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  4. Devine Constructions Pty Ltd v Stowe Australia Pty Ltd (No 2) - [2022] QSC 272

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Devine Constructions Pty Ltd v Stowe Australia Pty Ltd (No 2)[2022] QSC 272

Devine Constructions Pty Ltd v Stowe Australia Pty Ltd (No 2)[2022] QSC 272

SUPREME COURT OF QUEENSLAND

CITATION:

Devine Constructions Pty Ltd v Stowe Australia Pty Ltd & Ors (No 2) [2022] QSC 272

PARTIES:

DEVINE CONSTRUCTIONS PTY LTD

ACN 114 040 845

(Applicant)

v

STOWE AUSTRALIA PTY LTD ACN 002 556 603

(First Respondent)

PROFIRE SYSTEMS PTY LTD ACN 081 006 724

(FORMERLY KNOWN AS PROFIRE (QLD) PTY LTD) AS TRUSTEE FOR PROFIRE (QLD) UNIT TRUST ABN 91 905 798 318

(Second Respondent)

BEYFIELD PTY LTD T/A EAST COAST MECHANICAL SERVICES (IN LIQUIDATION)

ACN 055 838 438

(Third Respondent)

PHILIP CHUN & ASSOCIATES PTY LTD

ACN 007 401 649

(Fourth Respondent)

NOFIRE PTY LTD T/A FYREGUARD ACN 114 404 278

(Fifth Respondent)

FILE NO/S:

3559 of 2018

DIVISION:

Trial Division

PROCEEDING:

Application

ORIGINATING COURT:

Supreme Court at Brisbane

DELIVERED ON:

16 December 2022

DELIVERED AT:

Brisbane

HEARING DATE:

23 November 2022

JUDGE:

Crowley J

ORDER:

  1. I decline to make the orders sought by the First Respondent.
  2. Order 2 of my orders dated 23 November 2022 be varied as follows: Pursuant to rule 7 of the Rules, the time for compliance with Order 2(a) of the orders of Justice Applegarth dated 9 May 2022 be extended to 28 September 2022.

CATCHWORDS:

PROCEDURE – CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS – COURT SUPERVISION – AMENDMENT – TIME FOR AMENDMENT – where the plaintiff was granted leave to file a further amended statement of claim – where the further amended statement of claim raised new causes of action – where the first defendant would be deprived of limitation defences if the amendments are taken to have started when the original proceeding started – whether the Court should order that the amendments started only when the Court granted leave to file the further amended statement of claim – whether the new causes of action arise out of the same or substantially the same facts  as a cause of action for which relief has already been claimed – whether the first defendant would suffer prejudice if the Court refuses to make the orders sought

Limitation of Actions Act 1974 (Qld), s 10, s 10(1)(a)

Uniform Civil Procedure Rules 1999 (Qld), r 375(1), r 376, r 376(4)

Allonnor Pty Ltd v Wayne Doran [1998] QCA 372, cited

Aon Risk Services Australia Pty Ltd v Australian National University (2009) 239 CLR 175; [2009] HCA 27, cited

Devine Constructions Pty Ltd v Stowe Australia Pty Ltd & Ors [2022] QSC 51, cited

Draney v Barry [2002] 1 Qd R 145; [1999] QCA 491, applied

McDonald Keen Group Pty Ltd (in liq) v Queensland [2019] QSC 94, cited

Menegazzo v Pricewaterhousecoopers (A Firm) [2016] QSC 94, applied

Mokrzecki v Popham [2013] QSC 123, cited

Paul v Westpac Banking Corporation Ltd [2017] 2 Qd R 96; [2016] QCA 252, cited

Thomas v Queensland [2001] QCA 336, cited

Wardley Australia Ltd v Western Australia (1992) 175 CLR 514; [1992] HCA 55, cited

COUNSEL:

D O'Sullivan KC, with F Lubett, for the Applicant

A J Tindall for the First Respondent

M T Hickey for the Second Respondent

No appearance for the Third Respondent

R de Luchi for the Fourth Respondent

No appearance for the Fifth Respondent

SOLICITORS:

Carter Newell for the Applicant

Holding Redlich for the First Respondent

DLA Piper for the Second Respondent

No appearance for the Third Respondent

HWL Ebsworth for the Fourth Respondent

No appearance for the Fifth Respondent

Introduction

  1. [1]
    Devine Constructions Pty Ltd (‘Devine’), the Plaintiff/Applicant seeks leave to file a second further amended statement of claim (‘2FASOC’) and a second further amended claim (‘2FAC’), to permit discontinuance of its claims against the Third Respondent and for certain directions to be made.

Background to the proceedings

  1. [2]
    In 2010, Hamilton Harbour Developments Pty Ltd (‘Hamilton Harbour’) commenced work on its ‘Hamilton Harbor Project’ (the ‘Project’).  The Project involved the construction of several residential towers on a riverside site in Hamilton.
  2. [3]
    Devine was the head contractor responsible for the design and construction of three residential towers (‘H1’, ‘H2’ and ‘H3’).  Stages 1 and 2 of the Project encompassed the construction of H1 and H2.  H3 formed Stage 4 of the Project.
  3. [4]
    Devine subcontracted certain aspects of the work to the First, Second and Third Respondents (‘Stowe’, ‘Profire’ and ‘ECMS’, respectively).  The Fourth Respondent (‘Philip Chun’) and the Fifth Respondent (‘Fyreguard’) provided certification services to the Project.
  4. [5]
    By the end of 2013, the three residential towers had been constructed and were occupied by residents.
  5. [6]
    In 2013, the residents of tower H3, through their body corporate, engaged a building inspector who identified that a number of the service penetrations in H3 were non-compliant with building regulations. The non-compliance concerned a lack of compliant fireproofing around the penetrations for pipes and cables running through the plasterboard walls of each apartment (and elsewhere), which was required to prevent the passage of smoke into each apartment in the event of a fire in the tower. Subsequent investigations revealed similar issues in H1 and H2.
  6. [7]
    Complaints were made to Hamilton Harbour and Devine. Between 2014 and 2017, Devine engaged third-party contractors to carry out rectification works to install compliant fireproofing in each tower. This work cost approximately $2.6 million. It was carried out in conjunction with various demands upon, and correspondence with, several of the Respondents.

Original claim and statement of claim

  1. [8]
    On 29 March 2018, Devine commenced this proceeding by way of claim and statement of claim. The Applicant sought damages for breach of contract and/or debts arising pursuant to the various subcontracts that it had entered into with Stowe, Profire and ECMS, as well as damages for negligence.
  2. [9]
    The central allegations against each of those Respondents were that they had failed to adequately fireproof the service penetrations for which they were responsible. The debt or damages claimed were in respect of the costs incurred by Devine in rectifying the fireproofing in each of the three towers.
  3. [10]
    The Applicant also sought damages for misleading and deceptive conduct and in negligence for losses alleged to have been incurred by the Applicant relying upon misleading compliance certificates that had been provided by Philip Chun and Fyreguard in respect of the Project.

Further amended statement of claim and strike out application

  1. [11]
    On 3 December 2021, Devine filed a further amended statement of claim (‘FASOC’) which annexed 445 pages of schedules detailing the defective works and the costs of rectification. By orders made on 31 March and further reasons given on 7 April 2022,[1] Applegarth J struck out certain paragraphs of the FASOC, but granted Devine leave to replead on terms.
  2. [12]
    By those terms,[2] Devine was to deliver a 2FASOC to the Second, Fourth and Fifth Respondents and to file and serve an application for leave to amend the pleading. 
  1. [13]
    The Applicant served a proposed amended pleading on the Respondents on 28 September 2022. The Applicant then filed an application for leave on 12 October 2022 (the ‘Application for Leave’).
  2. [14]
    The First Respondent contends that the proposed 2FASOC includes new causes of action that had not previously been pleaded. The Applicant concedes that is so.
  3. [15]
    On 11 November 2022, the Applicant filed a notice of discontinuance in respect of its claim against the Fifth Defendant.

Application for Leave

  1. [16]
    On 23 November 2022, I heard the Application for Leave and made orders by consent, inter alia:
  1. (a)
    granting the Applicant leave to discontinue its claim against the Third Respondent, ECMS having been deregistered on 17 October 2021;
  2. (b)
    extending the time for compliance with the order of Applegarth J dated 9 May 2022 in respect of the delivery of the 2FASOC from 17 June to 28 September 2022;[3] and
  3. (c)
    granting the Applicant leave to file a 2FAC and 2FASOC.
  1. [17]
    The only remaining issue to be considered was whether I should make an order that the amendments which plead new causes of action should take effect from the date I granted leave to amend. The ordinary position would otherwise be that, pursuant to r 387(1) of the Uniform Civil Procedure Rules 1999 (Qld), (‘UCPR’), the amendments take effect from the date of the document being amended.[4]
  2. [18]
    The First Respondent submitted that I should make an order to that effect as the relevant limitation period for commencing proceedings in respect of the new causes of action has already expired.  That way, the First Respondent would not be deprived of the benefit of potentially pleading a defence under the Limitation of Actions Act 1974 (Qld) (‘LAA’) to the new causes of action. 
  3. [19]
    The Applicant conceded that, because the pleadings are essentially the same as between the Applicant and each of the First and Second Respondents, if I were to make the orders sought by the First Respondent, I would make the same orders in respect of the timing of the new causes of action pleaded against the Second Respondent.  However, I would reserve the question as to which paragraphs in the 2FASOC in respect of the Second Respondent would be affected by such an order.
  4. [20]
    I reserved my decision in respect of whether to make the orders sought.

The new causes of action

  1. [21]
    The First Respondent submits that the 2FASOC pleads new causes of action based on newly pleaded facts by:
  1. (a)
    at paragraphs 8Y to 8LL, 18A, 37O, 48A and 66O, an alleged contractual indemnity against liability;
  2. (b)
    at paragraphs 18B, 37L, 37N, 48B, 66L and 66N, an alleged right to claim costs incurred if urgent action is required to protect works; and
  3. (c)
    at paragraphs 18C, 48C, 66F, 66G, 66I and 66K,[5] an alleged right to claim costs incurred in carrying out works as a debt where the First Respondent has failed to comply with a direction to rectify works

(collectively, the ‘New Causes of Action’).[6]

  1. [22]
    The Applicant concedes that the 2FASOC introduces three new causes of action in the sense that it relies upon clauses of the subcontracts between the Applicant and the First Respondent dated 6 July 2010 (the ‘Stowe Stages 1 & 2 Subcontract’) and 11 January 2018 (the ‘Stowe Stage 4 Subcontract’) (together, the ‘Stowe Subcontracts’) that were not previously pleaded. 

Effect of the order sought on potential limitation defences

  1. [23]
    Section 10 of the LAA provides:

10Actions of contract and tort and certain other actions

  1. (1)
    The following actions shall not be brought after the expiration of 6 years from the date on which the cause of action arose:
  1. (a)
    Subject to section 10AA, an action founded on simple contract or quasi-contract or on tort where the damages claimed by the plaintiff do not consist of or include damages in respect of personal injury to any person;

…

  1. [24]
    The First Respondent submits that the Applicant’s new cause of action based on a contractual indemnity against liability must have arisen by 12 December 2014, when the demand to rectify defective work (as pleaded) was made by the Applicant or, alternatively, in 2015, when the Applicant pleads it commenced rectification works.[7] Accordingly, although the proceedings were commended within the relevant limitation period prescribed by s 10(1)(a) of the LAA, that period has now expired.
  2. [25]
    The Applicant does not necessarily agree with the First Respondent as to when the new cause of action accrued. The Applicant submits that, on one view, the new cause of action accrued in 2017 and therefore the relevant limitation period has not expired.
  3. [26]
    Noting that it is not appropriate to decide limitation points of this kind at an interlocutory stage,[8] the Applicant nevertheless contended this was an appropriate case for leave to amend to be granted.
  4. [27]
    If I order that the relevant paragraphs of the 2FASOC take effect from 23 November 2022, the date I granted leave for the Applicant to file the 2FASOC, the First Respondent could potentially raise a limitation defence to the new cause of action based on the six-year limitation period which prima facie applies under s 10(1)(a) of the LAA. 
  5. [28]
    However, if I refuse to make such an order, the proceeding as amended by the 2FASOC will be taken to have started on 29 March 2018 when the Applicant filed its original claim and statement of claim.  This would potentially deprive the First Respondent of a limitation defences.
  6. [29]
    As mentioned, I have already made orders by consent giving the Applicant leave to file a 2FASOC.  This order was made pursuant to rr 375(1) and/or 376(4) of the UCPR.  The parties are agreed that the remaining issue I must consider turns upon whether I am satisfied of the matters under r 376(4).[9]

Relevant principles

  1. [30]
    Rule 375(1) of the UCPR provides:

375Power 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. [31]
    Rule 376 of the UCPR provides:

376Amendment 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. (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
  2. (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.
  1. [32]
    In Draney and Barry,[10] Thomas JA held:
  1. [57]
    Rule 376 provides a structure within which courts may regulate such procedural applications with due regard to the interests of all parties. Sub-rule (4), which is directly relevant in the present context, 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 causes 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.
  1. [33]
    As the Court of Appeal in Thomas v State of Queensland explained, the ‘story’ is a shorthand reference to the matters the plaintiff has to prove.[11]
  2. [34]
    Whether a new cause of action arises out of the same or substantially the same facts as a cause of action previously pleaded involves a question of degree.[12]  If the comparison between the facts relied upon for the causes of action is conducted ‘at too high a level of generality’, the policies underlying the applicable statute of limitations may be ‘inappropriately undermined’.[13]  However, the policies underlying limitation statutes are not threatened by an amendment ‘that merely adds a ground of recovery or defence arising out of a transaction or occurrence already in suit’.[14]
  3. [35]
    Of relevance to the remaining issue that I must determine on this application, in Menegazzo v Pricewaterhousecoopers (A Firm),[15]  Applegarth J stated:
  1. [45]
    In some cases an applicant for leave to amend may not acknowledge that leave is required pursuant to r 376(4) and contend that any new cause of action is still within the relevant period of limitation. There may be scope for argument about that, for example, where it is not clear when the plaintiff first suffered loss and damage in cases in which the cause of action is not complete until loss and damage is suffered. In such cases the approach is often taken to proceed to the issues that arise under r 376(4), namely whether any new cause of action arises out of the same or substantially the same facts as the cause of action for which relief has already been claimed, and whether it is appropriate to make the amendment. This is because if the requirements in r 376(4) are satisfied, the plaintiff should be granted leave to make amendments, notwithstanding the expiry of the limitation period. If an applicant satisfies the requirements of r 376(4) then it should have the benefit of that rule, which permits the inclusion, by amendment, of a cause of action which otherwise would be out of time. If the court hearing the application is not in a position to fairly determine whether a relevant period of limitation, current at the date the proceeding was started, has ended, but the applicant satisfies the requirements of r 376(4), then there is no relevant detriment to the defendant in being deprived of a limitation defence. If, however, the requirements of r 376(4) are not satisfied, and it is not clear whether the new cause of action is out of time ‘the amendment may be permitted but on terms that it take effect from the order giving leave or from some other time, so as not to prejudice a possible limitation defence’.
  1. [46]
    In some cases it will be inappropriate to decide a contested issue of whether a relevant period of limitation has ended, and therefore whether r 376 applies, because that issue cannot be fairly determined. However, this does not mean that issues under r 376(4) cannot be determined. They should be so as to allow the effective date of the amendments to be determined. If the circumstances demonstrate that the requirements of r 376(4) are satisfied, then leave may be granted. If, on the other hand, they are not, then an order may be made that the amendments take effect, not from the date of the document which is being amended, but from some other date, such as the date when the amendments were foreshadowed or the date when the application to amend was made or the date that leave is granted to make them.

Do the New Causes of Action arise out of the same or substantially the same facts?

General submissions of the parties

  1. [36]
    The Applicant submits that the underlying facts that give rise to the New Causes of Action are the same facts that have been pleaded since the original statement of claim was filed. The Applicant argues that the pleadings have always alleged that:
  1. (a)
    the Applicant, as head contractor, entered into the Stowe Subcontracts with the First Respondent, under which the First Respondent agreed to complete certain work on the Project;
  2. (b)
    the First Respondent failed to complete the work in accordance with the Stowe Subcontracts, resulting in defective work; and
  3. (c)
    the Applicant was obliged to engage third-party subcontractors to rectify the defective work and incurred significant loss in doing so.
  1. [37]
    The Applicant also draws an analogy between the present case and that considered in McDonald Keen Group Pty Ltd (in liq) v Queensland.[16]  The plaintiff there sought leave to amend its claim and statement of claim to plead new causes of action. In granting leave, Burns J stated:[17]
  1. [36]
    The defendant submitted that these new claims do not arise out of the same or substantially the same facts as a cause of action for which relief has already been claimed in the proceeding, but I cannot agree. The claims are made with respect to the same contract and the same work about which the ASOC is concerned. Although they rely on additional facts, those facts arise out of substantially the same story as that which would have to be told to support the causes of action under the ASOC if those existing causes were permitted to proceed to trial…
  1. [38]
    While not a binding decision, the Applicant submits Burns J’s judgment provides reliable guidance with respect to the approach to be taken in this case, as here the New Causes of Action also arise out of ‘the same contract and the same work’ with which the original statement of claim was concerned.
  2. [39]
    The First Respondent submits that the New Causes of Action pleaded in the 2FASOC do not arise out of the same facts, or substantially the same facts, as the earlier pleadings.  The First Respondent argues that the Applicant approaches the facts that have previously been pleaded at too high a level of generality, undermining the policies underlying the limitation periods. 
  3. [40]
    The First Respondent submits that the outcome in McDonald Keen Group Pty Ltd (in liq) v Queensland has no bearing on the present case.

Contractual indemnity against liability

  1. [41]
    Paragraphs 18A and 48A of the 2FASOC recite the terms of cl 26.1(e) of the Stowe Subcontracts.  Clause 26.1(e) provides:

[Stowe] must indemnify Devine…against any liability relating to…any breach of the provisions of the [subcontract] or any negligent act or omission.

  1. [42]
    At paragraphs 8Y to 8LL, the Applicant alleges it was liable to the Body Corporates for H1, H2 and H3 and/or the lot owners in H1, H2 and H3 to remedy the defective works.
  2. [43]
    Paragraphs 37O and 66O of the 2FASOC allege the First Respondent is liable to indemnify the Applicant for the costs of rectifying the defects but has failed or otherwise refused do so, breaching cl 26.1(e).  Therefore, Devine is entitled to be paid the costs as a debt or damages.

Submissions of the parties

  1. [44]
    The Applicant submits that the only new fact that is pleaded with respect to clause 26.1(e) is the existence of the clause. 
  2. [45]
    In its submission, its claim against the First Respondent has always involved three essential elements:
  1. (a)
    The First Defendant had a contractual obligation to properly fireproof the service penetrations applicable to its work.  This was pleaded, inter alia, in paragraphs 13, 14, 18, 21, 28 and 33B of the FASOC.
  2. (b)
    The contractual obligation to correctly undertake that fireproofing work involved a right of indemnity if third parties had to be engaged.  This was pleaded in paragraph 22 of the FASOC.
  3. (c)
    The First Respondent failed to comply with the duty to properly fireproof those penetrations, and because the Applicant engaged others to do so, it has a right of indemnity in respect of those costs. This was pleaded, inter alia, in paragraphs 35, 35A, 36 and 37 of the FASOC.
  1. [46]
    On the Applicant’s argument, the only material difference is that it previously pleaded other clauses to make good the indemnity claim, rather than clause 26.1(e).
  2. [47]
    The Applicant submits that paragraphs 8Y to 8LL were only pleaded to prove the Applicant has suffered a ‘real loss’ as part of its breach of contract claim.  Therefore, its new cause of action for contractual indemnity against liability does not arise out of the new facts in those paragraphs.
  3. [48]
    The First Respondent submits that the matters pleaded in paragraphs 8Y to 8LL of the 2FASOC are critical to the newly pleaded cause of action as they establish the liability for which the First Respondent had allegedly indemnified the Applicant.

Consideration

  1. [49]
    I accept the Applicant’s submissions that its claim against the First Respondent, as previously pleaded, involved the three essential elements outlined above at paragraph [45].  However, I also accept the First Respondent’s argument that the newly pleaded matters in paragraphs 8Y to 8LL are critical to the newly pleaded cause of action.   
  2. [50]
    For example, paragraph 8KK relevantly provides:

In the premises of the matters set out in paragraphs 7, 8 and 8Y to 8JJ above, Devine was liable, to the Body Corporates for H1, H2 and H3…and/or the lot owners in H1, H2 and H3…to rectify any and all defective work under the [head contracts between Devine and Hamilton Harbour].

  1. [51]
    These paragraphs provide the basis for to the Applicant’s allegation that it was liable for the defects and therefore that the First Respondent was liable under cl 26.1(e) to indemnify the Applicant. 
  2. [52]
    Nonetheless, I am persuaded that the facts alleged in paragraphs 8Y to 8LL arise out of the same story and are substantially similar to the facts previously pleaded. 
  3. [53]
    In paragraphs 7 and 8 of the FASOC, the Applicant alleged that it entered into contracts with Hamilton Harbor to design and construct the three residential towers.  Paragraphs 8Y to 8BB and 8JJ of the 2FASOC elucidate the terms of those contracts, relevant to demonstrate the Applicant has suffered loss as a result of undertaking the rectification works.
  4. [54]
    Paragraphs 35 and 35A of the FASOC outline the alleged defects in the First Respondents work, while paragraphs 8DD to 8HH of the 2FASOC explain the circumstances in which the building inspector engaged by the H3 Body Corporate reported the identified defects to the Body Corporates for H1, H2 and H3. 
  5. [55]
    Paragraph 36 of the FASOC and paragraph 8LL of the 2FASOC both allege that the Applicant rectified the defects, while paragraphs 8II and 8KK further explain the basis for doing so was due to its contractual liability to the Body Corporates.
  6. [56]
    On this basis, I find that the Applicant’s claim that it was contractually indemnified against liability arises out of the same story as the claims in its earlier pleadings, albeit with the inclusion of additional facts providing a changed focus with elicitation of additional details.

Right to claim costs if urgent action is required

  1. [57]
    Paragraphs 18B and 48B of the 2FASOC recite the terms of cl 28.1 of the Stowe Subcontracts.  Clause 28.1 provides:

If urgent action is necessary to protect the Works, other property or people and [Stowe] fails to take action, Devine may take the necessary action.  The cost incurred by Devine in taking that urgent action will be a debt due from [Stowe] to Devine.

  1. [58]
    Paragraphs 37L and 66L of the 2FASOC allege that, pursuant to cl 28.1, Devine was entitled to engage others to carry out the rectification works urgently in order to protect its works and the residents of the apartments.  According to the particulars of those paragraphs:

Until the [rectification work] was completed, [the residential towers] were unsafe, in that the Fire Safety Installations in [the residential towers] were not maintained to the requisite standard of safety and reliability in the event of fire as required by section 104D of the Fire and Rescue Service Act 1990 (Qld).

  1. [59]
    Paragraphs 37N and 66N of the 2FASOC allege the rectification costs are a debt due and payable by the First Respondent to the Applicant pursuant, inter alia, to cl 28.1.

Submissions of the parties

  1. [60]
    The First Respondent submits that, as the Applicant’s previous pleadings made no allegation of fact with respect to urgent action being required to protect the Works and residents, the new cause of action does not arise out of the same facts as those previously pleaded.
  2. [61]
    The Applicant concedes that the particulars of paragraph 37L (and, presumably also paragraph 66L) introduce a new fact, namely that the fire safety installations in the residential towers were not maintained to the requisite standard of safety and reliability in the event of fire as required by the Fire and Rescue Service Act 1990 (Qld) s 104D.   However, the Applicant’s submits this new fact arises out of substantially the same facts as those which were previously pleaded.

Consideration

  1. [62]
    In the FASOC, the Applicant pleaded that it caused the First Respondent’s defective work to be rectified and the costs of doing so became a debt due and payable by the First Respondent to the Applicant.  For example, paragraphs 36 and 37 of the FASOC relevantly alleged:
  1. …Devine…has rectified, repaired and remedied the Stowe Stages 1 & 2 Defects…
  1. …the [cost of the rectification work]…became a debt due, and payable, by Stowe to Devine.
  1. [63]
    The new facts pleaded in the 2FASOC are that the rectification work needed to be undertaken urgently to comply with legislative requirements and that the debt is due and payable specifically under cl 28.1 of the Stowe Subcontracts.
  2. [64]
    In my view, the inclusion of these new facts again merely demonstrates a changed focus with elicitation of additional details.[18]  The cause of action still arises out of substantially the same story as the facts in the earlier pleadings.  

Right to claim costs as a debt

  1. [65]
    Paragraphs 18C and 48C recite the terms of cls 38.6 and 38.7 of the Stowe Subcontracts.  Clause 38.6 provides:

If Devine discovers materials or work performed by [Stowe] which is not in accordance with the Subcontract, Devine may direct [Stowe] to…reconstruct, replace or correct the material…

  1. [66]
    Clause 38.7 provides:

[Stowe] must comply with a direction given under this clause within the time stated, or if none is stated, in a reasonable time.  If [Stowe] fails to comply with Devine’s directions under this clause Devine may without further notice to [Stowe], have the work including the removal, demolition, replacement or correction, carried out by others and the cost incurred by Devine will be a debt due from [Stowe] to Devine.

  1. [67]
    The Applicant does not cite paragraph 18C elsewhere in the 2FASOC.  However, other paragraphs of the 2FASOC allege that:
    1. (a)
      on 22 October 2014, the Applicant’s representative issued a direction to Stowe pursuant to cl 38.6 to rectify the defects with Stage 4;[19] 
    2. (b)
      Stowe failed or otherwise refused to do so,[20] breaching cl 38.7;[21] 
    3. (c)
      the Applicant was therefore entitled to engage others to carry out the Stage 4 rectification works;[22] and
    4. (d)
      the costs it incurred in doing so are a debt due and payable by the First Respondent to the Applicant.[23]

Submissions of the parties

  1. [68]
    The First Respondent submits that the amendments at paragraphs 66E to 66G of the 2FASOC now allege for the first time (in effect) that on 22 October 2014, the Applicant issued to the First Respondent a direction to rectify defective work under the Stowe Stage 4 Subcontract, and the First Respondent has not complied with that direction.  In the First Respondent’s submission, this does not arise out of the same facts or the ‘same story’ as a cause of action previously pleaded by the Applicant.
  2. [69]
    The Applicant concedes that a new fact is being alleged, namely the making of the direction and refusal to comply with the direction.  However, it contends this new fact arises out of substantially the same facts as those which were previously pleaded.  In the Applicant’s submission, it would be uncontroversial at trial that a letter was written asking the First Respondent to rectify and the First Respondent wrote back refusing to do so. 

Consideration

  1. [70]
    Adopting the approach proposed by Applegarth J in Menegazzo v Pricewaterhousecoopers (A Firm),[24] it is helpful to consider the following question: if the Applicant did not file the 2FASOC and then sought to lead evidence at trial of the making of the direction and the refusal to comply, would that evidence be clearly objectionable on the ground of surprise or the ground it was simply irrelevant to the case raised by the Applicant’s pleading?
  2. [71]
    In my view, it is unlikely such evidence would be considered a surprise or irrelevant in circumstances where:
  1. (a)
    the alleged direction was made pursuant to a clause in a contract between the parties;
  2. (b)
    the Applicant’s pleadings relied extensively on the terms of that contract; 
  3. (c)
    the alleged direction was to rectify defective work performed under that contract;
  4. (d)
    the Applicant’s claim concerns the First Respondent’s liability for those defects; and
  5. (e)
    the Applicant alleges the First Respondent was aware the direction had been made, the direction having been issued in writing and the First Respondent having sent a letter in response.    
  1. [72]
    I am satisfied that this new cause of action arises out of substantially the same facts as those alleged in the FASOC.  The additional allegation that the Applicant issued a direction and the Respondent failed to comply fits within the story that would be told to support the earlier causes of action at trial.[25] 

Is it appropriate to grant leave without making the order sought?

  1. [73]
    Whether to make the orders sought by the First Respondent is ultimately a matter of discretion based on whether, in the Court’s opinion, it would be appropriate to do so.  Prejudice is one factor relevant to this question.[26]  Without providing an exhaustive list, it is usually also relevant to consider whether the amendment ‘facilitate[s] the just and expeditious resolution of the real issues in civil proceedings at a minimum of expense’[27] and whether the applicant has provided an adequate explanation for any delay in applying for the amendment.[28]

Submissions of the parties

  1. [74]
    The Applicant explains that the New Causes of Action were not pleaded before the 2FASOC because it engaged new junior counsel on 30 July 2022 due to issues with the availability of its previous junior counsel.[29]  Some difficulties were then encountered aligning senior and junior counsels’ schedules and obtaining the new instructions required to settle and finalise the draft 2FASOC.[30]
  1. [75]
    Despite this explanation, the First Respondent maintains that it is not appropriate to grant leave to file the 2FASOC without also ordering that the amendments only take effect from the time leave was granted.
  1. [76]
    The First Respondent concedes there is no evidence that it would suffer any prejudice if I were to refuse to make the orders sought, aside from its inability to plead limitation defences to the New Causes of Action. Nevertheless, this, it submits, is sufficient reason to make the order it seeks.
  1. [77]
    The Applicant on the other hand contends that the fact that a defendant may be deprived of a limitation defence is not prejudice of a kind that is relevant to whether the order sought should be made. The Applicant submits this is the very purpose of r 376(4).
  2. [78]
    The Applicant further relies on the statements of Burns J in McDonald Keen Group Pty Ltd (in liq) v Queensland.[31]  In the Applicant’s submission, the amendments to the 2FASOC are purely documentary, rather than allegations concerning state of mind.  In those circumstances, any delay as a result of leave being granted is unlikely to cause the First Respondent undue difficulty in responding to the new allegations. 

Consideration

  1. [79]
    The Applicant only offers an explanation for the delay in the period between the strike-out applications and its Application for Leave.  The strike-out application was not filed or heard until 2022, by which time the prima facie six-year limitation period for the New Causes of Action would have already expired.
  2. [80]
    Nonetheless, in circumstances where the Respondents have not been able to demonstrate that this would cause them any material prejudice, and I am otherwise satisfied that it is appropriate to grant leave, I am not persuaded that I should make an order that the amendments take effect from when I granted the Applicant leave to file the 2FASOC.
  3. [81]
    Further, the possibility that the First Respondent may be deprived of limitation defences is not sufficient to persuade me I should make the order it seeks. As Applegarth J noted in Menegazzo v Pricewaterhousecoopers (A Firm) & Ors, if amendments which include a new cause of action and which satisfy the requirements of r 376(4)(b) are appropriate, they do not cease to be appropriate because they would overcome what otherwise would be a relevant period of limitation.[32]

Conclusion

  1. [82]
    For these reasons, I decline to make the orders sought by the First Respondent. 
  2. [83]
    However, noting that order 2 of the orders I made by consent on 23 November 2022 incorrectly refers to an order Applegarth J made on 9 May 2022 as being made on 9 April 2022, I will vary order 2 of my order made on 23 November 2022 to:

Pursuant to rule 7 of the Rules, the time for compliance with Order 2(a) of the orders of Justice Applegarth dated 9 May 2022 be extended to 28 September 2022.

Footnotes

[1]Devine Constructions Pty Ltd v Stowe Australia Pty Ltd & Ors [2022] QSC 51.

[2]As later varied by the order of Applegarth J’s dated 9 May 2022.

[3]The order incorrectly referred to Applegarth J’s order as being made on 9 April 2022 rather than 9 May 2022.  I will vary the order to correct that date.

[4]That is, from 29 March 2018.

[5]In its written submissions, the First Respondent also submitted that, at paragraphs 37G, 66D and 66H, the Applicant make new allegations of entitlement to damages or debt.  However, these paragraphs concern potential breaches of obligations other than those pleaded in paragraphs 18A to 18C and 48A to 48C, so it is not necessary that I consider paragraphs 37G, 66D and 66H further.

[6] In its written submissions, the First Respondent also submitted that the 2FASOC seeks to introduce a new cause of action at paragraphs 38A to 38K and 67A to 67K based on an alleged indemnity under a separate deed poll.  However, the First Respondent did not ultimately seek orders in respect of these paragraphs as that cause of action remains within the relevant limitation period.  

[7]Pursuant to paragraph 2 of ‘Annexure A’ of the orders I made on 23 November 2022, the Applicant now specifically pleads it commenced rectification works in June 2015.

[8]Wardley Australia Ltd v Western Australia (1992) 175 CLR 514, 533 (Mason CJ, Dawson, Gaudron and McHugh JJ); [1992] HCA 55.

[9]Mokrzecki v Popham [2013] QSC 123, [22] (Philip McMurdo J); Menegazzo v Pricewaterhousecoopers (A Firm) [2016] QSC 94, [45] (Applegarth J).

[10][2002] 1 Qd R 145, [57]; [1999] QCA 491 (citations omitted).

[11][2001] QCA 336, [19] (McMurdo P, Thomas JA and Holmes J).

[12]Menegazzo v Pricewaterhousecoopers (A Firm) [2016] QSC 94, [50] (Applegarth J).

[13]Paul v Westpac Banking Corporation Ltd [2017] 2 Qd R 96, [15] (Fraser JA, Gotterson JA and Douglas J agreeing); [2016] QCA 252.

[14]Allonnor Pty Ltd v Wayne Doran [1998] QCA 372, [8] (McPherson JA, Muir J agreeing).

[15][2016] QSC 94, [45]-[46] (citations omitted).

[16][2019] QSC 94.

[17]Ibid [36].

[18]Draney v Barry [2002] 1 Qd R 145, [57] (Thomas JA); [1999] QCA 491.

[19]2FASOC paragraphs 66E-66F.

[20]Ibid paragraph 66G.

[21]Ibid paragraph 66I.

[22]Ibid paragraph 66K.

[23]Ibid paragraph 66M-66N.

[24][2016] QSC 94, [49].

[25]McDonald Keen Group Pty Ltd (in liq) v Queensland [2019] QSC 94, [36] (Burns J).

[26]Menegazzo v Pricewaterhousecoopers (A Firm) [2016] QSC 94, [76] (Applegarth J); Thomas v Queensland [2001] QCA 336, [17] (McMurdo P, Thomas JA and Holmes J).

[27]UCPR r 5.

[28]Menegazzo v Pricewaterhousecoopers (A Firm) [2016] QSC 94, [76] (Applegarth J); Aon Risk Services Australia Pty Ltd v Australian National University (2009) 239 CLR 175; [2009] HCA 27.

[29]Affidavit of John Grant, sworn 22 November 2022, paragraphs 22 and 23.

[30]Ibid.

[31]Ibid [37], [41].

[32][2016] QSC 94, [77].

Close

Editorial Notes

  • Published Case Name:

    Devine Constructions Pty Ltd v Stowe Australia Pty Ltd & Ors (No 2)

  • Shortened Case Name:

    Devine Constructions Pty Ltd v Stowe Australia Pty Ltd (No 2)

  • MNC:

    [2022] QSC 272

  • Court:

    QSC

  • Judge(s):

    Crowley J

  • Date:

    16 Dec 2022

Appeal Status

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

Cases Cited

Case NameFull CitationFrequency
Allonnor Pty Ltd v Doran [1998] QCA 372
2 citations
Jump To
Cite 1 - [1998] QCA 372
Cite 2 - [1998] QCA 372
Aon Risk Services Australia Limited v Australian National University (2009) 239 CLR 175
2 citations
Jump To
Cite 1 - (2009) 239 CLR 175
Cite 2 - (2009) 239 CLR 175
Aon Risk Services Australia Limited v Australian National University (2009) HCA 27
2 citations
Jump To
Cite 1 - (2009) HCA 27
Cite 2 - (2009) HCA 27
Devine Constructions Pty Ltd v Stowe Australia Pty Ltd [2022] QSC 51
2 citations
Jump To
Cite 1 - [2022] QSC 51
Cite 2 - [2022] QSC 51
Draney v Barry[2002] 1 Qd R 145; [1999] QCA 491
6 citations
Jump To
Cite 1 - [1999] QCA 491
Cite 2 - [1999] QCA 491
Cite 3 - [1999] QCA 491
Cite 4 - [2002] 1 Qd R 145
Cite 5 - [2002] 1 Qd R 145
Cite 6 - [2002] 1 Qd R 145
McDonald Keen Group Pty Ltd (in liq) v State of Queensland [2019] QSC 94
4 citations
Jump To
Cite 1 - [2019] QSC 94
Cite 2 - [2019] QSC 94
Cite 3 - [2019] QSC 94
Cite 4 - [2019] QSC 94
Menegazzo v Pricewaterhousecoopers (A Firm) [2016] QSC 94
8 citations
Jump To
Cite 1 - [2016] QSC 94
Cite 2 - [2016] QSC 94
Cite 3 - [2016] QSC 94
Cite 4 - [2016] QSC 94
Cite 5 - [2016] QSC 94
Cite 6 - [2016] QSC 94
Cite 7 - [2016] QSC 94
Cite 8 - [2016] QSC 94
Mokrzecki v Popham [2013] QSC 123
2 citations
Jump To
Cite 1 - [2013] QSC 123
Cite 2 - [2013] QSC 123
Paul v Westpac Banking Corporation[2017] 2 Qd R 96; [2016] QCA 252
4 citations
Jump To
Cite 1 - [2016] QCA 252
Cite 2 - [2016] QCA 252
Cite 3 - [2017] 2 Qd R 96
Cite 4 - [2017] 2 Qd R 96
Thomas v State of Queensland [2001] QCA 336
3 citations
Jump To
Cite 1 - [2001] QCA 336
Cite 2 - [2001] QCA 336
Cite 3 - [2001] QCA 336
Wardley Australia Ltd v Western Australia (1992) 175 CLR 514
2 citations
Jump To
Cite 1 - (1992) 175 CLR 514
Cite 2 - (1992) 175 CLR 514
Wardley Australia Ltd v Western Australia [1992] HCA 55
2 citations
Jump To
Cite 1 - [1992] HCA 55
Cite 2 - [1992] HCA 55

Cases Citing

No judgments on Queensland Judgments cite this judgment.

1

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