose and without the implication of any gloss on the statutory language.  Their particular criticism is directed at his Honour’s view or finding that because r 32.05 (in the ‘chaussette’) confers on the Court the power to order production of ‘any document of the kind described in paragraph (c)’, the effect of the rule is to confer on the Court the power only to order production of a document ‘relating to the question whether the applicant has the right to obtain the relief’.  The appellants note that ‘[n]o authority was cited in favour of such a limitation.’  Further, they submit that his Honour’s approach or construction ‘rests on an incomplete and partial reading of paragraph (c)’ − because paragraph (c) refers not only to documents relating to the question of whether the applicant has the right to obtain relief but also includes documents inspection of which would assist an applicant to make the decision whether to commence proceedings − a matter which his Honour did not acknowledge or address, and by failing to do so, ‘his Honour has implied a limitation on the Court’s power under r 32.05 which has not previously been suggested or upheld by the Court’.
257	Further, the appellants submit that the primary judge’s construction of r 32.05 was made notwithstanding contrary statements of principle in respect of an analogous Federal Court rule considered by the Full Federal Court in (for e.g.) Optiver and in Hooper v Kirella Pty Ltd and Hely J in St George Bank which, the appellants submit, were binding on him, and to which his Honour made reference but ultimately did not consider determinative. 
258	In this regard, the appellants submit that the construction of r 32.05 they contend for is more consistent with, justifiable with reference to, and better promotes, the policy underlying the rule, being relevantly whether the applicant has sufficient information to make a decision ‘whether to commence a proceeding in the Court’.  Further, they contend that ‘r 32.05 would, on its face, permit an order requiring discovery of documents which would disclose whether relief, if granted, would be met’.  In support of that contention they refer to and rely upon the decision in Hooper v Kirella Pty Ltd, where the Full Court stated:
Fifthly, an order may be made in favour of an applicant who already has available evidence establishing a prima facie case for the granting of relief … But the applicant, after having made all reasonable inquiries, must not have sufficient information to enable a decision to be made whether to commence a proceeding in the Court to obtain relief against the prospective respondent: see par (b).  The absence of sufficient information is to be assessed objectively …
259	The appellants submit that ‘[t]he circumstance that the Court has the power to make an order in favour of an applicant who already has available evidence establishing a prima face case for the granting of relief but who does not have sufficient information to enable a decision to be made whether to commence a proceeding supports the conclusion that the Court has the power to order discovery of a document that is relevant to that latter question’.
260	Finally, the appellants observe that the primary judge ‘did not explain why documents which may disclose or indicate whether relief, if granted, is likely to be met are documents which are not relevant to the question whether an applicant has the right to obtain the relief and/or the question whether an applicant lacks sufficient information to enable them to decide whether to commence proceedings’.  The appellants submit that, to the contrary, given the underlying purpose of the rule, it is likely that ‘[d]ocuments which bear upon whether any award of damages would be met are documents which relate to whether the applicant in fact has the right to obtain relief (i.e. these documents are related to whether relief will in fact be obtained in a practical sense)’.
261	In that regard, the appellants also reference and call in aid the obligations imposed on the parties and the Court under the Civil Procedure Act directed to promoting the efficient conduct of litigation.  They submit that documents which may, for example, demonstrate that no award of compensation may be met will plainly influence a party’s decision to commence proceedings.  In those circumstances, they contend the Court should ‘adopt an approach which would further the proper conduct of litigation under the Civil Procedure Act and the appropriate use of judicial resources’ and order that AIG give preliminary discovery of such documents.
The respondent’s submissions
262	The respondent contends that Ground Three does not establish error and should be rejected for the following reasons.
263	First, the respondent submits that the primary judge’s construction of r 32.05 adopted an orthodox and plain reading of the rule, and did not put any gloss on the statutory language.  In those circumstances, AIG says there was no need for his Honour to cite any authority for his construction, because it simply reflects the plain text of the rule.
264	Secondly, to the extent that the appellants contend that the primary judge’s construction of r 32.05 rested on an incomplete and partial reading of paragraph (c), because paragraph (c) refers not only to documents ‘relating to the question whether the applicant has the right to obtain the relief’ but also refers to documents, inspection of which ‘by the applicant would assist the applicant to make the decision’, AIG submits that the appellants’ submission ‘distorts the terms of rule 32.05(c)’.  Rather, AIG says that as is apparent from the framing and text of r 32.05(c) that: 
paragraph (c) is directed to documents that both relate to the question of whether the applicant has the right to obtain relief (first aspect) AND inspection of that document would assist the applicant to decide whether to commence proceedings (second aspect).  Use of “and” requires both aspects to be met before discovery may be ordered.  
265	Accordingly, in circumstances where his Honour was not satisfied that the first aspect was met, AIG submits it is ‘immaterial’ that he did not refer to the second aspect, and AIG contends ‘[t]here was no error of construction’.
266	Thirdly, as to the policy rationale underlying the rule, AIG submits ‘it is trite that the start and end point for statutory construction is the text of the provision, and that text takes primacy, while regard is had to context and purpose.’  Further, AIG says ‘[t]he policy rationale of a rule does not provide any legitimate means to ignore the plain text of a provision.’  AIG submits that ‘[n]one of the authorities cited in paragraphs 57 to 60 of the Appellants’ Submissions considered documents of the nature agitated in Ground Three [of their Notice of Appeal], such that any statements of policy from those judgments should be read in the context of the particular cases and not overshadow the plain words of the provision.’  Addressing those particular authorities, AIG submitted:
(a)	In Optiver Australia Pty Ltd v Tibra Trading Pty Ltd (2008) 169 FCR 435, the question was whether preliminary discovery should extend to source code.
(b)	In St George Bank Ltd v Rabo Australia Ltd (2004) 211 ALR 147, discovery was sought and granted of documents relating to whether certain representations as to the future were soundly based, including knowledge as to existing financial position and creditworthiness of a particular entity.
(c)	In BCI Media Group Pty Ltd v Corelogic Australia Pty Ltd [2020] FCA 1556, preliminary discovery was ordered of categories of information technology documents, and quite obviously directed to substantive relief.
(d)	In Quanta Software International Pty Ltd v Computer Management Services Pty Ltd (2000) 175 ALR 536, preliminary discovery was ordered of specified contracts and source code.
(e)	In Hooper v Kirella Pty Ltd (1999) 96 FCR 1, the case concerned a challenge to the validity of the relevant Federal Court provision for preliminary discovery, in the context of an application for documents directed to the identity of the maker of alleged representations, and other unspecified documents.
267	Further, AIG observed that ‘[i]n any event, it is abundantly clear that the Associate Judge was aware of the policy considerations, having set out a comprehensive analysis of the relevant authorities.’
268	Fourthly, AIG contends that the appellants’ submissions (at paragraph 62) conflate what in fact are two discrete – and ‘legally distinct’ - categories of documents: on the one hand, ‘documents relating to the question whether an applicant has a right to relief’ and documents relating to ‘whether the applicant will in fact obtain such relief [if] granted’ on the other.  AIG submits that the two categories are ‘legally distinct’, observing that ‘a person may obtain orders for relief in the nature of damages (as the appellants seek), but that does not mean the person will recover those damages’.
269	Fifthly, AIG submits that his Honour was correct to conclude that the appellants’ application for preliminary discovery with respect to documents relevant to whether there will be proceeds available to satisfy any judgment debt arising from a successful claim by them should not be granted.  AIG contends that were the Court to do so, it would ‘confer an unfair tactical and asymmetric advantage on the appellants of the type eschewed in Commonwealth Bank of Australia v ACN 076 848 112 Pty Limited and Kirby v Centro Properties Limited, as addressed in AIG’s submissions at first instance.’  Relevantly, before his Honour, AIG submitted:
31	In substance, what the plaintiffs are seeking to know by obtaining preliminary discovery of these documents is whether the prospective defendant will have the assets available to meet any judgment that may ultimately be made in the plaintiffs’ favour.  That is information that all prospective plaintiffs would like to know, but which they are not permitted to obtain, even by general discovery as it is not generally relevant to the issues in dispute in any proceeding (and would not be relevant to any claim for relief that the plaintiffs propound in this proceeding).  Accordingly, prospective plaintiffs must invariably decide whether to commence proceedings with imperfect information as to the defendants’ likely financial position at the time of any judgment.  There is no reason why the plaintiffs, by this application for preliminary discovery, should be put in a better position than any other prospective plaintiff.
32	As Ball J stated in Commonwealth Bank of Australia v ACN 076 848 112 Pty Limited:
Third, it is not obviously in the interests of justice that the Bank should know the extent of the first defendant’s insurance for the purpose of determining whether or not to pursue the proceedings.  Knowledge of how much a defendant is willing or able to pay in relation to court proceedings is obviously of considerable tactical advantage to the plaintiff.  One advantage is that it may be relevant to the question whether the proceedings are worth pursuing.  More often, though, it will assist the plaintiff in settlement negotiations because the plaintiff will not have to discount the amount for which it is prepared to settle to take account of the risk that it will recover less if it pursues its case to judgment than if it settles because any judgment it obtains will not be recoverable.  To the extent that the plaintiff enjoys that tactical advantage, the defendant and its insurers suffer a corresponding disadvantage.  As Lander J pointed out in Beneficial Finance Corporation [] (at 42), it is for reasons such as that that the insurance arrangements of a defendant are generally regarded as confidential.  The Bank did not articulate any reason in this case why in the interests of justice the court should seek to give it a tactical advantage by requiring the disclosure of confidential documents.  It may be that disclosure of the first defendant’s insurance policies will bring about an earlier settlement at an amount that does not have to be discounted because of the uncertainties associated with recovery of any judgment.  But that alone does not mean that it is in the interests of justice to require disclosure.
33	Accordingly, providing the plaintiffs with discovery of these documents would confer an unfair asymmetric commercial advantage in favour of the plaintiffs at the expense of the primary PI Insurers. As Ryan J stated in Kirby v Centro Properties Limited:
Were the Court to make orders in the terms which the applicant seeks in relation to the policies of insurance, the effect would be that one party to the mediation would know from the outset the likely maximum extent of the financial capacity of the respondent giving discovery to contribute to any settlement.  The prejudice to such a respondent immediately becomes obvious and reinforces the contention of Mr Beach QC for the respondents in VID 326 of 2008 made in oral submissions that there can be no cognate advantage (such as an indication of the group members’ desperation to settle) conferred on the respondent.  Accordingly, as Mr Beach argued, the respective bargaining positions of the parties would become “asymmetric”.
34	The rules concerning preliminary discovery were not designed to distort the playing field so as to confer an asymmetrical advantage in favour of one party at the expense of another.
270	Finally, AIG contends that his Honour’s alternative finding, to decline to exercise the discretion under r 32.05 on the basis of confidentiality, applies equally to Ground Three.
The appellants’ reply submissions
271	In their reply submissions, the appellants submit that it is common ground that the text of r 32.05 takes primacy.  Rather, they say, the issue is that the language of r 32.05 admits of some breadth in the exercise of a discretionary judgment, which they submit ‘must accommodate and be consistent with the purpose and rationale of the rule’.  The appellants’ submissions take issue with the primary judge having imposed a qualification or limitation on the scope of the Court’s power under r 32.05 which does not appear in the rule itself.  They contend that while his Honour may have been aware of the purpose or rationale of the rule, he nevertheless ‘failed properly to act in accordance with that purpose or rationale in fixing r 32.05 with a construction that has not been identified by any previous authority.’
272	As to AIG’s submission that if the Court were to order preliminary discovery of enforcement documents concerning the availability of proceeds to satisfy any judgment debt the order would operate to confer on the appellants ‘an unfair tactical and asymmetric advantage,’ the appellants submit this is irrelevant ‘because this was not a basis on which the primary judge relied in making his findings and AIG’s notice of contention does not assert that this is a further ground on which the primary judge’s holdings should be affirmed.’ 
273	Finally, the appellants contend that the documents now sought by them are not immune or precluded from production on the basis of confidentiality.  That is because, so they submit, ‘if the primary judge had not erred, they would properly have formed part of the documents that the primary judge should have ordered to be produced such that they fall within the primary judge’s identified exception to the application of confidentiality’.
Appellants’ oral submissions
274	In the course of oral submissions on Ground Three, counsel for the appellants elaborated upon the construction and operation of r 32.05 as it applies in circumstances where the potential ‘claim’ under consideration is, as here, a Corporations Act s 562 claim that is sought to be brought directly against the insurer.  
275	In essence, the appellants contend that his Honour fell into error by confining the scope of the documents for which preliminary discovery may be ordered under r 32.05(c) to those documents going to the issue of whether the person has a claim, its strength, what are the likely defences and even to quantum, but does not extend to or encompass documents going to the likelihood that the person will recover if they win.  Counsel submitted that his Honour’s approach, in so confining the ambit of the documents that are amenable to an order for preliminary discovery under r 32.05, or introducing a fetter or limitation on the Court’s power, was ‘wrong’:
[MR GLEESON:]  . . . We say that's wrong.  That on a fair reading of the authorities it's not so confined and nor logically would it be when the purpose of the rule is to help you to decide whether you are going to issue proceedings.  But in any event, this particular type of case renders that fascinating debate irrelevant because here, because of the type of claim we've got, it's directly against the insurer, for reasons I'll develop, this is different because the question of what might normally sound like recovery, or execution, pops its head up in the substantive issues, because it's a 562 claim.  
276	In advancing that submission, counsel focussed attention on the language used in r 32.05(c) of ‘whether the applicant has the right to obtain the relief, contrasting it with the right to get an order for the relief.  He acknowledged that the authorities on r 32.05 and on the counterpart provisions in the Federal Court Rules do not, in terms, ‘tease out that distinction between documents going to your likelihood of winning and documents going to your likelihood of recovering.  They just don’t do it in terms.  We haven’t found a case that expressly addresses that distinction in this sort of circumstance’.  
277	When comparing and contrasting the language used in r 32.05 with that used in the counterpart provisions in the Federal Court Rules, counsel identified as an ‘important’ difference the fact that r 7.23(1)(c) of the Federal Court Rules is broken into two sub-rules, with sub-rule (c)(i) requiring the documents in the prospective defendant’s control to be ‘documents directly relevant to the question whether the prospective applicant has a right to obtain the relief’.  He submitted that the ‘directly relevant’ expression used in the Federal Court Rules is ‘a tighter test’ than the language used in r 32.05(c) of ‘any documents relating to the question whether the applicant has the right to obtain the relief…’), because there is an adverb in r 7.23(1)(c)(i) that cannot be ignored.  In that regard, counsel noted that the formulation of the Federal rule in the (now repealed) Order 15A, r 6 of the Federal Court Rules 1979 (Cth) that was under consideration in Optiver, is more closely analogous with r 32.05(c) as Order 15A, r 6 was expressed in the ‘any documents relating to’ language and did not include any ‘directly relevant’ requirement.
278	Turning to the fact that r 7.23(1)(c) of the Federal Court Rules is broken into two sub-rules, counsel submitted that ‘[t]here’s a very important difference in the last two lines of the Supreme Court Rules and sub-rule 2 of the Federal Court Rule’ concerning what type of documents the Court may order.  Counsel observed that under r 32.05, the Supreme Court may order that discovery be given of ‘any document of the kind described in paragraph (c)’ – and the kind of document described in paragraph (c) is ‘any document relating to the question whether the applicant has the right to obtain the relief and that inspection of the document by the applicant would assist the applicant to make the decision’.  Counsel observed that the chaussette to r 32.05 uses very broad language – ‘any document of the kind’ – and doesn’t say that any such document must satisfy each of the two elements mentioned in paragraph (c).  He submitted that ‘any document of the kind’ as used in r 32.05 is:
A very broad phrase which when you follow the obligation identified in all the [authorities] to give a benevolent reading means you don't compartmentalise these sorts of documents.
279	Under FCR 7.23, however, counsel submitted that the position is that sub-rule (2) expressly limits the Court to ordering discovery of the documents of the kind mentioned in subparagraph (1)(c)(i), and thus ‘what the Federal Court did is said, [we] will only give you the first type’ of documents.  
280	Against that background, counsel for the appellants submitted:
[MR GLEESON:]  So you put all of that together and the construction that doesn't compartmentalise the type of documents in the way that our friends urge is the preferred construction.  That is, if it's a document that either relates to the question whether there's a right to obtain relief, or inspection would assist you, the court's got the power.  That's also fortified by the purposive approach to the construction, the benevolent approach that we must take, and we know the purpose lying behind the rule.  
Why would you deny, I say this rhetorically, why would the court deny preliminary discovery of a document when all the other boxes are ticked, just because the court thinks, all right, look I'm satisfied the inspection will assist you to make the decision, but I'm not going to give it to you.  It doesn't make sense.  . . .
281	In support of that approach, counsel for the appellants also referred the Court to the decision of Riordan J in Alex Fraser Pty Ltd v Minister for Planning where his Honour considered the effect of the obligations imposed on practitioners and the Court under the Civil Procedure Act.
282	Counsel for the appellants submitted that even if the authorities do draw the line where AIG contends it should be drawn, and if this Court were to construe r 32.05 as not permitting the Court to order discovery of documents that relate to the amount (if any) of the policy sum that is available, because it is a recovery style document, ‘that reasoning would not apply because of the nature of this claim,’ being one made directly against the insurer under s 562 of the Corporations Act.  Counsel submitted:
[MR GLEESON:]  …This is not a claim where a plaintiff is curious and would love to know whether a company its [sic] suing has enough money to meet the judgment.  
We say that on our interpretation of the rule the company can potentially get those sorts of documents subject to the discretion et cetera, et cetera, but if you're against us on that this is not that case.  This is a case directly against the insurer where a substantive issue is what is the amount under the policy.  What is the policy.  What's been notified.  What are the rights under the policy.  And what amount might be recovered by priority.  So, you know, a 562 claim and I took Your Honour to the language of 562 and it's worth just popping back to it.
A claim for a declaration may be the declaration for the insurer to pay the amount that's recovered against Probuild.  It may be a declaration formed in various different ways but at any rate, it is entirely possible and we're dealing in a realm of may here, it's entirely possible that an insurer runs as one of its defences, you can't get a declaration to that effect because the amount left under the policy in that year doesn't permit such a declaration.  And what Rule 32.05 tells us is that on any even narrow interpretation of the sorts of documents we can receive that is captured.
There ought not be any great mystery confronting a plaintiff who wants to sue an insurer directly when it's not its insurer as to whether it's worth doing so.  Whether there's any money left under the policy.  I've said to Your Honour that we acknowledge that the language of the authorities I've taken you to don't say in terms and you can get -  I'm calling them recovery style documents – we're not aware of any authority that says the contrary.  That you can't.  And our friends haven't pointed to any authority that says you can't.  
. . .  That’s all I want to say about Ground 3, Your Honour.  You can see that that's where there's a fair bit of law and a fair bit of thinking.  But if Your Honour's with us on that, we'll get access to documents that will tell us whether it's worth issuing against the insurer.  
AIG’s oral submissions
283	For the most part, AIG relied on its written submissions on Ground Three and counsel responded only briefly to the appellants’ oral submissions.  
284	In essence, AIG says that the first letter that QIC sent in October 2019 notified Probuild of circumstances that give rise to the claim, and the letters sent in the 2020-2021 and 2021-2022 years that the appellants now seek to rely upon are not fresh notifications but rather are continuations of, or updates to, the original notification of the defects and deficiencies that were earlier identified in respect of the Stage 7 Works.  But counsel submitted that if, contrary to AIG’s view, the appellants consider that these later letters do notify new claims, and that they are claims that can be assessed by the insurer as separate and distinct claims, ‘then it should go ahead and pursue Probuild and/or its insurers in respect of those claims’.
285	Further, insofar as the appellants contend they are entitled to know how much is left in the limits of indemnity, what other claims have been made on the policies and the details of any claims other principals of other construction projects might have made on Probuild, AIG submits that no plaintiff is entitled to know how much is left in the limit of indemnity under the primary layer policies ‘because no plaintiff is entitled to know that kind of information’.  Counsel for AIG submitted that while the deed administrators may not be unduly concerned about confidentiality issues, the insurers place much store in the confidentiality of its arrangements – such as ‘the confidentiality of its determinations of claims that are made by other third parties against the insured’ – and regard such information as being ‘highly sensitive and confidential information and not information to which third parties are normally entitled’.  
286	Counsel also observed that information of the kind sought by the appellants about claims having been made ‘doesn’t help at all to determine what the limit of liability is’.  Ms Crafti SC explained that under AIG’s policy:
Until the policy limit is eroded by the payment from the insurers to the insured, there is no erosion of the policy and these things can change over time.   It tells the appellants nothing to tell them what the - what other claims have been made on Probuild and, therefore, Probuild on the insurance.  
287	Counsel referred to the primary judge’s extensive and thorough review of the relevant cases at paragraphs 88 to 120 of the Principal Ruling.  She also referred to the decisions in Ingram v Ardent Leisure Ltd, Lopez, Davantage, and Watson & Co Superannuation Pty Ltd v Dixon Advisory and Superannuation Services Ltd, and made reference to the recent decision of Keogh J in Agnello v Heritage Care Pty Ltd; Fotiadis v St Basil’s Homes for the Aged in Victoria (No 2) which involved a direct claim against an insurer, and submitted that ‘Your Honour will not see, in the traversing of all of those decisions and you will not see anywhere in the appellants’ submission, any reference to any case in which material of this nature has even been granted’.  Further, counsel for AIG contended:
That what the appellants are seeking here in respect of appeal ground 3, is material to which no plaintiff is entitled and there is no reason, particularly in the context of the confidentiality of these insurance arrangements, to which Derrington J referring in, I think it's Ingram, and it's set out in Associate Justice Barrett's decision.  There is no warrant for ordering discovery of that material.
Consideration and disposition
288	Against that background, the appellants submit that his Honour erred in holding that the Court does not have power under r 32.05 to order preliminary discovery of documents relevant to the question whether, if the claim is successful, there will be proceeds available to satisfy any judgment debt.  They submit that a document of that kind falls within the ambit of r 32.05 because it is a document that will bear upon the decision whether to commence proceedings.  Further, they say, the approach of the primary judge introduces a fetter or limitation on the Court’s power in r 32.05 that has no justification, as a matter of logic or principle.
289	In my view, the primary judge did not err in holding that the Court’s power to order preliminary discovery under r 32.05 does not extend to ordering preliminary discovery of ‘recovery style documents’ of the kind sought, being documents relevant to the question whether, if the claim is successful, there will be proceeds available to satisfy any judgment debt.  Rather, as will be seen below, when regard is had to the text, context and purpose of the rule it is clear that when the rule was introduced in 1986, it was directed to establishing a discovery procedure that would assist an applicant in circumstances where a prospective defendant had been identified but there was doubt about whether an arguable cause of action exists against the prospective defendant.  In essence, the purpose underlying the adoption of the new procedure in r 32.05 was to enable such an applicant to seek information, by way of ‘preliminary discovery’, that would enable a proceeding to be commenced ‘alleging a cause of action in the proper way, that is, by alleging facts showing a cause of action, with the necessary particulars’. 
Background to the introduction of r 32.05
290	The rules which deal with preliminary discovery, in particular in r 32.05, formed  part of the package of Rules, called the ‘General Rules of Procedure in Civil Proceedings 1986’, made by the judges of the Court, that were introduced by the enactment of Supreme Court (Rules of Procedure) Act 1986 (Vic).  Those Rules, which were to constitute Chapter 1 of the Rules of the Supreme Court, were proposed to come into force on 1 January 1987.  
291	The ‘Supreme Court (Rules of Procedure) Bill’ was introduced by the (then) Attorney-General, The Hon J H Kennan, on 22 April 1986 ‘to ratify, validate and approve certain rules of the Supreme Court, to amend the Supreme Court Act 1958 and for other purposes’.  When the Bill was read a second time the next day, the Attorney-General stated, relevantly:
The purpose of the Bill is to ratify and validate the general rules of procedure in civil proceedings which were made by the judges of the Supreme Court on 18 March conditionally upon being approved by Parliament.
Rules of procedure are made by the judges to set down the practice and procedure of the court.  They deal with matters as diverse as the forms by which to commence proceedings and the factors which the court should take into account when dealing with the taxation of costs.
The current rules originated in 1884 and although revised and amended from time to time they remain essentially similar to those of 100 years ago.  A combination of poor arrangement, variations in terminology, archaic language and prolixity make the rules unclear.  Amendment has been piecemeal and produced inconsistencies in both text and substance.
There has long been criticism of the rules.  In 1975 preliminary work commenced on the rules revision.  In 1980 the project to rewrite the rules was begun in earnest.  The Rules Committee, a body comprising judges and members of the legal profession, undertook the task: much of the work was carried out by Mr Neil Williams, author of a standard text on the subject.
The rules introduce many new provisions designed to streamline the processes of the court and to simplify procedures and terminology.  These changes will benefit the court, litigants and legal practitioners alike.
Most of the new rules can be made under the existing heads of rule-making power in the Supreme Court Act 1958.  Other aspects of the rules are clearly dependent on statutory amendment; for example, removal of the distinction between a judge exercising jurisdiction in open court and chambers.  In addition, some parts of the rules arguably change the substantive law, for example, the rules which deal with preliminary discovery and discovery from a person who is not a party to proceedings.  It is of particular importance to remove any doubt that this third, and very important, category of rule is within the rule-making power of the judges.
In introducing the Bill the Government recognizes the desirability of ensuring that all aspects of this comprehensive and interlocking scheme of rules are beyond challenge.  The rules have been through the widest possible consultation and have gained the enthusiastic approval and support of the legal profession.  It is proposed that they come into operation on 1 January 1987 but it is necessary that Parliamentary approval be given well before that to enable commercial and professional bodies to make the appropriate preparations.  I commend the Bill to the House. 
292	At or about this time, Butterworths published a book for the profession in Victoria entitled ‘Supreme Court Civil Procedure: Procedure under Chapter 1 of the Rules of the Supreme Court of Victoria’ to accompany the introduction of the new Rules.  The book was written by Neil J Williams, the acknowledged ‘primary draftsman of the new Rules’ and (then) editor of the eponymous looseleaf text ‘Williams’ Supreme Court Practice’, to explain the practice and procedure in the Supreme Court under the new regime.
293	Relevantly, in Chapter 3 of the book, which dealt with ‘Preliminary Discovery’, the background to the introduction of the new provisions was outlined as follows:
[3.02]	Formerly, except in rather limited circumstances, discovery could not be employed by a prospective plaintiff to identify the correct person against whom to commence a proceeding; discovery was restricted to establishing that the defendant to a proceeding already commenced was person from whom the plaintiff was entitled to relief from anyone.  Further, in no circumstances could a prospective plaintiff obtain discovery from an identified person in order to assist the prospective plaintiff to decide whether to commence a proceeding against that person.  Finally, as mentioned above, in a proceeding already commenced discovery was available only between parties.  The new Rules introduce discovery procedures which change the previous practice in all these respects.  The following are the procedures:
(a)	discovery to enable a person desiring to commence a proceeding in the court to identify the correct defendant;
(b)	where there is reasonable cause to believe that one person has or may have the right to obtain relief in the court from another, discovery to enable the first person to decide whether to commence a proceeding against the other to obtain that relief;
(c)	discovery within (a) or (b) on the application of a party to an existing proceeding, where the discovery would assist the party to determine whether to join another person as party in order to make a claim against that person in the proceeding;
(d)	on the application of a party to an existing proceeding, discovery of documents in the possession of a non-party that relate to any question in dispute in the proceeding.  The procedure is alternative to securing the production of the documents at trial by subpoena served on the non-party.  It has the advantage that the party will see the documents before trial.
[3.03]	The first three discovery procedures are examined in this chapter.  The common feature is that the discovery is other than between parties to an existing proceeding.  . . .
294	Discovery from a prospective defendant under r 32.05 was discussed in paragraphs 3.10 - 3.12, relevantly as follows:
Discovery from  prospective defendant
[3.10]	. . .  Rule 32.05 establishes a discovery procedure for a different situation, namely, where the prospective defendant is identified but in doubt is whether an arguable cause of action exists against him.  The rule is taken from rules in England made under the powers conferred by the Administration of Justice Act 1970. Elsewhere in Australia the procedure has been introduced only in South Australia and the Northern Territory.  In England the procedure applies only to personal injury claims, but r 32.05 and the rules in South Australia and the Northern Territory are not so limited.  Rule 32.05 authorises the court to order that a person whose description is ascertained make discovery of documents where:
(a)	there is reasonable cause to believe that the applicant has or may have the right to obtain relief in the court from that person;
(b)	after making all reasonable enquiries, the applicant has not sufficient information to enable him to decide whether to commence a proceeding in the court to obtain that relief; and
(c)	there is reasonable cause to believe that that person has or is likely to have or has had or is likely to have had in his possession any document relating to the question whether the applicant has the right to obtain the relief and that inspection of the document would assist to make the decision.
In contrast to the procedure under r 32.03, there is no provision for discovery by oral examination.
[3.11]	The procedure makes a significant change to discovery practice, for it authorises a search for information which under the former Rules would be disallowed as a fishing expedition if attempted by means of discovery of documents or interrogatories in an action already commenced.  Indeed, under the new Rules the position would be no different were the attempt made in a proceeding already begun.  A plaintiff may use discovery to support his cause of action as pleaded; he may not use discovery to find out whether he has a cause of action to plead.  Essentially, what the new procedure under r 32.05 does is authorise a person to seek information that will enable a proceeding to be commenced alleging a cause of action in the proper way, that is, by alleging facts showing a cause of action, with necessary particulars.  A decision under the English rule, Dunning v United Liverpool Hospital Board of Governors, illustrates the value of the procedure.  The applicant was admitted to the respondent hospital to be treated for what seemed a relatively minor ailment.  However, on discharge from hospital, her mental and bodily health was so gravely impaired as to suggest that the hospital was responsible for the deterioration in her condition.  The applicant’s solicitors were not able to determine whether there was sufficient evidence of negligence to warrant a proceeding being commenced against the hospital without inspecting its records.  The hospital refused to give inspection.  An order for discovery was made.  Lord Denning MR said: ‘One of the objects of the section is to enable a plaintiff to find out before he starts proceedings whether he has a good cause of action or not.  This object would be defeated if he had to show in advance that he had already got a good cause of action before he saw the documents.’
[3.12]	There is another aspect to disclosure by a prospective defendant under the new Rules.  Rule 32.05 provides for the discovery of documents.  Rule 37.02 establishes an equivalent procedure in relation to property other than a document which is in the possession, custody or power of the prospective defendant.  On application by a prospective plaintiff, the court may make an order for the inspection, detention, custody or preservation of the property in the same circumstances as the court may order discovery of documents under r 32.05.  . . . 
295	While there have been several iterations of the Supreme Court’s ‘General Civil Procedure Rules’ since 1986, so far as I am aware,  there has not been any (or at least any substantive) change to the text of r 32.05 since it was first introduced.  Further, as was noted by the Full Court of the Federal Court in Hooper v Kirella Pty Ltd, it appears that r 32.05 of the (Victorian) Rules as it stood in 1988 served as the model for O 15A, r 6 of the Federal Court Rules.  The Full Court stated:
13	Prior to the introduction of O15A in 1988, the FCR made no provision for information discovery from a prospective respondent.  Order 15A, r 6 follows very closely the General Rules of Procedures [sic] in Civil Proceedings 1986 (Vic), r 32.05 as it stood in 1988.  It therefore seems that the Victorian rule served as the model for O 15A, r 6.
296	In light of the foregoing, it is clear that rule 32.05 was introduced to cater for the situation where a person who has ‘reasonable cause to believe’ that they may have ‘the right to obtain relief in the Court’ from a prospective defendant, but lacks sufficient information to enable them to decide whether to commence a proceeding to obtain that relief, may be permitted to gain access to and inspect documents by way of preliminary discovery in order to commence a proceeding alleging a cause of action in the proper way with the necessary particulars.  The concepts or notions of ‘reasonable cause to believe’ that the applicant may have ‘the right to obtain relief in the Court’ and whether the applicant has sufficient information to make a decision ‘whether to commence a proceeding in the Court’ that are embodied in r 32.05 are to be understood, in context, as being directed to enabling such an applicant to bring forward a proper pleading in pursuit of their ‘right to obtain relief in the Court’.  And where there is demonstrated both a reasonable cause to believe that a person (e.g., a prospective defendant) has or is likely to have any document relating to the question of whether the applicant has the right to obtain the relief and that inspection of such document(s) by the applicant would assist the applicant to make the decision, the Court may order that that person make preliminary discovery of such document.  
297	The procedure set out in the rule is one that facilitates both the pursuit of the ‘right to obtain relief in the Court’ and an applicant being placed in a position where a proper pleading may be brought forward.  It is not directed to facilitating the production of ‘recovery style documents’ (being documents ‘that go to whether you will recover if you win’) in advance of a proceeding being commenced. 
298	In the present case, both before the primary judge and on appeal, the appellants relied upon the authorities such as Beston Parks, (Hollingworth J) and B J Bearings Pty Ltd v Whitehead, (Hargrave J), which supported a liberal or benevolent construction of r 32.05 and facilitating the provision of information required to make an informed decision about whether to bring a proceeding and in particular as to whether the cost and risk of litigation is worthwhile.
299	In Beston Parks, after referring to the text of r 32.05, Hollingworth J proceeded, helpfully to articulate or identify from the text, a series of general principles which her Honour regarded as ‘not controversial’.  These principles included:
53	. . .  An applicant does not have to prove that there will be, only that there may be, a real benefit from making the order.  The benefit may be the drawing of an appropriate pleading with proper particulars and the avoidance of substantial amendment after discovery, or, alternatively, the possible avoidance of unnecessary and fruitless litigation.
300	However, her Honour noted that there was a dispute between the parties about the extent to which the requirement in r 32.05(b) is to be assessed objectively and/or subjectively.  In that regard, her Honour observed that:
55	The “reasonable cause to believe” requirement is primarily concerned with whether, as an objective fact, an applicant has sufficient information to decide whether to commence proceedings.  So, an application cannot succeed if the applicant has sufficient information (assessed objectively), but where the inability to determine whether to commence proceedings arises, for example, due to an overly indecisive or cautious nature.  
301	In Beston Parks, the respondents did not dispute the adequacy of the applicants’ inquiries; rather, they contended that the applicants in fact had sufficient information to decide whether to commence a proceeding against them.  Her Honour approached the issue of sufficiency of information on the basis that:
81	It is for the court to determine whether or not an applicant has sufficient information available to it; the applicant’s own assertion that it does not is not determinative (nor strictly necessary, although such an assertion is commonly made in a supporting affidavit). 
302	After reviewing the competing arguments, Hollingworth J found:
87	I am satisfied that the applicants do not have sufficient information to enable them to decide whether to commence a proceeding against the respondents for breaches of the relevant contractual provisions.  Nor could a statement of claim be properly drawn on the material currently available to the applicants.  For example, they do not know: the circumstances in which the CVC and Happy Hallidays emails came about; what information was provided by the respondents to Barwon and/or CVC; whether the Barwon/CVC proposal has gone ahead; whether any information which has been provided by the respondents was “confidential” within the meaning of the relevant agreements; the extent of Dr Sexton’s involvement in the Happy Hallidays Holiday Park; and Mr Gerlach’s precise knowledge of, and involvement in, all of these matters.  
. . .
92	Given the contents of the CVC and Happy Hallidays emails, and the admission by the respondents’ solicitors as to the various proposals which their clients have received, I am satisfied that there is reasonable cause to believe that the respondents have or are likely to have had in their possession documents relating to the question whether the applicants have the right to obtain relief against them, and that inspection of those documents by the applicants would assist the applicants to make the decision whether to commence proceedings against them.
303	When her Honour delivered judgment in Beston Parks in October 2008, the focus was on the requirements of r 32.05, unaffected by any additional requirements or considerations that nowadays may be imposed or enlivened by the Civil Procedure Act, which was enacted in 2010.  As will be noted, however, from the passages above, in construing r 32.05 and in considering the issue of what information was required to be provided to enable the applicant to make an informed decision about whether to bring a proceeding, her Honour was assisted in arriving at her objective determination or assessment by looking at what the applicant was required to plead to enable a proceeding to be commenced alleging a cause of action in the proper way, and asking ‘could a statement of claim be properly drawn on the material currently available to the applicants’.  Approached in that way, her Honour focussed on determining ‘as an objective fact’, whether there was demonstrated ‘reasonable cause to believe’ that the applicant ‘has not sufficient information to enable the applicant to decide whether to commence a proceeding in the Court to obtain that relief’, as required by r 32.05(b), and she did so unaffected by any ‘overly indecisive or cautious nature’ on the part of the applicant.
304	Several years later, in B J Bearings Pty Ltd v Whitehead, Hargrave J, when dealing with an application for preliminary discovery under (inter alia) r 32.05, summarised the relevant principles to be applied in exercising the Court’s discretion as to whether to make a preliminary discovery order in that particular case, as follows:
(1)	Rule 32.05 should be given a liberal or benevolent construction.  Its object is to avoid the commencement of ‘speculative suits’ and, instead, ‘to advance the administration of justice [by enabling] a prospective plaintiff … to make an informed decision whether to proceed or not upon proper material before issuing his proceeding.’
(2)	The fact that an applicant for preliminary discovery already has enough evidence to establish a prima facie case against a proposed defendant does not mean that the applicant has sufficient information to enable it to decide whether to commence a proceeding.  An applicant in that position may nevertheless ‘need information to know whether the cost and risk of litigation is worthwhile.’  For example, an applicant with sufficient information to plead a prima facie case may prudently wish to obtain preliminary discovery about ‘what defences are available to the respondent and the possible strength of those defences, or to determine the extent of the respondent’s breach and the likely quantum of any damages award’. 
(3)	An applicant for preliminary discovery is entitled to be cautious before making a decision to embark upon costly litigation.  This approach is consistent with the policy underlying the rule.  It is also, of course, consistent with the policy underlying the Civil Procedure Act 2010 generally, and the ‘proper basis certification’ requirements in s 42 of that Act in particular.  
(4)	In determining whether an applicant has in fact already decided to commence a proceeding, irrespective of the outcome of the application, the Court should not give too much weight to posturing in correspondence prior to the making of the application, particularly correspondence alleging the existence of a strong case but nevertheless seeking preliminary discovery by letter prior to making a formal application to the Court.  
(5)	‘What constitutes “reasonable inquiries” is a question of fact, to be considered in all the circumstances of the particular case.’  
305	Further, in considering whether a preliminary discovery order should be made, his Honour stated:
36	The fact that the applicant has satisfied the necessary pre-conditions to the making of a preliminary discovery order does not mean that an order must be made.  In St George Bank Ltd v Rabo Australia Ltd, Hely J stated:
The rule is to be beneficially construed, given the fullest scope that its language will reasonably allow, with the proper brake on any excesses lying in the discretion of the Court, exercised in the particular circumstances of each case.
306	As noted above, by 2016, when Hargrave J delivered judgment in B J  Bearings, the Civil Procedure Act was in force.  Accordingly, in B J  Bearings, the Court was expressly required by s 8(1) of the Act to ‘seek to give effect to the “overarching purpose” in the exercise of any of its powers or in the interpretation of those powers,’ and by s 9(1), in making any order in a civil proceeding, the Court was required to ‘further the overarching purpose by having regard to’ the objects listed in subparagraphs (a) to (g) of s 9(1).  These objects included:
(a)	the just determination of the civil proceeding; 
. . . 
(c)	the efficient conduct of the business of the court; 
. . . 
(d) 	the efficient use of judicial and administrative resources;
. . . 
(g)	dealing with a civil proceeding in a manner proportionate to―
(i)	the complexity or importance of the issues in dispute; and
(ii)	the amount in dispute.
307	Importantly, however, s 9(3) of the Civil Procedure Act provides that:
(3)	This section does not―
(a)	limit any other power of a court to make orders or give directions; or
(b)	preclude the court from considering any other matters when making any order or giving any direction.
308	Relevantly for present purposes, the ‘proper basis certification’ requirement in s 42 of the Civil Procedure Act, mentioned by his Honour, applies ‘on the filing of a party’s first substantive document in a civil proceeding’: s 42(1)(a).  Where a party is represented by a legal practitioner, in the case of a civil proceeding which involves allegations of fact, s 42(1A) requires the legal practitioner making a proper basis certification to certify that on the factual and legal material available―
(a)	each allegation of fact in the document has a proper basis;
(b)	each denial in the document has a proper basis;
(c)	there is a proper basis for each non-admission in the document.
309	As a practical matter, the requirement under s 42(1A) that each allegation of fact in the substantive document initiating the proceeding, relevantly a statement of claim, ‘has a proper basis’ is unlikely to raise any different considerations to the approach Hollingworth J adopted in Beston Parks, in asking ‘could a statement of claim be properly drawn on the material currently available to the applicants.’  That is to say, for a pleading to be ‘properly drawn’ it will be necessary for the legal practitioner to provide proper particulars which demonstrate a proper basis for each allegation of material fact.  Understood in that way, s 42 is effectively a shorthand rendition of the essential requirements under the pleading rules, that operates to accentuate or reinforce their observance.
310	More recently, in Alex Fraser Riordan J observed:
(a)	The primary purpose of the rule [r 32.05] is to advance the administration of justice by allowing a prospective plaintiff to make an informed decision on proper material about whether or not to bring a claim.  The importance of this rule to the advancement of the administration of justice has been accentuated by the certification requirements on filing of civil proceedings under Part 4.1 of the Civil Procedure Act 2010.  It is well established that the rule should be interpreted benevolently.
(b)	. . .   The purpose of the Rule is to allow an applicant, who has inadequate proof of any cause of action, to discover whether or not evidence is available that will impact (positively or negatively) on the possible proceeding.  
(c)	Although the jurisdictional threshold is low, its satisfaction only empowers the Court to exercise its discretion.  In the  exercise of its discretion, the Court can control any excesses; and assess whether there may be real benefit in making the order.  . . .
311	Against that background, in light of the submission made by counsel for the appellants’ that ‘what might normally sound like recovery, or execution, pops its head up in the substantive issues, because it’s a s 562 claim’, it is useful to adopt Hollingworth J’s approach in Beston Parks and turn to consider what information was required to be provided to enable the applicants in the present case to make an informed decision about whether to bring a proceeding, and in so doing to have regard to what must be pleaded by them in order to enable a proceeding to be commenced alleging a cause of action to obtain relief directly from AIG under the Primary PI Policy/ies. 
The appellants’ potential claim under s 562 seeking relief directly against AIG – could a statement of claim be properly drawn on the material currently available?
312	As noted earlier, in the present case, the potential claim that the appellants are considering commencing is a claim made directly against the insurer, AIG, pursuant to s 562 of the Corporations Act, along the lines of the claim for declaratory relief that was made in CGU Insurance Ltd by the liquidator against the insurer of the former directors.   
313	In essence, s 562 of the Corporations Act alters or modifies the common law position that a third person could not claim the proceeds of any relevant insurance paid to a liquidator and would instead have to lodge a proof of their claim.  Under s 562, the general position is that ‘where a company is insured against liability to a third person under a contract of insurance entered into before the beginning of the winding up…, then if such a liability is incurred (whether before or after the beginning of the winding up) and an amount in respect of that liability is received from the insurer by the company or the liquidator, that amount is to be paid to the third person.’
314	Section 562 is framed as follows:
562  Application of proceeds of contracts of insurance
(1)	Where a company is, under a contract of insurance (not being a contract of reinsurance) entered into before the relevant date, insured against liability to third parties, then, if such a liability is incurred by the company (whether before or after the relevant date) and an amount in respect of that liability has been or is received by the company or the liquidator from the insurer, the amount must, after deducting any expenses of or incidental to getting in that amount, be paid by the liquidator to the third party in respect of whom the liability was incurred to the extent necessary to discharge that liability, or any part of that liability remaining undischarged, in priority to all payments in respect of the debts mentioned in section 556.
(2)	If the liability of the insurer to the company is less than the liability of the company to the third party, subsection (1) does not limit the rights of the third party in respect of the balance.
(3)	This section has effect notwithstanding any agreement to the contrary.
315	Counsel for the appellants, after referring to the language in which s 562 is expressed, submitted:
[MR GLEESON:]  A claim for a declaration may be the declaration for the insurer to pay the amount that's recovered against Probuild.  It may be a declaration formed in various different ways but at any rate, it is entirely possible and we're dealing in a realm of may here, it's entirely possible that an insurer runs as one of its defences, you can't get a declaration to that effect because the amount left under the policy in that year doesn't permit such a declaration.  And what Rule 3205 [sic] tells us is that on any even narrow interpretation of the sorts of documents we can receive that is captured.
There ought not be any great mystery confronting a plaintiff who wants to sue an insurer directly when it's not its insurer as to whether it's worth doing so.  Whether there's any money left under the policy.  I've said to Your Honour that we acknowledge that the language of the authorities I've taken you to don't say in terms and you can get -  I'm calling them recovery style documents – we're not aware of any authority that says the contrary.  That you can't.  And our friends haven't pointed to any authority that says you can't.  
They fasten on the fact that the cases tend to talk about documents going to pleadings, defences, quantum, and say that's exhaustive in substance.  That's all I want to say about Ground 3, Your Honour.  You can see that that's where there's a fair bit of law and a fair bit of thinking.  But if Your Honour's with us on that, we'll get access to documents that will tell us whether it's worth issuing against the insurer.
316	Counsel for the appellants submitted that the documents that Wadren/the Co-Owners are seeking by way of preliminary discovery under ground three are ‘recovery style documents’ being documents ‘that go to whether you will recover if you win’.  But, he added, because the claim proposed is a s 562 claim brought directly against AIG, the position is different because ‘when the rule [r 32.05] speaks of any document relating to the question whether the applicant has the right to obtain the relief, that sort of document includes documents going to whether you’ll recover’ and ‘what might normally sound like recovery, or execution, pops its head up in the substantive issues, because it’s a s 562 claim.’  He said that ‘[t]his is not a claim where a plaintiff is curious and would love to know whether a company its suing has enough money to meet the judgment.’ Rather, he submitted ‘[t]his is a case directly against the insurer where a substantive issue is what is the amount under the policy. What is the policy.  What’s been notified.  What are the rights under the policy.  And what amount might be recovered by priority.’
317	If, as the appellants assert in the present case, a claim brought under s 562 of the Corporations Act ‘is the route home for the [appellants] if there is a route home at all’, it is instructive to consider or ask, as Hollingworth J did in Beston Parks, ‘could a statement of claim be properly drawn on the material currently available to the applicants’.    
318	As noted earlier, counsel for the appellants foreshadowed that the proposed claim under s 562 would be along the lines of the claim for declaratory relief that was made in CGU Insurance Ltd by the liquidator against the insurer of the former directors.  In CGU Insurance Ltd, when discussing the claim brought by the liquidators against CGU, which the Court found invoked federal jurisdiction, French CJ, Kiefel, Bell and Keane JJ outlined the claim that was pleaded against CGU, as follows:
18	As to CGU, the liquidators alleged that it had issued an insurance policy, for the period 30 June 2009 to 30 June 2010, described as a Civil Liability Professional Indemnity policy in favour of Crewe Sharp and extending to its director, Mr Crewe.  Express terms of the policy were pleaded, including that CGU would indemnify the insured “up to the Policy Limit for any Civil Liability to any third party which is incurred by the Insured in the conduct of the Professional Services” where the claims were made against the insured while the policy was in force, where CGU was given notice and where the claim arose from an act, error or omission on or after a date specified as the retroactive date.  The limit of the cover provided under the policy was $5 million.  The policy defined “Professional Services” as “the business of provision by the Insured of personnel, HR consultancy, management consultancy, business coaching, training and development consultancy, and debt recovery services”.  Exclusions relied upon by CGU in rejecting the claim for indemnity were pleaded and were said not to apply.  CGU’s denial of liability was pleaded.
19	CGU’s liability under the policy and the operation of s 562 of the Act were pleaded:
“25. By reason of the matters set out in paragraphs 18 to 24 above, CGU is liable to indemnify Crewe Sharp and Trevor Crewe under the Policy in respect of the amounts claimed by the Plaintiffs from Crewe Sharp and Trevor Crewe in this proceeding up to $5,000,000.
26. By reason of s 562 of the Act, any amount received by Crewe Sharp or its liquidator from CGU in respect of the Plaintiffs’ claims must be paid to the Plaintiffs.”
A plea in similar terms was set up in relation to a policy issued by CGU for the period from 30 June 2012 to 30 June 2013.
20	The declaration sought against CGU was as follows:
“A declaration that the Fifth Defendant is liable to indemnify the First and Fourth Defendants in respect of any judgment herein obtained by the Plaintiffs against the First and Fourth Defendants and in respect of any sums (including legal costs) which the Court may order the First and Fourth Defendants to pay to the Plaintiffs.”
319	Having regard to what is required to be demonstrated by an applicant third party seeking relief under s 562 in respect of proceeds of contracts of insurance received (or to be received) by the company or the liquidator, it seems clear that (at least) where proceeds have not yet been received in respect of a claim, the applicant is not required to plead that any precise sum of money is (or remains) available under any relevant contract of insurance.  Rather, in circumstances where the appellants propose claiming declaratory relief directly against AIG, what is required to be alleged is along the lines of that pleaded by the Akron liquidators in CGU Insurance Ltd as set out above.  Here, as there, the appellants’ claim is based upon the legal consequence created by s 562 in the event that the insurer (relevantly, AIG) is liable to indemnify the insured (Probuild), the legal consequence being the bringing into existence, in favour of the appellants (or Wadren), of a right to the proceeds of the insurance policy payable to the insured (Probuild) in respect of its liability to the appellants (or Wadren).
320	Accordingly, I do not share the view expressed by counsel for the appellants that a direct claim brought against an insurer under s 562 ‘is different because the question of what might normally sound like recovery, or execution, pops its head up in the substantive issues, because it's a 562 claim.’
321	In the present case, the appellants have copies of the Primary PI Policies (including the AIG Policies).  They know that AIG has not made any unconditional grant of indemnity to Probuild under the Primary PI Policies and know that as at 12 October 2022, ‘the limits of indemnity under the AIG Policies have not been exhausted.’  They also know that, in the new proceeding the appellants commenced against Probuild in March 2023, AIG is conducting the defence on behalf of all of the Primary PI Insurers (and not just AIG), which means that 100% of however much of the $20 million is not exhausted is available to respond, rather than just AIG’s 65% portion.  Further, as the limits of indemnity under the Primary PI Policies have not been exhausted, it follows logically that the whole of the excess layer insurance remains available.  At this stage, however, the appellants have apparently chosen not to pursue any of the excess layer insurers. 
322	As Hollingworth J observed in Beston Parks, it is for the court to determine whether or not an applicant has sufficient information available to it.  In my view, when the material before the Court is viewed and assessed objectively, the appellants do have sufficient information to enable them to decide whether to commence a proceeding against AIG for relief of the kind sought in respect of any proceeds of contracts of insurance that may be received by the company or the liquidator (or deed administrators), and a statement of claim could properly be drawn on the material currently available to them.  
323	I share the primary judge’s view that the legislature limited the power of the Court to order preliminary discovery under r 32.05 to documents ‘relating to the question whether the applicant has the right to obtain the relief’.  The purpose of the rule is to facilitate an applicant, who believes it has a right to obtain relief in the Court from a prospective defendant, to be placed in a position where it has access to sufficient information to decide whether a proceeding should be brought and to enable a proceeding to be commenced alleging a cause of action in the proper way.  Once the Court has formed the view, assessed objectively, that an applicant has sufficient information to enable it to decide whether to commence a proceeding, as the Court has here in the case of the proposed declaratory relief sought against AIG, r 32.05(b) is not enlivened, with the result that the Court does not have power to order preliminary discovery of the additional ‘recovery style documents’ that the appellants seek.  
324	For completeness, I should add that I do not agree with the construction of r 32.05(c) and the chaussette advanced by counsel for the appellants, to the effect that:
… if it's a document that either relates to the question whether there's a right to obtain relief, or inspection would assist you, the court's got the power.  
325	In my view, as a matter of construction, when the chaussette speaks of ‘any document of the kind described in paragraph (c)’ it is referring to  a document that satisfies both ‘the right to obtain relief’ criterion and the ‘inspection of the document by the applicant’ criterion, and both must be satisfied before the Court may order that preliminary discovery be given of any such document under r 32.05.  It is not open to the Court to order preliminary discovery of a document which satisfies only the ‘inspection would assist’ criterion.
326	In the circumstances, I am not satisfied that his Honour erred by holding that the Court did not have power to order preliminary discovery of the contested documents sought.  
Ground Four:	The primary judge erred by prohibiting the second appellant [QIC] from accessing the discovered documents
327	Ground Four concerns the primary judge’s holding that the documents concerning the confirmation or denial of indemnity by the Primary PI Insurers under the Primary PI Policies should not be produced to QIC because QIC had not demonstrated that articulated representations may entitle it to a claim for misleading or deceptive conduct.  
328	In the Notice of Appeal, Ground Four is framed as follows:
4.	The Associate Judge erred in holding that the documents concerning the confirmation or denial of indemnity by Primary PI Insurers under the Primary PI Policies should not be produced to the Second Appellant [QIC] because the Second Appellant had not demonstrated that articulated representations may entitle it to a claim for misleading or deceptive conduct (at Principal Ruling [63]-[65]), in circumstances where the Rules required the Second Appellant only to satisfy the Court that it had reasonable cause to believe that it may be entitled to relief without the need for it to establish a prima face case or, indeed, to even articulate a cause of action.
329	It will be recalled that, relevantly for present purposes, the orders the primary judge made on 22 August 2023 concerning the discovery of documents by AIG set out first, orders that were made by consent for discovery of documents to both Wadren and QIC, and secondly the orders the Court made in respect of a category of ‘disputed documents’ that were to be provided to (and inspected by) Wadren only.  In respect of the disputed documents, the orders were framed as follows:
6.	The second defendant [AIG] make discovery to the first plaintiff [Wadren] of all documents (including letters, emails, faxes, file notes and other written communications, whether electronic or hard copy) comprising confirmation of indemnity or denial of indemnity from the Primary PI Insurers to the first defendant [Probuild] in respect of the Primary PI Policies for the period 30 June 2019 to 30 June 2020 that are in the possession, custody or power of the second defendant [AIG] at the date of this Order.
. . .
11A	Inspection of documents ordered to be discovered under paragraph 6 above is limited to nominated representatives of the first plaintiff [Wadren] on terms that, prior to inspecting those documents, they sign the confidentiality undertaking attached in Annexure A.
330	By way of background, before the primary judge, AIG submitted that QIC had failed to establish the first limb of r 32.05, namely that there is ‘reasonable cause to believe’ QIC has or may have the right to obtain relief against either Probuild or AIG.  In essence, AIG contended that any claim the plaintiffs have against AIG is necessarily dependent upon them having a viable cause of action against Probuild.  And in circumstances where QIC is not a party to the Contract, AIG submitted that QIC does not have any claim as against Probuild for breach of the Contract or pursuant to any indemnities contained in the Contract.  Further, AIG said, while the plaintiffs asserted that QIC had ‘reasonable cause to believe’ that it may have the right to obtain relief against Probuild ‘on the basis of representations made by Probuild’, the plaintiffs adduced no evidence of the alleged representations or any reliance on them by QIC.  AIG observed that  ‘[i]f such representations were made in the lead up to or at the time of signing of the Contract, or during the performance of the Stage 7 Works, it is very difficult to envisage how QIC would have a right to relief in respect of them.’
331	His Honour’s reasons for prohibiting QIC having access to those disputed documents, as set out in paragraphs 58 – 65 of the Principal Ruling, are reproduced below:
[Principal Ruling]
Do the plaintiffs have reasonable cause to believe they may have a right to relief against the defendants?
58	The plaintiffs rely on the following propositions which were not disputed by the defendants and which I accept:
(a)	the plaintiffs are not required to show that they have a prima facie case for relief or to identify the cause of action precisely, rather, it is sufficient for the plaintiffs to identify factors that may reasonably give rise to a right to obtain relief (the ‘reasonable cause to believe’ being a belief that the plaintiffs may have a right to relief, not a conclusion that a prima facie case exists);
(b)	whether there is a relevant ‘reasonable cause to believe’ must be determined objectively;
(c)	some fishing is permitted but a ‘flimsy foundation’ or ‘mere hunch’ is insufficient to constitute a reasonable cause of action; and 
(d)	venturing too far into the merits of the existence of a possible cause of action may give rise to error.
59	AIG does not dispute that there is reasonable cause to believe that the first plaintiff has, or may have, the right to obtain relief against Probuild for breach of its obligations and warranties under the construction Contract in respect of the alleged defects in the Stage 7 works.
60	As noted above, AIG consents to orders granting the second plaintiff access to documents to be discovered by Probuild excluding the Disputed Documents.  But AIG otherwise says that the second plaintiff has failed to establish it has a reasonable cause to believe it has or may have a right to obtain relief against Probuild or AIG.  This submission is put on the basis that the second plaintiff is not a party to the construction Contract and so cannot have a breach of contract claim.  In relation to the misleading or deceptive conduct claim, AIG submits in relation to claims by both plaintiffs, that there is insufficient evidence to support the bald assertions in relation to the misrepresentations.  Further, even if there were such evidence, the plaintiffs have not produced any evidence of any representations made to the second plaintiff (which was not a party to the contract of sale) by Probuild which might support such a claim.
61	In response to AIG’s submission as to the right to relief based on breach of contract, the plaintiffs submitted in reply that the relevant test sets a low threshold and simply requires the second plaintiff to satisfy the Court that there is reasonable cause to believe they may have a right to obtain relief.  That may be so, but in the present case there was no articulation of the nature of the contractual claim that the second plaintiff may have against the defendants in the absence of privity.  In those circumstances, I am not satisfied that the second plaintiff has reasonable cause to believe that it may have a right to relief for breach of contract.
Have the plaintiffs established a reasonable cause to believe that they may have a right of action based on misrepresentations made by Probuild?
62	In the First Morcom affidavit, Ms Morcom states that:
[T]he co-owners consider that they may have the right to obtain relief against Probuild for misleading or deceptive conduct contrary to section 18 of Schedule 2 of the Competition and Consumer Act 2010 (Cth) … on the basis of representations made by Probuild.
63	Ms Morcom does not explain what the representations may have been, or when they were made, or by whom, or how they would give rise to a cause of action under the Australian Consumer Law.  Similarly, in their submissions, the plaintiffs did not descend into detail as to what representations they say were made.  The plaintiffs emphasise in their submissions that the test sets a low threshold which does not require the Court to form any concluded view about the legal merits of the claim. 
64	AIG submits that it is not sufficient for the plaintiffs merely to say there is a possibility that they have a cause of action for misleading and deceptive conduct based on misrepresentations but that they must put forward facts that create ‘an inclination of the mind’ that the plaintiffs may have a right to obtain relief in Court. 
65	I agree with AIG’s submission.  In my view, there is insufficient evidence before me to enable me to conclude that the plaintiffs may have the right to obtain relief against Probuild for misleading or deceptive conduct.  As conceded by AIG, it is within the realms of possibility that such a claim may be made, or even ultimately succeed, but that is not sufficient for the purposes of the inquiry before me.  Accordingly, the plaintiffs have not established that they have a reasonable cause to believe that they may have a right to relief against the defendants based on any misleading or deceptive conduct.
The appellants’ submissions
332	The appellants contend that his Honour’s approach ‘infringed the fundamental prohibition on a judge, on an application for preliminary discovery, from descending into the merits of any potential cause of action’ and accordingly, it was erroneous for him ‘to consider whether the elements of an identified potential cause had been, or could be, satisfied by QIC.’
333	First, the appellants say that the approach adopted by the primary judge was effectively one that required the Co-Owners to cause his Honour to have an ‘inclination of the mind’ that they ‘may have the right to obtain relief against Probuild for misleading or deceptive conduct.’  Rather, they submit, the question for the primary judge was ‘whether the Co-Owners had reasonable cause to believe that they may have a right to obtain relief such that they should be provided with the documents they seek to enable it [sic] to make a decision whether to commence proceedings.’  That is because an applicant under r 32.05 is not required to show a prima facie case for relief or to identify a cause of action precisely.  Rather, the authorities acknowledge that it is ‘sufficient for an applicant to identify facts which may reasonably give rise to a right to obtain relief (the “reasonable cause to believe” being a belief that the applicant may have a right to relief, not a conclusion that a prima facie case exists).’
334	The appellants referred to the decision in Telstra Corporation Ltd v Minister for Broadband, Communications and the Digital Economy (Telstra Corp), where the Full Federal Court allowed an appeal (by consent) from a dismissal of Telstra’s application for preliminary discovery, having found that the primary judge had erred.  Their Honours described the relevant error in the following terms:
53	His Honour went extensively into the merits of the existence of a possible cause of action which Telstra might bring against the minister.  In so doing it might be said he went further than was necessary in the context of an application for preliminary discovery under O 15A.  It was not necessary for him to form any concluded view about the legal merits of the Telstra claim.  That might well have to be assessed in the light of a range of facts including the context in which the decision to allocate funding to OPEL was made.  There was no evidence before his Honour or before us of any Appropriation Act under which the necessary funding could have been provided.  This raises a question about the status of the ministerial decision and the extent to which it could be amenable to judicial review.  Related to that is the status of the funding agreement.
335	The appellants submit that the observations of the Full Federal Court in Telstra Corp are apposite in the present circumstances.  Here, they say, the approach of the primary judge was, in effect, ‘to require the Co-Owners to satisfy the Court that they had a reasonable cause to believe that Probuild had engaged in misleading or deceptive conduct’ – rather than applying the test imposed under r 32.05, which has a lower threshold and ‘simply requires the Co-Owners to satisfy the Court that there is reasonable cause to believe that they may have a right to obtain relief in the Court’.  In those circumstances, the appellants contend that his Honour’s reasoning infringes the fundamental principle that an ‘application for preliminary discovery cannot be used to conduct a trial of the merits of the prospective case’.
336	Further, they say:
It is sufficient to satisfy the requirements of r 32.05 that the question whether QIC may have a right to relief against Probuild remains an open one, including by reason of the fact that it remains open for QIC to obtain relief under the Australian Consumer Law on the basis that it has suffered loss as a result of Probuild’s representations, even if the relevant reliance was not its reliance.  The primary judge was wrong to hold otherwise, and that error requires correction by the Court on appeal.
337	Finally, even if, contrary to the appellants’ submissions, the primary judge was correct to require proof of a claim for misleading or deceptive conduct, the appellants submit that it is sufficient to observe that his Honour accepted that it was ‘within the realms of possibility that such a claim may be made, or even ultimately succeed’.  If that is accepted, the appellants submit that ‘there must necessarily be a sufficient basis for there to be an “inclination of the mind” that the Co-Owners may have the right to obtain relief in respect of a claim for misleading or deceptive conduct.’  In those circumstances, the appellants submit:
that where a claim for misleading or deceptive conduct is not foreclosed, and it is otherwise accepted that such a claim may be made and, indeed, may succeed, that is ample to satisfy the requirement that QIC has reasonable cause to believe that it may have a right to obtain relief.  No further criteria, demanding articulation of specific representations or demonstration of how the elements of such a claim will be established, is required to be satisfied under r 32.05.  The primary judge was wrong to hold otherwise, and the Court can be satisfied that it would be proper to grant preliminary discovery without imposing any implied limitation on discovery to, or access by, QIC.
338	The appellants also observe that, in any event, QIC’s claim against Probuild for misleading or deceptive conduct has (now) been pleaded in paragraphs 118 to 119 of the writ filed in the new proceeding filed on 14 March 2023. 
The respondent’s submissions
339	The respondent contends that the conclusion the primary judge reached – that he was not satisfied on the evidence before him that QIC met the requirements of r 32.05(a) – was ‘patently correct’.  AIG says that contrary to the appellants’ submissions, his Honour’s approach did not descend into an impermissible assessment of the merits of any claim, nor did it require QIC to establish a prima facie case, for the following reasons.
340	First, as his Honour recorded in his Principal Ruling (at [62] – reproduced above), Ms Morcom’s First Affidavit set out the basis on which each of the Co-Owners sought preliminary discovery, framed in terms of ‘misleading or deceptive conduct contrary to section 18 of the Schedule 2 of the Competition and Consumer Act 2010 (Cth)…on the basis of representations made by Probuild’, and they made submissions before his Honour as to why they met the requirements of r 32.05(a), expressly in reliance on that evidence.  In that regard, AIG observes that:
Although the appellants point to authority that it was not necessary for QIC to even identify a cause of action, QIC in fact did so and, in AIG’s submission, it was imperative it did so in circumstances where it had no prospect of a claim in contract against Probuild, in distinction to Wadren.
341	Secondly, in their submissions on the appeal, the appellants acknowledge that it was sufficient for QIC as applicant ‘to identify facts which may reasonably give rise to a right to obtain relief (the “reasonable cause to believe” being a belief that the applicant may have a right to relief, not a conclusion that a prima facie case exists)’.  But AIG contended:
… belief requires more than mere assertion, suspicion or conjecture, in order to create the necessary inclination of the mind towards assenting to the proposition that there was reasonable cause to believe a right to relief existed.  Further, the test is objective, not subjective.  The highest the evidence rose before the Associate Judge was asserted but unidentified misrepresentations made by Probuild.  There was no evidence of what those misrepresentations were, when they were made, to whom they were made and how QIC suffered any loss as a result of them.
342	Accordingly, AIG submits that the primary judge’s conclusions were legally and factually correct, and that this is sufficient to dispose of Ground Four.  Further, it says, the statement of claim does not remedy these deficiencies, nor undermine the primary judge’s conclusions, for the reasons outlined in paragraphs 13 to 14 of AIG’s notice of contention submissions.
343	But if, contrary to AIG’s submissions, the Court finds error established by Ground Four, AIG contends his Honour’s decision should be affirmed on two independent bases, each of which is sufficient:
(a)	his Honour’s alternative finding to decline to exercise the discretion under r 32.05; and
(b)	the alternative basis AIG has addressed in its notice of contention and notice of contention submissions.
The appellants’ reply submissions
344	In response to AIG’s submission concerning the appellants’ formulation of QIC’s potential cause of action, the appellants submit that ‘the circumstance that an applicant for preliminary discovery has taken the trouble of attempting to articulate a potential cause of action does not alter the application of r 32.05 so as to impose some higher or different standard which has the effect of requiring the applicant to establish the merits of such a cause’.  Further, they say that his Honour was ‘wrong to proceed on the basis that it was necessary for QIC to articulate the representations made by Probuild in order to be entitled to preliminary discovery, particularly in circumstances where it was never part of QIC’s contention that the representations were made to it.’
345	The appellants also take issue with AIG continuing to maintain (what the appellants contend is) an ‘unduly narrow approach’ that a belief that the applicant may have a right to relief requires more than mere assertion, suspicion or conjecture.  They contend that more recent authority in Victoria, in Alex Fraser, makes clear that ‘a reasonable suspicion, conjecture or assertion may each fall within the ambit of a reasonable belief.’
346	Further, in relation to confidentiality, contrary to AIG’s submission the appellants submit that the documents now sought by them are ‘not immune or precluded from production on the basis of confidentiality’.  Rather, they say, if the primary judge had not erred, those documents would properly have formed part of the documents that the primary judge should have ordered to be produced, such that they fall within the primary judge’s identified exception to the application of confidentiality.
Appellants’ oral submissions
347	On Ground Four, the appellants effectively relied on their written submissions, and counsel spoke only briefly to them during oral submissions.  In essence, they say that his Honour refused QIC access to the documents that were produced to Wadren because he said he did not know enough about the sort of claim QIC might bring.  The appellants contend that the necessary inference from his Honour’s comments is that ‘His Honour assumed or believed that he had to know more about the specific nature of the claim than the authorities say he needed to know’. 
348	Council for the appellants submitted that to the extent that AIG, in its reply submissions, relies on the fact that QIC did, through Ms Morcom in the First Morcom Affidavit, talk about the cause of action that QIC might have, does not entail the consequence that QIC has ‘set the bar higher’ than it would otherwise be.  Further, he said, because the new proceeding has now been issued against Probuild, because of a time limitation issue, the case has been pleaded:
[MR GLEESON:]  So what they had not done before the hearing before His Honour, but have now done, is to issue, and there should be - the court is now in a very advanced state of knowing what the cause of action might be, because you've actually got a pleaded claim.  Our friends say look, there's all these other problems with it, because for the subsequent years, there's a prior claims exclusion that would bite.  
AIG’s oral submissions
349	On Ground Four, AIG likewise effectively relied on its written submissions.
Consideration and disposition
350	In dealing with Ground Four, it is necessary first to understand the basis upon which the Co-Owners presented their case for preliminary discovery before the primary judge.  
351	The procedure for making an application for preliminary discovery is set out in r 32.08 of the Rules.  Relevantly, r 32.08(4) requires that an originating motion seeking relief under r 32.05 be supported by an affidavit―
(a)	stating the facts on which the application is made; and
(b)	specifying or describing the documents or any class of documents in respect of which the order is sought.
352	In the First Morcom Affidavit, which was filed in support of the originating motion on 21 September 2022, Ms Morcom set out (her instructions about) the grounds on which Wadren and the Co-Owners respectively consider they may have the right to obtain relief, by way of preliminary discovery, against Probuild, AIG and the other Primary PI Insurers and excess layer insurers, and Mr Gray as a director of Probuild.  In so doing, Ms Morcom effectively outlined the factual predicate that Wadren and the Co-Owners respectively relied on to demonstrate ‘reasonable cause to believe’ that they may have a right to obtain relief by way of preliminary discovery, and accordingly, should be provided with documents that would enable them to make a decision whether to commence proceedings.  
353	Relevantly, Ms Morcom stated as follows:
C.	The Co-Owners may have right to obtain relief
57.	I am instructed that:
(a)	Wadren considers it may have the right to obtain relief against Probuild on the following grounds:
(i)	for breach of Probuild's design and construction obligations and warranties under the Contract, on the basis that Probuild failed to comply with those obligations and warranties in the course of completing the Stage 7 Works, including as described in the letter from Allens to Probuild dated 10 May 2021 (a copy of which is contained at pages '1272-1442' of Exhibit 
CEM-1); and
(ii)	under the indemnities in the Contract, on the basis that as a result of the Defects, Wadren has suffered loss or damage to which those indemnities respond; and
(b)	the Co-owners consider that they may have the right to obtain relief against Probuild for misleading or deceptive conduct contrary to section 18 of Schedule 2 of the Competition and Consumer Act 2010 (Cth) (the Australian Consumer Law), on the basis of representations made by Probuild.
58.	I am instructed that the Co-Owners consider that they may have the right to obtain relief against AIG Australia, the AIG Australia Co-Insurers and any other Professional Indemnity Insurers on the following grounds:
(a)	the Defects identified by the Co-Owners, and the grounds identified in paragraph 57(a) above, concern the services provided to Wadren by Probuild, which if proven to be defective, would be matters to which a professional indemnity insurance policy would ordinarily respond (subject to any applicable exclusions and limitations);
(b)	for the proceeds of each such responsive insurance policy:
(i)	section 562 of the Corporations Act 2001 (Cth) entitles the Co-Owners to priority to such proceeds in any liquidation of Probuild; and
(ii)	the DOCA expressly makes provision for the priority otherwise afforded by section 562 of the Corporations Act 2001 (Cth), relevantly stating at clause 8.5:
Subject to the terms of this Deed, section 562 of the Corporations Act is to be incorporated into this Deed as if references to a liquidator were references to the Deed Administrators and with any other amendments as necessary in the context of this Deed.
(c)	in circumstances where AIG Australia, the AIG Australia Co-Insurers and any other Professional Indemnity Insurer has denied or failed to confirm indemnity which ought to have been admitted, and section 562 of the Corporations Act 2001 (Cth) applies, the Co-Owners have the right to obtain relief in the form of a declaration that those insurers must give indemnity under the respective policy.
59.	I am instructed that the Co-Owners consider that they may have the right to obtain relief against Mr Gray on the basis that, in his time as director of Probuild, he was knowingly concerned in, or a party to, Probuild's potential contravention of the Australian Consumer Law as described in paragraph 57(b) above.
60.	I am instructed that the Co-Owners consider that they have the right to obtain relief against any D&O Insurers on the following grounds:
(a)	the potential claim against Mr Gray, if proven, would be a claim in respect of which a directors and officers insurance policy would ordinarily respond (subject to any applicable exclusions and limitations);
(b)	on the basis of the searches and asset position of Mr Gray described in paragraph 41 above, I infer that:
(i)	Mr Gray would be unable to satisfy any judgment against him in the order of the amount estimated in paragraph 14 above (to the extent that liability is attributed to Mr Gray and as between defendants);
(ii)	if Mr Gray were to have a trustee in bankruptcy appointed to his estate, whether by the Co-Owners following a failure to meet any judgment or otherwise, section 117 of the Bankruptcy Act 1966 (Cth) would entitle the Co­ Owners to priority to the proceeds of any responsive directors and officers insurance policy; and
(c)	for similar reasons as outlined in paragraph 58(c), the Co-Owners would have the right to obtain relief in the form of a declaration that the relevant D&O Insurers must give indemnity under the respective policy.
354	As will be noted, while Ms Morcom outlines (in paragraph 57(b)) her instructions about the Co-Owners’ belief that they may have a right to obtain relief against Probuild for misleading and deceptive conduct contrary to s 18 of Schedule 2 to the Australian Consumer Law (ACL), on the basis of representations made by Probuild, such relief (based on grounds of the kind described in paragraph 57(b)) is not mentioned by her in paragraph 58(a) (or (b) or (c) of her affidavit) where she outlines her instructions about the basis for the Co-Owners’ belief that they may have a ‘right to obtain relief against AIG’ and the other Primary PI Insurers and excess layer insurers.  That is to say, she does not assert or state any facts that might support any basis for a belief that the Co-Owners may have a right to obtain relief (in the form of a declaration or otherwise) against AIG and those other insurers in respect of a potential contravention by Probuild of s 18 of the ACL under the respective policy.  This position may be contrasted with her explicit statements (in paragraphs 59 and 60 of the First Morcom Affidavit) concerning the Co-Owners’ belief that they may have a right to obtain relief against Mr Gray and the D&O Insurers (in the form of a declaration), on the basis that ‘he was knowingly concerned in, or a party to, Probuild's potential contravention of the [ACL] as described in paragraph 57(b)’ of the First Morcom Affidavit and that ‘the potential claim against Mr Gray, if proven, would be a claim in respect of which a directors and officers insurance policy would ordinarily respond (subject to any applicable exclusions and limitations)’.
355	In the Second Morcom Affidavit, Ms Morcom deposes to receiving the 12 October 2022 letter from AIG’s solicitors, Clyde & Co, (which has been mentioned elsewhere in these reasons) in which they provided notice that AIG was prepared to consent to orders that it make preliminary discovery of, amongst other things, the professional indemnity insurance policies which insure Probuild for the policy years 2019/2020 and the ‘Later Years’ 2020 to 2022 (inclusive) etc and stated:
9.	Based on this correspondence, I [Ms Morcom] infer that, in addition to the policy for the policy year 30 June 2019 to 30 June 2020, the policies for the Later Policy Years respond, or may respond, to the potential claims of the Co-Owners described in paragraphs 57 and 58 of my First Affidavit.
356	Ms Morcom’s statement (above) does not state facts which might ‘plug the gap’ in the supporting evidence and it remains the case that there is simply no evidence advanced to support the notion of any reasonable cause to believe that the Co-Owners have or may have a right to obtain relief from AIG under the respective policy (in the form of a declaration or otherwise) in respect of Probuild’s potential contravention of s 18 of the ACL.  
357	That is to say, Ms Morcom does not (for e.g.) state to the effect that (adapting the grounds advanced in respect of the potential claim against Mr Gray concerning the contravention of the ACL and the description of the claim mechanism against AIG set out in sub-paragraphs 58(a), (b) and (c) of the First Morcom Affidavit) she is instructed that the Co-Owners consider that they may have the right to obtain relief against AIG on the following grounds:
•	the Co-Owners’ potential claim against Probuild for damages or compensation in respect of a contravention of the ACL as described in paragraph 57(b) of the First Morcom Affidavit, if proven, would be a claim in respect of which a professional indemnity insurance policy would ordinarily respond (subject to any applicable exclusions and limitations);
•	for the proceeds of each such responsive insurance policy:
(i)	section 562 of the Corporations Act 2001 (Cth) entitles the Co-Owners to priority to such proceeds in any liquidation of Probuild; and
(ii)	the DOCA expressly makes provision for the priority otherwise afforded by section 562 of the Corporations Act 2001 (Cth), relevantly stating . . .
•	in circumstances where AIG has denied or failed to confirm indemnity which ought to have been admitted, and section 562 of the Corporations Act 2001 (Cth) applies, the Co-Owners have the right to obtain relief in the form of a declaration that AIG must give indemnity under the respective policy.
358	In their outline of submissions filed in support of their application for preliminary discovery before the primary judge, the Co-Owners, when dealing with the requirements of r 32.05(a), referred to the evidence filed by Ms Morcom in the First Morcom Affidavit.  It is instructive to set out the text of those submissions, and to compare them to the evidence of Ms Morcom (referred to above) that was filed. 
B	The first condition – the plaintiffs have “reasonable cause to believe” that they may have a right to relief
. . .
The present case
19.	The plaintiffs have reasonable cause to believe that they may be entitled to relief in this Court as against Probuild, the second defendant [AIG] and the third defendant [Mr Gray].
20.	As against Probuild, the plaintiffs [Wadren and QIC] believe that they may have the right to obtain relief:
(a)	for breach of Probuild's design and construction obligations and warranties under the Contract, on the basis that Probuild failed to comply with those obligations and warranties in the course of completing the Stage 7 Works, and under the indemnities in the Contract, on the basis that as a result of the defects, the plaintiffs (including, in particular, the first plaintiff) has suffered loss or damage to which those indemnities respond; and
(b)	misleading or deceptive conduct contrary to section 18 of Schedule 2 of the Competition and Consumer Act 2010 (Cth) (the Australian Consumer Law), on the basis of representations made by Probuild.
21.	As against the second defendant, [AIG] the plaintiffs [Wadren and QIC] believe that they may have the right to obtain relief on the basis that:
(a)	the defects that have been identified concern the services provided by Probuild, which if proven to be defective, would be matters to which a professional indemnity insurance policy would ordinarily respond (subject to any applicable exclusions and limitations);
(b)	for the proceeds of each such responsive insurance policy:
(i)	section 562 of the Corporations Act entitles the plaintiffs to priority to such proceeds in any liquidation of Probuild (which priority is expressly recognised in the DOCA); and
(ii)	in circumstances where the second plaintiff, the AIG Australia Co-Insurers and any Other Professional Indemnity Insurer has denied or failed to confirm indemnity which ought to have been admitted, and section 562 of the Corporations Act applies, the plaintiffs have the right to obtain relief in the form of a declaration that those insurers must give indemnity under the respective policy.
22.	As against the third defendant [Mr Gray], the plaintiffs believe that they may have the right to obtain relief on the basis that, in his time as director of Probuild, he was knowingly concerned in, or a party to, Probuild's potential contravention of the Australian Consumer Law.  Further, the plaintiffs may have the right to obtain relief against any D&O Insurers because, if the claims against the third defendant are proven, it would be a claim in respect of which a directors and officers insurance policy would ordinarily respond.
23.	It is apparent from this explanation that the principal inquiry is whether the plaintiffs have reasonable cause to believe that they may have the right to obtain relief against Probuild.  The plaintiffs may have a further right to obtain relief against the second [AIG] and third [Mr Gray] defendants and these claims are factually related to the claims that may be made by the plaintiffs against Probuild; that is, the claim that may be made against the second defendant will depend on whether there exists policies of insurance that are likely to respond to the plaintiffs’ claims against Probuild, and the claim that may be made against the third defendant is for being knowingly concerned in a contravention of the Australian Consumer Law by Probuild.  As to the “reasonableness” of the plaintiffs’ belief, it is important for the Court to observe that the existence of the relevant defects has been the subject of expert reports, which are presently before the Court and has not been the subject of any dispute from any of the defendants.  Further, no party has suggested that any claim that the plaintiffs may bring against Probuild is misconceived in the sense that there could be no reasonable belief by the plaintiffs as to their right to relief, including, for example, because Probuild has an immediate and complete defence to any claim that may be advanced by the Plaintiffs.  It is difficult to see how such a suggestion could credibly be maintained.
24.	That being said, it must be observed that the plaintiffs do not need to satisfy the Court that they have a prima facie case for relief or to identify a cause of action precisely in order to satisfy the first condition in r 32.05(a).  The plaintiffs could satisfy the first condition even if they were unable to identify the form of relief to which they believe they may be entitled, and the grounds entitling them to that form of relief.  The fact that they are able to do so, however, is strongly suggestive that the circumstances of the present case amply satisfy the first condition.
25.	For the reasons set out in paragraphs 19 to 24 above, the first condition of the rule is satisfied in relation to each defendant.
359	As will be noted, in the submissions on ‘the first condition’ concerning  r 32.05(a), there is no separate treatment of Wadren’s reasonable cause to believe it may have a right to obtain relief against Probuild on the one hand and the Co-Owners’ reasonable cause to believe on the other.  Rather, in the submissions, contrary to the evidence of Ms Morcom (where the beliefs of Wadren on the one hand and of the Co-Owners on the other about their respective rights to obtain relief against Probuild were addressed separately in paragraphs 57(a) and 57(b)), they are bundled together and treated as one, as if they were the same (which they are not).  Secondly, paragraph 21 of those submissions effectively elides the distinction between the grounds Ms Morcom described in paragraph 57(a) (being Wadren’s grounds concerning the right to obtain relief against Probuild under the Contract) and those described in paragraph 57(b) (being the Co-Owners’ belief that they may have the right to obtain relief against Probuild for misleading and deceptive conduct) with the result that the submission that is made concerns only a belief that Wadren and QIC may have the right to obtain relief from AIG on the basis that:
(a)	the defects that have been identified concern the services provided by Probuild, which if proven to be defective, would be matters to which a professional indemnity insurance policy would ordinarily respond (subject to any applicable exclusions and limitations).
360	That is to say, no mention is made of any reasonable cause to believe that Wadren or QIC have or may have a right to obtain relief from AIG on the basis of representations made by Probuild that were misleading or deceptive in contravention of the ACL.  Nor is it suggested that any such potential claim against Probuild for damages or compensation in respect of a contravention of the ACL as described in paragraph 57(b) of the First Morcom Affidavit, if proven, would be a claim in respect of which a professional indemnity insurance policy would ordinarily respond (subject to any applicable exclusions and limitations).
361	Under r 32.05, paragraphs (a), (b) and (c) define the three necessary conditions that are a precursor to the exercise of the power conferred by the rule.  It is incumbent on an applicant for preliminary discovery to adduce evidence about each of the matters set out in paragraphs (a), (b) and (c), and once enlivened, the exercise of the power to order preliminary discovery is discretionary.  
362	In Telstra Corp, a decision upon which the appellants rely, the Full Federal Court outlined what is required to be demonstrated by an applicant under the first condition in the counterpart Federal Court rule, (at that time being O15A r6).  In Telstra Corp their Honours stated:
Under the first condition in [(a)] an applicant must show that there is “reasonable cause to believe that the applicant has or may have the right to obtain relief in the Court from a person whose description has been ascertained”.  The criterion as framed does not require that any person actually hold the requisite belief.  Its objective character requires the Court to be satisfied that a reasonable person could form a belief on the basis of the material before the Court that the applicant “has or may have the right to obtain relief”.  The word “may” indicates that the putative belief does not have to amount to a firm view that there is a right to relief: East Grace Corporation v Xing (No 2) [2005] FCA 1266 at [36].  However, mere assertion of a case against a prospective respondent is not enough: Hooper v Kirella Pty Ltd (1999) 96 FCR 1 at 11-12.  On the other hand a prima facie case for relief does not have to be demonstrated.  As Emmett J said in Austrac Operations Pty Ltd v New South Wales [2003] ATPR 41-960 at [10]:
The words, “where there is reasonable cause to believe that the applicant has or may have the right to obtain relief” are not satisfied by mere assertion.  The belief requires more than mere suspicion or conjecture.  On the other hand, it is not necessary for an applicant to establish even a prima facie case.  It is necessary, however, for the applicant to show objectively that there is reasonable cause for the relevant belief.  It is not necessary to demonstrate whether or not the applicant has the belief.
In Glencore International AG v Selwyn Mines Ltd (recs and mgrs apptd) (2005) 223 ALR 238, Lindgren J said (at [16]):
… while the notion of “reasonable cause to believe that the applicant … may have the right to obtain relief” … may be seen to set the threshold “at quite a low level” …, there must be some tangible support that takes the existence of the alleged right beyond mere “belief” or “assertion” by the applicant …
(Emphasis [in underlining] in original.)
We would add that satisfaction of the first criterion does require identification of the nature of the relief the subject of the hypothesised belief.
363	The judgment of Hely J in the leading case of St George Bank provides a helpful practical example of the sort of factual information about the nature of the relief sought that an applicant is required to identify in order to satisfy the first criterion, as a precursor to obtaining preliminary discovery.  In that case, St George Bank applied for preliminary discovery under the counterpart Federal Court rule, O15A r6, asserting that it has or may have the right to obtain relief in the Federal Court against Rabo Australia Ltd (Rabo) and/or its wholly owned subsidiary, Rabo Corporate Finance & Securities Pty Ltd (Rabo CF) in relation to losses suffered by St George Bank as a result of its having entered into a club participation agreement with Rabo on 16 November 2000 (the club participation agreement).  
364	In his judgment, Hely J noted that St George Bank contends there is ‘reasonable cause to believe’ that it has or may have the right to obtain relief from Rabo and his Honour then listed the potential causes of action which St George Bank had identified, as follows:
Potential causes of action
[24]	. . .
(a)	an action for damages for breach of the warranty set out in cl 10(d) of the club participation agreement;
(b)	an action for damages under s 52 of the Trade Practices Act 1974 (Cth) (‘the TPA’) and/or s 12DA of the Australian Securities and Investments Commission Act 2001 (Cth) (‘the ASIC Act’) in relation to representations made by Rabo CF concerning the financial position and performance of Parle, and its ability to comply with financial covenants in the future;
(c)	an action for damages under s 52 of the TPA and or s 12DA of the ASIC Act in relation to the failure to disclose the defects to St George when the defects were known to Rabo and/or Rabo CF, and when the circumstances were such that failure to disclose those matters was misleading and deceptive; and 
(d)	an action for damages under s 52 of the TPA and/or s 12DA of the ASIC Act based on the failure of Rabo CF and/or Rabo to disclose to St George facts which were known to them and which were material to St George’s assessment of Parle’s financial position and creditworthiness.  That non-disclosure may also found a claim for breach of fiduciary duty upon the basis that Rabo was in a position analogous to that of a lead banker in a syndicated loan (see UBAF Ltd v European American Banking Corp [1984] QB 713; [1984] 2 All ER 226) and by virtue of the following facts:
(i)	St George was being asked to indemnify Rabo in respect of amounts then owing but unpaid to Rabo by Parle (see cll 3.1–3.4 of the club participation agreement);
(ii)	Rabo held and would continue to hold (partly for St George’s benefit) all of the securities given by Parle in relation to the amounts the subject of the club participation agreement;
(iii)	Rabo was offering to act as agent for St George in relation to many aspects of the facilities afforded to Parle, including in relation to Parle’s compliance with facility limits and financial covenants (see, for example, cl 6.2 of the club participation agreement); and
(iv)	Rabo was proposing that St George share with Rabo the profits to be made from jointly financing Parle.
365	When summarising the relevant principles that emerge from the authorities in which the proper application of O 15A r 6 has been considered, Hely J explained the relevant concept of ‘belief’ embodied in the rule, as follows:
Order 15A r 6 — relevant principles
. . .
[26]	The following propositions emerge from the authorities in which the proper application of O 15A r 6 has been considered by judges of this court:
. . .
(d)	belief requires more than mere assertion and more than suspicion or conjecture.  Belief is an inclination of the mind towards assenting to, rather than rejecting a proposition.  Thus it is not sufficient to point to a mere possibility.  The evidence must incline the mind towards the matter or fact in question.  If there is no reasonable cause to believe that one of the necessary elements of a potential cause of action exists, that would dispose of the application insofar as it is based on that cause of action: John Holland Services Pty Ltd v Terranora Group Management Pty Ltd [2004] FCA 679; BC200403021 at [13], [14], [17] and [73];
(e)	while uncertainty as to only one element of a cause of action might be compatible with the “reasonable cause to believe” required by subpara (a), uncertainty as to a number of such elements may be sufficient to undermine the reasonableness of the cause to believe: Glowatzky v Insultech Group Pty Ltd (1997) 39 IPR 215;
. . .
366	In St George Bank, Hely J observed that the major contest between the parties in the case was as ‘as to whether the evidence establishes the elements prescribed in subpara (a) of the rule’.  Accordingly, his Honour turned to consider individually each of the possible causes of action foreshadowed.  
367	For present purposes, Hely J’s assessment of the foreshadowed claim for damages under s 52 of the TPA (set out in subpara [24](b) of the extract of ‘Potential causes of action’ above) suffices to demonstrate what may be regarded as a proper approach to the application of the relevant principles, and as one that accords with the approach outlined by the Full Federal Court in Telstra Corp.  His Honour stated:
The claim in [24](b) above
[33]	St George’s evidence establishes that there is reason to believe that Rabo and/or Rabo CF made representations to St George as to future matters, including as to Parle’s likely financial performance if St George and Rabo entered into the arrangement envisaged by the club participation agreement, and as to the likelihood that Parle would be able to comply with financial covenants thereafter.
[34]	Those representations were actionable at the suit of St George, unless Rabo and/or Rabo CF had reasonable grounds for making the representations: ASIC Act s 12BB(1); TPA s 51A(1).  Further, Rabo and Rabo CF are deemed not to have had reasonable grounds for making representations with respect to future matters unless they adduce evidence to the contrary: ASIC Act 12BB(2); TPA s 51A(2).
[35]	It is unnecessary, for present purposes, to determine whether s 51A of the TPA and s 12BB of the ASIC Act have the effect of reversing the onus of proof: see R V Miller, Miller’s Annotated Trade Practices Act, 25th ed, Lawbook Co, Sydney, 2004, at [1.51A.37].  It is sufficient for present purposes to observe that as a consequence of the statutory scheme, St George may have the right to obtain relief from this court in relation to the representations as made by Rabo and/or Rabo CF, although that prima facie position may be defeated if Rabo and/or Rabo CF adduce evidence that they had reasonable grounds for making those representations.
[36]	One of the “relevant principles” referred to in [24] above is that preliminary discovery may be ordered in order to determine the strength of the opposition to a prima facie claim.
[37]	The nature of the relationship between Rabo and/or Rabo CF on the one hand, and Parle on the other, establishes that there is reasonable cause to believe, in terms of subpara (c) of the rule, that Rabo and/or Rabo CF have documents in their possession relating to whether representations as to the future made by Rabo and/or Rabo CF were soundly based.  Whether those documents would support or deny St George’s claim, inspection of them would assist St George in deciding whether or not to commence proceedings.
[38]	Discovery should thus be made of documents which satisfy that description.  It was agreed by both parties that I should, at this stage, confine myself to questions of principle, rather than embarking upon a consideration of any problems with the sufficiency of the description of the documents the discovery of which is sought in the application, as the parties expected that this could be sorted out by agreement once the question of principle is determined.
[39]	No submissions were put on behalf of the respondents as to any discretionary considerations which might militate against an order for preliminary discovery, if I came to the conclusion which I have reached.  
368	In those circumstances, Hely J was satisfied that the evidence put forward by St George sufficed to create ‘an inclin[ation of] the mind’ that St George may have a right to obtain relief in the Court.  And as his Honour made clear (in paragraph [38] above) where there is reason to believe that there are documents in the possession of the prospective defendant relating to the representations which may support or deny the potential claim and inspection of those documents would assist the applicant in deciding whether or not to commence proceedings, ‘[d]iscovery should thus be made of the documents which satisfy that description.’
369	Further, as the primary judge recognised in the Principal Ruling, the fact that the representations allegedly made by Probuild were neither made to QIC, nor relied upon by QIC, does not operate to preclude QIC from having a reasonable cause to believe that it might have a right of action in respect of such representations.  As Lockhart J identified in Janssen-Cilag Pty Ltd v Pfizer Pty Ltd, when discussing the operation of the provisions of the Trade Practices Act 1974 (Cth) (TPA) that are the predecessor to the counterpart provisions of the ACL relied upon in the present case:
Section 82 is the vehicle for the recovery of loss or damage for multifarious forms of contravention of the provisions of Pts IV and V of the Act.  It is important that rules laid down by the courts to govern entitlement to damages under s 82 are not unduly rigid, since the ambit of activities that may cause contraventions of the diverse provisions of Pts IV and V is large and the circumstances in which damage therefrom may arise will vary considerably from case to case.
What emerges from an analysis of the cases (and there are many of them) is that they do not impose some general requirement that damage can be recovered only where the applicant himself relies upon the conduct of the respondent constituting the contravention of the relevant provision. 
Also, a perusal of the provisions of Pts IV and V, the contravention of which gives rise to an entitlement to an applicant for compensation for loss or damage, points to the conclusion that applicants may claim compensation when the contravener's conduct caused other persons to act in a way that led to loss or damage to the applicant. 
. . .
The use of the preposition “by” in s 82(1) is important; it indicates the requirement that there be a sufficient cause or link between the respondent's conduct and the recoverable loss or damage: see Brown v Jam Factory Pty Ltd (1981) 53 FLR 340 at 350-351; Elna Australia Pty Ltd v International Computers (Aust) Ply Ltd (No 2) (1987) 16 FCR 410 at 418.  “By” is used in s 52(1) in the sense of “by reason of” or “as a result of”: see Munchies Management Ply Ltd v Belperio [1989] ATPR 50,026 at 50,037.  Loss or damage must directly result from or be caused by the respondent's conduct.  The respondent's conduct must be the real or direct or effective cause of the applicant's loss; it must have been “brought about by virtue of” the conduct which is in contravention of s 52: see Elders Trustee & Executor Co Ltd v EO Reeves Pty Ltd (1988) 20 FCR 164; Kabwand Pty Ltd v National Australia Bank Ltd [1989] 11 ATPR 50,367 at 50,378 . . . 
. . . 
Whilst the applicant's loss or damage must be caused by the respondent's misleading or deceptive conduct, I see nothing in the language of the Act or its purpose to warrant the suggestion that the right of an applicant for damages under s 82 is confined to the case where he has relied upon or personally been influenced by the conduct of the respondent which contravenes the relevant provision of Pt IV or Pt V of the Act. 
. . .
Section 82(1) should not be given a restricted meaning to be available only to the person who suffers loss or damage by reason of his own reliance upon the representations which constituted the relevant contravention of Pt IV or V; nor for that matter should it be given an extended meaning which strains the language used by the legislature.  But a person who suffers damage by reason of or as a result of the conduct of the contravener (albeit that that person does not himself rely upon the representations) is not to strain the language of the subsection, but to interpret it according to its ordinary and natural meaning.  For a person to recover under the section he must suffer loss or damage by reason of or as a result of the contravention. There is nothing unduly wide about that.
370	In the same vein, the more recent decision of McMurdo J in BHP Coal Pty Ltd v O & K Orenstein & Koppel AG (BHP Coal) demonstrates an instance where a ‘co-venturer’ (the seventh plaintiff) in a mining joint venture was found to be entitled to damages against the defendant pursuant to s 82 of the TPA, in circumstances where his Honour found ‘the nature of the seventh plaintiff’s loss was identical to that suffered by the other plaintiffs’, which were its co-venturers that had relied upon advice that was misleading or deceptive.  His Honour outlined the (different) factual position as it applied in the case of the seventh plaintiff, which was not a joint venturer in October 1984, relevantly as follows:
[213]	The plaintiffs must prove that they have suffered loss by this conduct, that is to say by the making of the misrepresentations.  In this there is a potential difference between the position of those plaintiffs who were Joint Venturers in 1984, and that of the seventh plaintiff.  For the moment I shall not include it in referring to the plaintiffs.  Mr Black said that Utah relied solely on O&K in relation to the 1984 modifications.   . . .
. . .
[215]	Accordingly, there was reliance upon the alleged representations and in particular upon the represented fact that Dr Fleischhaker had exercised appropriate care and skill in his design.  The plaintiffs’ losses were caused by at least that misrepresentation because the provision of this design absent that implied representation would have resulted in the design not being accepted by Utah and its procuring a further design which was the result of due care and skill.  
[216]	I return to the position of the seventh plaintiff.  As a part owner of the BWE [Bucket Wheel Excavator] when it collapsed, it undoubtedly suffered losses of the same kind as those suffered by its co-venturers and for which they are entitled to be compensated pursuant to s 82 of the Act.  There was no argument by the defendants that the seventh plaintiff is not entitled to damages under s 82 if its co-venturers are so entitled but the point must be considered.  The question is whether the seventh plaintiff is a person which suffered loss or damage by the conduct of O&K which breached s 52.  That conduct was in the nature of a misrepresentation but the seventh plaintiff was not a representee.  However that need not be fatal.  In Janssen-Cilag Pty Ltd v Pfizer Pty Ltd  Lockhart J said:
Section 82 is the vehicle for the recovery of loss or damage for multifarious forms of contravention of the provisions of Pts IV and V of the Act.  . . . [relevant passage is reproduced at paragraph 369 above]  . . .
This passage was cited with approval by Gummow J in Marks v GIO Australia Holdings Ltd and has been applied in many cases:  see e.g. Hampic Pty Ltd v Adams and McCarthy v McIntyre.  In Australia and New Zealand Banking Group Ltd v Pan Foods Company Importers and Distributors Pty Ltd, Winneke P, referring to Janzen-Cilag, said that the burden of proving the causative link between the conduct and the loss is not as easily discharged where the claimant is not an entity which has relied to its detriment upon misleading representations made directly to it.  In McCarthy v McIntyre, the Full Court of the Federal Court said that:
All that is necessary, in our opinion, is that there be a sufficient and direct link (ie causation) between the loss or damage alleged to have been suffered by the claimant and the misleading or deceptive conduct.  
. . .
[218]	In the case of the seventh plaintiff, it is unlikely that anyone on its behalf knew of the 1984 repairs or of O&K’s conduct in relation to them.  Unlike the other plaintiffs, the seventh plaintiff does not claim to have acted in some way, or not acted in some way, in reliance upon the exercise of due care and skill in O&K’s design of the repair solution.  Nevertheless the connection between the conduct and the loss suffered by the seventh plaintiff is relatively close.  The immediate consequence of O&K’s misleading conduct was, as I have found, that the then owners did not procure a careful repair solution and the BWE thereafter had an undue structural weakness.  It was susceptible to a sudden and catastrophic collapse which is exactly what happened in 2000.  When that occurred, the nature of the seventh plaintiff’s loss was identical to that suffered by the other plaintiffs.  It is difficult to see that the statutory purpose would be served by compensating those other plaintiffs but not the seventh plaintiff.  It has suffered an identical loss because its co-owners relied upon advice which was misleading or deceptive.  Its loss is thereby from a reliance upon that conduct, although the reliance was not its reliance.  Accordingly, the seventh plaintiff is entitled to damages against O&K pursuant to s 82.
371	Accordingly, the decision in BHP Coal further supports Lockhart J’s view that an applicant may claim compensation in circumstances where the alleged contravenor’s conduct caused other persons to act in a way that led to loss or damage to the applicant.
372	When the material before the Court in the present case (as outlined above) is viewed against the guidance given in the authorities as to what is required to manifest ‘reasonable cause to believe’, I share the primary judge’s view that there was insufficient evidence before the Court to establish reasonable cause to believe (or incline the mind towards the view) that the plaintiffs may have a right to obtain relief against Probuild or AIG based on any misleading or deceptive conduct.  In forming that view, I do not regard his Honour as having descended into an impermissible assessment of the merits of that claim, nor did he require QIC to establish a prima facie case.
373	As framed, Ground Four of the appeal concerns (only) the primary judge’s holding that the documents concerning the confirmation or denial of indemnity by the Primary PI Insurers under the Primary PI Policies should not be produced to QIC because QIC had not demonstrated that articulated representations may entitle it to a claim for misleading or deceptive conduct.  
374	In my view, Ms Morcom’s assertion in paragraph 57(b) of her First Affidavit, that the Co-Owners―
may have the right to obtain relief against Probuild for misleading or deceptive conduct contrary to section 18 of Schedule 2 of the Competition and Consumer Act 2010 (Cth) (the Australian Consumer Law), on the basis of representations made by Probuild, 
falls well short of demonstrating a factual basis for any reasonable cause to believe that QIC has or may have a right to obtain relief in the Court against Probuild.   Even accepting that, as Riordan J stated in Alex Fraser, ‘a reasonable suspicion, conjecture or assertion may each fall within the ambit of a reasonable belief’, in the present case there is no supporting evidence advanced on behalf of the Co-Owners that is capable of demonstrating the ‘reasonableness’ of Ms Morcom’s assertion.  As Lindgren J explained in Glencore International AG v Selwyn Mines Ltd (recs and mgrs. Apptd) for an applicant to demonstrate or make out reasonable cause to believe ‘there must be some tangible support that takes the existence of the alleged right beyond mere “belief” or “assertion” by the applicant’.  In Telstra Corp, the Full Federal Court reiterated and endorsed Lindgren J’s view and added ‘that satisfaction of the first criterion does require identification of the nature of the relief the subject of the hypothesised belief.’
375	In my view, in circumstances where QIC is seeking to pursue a claim for damages or compensation as a result of alleged conduct of Probuild in contravention of s 18 of the ACL, but the relevant representations were not made to QIC or relied on by QIC, it is necessary on an application for preliminary discovery for QIC to adduce evidence demonstrating the link between Probuild’s (alleged) contravening conduct and the loss or damage suffered by QIC so as to provide some tangible support for the asserted ‘reasonable cause to believe’ that QIC may have the right to obtain relief in the Court pursuant to s 236 of the ACL.
376	Further, in the case of QIC’s claim against AIG, as noted earlier, the affidavit material of Ms Morcom that was filed before the primary judge does not advance any factual basis for demonstrating that QIC may have a reasonable cause to believe (or incline the mind towards the view) that QIC may have a right to obtain relief against AIG based on any misleading or deceptive conduct on the part of Probuild.
377	Given the views I have reached on Ground Four, it is not necessary to deal with any of the subsidiary arguments advanced by AIG.
Arguments on AIG’s notice of contention
378	While neither Ground One nor Ground Four of the appeal has been allowed, thus rendering it unnecessary to address AIG’s notice of contention, I propose, for completeness, to record the substance of the arguments that were advanced by the parties in respect of the grounds set out in AIG’s notice of contention, lest the matter be pursued further.  
379	Rule 77.06.8 of the Rules makes provision for the filing of a notice of contention by a party to an appeal from a judgment or order of an Associate Judge referred to in r 77.06.
380	As noted earlier, AIG filed a notice of contention in the appeal proceeding in which it contends that if either of the first or fourth grounds of appeal should be allowed, the decision of the primary judge, as contained in the Principal Ruling and August Ruling, should be affirmed on alternative grounds of fact or law which were not decided in the Court.  Two grounds are raised, as follows:
Grounds:
1	If Ground One of the appeal is allowed, the Court should nonetheless affirm the Associate Judge’s finding on the basis that the appellants have sufficient information to enable them to decide whether to commence a proceeding in the Court to obtain relief against AIG in respect of the 2020-2021 and 2021-2022 Primary PI Policies.
2	If Ground Four of the appeal is allowed, the Court should nonetheless affirm the Associate Judge’s finding that the documents concerning the confirmation or denial of indemnity by Primary PI Insurers under the Primary PI Policies should not be produced to the second appellant [QIC] on the basis that the second appellant has not, by its statement of claim filed in proceeding S ECI 2023 00960, or otherwise, established that it: (a) has reasonable cause to believe that it may be entitled to relief against Probuild Constructions (Aust) Pty Ltd (Subject to a Deed of Company Arrangement); (b) further or alternatively, does not have sufficient information to enable it to decide whether to commence a proceeding to obtain that relief.
381	In response, the appellants submit that neither of the grounds of contention should be accepted by the Court, in essence because:
(1)	in relation to the first ground of the notice of contention:
(a)	the Co-Owners have explained how the documents under the 2020-2021 and 2021-2022 Primary PI Policies bear upon the decision to be made by the Co-Owners and how, in the absence of those documents, the Co-Owners have insufficient information to decide whether to commence proceedings against AIG; and
(b)	nothing in s 54 of the Insurance Contracts Act 1984 (Cth) gainsays those matters;
(2)	in relation to the second ground of the notice of contention:
(a)	the invitation by AIG for the Court to interrogate the merits of QIC’s claim for misleading or deceptive conduct is impermissible in the light of the relevant authorities (which are set out in the Co-Owner’s written submissions in support of their notice of appeal);
(b)	even if the merits were relevant, AIG’s submissions rest on an unduly narrow approach to the issues of causation and reliance;
(c)	QIC has established that it does not have sufficient information to decide whether to commence proceedings against AIG, and this matter is not altered by the commencement of proceedings against Probuild; and
(d)	the Co-Owners’ submissions and evidence explain why the documents sought should be produced to QIC and the Co-Owners continue to rely on those matters.
Contention One:	The appellants have no entitlement to notifications under later policy periods
AIG’s submissions
382	This ground of contention only arises for consideration if the Court forms the view that the primary judge erred in holding that written notifications and confirmations or denials of indemnity under the Primary PI Policies for the later policy years, being the 2020-2021 and 2021-2022 policy years, should not be discovered because the documents sought were not relevant and did not relate to the question of whether the appellants had the right to obtain relief.  In that event, AIG submits that the Court should hold that it is not required to discover the documents sought under the 2020-2021 and 2021-2022 Primary PI Policies because the appellants have sufficient information to enable them to decide whether to commence a proceeding in the Court to obtain that relief.
383	AIG relies upon the fact that in August 2023, AIG made discovery to both appellants of each of the Primary PI Policies, by consent, pursuant to paragraph 1 of the order made by his Honour on 22 August 2023.  AIG observes that the appellants are aware of the notifications that they sent to Probuild in relation to the Stage 7 Works, and they are aware also that indemnity has been granted to Probuild under the 2019-2020 Primary PI Policy.  In those circumstances, AIG submits that:
5	The appellants do not need notifications that Probuild may have made to the Primary PI Insurers in the 2020-2021 or 2021-2022 policy years or documents constituting confirmation or denial of indemnity under the Primary PI Policies for those years in order to decide whether to commence a proceeding against the Primary PI Insurers in respect of cover for those two policy periods.
6	Further, the appellants have the benefit of the High Court’s decision in FAI General Insurance Co Ltd v Australian Hospital Care Pty Ltd, in which the majority held that in respect of ‘claims made and notified’ insurance policies, section 54(1) of the Insurance Contracts Act 1984 (Cth) operates to cure a failure on the part of the insured to notify the insurer of a claim made by a third party.  That is, the failure to notify is an omission to which section 54(1) applies.
384	Accordingly, AIG contends that the appellants cannot establish any entitlement to an order for preliminary discovery of documents insofar as they relate to the 2020-2021 or 2021-2022 policy periods, regardless of whether they are notifications made by Probuild to the Primary PI Insurers or confirmations or denials of indemnity by those insurers under the 2020-2021 or 2021-2022 Primary PI Policies.
The appellants’ submissions
385	The appellants’ contend that AIG’s submissions on the first ground of contention should not be accepted.  
386	First, they say, AIG asserts that the appellants do not need notifications that Probuild may have made to the Primary PI Insurers in the 2020-2021 or 2021-2022 policy years or documents constituting confirmation or denial of indemnity under the Primary PI Policies for those years in order to decide whether to commence a proceeding against the Primary PI Insurers in respect of cover for those two policy periods.  The appellants understand this assertion to be based on AIG’s view that the Co-Owners have the benefit of the High Court’s decision in Australian Hospital Care to the effect that in respect of ‘claims made and notified’ insurance policies, such as the policies in question here, s 54(1) of the Insurance Contracts Act operates to cure a failure on the part of the insured to notify the insurer of a claim made by a third party. 
387	The appellants submit that they have explained how the documents under the Primary PI Policies for the later years bear upon the decision to be made by them, and how, in the absence of those documents, they have insufficient information to decide whether to commence proceedings against AIG.  They have also filed the Third Morcom Affidavit which, they say, again explains these matters.  They submit that if the Court accepts the submissions and evidence made on behalf of the Co-Owners, that provides an immediate answer to this ground of the notice of contention.
388	The appellants dispute the notion that s 54(1) of the Insurance Contracts Act is determinative of the issue.  They contend it is ‘inherent in AIG’s submissions as to the relevance and effect of s 54 of the Insurance Contracts Act that whether there were notifications for the later years is irrelevant to the decision whether to commence proceedings’ and submit that such a proposition is an ‘overly broad statement of principle.’  That is because, so the appellants contend:
The authorities concerning s 54(1) have been notoriously difficult to understand and to reconcile.  The highest the proposition may be put is that AIG may be prevented from refusing to pay a claim because Probuild failed to notify AIG in the relevant policy year.  But, that being so, the remainder of s 54 operates to reduce AIG’s liability to the extent of any prejudice. AIG has not conceded that s 54 prevents it from refusing to a pay a claim because of any failure to notify by Probuild and that it has not suffered any prejudice which may reduce its liability.  The consequence is that s 54 does not provide an answer, let alone a complete answer, to the reasons why the Co-Owners submits that these documents should be discovered.  Even if the Court (impermissibly) descended to a merits analysis in order to conclude that s 54 may assist the Co-Owners, the subject documents would assist the Co-Owners to make the decision whether to commence proceedings.
389	In the circumstances, the appellants submit that the first ground of the notice of contention fails.
AIG’s reply submissions
390	In its reply submissions, AIG points out that (appeal) Ground One is concerned with the issue of ‘whether AIG should be ordered to give preliminary discovery of the written notifications under the ‘Contested PI Policies’ [i.e. for the 2020-2021 or 2021-2022 policy years], in distinction to the written notifications made under the 2019-2020 Primary PI Policy which the appellants already have.’
391	AIG submits that the Court should reject the appellants’ submissions and evidence on Ground One for the reasons set out in AIG’s submissions on the Notice of Appeal at paragraphs 8 to 35, which set out in detail why:
(a)	the appellants have not established any error in the [primary judge’s] ruling that the appellants did not establish reasonable cause to believe they may have a right to relief under the Contested PI Policies, and the corresponding irrelevance of the written notifications under the Contested PI Policies; and
(b)	the totality of the evidence, even if the evidence in [15] of the Third Morcom Affidavit is accepted, does not advance the appellants’ case on ground one.  In particular, when the “Prior Claims and Circumstances” exclusion in the Primary PI Policies, including the Contested PI Policies, and the appellants’ 18 February 2020 reservation of rights in respect of all defects and deficiencies in the Stage 7 Works are examined in the light of the High Court’s reasons in FAI General Insurance Co Ltd v Australian Hospital Care Pty Ltd, it is plain that the [primary judge’s] conclusion in Principal Ruling [79] is correct (see AIG Appeal Submissions at [25]- [37]).
392	In those circumstances, AIG says it follows that, with the information that the appellants already have, including the terms of each of the Primary PI Policies, and ‘their awareness that AIG has granted indemnity under the first of those policies and has taken carriage of Probuild’s defence in the Substantive Proceeding, the Court should find that the appellants do not lack the requisite sufficient information for the purposes of rule 32.05(b).’
393	Further, AIG observes, there remains the independent basis for his Honour’s refusal to order preliminary discovery on discretionary grounds (for protection of confidential information).
Contention Two:  QIC is not entitled to preliminary discovery
AIG’s submissions
394	This ground of contention pertains to Ground Four of the Notice of Appeal, which is directed to the relief under r 32.05 that QIC seeks against AIG.
395	AIG submits that if Ground Four is allowed, the Court should nonetheless affirm the primary judge’s finding on the basis that QIC has not, by its statement of claim filed in proceeding S ECI 2023 00960, or otherwise, established: (a) that it has reasonable cause to believe that it may be entitled to relief against Probuild, and (b) further or alternatively, that it does not have sufficient information to enable it to decide whether to commence a proceeding to obtain that relief.
396	As was noted earlier, the primary judge found that neither Wadren nor QIC had established reasonable cause to believe that they may have a right to obtain relief against either Probuild or AIG for alleged misleading or deceptive conduct because of an insufficiency of evidence regarding misrepresentations made by Probuild.  However, his Honour went on to make an ‘alternative finding’ to the effect that, if he was wrong and there was sufficient evidence that Probuild made relevant misrepresentations, QIC would not be precluded from having reasonable cause to believe it might have a right of action in respect of such representations simply because the representations were not made to QIC and, in that sense, that QIC had not relied on them (Alternative Finding).  In so doing, his Honour relied on BHP Coal Pty Ltd v O & K Orenstein & Koppel AG [2008] QSC 141 at [216]-[218], and authorities cited therein.
397	AIG submits that his Honour’s Alternative Finding ‘stops short of complete analysis.’  It says: 
12	Respectfully, the Alternative Finding stops short of complete analysis.  Whilst the authorities cited support the proposition that QIC may not need to establish reliance in order to found reasonable cause to believe it has a right of relief in respect of any misrepresentations, causation must still be established.  That is, there must be “a sufficient and direct link (ie causation) between the loss or damage alleged to have been suffered by the claimant and the misleading or deceptive conduct”.  In a case of indirect reliance and causation, ‘the causation inquiry required to be undertaken…entails a determination of whether the loss or damage is the “real or direct or effective cause of the applicant’s loss”…The inquiry is whether the plaintiff suffered loss or damage by reason of, or as a result of, the contravention…”  Moreover, the burden of proving the causative link between the conduct and the loss is not as easily discharged where the claimant is not an entity which has relied to its detriment upon misleading representations made to it.
398	If, contrary to AIG’s submissions, the Court finds that Ground Four is made out, AIG contends that ‘to the extent that QIC in fact believes that any representations made by Probuild may give it a right to obtain relief against either Probuild or the Primary PI Insurers, there is no basis for the Court to conclude that that belief is reasonable.’  In this regard, AIG points to the misleading or deceptive conduct case that QIC pleads against Probuild in the new proceeding at paragraphs 237 – 246 of the statement of claim.  QIC’s claim, which effectively piggybacks on Wadren’s claim, continues and asserts that in the premises, QIC as subsequent co-owner and a person that has suffered loss or damage because of Probuild’s conduct in contravention of s 18 of the ACL, is entitled to damages pursuant to s 236 of the ACL.  AIG contends that:
14	The statement of claim is devoid of material facts sufficient to establish a proper basis for pleading that any misrepresentation by Probuild caused QIC loss or damage.  There is no pleading linking QIC’s alleged loss with the fact that it is a subsequent co-owner of the shopping centre.  No material facts are pleaded, nor is there any other material before the Court, that creates the ‘inclination of the mind’ necessary to establish reasonable cause that it may be entitled to relief against Probuild for misleading or deceptive conduct.
399	Further, and in any event, AIG submits that QIC cannot meet the second limb of the preliminary discovery test because it has sufficient information to decide whether to commence proceedings against Probuild and, in fact, has done so.  That is to say, having regard to the obligations imposed on parties and their legal practitioners by s 42 of the Civil Procedure Act, it is to be inferred that QIC and its legal representatives considered that QIC had a proper basis to make the claim it has made against Probuild for misleading or deceptive conduct, and AIG submits that ‘[a]ny claim against the Primary PI Insurers rises or falls with that claim.’
400	AIG says that even if it is wrong about that, ‘QIC has been armed with sufficient information to enable it to decide whether to make a claim against the Primary PI Insurers’ in respect of coverage under the 2020-21 and 2021-22 Primary PI Policies, in that:
•	QIC is aware that Primary PI Insurers have granted indemnity under the 2019- 2020 Primary PI Policy and is conducting Probuild’s defence in the new proceeding; and
•	QIC also has the wording of the Primary PI Policies for all three policy years and is accordingly aware of their terms, conditions and exclusions.
401	AIG submits that QIC has failed to articulate why, in the face of the information it has, it is necessary for QIC to have access to documents comprising confirmation or denial of indemnity under the Primary PI Policies in order to determine whether to commence a proceeding against the Primary PI Insurers.  While QIC asserts that the information is necessary for it to ‘make a prudent commercial assessment as to whether the cost and risk of litigation would be worthwhile’, AIG submits that ‘does not establish the requisite insufficiency, and it forms no part of the test under rule 32.05.’
402	Accordingly, AIG says that if Ground Four is made out, the primary judge’s decision to refuse to order that the Primary PI Insurers give QIC preliminary discovery of documents comprising confirmation or denial of indemnity under the Primary PI Policies should be affirmed ‘on the alternative basis that the requirements of rule 32.05(a) and/or (b) are not met’ for the reasons advanced by AIG above.
The appellants’ submissions
403	The appellants’ contend that none of the propositions advanced in AIG’s submissions on the second ground of contention should be accepted.  
404	The appellants take issue with the first two propositions AIG advances, concerning first, its argument that his Honour’s Alternative Finding ‘stops short of complete analysis’ and secondly, that there is an absence of material facts sufficient to establish a proper basis for pleading that any misrepresentation by Probuild caused QIC loss or damage and no pleaded linkage between QIC’s alleged loss and the fact that it is a subsequent co-owner.  The appellants submit that the first two propositions invite the Court to perpetuate the error made by the primary judge, ‘by interrogating, and forming a view, as to the merits of the claim that QIC has made against Probuild in respect of Probuild’s misleading or deceptive conduct’ and contend that the Court ‘should resist any invitation to treat this appeal as an appropriate forum for contesting the merits of QIC’s claim.’
405	But even if it were open to the Court to interrogate the merits of that claim, the appellants contend that AIG adopts an ‘unduly narrow approach to the questions of causation and reliance’, and submit that the more modern authorities ‘make it clear that QIC can satisfy the relevant causal requirement by establishing that it has suffered loss and/or damage by reason of a third party’s reliance on the misleading or deceptive statements’.  In that regard, the appellants say that ‘[t]he fact of reliance by Wadren on which QIC relies, is plainly and expressly pleaded’ and ‘[u]nless that claim is struck out, the Court should proceed on the basis that a claim with a proper basis has been made.’
406	Further, in this context, the appellants contend that AIG’s reliance on the fact that QIC has commenced proceedings against Probuild ‘misses the point’.  They submit:
The submissions, and evidence, before the Court is that QIC cannot make a decision whether to commence proceedings against AIG (albeit in respect of Probuild’s liability for misleading or deceptive conduct) on the basis that the insurance policies respond to that liability and there are sufficient proceeds to mean that it is appropriate, from both a commercial and juridical perspective, for proceedings to be commenced against AIG.  In this way, QIC falls squarely within the circumstance adverted to in Hooper v Kirella Pty Ltd:
Fifthly, an order may be made in favour of an applicant who already has available evidence establishing a prima facie case for the granting of relief … But the applicant, after having made all reasonable inquiries, must not have sufficient information to enable a decision to be made whether to commence a proceeding in the Court to obtain relief against the prospective respondent: see par (b). The absence of sufficient information is to be assessed objectively …
407	Finally, QIC otherwise relies on the submissions and evidence filed in support of Ground Four, which QIC submits provides a complete answer to the second ground of contention. 
408	Accordingly, for these reasons, the appellants submit that the second ground of contention fails.
AIG’s reply submissions
409	AIG rejects the appellants’ submission that in the second ground of contention it has invited the Court to engage in merits review of QIC’s pleaded claim in misleading or deceptive conduct.  Rather, AIG says that submission repeats the appellants’ submission in respect of Ground Four of the appeal, and ‘wrongly assimilates the identification of facts which may reasonably give rise to a right to obtain relief (the “reasonable cause to believe” aspect) with the prospects of making out such relief (the merits).’  In this regard, AIG relies on its submissions on Ground Four.
410	AIG contends that, as its submissions on the Notice of Appeal make clear, ‘reliance and causation are related but distinct concepts’, however the appellants’ submissions elide that distinction and ‘erroneously equate bare claims of reliance with causation, citing five authorities’.  AIG submits that none of the cited passages supports the appellants’ submissions, and in fact tends against them.  In particular, AIG submits:
(a)	BHP Coal Pty Ltd v O & K Orenstein & Koppel AG at [216]-[218] (relied on by the Associate Judge), supports the distinction.  McMurdo J quoted from Australia and New Zealand Banking Group Ltd v Pan Foods Company Importers and Distributors Pty Ltd, which is cited in the final sentence of paragraph 12 of AIG’s NOC Submissions, where it was said, “the burden of proving the causative link between the conduct and the loss is not as easily discharged where the claimant is not an entity which has relied to its detriment upon misleading representations made to it.”
(b)	Port Stephens Shire Council v Booth [2005] NSWCA 323 at [147] is directed to reliance on a misleading statement through an agent.  It is inapt to QIC’s pleaded case against Probuild.
(c)	Ingot Capital Investments Pty Ltd v Macquarie Equity Capital Markets Ltd (2007) 63 ACSR 1 at 133-134 [504] simply quotes from Port Stephens at [147].
(d)	Addenbrooke Pty Ltd v Duncan (No 2) (2017) 348 ALR 1 at 123 [499].  The first sentence of that paragraph is “Reliance is not a substitute for causation in misleading or deceptive conduct claims”.
(e)	Re HIH Insurance Ltd (2016) 335 ALR 320 at 340-341 [55].  That paragraph quotes from the decision in Ford Motor Company of Australia Ltd v Arrowcrest Group Pty Ltd (2003) 134 FCR 522 at [48], where Lander J relevantly found that the cases of Janssen-Cilag v Pfizer, Hampic v Adams, McCarthy v McIntyre and Marks v GIO stood for the proposition that “…an applicant may establish causation in such a case by proving that a third party relied upon the misrepresentations and that party’s reliance caused the applicant’s damage.” (emphasis added).
411	In respect of the appellants’ final substantive submission on the second ground of contention, to the effect that AIG has missed the point in contending that, by QIC having commenced the new proceeding against Probuild, it follows that QIC has sufficient information to determine whether to commence a proceeding against AIG.  AIG observes that the appellants rely on the submissions made in support of ground three of the appeal.  AIG elaborates by adding ‘that is, [the appellants] say that “QIC cannot make a decision whether to commence proceedings against AIG (albeit in respect of Probuild’s liability for misleading or deceptive conduct) on the basis that the insurance policies respond to that liability and there are sufficient proceeds to mean that it is appropriate, from both a commercial and juridical perspective, for proceedings to be commenced against AIG”.’
412	AIG submits that the appellants’ submission does not in fact grapple with AIG’s outline re notice of contention (1.12.2023) at [15] and, in any event, should be rejected for the same reasons AIG has addressed on Ground Three in AIG’s NoA submissions (14.12.2023), at [43]-[53].
413	AIG submits that, for the reasons set out above, if Grounds One to Four of the appeal are made out, then the reasoning AIG advances in its notice of contention should prevail.  
Conclusion
414	For the reasons set out above, I would dismiss each ground of appeal.
415	I will hear from the parties as to the appropriate form of order.

ANNEXURE A: Side-by-side comparison of the Rules

Rule 32.05 of the Supreme Court (General Civil Procedure Rules) 2015 (Vic)	Rule 7.23 of the Federal Court Rules 2011 (Cth)	Order 15A, r 6 of the Federal Court Rules 1979 (Cth) [now repealed]	
Rule 32.05 provides as follows:	Rule 7.23 provides as follows: 	Order 15A, r 6 provides as follows: 	
Discovery from prospective defendant 	Discovery from prospective respondent	Discovery from prospective respondent	
Where—	(1)	A prospective applicant may apply to the Court for an order under subrule (2) if the prospective applicant:	Where:	
(a)	there is reasonable cause to believe that the applicant has or may have the right to obtain relief in the Court from a person whose description the applicant has ascertained;	(a)	reasonably believes that the prospective applicant may have the right to obtain relief in the Court from a prospective respondent whose description has been ascertained; and	(a)	there is reasonable cause to believe that the applicant has or may have the right to obtain relief in the Court from a person whose description has been ascertained;	
(b)	after making all reasonable inquiries, the applicant has not sufficient information to enable the applicant to decide whether to commence a proceeding in the Court to obtain that relief; and	(b)	after making reasonable inquiries, does not have sufficient information to decide whether to start a proceeding in the Court to obtain that relief; and	(b)	after making all reasonable inquiries, the applicant has not sufficient information to enable a decision to be made whether to commence a proceeding in the Court to obtain that relief; and	
(c)	there is reasonable cause to believe that that person has or is likely to have or has had or is likely to have had in that person's possession any document relating to the question whether the applicant has the right to obtain the relief and that inspection of the document by the applicant would assist the applicant to make the decision—	(c)	reasonably believes that:
(i)	the prospective respondent has or is likely to have or has had or is likely to have had in the prospective respondent’s control documents directly relevant to the question whether the prospective applicant has a right to obtain the relief; and
(ii)	inspection of the documents by the prospective applicant would assist in making the decision.	(c)	there is reasonable cause to believe that that person has or is likely to have or has had or is likely to have had possession of any document relating to the question whether the applicant has the right to obtain the relief and that inspection of the document by the applicant would assist in making the decision;	
the Court may order that that person shall make discovery to the applicant of any document of the kind described in paragraph (c).	(2)	If the Court is satisfied about matters mentioned in subrule (1), the Court may order the prospective respondent to give discovery to the prospective applicant of the documents of the kind mentioned in subparagraph (1)(c)(i).	the Court may order that that person shall make discovery to the applicant of any document of the kind described in paragraph (c).