Northern SEQ Distributor-Retailer Authority t/a Unitywater v Monadelphous Engineering Pty Ltd
[2025] QSC 253
•7 October 2025
SUPREME COURT OF QUEENSLAND
CITATION:
Northern SEQ Distributor-Retailer Authority t/a Unitywater v Monadelphous Engineering Pty Ltd [2025] QSC 253
PARTIES:
NORTHERN SEQ DISTRIBUTOR-RETAILER AUTHORITY TRADING AS UNITYWATER (ABN 89 791 717 472)
(plaintiff)v
MONADELPHOUS ENGINEERING PTY LTD (ABN 43 010 305 923)
(first defendant)ACCIONA AGUA AUSTRALIA PTY LTD (ACN 128 531 742)
(second defendant)FILE NO/S:
BS 8948/22
DIVISION:
Trial division
PROCEEDING:
Application
ORIGINATING COURT:
Supreme Court at Brisbane
DELIVERED ON:
7 October 2025
DELIVERED AT:
Brisbane
HEARING DATE:
29 August 2025
JUDGE:
Cooper J
ORDER:
1. The interlocutory application filed by the first defendant on 4 July 2025 is dismissed.
2. On the interlocutory application filed by the plaintiff on 19 August 2025, it is ordered that the following amendments made in the Second Further Amended Statement of Claim filed on 26 June 2025 take effect against the first defendant for limitation purposes from the date the proceeding commenced:
a. paragraphs 190I(b), 190S(b)(iv), and Parts L, M and N; and
b. to the extent they are relied upon in the claim against the first defendant, paragraphs 282 to 420.
CATCHWORDS:
PROCEDURE – JOINDER OF CAUSES OF ACTION AND OF PARTIES – MATTERS RELATING TO LIMITATION PERIOD – where the plaintiff amended their claim and statement of claim – where the first defendant applied for an order that certain amendments were to take effect against the first defendant for limitation purposes from the date the amended claim and statement of claim was filed – where the plaintiff applied for an order that the amendments take effect from the date when the proceeding commenced – where r 376(4) of the Uniform Civil Procedure Rules 1999 (Qld) (‘UCPR’) permits a party to make an amendment to include a new cause of action which, whilst current at the date the proceeding was started, had ended – where, if a document is amended in accordance with the requirements of r 376(4), the amendment takes effect on and from the date of the document being amended under r 387(1) of the UCPR – whether the amendments in the amended claim and statement of claim were made in accordance with the requirements r 376(4) of the UCPR – whether, if the amendments in the amended claim and statement of claim were not made in accordance with the requirements of r 376(4), the amendments should take effect from some other time to preserve a possible limitation defence
Allonnor Pty Ltd v Doran [1998] QCA 372, cited
Aon Risk Services Australia Ltd v Australian National University (2009) 239 CLR 175; [2009] HCA 27, cited
Brisbane Airport Corporation Pty Ltd v Arup Pty Ltd [2017] QSC 232, cited
Brisbane South Regional Health Authority v Taylor (1996) 186 CLR 541; [1996] HCA 25, cited
Draney v Barry [2002] 1 Qd R 145; [1999] QCA 491, cited
Hartnett v Hynes [2009] QSC 225, cited
Menegazzo v Pricewaterhousecoopers (A Firm) [2016] QSC 94, cited
Mokrzecki v Popham [2013] QSC 123, cited
Nalos Pty Ltd v Robert Bird Pty Ltd [2015] QSC 174, followed
Paul v Westpac Banking Corporation [2017] 2 Qd R 96; [2016] QCA 252, cited
Thomas v Queensland[2001] QCA 336, citedUniform Civil Procedure Rules 1999 (Qld) r 5, r 376, r 387(1)
COUNSEL:
PL O’Shea KC with S McCarthy for the plaintiff
BJ Kabel for the first defendant
D Tay for the second defendantSOLICITORS:
Lamont Project and Construction Lawyers for the plaintiff
Ashurst Australia for the first defendant
Corrs Chambers Westgarth for the second defendant
Applications
On 26 June 2025, the plaintiff (Unitywater) filed a second further amended claim (2FAC) and a second further amended statement of claim (2FASOC).
The first defendant (MEPL) has applied for an order that certain amendments made in the 2FASOC are to take effect against MEPL for limitation purposes from the date the 2FASOC was filed. The effect of such an order would be to preserve a potential limitation defence.
Unitywater subsequently filed its own application seeking an order that the contentious amendments are to take effect against MEPL from the date that the proceeding commenced. If that order is made, MEPL would not be able to rely upon the expiration of a relevant limitation period.
Both applications raise the question whether the requirements for leave to amend to introduce a statute-barred cause of action under r 376(4) of the Uniform Civil Procedure Rules 1999 (Qld) (UCPR) are satisfied in the circumstances of this proceeding. The question to be resolved is not whether leave to amend should be granted (such leave having already been granted on 24 June 2025, but subject to a right of MEPL to bring any application to disallow the amendments), but the date on which the contentious amendments should take effect against MEPL.
For the reasons which follow, relief should be granted in the form sought by Unitywater. MEPL’s application should be dismissed.
Background to the proceeding
Unitywater is a retail and distribution authority established under s 8(a) of the South East Queensland Water (Distribution and Retail restructuring) Act 2009 (Qld).
On about 11 November 2016, Unitywater entered into a contract (Contract) with MEPL pursuant to which MEPL agreed to design, engineer, supply, manufacture, install, test and commission the upgrade of the Kawana Sewage Treatment Plant (Plant) at Birtinya on the Sunshine Coast.
The work which MEPL performed under the Contract included the design and construction of a biological wastewater treatment process. MEPL engaged the second defendant (Acciona) to design the biological wastewater treatment process.
The biological wastewater treatment process uses Moving Bed Biofilm Reactor (MBBR) technology to facilitate a biological process that treats sewage through the processes of nitrification and denitrification. The process incorporates plastic biofilm carriers (media) that support the biomass. The media provides increased surface area by which biological breakdown of the sewage constituents can occur.
Commissioning of the biological wastewater treatment process commenced in September 2019. After commissioning had commenced, fragments of media installed in the MBBRs were released from the Plant on four occasions during periods of wet weather. Those releases occurred on about 18 January 2020, 20-21 September 2020, 22 March 2021, and 5 April 2021.
The Plant operates under an Environmental Authority that was issued by the Department of Environment and Heritage Protection, since renamed the Department of Environment, Tourism, Science and Innovation (Department).
The Department issued warnings to MEPL (in March 2020), and to Unitywater (in March 2021), for contravening conditions of the Environmental Authority by reason of the release of fragments of media from the Plant.
Further, Unitywater says that from about December 2021, the Plant performed poorly in terms of its ability to achieve its nominated design capacity and to comply with ammonia limits in prescribed effluent quality criteria.
On 29 March 2022, Unitywater issued a Notice of Dispute to MEPL under the Contract. The dispute was not resolved under the dispute resolution procedures prescribed by the Contract. Unitywater then commenced this proceeding on 28 July 2022 by filing its original claim and statement of claim.
The effect of r 376(4) on a potential limitations defence
Rule 376(1) provides:
“(1) This rule applies in relation to an application, in a proceeding, for leave to make an amendment mentioned in the rule if a relevant period of limitation, current at the date the proceeding was started, has ended.”
Where r 376 applies, the court may give leave to make an amendment to include a new cause of action only in the circumstances described in r 376(4):
“(a) the court considers it appropriate; and
(b) the new cause of action arises out of the same facts or substantially the same facts as a cause of action for which relief has already been claimed in the proceeding by the party applying for leave to make the amendment.”
An amendment which is made under r 376(4) can defeat a limitation defence because such an amendment takes effect “on and from the date of the document being amended” pursuant to r 387(1).[1]
[1]Mokrzecki v Popham [2013] QSC 123, [11].
That is the outcome Unitywater seeks by its application.
MEPL advances its application on the basis that the contentious amendments do not meet the requirements of r 376(4). Consequently, it submits that, if it is ultimately found that new causes of action have been pleaded by the contentious amendments, and those causes of action were statute barred at the time Unitywater filed the 2FAC and 2FASOC, MEPL should have the benefit of the limitation defence.
On these interlocutory applications, Unitywater and MEPL do not seek to have the court finally determine the question whether a limitation period, current at the date the proceeding was started, has ended. Both parties submit the applications should be determined on the basis that the most that can presently be said is that it is possible that evidence at trial might establish the existence of circumstances prescribed in r 376(1) such that the rule might be found to apply.
In those circumstances, making an order which treats the contentious amendments as taking effect only from the date of filing the further amended claim and statement of claim might unfairly defeat the beneficial operation of r 376 in Unitywater’s favour. If the requirements of r 376(4) are satisfied, there is no relevant prejudice to MEPL in being deprived of a limitation defence. If it is later determined that r 376 does not apply because the circumstances prescribed in r 376(1) are not established the limitation period either would not have ended (in which case no limitation defence would be available to MEPL) or it would have ended prior to the commencement of the proceeding (in which case the limitation defence would still be available to MEPL).[2]
[2]Mokrzecki v Popham [2013] QSC 123, [20]-[21]; Menegazzo v Pricewaterhousecoopers (A Firm) [2016] QSC 94, [44].
If, however, the requirements of r 376(4) are not satisfied, and it is not clear whether a new cause of action is out of time, it may be appropriate to order that the amendment take effect from the date of the order giving leave or from some other time to preserve a possible limitation defence.[3]
[3]Mokrzecki v Popham [2013] QSC 123, [22]; Menegazzo v Pricewaterhousecoopers (A Firm) [2016] QSC 94, [44]-[46].
Consequently, the determination of the competing applications turns on the question whether the requirements of r 376(4) are satisfied. Three issues arise in determining whether amendments should be permitted under the rule.
The first issue is a threshold issue: whether the amendments in question plead a new cause of action. That threshold issue does not arise for consideration on the present applications. Although Unitywater contends that some of the contentious amendments do not plead a new cause of action, it submits that it is not necessary to finally determine that issue to decide the applications. Unitywater submits that even it is assumed that all the contentious amendments plead new causes of action, it is entitled to succeed on the applications on the basis that it can establish that the amendments meet the requirements of r 376(4)(a) and (b).[4]
[4]Transcript 1-6:37 to 1-7:4, 1-15:2-20.
Consequently, the determination of the applications ultimately turns on the remaining two issues raised by r 376(4):
(a)whether a cause of action pleaded by the contentious amendments arises out of the same facts or substantially the same facts as a cause of action for which Unitywater already claims relief; and
(b)the discretionary question as to whether the court considers it appropriate to grant leave to make the amendments on terms which would defeat a possible limitation defence (in the present case by the contentious amendments taking effect from the commencement of the proceeding).
Substantially the same facts
Relevant principles
In Draney v Barry,[5] Thomas JA held that the words “substantially the same facts” should not be read as tantamount to the same facts. Consequently, the need to prove some additional facts is not necessarily fatal to a favourable exercise of discretion under r 376(4), provided that the necessary additional facts arise out of substantially the same story as that which would have to be told to support the original cause of action. In such circumstances, the fact that there is a changed focus with elicitation of additional details should not of itself prevent a finding that the new cause of action arises out of substantially the same facts.
[5][2002] 1 Qd R 145, 164 [57].
In Thomas v Queensland,[6] the Court of Appeal observed that the “story” is a shorthand reference to matters that a plaintiff must prove. Although some authorities may be read as encouraging a fairly broadbrush comparison between the nature of the original claim and that which is sought to be added by amendment, there are limits to which a broadbrush approach can provide the necessary answer.
[6][2001] QCA 336, [19].
As Fraser JA observed in Paul v Westpac Banking Corporation,[7] the question whether the facts out of which a new cause of action arises are substantially the same as facts relied upon in a cause of action for which relief has already been claimed may involve questions of degree and fine judgment. However, the answer to the question should be informed by an appreciation that the policies underlying the applicable statute of limitation may be inappropriately undermined if the required analysis is conducted at too high a level of generality. If those underlying policies are not threatened by a proposed amendment, the test in r 376(4)(b) may be found to be satisfied even though the new claim involves some variation in the facts.
[7][2017] 2 Qd R 96, 103 [15].
Scope of the inquiry
MEPL submits the contentious amendments should be analysed in two groups:
(a)PLST Allegations, being amendments which plead allegations concerning the primary lamella sedimentation tank (PLST),[8] including amendments which plead the measure of Unitywater’s loss as being the loss of the benefit of the Contract to the extent that claim relies upon allegations of breach concerning the PLST; and
(b)Vicarious Liability Allegations, being amendments which plead a claim that MEPL is vicariously liable under the Contract for Acciona’s conduct (save to the extent that amendments form part of the PLST Allegations).[9]
[8]2FASOC, paragraphs 190I(b), 190S(b)(iv), Part L (paragraphs 272 to 277), Part M (paragraphs 278 to 281 – to the extent those paragraphs claim loss by reason of breaches concerning the PLST) and Part N (paragraph 281A – to the extent it relies upon Acciona’s conduct pleaded in paragraphs 366 to 395 as the basis for the claim of vicarious liability under the Contract).
[9]2FASOC, Part N (paragraph 281A – to the extent that it relies Acciona’s conduct pleaded in paragraphs 325 to 343), Part U (paragraphs 344 to 365), Part W (paragraphs 396 to 409) and Part X (paragraph 410).
MEPL accepts that, other than the PLST Allegations, new causes of action pleaded by the amendments to the 2FASOC arise from the same or substantially the same facts as those already pleaded.
Consequently, it is only necessary to consider whether, assuming the PLST Allegations plead new causes of action, those causes of action arise from the same or substantially the same facts already pleaded.
The case pleaded before the inclusion of the PLST Allegations
Prior to the amendments made in the 2FASOC, Unitywater pleaded various breaches of contract against MEPL based upon what it alleged to be the defective performance of the Plant. In the previous statement of claim, the defective performance was linked to issues with the operation of the MBBRs.[10] In summary, Unitywater pleaded that the Plant began to operate less efficiently about two years after the MBBRs commenced operating. This was attributed to two things. The first issue was the wearing and fragmenting of the media. The previous pleading alleged that this resulted in the release of fragments of the media from the Plant, as well as the loss of media (and the biomass it supported) from the MBBRs. The second issue was the discovery of a worm species present in the aerobic zones of the MBBRs which were likely contributing to the Plant operating less efficiently due to the apparent loss in biomass on the media.
[10]Part E2 (paragraphs 73 to 85).
To determine the present applications, it is not necessary to analyse all the previously pleaded claims for breach of contract based on allegations of defective design or construction of the Plant. It is sufficient to briefly describe some of those claims as follows:
(a)a claim that the release of media into the environment breached obligations imposed on MEPL under the Environmental Protection Act 1994 (Qld) (EP Act) and the Environmental Authority for the Plant, as well as MEPL’s obligations under the Contract to comply with those legislative requirements;[11]
(b)a claim that MEPL’s failure to rectify the ongoing issue of the discharge of media into the environment is that MEPL is not entitled to be awarded Practical Completion under the Contract;[12]
(c)a claim that the releases of media into the environment were caused by MEPL’s breach of the warranties it gave under the Contract;[13]
(d)a claim that MEPL is required to indemnify Unitywater for any loss, damage or liability arising from or in connection with the environmental harm or contamination caused by the release of media in circumstances where the Department became engaged in the issue.[14]
[11]Part E3 (legislative obligations); Part E4 (obligations under the Contract to comply with legislative requirements); Part E5 (breach).
[12]Part E6 (failure to rectify); Part E7 (effect on Practical Completion).
[13]Part E8. The warranties were pleaded in Part E1.
[14]Part E9.
In submitting that a new cause of action pleaded by the PLST Allegations arises out of substantially the same facts as those already pleaded, Unitywater relies heavily upon Parts E11A and E11B of the previous pleading.
Part E11A addressed the issue of “MBBR Treatment Capacity”. It pleaded as follows:
(a)MEPL was obliged to (a) design and construct an upgraded Plant that would treat sewage for a population of 200,000 people – referred to in the Contract and in the pleadings as an “equivalent population” or “EP” figure of 200,000 – and which would continuously meet all contractual requirements, including effluent quality criteria specified in Unitywater’s project requirements (PPR); and (b) ensure the media would, when incorporated within the Plant, comply with the requirements of the design and the Contract and perform satisfactorily to achieve the design treatment capacity;[15]
(b)from about December 2021 the Plant started experiencing poor performance, specifically with respect to its ability to comply with ammonia limits (one of the effluent quality criteria in the PPR and a requirement of the Environmental Authority) due to there being an insufficient amount of biomass present on the media which is required to remove ammonia during the treatment process;[16]
(c)a decrease in the biofilm on the media impacts the ability of the Plant to perform the sewage treatment process, resulting in the reduced treatment capacity and ammonia levels which did not comply with the effluent quality criteria;[17]
(d)analysis of the Plant operational data from June 2022 determined that: (a) the surface area of the media was significantly reduced due to biofilm accumulation; (b) the treatment capacity of the Plant (estimated to be 157,000 EP due to insufficient biomass present on the media) was less than the required design treatment capacity of 200,000 EP; (c) the insufficient amount of biomass present on the media hindered the nitrification process for the removal of ammonia during the sewage treatment process, causing a reduction in the Plant’s performance in terms of ammonia removal and, consequently, impacting the treatment capacity of the Plant and its ability to operate in compliance with the Contract (including the PPR and the Environmental Authority);[18]
(e)on 20 January 2023, the Superintendent issued MEPL with a non-compliant works notice in respect of the defective media treatment capacity, which identified, inter alia: (a) the inability of the media to achieve the design treatment capacity; (b) the proliferation of worms in the MBBRs had reduced the Plant treatment capacity to circa 157,000 EP; (c) MEPL had not provided any guidance as to how to operate the MBBRs to control or eliminate the proliferation of worms in the MBBRs; (d) the reduction in the Plant’s treatment capacity justified Unitywater investigating alternative replacement media;[19]
(f)the insufficient amount of biomass present on the media must be rectified to ensure the Plant can operate in compliance with the Environmental Authority;[20]
(g)MEPL failed to ensure that there is a sufficient amount of biomass present on the media, including by, inter alia, failing to eradicate the presence of worms from the MBBRs;[21]
(h)Unitywater has and will suffer loss associated with the insufficient amount of biomass present on the media.[22]
[15]Part E11A, paragraphs 190A to 190F.
[16]Part E11A, paragraphs 190H, 190I(a) and 190O(c).
[17]Part E11A, paragraphs 190J and 190O(b).
[18]Part E11A, paragraphs 190K and 190O.
[19]Part E11A, paragraphs 190L and 190M.
[20]Part E11A, paragraph 190P.
[21]Part E11A, paragraph 190Q.
[22]Part E11A, paragraph 190R.
Part E11B pleaded MEPL’s responsibility for the reduced treatment capacity of the Plant. It alleged the reduced capacity was the result of MEPL breaching warranties it gave under the Contract.[23] The following breaches were specifically pleaded:[24]
[23]The warranties were pleaded in Part E1.
[24]Paragraph 190S.
(a)breach of the warranty given under cl 2.2(a)(i)(A) of the general conditions by MEPL failing to exercise due skill, care and diligence, and good industry practice, in carrying out and completing the design and construction of the Plant;
(b)breach of the warranty given under cl 2.2(a)(v)(C) of the general conditions by MEPL failing to carry out its design obligations in accordance with the requirements of the Contract, including the PPR, to:
(i)rectify the defect manifested by the insufficient amount of biomass present on the media associated with, inter alia, the proliferation of worms in the MBBRs;
(ii)develop a long-term solution to ensure a sufficient amount of biomass is present on the media including, inter alia, to eradicate, control or prevent the continued growth of worms in the MBBRs;
(iii)to ensure the design treatment capacity of 200,000 people was reached;
(c)breach of the warranty given under cl 2.2(a)(v)(E) of the general conditions by MEPL failing to carry out its design obligations to ensure that the Plant, once constructed, would be fit for purpose and comply with the requirements of the Contract, including the PPR, by being capable of achieving the design treatment capacity of 200,000 people and satisfying all performance requirements;
(d)breach of the warranties given under cl 2.2(a)(vi)(B) and cl 2.2(a)(vii) of the general conditions by MEPL failing to complete the construction of the Plant and selection of the media so that, when constructed, the Plant would be fit for its stated purpose in accordance with the requirements of the Contract, including the PPR, and capable of achieving the design treatment capacity of 200,000 people;
(e)breach of the warranty given under cl 34A.2 of the general conditions by MEPL failing to ensure the Plant would achieve the performance criteria in accordance with the PPR, including the effluent quality criteria.
Unitywater then pleaded that, by reason of the alleged breaches of warranty, it has and will suffer loss and damage associated with there being an insufficient amount of biomass present on the media.[25]
[25]Paragraph 190T. See also paragraphs 193(d), 194(h) and 195(je)-(jg).
The allegations concerning the reduction in biomass and the inability of the Plant to achieve its nominated design treatment capacity were also relied upon to claim the cost of replacing the media by reason of MEPL’s breach of the obligation under the Contract to use suitable materials that are fit for their intended purpose.[26]
[26]Parts F1 to F3; specifically paragraphs 198(c) and 203.
The additional facts raised by the PLST Allegations
The PLST Allegations now plead a defect in the design of part of the Plant separate to the MBBRs, namely the PLST which was intended to remove organic loads before the sewage influent reached the MBBRs for treatment.[27] The relevant allegations can be summarised as follows:
[27]2FASOC, paragraph 76(b)
(a)the design of the Plant involved an unreasonable assumption that the PLST would remove 40% of organic loads from the influent;[28]
[28]2FASOC, paragraphs 368-369.
(b)the PLST only removed 30% of organic loads, with the result that the volume of organic loads received by the MBBRs was 17% higher than assumed in the design;[29]
[29]2FASOC, paragraphs 370-373.
(c)the higher than assumed organic loads received by the MBBRs meant that:[30]
[30]2FASOC, paragraphs 374-376.
(i)the treatment capacity of the MBBRs is reduced to approximately 170,000 EP such that the Plant does not achieve the minimum treatment capacity requirement of 200,000 EP;
(ii)the MBBRs cannot remove sufficient ammonia nitrate to comply with the effluent quality criteria in the PPR and the Environmental Authority;
(iii)in accordance with the PPR, MEPL cannot demonstrate that the Plant can be reasonably augmented to a future treatment capacity of 600,000 EP within the confines of the existing Plant;
(d)to minimise the extent to which the treated effluent contained ammonia in an amount greater than specified in the effluent quality criteria, Unitywater increased the level of aeration in the aerobic zones of the MBBRs. The increased level of aeration exacerbated the proliferation of worms in the MBBRs, exceeded the design levels of dissolved oxygen for the aerobic zones of the MBBRs, exacerbated the deterioration of the media in the MBBRs and increased the amount of power required to operate the Plant;[31]
[31]2FASOC, paragraphs 377-378.
(e)because of these matters:
(i)the Plant does not comply with the Environmental Authority and consequently does not comply with the EP Act;[32]
(ii)in its specification of the PLST, the design of the Plant is not fit for purpose; [33]
(iii)the design of the Plant is not fit for purpose as: (a) it does not result in sufficient biomass being present on the media in the MBBRs; (b) results in a decrease in the volume of available media in the MBBRs due to its wearing and fragmenting; and (c) does not prevent the proliferation of worms in the MBBRs;[34]
(f)a designer of the Plant acting with care and skill would have:[35]
(i)identified (a) the requirements of the EP Act and the Environmental Authority, including the prescribed maximum concentration of ammonia in the effluent quality criteria; (b) that it was unlikely that the PLST would or could remove 40% of the organic loads from the influent; and (c) that the likely result would be that the MBBRs would be overloaded and fail to achieve the design treatment capacity of 200,000 EP, and fail to remove sufficient ammonia to meet the effluent quality criteria;
(ii)specified a primary treatment methodology with sufficient capacity to remove at least 40% of the organic loads, or designed the Plant with sufficient capacity in the MBBRs to sufficiently treat the increased organic loads passing into the MBBRs from the primary treatment zone;
(g)those things were not done in the case of the Plant and, instead, the design specified the PLST with insufficient capacity to remove at least 40% of the organic loads and specified the MBBRs with insufficient capacity to treat the higher than intended organic loads to achieve the design treatment capacity of 200,000 EP, and to remove sufficient ammonia to meet the effluent quality criteria.[36]
[32]2FASOC, paragraph 382.
[33]2FASOC, paragraphs 383.
[34]2FASOC, paragraphs 384.
[35]2FASOC, paragraph 387.
[36]2FASOC, paragraph 388.
Unitywater pleads that the poor performance of the Plant can be attributed (in whole or in part) to the failure of the PLST to remove a sufficient proportion of the organic loads.[37]
[37]2FASOC, paragraph 190I(b).
Unitywater further pleads that, by reason of the PLST Allegations, MEPL breached:
(a)the warranty it gave under cl 2.2(a)(v)(C) of the general conditions, because it failed to carry out its design obligations in accordance with the requirements of the Contract, including the PPR, to ensure the PLST removed a sufficient proportion of the organic loads;[38]
(b)the warranties it gave in cll 2.2(a)(v)(E)(1) and 2.2(a)(vii)(A) of the general conditions, because the Plant, constructed in accordance with the design, is not fit for purpose;[39]
(c)the warranty it gave in cl 2.2(a)(v)(E)(2) of the general conditions, because the Plant, constructed in accordance with the design, does not comply with the requirements of the Contract, particularly the PPR;[40]
(d)the warranties it gave in cll 2.2(a)(v)(E)(3) and 2.2(a)(vi)(E) of the general conditions, because the Plant, constructed in accordance with the design, do not comply with all legislative requirements, particularly the Environmental Authority and the EP Act;[41]
(e)the warranty it gave in cl 2.2(a)(i)(A) of the general conditions, because it did not exercise due skill, care and diligence in the design of the Plant;[42]
(f)the warranty it gave in cl 2.2(a)(v)(E)(5) of the general conditions, because it carried out its design obligations other than in accordance with good industry practice;[43]
(g)the common law duty of care it owed to Unitywater.[44]
[38]2FASOC, paragraph 190S(b)(iv).
[39]2FASOC, paragraph 273.
[40]2FASOC, paragraph 274.
[41]2FASOC, paragraph 275.
[42]2FASOC, paragraph 276(a).
[43]2FASOC, paragraph 276(b).
[44]2FASOC, paragraph 276(c).
Finally, Unitywater pleads that MEPL’s breaches arising from the PLST Allegations caused it loss or damage because of the need to design and construct a balance tank to achieve the design treatment capacity of 200,000 EP and ensure compliance with the Environmental Authority and the EP Act.[45]
[45]2FASOC, paragraphs 277 and 412(a).
Consideration
As Unitywater accepts, the PLST Allegations plead new material facts; specifically, the design assumption concerning the removal of organic loads by the PLST, the alleged deficiency in that design assumption, the consequences of that design deficiency, and MEPL’s responsibility under the Contract and in negligence for the consequences of that design deficiency.
MEPL submits that the PLST Allegations are unconnected to allegations in the earlier pleading about problems with the biomass on the media in the MBBRs. Although the PLST forms part of the overall sewage treatment process, it does not contain the media which is the subject of complaint in the earlier pleading. It is a separate piece of equipment which performs a different part of the treatment process to the MBBRs.
Consequently, MEPL submits that new causes of action pleaded by the PLST Allegations depend upon establishing that the MBBRs are receiving a higher level of organic loads than intended, and this higher than intended level of organic loads is the reason the Plant is not achieving the design treatment capacity of 200,000 EP and not complying with the effluent quality criteria for ammonia levels. Proof of that case does not require that Unitywater prove the existence of problems in the design of the MBBRs themselves, or the specification of the media used in the MBBRs, which are the subject of complaint in the earlier pleading. On that basis, MEPL argues that none of the allegations in the earlier pleading, save for the ultimate effect on the performance of the Plant, appear to have anything to do with the new story which Unitywater seeks to tell with the PLST Allegations.
In the circumstances of this proceeding, I do not accept MEPL’s submission that the design and operation of the PLST should be characterised as entirely distinct and independent from the design and operation of the MBBRs. Nor do I consider that the breaches the subject of the PLST Allegations should be treated as entirely separate and independent from the breaches pleaded in the earlier pleading. In both cases, the breaches concern an alleged failure to design components of the Plant to achieve the minimum treatment capacity and effluent quality required under the Contract. The PLST is not itself involved in the biological wastewater treatment process. However, by the PLST Allegations, Unitywater pleads that, because of the unreasonable design assumption regarding the performance of the PLST, the influent which passed through to the MBBRs contained a higher level of organic loads than was contemplated in the design. This is alleged to have overloaded the MBBRs leading to a reduction in their treatment capacity and to them being unable to remove sufficient ammonia to comply with the effluent quality criteria prescribed by the PPR and the Environmental Authority.
In determining whether the PLST Allegations arise from substantially the same story set out in the earlier pleading, it is relevant that both pleadings allege that MEPL breached relevant contractual warranties with the same ultimate consequences.[46] That is, the alleged breaches in both pleadings are said to have caused or contributed to the same performance issues at the Plant, being the failure to achieve the design treatment capacity of 200,000 EP and the failure to comply with the effluent quality criteria for ammonia levels. The critical difference between the two pleadings is the alleged cause of the performance issues. Whereas the earlier pleading attributed the performance issues to problems with the media and the amount of biomass in the MBBRs, the PLST Allegations identify a further contributing cause – the failure of the PLST to remove the intended level of organic loads from the influent which the MBBRs were required to treat. In this way, the PLST Allegations expand the focus of the pleaded case regarding the cause of the Plant’s performance issues.
[46]Brisbane Airport Corporation Pty Ltd v Arup Pty Ltd [2017] QSC 232, [45].
The case pleaded prior to the PLST Allegations, and the case as amended, are both about the alleged failure of MEPL to design a Plant capable of meeting the relevant performance requirements. The different factors alleged to have contributed to that outcome are different aspects of MEPL’s alleged breach of the warranties it gave under the Contract relating to the design of the Plant, and its performance once constructed as designed. The PLST Allegations extend Unitywater’s case from the design of the MBBRs themselves, including the media specified in the design, to the impact that the allegedly defective PLST design assumption had on the operation of the MBBRs. Nevertheless, I consider the PLST Allegations to be sufficiently connected with the allegations made in the earlier pleading to conclude that they arise out of substantially the same facts Unitywater had previously pleaded.
The story Unitywater will be required to tell to establish the case described in the earlier pleading (and which remains in the 2FASOC) will involve explaining why the Plant was unable to achieve the nominated design capacity of 200,000 EP and to comply with the effluent quality criteria for ammonia prescribed in the PPR and the Environmental Authority. This will require that Unitywater demonstrate that the amount of biomass present in the MBBRs is insufficient to meet the 200,000 EP capacity requirement and the ammonia limit. The reasons stated in the earlier pleading for there being insufficient biomass – wear and fragmentation of the media, as well as the proliferation of worms – will form part of this story. However, the fact that those were the reasons initially identified in the earlier pleading for there being insufficient biomass does not mean that another reason cannot form part of substantially the same story. Putting to one side the issue of MEPL being taken by surprise, it seems to me that even if the PLST Allegations had not been added evidence about the level of organic loads removed from the influent by the PLST, and the ability of the MBBRs to treat influent with such levels of organic loads removed, would not be objectionable as irrelevant. In my view, even though not the subject of a specific claim of breach of contractual warranty by MEPL, evidence about those matters would still be relevant to establishing the insufficiency of the amount of biomass present in the MBBRs and the steps required to address the failure of the Plant to operate in accordance with the requirements under the Contract.
By pleading the PLST Allegations as an additional reason that the MBBRs cannot treat the influent in compliance with the requirements of the Contract, and relying upon that additional reason as a further basis to allege that MEPL breached the warranties it gave about the design of the Plant, Unitywater has elicited further detail and augmented the existing story but I am not satisfied that this precludes a finding that these additional facts arise out of substantially the same story as was previously pleaded.
In summary, I am satisfied that new causes of action pleaded by the PLST Allegations arise out of substantially the same facts Unitywater had already pleaded. In my view, the foregoing analysis of the similarities and differences between the earlier pleading and the PLST Allegations does not consider the issue at too high a level of generality such as to undermine the policies of limitations statutes. I address these policies further in considering the question of appropriateness to which I now turn.
Appropriateness
Relevant principles
In determining the question of appropriateness, the court must consider whether MEPL will be prejudiced by Unitywater’s delay in making the amendments.[47]
[47]Hartnett v Hynes [2009] QSC 225, [25].
However the inquiry as to appropriateness is a broad one and not confined to questions of prejudice.[48] The court should also have regard to the objectives stated in r 5 of the UCPR, being to facilitate the just and expeditious resolution of the real issues in civil proceedings at a minimum of expense and to avoid undue delay, expense and technicality, as well as the principles discussed in Aon Risk Services Australia Ltd v Australian National University.[49] The stage which the proceeding has reached when the amendments are made may have a bearing on weighing these various considerations.[50]
[48]Brisbane Airport Corporation Pty Ltd v Arup Pty Ltd [2017] QSC 232, [53].
[49](2009) 239 CLR 175. See the summary of the relevant principles in Hartnett v Hynes [2009] QSC 225, [27].
[50]See, eg, Brisbane Airport Corporation Pty Ltd v Arup Pty Ltd [2017] QSC 232, [56].
Further, as just noted, the fact that the applications concern the operation of limitations statutes means that it is appropriate to have regard to the policies that underlie such statutes,[51] as identified by McHugh J in Brisbane South Regional Health Authority v Taylor:[52]
“The effect of delay on the quality of justice is no doubt one of the most important influences motivating a legislature to enact limitation periods for commencing actions. But it is not the only one. Courts and commentators have perceived four broad rationales for the enactment of limitation periods. First, as time goes by, relevant evidence is likely to be lost. Second, it is oppressive, even ‘cruel’, to a defendant to allow an action to be brought long after the circumstances which gave rise to it have passed. Third, people should be able to arrange their affairs and utilise their resources on the basis that claims can no longer be made against them. Insurers, public institutions and businesses, particularly limited liability companies, have a significant interest in knowing that they have no liabilities beyond a definite period. … The final rationale for limitation periods is that the public interest requires that disputes be settled as quickly as possible.”
[51]Brisbane Airport Corporation Pty Ltd v Arup Pty Ltd [2017] QSC 232, [54].
[52](1996) 186 CLR 541, 552-553 (citations omitted).
In Paul v Westpac Banking Corporation,[53] the Court of Appeal confirmed the requirement to consider whether granting leave on an application under r 376(4) would inappropriately undermine these policies.
[53][2017] 2 Qd R 96, 103 [15], 105 [21].
When determining whether it is appropriate to give leave to make an amendment under r 376(4) or, as in this case, to allow such amendment from the date the proceeding commenced, a central question is whether a fair trial can occur despite the time taken to make the amendments.[54]
[54]Nalos Pty Ltd v Robert Bird Pty Ltd [2015] QSC 174, [19]-[25].
The course of the proceeding
As noted above, Unitywater commenced this proceeding on 28 July 2022. It did not serve the claim at that time. Instead, it wrote to MEPL stating it had commenced the proceeding to preserve its rights in respect of matters raised in the Notice of Dispute (see [14] above). Unitywater further stated that its intention at that time was to continue to engage with the Department before serving the claim on MEPL. Unitywater did not ultimately serve its original claim and statement of claim on MEPL.
On 25 July 2023, Unitywater was granted leave to file an amended claim and statement of claim. It served the amended claim and statement of claim on MEPL the same day.
After receiving a request for particulars from MEPL, Unitywater filed a further amended statement of claim on 20 October 2023.
On 24 October 2023, MEPL’s solicitors, Ashurst Australia (Ashurst), wrote to Unitywater’s solicitors, Lamont Project & Construction Lawyers (Lamont PCL). That letter:
(a)referred to MEPL’s engagement of Acciona to carry out process design and procurement, commissioning and maintenance for the upgrade of the Plant;
(b)further referred to a Deed of Covenant that Unitywater, MEPL and Acciona entered into on 21 June 2019, by which Acciona:
(i)warranted to Unitywater (among other things) that it would complete the design works with professional skill and care and in a thorough and professional manner so that they are fit for their purpose; and
(ii)indemnified Unitywater for any loss or damage it suffered as a result of any breach by Acciona of any of the covenants under the Deed;
(c)attached a copy of the Deed of Covenant;
(d)asserted that if Unitywater was entitled to any of the relief pleaded in its further amended statement of claim, it would appear to have a direct cause of action against Acciona under the Deed of Covenant and asked Unitywater to inform MEPL if it intended to join Acciona as a defendant;
(e)stated that, whether or not Unitywater joined Acciona as a defendant, some of the claims Unitywater had pleaded against MEPL were apportionable claims for which Acciona was a concurrent wrongdoer.
On 26 October 2023, Lamont PCL responded to Ashurst, stating that, in circumstances where Unitywater considered MEPL had not complied with the obligation to provide information that made it believe Acciona was a concurrent wrongdoer,[55] Unitywater was not in a position and did not propose to join Acciona as a defendant.
[55]Civil Liability Act 2003 (Qld), s 32.
On 1 November 2023, Ashurst wrote again to Lamont PCL, asserting that the 24 October 2023 letter, and the Deed of Covenant attached to that letter, discharged MEPL’s obligation to provide information that made it believe Acciona was a concurrent wrongdoer. Ashurst stated that the question whether to join Acciona was one for Unitywater. However, MEPL took the position that Unitywater was on notice that MEPL’s defence would plead that Acciona was a concurrent wrongdoer in respect of some of the claims.
On 15 December 2023, MEPL filed its defence and counterclaim. As foreshadowed in the correspondence set out above, MEPL pleaded that, if Unitywater’s allegations as to inadequacies in the design of the biological wastewater treatment process are found to be true, some of Unitywater’s claims are apportionable claims and Acciona is a concurrent wrongdoer in respect of those apportionable claims.
Following the filing of the defence and counterclaim, Lamont PCL requested copies of documents mentioned in that pleading. An exchange of correspondence followed. MEPL provided copies of some of the requested documents under cover of a letter from Ashurst dated 10 January 2024. At the end of that letter, Ashurst observed that the documents requested by Unitywater concerned advice and information provided by, and correspondence with, Acciona and asked that Unitywater tell MEPL as soon as possible if it intended to join Acciona.
Pleadings closed after Unitywater served its reply and answer on 28 March 2024, and MEPL served its reply to answer on 11 April 2024.
The parties agreed to a Document Management Plan under which disclosure would be completed by 28 January 2025.
MEPL next raised the issue of joining Acciona in a letter from Ashurst to Lamont PCL dated 14 August 2024. That letter repeated the assertion that the claims Unitywater had pleaded against MEPL arose out of facts, matter and circumstances which Acciona was directly involved in. It attached further documents and explained the basis upon which MEPL believed that if it was liable to Unitywater (which it denied) Acciona would also be liable. The letter again asked that Unitywater tell MEPL whether it intended to join Acciona and indicated that MEPL would consent to a joinder application.
On 13 September 2024, Lamont PCL wrote to Ashurst asserting that the material MEPL had previously provided to Unitywater did not contain sufficient particularity to permit Unitywater to properly plead a claim against Acciona. The letter requested that MEPL provide further documents prior to the agreed date for disclosure of 28 January 2025.
On 27 September 2024, Ashurst responded to Lamont PCL, stating that MEPL was not obliged to provide documents to Unitywater to permit Unitywater to particularise a claim against Acciona. In any event, MEPL considered that Unitywater already possessed the information and documents necessary for it to do so. The letter stated that if, having undertaken a detailed review of the material already in its possession, Unitywater considered that it required further information and documents to decide whether to join Acciona then it was free to make an application for pre-action disclosure from Acciona. However, MEPL’s position was that the proceeding should not be delayed while Unitywater undertook investigations to determine whether it wished to join Acciona.
Lamont PCL responded to Ashurst on 3 October 2024. That letter disputed much of what was said in Ashurst’s letter of 27 September 2024. Of most relevance for present purposes, the letter stated that Lamont PCL did not believe that they had knowledge of all material facts required to plead a claim against Acciona.
Ashurst wrote to Lamont PCL again on 31 October 2024. Relevantly for present purposes, that letter indicated that MEPL was prepared to consent to orders which required Unitywater to make any application to join additional parties to the proceeding by 28 February 2025. Lamont PCL responded to that letter on 8 November 2024, including by agreeing to the proposal that any joinder application be filed by 28 February 2025.
On 22 November 2024, Lamont PCL wrote to Ashurst again, stating that, having further considered the matter, Unitywater proposed to prepare a draft pleading to support its application to join Acciona. Consequently, Unitywater would require until 7 May 2025 to make that application.
On 19 December 2024, MEPL provided an initial tranche of disclosure comprising 53,164 documents.
On 24 January 2025, MEPL provided the balance of its disclosure. In total, MEPL’s disclosure comprised 222,830 documents.
The matter came on for review on 29 January 2025. At that review, Unitywater sought a direction that it apply for leave to join a further defendant to the proceeding by 7 May 2025. MEPL sought a direction requiring that the joinder application be filed by 28 February 2025. In an affidavit filed by leave, Mr Lamont of Lamont PCL, deposed to steps Unitywater would be required to take to plead its proposed claims against Acciona, including engaging with relevant expert witnesses. At the conclusion of the review, directions were made granting Unitywater the time it sought to bring its joinder application.
On 7 May 2025, Unitywater filed its application for leave to join Acciona as a defendant and to file the 2FAC and 2FASOC. Drafts of the 2FAC and 2FASOC were provided to MEPL and Acciona on 19 May 2025.
Unitywater’s application came on for hearing on 24 June 2025. The joinder application was not opposed by either MEPL or Acciona and leave was granted to join Acciona to the proceeding. MEPL also did not oppose the application for leave to file the 2FAC and 2FASOC but, to preserve its ability to rely upon a limitation defence, sought an order that the 2FAC and 2FASOC should take effect from the date they were filed. Unitywater accepted that the 2FAC and 2FASOC should take effect as against Acciona from the date they were filed. However, Unitywater opposed the order sought by MEPL which was to similar effect. The issue was not finally resolved at that hearing. Instead, the grant of leave to Unitywater to file and serve the 2FAC and 2FASOC was made subject to MEPL’s right to apply to have the amendments disallowed. MEPL did not apply to disallow the amendments but (as noted above) brought its present application for orders that the contentious amendments are to take effect against it for limitation purposes from the date the 2FASOC was filed.
Delay
Based on this history, MEPL submits that Unitywater has delayed both in joining Acciona and in pleading the contentious amendments and, further, that delay is a reason why the court would find it is not appropriate to exercise the discretion in Unitywater’s favour on the present applications.
Joinder of Acciona
As to the timing of the application to join Acciona to the proceeding, Mr Lamont has deposed that when he received the Ashurst letter on 14 August 2024 (see [67] above), he did not consider that Unitywater was aware of sufficient facts or had access to documents which would provide a sufficient basis for Unitywater to plead a claim against Acciona. That evidence is consistent with the position that Lamont PCL expressed in the letters sent to Ashurst on 13 September 2024 and 3 October 2024 (see [68] and [70] above).
In written submissions, MEPL described this evidence as “curious” considering documents that were subsequently disclosed by Unitywater which demonstrate Acciona’s involvement in the upgrade of the Plant, the correspondence between Ashurst and Lamont PCL on the issue of Acciona’s liability as a concurrent wrongdoer and MEPL’s early disclosure of material relevant to Unitywater’s claims against Acciona. During oral submissions, however, MEPL expressly disavowed any suggestion that I should disbelieve Mr Lamont’s evidence that he did not think Unitywater had sufficient information to plead a claim against Acciona.[56] Instead, MEPL submits that, based on the material that was available to Unitywater, I should be satisfied that it ought to have realised it had a basis to join Acciona much earlier than it did.
[56]Transcript 1-45:42 to 1-46:8.
Even if I was to accept, on an objective consideration of the information available to Unitywater, that Lamont PCL and Unitywater should have realised earlier that there was a proper basis to join Acciona, that conclusion would not change the fact that the unchallenged evidence on the present applications is that Mr Lamont’s subjective belief until around November 2024 was to the contrary. That subjective belief explains why Unitywater did not take steps to join Acciona in the period from October 2023 when MEPL first raised the issue (see [60] above), until November 2024 when Unitywater confirmed that it would make a joinder application (see [71] and [72] above).
The period between November 2024 and 7 May 2025, when Unitywater filed the joinder application, is explained by the work that was involved in preparing the draft pleading (including the PLST Allegations). As deposed to by Mr Lamont, that work involved: considering documents disclosed by MEPL, briefing relevant documents to experts engaged by Unitywater; obtaining those experts’ views on potential claims against Acciona; briefing relevant documents and the experts’ views to Unitywater’s counsel; and preparation of the draft pleading by counsel. At the review hearing on 29 January 2025, I accepted Unitywater’s submission that the time required for these steps to be undertaken justified a direction that it should have until 7 May 2025 to file its joinder application. Unitywater complied with that direction, although the supporting affidavit exhibiting the draft pleading was not filed until 19 May 2025. In those circumstances, I do not consider that this further period from November 2024 until the joinder application was filed constitutes unexplained delay by Unitywater.
There is also force in Unitywater’s submission that although the time taken to bring the joinder application would have been particularly relevant to the determination of that application (if it had been opposed), it is of less relevance to the question whether the contentious amendments made in the case against MEPL (both the PLST Allegations and the Vicarious Liability Allegations) meet the requirements of r 376(4). That is because, even if the joinder application was opposed and joinder had been refused, Unitywater could still have sought to plead the same amendments against MEPL pursuant to r 376(4). Although the contentious amendments are based on conduct by Acciona, they plead the bases upon which Unitywater alleges that MEPL is liable for that conduct.
In any event, the more relevant question for the purposes of the present applications is whether Unitywater delayed in making the contentious amendments against MEPL and, if it did, whether it has adequately explained such delay.
PLST Allegations
The time Unitywater took to plead the PLST Allegations is explained by work that was undertaken by Mr Griffiths, a sewage treatment process engineer. Mr Lamont deposed to having engaged Mr Griffiths as an expert witness in April 2024 to consider the cause of the poor performance of the Plant, specifically with respect to ammonia levels and the treatment capacity allegations pleaded in Part E11A of the earlier pleading. This engagement occurred around the time that pleadings closed (see [65] above).
On 30 April 2024 and 21 May 2024, Mr Griffiths requested that he be provided with various documents and sampling results for influent characteristics at the Plant. Lamont PCL provided the sampling results requested by Mr Griffiths on 7 August 2024 and provided some further data to Mr Griffiths on 16 September 2024.
On about 15 November 2024, Mr Griffiths expressed some initial opinions in a draft report. Unitywater has disclosed that draft report and it was exhibited to an affidavit of Mr Lamont read on the applications. The opinions which, I infer, ultimately formed the basis for the PLST Allegations are set out in section 8.2 of that draft report. Mr Lamont has deposed that, until Mr Griffiths provided the initial opinions set out in the draft report, he was not aware of a basis to plead the PLST Allegations. MEPL does not suggest I should disbelieve that evidence.
Mr Griffiths subsequently informed Mr Lamont that he wished to perform further calculations to confirm his initial opinions. Mr Griffiths had not completed those further calculations when he went on leave from 24 January 2025 until the end of February 2025. After Mr Griffiths returned from leave, he had to complete his further calculations, consider relevant documents from MEPL’s disclosure and confer with Lamont PCL for the purpose of briefing counsel to draft the amendments.
MEPL relies on material which establishes that Unitywater had direct contact with Mr Griffiths as early as 14 September 2023, well before he was engaged by Lamont PCL to prepare an expert report for the purposes of the proceeding. Unitywater has disclosed a copy of draft report by Mr Griffiths titled “Kawana Wastewater Treatment Plant: Effluent Ammonia Issues Identification and Management Options” (Ammonia Issues Report). The first draft of that report appears to have been prepared by Mr Griffiths in January 2024.
As its title suggests, the Ammonia Issues Report was focused on attempting to resolve the issue of the ammonia levels in the effluent released from the Plant. The scope of the Ammonia Issues Report was expressed as follows:
“The project scope is to evaluate the available plant data in conjunction with previous microbiological investigations. Based on this evaluation, any further microbiological investigations warranted are to be identified and the subsequent findings evaluated. The ultimate intent is to identify the cause of the poor nitrification performance. The cause of the elevated effluent concentrations is to be determined. The ability of the existing secondary treatment facilities to treat the ammonia loads and the possible modifications or adaptions of the existing facilities to improve ammonia removal are to be identified.”
Mr Griffiths did not address the adequacy of design of the Plant generally, or the PLST specifically, in the Ammonia Issues Report.
In contrast, the description of the scope of the draft report Mr Griffiths prepared after he was engaged by Lamont PCL to provide expert evidence in this proceeding records that, as part of his engagement, Mr Griffiths was instructed to “consider the suitability of the design of the Plant to achieve a treatment capacity of 200,000 EP in accordance with the Environmental Authority Licence”. I infer it is that instruction which caused Mr Griffiths to consider the suitability of the design of the PLST and to express the views which led Unitywater to plead the PLST Allegations.
The relevant question is whether, by not instructing Mr Griffiths to consider the suitability of the design of the Plant earlier than in fact occurred, Unitywater failed to act with the degree of expedition required by r 5.
I accept that, if he had been instructed earlier, Mr Griffiths would have provided his opinions on the PLST earlier and, consequently, Unitywater would have been able to plead the PLST Allegations earlier. That does not lead me to conclude, however, that Unitywater has failed to progress the proceeding with sufficient expedition. To do so would ignore the reality that Unitywater’s understanding of the causes of the alleged operational problems at the Plant is likely to have developed over time as it undertook investigations into the various issues it was confronted with.
From the limited materials available on the present applications, it appears that Unitywater’s efforts, and its interactions with the Department, were initially focused on the problem of the fragmentation of the plastic media and the release of media fragments from the Plant into the environment commencing in about January 2020. From about December 2021, Unitywater began to address the Plant’s ability to achieve its nominated design capacity and to comply with ammonia limits in the treated effluent. Initially, in seeking to determine the cause of those issues, the focus seems to have been upon matters that were observable at the Plant, including the reduction of the volume of media available to support the biomass in the MBBRs by reason of the degradation and wear of that media, as well as the proliferation of worms in the MBBRs. In those circumstances, I do not think it is fair to criticise Unitywater for failing to immediately progress to an investigation of the design of parts of the Plant separate from the MBBRs. It seems to me that the subsequent work done by Mr Griffiths which identified the alleged defect in the design of the PLST forms part of an iterative process of investigation into the cause of the alleged operational deficiencies at the Plant.
In summary, I do not accept that the time taken by Unitywater to plead the PLST Allegations constitutes unexplained delay.
Vicarious Liability Allegations
Separately, MEPL criticises the time which Unitywater took to plead the Vicarious Liability Allegations. In that regard MEPL submits that these allegations were substantially the same as allegations already pleaded against MEPL itself. I accept that there is a substantial overlap between the Vicarious Liability Allegations and the case which Unitywater set out against MEPL in its earlier pleading. However, that fact does not address the issue considered above concerning Mr Lamont’s belief as to whether Unitywater had a basis to plead any claims against Acciona. For the reasons already given, I am satisfied that Mr Lamont’s belief explains why Unitywater had not pleaded the Vicarious Liability Allegations before about November 2024. Unitywater would hardly be expected to plead that MEPL was vicariously liable for conduct of Acciona before Mr Lamont had formed the view that there was a basis to plead Acciona’s liability for the same conduct.
It is then necessary to consider the reason Unitywater did not plead the Vicarious Liability Allegations, which do not seem to have depended upon Mr Griffiths’ work, before May 2025. Even if I was to accept that Unitywater could have pleaded the Vicarious Liability Amendments earlier in the period between November 2024 and May 2025, I do not think it was unreasonable to approach the process of amending by deferring the amendments to plead the Vicarious Liability Allegations until Unitywater was able to also plead the PLST Allegations. Despite the additional time that was taken, delivering a single 2FASOC, rather than amending in two stages, seems to me to be a more efficient way for Unitywater to have proceeded, both in terms of the resources involved in preparing the amendments and for both MEPL and Acciona (upon being joined) in responding to the amendments.
Again, I do not accept that the time taken by Unitywater to plead the Vicarious Liability Allegations constitutes unexplained delay.
Prejudice
In terms of considering whether the various rationales for the imposition of limitation periods would be undermined if the contentious amendments are to take effect from the commencement of the proceeding, Unitywater submits that there is no evidence on the present applications that any evidence has been lost due to the effluxion of time or that MEPL will suffer any specific prejudice because of the contentious amendments. By contrast, MEPL submits that the risk of prejudice is obvious.
MEPL relies on the evidence of its solicitor, Ms Yeo, that it is likely to suffer prejudice because of the time Unitywater has taken to make the contentious amendments, including with respect to the preparation of its evidence, in that:
(a)at the time Ms Yeo prepared her affidavit for the purposes of the review on 29 January 2025, six out of ten people which Ashurst had identified as potential lay witnesses had left their employment with MEPL and, in Ms Yeo’s experience, it is more difficult to get access to witnesses for the purposes of preparing their evidence once they are no longer employed by a party to the proceeding;
(b)since about February 2021, Unitywater has been operating the Plant and over the ensuing period of operation the design and operating conditions at the Plant are likely to have changed, including by reason of the introduction of a replacement media in the MBBRs, which Ms Yeo considers will negatively impact MEPL’s ability to test Unitywater’s evidence by reference to the operation of the Plant as originally designed.
As to difficulty in accessing witnesses, I note McPherson JA accepted in Allonnor Pty Ltd v Doran[57] that the policies underlying statutes of limitation are not usually threatened by an amendment that adds a ground of recovery arising out of a transaction or occurrence already in suit because, in circumstances where a defendant’s sense of security concerning the transaction or occurrence has already been disturbed by the commencement of a proceeding, that defendant is likely to have collected and preserved all the evidence relating to the transaction or occurrence, not just those aspects of it that support or defeat a single legal theory.
[57][1998] QCA 372, 6 [8].
MEPL received a Notice of Dispute from Unitywater in March 2022 and was informed that the proceeding had been filed in July 2022. From that time, MEPL was aware that the work it performed under the Contract would be the subject of legal proceedings. In circumstances where it is to be expected that staff who worked at MEPL when it performed its work under the Contract might leave before the proceeding reaches the stage of MEPL preparing its evidence, it is reasonable to expect that MEPL would have taken steps to identify potential witnesses and collect relevant evidence from those potential witnesses, even in a preliminary form. Although I accept that it might become harder to access witnesses after they leave MEPL’s employment, that difficulty falls well short of establishing that, by reason of the passage of time, evidence is likely to have been lost.
As to Unitywater’s operation of the Plant, it seems likely that Unitywater will hold, and be obliged to disclose, information which evidences the way the Plant was operated and its performance, both as it was designed by MEPL under the Contract and after any subsequent modification of that design. That information will be available to experts engaged by MEPL for them to consider in responding to reports delivered by Unitywater’s experts. If MEPL’s experts come to the view that they require access to the Plant to prepare their evidence then MEPL can raise that with Unitywater and, if no agreement about access for MEPL’s experts can be reached, MEPL can approach the court for appropriate directions. In those circumstances, I have difficulty seeing how it is that Unitywater’s operation of the Plant (which began before this proceeding was filed) could be a basis to conclude that MEPL will be prejudiced if the contentious amendments take effect from the commencement of the proceeding.
Finally, MEPL complains about what it describes as the inconsistent position Unitywater has taken to the amendments pleaded against Acciona. As MEPL observes, the usual position set out under r 74(5) is that when a new defendant is joined to a proceeding then, for a limitation period, the proceeding against that new defendant is taken to have started when the original proceeding started. MEPL submits that, by accepting that the 2FAC and 2FASOC should take effect as against Acciona from the date they were filed (see [77] above), Unitywater consented to orders that varied this position. MEPL further submits that there is a real risk it will be prejudiced by Unitywater’s adoption of this different position concerning Acciona in circumstances where Unitywater seeks to hold MEPL vicariously liable for the claims now pursued against Acciona but (if Unitywater succeeds on its application) different time bars will apply to those claims to the extent to which they are asserted against each defendant.
MEPL points to the example that, if it succeeds in its claim that Acciona is a concurrent wrongdoer in respect of the alleged inadequacies in the design of the Plant, its proportionate liability would be reduced to reflect the extent of its contribution to any loss suffered by Unitywater, as compared to Acciona’s contribution to such loss. However, if the limitation period for the claim against Acciona has expired, and Unitywater is unable to recover from Acciona the amount of its proportionate liability, Unitywater could be expected to seek to rely upon the Vicarious Liability Allegations to hold MEPL liable for the portion of its loss which, on that scenario, it could not recover from Acciona. Thus, the prejudice is said to be the increased likelihood that MEPL will find itself subject to liability for claims for which it otherwise would have shared the liability with Acciona.
I accept that the scenario posited by MEPL is a possible outcome of the proceeding and that, if that scenario was to occur, MEPL would be faced with liability for the whole of Unitywater’s claim rather than its own proportionate liability. I do not accept, however, that this potential result (or any other scenario which would see MEPL bearing the whole of any loss suffered by Unitywater as a consequence of the Vicarious Liability Allegations ultimately being accepted) can be characterised as prejudice to MEPL resulting from either the pleading of the Vicarious Liability Allegations or the different positions Unitywater has taken to the time when the amendments should take effect against the different defendants. To the contrary, as Unitywater submits, it would be the result of MEPL agreeing (in return for payment under the Contract) to a term by which it would be held vicariously liable for a breach by Acciona. This is apparent from the fact that it was not necessary for Unitywater to join Acciona as a party to plead the Vicarious Liability Allegations. As noted above at [83] above, if joinder had been refused (or if there had been no joinder application) Unitywater could still have sought to plead the Vicarious Liability Allegations. If those amendments were made under r 376(4), MEPL would be in the same position it now complains would be the result of differing time bars applying as between it and Acciona; that is, it would be held liable for the whole of what would otherwise be an apportionable claim.
In summary, I do not consider that MEPL would be unduly prejudiced if the contentious amendments are to take effect from the commencement of the proceeding. Further, I do not consider that this would inappropriately undermine the various rationales for the imposition of limitation periods. To the contrary, I am satisfied that a fair trial can occur despite the time Unitywater has taken to make the contentious amendments. Overall, I consider it appropriate that the contentious amendments take effect against MEPL from the time the proceeding commenced.
Conclusion
For the reasons set out above, I will grant the relief sought on Unitywater’s application. MEPL’s application will be dismissed. I will hear the parties as to costs.
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