Community Corporation No 21561 Incorporated v Pier Apartment Hotel Pty Ltd

[2014] SADC 111

DISTRICT COURT OF SOUTH AUSTRALIA

(Civil: Interlocutory Application)

COMMUNITY CORPORATION NO 21561 INCORPORATED & ANOR v PIER APARTMENT HOTEL PTY LTD & ORS

[2014] SADC 111

Ruling of His Honour Judge Slattery

23 June 2014

PROCEDURE - COURTS AND JUDGES GENERALLY - COURTS - RULES OF COURT - EFFECT AND CONSTRUCTION

Interlocutory application of the plaintiffs for leave of the Court under DCR 6R 54(5)(a) to file and deliver a fourth statement of claim which had already been filed and delivered by them on 19 December 2013 but without the permission of the Court or the consent of the parties – plaintiffs had previously obtained leave of a Master of the Court to discontinue claims in respect of particular defects as specified in the fourth statement of claim and for other orders.

Interlocutory application of the plaintiffs for leave to file a fourth statement of claim pursuant to DCR 6R 54(4)(a) – both of the plaintiffs applications seek an order nunc pro tunc to 19 December 2013.

Interlocutory application of the first and second defendants for an order that the amendments to the fourth statement of claim be disallowed as against the first and second defendants.

Whether the plaintiffs were entitled to file and deliver the fourth statement of claim without consent of the parties or the permission of the Court pursuant to the District Court Civil Rules 2006 (SA); whether, if the plaintiffs were not entitled to file and deliver the fourth statement of claim without consent or permission, the Court would grant the plaintiffs permission to file the fourth statement of claim in its current form; operation of District Court Civil Rules 2006 (SA) considered in relation to the amendment of pleadings.

Plaintiffs reached a settlement with the third defendant; whether the plaintiffs may maintain the relief claimed against the third defendant or whether the plaintiffs are required to amend their pleaded case to reflect the settlement as well as maintaining their allegations against the third defendant to, inter alia, be in a position to continue to press their claims against the second defendant as builder and in respect of any antecedent duty allegedly owed in relation to a claim for pure economic loss.

Administrator appointed to the fourth defendant under Part 5.3A Corporations Act 2001 (Cth); whether and to what extent the plaintiffs are permitted to maintain or proceed with a claim against the fourth defendant absent the permission of a court or administrator prior to a deed of company arrangement being considered by the creditors of the corporation.

Held:

(1) Absent the operation of DCR 6R 54(5)(a), under DCR 6R 54(4)the plaintiffs were required to obtain the permission of the Court or the consent of the parties before filing and delivering the fourth statement of claim.

(2) In the circumstances of this case, DCR 6R 54(5)(a) had no application and the plaintiffs were not permitted to file any amended pleading under that sub-rule.

(3) DCR 6R 56(1) does not permit a party to file and deliver an amended pleading outside of the operation of DCR 6R 54(4) and (5); observations about the operation of DCR 6R 56.

(4) Observations about the content of the fourth statement of claim having regard to the operation of DCR 6R 54(4).

(5) Following the settlement of the plaintiffs’ claims against the third defendant, plaintiffs required to file an amended pleading in any event in order to reflect the settlement and the relief now claimed following such settlement.

(6) The claim against the fourth defendant is stayed but only to the extent that the plaintiffs would seek to commence or proceed with an action against the property of the fourth defendant.

(7) Observations about whether a party in the position of the plaintiffs may plead a case of vicarious liability of a builder for the breach of any alleged duty of care owed to the builder’s principal by one of the builder’s subcontractors.

Community Titles Act 1996 (SA) ss 6, 10, 28, 29, 78; District Court Civil Rules 2006 (SA) rr 54, 55, 56, 105; Corporations Act 2001 (SA) ss 435C, 436A, 440D; Home Building Act 1989 (NSW); Wrongs Act 1958 (Vic), referred to.
Owners - Strata Plan 61288 v Brookfield Australia Investments Ltd [2013] NSWCA 317; Aon Risk Services Australia Ltd v Australian National University (2009) 239 CLR 175 ; Channel Seven Adelaide Pty Ltd v Manock [2010] SASCFC 59, applied.
Owners Corporation Strata Plan 61288 v Brookfield Multiplex [2012] NSWSC 1219 ; Bryan v Maloney (1995) 182 CLR 609; Caltex Oil (Australia) Pty Ltd v The Dredge “Willemstad” (1976) 136 CLR 529; Perre v Apand Pty Ltd (1999) 198 CLR 180; Woolcock Street Investments Pty Ltd v CDG Pty Ltd (2004) 216 CLR 515; Astley v Austrust Ltd (1999) 197 CLR 1; Hoffmann v Boland [2013] NSWCA 158; Winnipeg Condominium Corporation No 36 v Bird Construction Co. [1995] 1 SCR 85; RSP Architects Planners and Engineers (Raglan Squire & Partners FE) v Management Corporation Strata Title Plan No 1075 [1999] 2 SLR 449; Pullen v Guteridge Haskins & Davey Pty Ltd [1993] 1 VR 27; Moorabool Shire Council v Taitapanui [2006] VSCA 30; Gunston v Lawley & Ors [2008] VSC 97; Valleyfield Pty Ltd v Primac Ltd [2002] QSC 80; Frederick W Nielsen (Canberra) Pty Ltd v PDC Constructions (ACT) Pty Ltd (1987) 71 ACTR 1; Simaan General Contracting Co v Pilkington Glass Ltd (No 2) [1988] QB 758; Greater Nottingham Co-operative Society Ltd v Cementation Piling and Foundation Ltd [1989] QB 71; John Goss Projects Pty Ltd v Thiess Watkins White Constructions Pty Ltd [1992] QCA 088; Valleyfield Pty Ltd v Primac Ltd [2003] QCA 339; Cement Australia Pty Ltd v Australian Competition and Consumer Commission (2010) 187 FCR 261; BHP Billiton Olympic Dam Corporation Pty Ltd v Bluestone Apartments Pty Ltd (No 2) [2013] SASC 133, considered.

COMMUNITY CORPORATION NO 21561 INCORPORATED & ANOR v PIER APARTMENT HOTEL PTY LTD & ORS
[2014] SADC 111

Introduction

1. This action concerns a claim by the two plaintiffs that are strata corporations incorporated pursuant to the Community Titles Act 1996 (SA) (‘the CTA’) in respect of the creating of strata allotments under a strata plan of a building at Glenelg which can conveniently be called the Pier Apartments. The plaintiffs’ claims relate to building defects in the common areas of the building. The plaintiffs make that claim against the first defendant Pier Apartment Hotel Pty Ltd (‘Pier Apartments’) which, it is alleged, from 20 December 2000 was the developer of the building, against the second defendant Baulderstone Hornibrook Pty Ltd (‘Baulderstone Hornibrook’) which, was at all material times alleged to be the builder of the building, against the third defendant Aurecon Australia Pty Ltd (‘Aurecon’), which under its former name was an engineering firm that provided engineering services prior to and after 20 December 2000 and the fourth defendant Woodhead Pty Ltd (‘Woodhead’), a firm of architects which provided architectural services prior to and after 20 December 2000.

2. The plaintiffs now wish to allege that prior to 20 December 2000, a joint venture of Baulderstone Hornibrook and Urban Construct Pty Ltd (‘Urban Construct’) was the developer of the building project. Baulderstone Holdings Pty Ltd (‘Baulderstone Holdings’), the holding company of Baulderstone Hornibrook was a shareholder of Pier Apartments. It is alleged that Pier Apartments is effectively the continuation of or the corporate manifestation of the previous joint venture.

3. The plaintiffs have now reached a settlement with Aurecon but they have not amended their pleadings in that respect. As will later become apparent, the plaintiffs say that the allegations against Aurecon are required to be maintained in these proceedings in order to properly plead their claim for pure economic loss.

4. The position of the Aurecon and Woodhead has been the subject of an intense factual dispute between the parties. The plaintiffs contend that Aurecon and Woodhead were intrinsically involved with the project to build the building in concert with the joint venturers prior to 20 December 2000. They also say that Woodhead as architects and Aurecon as engineers were in breach of their duties as professionals and that the detriment suffered by the plaintiffs is claimable against Baulderstone Hornibrook as builder and against Pier Apartments as the developer. The plaintiffs also claim, as subsequent owners, an entitlement to claim damages against Aurecon as engineers and Woodhead as architects in respect of alleged breaches of duty. Separate claims are made against each of the defendants. The plaintiffs case is that Pier Apartments entered into a design and construct contract with Baulderstone Hornibrook in respect of the project. In turn Baulderstone Hornibrook entered into separate contracts with Aurecon and Woodhead for engineering and architectural works on the project.

5. The plaintiffs allege that by reason of the very peculiar facts of the matter, a duty of care was owed to Pier Apartments by each of Baulderstone Hornibrook, Aurecon and Woodhead. The plaintiffs also allege that it was always in the contemplation of all of the parties that there would be a division of the project into separate allotments under a strata plan which would, in turn, require the creation of the plaintiffs as the relevant strata corporation under the CTA.

6. The plaintiffs make separate pleas against the defendants in respect of and in consequence of what they allege are their separate breaches of duty, statutory duty and contract. The defendants previously made separate damages claims against each of the defendants but in light of the disclosure of the type of building contract between Baulderstone Hornibrook and Pier Apartments, the plaintiffs now seek to claim all of the damages against Baulderstone Hornibrook whilst maintaining separate damages claims for breaches of duty, breaches of statutory duty (and contract where appropriate), notwithstanding their rolled up pleas against Baulderstone Hornibrook.

7. The plaintiffs also seek to make further claims for pure economic loss on the basis of their peculiar vulnerability as entities carrying very large responsibilities and absent any means to protect their position.

8. The plaintiffs have now settled their action against Aurecon. Woodhead is currently in administration following a resolution of the directors of that company. There is no evidence before the Court about whether a deed of company arrangement has been agreed to by the creditors of that company and if so on what terms.

9. The plaintiffs filed a second Scott Schedule on 6 May 2014 following the receipt by them of experts’ reports. The amended content of that Scott Schedule is also a matter of contention between the parties.

10. This matter comes before me on a number of interlocutory applications by both the plaintiffs and Pier Apartments and Baulderstone Hornibrook. The central issue before me is the status of a filed document (FDN 92) called the fourth statement of claim. That document came forward following agitation in late 2013 by Pier Apartments and Baulderstone Hornibrook who were contemplating amendments to their defence.

11. The status and content of the fourth statement of claim are two of the principal issues for my determination. Another is the content of the second Scott Schedule filed by the plaintiffs on 6 May 2014. In order to properly explain my reasons, it is necessary for me to review some of the history of the matter in order to better explain how it is that the quite peculiar circumstances of this case came about and the matters that have influenced the exercise of my discretion in this case.

    History

12. This proceeding was commenced in 2007. To date, there have been three statements of claim filed[1] and four defences have been filed on behalf of the defendant parties.[2]

    [1]    FDN 1, FDN 10, FDN 43; FDN 92 was not filed under DCR 6R 54(4)(a) or (b). 

    [2]    FDN 49, FDN 54, FDN 57, FDN 58.

13. After hearing argument over a number of days between 24 June and 16 September 2011 Master Blumberg of this Court made orders on 19 October 2011 refusing permission to the plaintiffs to file a third statement of claim in the form and in the terms then propounded by them. This application had been opposed by the first three defendants. In the course of argument some proposed new paragraphs in the pleading were not pursued. The learned Master refused the application of the plaintiffs on the basis that the proposed document did not comply with District Court Civil Rules 2006 (SA) (“DCR 6”) r 98 and 99 and that a DCR 6R 102 order would be made. The learned Master was of the view that if certain amendments were made to the pleading including the quarantining of schedules of particulars into a Scott Schedule, the case sought to be pleaded by the plaintiffs in the proposed third statement of claim would be accepted by the Court. The plaintiffs were then provided with a further opportunity to file an amended third statement of claim.

14. A further version of the third statement of claim was subsequently filed by the plaintiffs[3] dated 22 March 2012. It is filed pursuant to an order of Master Blumberg dated 22 March 2012. This version of the third statement of claim[4] does not observe the rules in relation to amendment of pleadings and it is not possible to identify the amendments from a reading of this document.[5]

    [3]    FDN 43.

    [4]    FDN 43.

    [5]    By underlining, shading or some other method.

15. After the filing of the third statement of claim, the process of disclosure took place between the parties. Pier Apartments’ defence[6] was filed on 13 June 2012 and Pier Apartments’ list of documents[7] was filed on 20 November 2012. Baulderstone Hornibrook’s defence[8] was filed on 30 April 2012 and Baulderstone Hornibrook’s lists of documents[9] were filed on 21 December 2012 and 30 January 2014 respectively.

    [6]    FDN 57.

    [7]    FDN 65.

    [8]    FDN 49.

    [9]    FDN 75, FDN 78.

16. I am informed by the plaintiffs that the defendants’ discovery is voluminous and is approximately 24,500 pages. I am also informed that the documents that governed the contractual relationships between the plaintiffs and the defendants were available to the plaintiffs through this process of disclosure from in or about December 2012.

17. Between December 2012 and December 2013, the parties continued to attend to their responsibilities within the action and also a mediation was conducted before Mr McNamara QC. That mediation was conducted between about July and October 2013 but failed to resolve the action. There had been no significant amendment of the pleadings in that time.

18. After the closure of the mediation on 16 December 2013 the plaintiffs filed at Court and delivered a document[10] entitled “Fourth Statement of Claim”. The plaintiffs say that this amended pleading was filed pursuant to DCR 6R 55 and 56. The amended pleading was filed without permission of the Court but the plaintiffs contend that, under these rules, this can occur. The defendants dispute the entitlement of the plaintiffs to file and deliver the fourth statement of claim. The fourth affidavit of Jonathan Charles Clarke,[11] of the firm Cowell Clarke Commercial Lawyers (‘Cowell Clarke’), the solicitors for Pier Apartments and Baulderstone Hornibrook, discloses correspondence sent to the solicitors for the plaintiffs identifying the objections to the amendments to the fourth claim pursuant to DCR 6R 56(2). The letter sets out the detail of objections raised concerning the pleadings.[12] The affidavit also discloses a response of the firm FBR Law Pty Ltd (‘FBR Law’), the solicitors for the plaintiffs dated 28 January 2014.[13] The letter of FBR Law identifies the assumption of that firm that the letter of Cowell Clarke dated 24 January 2014 was intended to foreshadow the terms of an application under DCR 6R 56(1) seeking an order that the Court disallow the amendments identified in the letter of Cowell Clarke of 24 January 2014. The letter of FBR Law then goes on to respond to the specific paragraphs of the Cowell Clarke letter. The affidavit of Mr Clarke was filed in support of an interlocutory application; [14] the content of which is set out in paragraph 24.

    [10]   FDN 92.

    [11]   FDN 95.

    [12]   Exhibit JCC9 to the affidavit of Jonathan Charles Clarke.

    [13]   Exhibit JCC10 to the affidavit of Jonathan Charles Clarke, FDN 95.

    [14]   FDN 94.

19. By interlocutory application dated 30 January 2014[15] the plaintiffs sought the following orders:

    [15]   FDN 96.

    1.   The within application be made specially returnable to Master Blumberg on 3 February 2014 at 9.30.

    2.   The Fourth Statement of Claim be amended by Master Blumberg on the Court file by striking through paragraphs 83 and 87.

    3.   The Plaintiffs be given leave nunc pro tunc to 16 December 2013 to discontinue the claims in respect of the 1^st to 5^th Defects, 10^th Defect, 12^th to 15^th Defects and 17^th to 19^th Defects as pleaded in paragraphs 75 to 79, 83, 85 to 87 and 89 to 91 of the Fourth Statement of Claim pursuant to DCR 6R107(3).

    4.   The date for compliance with order 5 made on 19 December 2013 be extended to 14 days after the receipts of the last of the expert reports provided pursuant to order 6 made on 19 December 2013.

    5.   The Fourth Defendant be required to produce the Rule 160(5) documents in relation to their expert report by Lolita Mohyla within a seven (7) day period.

    6.   The time for compliance with order 6 made on 19 December 2013 in respect of a report responding to the report of Lolita Mohyla be extended to fourteen (14) days after the production of the three (3) numbered volumes of documents titled “Brief for the Use of Lolita Mohyla”.

    7.   The costs of orders 4 and 5 herein be paid by the Fourth Defendant in any event.

    8.   The costs of the application be costs in the cause.

    9.   ...

20. It is apparent that the interlocutory application of 30 January 2014[16] presumes the acceptance on the Court file of the document entitled “Fourth Statement of Claim” as an extant document before the Court. That presumption is challenged by Pier Apartments and Baulderstone Hornibrook. One quite unusual aspect of this case is that, apparently by consent, the learned Master did make some of these orders. I will deal with that matter later in these reasons.

    [16]   FDN 96.

21. Reference is also made to the third affidavit of Jonathan Charles Clarke filed herein[17] sworn on 29 November 2013. That affidavit discloses that by letter dated 16 September 2013 Cowell Clarke wrote to the plaintiffs solicitors requesting confirmation of whether the plaintiffs intended to make any further amendments to the statement of claim.[18] There had been an earlier indication by the firm FBR Law on behalf of the plaintiffs that they would not address these issues until such time as the mediation was finalised.[19] Implicitly by that time (i.e. 23 September 2013) the parties were still engaged in mediation. The letter of FBR Law did not gainsay the proposition that the plaintiffs may prepare a fourth statement of claim.

    [17]   FDN 91.

    [18]   Exhibit JCC7, letter Cowell Clarke to FBR Law dated 16 September 2013.

    [19]   Exhibit JCC6, letter FBR Law to Cowell Clarke dated 23 September 2013.

22. By letter of 27 November 2013 from FBR Law to Cowell Clarke, the solicitors for the plaintiffs informed the solicitors for Pier Apartments and Baulderstone Hornibrook that they were presently formulating amendments to the second statement of claim (implicitly this must be the third statement of claim) which were intended to be filed and served pursuant to DCR 6R 55 and 56. The letter announces that the solicitors did not think that it was necessary for the plaintiffs to seek formal leave to amend the pleading. The affidavit of Mr Clarke of 29 November 2013[20] also advises the Court that Mr Patrick O’Sullivan QC of senior counsel had been retained to consider and advise on any amendments needed to be made to the defences of Pier Apartments and Baulderstone Hornibrook ahead of the trial. The affidavit goes on to state:-

    15... Before circulating a proposed amended defence, however, I wish to first determine whether the statement of claim is in its final form.

    [20]   FDN 91.

1. This is an obviously sensible approach because it is apparent that Pier Apartments and Baulderstone Hornibrook were giving consideration to the amendment of their defences. It was appropriate therefore, for the first and second defendant to give consideration to an amendment of their defence to the final pleading of the plaintiffs. In my opinion this is an important matter for the reasons that I set out hereunder. The stated intention of Pier Apartments and Baulderstone Hornibrook to consider any amendments to their defence stands in the background of these matters.

2. The affidavit of Mr Clarke of 30 January 2014[21] was sworn and filed in support of an interlocutory application on behalf of Pier Apartments and Baulderstone Hornibrook dated 30 January 2014.[22] That interlocutory application sought the following orders:-

   1.   That a direction be made by Master Blumberg that this application be determined by a judge of this honourable Court at the earliest opportunity.

   2.   Pursuant to rule 56(1) of the District Court Civil Rules 2006 (SA) the amendments to the fourth statement of claim be disallowed as against the first defendant and the second defendant as set out in the letter dated 24 January 2014 from Jon Clarke to Sean Ryan exhibited at “JCC9” to the fourth affidavit of Jonathan Charles Clarke dated 30 January 2014.

   3.   ...

   [21]   FDN 95.

   [22]   FDN 94.

3. Following that application, the action was referred to my list by an executive order made by the Chief Judge of this Court in February 2014.

4. At the request of the parties, I held a directions hearing on 12 May 2014. Following that directions hearing, the plaintiffs filed an interlocutory application dated 13 May 2014.[23] The matter came on for further hearing before me on 14 May 2014. The interlocutory orders sought by the plaintiffs in the application of 13 May 2014,[24] relevantly were:-

   1.   ...

   2.   That leave to bring the within application be granted pursuant to rule 131(5);

   3.   That the time for the plaintiffs to exercise the right of amendment under rule 54(5)(a) be extended nunc pro tunc to 16 December 2013;

   4.   That the plaintiffs have leave to file the fourth statement of claim (FDN 92) to 16 December 2013 pursuant to rule 54(5)(a) nunc pro tunc to 16 December 2013;

   5.   In the alternative, that the plaintiffs have leave to file (the) fourth statement of claim (FDN 92) to 16 December 2013 pursuant to rule 54(4)(a) nunc pro tunc to 16 December 2013;

   6.   The plaintiffs have an extension of time to comply with paragraph 5 of the orders made on 19 December 2013 to 6 May 2014;

   7.   The plaintiffs have an extension of time to comply with paragraph 6 of the orders made on 19 December 2013 to 21 March 2014.

   [23]   FDN 106.

   [24]   FDN 106.

5. On 19 December 2013 Master Blumberg made the following orders in this Court:-

   1.   The [fourth] statement of claim (FDN 92) has been filed and served without permission and without consent on 1.12.2013.

   2.   The defendants may wish to exercise their rights in Rule 56 to seek an order disallowing the amendments in whole or in part.

   3.   Pursuant to Rule 117, I extend the time prescribed in Rule 56(2) until 31.01.2014.

   4.   In these circumstances, the defendants are excused from filing any pleading responding to the [fourth] statement of claim until further order.

   5.   If so advised, the plaintiffs have permission to draw and to serve upon the defendants a revised Scott Schedule on or before 17.01.2014 and the issue of whether the defendants should add their contribution to that schedule will be further considered on 03.02.2014.

   6.   Plaintiffs have an extension of time to obtain and serve experts reports until 31.01.2014. 

   7.   Defendants have an extension of time within which to obtain and serve expert reports until 30.04.2014.

   8.   Plaintiffs to supply Rule 160 documents, as sought in FDN 90, on or before 24.01.2014.

   9.   The application in FDN 88, in relation to paragraph3 (Notice to admit) is adjourned FMO to 03.02.2014 at 9.30am.

   10.   Costs reserved.

6. I refer to paragraph 5 of the orders of 19 December 2013 made by the learned Master. The plaintiffs did not comply with the terms of that order because it did not file and deliver the second Scott Schedule until 6 May 2014. That date is significant for a number of the matters that are discussed below.

7. The important feature of these orders concerns the fourth statement of claim.[25] It will be apparent that the interlocutory application of Pier Apartments and Baulderstone Hornibrook[26] dated 30 January 2014 which I have discussed above, was filed in response to orders 2 and 3 of the learned Master made on 19 December 2013. By that time, there was no interlocutory application of the plaintiffs seeking the permission of the Court to file the fourth statement of claim. That permission was not sought until the interlocutory application of the plaintiffs dated 13 May 2014 was filed.[27] Following the filing of the interlocutory application of Pier Apartments and Baulderstone Hornibrook of 30 January 2014, the plaintiffs filed the interlocutory application[28] dated 30 January 2014, the terms of which have been set out above. The content of the interlocutory application FDN 96 and, to an extent FDN 94, were considered by the learned Master on 3 February 2014. It is necessary to identify the orders made by the learned Master on that day. They were as follows:-

   [25]   FDN 92.

   [26]   FDN 94.

   [27]   FDN 106.

   [28]   FDN 56.

   1.   By consent and on the application of the plaintiffs, I strike out paragraphs 83 and 87 of the [fourth] statement of claim.

   2.   The plaintiffs ha[ve] permission nunc pro tunc to discontinue their claims in relation to the 1^st-5th defects, the 10^th defect, the 12^th-15^th defects and 17-19^th  defects as reflected in the [fourth] statement of claim filed on 16.12.2013.

   3.   Plaintiffs have an extension of time to comply with paragraph6 of my orders of 19.12.2013 until 17.02.2014.

   4.   Defendants have a corresponding extension of time to comply with paragraph7 of my orders of 19.12.2013 until 14.05.14.

   5.   Plaintiffs have an extension of time to comply with paragraph5 of my orders of 19.12.2013 until 03.03.2014 noting the objection of the [fourth] defendant to this order on the basis that it may give rise to new subject matter about which the defendant has not obtained expert evidence.

   6.   [Third] and [fourth] defendants, if so advised, to file and serve any amended defence on or before 03.03.2014.

   7.   [First] and [second] defendants to file and serve written outline of argument in relation to FDN 94 on or before 24.02.2014.

   8.   Plaintiffs to file and serve responding outline of argument on or before 11.03.2014.

   9.   All outstanding aspects of FDNs 88, 90, 94 and 96 are adjourned FMO to 14.03.2014 (1/2 set aside).

   10.   Costs reserved.

8. By notice of 25 February 2014 sent to the parties on that day, the Court advised the parties that, his Honour Chief Judge Muecke had, pursuant to DCR 6R 115, assigned a special classification to the action and assigned me as a judge to supervise the conduct of the action to the point of trial.

9. The “for mention” date (of 14 March 2014) set by the learned Master on 3 February 2014 was then vacated by the consent of all of the parties. The learned Master made those formal orders on 14 March 2014. I was thereafter not able to deal with the matter until May 2014 because of other commitments.

10. It has been necessary to recite this history in order to identify that there are now two principle issues for resolution arising between the plaintiffs and Pier Apartments and Baulderstone Hornibrook. It is also necessary to identify that the plaintiffs and Aurecon have reached a settlement, a judgment has been entered against Aurecon and a judgment sum paid by it. Woodhead is a corporation. The directors of that company have now appointed an administrator to that company under Part 5.3A of the Corporations Act 2001 (Cth) (‘the CA’). I am informed by counsel that a meeting of the creditors has been held and that a summary of the effect of a proposed deed of company arrangement has been provided to the creditors for their consideration, but that a formal deed of company arrangement has not yet been put before the creditors. I am also informed by counsel, although without any formal proof, that the summary of the proposed deed of company arrangement suggests that the terms of the deed will not affect claims such as this claim made by the plaintiffs against Woodhead. I mention those matters only on the basis that this is information given to me by counsel from the bar table and is not the subject of formal proof before me. Counsel were content for me to proceed on the basis of the information that they had provided to me. I will do so but I bear in mind that it will directly affect the matters that are required to be decided by me in this matter.

    The interlocutory applications: the issues

11. The position is that I have before me FDN 94, FDN 96 and FDN 106. It is necessary for me first to identify the two matters that require my decision and to state that the other matters involved in those applications will be dealt with consequently upon my determination of the two issues that I contemplate arise under those applications. The first issue is whether, and if so in what circumstances, the plaintiffs were entitled to merely file and deliver FDN 92, the fourth statement of claim that was filed in the Court on 16 December 2013. That requires a review by me of the effects of the relevant rules.[29]

    [29]   DCR 6R 54, 55 and 56.

12. The second issue which arises is, if I am against the plaintiffs in respect of their primary contention concerning the operation of the rules, whether I would grant the plaintiffs leave to file the fourth statement of claim in its current form. If it is the case that I am not prepared to make that order, the alternate issue arises as to whether, by virtue of the matters that I discuss in this judgment, I am prepared to allow the plaintiffs to file the fourth statement of claim in any form. The determination of that matter requires a consideration of the content of the fourth statement of claim and the content of the second Scott Schedule. Those matters have been addressed in detail by the parties and they require my consideration.

13. Before embarking upon a consideration of the issues that I have defined as requiring determination, it is necessary to state that there is a curious aspect about the orders made by the learned Master on 3 February 2014. On that day and apparently by consent, the Court gave permission to the plaintiffs to amend the fourth statement of claim by the deletion of paragraphs 83 and 87. On the same basis (i.e. by consent) the Court also gave the plaintiffs permission to discontinue their claims in relation to a number of defects. I leave aside the question of defects because I will presume that the discontinuance of those matters would have occurred in any event, irrespective of the existence of the fourth statement of claim. The important matter is that the Court has already allowed the plaintiffs the right to amend the fourth statement of claim as if it was the extant document before the Court. 

    The Rules

14. DCR 6R 54 reads as follows:-

    54—Amendment

    (1)A party may amend a document filed by the party.

    (2)An amendment is made by filing in the Court the amended document on which the amendments are to be shown as follows—

    (a)material deleted from the previous version of the document is to be shown in erased type (that is, type through which a single line is drawn);

    (b)material not previously included is to be distinguished from material previously appearing in the document by underlining or by shaded type.

    (3)A party who amends a document must serve copies of the amended document on all other parties as soon as practicable after the amendment is made.

    (4)An amendment may be made—

    (a)with the Court's permission; or

    (b)with the consent of all other parties to the action; or

    (c)as authorised by subrule (5).

    (5)A party is authorised to amend without the consent of the other parties or the Court's permission if—

    (a)the amendment is made within the period allowed for disclosure of documents or a further 14 days from the end of that period; and

    (b)the party has not exercised the right to amend under this subrule on an earlier occasion.

    (6)However, an amendment cannot be made without the Court's permission or the consent of the other parties if the effect of the amendment is—

    (a)to withdraw an admission; or

    (b)to add or substitute a cause of action that is statute barred; or

    (c)to introduce a defendant against whom a fresh action would be statute barred.

    (7)The Court's power to grant permission for amendment under subrule (6) is subject to the following qualifications—

    (a)the Court may only grant permission for the addition or substitution of a cause of action that is statute barred if the new cause of action arises out of substantially the same facts as the original cause of action;

    (b)the Court may only grant permission for the introduction of a defendant against whom a fresh action would be statute barred if satisfied that the plaintiff's failure to joint the defendant arose from a genuine mistake.

    (8)The following documents cannot be amended under this rule—

    (a)an affidavit;

    (b)a judgment or order.

15. I refer to sub-rules (6) and (7). As a result of the matters I discuss below, it will not currently be necessary to revisit the content of those rules.

16. My present focus is upon sub-rules (2), (4) and (5) of this rule. Sub-rule (2) is a machinery provision. It refers to the process of making the amendment. The steps preparatory to that process are covered in sub-rule (4) and (5). In my opinion, there are three methods by which an amendment to a pleading may be made. The first is with the Court’s permission.[30] The second is with the consent of all other parties[31] and the third is as authorised by sub-rule (5). 

    [30]   DCR 6R 54(4)(a)

    [31]   DCR 6R 54(4)(b)

17. The steps required for the obtaining of the Court’s permission to make an amendment are well known and understood. They do not require any in depth discussion here. In the usual course, a party proposing an amendment, circulates the document containing the amendment for consideration by the other parties and then, if there is any objection, justifies the amendment before the Court. The party thereby gains the Court’s permission if the Court allows the amendment. The matters for consideration for the Court in granting its permission are well known and understood. They are thoroughly discussed in the text Lunn’s Civil Procedure South Australia[32] at paragraphs 6R 54.30 et seq.

    [32]   LexisNexis Butterworth, Lunn’s Civil Procedure South Australia, vol 1 (at service 136), p 5200.7 et seq.

18. On occasions, it may not be necessary for a party proposing an amendment to obtain the Court’s permission. This will occur in the event that the party has the consent of all other parties to the amendment. Again, the question of what amendment can be made and on what basis is well known and understood and it is not necessary here to discuss those principles. The third way is as authorised under sub-rule(5) and this entitles a party to amend without the consent of the other parties or the Court’s permission if the amendment is made within the period allowed for disclosure of documents or a further 14 days from the end of that period; and the party has not exercised the right to amend under the subrule on an earlier occasion. It is necessary to emphasise that DCR 6R 54(5) sets out the circumstances where a party is authorised to amend without the consent of the parties or the Court’s permission.

19. DCR 6R 54(6) prohibits amendments being made without the Court’s permission or the consent of the other parties (necessarily under DCR 6R 54(5)) if the amendment withdraws an admission, adds or substitutes a cause of action that is statute barred or introduces a defendant against whom a fresh action would be statute barred.

20. The process governing the operation of the matters raised in DCR 6R 54(6) is described in DCR 6R 54(7) and (8). Those matters will be discussed later.

21. DCR 6R 55 reads as follows:-

    55—Amendment of pleadings

    (1)This rule applies to an amendment to a pleading.

    (2)If a party amends a pleading, the opposing party may respond to the amendment within 14 days after the amended pleading is filed.

    (3)If the opposing party has already filed a pleading and makes no response to an amendment, the opposing party is taken to rely on the pleading already filed as a response to the amendment.

    (4)However, if an amendment is made by permission of the Court, the Court may when granting its permission make any other provision it considers appropriate for the response of other parties to an amendment.

22. This rule applies to the amendment of the pleading and is a machinery provision in relation to any responses to the amendment, the failure to respond to the amendment and the ability of the Court to make ancillary orders in the event that responses are necessary. If the pleading raises a later cause of action, then it is necessary for the party moving the amendment to also satisfy the Court that permission should be granted under DCR 6R 105. That rule reads as follows:-

    105—Court's permission required if pleading raises later cause of action

    (1)A pleading may refer to events occurring before or after the date of the commencement of the action to which the pleading relates.

    (2)However, a pleading cannot raise a new cause of action based on events occurring after the commencement of the action unless the Court—

    (a)is satisfied that the new cause of action can be included without injustice to another party; and

    (b)gives its permission.

    The operation of DCR 6R 56

23. DCR 6R 56 reads as follows:

    56—Power to disallow amendment

    (1)If a party has made an amendment without the Court's permission, the Court may, on its own initiative or on application by another party, disallow the amendment in whole or part.

    (2)An application under this rule must be made within 14 days after notice of the amendment is given to the applicant.

24. The argument of the plaintiffs is that this rule contemplates a party making an amendment without the Court’s permission simpliciter. That is, the expression is DCR 6R 56(1) of ‘…a party has made an amendment without the Court's permission…’ provides a power or authority (without more) for a party to make an amendment without the Court’s permission. This is the argument of the plaintiffs which purports to justify the filing of the fourth statement of claim on 16 December 2013. Thus, according to the plaintiffs’ argument, it was always open to the plaintiffs to make an amendment to the pleading without the Court’s permission and it would only be if the Court, on its own initiative, or another party applies to disallow the amendment in whole or in part, that the amendment would not otherwise stand as an amended pleading on the Court file.

25. I am unable to accept the arguments of the plaintiffs. There are three principal reasons.  The first is that, properly read, DCR 6R 54(4) establishes the requisite methodology (and procedure) for the making of an amendment to any document filed by the party. The first method is by the Court’s permission and the second with the consent of the other parties. The only way that a party could amend a pleading without the consent of the other parties or with the Court’s permission is if the amendment is made within the particular time period prescribed in DCR 6R 54(5)(a) and in the circumstances described in DCR 6R 54(5)(b). There is an initial limitation upon the power of the party under DCR 6R 54(5) by virtue of the matters set out in DCR 6R 54(6).[33]

    [33]   Viz DCR 6R 54(7) and (8)

1. In my opinion, there is another restriction on the power of a party to make an amendment to a filed document under DCR 6R 54(5). That restriction is as described in DCR 6R 56. The operation of DCR 6R 56(1) assumes that an amendment has been made under DCR 6R 54(5) (viz, an amendment made without the Court’s permission). In those circumstances, the Court may, on its own initiative or on the application by a party to be made within 14 days after notice of the amendment is given to the applicant, to disallow the amendment in whole or in part. This maintains the right of the Court to control the processes before it so that, absent an issue arising under DCR 6R 54(6), it is still possible for the Court of its own initiative, or on the application of a party made within 14 days after notice of the amendment is given to the applicant, to disallow the amendment in whole or in part. Therefore, on the second basis, properly read DCR 6R 56(1) and (2) removes any doubt with respect to the capacity of the Court to continue to supervise the content of a document filed by a party on its own initiative or by application of another party to the proceedings. Thus it is to be seen that DCR 6R 54(6) is not a code of limitation of the right of the Court to supervise the conduct of a party before it concerning the documents which it files but that the Court will maintain a general power of supervision of the process of amendment of pleadings.

2. The second reason for this view is that, properly understood, DCR 6R 56(2) contemplates that a notice of amendment has been given to the applicants. In my opinion, the wording of this subrule contemplates a number of matters. First that the amendment has been made and in my opinion, the only basis to make that amendment (without the permission of the Court or the consent of the other party) is by an amendment under DCR 6R 54(5). The second is that the subrule contemplates a notice of the amendment having been given. That is a notice of an amendment as a fait accompli rather than, conversely, a notice to the other party seeking the other party’s permission to make the amendment or notice to the other party of an intention to apply to the Court for its permission to make the amendment.[34]

   [34]   DCR 6R 54(4)(a) and (b)

3. The third reason is that if the contention of the plaintiffs was correct then there is a very real risk of the Court losing control of its own procedures. An acceptance of the plaintiffs’ contentions would result in the situation where, outside of DCR 6R 54(5), the parties to a proceeding could file and deliver amended pleadings without the Court being aware (or supervising) the basis upon which they are filed despite the powers set out in DCR 6R 56(1). The position may be reached where it is difficult to ascertain at any given time what is the state of the pleadings in an action. That is unsatisfactory at many levels. The Court must maintain control of its own processes. The Court file must properly disclose, in at least a snapshot form, the respective positions reached in the proceedings. The same may be said for the parties’ own positions. There are sanctions for a failure to properly plead a case and there are consequences for attempting to lead a case at trial that is not pleaded. The structure and purpose of the rules and the common law principles surrounding them are not laissez faire in nature.

   The operation of DCR 6R 56: decision

4. I am therefore of the opinion that the plaintiffs first application concerning the operation of DCR 6R 56 fails and therefore, in order for the fourth statement of claim to stand as a filed document, it is necessary for that filed document to satisfy the requirements of DCR 6R 54(4)(a). This is so because Pier Apartments and Baulderstone Hornibrook do not consent to the filing of that document by the plaintiffs. The position of Aurecon and Woodheads is one of ambivalence towards the amendment.

5. Turning again to FDN 106, the plaintiffs’ interlocutory application, I am able to deal with paragraphs 3 and 4 of that paragraph, in short order.

6. As briefly as possible, the plaintiffs’ argument in support of these paragraphs under which the plaintiffs contend for the operation of DCR 6R 54(5)(a) is that because of the length of time over which disclosure has been made by the other parties to the proceedings, the Court should make an order nunc pro tunc to facilitate the plaintiffs’ amendment under that sub-rule.

7. The plaintiffs admit that the right of amendment provided to them was not exercised within the 14 days provided by the subrule. I am told that the reasons for that failure were the sheer volume of disclosed documents. I do not have any detail as to when the material from each of the defendants came forward. I am informed that the disclosure of Pier Apartments constituted 620 pages, of Baulderstone Hornibrook 12, 350 pages, of Aurecon 736 pages and of Woodhead 10, 598 pages. I am also told that Pier Apartments’ list of documents was filed on 20 November 2012 and Baulderstone Hornibrook’s list of documents was filed on 21 December 2012 and second list was filed on 30 January 2013.[35] The plaintiffs contend that very soon after this disclosure was given and on 26 November 2012, Baulderstone Hornibrook (the builder) filed an application[36] seeking to refer the matter to mediation. There was some contest about it but an order was made by his Honour Judge Tilmouth of this Court on 6 June 2013 for referral of the matter to mediation. No explanation is given by the plaintiffs as to what transpired between 30 January 2013[37] and the orders made by his Honour Judge Tilmouth on 6 June 2013.

   [35]   FDN 65, FDN 75 and FDN 78 respectively.

   [36]   FDN 66.

   [37]   FDN 78, the latest date of the filing of Baulderstone Hornibrook’s list of documents (second).

8. It is the case that the mediation in this matter was conducted over a long period of time. It was a matter for the judgment of Mr McNamara QC as to how the mediation would be conducted. As at 22 October 2013 the position was that the parties were still in the process of mediation. On that day, Master Blumberg made orders requiring any applications or interlocutory orders to be made returnable to the hearing on 19 December 2013. The mediation was not formally terminated until 30 January 2014 by order of the Court.

9. The plaintiffs contend that the fourth statement of claim was drawn in the period between 22 October 2013 (the date of the last orders of Master Blumberg) and 16 December 2013 (the date that it was forwarded to the other parties).This contention was not seriously put in issue.

10. When the parties are involved in a mediation, the usual course is for the parties to focus all of their energies upon the mediation in a genuine effort and attempt to resolve the action. I will approach this matter with that view in mind. That said, I am also aware that where orders are made by the Court for the delivery of pleadings or for disclosure or to take other steps, for example to deliver a notice to admit facts and documents, it is the responsibility of the parties to comply with the orders of the Court unless an indulgence is granted by the Court to that party. This problem becomes particularly acute in those circumstances where the Court has established a date for the hearing of the proceeding and also then makes an order for a mediation or the parties request time to allow a mediation to occur. In those circumstances, my view is that, absent an order of the Court indulging the relevant parties by the allowance of further time, the orders of the Court must be complied with by the parties. The reasons are obvious enough: a failed mediation in the face on an impending trial date invariably causes difficulties for parties in complying with orders of the Court made some time previously. The parties would be put to extra costs in seeking extensions of time for compliance with Court orders whilst also involved in (frenetic) activities preparatory to a trial.

    The ‘nunc pro tunc’ application: decision

11. In these circumstances, and having regard to the relevant affidavit material that I have described earlier in these reasons, I am unable to identify any appropriate ground as a basis for me to make an order, nunc pro tunc, in favour of the plaintiffs under DCR 6R 54(5) of the District Court Civil Rules 2006. In my opinion, there has been insufficient explanation given by the plaintiffs as to why the relevant amendments were not earlier drawn and promulgated for the consideration of the parties and, if necessary, consideration by the Court under DCR 6R 54(4).

12. I turn then to consider paragraph 5 of the plaintiffs’ interlocutory application FDN 106 and paragraph 2 of Pier Apartments’ and Baulderstone Hornibrook’s interlocutory application FDN 94. Although each of the interlocutory applications seeks different orders, the considerations arising under them are essentially the same. The plaintiffs seek leave to file the fourth statement of claim nunc pro tunc to 16 December 2013 and Pier Apartments and Baulderstone Hornibrook contend that no permission should be given to amend the pleadings.

13. In the course of consideration of these matters, the relevant objections of Pier Apartments and Baulderstone Hornibrook and the relevant contentions of the plaintiffs concerning the fourth statement of claim have become significantly more focused. This typically occurs in these types of arguments. In order for that process to occur, there has been a re-canvassing of a number of the arguments that were put before Master Blumberg in 2011 at the time when the learned Master considered the application of the plaintiffs to file a version of the third statement of claim. Earlier in these reasons I have recited the history of that matter and it is sufficient to say that by March 2012, the argument had been run before the learned Master, the learned Master had published his reasons and following the publication of those reasons, and as a result of them, the plaintiffs further amended their proposed third statement of claim and that pleading was ultimately filed by the consent of the parties. That version was the state of the pleadings as at 16 December 2013 (and was therefore the relevant pleaded positions of the parties before the mediator) and this position changed on 16 December 2013 when the plaintiffs delivered the fourth statement of claim in the factual circumstances as I have already previously described.

14. In support of FDN 94, the first and seconds defendants filed the fourth affidavit of Jonathan Charles Clarke sworn 30 January 2014 (FDN 95). The first exhibit to that affidavit (exhibit JCC9) is a letter from Cowell Clarke to Mr Sean Ryan of FBR Law dated 24 January 2014. That letter, over some four pages, sets out a series of complaints about the content of the fourth statement of claim. The second exhibit to that affidavit (exhibit JCC10) is the response of FBR Law to Cowell Clarke dated 28 January 2014. The letter addresses the criticisms made by Pier Apartments’ and Baulderstone Hornibrook’s solicitors of the fourth statement of claim. I have closely read and had regard to the content of those letters.

15. Following the exchange of that correspondence, the parties filed and delivered outlines of submissions. The plaintiffs filed responding submissions on FDN 94 on 26 March 2014.[38] Those submissions address the content of the first exhibit to the fourth affidavit of Mr Clarke FDN 95.[39] The submissions of the plaintiffs embellish the content of the second exhibit to Mr Clarke’s affidavit JCC10, letter FBR Law addressed to Cowell Clarke.

    [38]   FDN 103.

    [39]   Exhibit JCC9.

16. Following the delivery of those documents, Pier Apartments and Baulderstone Hornibrook filed an outline of submissions FDN 99 in support of their interlocutory application FDN 94.

17. Subsequent to the delivery of both of those written submissions, the plaintiffs filed an interlocutory application FDN 106 which was first considered by me on 14 May 2014. After filing that interlocutory application the plaintiffs filed a second outline of submissions for the hearing before me on 22 May 2014. The defendants also filed a second outline of submissions for that hearing. I heard the parties submissions over a half day argument. In the course of those matters I was informed that the Court of Appeal of New South Wales (NSW) had delivered its decision in the case of Owners - Strata Plan 61288 v Brookfield Australia Investments Ltd[40] (‘Brookfield Case’).. That judgment was delivered on 25 September 2013. The judgment of the Court was written by Basten JA. The other members of the Court agreed with his Honour’s judgment, although their Honours Macfarlan JA and Leeming JA made some further separate observations.

    [40] [2013] NSWCA 317.

18. Because of the importance of the factual matters under consideration in that case and the discussion of the legal principles arising in it, I intend to canvass the decision at length in these reasons. The appeal from this decision of the Court of Appeal of NSW was heard by the High Court on 19 June 2014. The discussion in this decision informs my attitude to a number of matters which are the subject of the contest between the parties in this action.

19. The case concerned the redevelopment of a property in Chatswood, Sydney which required the demolition of an existing property and the construction of a 22 storey building of mixed use but particularly residential and serviced apartments for $55 million. The developer was a company called Chelsea Apartments Pty Ltd. It contracted with the first respondent then known as Multiplex Constructions Pty Ltd, now known as now Brookfield Australia Investments Ltd, to carry out the development pursuant to a design and construct contract. The developer made agreements with three companies in the Stockland Group[41] under which a serviced apartments strata plan would be registered so that the apartments could be sold to investors but could continue to be managed as a serviced apartment business by one of the Stockland Group.

    [41]   A property owning and development company.

20. A certificate of final completion was issued in 1999 and at that time, the strata plan for the serviced apartments was registered. It was only at that time that the plaintiff company the Owners – Strata Plan 61288 came into existence. At the same time a strata plan was registered.

21. In November 2008 proceedings were commenced by the strata company claiming for defective building works. It identified a number of defects in the common property said to have been discovered as early as 2004. The strata company limited its claim to one in negligence under general law for pure economic loss. McDougall J at first instance addressed a preliminary question and found that the builder did not owe a duty of care to the strata company as alleged.[42] The strata company appealed. The principal appeal decision was written by Basten JA. His Honour identified that there was no contractual relationship between the strata company and the builder and the strata company did not come into existence until the registration of the relevant strata plan. This was after the builder had completed at least its primary obligation under its contract with the developer.[43]

    [42]   Owners Corporation Strata Plan 61288 v Brookfield Multiplex [2012] NSWSC 1219

    [43] Decision para [8].

22. Basten JA  also found that the strata company could not make any contract with the developer with respect to the benefits that the developer had under its contract with the builder and so it did not have the benefits of the statutory warranties under the Home Building Act 1989 (NSW). This limited the strata company’s claim to one in negligence for the defective work. The strata company was by law obliged to rectify the defect on behalf of the owners of the lots in the strata plan.

23. Basten JA then gave consideration to the question of the application of general law principles upon a consideration of relevant settled authorities in Australia.[44] The respondents contended that a finding of a duty of care owed by the builder to the strata company would involve a novel development in tort law with respect to pure economic loss. The respondents contended that it was necessary then to consider the principles more broadly.[45]

    [44]   Bryan v Maloney (1995) 182 CLR 609; Woolcock Street Investments Pty Ltd v CDG Pty Ltd (2004) 216 CLR 515.

    [45]   Caltex Oil (Australia) Pty Ltd v The Dredge “Willemstad” (1976) 136 CLR 529; Perre v Apand Pty Ltd (1999) 198 CLR 180.

24. The duty of care as pronounced by the strata company was for the builder to take reasonable care to avoid reasonably foreseeable economic loss to the strata company in having to make good the consequences of latent defects caused by the building’s defective design or construction.[46] Basten JA then considered the question of the nature of defects called latent defects. His Honour stipulated that there should be discernment between types of latent defects and there is a difference between an extreme example of a latent defect which required evacuation and rebuilding compared to a latent defect that complained of a lower grade of material being used than was required under the contractual specification and so leading to a need for higher maintenance than otherwise would have been the case. In the middle of this range are those types of defects which created a risk of personal injury which meant that the strata company was required to repair them in order to comply with its obligations to the unit holders.

    [46]   Owners - Strata Plan 61288 v Brookfield Australia Investments Ltd [2013] NSWCA 317, [12]; Owners Corporation Strata Plan 61288 v Brookfield Multiplex [2012] NSWSC 1219, [18].

25. Basten JA then considered the question of indeterminacy[47] and vulnerability[48] as well as proportionality[49] and ordinary business conduct.[50] At paragraphs [49] and following Basten JA said: -

    [49]    In the present case, the following elements are to be assumed:

    (a)    the respondent was negligent in its construction of the building in the respects particularised in the schedule of defects;

    (b)    those defects (or at least some of them) were "latent" in the sense that they could not have been discovered by a purchaser exercising reasonable care;

    (c)    the defects were caused by conduct of the respondent before the registration of the strata plan;

    (d)    the defects were not trivial or insignificant, but were of a kind which required rectification by a responsible owner, and

    (e)    the defects arose in the common property and were therefore within the responsibility of the appellant.[51]

    [47]   Owners - Strata Plan 61288 v Brookfield Australia Investments Ltd [2013] NSWCA 317, [16] – [18].

    [48] Ibid, [19] – [42].

    [49] Ibid, [43].

    [50] Ibid, [44] – [48].

    [51] Ibid, [49].

26. Basten JA identified the factors relied upon by the appellant, Strata Company, as a basis for finding of liability at paragraph [50] of the judgment as follows:

    [50] The factors relied upon by the appellant as a basis for a finding of liability against the builder were as follows:

    (a)    the economic loss suffered as a consequence of the latent defects was reasonably foreseeable to a party in the position of the builder;

    (b)    exercising reasonable skill and care in the construction of the building in accordance with the contractual specifications was a responsibility which the builder took upon itself;

    (c)    the developer relied upon the builder to exercise such skill and care and indeed obtained contractual warranties that it would;

    (d)    the registration of the strata plan creating the appellant was an inherent part of the development with respect to which the respondent agreed to design and construct the building - at least with respect to the common property there was no question of an indeterminate class of persons to whom the builder might be liable: there was only one known body corporate, being a creature of statute;

    (e)    the scope of the liability of the builder with respect to the defects was the same as the scope of its liability to the developer under the contract;

    (f)     being a creature of statute, the appellant had no ability to negotiate the terms upon which it undertook its functions with respect to the strata plan, and

    (g)     there was no statutory regime inconsistent with the imposition of liability on the builder in the circumstances of the case.[52]

    [52] Ibid, [50].

1. Basten JA  also identified the factors relied upon by the respondents to resist the duty of care in paragraph [51] of his Honour’s judgment as follows:-

   [51]The factors relied upon by the respondents in resisting the duty of care were as follows:

   (a)to find a duty of care in these circumstances would be an extension of the general law;

   (b)to find a duty would be to impose on the builder a "transmissible warranty of quality" (adopting language used by Brennan J in dissent in Bryan v Maloney, but traceable to Lord Keith of Kinkel in Murphy v Brentwood District Council [1991] UKHL 2; [1991] AC 398 at 469) which is a matter for the legislature, not the courts, because of the economic impact of such a step;

   (c)the only relevant indicium of a duty in the present case is that economic loss is a reasonably foreseeable consequence of negligence by the builder, but that is not a sufficient basis for establishing a duty;

   (d)to the extent that a statutory duty exists with respect to residential building work, pursuant to the Home Building Act, but not to commercial buildings, it would be inappropriate for the Court to expand the statutory scheme to an area where the legislature decided it should not operate, and

   (e)the appellant was not in any relevant sense vulnerable, because it was the consequence of a sophisticated commercial arrangement between two well resourced commercial entities, namely the developer and the Stockland Group, which were well able to negotiate on equal terms with any company tendering to design and construct the building, in relation to liability for defects.[53]

   [53] Ibid, [51].

2. His Honour then gave consideration to the contractual relationship between builder and developer.[54] At paragraph[76] of the judgment, his Honour said as follows:-

   [76]... rather, the point of departure between the parties was whether the appellant was properly characterised as "vulnerable" in the sense discussed above, for the purposes of determining whether it was owed a duty of care by the builder. Broadly speaking, the appellant submitted it was vulnerable because of the manner of its creation and because it had no ability to control the work undertaken by the builder, nor to carry out any appropriate inspection or investigation before acquiring the common property. The respondent's submission, in broad terms, was that the appellant was the alter ego of the beneficial owners of the lots which were, at the point of registration of the strata plan, vested in the developer. Accordingly the appellant, on that view, was no more vulnerable than the developer... (emphasis added by underlining)[55]

   [54] Ibid, [53] et seq.

   [55] Ibid, [76].

3. Basten JA then addressed what he described as a central plank of the reasoning of the trial judge that there was no tortious duty of care owed as between the builder and the developer. Basten JA identified that the learned trial Judge justified his conclusions on that question by relying upon the decision of the High Court in Astley v Austrust Ltd.[56] The learned trial Judge appears to have misapprehended the relevant passage and the purpose of the discussion in the passage of the High Court. Basten JA held as follows:-

   [94] Not only does the passage extracted from Astley not support that conclusion, but it is premised on an assumption which is inconsistent with it. The passage appears under the heading "Concurrent liability" and explains how the rights and obligations of solicitor and client have come to be the subject of obligation in both tort and contract...

   [95] ...

   [96]    the joint reasons (of the High Court) concluded at [48]:

   "The evolution of the law of negligence has broadened the responsibility of professional persons and requires them to take reasonable care and skill even in situations where a contractual relationship cannot be established. But given the differing requirements and advantages of each cause of action, there is no justification in recognising the tortious duty to the exclusion of the contractual duty."[57]

   [56] (1999) 197 CLR 1, [47].

   [57]   Owners - Strata Plan 61288 v Brookfield Australia Investments Ltd [2013] NSWCA 317, [94] – [96], citation omitted.

4. Basten JA found that there was no basis within the contract between the developer and the builder to exclude a general law duty of care in tort. Basten JA reiterated that no general law duty of care can arise with respect to successive owners unless there was a general law duty owed to the original owner with whom the builder contracted to construct the building. His Honour found that having stated this principle, it does not mean that a builder does not owe a duty of care to persons who are not a party to the contract. The example given was persons coming onto the premises and being injured when a negligently constructed wall falls on them.[58] His Honour then held as follows at [100]:-

   [100] The principle that parties to a contract can exclude a general law duty of care has no operation with respect to persons who are not party to the contract. Their cases must be established according to principles of tort law, bearing in mind the different circumstances which operate with respect to pure economic loss, as opposed to personal injury. In any event, these questions do not arise in the present case. The critical issue which does arise is whether, if one focuses on vulnerability, the fact that successive owners (and in particular the appellant) may be vulnerable is relevant in circumstances where the original owner is not.[59]

   [58]   Hoffmann v Boland [2013] NSWCA 158, [156] - [170].

   [59]   Owners - Strata Plan 61288 v Brookfield Australia Investments Ltd [2013] NSWCA 317, [100].

5. His Honour rejected the decision of the trial Judge that to uphold a duty of care in the circumstances would be to impose a novel duty of care in a commercial transaction and he identified that similar claims have been upheld in other jurisdictions.[60] His Honour also identified decisions of other state Supreme Courts to similar effect.[61] On the question of vulnerability, his Honour concluded at paragraph[120] of his Honour’s judgment as follows:-

   [120] The defects, so far as one can tell, do not involve complaints about the design stage of the project, but rather the execution of the building works. There was a superintendent appointed under the design and construct contract, but there can be no doubt that the developer relied upon the expertise, care and honesty of the builder in performing its obligations under the contract. Whatever may be possible in theory, there is no suggestion that in practical terms the contract was not administered in accordance with usual industry practices, which inevitably involve reliance by the developer on the exercise of responsibility by the builder. There is no reason in these circumstances to treat the developer as otherwise than vulnerable in the relevant sense. The fact that the vulnerability arose with respect to its commercial interests rather than any personal interests of individuals, was not suggested to be a relevant consideration. If the imposition of liability on the builder in those circumstances was thought to impose an additional commercial cost, it must equally be assumed that to require the owner to check every step taken by the builder in executing the contract must impose a very significant commercial cost on an owner (emphasis added by underlining).[62]

   [121] The next question concerns the vulnerability of the appellant. The respondent submitted that the appellant, at the point of registration, was not so much a successor in title to part of the building as the alter ego of the developer, which was then the owner of all allotments and hence the beneficial owner of the common property. However, on the basis that there can be no liability to a successor in ownership unless there had been equivalent liability to the original owner, this argument cannot assist the respondent. In other words, one does not ask whether the appellant was owed a duty of care unless it has already been established that the developer was owed such a duty. If the developer was owed such a duty, presumably it did not cease to be owed such a duty at the point in time at which the appellant came into existence, on the assumption that the developer was then still the equitable owner of the relevant property.

   [60]   Winnipeg Condominium Corporation No 36 v Bird Construction Co. [1995] 1 SCR 85; RSP Architects Planners and Engineers (Raglan Squire & Partners FE) v Management Corporation Strata Title Plan No 1075 [1999] 2 SLR 449.

   [61]   Pullen v Guteridge Haskins & Davey Pty Ltd [1993] 1 VR 27; Moorabool Shire Council v Taitapanui [2006] VSCA 30.

   [62]   Owners - Strata Plan 61288 v Brookfield Australia Investments Ltd [2013] NSWCA 317, [120].

6. Basten JA found that there were significant features of the matter which militated in favour of the existence of the duty of care covering loss resulting from latent defects which: ‘...(a) were structural, (b) constituted a danger to persons or property in, or in the vicinity of, the serviced apartments, or (c) made them uninhabitable. The existence of a duty expressed in those terms should be accepted.’[63] His Honour allowed the appeal.

   [63] Ibid, [129].

7. The two other Justices of appeal each delivered separate short judgments in which they agreed with the judgment of Basten JA and made other comments. It is necessary to identify some aspects of the comments made by the other Justices of Appeal. On the question of vulnerability, Mcfarlan JA said at [135] as follows:-

   [135]Secondly, the respondent argued that the appellant did not show that it had been vulnerable, in the sense that it had been unable to protect itself from the consequences of the respondent's lack of care (Woolcock Street Investments Pty Ltd v CDG Pty Ltd [2004] HCA 16; 216 CLR 515 at [23]), because it did not show that it could not have bargained with the developer for contractual protection. One answer to this argument is that the appellant only came into existence on registration of the strata plan and was not a conventional successor in title which acquired the property in question under a contract with the previous owner (here the developer). A further answer is as follows.

   [136]The existence of a contract between the developer and a builder for the latter to construct a building does not preclude the existence of a duty of care owed by the builder to the developer as similar contractual and tortious rights may exist concurrently ... Further, it was not suggested in Astley (Astley v Austrust Ltd (1999) 197 CLR 1 at [44] – [48]) that proof of the existence of a tortious duty of care concurrent with contractual obligations was dependent upon proof by the party to whom it was owed that it could not have negotiated with the party subject to the duty for contractual protection against the loss that came to be suffered. This being the case, it is difficult to see why a successor in title, or a party otherwise related to that to whom the duty of care was owed, should have to show that it could not have negotiated contractual protection in order to establish that a duty of care was owed to it.

   [137]The decision in Barclay v Penberthy [2012] HCA 40; 246 CLR 258 confirms that it need not do so... [64]

   [64] Ibid, [135] – [137].

8. Leeming JA gave consideration to the operation of the New South Wales Strata Schemes Management Act 1996 (NSW) and the Home Building Act 1989 (NSW) and the intersection of those Acts with the Civil Liability Act 2002 (NSW). At paragraph[142] his Honour held as follows:-

   [142]The effect of the Strata Schemes Management Act is to require a special company, created by State law, to come into existence, necessarily after the building contract has been substantially performed. Statute vests legal title to particular property - the common property - in that new company. The owners corporation is expressed to hold that property as "agent", which gives rise to a relationship between it and the owners of the individual lots of trustee and beneficiary, or analogous to trustee and beneficiary: Owners - Strata Plan No 43551 v Walter Construction Group Ltd [2004] NSWCA 429; (2004) 62 NSWLR 169 at [43]- [48]. The owners corporation has, speaking generally, statutory obligations to manage and control the use of the common property, maintain and repair it, and the power to levy contributions from lot owners to pay for its performance of those obligations.

   [143]The essence of the legislative regime is that whenever a developer and builder contract to carry out a development with a view to lodging a strata plan for a strata scheme, an artificial person, distinct from the lot owners, will come into existence and become the owner of part of the building. The original owner of the lots created will be the developer, and the legislation contemplates an "initial period" until such time as lots become owned by third parties such that the sum of their unit entitlements is at least one third of the aggregate unit entitlement ...

   [144]There is nothing antithetical in those provisions to a duty of care owed by the builder to that special creature of statute which is intended by builder and developer to come into existence following the performance of the builder's obligations. The legislative scheme is such that the owners corporation is much more vulnerable than, say, a company which owns land on which is to be erected a company title building...  (emphasis added by underlining)[65]

   [65] Ibid, [142] – [144].

9. On the question of the novel development of principle, Leeming JA said at [146] as follows:-

   [146]Finally, one reading of parts of the reasoning of the primary judge... is that it is not for judges at first instance to accede to an argument for a novel duty of care. I respectfully disagree. The law is dynamic; as Street CJ said, "the plain fact is that legal principle is constantly evolving": Reg v Unger [1977] 2 NSWLR 990 at 995. From time to time new classes of tortious liability will be identified (and indeed from time to time hitherto accepted classes of liability will be rejected)... In any event, what the owners corporation seeks is not even a "non-radical change" in the law... but the application in a novel case of principles governing the existence of a duty of care, in an area of the law where there is, as McHugh J has observed, "inherent indeterminacy": Burnie Port Authority v General Jones Pty Ltd [1994] HCA 13; (1994) 179 CLR 520 at 593.[66]

   [66] Ibid, [146].

10. I am informed by counsel that special leave to appeal from the decision of the Court of Appeal of NSW has been granted by the High Court. I am also informed that the transcript of the leave to appeal application was not informative on the special leave question but that the appeal was heard on 19 June 2014. I intend to approach this matter on the basis that the applicable law is as stated in the decision of the Court of Appeal of NSW supported as it is by decisions to similar effect in other Australian jurisdictions and overseas common law jurisdictions.

    The Community Titles Act 1996

11. The CTA is an Act that provides for the division of land into lots and common property.[67] Under s 7 of the CTA land comprised in an allotment may be divided into two or more community lots called primary lots and the common property by a primary plan of community division (s 7(1) – (3)) of the CTA. A plan of community division which is called a strata plan may create community lots and each strata lot must be wholly or partly within a building or be defined by reference to the building (s 9(1) and (2)) of the CTA.

    [67]   Community Titles Act 1996 (SA), s 6.

12. Section 10 of the CTA reads as follows:-

    10—The community corporation

    (1)A community corporation is established when a plan of community division is deposited by the Registrar-General in the Lands Titles Registration Office.

    (2)The owners of the community lots are the members of the community corporation.

    (3)The corporation is the mechanism by which the owners of community lots participate in the administration of the community parcel.[68]

    [68] Ibid, s 10.

13. This scheme is generally the same as the scheme that operates in NSW and was under consideration in the Brookfield Case. And in this case there is a pleading of a joint venture as a forerunner to the creation of Pier Apartments as the developer. The holding company of the Baulderstone Hornibrook defendant (Baulderstone Holdings) was a shareholder of Pier Apartments. That company, in turn, was required to incorporate the two plaintiffs. There are some obvious factual similarities to the Brookfield Case.

14. Under s 3 of the CTA, “community corporation” is defined to mean a corporation established when a plan of community division is deposited in the Lands Titles Registration Office. Part 9, Division 1 of the CTA deals with the establishment and nature of community corporations. Section 78 of the CTA reads as follows:-

    78—Non-application of Corporations Act 2001

    The following matters are declared to be excluded matters for the purposes of section 5F of the Corporations Act 2001 of the Commonwealth in relation to the whole of the Corporations legislation to which Part 1.1A of that Act applies:

    (a)     a community corporation;

    (b)     any act or omission of any person, body or other entity in relation to a community corporation.[69]

    [69] Ibid, s 78.

15. The importance of s 78 CTA is to identify the special corporate status of the plaintiff companies under the CTA. They are bodies corporate for the CTA. They do not assume the position of the developer but are separate from it because that is the requirement of the CTA.

16. Part 3, Division 4 of the CTA deals with common property in ss 28 and 29. Those provisions read as follows:-

    28—Common property

    (1)The common property created by a community plan comprises—

    (a)those parts of the community parcel that do not comprise or form part of a lot; and

    (b)the service infrastructure (except for any part of the service infrastructure that is vested in a Minister of the Crown or other authority or person and the parts of the service infrastructure that provide a service to only one lot); and

    (c)in the case of a strata plan—those parts of the building that are not part of a lot; and

    (d)any building that is not for the exclusive use of a lot and was erected before the deposit of the community plan; and

    (e)any building erected by the developer or the community corporation as part of the common property; and

    (f)any other building on the community parcel that has been committed to the care of the community corporation as part of the common property.

    (2)The common property may be used for any lawful purpose including a commercial purpose.

    (3)Any income arising from the use of the common property must be paid into the administrative fund or the sinking fund.

    (4)If a plan of community division indicates that members of the public have access to the common property, or a part of it, then members of the public are entitled to use the common property, or the relevant part of it, in accordance with the by-laws.

    (5)Despite any Act or law to the contrary, uninterrupted use by the public of common property under subsection (4) does not vest the public or any local or State government authority any rights in respect of the common property.

    29—Vesting of the common property

    (1)The common property of a community parcel is vested in fee simple as tenants in common in the owners for the time being of the community lots in shares proportionate to the lot entitlements of their respective lots.

    (2)If a primary parcel has been divided into primary and secondary lots or primary, secondary and tertiary lots, the common property of the primary parcel is vested in fee simple as tenants in common in the owners for the time being of the primary and secondary lots or the primary, secondary and tertiary lots in shares proportionate to the lot entitlements of their respective lots.

    (3)If a secondary parcel has been divided into secondary and tertiary lots, the common property of the secondary parcel is vested in fee simple as tenants in common in the owners for the time being of the secondary and tertiary lots in shares proportionate to the lot entitlements of their respective lots.

    (4)An owner's interest in a lot is inseparable from his or her interest in the common property and accordingly—

    (a)a dealing affecting the lot affects, without express reference, the interest in the common property in the same manner and to the same extent; and

    (b)the owner of a lot cannot separately deal with or dispose of the interest in the common property.

    (5)If the community corporation is authorised by or under this Act to enter into a transaction affecting the common property, it may enter into the transaction and execute documents related to the transaction, in its own name, as if it were the owner of an estate in fee simple in the common property.

    (6)A community corporation may sue and be sued for rights and liabilities related to the common property as if it were the owner and occupier of the common property.[70]

    [70] Ibid, ss 28 and 29.

1. It must also be recalled that Aon[105] is not a “one size fits all” decision.[106] It is peculiar in a number of respects: the delay between the amendment application and the decision of the judge as first instance; the very significant changes of approach of the plaintiffs after the earlier settlement with other parties to the proceedings and the obvious unfairness to be visited upon the appellant upon the allowing of the amendment application (and the appeal). And Aon[107] will not be applied if there is sufficient time to deal with the consequences of amendment before the hearing.[108] Similarly, in my view, where the combination of factual circumstances discloses a need or intention of both parties to the issue to amend their pleadings in the time available, both being under the same time constraints and both having had some eight months or so to consider their position then different considerations may well arise.

   [105] (2009) 239 CLR 175.

   [106] Cement Australia Pty Ltd v Australian Competition and Consumer Commission (2010) 187 FCR 261.

   [107] (2009) 239 CLR 175.

   [108] BHP Billiton Olympic Dam Corporation Pty Ltd v Bluestone Apartments Pty Ltd (No 2) [2013] SASC 133.

2. Questions of fact are, generally in a broad compass. This is a complex building case. It falls into two reasonably distinct categories – legal issues and specialty building issues. It behoves me as the trial Judge to dispose of both as efficiently as possible and I intend to do so in this action. I have already raised with counsel for their consideration the potential for the use of a referee – most likely a specialist arbitrator – to deal with the specialist building aspects of the matter. This is under active consideration. One possibility that looms quite large in this matter is that the legal issues are to be dealt with first by me, a Judgment delivered and then, if necessary, the special building issues will be dealt with by the arbitrator. I have asked the parties to make formal submissions to me on this matter.

3. It is in the whole of that background that I would then consider the ten matters identified by Bleby J in Manock as follows:-

   (1)Whether there has been undue delay in making the application;

   (2)The extent to which there will be wasted public resources in granting the amendment;

   (3)Whether there will be inefficiency occasioned by the need to revisit interlocutory processes;

   (4)Whether a trial date would need to be vacated or a trial adjourned;

   (5)Whether there is any satisfactory reason for the delay in applying;

   (6)Whether the point to be raised by the amendment would be raised in any event at the trial;

   (7)The likelihood of strain and uncertainty being imposed on the litigants;

   (8)Whether any further delay would undermine confidence in the administration of civil justice;

   (9)Any other prejudice likely to be suffered by the other party;

   (10)The additional costs likely to be incurred.[109]

   [109] Manock [2010] SASCFC 59, [46] (citations omitted).

4. Considering each matter in turn, I make the following comment.

   1.   There is a peculiarity about this application in that the plaintiffs considered that an application was not necessary because of the arguments contended for by the plaintiffs about the meaning of DCR 6R 56 and whether nunc pro tunc orders would be made under DCR 6R 54(5). That view was formed contemporaneously with the agitation by Pier Apartments and Baulderstone Hornibrook of their intention to amend their defence and requesting that the plaintiffs deliver the final version of their statement of claim so that, for the sake of efficiency, Pier Apartments and Baulderstone Hornibrook would file only one defence to the amended pleading to include the further defences as planned by them. Therefore, there are two matters under active consideration: the first is the effect of the mistake made by the advisors to the plaintiffs concerning the operation of the rules;[110] and the confluence of that with the second, the inevitability of an amendment to the pleadings, at the very least from Pier Apartments and Baulderstone Hornibrook point of view. Added to that is the fact that interlocutory applications were taken in respect of the fourth statement of claim, orders were made by a Master of this Court in respect of the fourth statement of claim (absent any permission of the Court to file and deliver such statement of claim) and the matter was then directed to be heard in my list. The Court records do not disclose any opposition of Pier Apartments and Baulderstone Hornibrook to these orders of the Master. I was not able to deal with the matter until May 2014 (applications had been issued in March 2014 and earlier) because of other time considerations. In those circumstances I do not think there has been undue delay in the making of the application. There certainly has been delay and there certainly have been errors but in the circumstances, I would not describe them as undue.

   2.   I am unable to identify that there will be wasted public resources in granting the amendment. One of the matters that must be weighed in the balance here is the intention of the Court to use public resources in the most efficient way possible by dividing the tasks for consideration into legal issues and specialty building issues. In my opinion, there is much ground to cover before this action will be conducted in a way that efficiently uses public resources.

   3.   Pier Apartments and Baulderstone Hornibrook have informed the Court that, upon a failure of their application to strike out the fourth statement of claim, they will give consideration to issuing a claim against Aurecon or against Woodhead. It is not entirely clear to me why there has been a delay in making such a claim. However I will accept at face value the matters put to me by Mr O’Sullivan QC. The matters to be weighed in the balance are that Woodhead is still named as a party to the proceedings. The question of the determination of the creditors of Woodhead and the proposed deed of company arrangement means that any further action concerning the ‘property’ of Woodhead must stand to one side. In relation to Aurecon, that company was a party to the proceedings until very recently. It would be difficult to imagine inefficiencies occasioned by virtue of a claim being issued against that company now. 

   4.   In my opinion, the trial date does not need to be vacated or the trial adjourned. I have already discussed at some length the question of the management of this proceeding. There is a nine week window allowed to me as trial Judge to dispose of the issues. In my opinion, there does not need to be a vacation of the trial date or an adjournment of the trial.

   5.   There is a reason for delay in applying but that delay is not undue. The reason revolves around a misapprehension by the legal advisors of the plaintiffs. In my opinion, the plaintiffs should not suffer because of that misapprehension. That said, I am of the view that there is no satisfactory reason for that delay but I am also of the view that no prejudice should be visited upon the plaintiffs as a result.

   6.   On one view, the responsibility of Baulderstone Hornibrook under a design and construct contract would, a fortiori, include the liability of Baulderstone Hornibrook in respect of any failure of Woodhead. To that extent, it might be said that the issue would be raised and determined at the trial in any event. However, absent that pleading, there is the possibility of a pleadings argument at trial which in my opinion should be obviated in any reasonable way possible. The same could not be said of a proposition that Woodhead, as subcontractor (to Baulderstone Hornibrook) owed a duty of care to the principal (Pier Apartments and then the plaintiffs).

   7.    I am unable to identify any difference between the strain and uncertainty imposed upon the litigants absent the amendments and the strain and uncertainty being imposed upon them with the amendments.

   8.   In my opinion, the confidence in the administration of justice would be undermined if there was not a proper and complete disposition of all of the issues involved in the matter, particularly through a methodology that allows for the best use of resources of the Court as well as the specialty skills of a referee.

   9.   I am unable to identify any other prejudice likely to be suffered by the other parties.

   10. There will be additional costs incurred but in my opinion those costs can be dealt with by an appropriate costs order.

   [110] District Court Civil Rules 2006

5. Earlier in these reasons, I have identified those amendments within the fourth statement of claim that I would allow, notwithstanding the argument of Pier Apartments and Baulderstone Hornibrook. I have also identified those matters falling within the Scott Schedule which cannot stand absent some pleading within the fourth statement of claim of an allegation of fact to support the causes of action appropriately pleaded. It is not necessary that I address those latter matters further. However, for ease of reference, it is appropriate that I attach as an appendix to these reasons, a schedule of the pleadings that would otherwise be allowable having regard to the decision that I have set out above. That is attached as Appendix A. I emphasise again that any approval of a pleading of or concerning Woodhead is not and must not be understood as a grant of leave to proceed with an action against the property of Woodhead.

6. It is also appropriate that I address each of the applications before me and indicate my decision in relation to each of the paragraphs of those applications. For the sake of convenience, I will identify the paragraph and my decision. My decision is set out in bold type at the end of the paragraph.

   FDN 94 Interlocutory Application of Pier Apartments and Baulderstone Hornibrook dated 30 January 2014

   1.That a direction be made by Master Blumberg that this application be determined by a Judge of this Honourable Court at the earliest opportunity:

   Direction made.

   2.Pursuant to Rule 56(1) of the District Court Civil Rules 2006 (SA), the amendments to the Fourth Statement of Claim be disallowed as against Pier Apartments and Baulderstone Hornibrook as set out in the letter dated 24 January 2014 from Jon Clarke to Sean Ryan exhibited at “JCC9” to the Fourth Affidavit of Jonathan Charles Clarke dated 30 January 2014:

   Application allowed to the extent as follows:-

   a.Any claim against the property of the fourth defendant Woodhead is stayed under the Corporations Act 2001(Cth) but otherwise the claims against Woodhead may proceed;

   b.In the absence of any pleading of a vicarious liability of Baulderstone Hornibrook for the breaches of its sub contractors of any duties owed to Pier Apartments as principal, the plaintiffs may not maintain such an alleged liability exists within the second Scott Schedule;

   c.In any amended pleading, the plaintiffs are required to include further pleadings to reflect the settlement that has been reached with Aurecon.

   Otherwise, the application of the defendants is dismissed.

   3.The plaintiffs pay [Pier Apartments’] and [Baulderstone Hornibrook’s] costs of this application:

   The question of the costs will be considered once only and will be addressed at paragraph 8 of interlocutory application FDN 106.

   FDN 96 Interlocutory Application of the Plaintiffs dated 30 January 2014

   1....

   2.The Fourth Statement of Claim be amended by Master Blumberg on the Court file by striking through paragraphs 83 and 87:

   Application granted by Master Blumberg.

   3.The plaintiffs be given leave nunc pro tunc to 16 December 2013 to discontinue the claims in respect of the 1^st to 5^th Defects, 10^th Defect, 12^th to 15^th Defects and 17^th to 19^th Defects has pleaded in paragraphs 75 to79, 83, 85 to 87 and 89 to 91 of the Fourth Statement of Claim pursuant to DCR 6R 107(3).

   Application granted by Master Blumberg.

   4.The date for compliance with order 5 on 19 December 2013 be extended to 14 days after the receipt of the last of the expert reports provided pursuant to order 6 made on 19 December 2013.

   Application granted (plaintiffs failed to comply with order).

   5....

   6....

   7....

   8....

   9....

   FDN 106 Interlocutory Application of the Plaintiffs orders sought

   1....

   2.That leave to bring the within application be granted pursuant to Rule 131(5).

   Leave granted.

   3.That the time for the plaintiffs to exercise the right of amendment under Rule 54(5)(a) be extended nunc pro tunc to 16 December 2013:

   Application dismissed.

   4.That the plaintiffs have leave to file the Fourth Statement of Claim (FDN 92) to 16 December 2013 pursuant to Rule 54(5)(a) nunc pro tunc to 16 December 2013:

   Application dismissed.

   5.In the alternative, that the plaintiffs have leave to file [the] Fourth Statement of Claim (FDN 92) pursuant to Rule 54(4)(a) nunc pro tunc to 16 December 2013:

   The question of the grant of leave to the plaintiffs to file any further pleading is adjourned to Monday, 30 June 2014 at 8.45 am for further consideration.

   6.The plaintiffs have an extension of time to comply with paragraph 5 of the orders made on 19 December 2013 to 6 May 2014:

   Application granted save and except that the plaintiffs do not have leave to file a second Scott Schedule in the form of paragraphs 21 (2.1) and 44(2.1) of the second Scott Schedule.

   7.The plaintiffs have an extension of time to comply with paragraph 6 of the orders made on 19 December 2013 to 21 March 2014:

   Application granted.

   8.I will hear the parties as to costs generally.

7. These orders will now be reflected in the terms of minutes of order that are to be settled by me.

   APPENDIX A: Schedule on the Fourth Statement of Claim

Paragraph Number	Approved/ Disapproved	Reasons
1.7	Approved	Proper pleading of CTA s 75(1).
1A.2	Approved	Pleading of fact.
1A.7	Approved	Better pleading of CTA s 75(1).
2.1	Approved	Pleading of joint venture; to be read with paragraph 3.6.
2.6	Approved	Pleading of fact.
3.5	Approved	Pleading of fact.
3.6	Approved	Pleading of fact; must be read with paragraph 2.1.
4.4	Approved	Pleading of fact.
4A	Approved	Pleading of fact.
7	Approved	Pleading of fact.
7.1	Approved	Pleading of fact.
7.2	Approved	Pleading of fact.
7.3	Approved	Pleading of fact.
7A	Approved	Pleading of factual matters concerning the building contract.
7B	Approved	Pleading of the terms of the building contract.
7C	Approved	Pleading of consequences of the existence of the building contract and the knowledge of Baulderstone Hornibrook.
7D	Approved	Pleading of a duty of care owed by the builder to the developer, they being in a contractual relationship and therefore a pleading of a concurrent duty.
7E	Approved	Pleading of a duty of care owed by the builder to the developer, they being in a contractual relationship and therefore a pleading of a concurrent duty.
7F	Approved	Pleading of fact.
7G	Approved	Pleading of fact.
1.7	Approved	Proper pleading of CTA s 75(1).
1A.2	Approved	Pleading of fact.
1A.7	Approved	Better pleading of CTA s 75(1).
7K	Approved	Pleading of a duty of care as an antecedent duty under a claim for pure economic loss.
7L	Approved	Pleading of fact.
7M	Approved	Pleading of fact.
7N	Approved	Pleading of fact.
7O	Approved	Pleading of knowledge arising from the existence of the contract.
7P	Approved	Pleading of an antecedent duty of care preparatory to a claim for pure economic loss.
7Q	Approved	Pleading of an antecedent duty of care preparatory to a claim for pure economic loss.
9F	Approved	Pleading of fact.
15	Approved	Pleading of the effect of the Development Act 1993 (SA) provision.
18 (Chapeau)	Approved	Pleading of fact for the purposes of CTA s 75(1).
21A (Chapeau)	Approved	Pleading of fact for the purposes of CTA s 75(1).
21A.2	Approved	Further pleading of statutory duty which are described in the chapeau of the paragraph.
21A.3	Approved	Further pleading of statutory duty which are described in the chapeau of the paragraph.
21A.4	Approved	Further pleading of statutory duty which are described in the chapeau of the paragraph.
24	Approved	Better pleading of CTA s 75(1) and the consequences thereof.
26	Approved	Better pleading of CTA s 75(1) and the consequences thereof.
28	Approved	Better pleading of CTA s 75(1) and the consequences thereof.
1.7	Approved	Proper pleading of CTA s 75(1).
1A.2	Approved	Pleading of fact.
1A.7	Approved	Better pleading of CTA s 75(1).
33A.7	Approved	Better pleading of the duty.
33B	Approved	Better factual pleading.
33C	Approved	Better pleading of the legal duty.
33E	Approved	Better pleading of the duty at common law and under statute.
33G	Approved	Better pleading of the alleged duty under statute.
33I.7	Approved	Better pleading of the duty alleged.
39.5	Approved	Better pleading of the duty alleged.
40 (Chapeau)	Approved	Better pleading of the alleged statutory duty and duty.
41	Approved	Better pleading of the alleged statutory duty and duty.
42	Approved	Better pleading of the alleged statutory duty.
43A	Approved	Pleading of vulnerability to risk of damage.
44	Approved	Better pleading of the alleged statutory duty
47	Approved	Better pleading of alleged vulnerability to damage and loss.
49	Approved	Better factual pleading in relation to loss.
49B	Approved	Better pleading of alleged consequences of a failure to observe duties.
49C	Approved	Better pleading of alleged statutory duty and duty.
49D	Approved	Better pleading of alleged statutory duty and duty and vulnerability to loss.
49F	Approved	Better pleading of alleged statutory duty and duty.
49G	Approved	Pleading of vulnerability under a claim for pure economic loss.
49H	Approved	Better pleading of alleged statutory duty and duty.
49I	Approved	Better pleading of duty and consequences.
1.7	Approved	Proper pleading of CTA s 75(1).
1A.2	Approved	Pleading of fact.
1A.7	Approved	Better pleading of CTA s 75(1).

Aurecon

Claim against Woodhead

1. The following comments are made based upon an assumption (not yet made good) that the plaintiffs will be able to proceed against Woodhead as part of their claims. This approval is not and must not be understood to be a grant of leave to proceed against the property of Woodhead.

Paragraph Number	Approved/ Disapproved	Reasons
61M	Approved	Better pleading of fact and duty.
62	Approved	Better pleading of alleged statutory duty and alleged duty.
63	Approved	Better pleading of fact.
64	Approved	Pleading of fact.
65	Approved	Better pleading of alleged statutory duty and alleged duty.
66	Approved	Plea of vulnerability.
67	Approved	Better pleading of statutory duty.
69	Approved	Better pleading of duty.
70	Approved	Better pleading of duty.
72	Approved	Pleading of fact.
73A	Approved	Pleading of fact.
73B	Approved	Better pleading of statutory duty and duty.
73C	Approved	Better pleading of statutory duty and duty.
73E	Approved	Better pleading of duty and consequences.
73F	Approved	Pleading of vulnerability.
73G	Approved	Better pleading of statutory duty and duty.
73H	Approved	Better pleading of duty of care.
73I	Approved	Better pleading of duty of care.
73K	Approved	Better pleading of loss.
73L	Approved	Better pleading of loss.
74	Approved	Pleading of fact.

436A  Company may appoint administrator if board thinks it is or will become insolvent

(1)     A company may, by writing, appoint an administrator of the company if the board has resolved to the effect that:

(a)in the opinion of the directors voting for the resolution, the company is insolvent, or is likely to become insolvent at some future time; and

(b)an administrator of the company should be appointed.

(2)     Subsection (1) does not apply to a company if a person holds an appointment as liquidator, or provisional liquidator, of the company.

435C  When administration begins and ends

(1)     ...

(2)     The normal outcome of the administration of a company is that:

(a)     a deed of company arrangement is executed by both the company and the deed’s administrator; or

(b)    the company’s creditors resolve under para 439C(b) that the administration should end; or

(c)     the company’s creditors resolve under para 439C(c) that the company be wound up.

(3)     ...

(4)     ...