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Australian Golf Management Corporation Pty Ltd v Logan City Council[2021] QSC 291

Australian Golf Management Corporation Pty Ltd v Logan City Council[2021] QSC 291

SUPREME COURT OF QUEENSLAND

CITATION:

Australian Golf Management Corporation Pty Ltd v Logan City Council [2021] QSC 291

PARTIES:

AUSTRALIAN GOLF MANAGEMENT CORPORATION PTY LTD ACN 003 285 514

(Plaintiff)

v

LOGAN CITY COUNCIL

(Defendant)

FILE NO/S:

BS 5779 of 2019

DIVISION:

Trial Division

PROCEEDING:

Application

DELIVERED ON:

11 November 2021

DELIVERED AT:

Brisbane

HEARING DATE:

18 October 2021

JUDGE:

Bowskill SJA

ORDERS:

THE COURT ORDERS THAT:

  1. The plaintiff have leave to file and serve an amended statement of claim, in the form of the document marked “B” for identification on 18 October 2021, save for the following proposed amendments for which leave is not given:
  1. (a)
    the proposed amendments to add paragraphs 68(c)(i) and (ii) and 72 to 75;
  1. (b)
    the part of proposed paragraph 68A, being the words “and profit” in sub-paragraph (e) and the words “and lost profit” in the particulars to sub-paragraph (e);
  1. (c)
    the proposed amendment to paragraph 69(h) to add the words “and profit” and the words “and lost profit” in the particulars;
  1. (d)
    the proposed amendments to paragraph 20 and annexure A to the statement of claim, and the addition of reference to paragraph 20 in paragraph 68 of the statement of claim; and
  1. The plaintiff’s application filed 10 September 2021 is otherwise dismissed.

I will hear the parties as to costs.

CATCHWORDS:

LIMITATION OF ACTIONS – GENERAL MATTERS – AMENDMENT OF ORIGINATING PROCESSES AND PLEADINGS OUTSIDE LIMITATION PERIOD – AMENDMENTS INTRODUCING NEW CAUSE OF ACTION OR PARTICULARISING CAUSE OF ACTION – where the plaintiff seeks leave to amend its claim and statement of claim to include new causes of action in respect of which the relevant period of limitation has now ended, being claims of non-parties to the proceeding which were assigned to the plaintiff prior to the proceeding being commenced – whether the new causes of action arise out of the same or substantially the same facts as the causes of action for which relief has already been claimed in the proceeding by the plaintiff and whether it is appropriate to give leave to make the amendment under r 376(4) of the Uniform Civil Procedure Rules 1999 (Qld) – whether other proposed amendments are merely elaborations of the existing causes of action, or relevant only to, or comprise, new causes of action

Civil Proceedings Act 2011 (Qld), s 16

Uniform Civil Procedure Rules 1999 (Qld), rr 69, 375, 376

Althaus v Australia Meat Holdings Pty Ltd [2007] 1 Qd R 493 Brisbane South Regional Health Authority v Taylor (1996) 186 CLR 541

Draney v Barry [2002] 1 Qd R 145

Menegazzo v Pricewaterhousecoopers [2016] QSC 94

Paul v Westpac Banking Corporation [2017] 2 Qd R 96

Thomas v Queensland [2001] QCA 336

Wolfe v State of Queensland [2009] 1 Qd R 97

COUNSEL:

B O'Donnell QC and B Wacker for the plaintiff

D G Clothier QC and E L Hoiberg for the defendant

SOLICITORS:

Russells for the plaintiff

Clayton Utz for the defendant

Introduction

  1. [1]
    The defendant (the Council) owns land on which the Logan City Golf Course is constructed.  In December 1998, the Council leased the land to the plaintiff (AGMC), with the rent calculated by reference to a percentage of the “Gross Income” received by AGMC from the operation of the golf course (clauses 2.1 and 2.2 of the lease).  In November 2001, AGMC subleased the land to Cosmo Gold Pty Ltd (Cosmo). 
  2. [2]
    From about August 2009, the Council formed an alliance of engineering service providers to plan, design and deliver capital works projects to meet the demand for water services within its Council area.  One of the projects was a major sewerage upgrade in an area near the golf course which involved the construction of about 6.4 km of pipeline.  Briefly, the plaintiff alleges that the plan was to construct this new pipeline through, in part, the golf course; that, initially, this was to have been by way of an underground pipeline; when issues arose in relation to that, alternative solutions were attempted, without success; and ultimately the Council caused the works to be undertaken by way of open cut trenching through the golf course, which caused extensive damage to improvements on the golf course. 
  3. [3]
    By this proceeding, commenced on 31 May 2019, AGMC claims damages of “not less than” just over $12 million for breach of contract (in particular, breach of the covenant of quiet enjoyment contained in clause 11.1 of the lease) or alternatively trespass.
  4. [4]
    In the present pleading, paragraph 20 alleges that between 2011 and May 2013, the Council communicated to AGMC, Cosmo and members and casual (or ‘social’) players of the golf course the Council’s intention to construct the pipeline through the relevant land.  Particulars of this allegation are set out in annexure A to the statement of claim, headed “particulars of pre-construction communications”.  Apart from various letters, emails, reports and meetings, these “communications” also include the Council undertaking geotechnical testing on the land using a 30-tonne truck.
  5. [5]
    The allegations about the construction of the pipeline, including the various alternatives attempted, are pleaded in paragraphs 21 to 66 of the existing statement of claim.
  6. [6]
    The breach of the covenant of quiet enjoyment is pleaded in paragraph 67, as follows:

“67. The conduct by Council:

  1. (a)
    pleaded in paragraph 20 above;
  1. (b)
    further, and alternatively, pleaded in paragraphs 21 to 66 above, constituted:

(i)threats or, or alternatively actual, interference with AGMC’s right to peaceably and quietly hold and enjoy the Demised Premises without any interruption by the Council; and

(ii)a breach by Council of clause 11.1 of the Lease.”

  1. [7]
    The trespass is pleaded in paragraph 68, as follows:

“68. Alternatively, the conduct by, or at the direction of, Council pleaded in paragraphs 21 to 66 above:

  1. (a)
    was intentionally undertaken;
  1. (b)
    was without lawful authority; and
  1. (c)
    amounted to a continuing trespass by Council of AGMC’s reversionary interest in the Lease.”
  1. [8]
    The current pleading of causation is set out in paragraph 69 of the statement of claim, as follows:

“69. The consequence of:

  1. (a)
    Council’s breach of clause 11.1 of the Lease;
  1. (b)
    alternatively, Council’s trespass;

    was that:

  1. (c)
    large parts of the golf course could not be used for golf for extended periods of time;
  1. (d)
    the number of members of the golf course reduced between June 2010 and June 2015 by more than 500 members;
  1. (e)
    Cosmo could not reasonably accept advance bookings for social events and functions in respect of periods during which Pipeline works were occurring or were anticipated to occur without disclosing same which resulted in a decline in the number of social events and functions at the golf course;
  1. (f)
    the golf course could not, and did not maintain, accreditation of all holes for handicap purposes;
  1. (g)
    the goodwill and reputation of the golf course was harmed;
  1. (h)
    the revenue derived by Cosmo from the operation of the golf course declined due to:
  1. (i)
    the decline in the number of members;
  1. (ii)
    the decline in the number of social players using the golf course;
  1. (iii)
    the decline in social events and functions;
  1. (iv)
    the decline in retail sales associated with use of the golf course;
  1. (i)
    in the parts of the golf course that were directly affected by the Council’s work, the damage was partly but not fully, rectified by the Council;

Particulars of damage not fully rectified

  1. (i)
    damage occurred to the surrounding areas of the golf course between fairways and around the perimeter of the golf course as a consequence of:
  1. (A)
    heavy vehicles traversing those areas;
  1. (B)
    the placement of excavated soil and spoil, including acid sulphate soils;
  1. (C)
    the placement of construction materials, resulting in:
  1. (1)
    damage to soil, grasses and vegetation;
  1. (2)
    the compaction of soils, tyre tracks and ruts;
  1. (ii)
    damage occurred to the irrigation systems which resulted in the grass on fairways, tees and greens dying;
  1. (j)
    Cosmo was unable to and did not pay rent to AGMC as required by clause 2 of the Sublease;
  1. (k)
    Cosmo was unable to and did not undertake maintenance of the golf course as required by clause 16 of the Sublease and clauses 5.10 and 5.11 of the Lease (with which it was required by comply by clause 11 of the Sublease);

Particulars

During the period of construction of the pipeline, and following completion of it, Cosmo did not:

(i)maintain the greens on the golf course which:

  1. (A)
    reduced the quality of the soils leading to high sodium levels and low trace elements;
  1. (B)
    resulted in the drainage collapsing;
  1. (C)
    resulted in the greens being overcome by foreign grasses and weeds;
  1. (ii)
    maintain the tees on the golf course which resulted in the tees deteriorating;
  1. (iii)
    maintain the fairways on the golf course through weeding, the application of water and fertiliser, resulting in grass cover missing from fairways, erosion of the fairways and an increase in weeds;
  1. (iv)
    maintain the driving range and associated equipment (ball collector and mower) resulting in the ingress of weeds in the driving range area and the equipment to fail earlier tha[n] the end of its anticipated service life if properly maintained;
  1. (v)
    maintain the irrigation system, resulting in the grass on fairways, tees and greens dying;
  1. (vi)
    maintain the clubhouse resulting in:
  1. (A)
    water leaks through windows and rooves; and
  1. (B)
    plumbing leaks from toilets and changing rooms;

which caused structural damage to the clubhouse;

  1. (vii)
    maintain the furniture and equipment in the clubhouse causing the furniture and equipment to fail earlier tha[n] the end of its anticipated service life if properly maintained; and
  1. (l)
    the overall condition of the golf course had substantially deteriorated from its condition before commencement of the work in May 2013;
  1. (m)
    there was a diminution in the value of AGMC’s interest in its long term lease of the Land;

Particulars

By reason of the matters particularised in paragraphs (c) to (l) above, the value of AGMC’s interest in the Land by way of the Lease upon the expiry of the Sublease was less than the value of that interest had Council not breached clause 11.1 of the Lease or committed the trespass.”

  1. [9]
    The loss and damage claimed by AGMC for breach of clause 11.1 of the lease, or alternatively trespass, as pleaded in paragraph 70 of the statement of claim, comprises:
    1. (a)
      costs of rectifying the greens – $2,160,000;
    2. (b)
      costs of rectifying the tees – $810,000;
    3. (c)
      costs of rectifying the fairways – $4,365,000;
    4. (d)
      costs of rectifying surrounds – $312,000;
    5. (e)
      costs of rectifying the driving range and equipment – $260,000;
    6. (f)
      costs of rectifying the irrigation system – $2,500,000;
    7. (g)
      costs of repairs to clubhouse – $525,000;
    8. (h)
      costs of repairs to levees (embankments) – $700,000;
    9. (i)
      rent unpaid by Cosmo pursuant to the Sublease – $372,451.39; and
    10. (j)
      diminution in the value of AGMC’s interest in the land by way of the lease [particulars to be provided].
  2. [10]
    By application filed on 10 September 2021, AGMC seeks leave to amend its claim and statement of claim.  Some of the proposed amendments are opposed by the Council.  These fall into three categories.  The first are proposed amendments to add claims for damages for trespass on the interest of Cosmo and for trespass on the interest of another entity, Logan City Golf Club Pty Ltd (LCGC), alleged to be a sub-sublessee from Cosmo.  In both cases, AGMC seeks to pursue the claims as the assignee of those claims from Cosmo and LCGC, under a deed of assignment entered into on 10 July 2018.[1]  The second category comprises proposed amendments that refer to Cosmo and LCGC, but which AGMC submits are simply elaborations of the existing cause of action against the Council, as part of the chain of causation already pleaded.[2]  The third category concerns proposed amendments to paragraph 20 and annexure A, and the addition of reference to paragraph 20 to the pleading of trespass in paragraph 68.

The new causes of action

  1. [11]
    AGMC accepts the proposed amendments to add paragraphs 2A and 2B to the claim, and paragraphs 68(c)(i)-(ii) and 72-75 to the statement of claim are new causes of action. By these amendments, AGMC seeks to pursue a claim for damages for trespass on the interest of each of Cosmo and LCGC, as assignee of those interests, pursuant to a deed of assignment entered into on 10 July 2018.  The damages sought to be recovered in respect of Cosmo’s and LCGC’s assigned claims comprise loss of profits from the operation of the golf course.
  2. [12]
    The assignment took place almost a year before the proceedings were commenced.  There is no explanation given for the delay in seeking to bring these claims, and senior counsel for AGMC frankly acknowledged there is none.
  3. [13]
    The sublease from AGMC to Cosmo is pleaded in paragraphs 5 to 8 of the statement of claim.  There is only one passing reference to LCGC in the existing pleading, which is in paragraph 6(d), by which it is alleged the sublease to Cosmo included a term (clause 13) to the effect that “Cosmo could operate the business of the ‘Logan City Golf Course’ and perform its obligations under the Sublease by itself or by Par 72 Pty Ltd (which, from on or about 7 May 2002, was named Logan City Golf Club Pty Ltd) or any management company of Cosmo”.  
  4. [14]
    Subject to the matter discussed in paragraphs [15]-[18] below, it is also accepted that the proposed new claims are now statute-barred.  They were not, at the time these proceedings were commenced in May 2019.
  5. [15]
    AGMC contends that not all of the cause of action for trespass to Cosmo’s and LCGC’s interests is statute-barred.  In that regard, paragraphs 64, 65 and 66 of the existing pleading are as follows:

“64. On or about 27 February 2015, practical completion of the Pipeline was achieved.

65. Between March and November 2015, the Council made some restoration of the parts of the golf course in the immediate vicinity of the installed pipeline.

66. By 30 November 2015, all 27 holes of the golf course were reopened.”

  1. [16]
    These paragraphs are unchanged in the proposed amended statement of claim. 
  2. [17]
    The proposed amended claim and statement of claim appears to have been provided to the Council under cover of a letter dated 18 August 2021.[3]  AGMC’s submission is that trespass constituted by work carried out by the Council between 18 August 2015 (six years before the amendments were foreshadowed) and the end of November 2015 would be within the (6 year) limitation period.  Foreshadowing the amendment would not have stopped time running, but could be relevant, if necessary, in terms of the time from which amendments take effect.[4] 
  3. [18]
    But even putting that to one side, as the Council submits, paragraph 65 of the statement of claim does not identify any specific act by the Council that occurred between 18 August 2015 and the end of November 2015; and the pleading as a whole is not put on the basis that any particular conduct occurring in this time period, in particular involving restoration work, caused loss.   Isolating out this short period of time appears artificial, as not forming the basis, rationally, of the proposed new claim for damages for trespass. 
  4. [19]
    For the new claims AGMC seeks to make, as assignee from Cosmo and LCGC, which are statute-barred, AGMC seeks to invoke the Court’s power under r 376(1) and (4) of the Uniform Civil Procedure Rules 1999 (Qld).  Relevantly, rules 375 and 376 of the UCPR provide as follows:

375 Power to amend

  1. (1)
    At any stage of a proceeding, the court may allow or direct a party to amend a claim, anything written on a claim, a pleading, an application or any other document in a proceeding in the way and on the conditions the court considers appropriate.
  1. (2)
    The court may give leave to make an amendment even if the effect of the amendment would be to include a cause of action arising after the proceeding was started.
  1. (3)
    If there is misnomer of a party, the court must allow or direct the amendments necessary to correct the misnomer.
  1. (4)
    This rule is subject to rule 376.

376 Amendment after limitation period

  1. (1)
    This rule applies in relation to an application, in a proceeding, for leave to make an amendment mentioned in this rule if a relevant period of limitation, current at the date the proceeding was started, has ended.
  1. (2)
    The court may give leave to make an amendment correcting the name of a party, even if the effect of the amendment is to substitute a new party, only if –
  1. (a)
    the court considers it appropriate; and
  1. (b)
    the court is satisfied that the mistake sought to be corrected –
  1. (i)
    was a genuine mistake; and
  1. (ii)
    was not misleading or likely to cause any reasonable doubt as to the identity of the person intending to sue or intended to be sued.
  1. (3)
    The court may give leave to make an amendment changing the capacity in which a party sues, whether as plaintiff or counterclaiming defendant, only if –
  1. (a)
    the court considers it appropriate; and
  1. (b)
    the changed capacity in which the party would then sue is one in which, at the date the proceeding was started by the party, the party might have sued.
  1. (4)
    The court may give leave to make an amendment to include a new cause of action only if –
  1. (a)
    the court considers it appropriate; and
  1. (b)
    the new cause of action arises out of the same facts or substantially the same facts as a cause of action for which relief has already been claimed in the proceeding by the party applying for leave to make the amendment.”[5]
  1. [20]
    In terms of the relevant principles to be applied, in Draney v Barry [2002] 1 Qd R 145 at [57] Thomas JA said:

“[Rule 376(4)] allows a fairly wide discretion in that the court will not allow such an amendment unless it considers it ‘appropriate’ to do so and also considers that the new cause of action arises at least substantially out of the same facts as the existing cause of action.  I do not think that ‘substantially the same facts’ should be read as tantamount to the same facts, and consider that the need to prove some additional facts is not necessarily fatal to a favourable exercise of discretion under r 376(4).  If the necessary additional facts to support the new cause of action arise out of substantially the same story as that which would have to be told to support the original cause of action, the fact that there is a changed focus with elicitation of additional details should not of itself prevent a finding that the new cause of action arises out of substantially the same facts.  In short, this particular requirement should not be seen as a straitjacket.”[6]

  1. [21]
    In Thomas v Queensland [2001] QCA 336 at [19] the Court of Appeal (McMurdo P, Thomas JA and Holmes J (as her Honour then was)) clarified, by reference to this passage from Draney v Barry, that:

“Of course ‘the story’ is a shorthand reference to the matters that the plaintiff has to prove.”[7]

and cautioned against an approach which is too “broad brush”.

  1. [22]
    In Paul v Westpac Banking Corporation [2017] 2 Qd R 96 at [15] Fraser JA (with whom Gotterson JA and Douglas J agreed) said:

“In an appropriate case leave to amend to add a new cause of action which is statute-barred may be granted even though it involves reliance upon facts in addition to those out of which a pleaded cause of action arises, provided that those additional facts are substantially the same as facts already pleaded. The question in each case is whether the facts out of which a new cause of action arises are substantially the same as facts relied upon in a cause of action for which relief has already been claimed in the proceeding. As has been mentioned in other cases, this may involve questions of degree and fine judgment, but the answer to that question should be informed by an appreciation that the policies underlying the applicable statute of limitation may be inappropriately undermined if the required analysis is conducted at too high a level of generality.  If those underlying policies are not threatened by a proposed amendment, the test in UCPR r 376(4)b) may be found to be satisfied even though the new claim involves some variation in the facts.  This approach is consistent with the careful way in which the rule has generally been applied since it was enacted.”[8]

  1. [23]
    A practical test which might assist in determining whether the new cause of action arises out of substantially the same facts is to consider what would have happened if, at trial, the plaintiff sought to lead evidence of the facts without having made the amendment.[9]  If the evidence would be objectionable on the ground of surprise, or on the ground that it was simply irrelevant to the pleaded cause(s) of action, this might assist in determining whether the requirement in r 376(4)(b) is satisfied.
  2. [24]
    In Wolfe v State of Queensland [2009] 1 Qd R 97 at [11] and [16] Keane JA (as his Honour then was) referred to another practical test, which is whether the allegations pleaded prior to the proposed amendment were apt to alert the defendant that the case made against it comprehended a complaint of the kind now sought to be made.
  3. [25]
    In submitting that the requirement in r 376(4)(b) is satisfied here, AGMC emphasises that “the assigned causes of action arise out of the same history of the Council’s involvement with the golf course”; that they arise out of the “same general narrative”.
  4. [26]
    In relation to Cosmo, AGMC submits that the cause of action for trespass to Cosmo’s interest “builds on” the allegations already pleaded in respect of AGMC’s cause of action, in particular:
    1. (a)
      that the revenue derived by Cosmo from the operation of the golf course declined due to the decline in the number of members, the number of social players using the golf course, the number of social events and functions and the retail sales associated with use of the golf course (para 69(h));
    2. (b)
      that Cosmo was unable to and did not pay rent to AGMC as required by the sublease (para 69(j)); and
    3. (c)
      that Cosmo was unable to and did not undertake maintenance of the golf course as required under the sublease (para 69(k)).
  5. [27]
    In the context of the existing cause of action, those things are pleaded as part of the claim that the overall condition of the golf course substantially deteriorated from its condition before commencement of the work in May 2013, and that there was a diminution in the value of AGMC’s interest in its long term lease of the land (ie its reversionary interest).  The damages claimed, as pleaded in paragraph 70 of the existing statement of claim, include the costs of rectifying or repairing various parts of the golf course and surrounds, equipment and clubhouse facilities; the rent unpaid by Cosmo (a relatively small component of the over $12 million claim, at $372,451.39); and the (as yet unparticularised) diminution in value of AGMC’s (reversionary) interest in the land.
  6. [28]
    In relation to LCGC, as already noted, there is only passing reference to it in the existing pleading.  LCGC’s proposed cause of action mirrors that of Cosmo’s trespass cause of action.  But in addition to the matters required to be established to add the claim by Cosmo, in the case of LCGC there are also the new facts required to be pleaded in relation to the alleged sub-sublease.
  7. [29]
    The question is whether the proposed amendment to now claim the loss of profit from operation of the golf course, to Cosmo and/or LGCC, can fairly be said to be a claim which arises out of the same facts or substantially the same facts as the cause of action presently pleaded, within the meaning of r 376(4).   AGMC submits that it does, because it all arises out of “substantially the same story”, adopting Thomas JA’s phrase from Draney v Barry; that both the new causes of action “rely on essentially the same conduct of the Council”.
  8. [30]
    The Council submits that it does not.  First, the Council submits that r 69 of the UCPR is relevant to the determination of this question, on the basis that rules 69 and 376 should be construed harmoniously, and not with the effect of r 376(4) circumventing the policy and terms of r 69.  The Council submits that, construing rules 69 and 376 harmoniously:
    1. (a)
      a claim of interference to the right of, or wrong done to, a non-party that is not already the subject of relief in the proceedings is not one that arises out of the same or substantially the same facts as a cause of action for which relief has already been claimed; or
    2. (b)
      alternatively, it is inappropriate to permit an amendment under r 376(4) where the cause of action is that of a non-party who could not be joined under r 69.
  9. [31]
    Further, and even without having regard to the terms and policy of r 69, the Council submits that the proposed new causes of action cannot be said to arise out of the same or substantially the same facts having regard to the matters that AGMC would need to prove in order to be successful in its causes of action for trespass.  The Council submits that AGMC’s focus on the “general narrative” is too broad and fails to pay the appropriate attention to the “story”, in the sense of the things AGMC presently has to prove to establish its claim against the Council, and the substantial differences in terms of the things it would have to prove to establish its proposed claim, as assignee from Cosmo and LCGC.
  10. [32]
    In my view, each of the Council’s submissions in this regard are correct and should be accepted.
  11. [33]
    Relevantly, r 69(2) provides that:

However, the court must not include or substitute a party after the end of a limitation period unless 1 of the following applies –

  1. (a)
    the new party is a necessary party to the proceeding because –
  1. (i)
    property is vested in the party at law or in equity and the plaintiff’s or applicant’s claimed entitlement to an equitable interest in the property may be defeated if the new party is not included; or
  1. (ii)
    the proceeding is for the possession of land and the new party is in possession personally or by a tenant of all or part of the land; or
  1. (iii)
    the proceeding was started in or against the name of the wrong person as a party, and, if a person is to be included or substituted as defendant or respondent, the person is given notice of the court’s intention to make the order; or
  1. (iv)
    the court considers it doubtful the proceeding was started in or against the name of the right person as a party, and, if a person is to be included or substituted as defendant or respondent, the person is given notice of the court’s intention to make the order;
  1. (b)
    the relevant cause of action is vested in the new party and the plaintiff or applicant jointly but not severally;
  1. (c)
    the new party is the Attorney-General and the proceeding should have been brought as a relator proceeding in the Attorney-General’s name;
  1. (d)
    the new party is a company in which the plaintiff or applicant is a shareholder and on whose behalf the plaintiff or applicant is suing to enforce a right vested in the company;
  1. (e)
    the new party is sued jointly with the defendant or respondent and is not also liable severally with the defendant or respondent and failure to include the new party may make the claim unenforceable;
  1. (f)
    for any other reason –
  1. (i)
    a claim made, or ground of defence raised, in the proceeding before the end of the limitation period can not be maintained; or
  1. (ii)
    relief sought in the proceeding before the end of the limitation period can not be granted;

unless the new party is included or substituted as a party.”[10]

  1. [34]
    Self-evidently, if Cosmo or LCGC were sought to be joined now as parties to this proceeding, to pursue their respective claims in their own names, none of the circumstances specified in r 69(2) would apply.  As Keane JA said in Althaus v Australia Meat Holdings Pty Ltd [2007] 1 Qd R 493 at [27]:

“The command in r 69(2) that ‘the court must not include or substitute a party after the end of a limitation unless 1 of the following applies’ serves to ensure that a defendant in pending proceedings is not confronted by a plaintiff seeking to pursue a new cause of action raised for the first time by that plaintiff after the end of ‘a limitation period’.  Where the cause of action sought to be agitated by the person seeking to be joined as a new plaintiff is statute-barred, r 69(2) excludes entirely the risk that, under r 74(5),[11] a good defence under the limitation statute would be defeated by the joinder.  The particular provisions of r 69(2)(a) to (f) each exhibit a concern to ensure that a time-barred cause of action to be pursued by the new party should be closely associated with a cause of action already the subject of a claim by an existing party.”

  1. [35]
    The “close association” Keane JA refers to is defined in r 69(2).  That association is not present here.
  2. [36]
    Section 16 of the Civil Proceedings Act 2011 (Qld) provides:

16 Amendment for new cause of action or party

  1. (1)
    This section applies to an amendment of a claim, anything written on a claim, pleadings, an application or another document in a proceeding.
  1. (2)
    The court may order an amendment to be made, or grant leave to a party to make an amendment, even though –
  1. (a)
    the amendment will include or substitute a cause of action or add a new party; or
  1. (b)
    the cause of action included or substituted arose after the proceeding was started; or
  1. (c)
    a relevant period of limitation, current when the proceeding was started, has ended.
  1. (3)
    Despite subsection (2), the rules of court may limit the circumstances in which amendments may be made.
  1. (4)
    This section –
  1. (a)
    applies despite the Limitation of Actions Act 1974; and
  1. (b)
    does not limit section 103H.”[12]
  1. [37]
    The UCPR do limit the circumstances in which amendments may be made, either to add a party (r 69) or a cause of action (r 376), after the limitation period has ended.
  2. [38]
    Notably, r 376(2) and (3) make very limited provision for amendments affecting the name, identity or capacity of a party.  On the proper construction of r 376, in the context of the UCPR as a whole, including relevantly r 69, in my view it is inappropriate to permit an amendment under r 376(4) where the cause of action is that of a non-party who could not be joined under r 69.  Upon an assignment of a cause of action, the defendant retains all defences which it would have against the claim if brought by the assignor.  But if a party to a proceeding were permitted to make an amendment to bring a cause of action which has been assigned to that party, after the limitation period in respect of the cause of action has ended, that defence is lost.  Rule 69(2) sets out the circumstances in which the legislature has considered that an appropriate outcome, in respect of a cause of action sought to be agitated by a new party.  I cannot see any reason, having regard to the terms of r 376, the UCPR as a whole, or as a matter of policy, why the position should be different in the case of an assigned cause of action.  The effect of acceding to AGMC’s application would be to defeat a good defence under the limitation statute, to a claim by a non-party to the proceeding, in circumstances where the close association otherwise seen to justify such an outcome (in r 69(2)) is not present.
  3. [39]
    However, even if I am incorrect in that conclusion, in my view it cannot be said the proposed new causes of action for trespass on the interest of Cosmo and/or LCGC arise out of the same facts or substantially the same facts as a cause of action for which relief has already been claimed in the proceeding by AGMC.
  4. [40]
    There are substantial differences which put this case outside the reach of r 376(4).  I accept the Council’s submissions in this regard.  First, the entitlement to bring the proceedings is different.  AGMC presently brings the claim on its own behalf, for its own alleged losses.  The proposed new causes of action are those of Cosmo and LCGC, which AGMC seeks to pursue on the basis of an assignment.  Plainly that is a new fact, evidence of which could not have been led at a trial on the basis of the existing pleading.  And the existing pleading was not such as to alert the Council that claims of the kind now proposed were comprehended.  Next, the nature of the interest said to be affected by the alleged trespass is different.  AGMC currently sues in trespass for damage to its reversionary interest; whereas the interest of Cosmo and LCGC said to have been effected is the interest (or alleged interest) in a sublease and a sub-sublease, respectively.  In so far as LCGC is concerned, that involves significantly new factual allegations, as to the existence of a sub-sublease from Cosmo, evidence of which would not have been admissible on a trial of the existing pleading, as it was not a matter raised on the pleading.  Thirdly, the loss alleged to have been suffered is also different, with the proposed new claims being for damages comprising the loss of profits from the operation of the golf course which will, I accept, involve consideration of new and separate facts relating to the financial positions of Cosmo and LCGC over an extended period of time.
  5. [41]
    Lastly, I am not satisfied in any event that it is appropriate to permit the amendments to be made.  The deed of assignment was made in July 2018, almost a year before these proceedings were commenced in May 2019.  Now, almost two and a half years later,  AGMC seeks to amend its proceeding to bring in the claims of Cosmo and LCGC, which are otherwise statute-barred, in circumstances where there is no explanation given, and none to be given, for the delay.  The loss of the limitation defence in those circumstances, had leave been given, would be a significant and, in my view, unfair prejudice to the defendant.  There are also, I accept, issues as to the availability of evidence after this length of time, although there are arguments both ways in relation to this.  And in my view, it is really the other rationales or policies underlying the enforcement of limitation periods which are particularly compelling here: that it is oppressive to a defendant to permit an action to be brought long after the circumstances which gave rise to it have passed; that people should be able to arrange their affairs on the basis claims can no longer be made against them (a reasonable assumption here, in circumstances where not only had the limitation period passed, but both Cosmo and LCGC have been deregistered) and that the public interest requires disputes to be resolved as quickly as possible.[13]
  6. [42]
    For completeness, and returning to the matter addressed in paragraphs [15]-[18]  above, I record that I did not understand AGMC to submit that it would seek to press a claim for damages, arising from conduct in the period from September to November 2015, if leave were not given to make the proposed amendments otherwise.  Rather, I understood the argument in this regard (made only in the written submissions and not addressed in the oral submissions) to be put in support of the application for leave more generally.
  7. [43]
    For those reasons, leave to amend the claim to add paragraphs 2A and 2B, and to amend the statement of claim to add paragraphs 68(c)(i)-(ii) and 72 to 75 is refused.

The elaborations

  1. [44]
    Turning then to the amendments which are characterised by AGMC as simply elaborations of the existing cause of action against the Council, as part of the chain of causation already pleaded:  paragraphs 8A and 8B, 68A, 69(h), 69(j), 69(k) and 70 (opening paragraph) of the proposed amended statement of claim.
  2. [45]
    The Council submits these amendments are relevant only to the new causes of action in trespass on behalf of Cosmo and LCGC, and therefore should be dealt with in the same way, by the refusal of leave.  But even if leave is not required, the Council submits the amendments should not be permitted by reason of delay and prejudice.  In this regard, I infer the Council relies upon r 379, which enables a party to apply to the court to disallow an amendment and empowers the court on such an application to make the order it considers appropriate.
  3. [46]
    Proposed new paragraphs 8A and 8B plead the alleged “sub-sublease” to LCGC, and the Council’s alleged consent to it.  AGMC submits these paragraphs are by way of elaboration of the existing cause of action in the sense that what is presently pleaded is that the Council’s work impacted upon the operator of the golf course, which in turn resulted in loss to AGMC and damage to AGMC’s reversionary interest.  In the existing pleading, the sublease to Cosmo is pleaded, and the focus is on Cosmo as the operator.  What is sought to be added is that LCGC became the operator, under the terms of the so-called sub-sublease.  I accept that the argument for the existence of a sub-sublease, by reference to clauses 2.06, 13 and 19.07 of the sublease and the guarantee of the sublease does not appear to be a strong one.  However, I do not consider it appropriate to finally determine that on an interlocutory application such as this.  And otherwise, on the basis that AGMC wishes to plead a case on the basis that LCGC was in fact the operator, I can see no reason not to allow the amendment.  The delay in making the amendment, which in reality involves a fairly narrow legal question, having regard to the proposed paragraphs 8A and 8B, does not in my view provide a sound basis to disallow it.
  4. [47]
    Paragraph 68A is the pleading of causation, in terms of the consequence of the Council’s alleged breach of clause 11.1 of the lease, for Cosmo and LCGC, in particular in terms of the alleged decline in revenue and profit.  AGMC submits this is also merely an expansion of its existing cause of action to refer to LCGC.   The Council submits this new paragraph can only be relevant to the new causes of action, for which leave has been refused.
  5. [48]
    I largely accept AGMC’s submission.  The proposed amendments include amendments to paragraphs 67 and 67A (to which no objection is taken).   It is consequent upon those amendments, that new paragraph 68A and existing paragraph 69 deal with causation:
    1. (a)
      in relation to new paragraph 68A, in terms of the pleaded consequence of the Council’s breach of clause 11.1 of the lease, on the basis of the threats of interference pleaded in paragraph 20; and
    2. (b)
      in relation to paragraph 69, in terms of the pleaded consequence of the Council’s breach of clause 11.1 of the lease, on the basis of the alleged actual interference pleaded in paragraph 67A (by reference to earlier paragraphs of the pleading) and on the basis of the trespass.
  6. [49]
    To that extent, I accept that the proposed new paragraph 68A can be seen to be an elaboration of the existing claim, and the desire to include in the pleading the reference to LCGC as the operator of the golf course.  The one exception to this is the reference to the decline in profit.  That is, in my view, plainly a matter pleaded in the context of the proposed new cause(s) of action.  The justification, by reference to the definition of “Gross Income” in the lease and sublease, does not withstand scrutiny, because that is concerned with income (or revenue, as presently pleaded) not profit.  Accordingly, I would allow the amendment to include paragraph 68A, save for the reference to “and profit” in paragraph 68A(e) and “and lost profit” in the particulars (on the basis that this relates to the new cause(s) of action for which leave has been refused).
  7. [50]
    The amendment to paragraph 69(h) adds reference to the decline in profit (previously limited to revenue) derived by Cosmo from the operation of the golf course, and to add reference to LCGC.   For the same reason as just discussed, I would allow the amendment to paragraph 69(h) to refer to LCGC, and the particulars, but not allow the reference to “profit”, or “lost profit” (on the basis that this relates to the new cause(s) of action for which leave has been refused).
  8. [51]
    The amendment to paragraph 69(j) adds reference to LCGC being unable to pay rent to AGMC (previously limited to Cosmo).  I accept this is an elaboration of the existing pleading and should be allowed.
  9. [52]
    Paragraph 69(k) expands the allegation, which previously was that Cosmo was unable to undertake maintenance of the golf course, to an allegation that by reason of the Council’s works, and the effect of those works on Cosmo and/or LCGC, those entities or either of them was financially unable to maintain the golf course.  I accept this is an elaboration of the existing pleading and should be allowed.
  10. [53]
    The proposed amendment to paragraph 70 seeks to add the following (underlined) words:

“By reason of the Council’s breaches of clause 11.1 of the Lease, or alternatively trespass, and the consequent failure by Cosmo and, or alternatively LGCG to maintain the golf course as pleaded in paragraph 69(k) above, AGMC has suffered loss and damage in the following amounts…”

  1. [54]
    I accept this also is an elaboration of the existing pleading and should be allowed.

Annexure A

  1. [55]
    That leaves the third category of amendments objected to, namely the amendment to paragraph 20 and annexure A, and the addition of reference to paragraph 20 to the pleading of trespass in paragraph 68.
  2. [56]
    The proposed amendment to paragraph 20 seeks to add an allegation that, between 2011 and 30 May 2013 [the date range already pleaded], the Council “undertook works preparatory to the construction of the Pipeline through the Demised Premises”.
  3. [57]
    Particulars of paragraph 20 are contained in annexure A, which is proposed to be amended to refer to “pre-construction communications and preparatory activities”, and to refer to activities on or about 18 February 2011 (undertaking a borehole investigation); 5 and 6 July 2011 (undertaking drilling tests); 28 July 2011 (marking out a proposed route for the wastewater pipeline by placing stakes, ribbons and flags along fairways); 15, 16 and 19 September 2011 (carrying out drilling tests at the seventh hole); and 25 and 29 October 2011 (undertaking vibration tests).
  4. [58]
    In addition, there is a proposed amendment to paragraph 68 of the statement of claim to include reference to paragraph 20, the effect of which is to include all that is set out in paragraph 20 (by reference to annexure A) within AGMC’s allegation of trespass.
  5. [59]
    The Council opposes these amendments on the basis that the effect of them is to add new causes of action in the form of new threats of interference constituting a breach of clause 11.1 of the lease (paragraph 67 of the statement of claim) and new causes of action for trespass (paragraph 68 of the statement of claim, as proposed to be amended); the limitation period for which expired in 2017 at the latest; they do not arise out of the same or substantially the same facts for which relief has already been claimed; and they should be refused in any event as not appropriate in circumstances where there is no explanation for the delay in seeking to make the amendments.
  6. [60]
    In oral submissions, senior counsel for AGMC accepted that the proposed amendments do comprise new causes of action, such that the test in r 376(4) would need to be satisfied before leave to make the amendments could be given.   However, it was said that the relevant period of limitation had not expired in 2017, as the Council contends, because the damage for which AGMC sues is damage to its reversionary interest, and that did not occur until all the work by the Council was complete (in November 2015).  That is, AGMC relies upon these earlier acts as part of the “combination of events which produced the permanent damage by the time the Council vacated the site”.[14]   In contrast, in AGMC’s written submissions it is first contended these acts in 2011 did not give rise to a cause of action and, if that is wrong, then even if leave to make the amendments was granted, the amendments would date back to the commencement of the proceedings, and any cause of action would still be time barred, resulting in “no harm to the Council by the amendment”.[15]
  7. [61]
    Rule 376 only applies where the relevant period of limitation was still current at the date the proceeding was commenced.  There is no discretion conferred to give leave to make an amendment, under r 376, where the period of limitation had already expired prior to the proceedings being commenced.
  8. [62]
    The two parts of AGMC’s (oral) argument are difficult to reconcile.  On the one hand, it accepts the effect of the proposed amendment is to add new causes of action; but on the other, disputes that the period of limitation has expired, because the matters sought to be pleaded are not relied upon as producing recoverable loss in their own right, but rather as part of a combination of events which ultimately produced loss for which damages are sought to be recovered.  If that is the intention, in my respectful view the presently proposed amendments do not reflect that.
  9. [63]
    In my view, the presently proposed amendments to paragraph 20, annexure A, and paragraph 68 (to include reference to paragraph 20) should not be allowed.  As AGMC accepts, the effect of the proposed amendments is to add new causes of action.  The period of limitation in respect of those new causes of action, arising from acts in 2011, had expired before these proceedings commenced.  In those circumstances, r 376 does not apply; and, in any event, it is not appropriate to permit a party to make such an amendment, putting the other party to the cost of litigating such issues.

Orders

  1. [64]
    For those reasons, I propose to order:
  1. The plaintiff have leave to file and serve an amended statement of claim, in the form of the document marked “B” for identification on 18 October 2021, save for the following proposed amendments for which leave is not given:
  1. (a)
    the proposed amendments to add paragraphs 68(c)(i) and (ii) and 72 to 75;
  1. (b)
    the part of proposed paragraph 68A, being the words “and profit” in sub-paragraph (e) and the words “and lost profit” in the particulars to sub-paragraph (e);
  1. (c)
    the proposed amendment to paragraph 69(h) to add the words “and profit” and the words “and lost profit” in the particulars;
  1. (d)
    the proposed amendments to paragraph 20 and annexure A to the statement of claim, and the addition of reference to paragraph 20 in paragraph 68 of the statement of claim;
  1. The plaintiff’s application filed 10 September 2021 is otherwise dismissed.
  1. [65]
    I will hear the parties as to costs.

Footnotes

[1]  The proposed amendments are to add paragraphs 2A and 2B of the proposed amended claim (MFI A”) and paragraphs 68(c)(i)-(ii) and 72 to 75 of the proposed amended statement of claim (MFI “B”).

[2]  This includes the amendments to, or to add, paragraphs 8A and 8B, 68A, 69(h), 69(j), 69(k) and 70 (opening paragraph) of the proposed amended statement of claim.

[3]  Mr Khan’s affidavit (CFI 18) at pp 13-15; cf Mr Khan’s earlier affidavit (CFI 17) at [3], which refers to an amended statement of claim filed on 18 August 2021.

[4]  See, for example, Menegazzo v Pricewaterhousecoopers [2016] QSC 94 at [45]-[46], referring to Mokrzecki v Popham [2013] QSC 123 at [22].  Cf r 387(1) of the UCPR.

[5]  Underlining added.

[6]  Underlining added.

[7]  See also Althaus v Australia Meat Holdings Pty Ltd [2007] 1 Qd R 493 at [33]-[36] per Keane JA.

[8]  References omitted.  See also Paul v Westpac at [21], and the reference to Brisbane South Regional Health Authority v Taylor (1996) 186 CLR 541 at 552-553.

[9]Menegazzo v Pricewaterhousecoopers [2016] QSC 94 at [49]-[50], referring to Wolfe v State of Queensland [2009] 1 Qd R 97 at 100 [12].

[10]  Underlining added.

[11]  Rule 74(5) of the UCPR provides that “for a limitation period, a proceeding by or against a new party is taken to have started when the original proceeding started, unless the court otherwise orders”. 

[12]  Underlining added.  Section 103H of the Civil Proceedings Act deals with cause(s) of action accruing after a representative proceeding has started, and so is not relevant here.

[13]Brisbane South Regional Health Authority v Taylor (1996) 186 CLR 541 at 552-553.  See also Menegazzo v Pricewaterhousecoopers [2016] QSC 94 at [52].

[14]  Transcript at 1-46.43.

[15]  AGMC’s submissions at [31]-[34].

Close

Editorial Notes

  • Published Case Name:

    Australian Golf Management Corporation Pty Ltd v Logan City Council

  • Shortened Case Name:

    Australian Golf Management Corporation Pty Ltd v Logan City Council

  • MNC:

    [2021] QSC 291

  • Court:

    QSC

  • Judge(s):

    Bowskill SJA

  • Date:

    11 Nov 2021

  • Selected for Reporting:

    Editor's Note

Appeal Status

Please note, appeal data is presently unavailable for this judgment. This judgment may have been the subject of an appeal.

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