In Acciona Infrastructure Australia Pty Ltd v Zurich Insurance plc UK Branch [2026] NSWSC 185, Peden J rejected separate arguments from both parties that different parts of two referee reports determining liability and quantum for a material damage claim under an insurance policy, should not be adopted by the Court, with none meeting the "high bar" as required.
In 2013 Acciona entered into a D&C construct with the Department of Transport and Main Roads to upgrade a section of the Bruce Highway in QLD. In February and May 2015 severe weather events damaged work on the site. Acciona made claims for indemnity under a policy which covered the contract works for physical damage and demanded insurers pay the cost of repatriation of the works. Insurers accepted the policy responded to some of the damage claimed by declined to indemnity other parts, in particular "embankment costs".
The Court ordered a reference to determine Acciona's unresolved claim. In March 2026 the referee held a four day hearing. All documentary material was tendered without objection on the basis parties would make submissions as to weight. At the hearing Acciona claimed the Embankment was damaged by saturation of the fill. Insurers contended damage due to defective road fill and a contractual direction to replace the works. In May 2025 the referee delivered a report determining insurers must pay Acciona $2.11m as damages. In August 2025 a second report found Acciona was not entitled to interest under s 57 of the ICA because that claim had only been made plain during the hearing. Acciona and Insurers submitted the Court should not adopt the entirety of either report for different reasons.
Insurers argued the first report should not be adopted due to a denial of procedural fairness and a failure to provide sufficient reasoning. Her Honour rejected both arguments, finding that the referee was alive to both parties competing positions, as well as the complaint about "natural justice". Understanding that he was required to determine the issue of fairness to bot parties, which was "finely balanced", and understanding he was not bound by the rules of evidence, the referee found in favour of Acciona - but doing so did nor deny insurers any procedural fairness or involve error. Further, the referee's reasons were adequate and did not enliven a requirement to reconsider the evidence.
Acciona argued that the referee erred in not awarding interest under s 57. There was no clear formulation of the claim, pre-hearing, to the effect of that which was ultimately upheld. The claim was "riven with complexity" and that which succeeded was not first made in its totality until the reference hearing, and it was at the hearing that the insurers received all information in support of the claim. There was no error or misapprehension of the evidence or manifest unreasonableness. Further, it would not advance the overriding purpose for the Court to reexamine the evidence and issues already considered.