Tantallon Constructions Pty. Ltd. (in liq) v Santos GLNG
[2016] QDC 324
To print this judgment please return to the case and click on the PDF icon
next to the
case name. For court use, a full PDF copy is required or preferred.
Exit Distraction Free Reading Mode
Please Note: You are about to print a copy of the onscreen
version of
this judgment. For court use, a full PDF copy of the judgment is required or preferred. Please
return to
the case for PDF printing options.
- Unreported Judgment
- Tantallon Constructions Pty. Ltd. (in liq) v Santos GLNG[2016] QDC 324
- Add to List
Tantallon Constructions Pty. Ltd. (in liq) v Santos GLNG[2016] QDC 324
Tantallon Constructions Pty. Ltd. (in liq) v Santos GLNG[2016] QDC 324
DISTRICT COURT OF QUEENSLAND
CITATION: | Tantallon Constructions Pty Ltd (in liq) v Santos GLNG & Anor [2016] QDC 324 |
PARTIES: | TANTALLON CONSTRUCTIONS PTY LTD (ACN 159 235 131) (in liquidation) (plaintiff) v SANTOS GLNG (ACN 131 271 648) (first defendant) and SANTOS QLD UPSTREAM DEVELOPMENTS PTY LTD (ACN 158 698 027) (second defendant) |
FILE NO/S: | 3430/2014 |
DIVISION: | Civil |
PROCEEDING: | Application |
ORIGINATING COURT: | District Court at Brisbane |
DELIVERED ON: | 13 December 2016 |
DELIVERED AT: | Brisbane |
HEARING DATE: | 20 October 2016 |
JUDGE: | Reid DCJ |
ORDER: |
|
CATCHWORDS: | CONTRACTS – BUILDING, ENGINEERING AND RELATED CONTRACTS – REMUNERATION – STATUTORY REGULATION OF ENTITLEMENT TO AND RECOVERY OF PROGRESS PAYMENTS – where the plaintiff was engaged to perform building works – where the plaintiff allegedly served payment claims on the first defendant under the Building and Construction Industry Payments Act 2004 (Qld) – where the defendants did not serve payment schedules on the plaintiff – where the plaintiff subsequently entered into liquidation – whether a company in liquidation can be a ‘claimant’ under the Building and Construction Industry Payments Act 2004 (Qld) COSTS - adversarial costs of unsuccessful litigation brought by insolvent company - appropriateness of order against liquidator personally - whether indemnity costs should be ordered Building and Construction Industry Payments Act 2004 (Qld) ss 12, 100 Building and Construction Industry Security of Payment Act 2002 (Vic) ss 9, 14, 16 District Court of Queensland Act 1967 (Qld) s 31 Uniform Civil Procedure Rules 1999 (Qld) rr 17, 377, 658, 800 RJ Neller Building P/L v Ainsworth [2009] 1 Qd R 390, followed Facade Treatment Engineering Pty Ltd (in liq) v Brookfield Multiplex Constructions Pty Ltd [2016] VSCA 247, followed Knight v FP Special Asset Ltd (1999) 174 CLR 178 Kimtran Pty Ltd v Downie [2004] 1 Qd R 651, followed Mahaffey v Belar Pty Ltd (in liq) [1999] QCA 2, considered Colgate-Palmolive Company v Cussons Pty Ltd [1993] 46 FCR 225, considered Lexis Nexis, Civil Procedure Queensland, ‘Non-party paying costs’ (at September 2014), [679.5] |
COUNSEL: | N M Cooke for the plaintiff M H Hindman for the defendants |
SOLICITORS: | Rostron Carlyle Lawyers for the plaintiff Richard Baldock for the defendants |
Introduction
- [1]The plaintiff, in or about November 2013, entered into two contracts for the supply and installation of white goods into a building at Roma and for the supply of furniture and joinery works to buildings and mines at Roma and Injune. Whilst there is some dispute whether the contracts were with the first defendant or with the second defendant or, indeed, with both, that is not currently of importance.
- [2]Subsequently, work was performed by the plaintiff under each of those contracts. The plaintiff alleges it served a payment claim under the Building and Construction Industry Payments Act 2004 (Qld) (BCIPA) in relation to each contract and that the defendants did not serve a payment schedule in response as required by BCIPA. The plaintiff claims that as a result it was entitled to judgment in the amount of the payment claim and filed an application for summary judgment seeking judgment in such amounts.
- [3]It is common ground that after the purported service of the payment claims early in April 2014, the plaintiff went into administration on 8 April 2014 and went into liquidation on 22 March 2014.
- [4]In response to the administration, the second defendant terminated the contracts on 8 April 2014. It was not disputed that it was contractually entitled to do so.
- [5]Whilst there is dispute as to whether the contracts were with the first or second defendant; whether the payment claims on which the plaintiff relies were served as required by BCIPA; and whether the defendants in fact served payment schedules in response, those issues do not currently need to be resolved.
- [6]Before me, the plaintiff itself sought orders that its application for summary judgment be dismissed but that there be no order as to costs. The defendants also sought orders that the application for summary judgment be dismissed but also that the proceedings be permanently stayed and that the plaintiff pay the defendants’ costs of and incidental to the proceeding on the standard basis except that it be ordered that the plaintiff’s liquidator pay the defendants’ costs of and incidental to the application itself on the indemnity basis.
Legal Considerations
- [7]Against that background it is helpful to first consider two decisions, namely, RJ Neller Building Pty Ltd v Ainsworth [2009] 1 Qd R 390 (Neller) and Facade Treatment Engineering Pty Ltd (in liq) v Brookfield Multiplex Constructions Pty Ltd [2016] VSCA 247 (Facade). Judgment in this latter case was given only on 14 October 2016, a few days before the application before me.
- [8]In Neller, the respondent performed building work for the applicant, Ainsworth. It obtained an adjudication certificate pursuant to BCIPA, filed it under s 31 of the District Court of Queensland Act 1967 (Qld) and then obtained an enforcement warrant against Ainsworth’s property.
- [9]Ainsworth applied for a stay of the warrant pending determination of District Court proceedings against Neller for an order setting aside the adjudication and for damages for breach of the building contract. That application was dismissed. The subsequent appeal by Ainsworth was also dismissed. The case is important for its discussion of the objects and framework of BCIPA. In his judgment, with whom Fraser JA and Fryberg J agreed, Keane J first considered the prospects of success of Ainsworth in its action to set aside the adjudication. His Honour said at [36] of his reasons:
I do not consider that the principal substantive argument to be advanced by Ainsworth … can be said to enjoy such strong prospects of success as to displace the consideration that the evident intention of the BCIP Act that an adjudication should have effect unless and until an inconsistent decision is made by a court of competent jurisdiction.
- [10]His Honour then considered issues associated with the intention and purpose of BCIPA. His Honour said at [39] it was:
…evidently the intention of the BCIP Act…that the process of adjudication established under that Act should provide a speedy and effective means of ensuring cash flow to builders from the parties with whom they contract…in a commercial…context. This intention reflects an appreciation on the part of the legislature that an assured cash flow is essential to the commercial survival of builders.
- [11]His Honour continued:
[40] The BCIP Act proceeds on the assumption that the interruption of a builder’s cash flow may cause the financial failure of the builder before the rights and wrongs of claim and counterclaim between builder and owner can be finally determined by the courts. On that assumption, the BCIP Act seeks to preserve the cash flow to a builder notwithstanding the risk that the builder might ultimately be required to refund the cash in circumstances where the builder’s financial failure, and inability to repay, could be expected to eventuate. Accordingly, the risk that a builder might not be able to refund moneys ultimately found to be due to a non-residential owner after a successful action by the owner must, I think, be regarded as a risk which, as a matter of policy in the commercial context in which the BCIP Act applies, the legislature has, prima facie at least, assigned to the owner.
[41] The mere existence of the very kind of risk on which the provisions of the BCIP Act in favour of the builder are predicated would not ordinarily be sufficient of itself to justify a stay of an execution warrant based on the registration of a certificate of adjudication. There may, of course, be other circumstances, which, together with this risk, justify the staying of a warrant of execution based on the registration of an adjudication certificate. For example, the builder may have engaged in tactics calculated to delay the ultimate determination of the rights and liabilities of the parties so as unfairly to increase the owner’s exposure to the risk of the builder’s insolvency. Or the builder may have restructured its financial affairs after the making of the building contract so as to increase the risk to the owner of the possible inability of the builder to meet its liabilities to the owner when they are ultimately declared by the courts. In this case there are no such circumstances.
- [12]These important statements concerning the purpose of BCIPA must be considered against the particular facts of this case. Rather than there being a risk that the plaintiff might not be able to refund to the defendants any sum paid by them pursuant to the interim payment arrangements prescribed by BCIPA to preserve the builder’s cash flow, the fact of the plaintiff’s liquidation means that risk has in fact eventuated. Furthermore, because of that liquidation, and the fact that such liquidation means that the plaintiff is unable to conduct building construction work, issues of cash flow, which underpin the purpose of BCIPA, are not of importance.
- [13]In the case of Facade, Facade had issued payment claims not paid or fully paid by Multiplex. Subsequently, Facade was placed into liquidation. The liquidators sought to enter judgment against Multiplex pursuant to the Victorian Building and Construction Industry Security of Payment Act 2002 (Vic), (BCISPA). That Act is very similar to BCIPA.
- [14]The trial judge dismissed Facade’s proceeding (see [2015] VSC 41). Facade appealed.
- [15]The Court of Appeal, in a joint judgment, highlighted the fact that the right to payments under s 9(1) of the BCISPA (equivalent to s 12 of the BCIPA) was a right in those who were able to perform actions under the construction contract. Their Honours said at [78]:
Therefore, it is open to interpret s 9(1) in two ways. The first is that it is available to any person who has undertaken to carry out construction work or supply related goods and services under a construction contract. The second is that it is only available to a person who not only has undertaken to carry out construction work or supply related goods and services, but also continues to perform such services.
- [16]Their Honours adopted the second, more restrictive interpretation of s 9 and said at [79]:
Adopting the narrower interpretation of s 9(1) would mean that the term ‘the claimant’ is only apt to cover persons who still carry out construction work or who still supply related goods and services pursuant to the construction contract. Consequently, once a winding-up order is made in respect of a builder, such that it only continues to exist for the purpose of being wound up, it would cease to be a claimant for the purposes of Pt 3 of the BCISP Act. It would therefore lose the right to issue payment claims under s 14, or recover unpaid amounts pursuant to s 16(2).
- [17]The rationale of their Honours’ reasoning applies, in my view, equally to BCIPA. Moreover, it is entirely consistent with the judgment of the Court of Appeal in Neller. Both judgments highlight that the “driving concern underpinning the…Acts was cash-flow problems within the construction industry” (see Facade at [87]). At [84] of Facade the court said:
In our view, therefore, s 9(1) creates an entitlement to progress payments only for persons who have undertaken to, and continue to, carry out construction work or supply related goods and services. The term ‘the claimant’ used throughout Pt 3 is commensurately limited. Consequently, the payment regime in Pt 3 of the BCISP Act is not available to companies in liquidation, since such companies cannot carry out construction work or supply goods and services, and thus do not satisfy the requirements for ‘a claimant’.
Conduct of the Parties
- [18]To understand the rival contentions concerning the resolution of the matter, especially in relation to costs, it is necessary to consider the correspondence between the parties. After the plaintiff entered into liquidation these proceedings were commenced on 4 September 2014. After close of proceedings, the plaintiff filed its application for summary judgment on 26 September 2016. After having been served with the application, the defendants’ solicitor, on 5 October 2016, wrote to the plaintiff’s solicitors in these terms:
By the proceeding the plaintiff seeks to enter judgment to recover the amount of two payment claims purported to be made under BCIPA in 2014, against either or both of the defendants, in default of the defendants having provided payment schedules in response to the payment claims. That might ordinarily be a reasonable case for a summary judgment application. The difficulty for the plaintiff however is mere days after the date of those payment claims the plaintiff entered into voluntary administration and then was placed in liquidation (by the creditors – plainly in the circumstances of the plaintiff’s insolvency).
BCIPA implements an interim payment scheme with the objective of assisting in cash flow to contractors. Even if the plaintiff could otherwise establish an entitlement to judgment pursuant to s. 18(5) (as it then stood) the judgment would be liable to be stayed (rule 800 UCPR) because the effect of payment to the plaintiff by the defendants in this case would be to turn an interim payment into an irrecoverable final payment, by reason of the plaintiff’s liquidation (which is not merely a risk but has in fact occurred – see RJ Neller Building Pty Ltd v Ainsworth [2009] 1 Qd R 390 at [39]-[41]). The stay would operate until the true contractual position between the parties was ascertained, which would then replace the judgment concerning an interim payment (s 100(3)(b) BCIPA).
In those circumstances, the proceeding should be reframed by the plaintiff into a claim for the amount it contends is finally due and owing to it by the first and/or second defendants – rather than seeking what is only an interim payment which, in the circumstances, will not be permitted to be enforced.
The defendants therefore make an open offer for your client to consent to the following orders:
- The application is dismissed with no order as to costs.
- The plaintiff has leave pursuant to rule 377(c) UCPR to amend the claim.
- The plaintiff is to file and serve an amended claim and statement of claim by Wednesday 2 November 2016.
- The defendants are to file and serve a defence or defence and counterclaim to the amended claim and statement of claim by Wednesday 30 November 2016.
- The plaintiff is to file a (sic) serve a reply or reply and answer by Wednesday 14 December 2016.
The offer is open for acceptance in writing until 5pm on Monday, 10 October 2016.
- [19]The time for acceptance of the offer was of course limited by the fact that the application was an application for summary judgment, returnable on 20 October 2016, and that the defendants would need to prepare and file affidavit or other material prior to that time. In my view, the contentions set out in that letter are correct. The offer contained therein was entirely appropriate and, in my view, ought to have been accepted by the liquidator. If it had, the hearing before me of the application that the plaintiff itself now seeks to have dismissed would have been obviated and the real issue in dispute between the parties could have been advanced by delivery of appropriate pleadings.
- [20]Rather than accepting the offer however, the plaintiff did not respond other than to make an offer on 18 October which I interpret to have been an offer to resolve the whole of the issues between the parties, including issues not currently encompassed by the current proceeding.
- [21]On 19 October 2016 at 9.20am, the defendants’ solicitor again wrote to the plaintiff’s solicitors in the following terms:
I refer to my letter to you of 5 October 2016 to which there has been no reply.
The position I have expressed is supported by recent Court of Appeal authority – see Facade Treatment Engineering Pty Ltd (in liq) v Brookfield Multiplex Constructions Pty Ltd [2016] VSCA 247.
I consider your client’s application is doomed to fail, justifying an award of indemnity costs in my client’s favour.
The respondents make an open offer to settle the application on the following basis:
- The application is dismissed.
- The applicant is to pay the respondent’s costs of and incidental to the application on the standard basis.
- The plaintiff has leave pursuant to rule 377(c) UCPR to amend the claim.
This offer is open for acceptance until 12 noon today, 19 October 2016, failing acceptance of which my clients will be seeking the following orders:
- The application is dismissed.
- The proceeding is permanently stayed.
- The applicant is to pay the respondent’s costs of and incidental to the application on the indemnity basis.
- The applicant is to pay the respondents’ costs of and incidental to the proceeding on the standard basis.
- [22]Thus, from early in the morning of the day prior to the hearing of the application, the plaintiff’s solicitors and presumably the liquidator, would have been aware of the very clear decision of the Victorian Court of Appeal that a company in liquidation could not be a claimant under BCISPA.
- [23]At 11.32am on that day, the plaintiff’s solicitor responded, offering to settle the application for summary judgment on the basis that the application be dismissed, that the respondent file an amended pleading within 14 days and that there be no order as to costs.
- [24]At 2.18pm on that day, the defendants again attempted to resolve the matters. They wrote to the plaintiff’s solicitors in the following terms:
I refer to my letters of offer to you of 5 and 19 October 2016. Please note, it will be submitted to the court tomorrow that the rejection of both offers is entirely unreasonable and justifies costs orders being sought and made against the liquidators personally.
I am instructed to make a final, open offer to settle the application on the following basis:
- The application is dismissed.
- The plaintiff is to pay the defendants’ costs of and incidental to the application on the indemnity basis.
- The plaintiff is to pay the defendants’ costs of and incidental to the proceeding up to 19 October on the standard basis in any event.
- The plaintiff has leave pursuant to rule 377(c) UCPR to amend the claim.
- The plaintiff is to file and serve an amended claim and statement of claim by Wednesday 2 November 2016.
- By Wednesday 2 November 2016 the plaintiff is to either:
- (a)provide to the defendants an irrevocable undertaking that the plaintiff’s liquidators will be personally liable for any future costs orders made against the plaintiff in this proceeding; or
- (b)provide to the Registrar, in a form acceptable to the Registrar, security for costs in the amount of $30,000,
failing which the proceeding is stayed until further order.
This offer is open for acceptance until 5pm today.
- [25]At 3.22pm, the plaintiff’s solicitor again sought to resolve the matter on the same terms as their offer at 11.32am on that day, which, as I have previously said, included an order that there be no order as to costs.
Consideration
- [26]Before me, the defendants were given leave to read and file an application returnable instanter for orders that the plaintiff’s proceeding be permanently stayed pursuant to s 69(2)(c) of the District Court of Queensland Act 1967 (Qld) or, alternatively, pursuant to the Court’s inherent jurisdiction and other consequential or alternative orders.
- [27]The plaintiff opposes such orders, in part on reliance on the fact the requisite notice had not been given and sought an order that the defendants’ application be adjourned to allow that to occur.
- [28]There is, of course, power to abridge time pursuant to r 17 UCPR.
- [29]In my view, consideration of the provisions of BCIPA and of the decisions of Neller and of Facade make it clear that, certainly upon the plaintiff being placed into liquidation, and very probably upon its being earlier placed into administration, its ability to make and progress a claim under BCIPA was lost.
- [30]Counsel for the plaintiff submitted that he had not had an opportunity to properly read and understand Facade which, as I said, had only been delivered in the days prior to the hearing of the application before me and which had only been provided to the plaintiff’s solicitor on the morning of 19 October. I conclude however, that there is no point in adjoining the defendants’ application to allow that to occur. The reasoning in Facade is, in my view, entirely consistent with the approach of Keane J in Neller and, indeed, was foreshadowed in the letter from the defendants’ solicitor to the applicant’s solicitor of 5 October 2016.
- [31]In my view, the attempts of the defendants’ to resolve the matter on each of 5 October, and at 9.20am and again at 2.18pm on 19 October were entirely reasonable. The failure of the plaintiff to have accepted each of those offers was, in my view, correspondingly unreasonable.
Costs Considerations
- [32]An issue for me to consider is whether I should order that the liquidators pay the defendants’ costs of the plaintiff’s unsuccessful application for summary judgment, and whether I should do so on an indemnity basis as the defendants’ counsel submits would be appropriate.
- [33]I have found the liquidators’ rejection of the offers of 5 October and both offers of 19 October to have been unreasonable. The first offer of 19 October foreshadowed the defendants seeking costs on an indemnity basis. The second offer foreshadowed the possibility of seeking costs against the liquidators personally.
- [34]The issue of costs is of course one for the exercise of my discretion. In relation to indemnity costs, the principal authority is the well-known case of Colgate-Palmolive Company v Cussons Pty Ltd [1993] 46 FCR 225 per Sheppard J. In that case, His Honour clearly stated that in order to depart from the usual order that costs be paid on a party and party basis, it was necessary to show that the circumstances were such as to want departure from that usual course. His Honour set out some circumstances which in other cases had been thought to warrant the exercise of the discretion to award indemnity costs. Included by His Honour were the fact that the proceedings were commenced or continued in wilful disregard of known facts or clearly established law and, importantly, an imprudent refusal of an offer to compromise.
- [35]In my view, the circumstance of this case warrant my making an order for indemnity costs. The refusal of the plaintiff to have accepted the defendants’ offers, made as early as 5 October 2016, were in my view imprudent and unreasonable.
- [36]A further issue is whether the order for costs should be made against the liquidators rather than the plaintiff company which is in liquidation. The court has power to make orders for costs against a non-party, where the non-party is the effective litigant standing behind the contractual party. See for example Knight v FP Special Asset Ltd (1999) 174 CLR 178, referred to in Lexis Nexis, Civil Procedure Queensland, ‘Non-party paying costs’ (at September 2014) [679.5]. Furthermore, the definition of “party” in Chapter 17A of UCPR, relating to costs, includes a person not a party to a proceeding by or to whom assessed costs of the proceedings are payable.
- [37]In my view, there is clear power to make an order for costs, including indemnity costs, against the liquidator of the plaintiff company.
- [38]Counsel for the plaintiff submitted I should not do so, and submitted that the judgment in Kimtran Pty Ltd v Downie [2004] 1 Qd R 651 supported that view.
- [39]In that case, the judge at first instance had concluded that it was sufficient to justify an order against the liquidator for the successful party to show that an order against the company would be unlikely to result in an effective indemnity. In other words, there was no necessity to show the propriety of the conduct of the liquidator itself justified an order for costs against the liquidator. In so holding, the primary judge had felt he was bound to do so by the decision of the Court of Appeal in Mahaffey v Belar Pty Ltd (in liq) [1999] QCA 2. In Kimtran Pty Ltd v Downie (supra) Dutney J, with whom McMurdo P and Philippides J agreed, held that the judge at first instance “was wrong in interpreting that decision as saying anything other than that the discretion to award costs was at large.”
- [40]Importantly, Dutney J described as a truism the notion that “the adversarial costs of unsuccessful litigation bought by an insolvent company are commonly ordered against the liquidators personally”.
- [41]His Honour said at paragraph [26], “that a finding of misconduct or incompetence was not an essential precondition”, to the making of an order against the liquidator.
- [42]Having determined that the primary judge had wrongly fettered his discretion, Dutney J nevertheless exercised the discretion as to award costs against the liquidator personally, as the judge at first instance had done. His Honour, in determining not to make an order against the liquidator personally, relied principally on two factors, namely, 1) that no impropriety or misconduct had been found against the liquidators and 2) that an application to provide for security for costs had been dismissed without any determination on the merits at an early stage in proceedings, and before significant costs had been incurred.
- [43]His Honour referred to the decision of the High Court in Knight v FP Special Asset Ltd (supra) and to the comment of Mason CJ and Deane J (with whom Gaudron JJ agreed) that:
The availability of an order for security for costs at an earlier stage of the litigation would, in many situations, be a strong argument for refusing to exercise a discretion to order costs against a nonparty, but discretion must be distinguished from jurisdiction.
- [44]In this case, the presence of a power to order security for costs in the action against the liquidators, and the fact that no such order had been sought, is a significant factor militating against making an order for costs, especially indemnity costs, against the liquidators.
- [45]Ultimately, however, I have concluded it is an insufficient reason for not doing so. I am persuaded to the contrary, principally by the following:
1) As in almost all cases against a company in liquidation, an order against the company alone is unlikely to provide the defendants in this case with an effective indemnity;
2) The costs sought against the liquidator are only those in respect of the application, and not of the whole of the action itself;
3) The conduct of the liquidators in refusing to agree to the entirely reasonable offer of the defendants of 5 October and their subsequent offers of 19 October was, in my view, unreasonable and in disregard of the decision in Neller’s case, and as was explained by the defendants’ letter of offer of 5 October. Although the decision of the Court of Appeal in Facade was not delivered until 14 October, that decision upheld the earlier decision of the Supreme Court per Vickory J in 2015. In any case, after being provided with a reference to the Court of Appeal decision on 19 October the liquidators still did not give instructions to resolve the matter as the defendants had proposed in their letter for 19 October. As counsel for the defendants submitted rhetorically, what else could they have done?
- [46]In the circumstances I think it appropriate that the liquidators pay the costs of the unsuccessful application for summary judgment on an indemnity basis.
Orders
- [47]I have given consideration to the term of the order sought by the defendants to permanently stay the proceedings or, alternatively, to enter judgment for the defendants against the plaintiff pursuant to rule 658(1) of the UCPR.
- [48]I am conscious of my conclusion that the proceedings of the plaintiff as currently framed cannot succeed. In the circumstances it is appropriate to stay those proceedings but, in my view, it is appropriate to give the plaintiff leave to re-plead, so as to raise the real issues between the parties so that the matter can be resolved, if that is the plaintiff’s wish, without the need for commencing fresh proceedings. Indeed such an approach was that proposed by the defendants in their letter of offer of 5 October.
- [49]In the circumstances I will order:
- The defendants be given leave to read and file their application for orders that the plaintiff’s proceeding be permanently stayed, and for other consequential or alternative orders, and further order that the time for service thereof be abrogated so that it be heard instanter.
- The plaintiff’s application for summary judgment be dismissed
- The liquidators pay the defendants’ costs of and incidental to that application to be assessed on an indemnity basis.
- The plaintiff is to file and serve an amended statement of claim by a date to be agreed or failing agreement to be determined by me.
- The defendants are to file and serve a defence, or defence and counterclaim to any amended claim and statement of claim on a date to be agreed or failing agreement to be determined by me.
- The plaintiff is to file and serve a reply or reply on answer on a date to be agreed between the parties or failing agreement to be determined by me.
- The plaintiff is to pay the defendants’ costs thrown away by reason of such amendments and, in the event that the plaintiff does not file and serve an amended claim and statement of claim by the date referred to in subparagraph 4, the plaintiff is to pay the defendants’ costs of and incidental to the action to be assessed on a standard basis.