Northern Territory of Australia v Bellamack Pty Ltd
[2025] NTSC 44
•24 July 2025
CITATION:Northern Territory of Australia v Bellamack Pty Ltd [2025] NTSC 44
PARTIES:NORTHERN TERRITORY OF AUSTRALIA
v
BELLAMACK PTY LTD
(ACN 135 043 033)
TITLE OF COURT: SUPREME COURT OF THE NORTHERN TERRITORY
JURISDICTION: Supreme Court exercising Territory jurisdiction
FILE NO:2023-00175-SC
DELIVERED: 24 July 2025
HEARING DATE: 24 February 2025
JUDGMENT OF: Smyth A/AsJ
CATCHWORDS:
Application to Strike Out Pleading – No Reasonable Cause of Action Pleaded – Breach of Contract – No material facts pleaded linking breaches of contract to caused loss – Application dismissed
Application to Strike Out Pleading – Concurrent Application to Amend Pleadings– Amendments made without leave of Court – Abuse of Process – Amendment seeking to withdraw admission made in pleading – Application to strike out dismissed and leave to amend granted
Supreme Court Rules 1987 (NT) r 23.02(a), r 23.02(d), r 23.04(2)
A v Ipec Australia Ltd and Crew [1973] VR 39; Amcor Pty Ltd Trading as A.P.M Containers v Victoria Valley Beef Pty Ltd & Anor [1995] NTSC 11; Bellgrove v Eldrige (1954) 90 CLR 613; Berno v Green’s Steel Constructions Pty Ltd [1991] NTSC 4; Bond Corporation Pty Ltd v Thiess Contractors Pty Ltd (1987) 71 ALR 615; Bulmer v Oakey Co-op Dairy Co Ltd [1908] St R Qd 216; Darcy v Connolly (1924) 26 WALR 93; De Cesare v Deluxe Motors Pty Ltd (1996) 67 SASR 28; Director of War Service Homes v Harris (1968) Qd R 275; Fancourt v Mercantile Credits Ltd (1983) 154 CLR 87; Golding v Wharton Saltworks (1876) 1 QBD 374; Hoh v Frosthollow Pty Ltd [2014] VSC 77; Karlovsky v Q-Built Constructions [2006] NTMC 93; Knowles v Roberts (1888) 38 Ch D 263; Laws v Australian Broadcasting Tribunal (1990) 170 CLR 70; Liddle v North Australian Aboriginal Legal Aid Service Inc [1993] NTSC 78; Motor Accidents (Compensation) Commission v Toyota Motor Corporation Australia Limited & Anor [2023] NTSC 65; Northern Territory of Australia v Bellamack Pty Ltd [2024] NTSC 66; Northern Territory of Australia v John Holland Pty Ltd & Ors [2008] NTSC 4; Otter Gold NL v Barcon Pty Ltd & Sankey [2000] NTSC 65; Robinson v Harman (1848) 1 Exch 850; Scott Carver Pty Ltd v SAS Trustee Corporation [2005] NSWCA 462; Sherrington v Independent Commissioner Against Corruption (NT) & Anor [2025] NTSC 27; Singleton v. John Fairfax & Sons Ltd [1982] 2 NSWLR 38; Stohl Aviation v Electrum Finance Pty Ltd (1984) 56 ALR 716; Tabcorp Holdings Ltd v Bowen Investments Pty Ltd (2009) 236 CLR 272; Tropicus Orchids Flowers and Foliage Pty Ltd v Territory Insurance Office [1995] NTSC 131; UI International Pty Ltd v Interworks Architects Pty Ltd & Ors [2006] QSC 79; UI International v Interworks Architects P/L & Ors [2006] QCA 434; UI International Pty Ltd v. Interworks Architects Pty Ltd & Ors [2007] QSC 96; UI International Pty Ltd v Interworks Architects Pty Ltd (2008) 2 Qd R 158; Webster v Lampard (1993) 177 CLR 598; Westpoint Management Ltd v Chocolate Factory Apartments Ltd [2007] NSWCA 253, referred to.
Grant on Civil Procedure, Presidian Legal Publications, paragraph 5.23.106
Heydon JD, Heydon on Contracts, (Sydney, Thomson Reuters, 2019)
REPRESENTATION:
Counsel:
Plaintiff:P Bick KC with T Silvester
Defendant:D Robinson SC
Solicitors:
Plaintiff:HWL Ebsworth Lawyers
Defendant:Clayton Utz followed by MCS Wolf Pty Ltd
Judgment category classification: B
Judgment ID Number: Smy2506
Number of pages: 39
IN THE SUPREME COURT
OF THE NORTHERN TERRITORY
OF AUSTRALIA
AT DARWINNorthern Territory of Australia v Bellamack [2025] NTSC 44
No. 2023-00175-SC
BETWEEN:
NORTHERN TERRITORY OF AUSTRALIA
Plaintiff
AND:
BELLAMACK PTY LTD
(ACN 135 043 033)
Defendant
CORAM: SMYTH A/AsJ
REASONS FOR JUDGMENT
(Delivered 24 July 2025)
The Defendant makes application by summons filed 23 October 2024. In turn the Plaintiff makes application by summons filed 25 November 2024.
By summons filed 23 October 2024 the Defendant relevantly seeks the following orders:
1. Pursuant to rule 23.02(a) or (d), paragraph [23] of the second amended statement of claim filed 4 October 2024 including the particulars thereto be struck out.
2. The plaintiff not be granted further leave to amend paragraph [23] of the second amended statement of claim filed 4 October 2024.
3. Paragraphs [6] and [19] of the second amended statement of claim filed 4 October 2024 be struck out and in lieu thereof reinstate paragraphs [6] and [19] of the amended statement of claim filed 21 June 2023.
By summons filed 25 November 2024 the Plaintiff seeks the following:
1. The Plaintiff be granted leave to amend its pleading in accordance with paragraphs 4(a), 6(b), 14(b), 17(c)(i), 19 and 19(a) of the Second Amended Statement of Claim filed 4 October 2024.
There are essentially two arguments arising in this proceeding:
(1)Issues relating to the strike out of paragraph [23] of the Second Amended Statement of Claim (“2ASOC”); and
(2)Issues relating to the purported withdrawal of admissions in paragraphs 6 and 19 of the 2ASOC and various other amendments to other paragraphs 4(a), 17(c)(i), 13(a)(i)(B) and 14(b).
Preceding Interlocutory Application
It is not possible to get a full appreciation of what is sought without the context of the proceeding to date. On 24 January 2023 the Plaintiff filed its Writ and Statement of Claim. On 21 June 2023 the Plaintiff filed an Amended Statement of Claim (“ASOC”). On 12 July 2023 the Defendant filed a summons for summary judgment of the whole of the claim, and alternatively in respect to certain parts of the ASOC including paragraph [23] of the ASOC to be struck out. On 3 November 2023 an application was heard by Huntingford J, with a decision delivered on 24 August 2024, dismissing the summary judgment application, and ordering paragraph [23] of the ASOC to be struck out, but granting leave to file a further Amended Statement of Claim. On 4 October 2024 the Plaintiff filed a 2ASOC which is the subject of these applications.
Factual Background to the Proceeding
The factual background to the substantive proceeding is set out in the judgment of Huntingford J, particularly at paragraphs [4] – [21].[1] As it was before Huntingford J, the essential facts were not in dispute for the purposes of these applications. The factual background is rather complex and I am assisted by adopting the factual findings of Huntingford J which are set out in full as follows:
[4]Sometime before 1 June 2009, the Territory decided to develop a suburban subdivision on Crown land in Palmerston, to be known as the suburb of Bellamack. The Territory was the registered proprietor of the land which was referred to as the “lease area”. There was a call for expressions of interest for proponents to develop the lease area and a competitive selection process was conducted. Bellamack was selected as the preferred proponent.
[5]On 1 June 2009, the Territory and Bellamack entered into a development agreement. The scheme of the development agreement was that Bellamack was initially granted a Crown lease over the area of land to be developed, subject to the terms and conditions in the development agreement and the lease.
[6]As part of its obligations under the development agreement (developer’s works) Bellamack was required to develop, inter alia, residential housing blocks in the lease area, together with a number of house and land packages (affordable homes) which were to be sold to qualified low-income consumers (eligible purchasers).
[7]In accordance with the development agreement, Bellamack was to complete the subdivision works in stages over six years. As each stage was practically complete, areas of the Crown lease were converted into titles to the developed lots registered in the name of Bellamack. As the development went on, some lots were further subdivided and additional titles were issued. Bellamack then sold the titled lots to third parties (purchasers) and remitted a percentage of the sale price of each lot to the Territory upon settlement. After issue of a certificate of title, and pending the sale of each lot, the Territory was entitled to register a caveat to protect its interest. The caveat on each lot was removed upon completion of sale to a purchaser.
[8]The consideration payable to Bellamack is set out in special condition 2 of schedule 4 of the development agreement. In practical terms, Bellamack’s payment came from monies received on the sale of the lots. The development agreement also stipulated that the minimum consideration payable to Bellamack upon completion of all lots was to be $14,450,000.
[9]It is not in dispute that, after the sale of each lot had taken place, and the amount payable under the development agreement had been paid, the Territory had no ongoing proprietary or beneficial interest in the land the subject of a sold lot.
[10]Bellamack was obliged, in accordance with clause 3 of schedule 4 of the development agreement, to allocate 67 lots as “affordable allotments”. The location of those allotments was required to be approved by the Territory. Bellamack was also obliged to make available to eligible purchasers the maximum number of affordable homes capable of being constructed on the affordable allotments, which was said to be between 77 and 114 houses. An eligible purchaser is defined in the development agreement as “a purchaser determined by the Territory (in its absolute discretion) who has pre-approval for finance to purchase an Affordable Allotment and Affordable Home under this special condition”.
[11]The Territory’s obligation in relation to identification of eligible purchasers was set out in the development agreement in these terms:
The Territory must at all times during the Term make its best endeavours to nominate and refer to the Developer a sufficient number of Eligible Purchasers to enable the Developer to fulfil its obligations under this special condition 3.
[12]That clause is followed by clause 3.4 which provides, in summary, that if an affordable lot or home was unsold after three months from issue of the title, Bellamack was required to offer it to the Territory for purchase on the same terms as the property would have been sold to an eligible purchaser. If the Territory failed or refused to purchase the property, Bellamack could then offer it for sale on the open market at market price.
[13]Bellamack’s obligations under the development agreement as pleaded in the ASOC also included:
a. An indemnity to the Territory in relation to certain stipulated liabilities, including for any loss or damage to any property caused by any errors, omissions, faulty workmanship or any negligent act or omission or wilful misconduct of Bellamack or its subcontractors and any costs (on a solicitor and own client basis, and whether incurred by or awarded against the Territory) that the Territory may sustain or incur as a result (clause 8.2);
b. To carry out the work in a proper and workmanlike manner and in accordance with the development agreement (clause 11.2(b));
c. At all times during the construction of the developer’s works, to ensure that they complied with the Building Act 1993 (NT) (Building Act), Building Regulations and/or Building Code of Australia (the Code) (clause 11.2(c)(ii));
d. To make affordable homes, constructed to comply with the Code, available to the eligible purchasers (schedule 4 special conditions 3.1(b) and (c), 3.3 and 3.13);
e. To take all steps reasonably necessary or appropriate to ensure that the affordable homes were constructed in a proper and workmanlike manner (Schedule 4 special condition 3.14); and
f. To design and construct the affordable homes in accordance with the requirements of the Building Act (including obtaining building certification); carry out all works in accordance with the building permit; and ensure the affordable homes comply with and meet the Code and other relevant standards, including the then current Code requirements for the tropical cyclone region (Annexure F Part 1.2).
[14]In 2012, by separate contract, Bellamack sub-contracted that part of its obligations under the development agreement which related to construction of the 18 houses the subject of this proceeding to San Industries Pty Ltd trading as Titan Building Systems (San Industries). The houses were constructed between 2012 and 2014. San Industries is now insolvent.
[15]Ten of the 18 homes built by San Industries were subject to the compulsory home warranty protection scheme known as the Home Building Certification Fund (HBCF) then in place in the Northern Territory. The HBCF was the scheme of insurance approved by the Director of Building Control pursuant to s 61 of the Building Act at the relevant time. The HBCF was financed largely by the Territory, with some contribution through premiums paid by builders and owners. Initially, the HBCF was managed by the Territory Insurance Office on behalf of the Territory.
[16]The remainder of the houses built by San Industries were covered by the Master Builders Association Fidelity Fund Scheme (MBA Fidelity Fund) insurance arrangement which replaced the HBCF scheme as the approved insurance pursuant to s 61 of the Building Act from 1 January 2013.
[17]In the period from about 2013 to 2014, Bellamack sold 17 of the affordable homes constructed by San Industries to eligible purchasers pursuant to individual contracts of sale between it and the relevant purchaser(s) (home owners). Bellamack retained ownership of one lot on which San Industries had constructed a house (house 9) and made the relevant payment to the Territory in accordance with the development agreement.
[18]From about 2015, serious construction defects became apparent in all of the houses constructed by San Industries. In about July 2015 Bellamack wrote to the purchasers of the houses acknowledging the defects, and stating that it had written to San Industries to rectify the faults and had engaged a structural engineer. The defects were not rectified. In 2019 Bellamack commenced proceedings against San Industries claiming damages in respect of the defects in the houses.
[19]The owners of each of the ten houses covered by the HBCF scheme (including Bellamack in relation to house 9) have made a claim under that scheme for rectification of defects. The Territory has, so far, assessed that the HBCF scheme covers all of the claims, other than that made by Bellamack which remains outstanding. On the basis that none of the houses could be economically repaired, the Territory has provided purchasers with an option to either rebuild their homes or sell them to the Territory. As a result, six of the nine lots were purchased by the Territory and three houses were rebuilt. The claim in relation to the property owned by Bellamack has not been finalised.
[20]The eight houses insured under the MBA Fidelity Fund scheme have not been purchased or rebuilt at the expense of the Territory.
[21]For the purpose of this application, Bellamack asks the Court to assume that the 18 affordable homes built by San Industries did not meet the contractual definition and specifications of an affordable home prescribed by the development agreement in accordance with clauses 3.3 and 3.14 of the special conditions and clauses 1.2 and 2.3 of Annexure F (functional design guidelines). The obvious consequence is that for the purpose of this application it is assumed that Bellamack breached its contract with the Territory. Bellamack does not, however, admit the breach of the development agreement for the purpose of the proceeding generally.
Issues in respect to Paragraph 23 of the Statement of Claim
Application is brought pursuant to Rule 23.02(a) or (d) which provides:
23.02 Striking out pleading
Where an endorsement of claim on a writ or originating motion or a pleading or a part of an endorsement of claim or pleading:
(a) does not disclose a cause of action or defence;
(b) is scandalous, frivolous or vexatious;
(c) may prejudice, embarrass or delay the fair trial of the proceeding; or
(d) is otherwise an abuse of the process of the Court,
the Court may order that the whole or part of the endorsement or pleading be struck out or amended.
As was the case in the preceding interlocutory application, there was no substantial argument in respect to paragraph [23] of the 2ASOC being an abuse of process of the Court, and argument centred on whether the relevant pleading disclosed a cause of action[2].
Rule 23.02 supports the underlying proper purpose of pleadings, which were aptly expressed by Angel J in Northern Territory of Australia v John Holland Pty Ltd & Ors:[3]
(a) to define with clarity the issues which are in dispute between the parties and fall to be decided by the court;
(b) to require each party to give fair and proper notice to the other of the case to be met to enable the opponent to frame and prepare the opponent’s own case for trial;
(c) to inform the court what are the precise matters in issue between the parties which alone the court may determine, since they set the limits of the action which may not be extended without due amendment properly made, and
(d) not only to provide a brief summary of the case of each party, which is readily available for reference, and from which the nature of the claim and defence may be easily apprehended, but also to constitute a permanent record of the issues and questions raised in the action and decided therein so as to prevent future litigation upon matters already adjudicated upon between the litigants or those privy to them.
The general rules of pleading are contained in Order 13 Supreme Court Rules. O 13.02(1)(a) provides:
“A pleading shall ... contain in a summary form a statement of all the materials facts on which the party relies but not the evidence by which those facts are to be proved.”
Material facts are those necessary to formulate a complete cause of action. The Statement of Claim must state with sufficient clarity the case that must be met. Material allegations of fact are not to be expressed in terms of great generality. They must inform the defendants of the case they must meet and set it out with particularity sufficient to enable any eventual trial to be conducted fairly to all parties. As James LJ said in Davy v Garrett (1878) 7 Ch D 473 at 486:
“... a defendant may claim ex debito justitiae to have the plaintiff’s case presented in an intelligible form, so that he may not be embarrassed in meeting it ...”
A defendant is entitled to have a plaintiff tied down to a clearly pleaded case so as not to be able to spring a new case on the defendant at trial. A plaintiff must plead its case with clarity sufficient to preclude conjecture as to what the case being made against a defendant might be. The defining of the issues in litigation is required from an early stage because discovery and other interlocutory procedures and steps necessary to deal with an opposing case must be conducted within a known framework. Apart from questions of procedural fairness, properly pleaded cases set the arena for the eventual trial and interlocutory processes preceding trial and assist the court by ensuring that the task of managing interlocutory processes and of supervising the conduct of the trial itself are conducted in circumstances where the nature and ambit of the dispute between the parties is clear and the issues for decision are defined. The general rule is that relief is confined to that available on the pleadings. This is a basic requirement of procedural fairness: Banque Commerciale SA, En Liquidation v Akhil Holdings Pty Ltd (1990) 169 CLR 279 at 286.
In a claim for breach of contract the material facts which must be pleaded include:
(1) the term of the contract alleged to have been breached;
(2) the nature of the breach alleged;
(3) the particular means by which the breach is alleged to have occurred;
(4) the details of any special or consequential damage claimed, and
(5) the facts which establish the necessary causal link between breach and damage.
In John Holland, as there is in this case, there was an issue in respect to the pleadings, and in particular an argument that the plaintiff had failed to plead the material facts which established the necessary causal link between breach of contract and damage.[4]
In respect to Rule 23.02(a), the reference to a statement of claim or pleading not disclosing a cause of action is a reference to a reasonable cause of action. As such, the test to be applied is similar to that which applies to an application for summary judgment. The test for a failure to disclose a cause of action on the strike out application was the “no reasonable prospects of success” test.[5] In accordance with Rule 23.04(2), a decision in relation to a strike out application is based only upon the wording of the pleading. Notwithstanding the tender of affidavit evidence in support of the application,[6] in respect to affidavit evidence I note Rule 23.04(2) which provides:[7]
On an application under rule 23.02 no evidence shall be admissible on the question whether an endorsement of claim or pleading offends against that rule.
I therefore have not taken affidavit material into account, certainly in respect to the issue concerning paragraph [23] of the 2ASOC. There is commentary that, for the purposes of whether pleadings constitute an abuse of process, evidence surrounding that pleading must be provided to the court to allow it to make an informed decision.[8]
The power to strike out or compel amendment of a pleading is discretionary.[9] There is a heavy onus to warrant exercise of the power under Rule 23.02, it should be exercised with caution, especially where it appears there is a real question to be tried.[10] The court will not make an order where the pleading raises a debatable point of law.[11]
Defendant’s submissions
It was the Defendant’s position that the central issue was whether the Plaintiff had properly re-pleaded its claim for compensatory damages caused by the alleged breaches of the Development Agreement. It was the Defendant’s position that the Plaintiff had failed to address the fundamental criticisms of this aspect of the pleading made by Huntingford J and therefore it had not plead a tenable cause of action. Huntingford J’s criticisms were highlighted at paragraphs [58], [61]-63] of her Honour’s judgment:
Bellamack argues that the Territory’s ASOC is defective because it fails to plead material facts which, if proved, would establish that Bellamack’s breaches caused the Territory’s alleged loss by connecting the alleged breaches of contract to the alleged losses flowing from the defective construction of the 18 houses, and because it fails to include material facts which are relevant to why the categories of loss claimed by the Territory are not too remote.
…
At paragraph [23] the Territory sets out its alleged losses, namely the cost of demolishing and rebuilding, or alternatively acquiring, various houses in the table set out at [6] of the ASOC.
Leaving aside the HBCF indemnity claims, which are a separate cause of action, there is no pleading of material facts which link the loss in paragraph [23] to the failures of Bellamack in circumstances where it is unclear why the Territory was required to replace or rebuild the houses. There is no pleading, for example, that the contract was entered into for the benefit of the ultimate purchasers or that the Territory has an obligation to them in some other way, such as misrepresentation/reliance.
The pleading at paragraphs [21] and [22] that the failures of Bellamack meant that it did not make affordable homes available which complied with the requirements of the development agreement does not in my view sufficiently link the alleged failure with the loss which is alleged at paragraph [23].
It was accepted that the Plaintiff may have a claim for nominal damages only but not compensatory damages. Further, two incontestable facts were found by Huntingford J, namely:
(a)There was no suggestion that the Plaintiff was suing on behalf of other persons to whom it is obliged to pass on any damages recovered; and
(b)The Plaintiff ceased to have any economic interest recognised by law in the land that was being developed by the Defendant long before any Affordable Home was built.
The Defendant submitted that the Plaintiff had failed to plead material facts in paragraph [23] of the 2ASOC, but rather had recited a conclusion of law in Robinson v Harman,[12] which is premised on the position that the owner requires an economic interest in the relevant property which requires rectification by the person who is in breach of the contract. It was submitted there was no such economic interest in this case. In short, it was submitted that there was no pleading of material facts which would satisfy the issue raised by Huntingford J, namely as to why the Territory was required to replace or rebuild the houses, that nothing had changed and the pleading remained similarly defective. The Defendant submitted that, if the Plaintiff wished to pay out losses in respect to the homes, it did so as a volunteer.[13]
The Defendant opposed the exercise of any discretion to allow a re-pleading, noting that, should paragraph [23] of the 2ASOC be struck out, it would be the third formal attempt to plead the case. It was submitted that the overwhelming likelihood was that no case could be pleaded which accorded with Australian law, and were it otherwise the defects identified by Huntingford J would have been cured.
Plaintiff’s submission
It was the Plaintiff’s position that the issue for determination was whether the 2ASOC containing paragraph [23] plead an arguable claim for damages for breach of contract appropriate to send the matter to trial.
The Plaintiff submitted that it had properly addressed Huntingford J’s criticisms in respect to the strike out of paragraph [23] of the ASOC.[14]
It was the Plaintiff’s position that authority establishes that it is entitled, in respect to a breach of contract, by an award of damages, to be placed in the position it would have been if the contract had been performed. It was submitted that one form of loss capable of compensation is the value of what a promisee would have received if the promise had been performed. In this case the Plaintiff submitted the focus should have been on the task of identifying the loss of the value of what the Plaintiff would have received if the Defendant had performed the contract. The Plaintiff says, in determining the loss, it is not necessary to focus on the loss of third parties incurred on separate transactions, being the owners of the Affordable Homes, and that any such loss is irrelevant to the loss suffered by it. The Defendant, the Plaintiff says, was required to make available Affordable Homes which complied with the requirements of the Development Agreement, which had nothing to do with obligations owed to third parties. It follows, as it is alleged the Defendant did not do that, the task of the Court is to place the Plaintiff, so far as money can do it, in the position it would have been had the Development Agreement been performed, and the Court must quantify the loss of the value of what the Plaintiff would have received if the promise by the Defendant had been performed. It was submitted that, in paragraph [23] of the 2ASOC, the Plaintiff pleads that loss and its value, namely the necessary and reasonable cost of rectification or of demolishing and rebuilding the Completed Affordable Homes where that is the reasonable cure.
In respect to the argument that the Territory could not have suffered a loss because it had no legal obligation to rectify the defective building work and any loss was suffered by purchasers from the Defendant, the Plaintiff argues that that contention arises by virtue of Huntingford J’s statement that “it was unclear why the Territory was required to replace or rebuild the houses”. The Plaintiff submitted that it did not contend that it was required to rebuild or replace the houses, but rather it was entitled to rebuild or replace the houses to procure what the Defendant was required to do under the Development Agreement and by breaching its contractual obligations had failed to do.
It was the Plaintiff’s position that, it was not its claim that it held any proprietary or equitable interest in the land or it had any obligation to repair them. Further, it was argued that it mattered not that the land had left the ownership of the Plaintiff and become the property of the Defendant and then the property of third parties.
The Plaintiff relied on a number of authorities to the effect that, notwithstanding that land with a defective building on it was sold or otherwise ceased to be owned by a party, that any such sale did not affect the entitlement of the person, to whom contractual obligations to build was owed, to compensation for that breach of the building contract.
Disposition
The starting position in respect to consideration of this matter is set out in Tabcorp Holdings Ltd v Bowen Investments Pty Ltd[15] where the High Court noted the ruling principle with respect to damages at common law for breach of contract is that stated in Robinson v Harman:[16]
“The rule of common law is, that where a party sustains a loss by reason of a breach of contract, he is, so far as money can do it, to be placed in the same situation with respect to damages, as if the contract had been performed.”
The High Court recognised placing a party in the same financial situation was apt where the contract was for the sale of marketable commodities, but not so in others, where the diminution in value damages would not restore an innocent party to the same situation as if the contract had been performed.[17] In Tabcorp, citing Bellgrove v Eldrige,[18] the High Court recognised that in respect to a breach of contract in building cases:
In the present case, the respondent was entitled to have a building erected upon her land in accordance with the contract and the plans and specifications which formed part of it, and her damage is the loss which she has sustained by the failure of the appellant to perform his obligation to her. This loss cannot be measured by comparing the value of the building which has been erected with the value it would have borne if erected in accordance with the contract; her loss can, prima facie, be measured only by ascertaining the amount required to rectify the defects complained of and so give to her the equivalent of a building of her land which is substantially in accordance with the contract.
The above was subject to the qualification that not only must the work be necessary to produce conformity, but that also, it must be a reasonable course to adopt.[19] What rectification work is necessary and reasonable is a question of fact. As stated in Heydon on Contracts (footnotes omitted):[20]
In short, this area of the law protects the interests of “performance itself, [and damages are not] confined to compensating for the loss of economic benefits of performance”. There are limits on the extent to which a decree of specific performance of a contract will be granted. But damages can secure a similar result if those damages will ensure performance, however belatedly, not merely compensation for some decline in the value by reason of non-performance.
The factual circumstances in Bellgrove (and other cases) are distinguishable. In this proceeding, the contract, the Development Agreement, was between the Plaintiff and the Defendant. The defective buildings were built on land owned by the Defendant, having had that land transferred to it, by the Plaintiff, for that purpose pursuant to the Development Agreement. Unlike other similar cases, including those of subsequent sale, the Plaintiff never actually owned the building after it was built. All buildings have been sold (all but one) via the Defendant to third parties. In respect to the latter issue, there is authority that recognises that the subsequent sale by an original owner of a building to a third party, in respect to a claim for defective building works as against a builder, does not disentitle the original owner from damages arising from the breach of contract between it and the builder. That is, the sale of the property by a plaintiff, whereby the plaintiff is subsequently divested of an interest in the property, does not itself displace the entitlement to damages according to the rectification measure in Bellgrove.
The most often cited authority in respect to that principle is that of Director of War Service Homes v Harris:[21]
When the builder in breach of his contract delivered to the building owner a building that did not conform to the specifications, the owner became entitled to recover damages according to the measure approved in Bellgrove v Eldridge. If the owner subsequently sold the building, or gave it away, to a third person, that would not affect his accrued right against the builder to damages according to the same measure. The fact that the building had been sold might be one of the circumstances that would have to be considered in relation to the question whether it would be reasonable to effect the remedial work, but assuming that it would be reasonable to do the work the owner would still be entitled to recover as damages the cost of remedying the defects or deviations from the contract (assuming of course that the contract price had been paid). In assessing those damages it would not be relevant whether the owner was under a legal liability to remedy the defects, or whether he had a profit or a loss on the sale of the building, for the builder has no concern with the details of any contract that the owner might make with a third party.
In Harris, the trial judge held that no damages were recoverable because the loss was caused by a voluntary act and stated (my emphasis):[22]
It is not shown what interest the Director of War Services Homes then had in any of the nine houses, nor is it shown that he was under a legal liability to the owners to rectify any defects or omissions in the works originally specified. The fact that he did pay to have some remedial work carried out between November 1955 and March 1956 does not, in my opinion, entitle him to recover against the defendant the cost of such work…. In [Bellgrove v Eldridge (1954) 90 CLR 613] which was an action by the building owner, the cost of making the building confirm to the contract was adopted plus consequential losses. In the present case there was no attempt made to prove any loss on the part of the Director of War Service Homes on the sale of the houses and it appears to me that the cost of the remedial work was not a loss resulting from the breach of the contract but from a voluntary act.
That the remedial work was not a loss resulting from a breach, and was a voluntary act, was not accepted by the Court on appeal in Harris:[23]
The owner of a defective building may decide to remedy the defects before he sells it so that he may obtain the highest possible price on the sale; he may sell subject to a condition that he will remedy the defects; or he may resolve to put the building in order after it has been sold because he feels morally, although not legally, bound to do so. These matters are nothing to do with the builder, whose liability to pay damages has already accrued.
The three scenarios referred to above in the judgment of Gibbs J were cited by Williams JA in UI International Pty Ltd v Interworks Architects Pty Ltd who said: “In my view the reasoning of the Full Court should be restricted to the three situations referred to in the judgment”.[24]
Harris has subsequently been referred to by numerous other authorities, which are helpfully summarised in Westpoint Management Ltd v Chocolate Factory Apartments Ltd,[25] notwithstanding some divergence in the decisions as to the relevance of the sale of the building to the question of whether it would be reasonable, necessary or at all possible to effect the remedial work.[26] Relevantly, the cases of UI International Pty Ltd v Interworks Architects Pty Ltd & Ors are also insightful[27] where issues were taken with pleadings. In the first instance proceeding of UI International Pty Ltd v Interworks Architects Pty Ltd & Ors, after an analysis of cases such as Bellgrove and Harris, McMurdo J stated:[28]
Bellgrove provides support for this plaintiff’s case then in two respects. First, it holds that the cost of demolishing and rebuilding a structurally unsound building is the appropriate measure of damages, the qualification of reasonableness not being significant where the defect is of that kind. Secondly, it holds that it is unnecessary, at least in every case, to prove that there will be a demolition and rebuilding.
The plaintiff in Bellgrove had remained the owner of the building. However, Bellgrove was applied in favour of a plaintiff which had sold the relevant property in Director of War Service Homes v Harris. The respondent there was a builder who had breached his contract with the appellant by substantially departing from the specifications for ten houses. It was only after the houses had been sold that the breaches were discovered and there were complaints by occupiers to the appellant. The appellant demanded that the respondent rectify the defects but he refused. The appellant then had another builder do the work at the appellant’s cost, and the appellant claimed that cost from the respondent. The trial judge dismissed the claim because in his view "the cost of the remedial work was not a loss resulting from the breach of the contract but from a voluntary act." That was reversed by the Full Court, in which the principal judgment was given by Gibbs J….
That passage seems to provide sufficient support for the present claim; indeed it suggests that the plaintiff who is a former owner need not plead, as this plaintiff has, that it will demolish and rebuild. But the difference between that case and the present, of course, is that there the plaintiff had rectified the works, and it was the amount which it had spent which it sought to recover. The question was one of causation: whether a proven loss, from the plaintiff’s expenditure upon remedial works, was relevantly caused by the defendant’s breach of contract. The disposition of the appeal required only a decision as to whether there was that causal relationship, the trial judge having dismissed the claim upon that issue. Many of the remarks in the above passage were obiter dictum.
In holding that the owner in Bellgrove need not prove that she would demolish and rebuild her house, the court was not holding that proof of a loss was unnecessary. The respondent there remained the owner of the house, and her loss came from her not having the benefit of the performance of her contract, which mattered to her because of the consequences for her enjoyment of her property.
Similarly, in Director of War Service Homes v Harris, there was no question that the plaintiff had suffered a loss. As I have said earlier, the issue for determination was whether that loss (the plaintiff’s expenditure on rectification works) was relevantly caused by the breach of contract. I agree with Doyle CJ in De Cesare that the obiter dictum of Gibbs J is, with great respect, "expressed in terms that are too absolute". Where a building owner does not have a building that conforms with that required by its contract (or which it would have had absent a breach of a duty of care owed to it) the owner suffers a loss, and one to be compensated according to the measure expressed in Bellgrove, unless, as Hodgson said in SAS, that is displaced by supervening circumstances showing that a different loss or indeed no loss has been suffered.
The Plaintiff’s 2ASOC can be summarised as follows:
(a)Paragraphs [4] – [5] plead the terms of the Development Agreement;
(b)Paragraph [6] pleads the construction of the 17 defective homes;
(c)Paragraphs [7] – [11] plead the building requirements of the Development Agreement (Building Code of Australia, Building Regulations 1993 (NT));
(d)Paragraph [12] pleads non-compliance with the Building Code of Australia, Building Permits and Australian Standards;
(e)Paragraph [13] pleads the breaches of the Development Agreement by reference to the matters of non-compliance in paragraph [12].
(f)Paragraphs [14] – [17] plead the consequences of the breaches;
(g)Paragraphs [18] – [20] relate to the Home Builders Certification Fund, which is not relevant to this part of the application;
(h)Paragraph [21] pleads that, had the Defendant complied with its obligations under the Development Agreement, it would have made available for sale homes which complied with the Development Agreement;
(i)Paragraph [22] pleads that, by reason of paragraphs [14] – [17] breaches, the Defendant failed to make available houses which complied with the Development Agreement;
(j)Paragraph [23(a)] pleads that, had the Defendant complied with the Development Agreement, then 17 affordable homes would have been released to the residential housing market to be purchased by Eligible Purchasers which complied with the development agreement and would have not been 17 severely defective homes on the relevant allotments;
(k)Paragraph [23(b)] pleads that as a result of the Defendant’s breaches and consequences thereof pleaded in paragraphs [14] – [17] 17 homes which did not comply with the development agreement were released to the market, and were purchased with defects, requiring demolition and in most cases rebuilding.
The Plaintiff’s pleading at paragraph [23(c)] of the 2ASOC then states:
As a result of the Defendant’s breaches and the consequences thereof pleaded in [14]-[17] above, the Plaintiff is entitled to a measure of compensatory damages in an amount, so far as money can do it, that places the Plaintiff in the same situation as if the Development Agreement had been performed. Namely, the Plaintiff is entitled to the necessary and reasonable cost of rectification or where the reasonable cure is to demolish and rebuild the Completed Affordable Homes, then the cost of that undertaking, so as to repair or remove the defective homes (as each case may require) and create Affordable Homes which complied with the Development Agreement on the Affordable Allotments available to be owned by Eligible Purchasers or to enable the construction on them of homes which were not defective and which complied with the Building Act and BCA.
Paragraph [23(a)] of the 2ASOC pleads what the Plaintiff should have received in terms of expectation. Paragraphs [23(b) and (c)], particularly through the use of the words “as a result of” plead what the Defendant’s breaches caused. Paragraph [23(c)] begins with the statement from Robinson v Harman, further qualified by the statement that such damages are to be the reasonable and necessary cost of rectification or demolition/rebuilding so as to give the Plaintiff the equivalent of a building which is substantially in accordance with the contract. That qualification is in accordance with the principles in Bellgrove and Harris. Particulars of the loss, are provided in terms of the reasonable and necessary costs of rectification or demolition, which comprises: costs of assessing the nature, extent and cost of repairs (paragraph [23(i)]), the costs of demolishing and rebuilding homes under the HBCF claims (paragraph [23(ii)]), Costs of acquisition, demolition, resale of lots to third parties minus amounts received on resale for certain other HBCF homes (paragraph [23(iii)]) and in respect to eight homes either the costs and expenses of demolishing and rebuilding, or costs of acquisition, demolition, resale to third parties less amounts received from sale (paragraph [23(iv)]). The pleadings state that particulars of loss and damage are set out in an attached schedule and that further particulars of quantum will be provided when identified and otherwise prior to trial, with which no issue was taken.
As noted above, a decision to strike out a pleading should not be made lightly and should be made on the basis of there being no reasonable prospect of success, and in respect to a cause of action, no reasonable prospects of success in respect to the raising of a reasonable cause of action.
On its face there is a reasonable cause of action pleaded, namely that there has been a breach or breaches of the development agreement, and as a result of that breach or breaches, a loss was caused (i.e. damage). The loss or damage, that is “the something of value”, is the loss of expectation that the houses were to be built in accordance with the contract, the Development Agreement, and through the remedy of damages, the Plaintiff is entitled to be put into the position it should have been had the contract been performed. The measure of which, in the circumstances, is the necessary and reasonable cost of rectification of the defective homes or of demolition and rebuilding of the homes. That entitlement to damages would arise regardless as to whether the Plaintiff had in fact already rectified or demolished/rebuilt the homes, as damages are assessed in a “once and for all basis”.[29] Further, on the authority of Harris, the entitlement to the remedy of damages may be unaffected by a subsequent sale of a defective property, or the fact that the promisee did not have an interest in the property at the time of the suit. As Gibbs J stated in Harris, the Plaintiff “may resolve to put the building in order after it has been sold because he feels morally, although not legally, bound to do so” and that has “nothing to do with the builder, whose liability to pay damages has already accrued”. It is therefore not necessary, given the manner in which the Plaintiff’s case is pleaded, to plead why the Plaintiff was actually required to replace or rebuild the houses because that is not the Plaintiff’s case.
At hearing the Defendant made the point that it was not my role to act as an appeal of Huntingford J’s decision in striking out paragraph [23] of the ASOC. In determining these applications I am not doing so. I am determining the applications, made and argued before me, on the basis of submissions and the authorities referred to. Her Honour examined the nature of contractual damages without reference to Harris[30] but with reference to Bellgrove. Reference was made to by her Honour certain English authorities. I can only discern from that, that the argument was not fully developed before her Honour in those respects, and had it been so, possibly a different result may have arisen.
It may be that the Plaintiff faces issues at trial. It may be that the circumstances of this case, given the nature of the contract and the dealings with the land, this case is distinguished from the general principles which applied in Harris, and the manner of the sale of the property displaces an entitlement to damages. Alternatively, it may be that if the Bellgrove measure of damages applies it may be found that the damages claimed were not reasonable or necessary, or too remote. Those risks were acknowledged by the Plaintiff. Those matters, in my view, are certainly arguable and substantive matters which should be determined at trial, in light of a reasonable cause of action.
On the basis of the above, and the authorities referred to, I am satisfied that the Plaintiff’s pleading at paragraph [23] of the 2ASOC discloses a reasonable cause of action which should not be struck out. That part of the Defendant’s application is dismissed.
Issues in respect to Paragraphs [6] and [19] of the 2ASOC
The second aspect of this proceeding is that the Defendant seeks paragraphs [6] and [19] of the 2ASOC be struck out as an abuse of process pursuant to Rule 23.02(d) and the former paragraphs be re-instated.
The Plaintiff, in turn, seeks leave, pursuant to Rule 36.03(b), to amend the ASOC, to amend various paragraphs. Some amendments are of a minor grammatical nature and are of no issue. The substance of the amendments relate to paragraphs [6] and [19] (and [17]) of the ASOC in so far as reference is made to a home which was developed and retained by the Defendant in the course of development (referred to as House No.9 in paragraph [17] of Huntingford J’s judgment extracted above).
The Defendant’s position is that leave was not granted to amend paragraphs [6] and [19], they should not have been amended and leave should not be granted now.
On an analysis of Huntingford J’s judgment, although the final order is framed in terms of “The Territory has leave to file and serve a further amended statement of claim” it was clearly not intended that be carte blanche in terms of amendment, rather the leave granted was referable to the defects in the pleadings identified by her Honour, most notably those arising in paragraph [23]. There were no arguments before Huntingford J about the adequacy of paragraphs [6] or [19] such that they required amendment and it is difficult to see why the Plaintiff would have thought that any order for leave to amend extended to those provisions. In submissions, the Plaintiff stated that whilst the leave granted might properly encompass the relevant amendments, it acknowledged that the better course may have been to seek consent to amend or, absent that, make application to amend.[31] I agree with the latter. The Plaintiff ought not to have amended paragraphs [6] or [19] of the ASOC without seeking leave of the Court. Rule 36.03 provides that a party may amend a pleading once before the close of pleadings. Pleadings have not yet closed and the Statement of Claim was amended once already, arguably using up the one opportunity to amend before the close of pleadings.[32] On its face, filing an amended statement of claim, amending parts of a statement of claim for which leave was not granted, would amount to an abuse of process. However, leave has now been sought, ex post facto, under Rule 36.03(b) and I will proceed to consider the amendments sought.
The law in respect to seeking leave to amend pleadings is well established. Authorities make it clear that the general approach to applications to amend pleadings is liberal and amendment should be allowed if it can be made without injustice to the other side.[33] Parties should not be punished for mistakes in the conduct of their cases, unless fraudulent or intended to be over-reach.[34] Further, where the withdrawal of an admission in a pleading is sought, an explanation may be required which is sensible and based on substantial evidence.[35] Considerations as to the administration of justice, proper case management and prejudice to the non-amending party are all relevant.
In this particular instance the amendments concern deletion of reference to House No. 9 from paragraphs [6] and [19] (and paragraph [17]), of the ASOC. House No. 9, as found by Huntingford J at paragraph [17] of her judgment, was constructed by San Industries and retained by the Defendant who made payment to the Plaintiff in accordance with the Development Agreement. House No. 9 was described by her Honour as one of the 10 houses “subject” to the HBCF scheme of insurance.[36] As noted by her Honour, the owners of each of the 10 houses covered by the HBCF scheme had made a claim under the scheme for rectification defects. As her Honour also noted, the Territory, had at that point in time assessed that the HBCF scheme covered all of the claims, other than that made by Bellamack which remained outstanding, and that that claim had not been resolved.[37] Subsequent to hearing before Huntingford J, the Defendant’s HBCF claim was determined on 17 May 2024. The Defendant was informed by letter of 17 May 2024 that its claim had been rejected as the “HCBF policy does not respond to the HBCF claim. That is because, inter alia, Bellamack Pty Ltd does not fall under the definition of “Owner” under the HBCF Policy”. In response on 17 June 2024, by letter, the Defendant stated that the Plaintiff’s position was inconsistent with the admission made by it in paragraph [19] of the ASOC. It was the Defendant’s position that the admission put the matter of the indemnity (i.e. that the policy applied to House 9 and an indemnity was provided) beyond doubt.
On 27 June 2024 the Plaintiff responded indicating that it would be taking steps to withdraw the alleged “admission” after Huntingford J’s decision was received.[38]
The Defendant’s position is that the amendments to paragraphs [6] and [19] (and [17](c)(i)) of the ASOC are seeking to withdraw an admission previously made in the ASOC and leave to do so should not be granted.
Formal admissions may be made in a number of ways: through statements of the party or counsel, express admissions in pleadings (Rule 35.02(1)), a failure to deal with an allegation of fact in a pleading (Rule 13.12), an answer or failure to answer a notice to admit facts (Rule 35.03), answer to interrogatories or as agreed between the parties. The Defendant’s written submissions originally referred to Rule 35.02 and the process under that Rule for the withdrawal of an admission. Rule 35.02 applies to a notice served on one party voluntarily admitting facts. That does not apply here. Rather, this is an application for amendment under Rule 36.03(b) for leave to be granted to amend a pleading. The question is whether what is contained in the pleading is an admission and if so, should leave to withdraw it be granted. If it was an admission it would need to be an informal one. If it is not an admission the “regular” principles in respect to amendments should apply.
The Defendant submitted that the inclusion of Home No. 9 in paragraph [19] of the ASOC represented an admission by the Territory that the HBCF Policy “responds to the claim by Bellamack in relation to the property”. “Responds to the claim” is a reference to what is pleaded in paragraph [19] of the ASOC namely:
Pursuant to its policy terms, the HBCF insurance coverage responded to claims for defective building work made in respect of the Completed Affordable Homes identified in No. 9-18 of the table pleaded in [6] above.
Particulars are provided to paragraph [19](a)] which provides that “The owners of the Completed Affordable Homes made claims under the HBCF insurance policy on the following dates (HBCF Claims)” and thereby follows a further table in which the claim details of all 10 homes are listed including House No. 9, which the Plaintiff now seeks to amend by deletion. Paragraph [20] of the 2ASOC then goes on to state that the Plaintiff is liable to settle or had settled each of the HBCF claims in the following ways – (a) by reference to Homes 10, 12 and 18 of the table pleaded in [6], by demolition and rebuilding (called the Demolish and Rebuild HBCF Claims) and (b) by reference to Homes 11 and 13-17 of the table pleaded in [6], by acquisition and sale (called the Acquisition HBCF Claims). There is no reference to Home No. 9.
The Defendant says that the ASOC contains an admission that Bellamack came within the policy terms of the HBCF insurance policy (not an admission of liability under the policy per se), that is, it was prima facie covered by the policy. The relevance of whether Bellamack comes within the policy terms is important, the Defendant says, because broadly the Plaintiff wishes to advance an argument that it was obliged to insure the subsequent purchasers of the Homes covered by the HBCF scheme (and seek to rely on the indemnity in clause 8.2 of the Development Agreement), because the subsequent purchasers of those homes come within the definition of “owners” as defined in the policy. The Defendant disputes that the policy extends to any other owners other than itself. In any event, the Defendant says, inclusion of reference to its house in the ASOC, was an admission that the policy applied to it as well, as an owner. That broader argument is set out in more detail in paragraphs [36] – [47] of Huntingford J’s judgment.
It is the Defendant’s case that the ASOC has been in its current form since the beginning of the proceedings, and it was only now that the Plaintiff sought to abandon something it had agreed to.
In response, the Plaintiff submitted that the relevant parts of paragraphs [6] and [19] of the ASOC were not an admission for the purposes of the pleadings rules, and therefore their proposed amendment does not constitute a withdrawal of an admission. The Plaintiff submitted that the statements were mere assertions, and assertions made in a pleading do not constitute an admission by the party filing the pleading. As such, specific leave to withdraw an admission is not required. Reliance was placed on the High Court decision of Laws v Australian Broadcasting Tribunal (footnotes omitted):[39]
Indeed, traditional principle is that assertions made in pleadings do not amount to admissions. In Boileau v. Rutlin, the Court of Exchequer Chamber held that an averment of the existence of an agreement in a bill in equity in another suit between the same parties could not be received as an admission of the agreement by the party pleading the agreement…
It has been suggested that the traditional principle may be too strict and that in some circumstances an assertion in a pleading should be received as an admission… More recently, in Singleton v. John Fairfax & Sons Ltd., Hunt J. declined to follow the older cases and concluded that:
"an imputation pleaded in a statement of claim as required by Pt 67, r. 11(2) is admissible evidence by way of admission against the plaintiff that the matter complained of conveyed that imputation in fact. The same may well operate against a defendant in relation to any contextual imputation pleaded in his defence."
In reaching this conclusion, Hunt J. considered that pleadings should be treated "in the same way as any other form of admission" and that the susceptibility of a pleading to be received as an admission should depend upon whether it was intended to be taken as a sincere or absolute assertion.
However, in Stohl Aviation v. Electrum Pty. Ltd. Jenkinson J. declined to follow the approach taken by Hunt J., preferring the traditional rule of exclusion on the ground that a departure from that rule would often lead to unprofitable collateral inquiries concerning the circumstances in which the assertion was included in the pleading. The suggestion that pleadings should be treated in the same way as any other form of admission fails, in our view, to take account of the function and object of pleadings, when they are not required to be verified, in outlining the party's case and defining the issues to be tried.
The Plaintiff says that reference to the Defendant’s Home No. 9 was included in error in the table in paragraph [6] and subsequently by back reference to it in paragraph [19] of the ASOC. The table at paragraph [6] of the ASOC refers to the allocation, by the Defendant, of lots to be Affordable Allotments where Affordable Homes were constructed on each Affordable Lot.[40] It follows that, according to the definition of Affordable Allotment in Clause 3.1(a) of the Special Conditions of the Development Agreement (at [5](i) ASOC), it was to be a lot allocated by the Developer, with the approval of the Plaintiff, for the construction and sale of Affordable Homes. The Plaintiff submits that the Defendant built House No. 9 on a lot, but kept it for its own purposes, and as such it was not an Affordable Allotment (as defined in the Development Agreement). As such, House No. 9 was included in error in the table in paragraph [6] of the ASOC, of Affordable Allotments, and as result it was referenced as a Completed Affordable Home that the HBCF insurance coverage responded to at paragraph [19] of the ASOC. As an error, which should be corrected, the Plaintiff submits that leave to amend in the ordinary course should be granted.
I am not satisfied that paragraph [19] of the ASOC was an admission. I do so on the basis of the authority of Laws and the relevant authorities referred to therein, namely that an assertion made in an unverified pleading does not, or cannot, amount to an admission.[41] Even on the more liberal test expounded by Hunt J in Singleton v John Fairfax & Sons Ltd,[42] the relevant paragraphs are internally inconsistent, such that it could not logically or rationally amount to an admission. I accept reference to House No. 9 in paragraphs [6] and [19], and in paragraph [17(c)(i)] of the ASOC, was a mistake by the Plaintiff as claimed, and ought to be corrected. The distinction between House No. 9 and the other Houses, was, as the Plaintiff’s counsel pointed out, a point of distinction which was made by the Defendant in submissions before Huntingford J in which it was said necessitated separate consideration of the engagement of the HBCF policy in respect to that particular home.[43]
I therefore do not take the inclusion of Home 9 in the ASOC as an admission but rather an error in the pleading in assertions made therein. In the exercise of the discretion to allow the amendment, there is no significant prejudice or injustice which would flow to the Defendant. The proceeding, in terms of pleadings and case management, is at very early stage, and the Defendant is yet to file a defence. Even if prejudice arises, it could be otherwise met by an application for costs if necessary.
Leave is therefore granted for the Plaintiff to make amendments in terms of the 2ASOC as filed in this proceeding, and the 2ASOC as already filed shall be taken to be so filed in accordance with leave granted.
Costs
The usual order in interlocutory orders is that costs are costs in the proceeding. Although the Plaintiff has been successful in maintaining its amendments, some of those amendments were not made in accordance with leave granted by Huntingford J, and precipitated not only part of the Defendant’s summons but the Plaintiff’s summons. My preliminary view is that the usual order as to costs should apply. However, should either party wish to make an application for costs, they should do so within four weeks of the date of this judgment, with two weeks provided for any reply. A decision on costs will then be made on the papers.
Orders
The orders are as follows:
(1)The Defendant’s summons dated 23 October 2024 is dismissed.
(2)On the Plaintiff’s summons dated 25 November 2024, the Plaintiff has leave to amend paragraphs [4(a)], [6(b)], [14(b)], [17(c)(i)], [19] and [19(a)] in terms of the Second Amendment Statement of Claim filed 4 October 2024.
(3)The Second Amended Statement of Claim, filed on 4 October 2024, shall be taken as filed in accordance with these orders.
(4)Costs are reserved.
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[1] Northern Territory of Australia v Bellamack Pty Ltd [2024] NTSC 66 (“Huntingford J’s judgment”)
[2] See paragraph [12] of the Defendant’s written submissions dated 11 November 2024. See paragraph [34] of the submissions in respect to the issue of abuse of process.
[3] [2008] NTSC 4 at [9]-[12] (“John Holland”).
[4] The Defendant also cited Bond Corporation Pty Ltd v Thiess Contractors Pty Ltd (1987) 71 ALR 615 at 621 to the same effect.
[5] See Sherrington v Independent Commissioner Against Corruption (NT) & Anor [2025] NTSC 27 citing Northern Territory of Australia v Bellamack Pty Ltd [2024] NTSC 66 at [55] per Huntingford J; Motor Accidents (Compensation) Commission v Toyota Motor Corporation Australia Limited & Anor [2023] NTSC 65 at [93] per Luppino AsJ (“Toyota”).
[6] The affidavits of Spain made 23 October 2024, Bloemendal made 19 February 2025 and Chin made 25 November 2024 were tendered by both parties and taken as read.
[7] Toyota at [5].
[8] See Grant on Civil Procedure at paragraph 5.23.106 citing Karlovsky v Q-Built Constructions [2006] NTMC 93 at [8] in respect to the equivalent rule in the Local Court, although there is no express rule prohibiting affidavit evidence in the Local Court Rules as there is in rule 23.04 of the Supreme Court Rules.
[9] Golding v Wharton Saltworks (1876) 1 QBD 374; Knowles v Roberts (1888) 38 Ch D 263; Bulmer v Oakey Co-op Dairy Co Ltd [1908] St R Qd 216; Darcy v Connolly (1924) 26 WALR 93.
[10] Fancourt v Mercantile Credits Ltd (1983) 154 CLR 87 at 99; Webster v Lampard (1993) 177 CLR 598 at 602-603 (cited in Otter Gold NL v Barcon Pty Ltd & Sankey [2000] NTSC 65 at [22].
[11] A v Ipec Australia Ltd and Crew [1973] VR 39 at 53; Hoh v Frosthollow Pty Ltd [2014] VSC 77 at [20].
[12] (1848) 1 Exch 850 per Parke B.
[13] Defendant’s written submissions dated 11 November 2024 at paragraph [31].
[14] Plaintiff’s submissions dated 25 November 2024 at paragraph [19].
[15] (2009) 236 CLR 272 (“Tabcorp”).
[16] (1848) 1 Exch 850 at 855.
[17] Also see Heydon JD, Heydon on Contracts, (Sydney, Thomson Reuters, 2019), paragraph 26.430 entitled “Expectation loss: recovery not limited to financial loss”.
[18] (1954) 90 CLR 613 at 617 (“Bellgrove”).
[19] Bellgrove at 618.
[20] Heydon JD, Heydon on Contracts, (Sydney, Thomson Reuters, 2019), paragraph 26.430.
[21] (1968) Qd R 275 per Gibbs J at 278 (“Harris”).
[22] Harris at 277-278.
[23] Harris at 270.
[24] UI International Pty Ltd v Interworks Architects Pty Ltd (2008) 2 Qd R 158 at 170.
[25] Westpoint Management Ltd v Chocolate Factory Apartments Ltd [2007] NSWCA 253 at [49-51].
[26] See paragraph [50] in Westpoint Management Ltd v Chocolate Factory Apartments Ltd [2007] NSWCA 253, Also and subsequently UI International Pty Ltd v Interworks Architects Pty Ltd (2008) 2 Qd R 158 at 170-17, 192, 194.
[27] There were four sets of proceedings involving challenges to pleadings: UI International Pty Ltd v Interworks Architects Pty Ltd & Ors [2006] QSC 79 (20 April 2006) upheld on appeal in UI International v Interworks Architects P/L & Ors [2006] QCA 434 (3 November 2006) and further challenges to pleadings in UI International Pty Ltd v. Interworks Architects Pty Ltd & Ors [2007] QSC 96 (30 April 2007) and on appeal UI International Pty Ltd v Interworks Architects Pty Ltd (2008) 2 Qd R 158.
[28] UI International Pty Ltd v Interworks Architects Pty Ltd & Ors [2006] QSC 79 at [17]-[18] and [29]-[30].
[29] Bellgrove at 620.
[30] Nor possibly other more contemporary cases such as De Cesare v Deluxe Motors Pty Ltd (1996) 67 SASR 28, Scott Carver Pty Ltd v SAS Trustee Corporation [2005] NSWCA 462, Westpoint Management Ltd v Chocolate Factory Apartments [2007] NSWCA 253 or UI International Pty Ltd v Interworks Architects Pty Ltd [2007] QCA 402.
[31] Plaintiff’s written submissions dated 25 November 2024 at paragraph [44].
[32] It is not apparently clear how that was done. The Plaintiff had contacted the Court Registry indicating it wished to file without leave or consent using up its one chance to do so under Rule 36.03(a) but also sought dispensation from marking up the amended copy in accordance with the Rule. Leave was granted to file an Amended Statement of Claim and was so filed. The Amended Statement of claim is headed “Amended Pursuant to Rule 36.03(a)”, which I take to be use of the “free amendment” before pleadings closed.
[33] Berno v Green’s Steel Constructions Pty Ltd [1991] NTSC 4 at [17].
[34] Liddle v North Australian Aboriginal Legal Aid Service Inc [1993] NTSC 78 at [33].
[35] See Tropicus Orchids Flowers and Foliage Pty Ltd v Territory Insurance Office [1995] NTSC 131 at [6] and Amcor Pty Ltd Trading as A.P.M Containers v Victoria Valley Beef Pty Ltd & Anor [1995] NTSC 11 per Coulehan M at [20] – which was an application by a defendant to withdraw, by amendment, an admission in its defence as to the existence of a written agreement and its effect.
[36] Northern Territory of Australia v Bellamack Pty Ltd [2024] NTSC 66 at [15].
[37] Northern Territory of Australia v Bellamack Pty Ltd [2024] NTSC 66 at [19].
[38] The relevant correspondence is set out in the affidavit of Chin made 25 November 2024, Annexure AYC-1.
[39] (1990) 170 CLR 70 at 98 per Gaudron and McHugh JJ, and at 86 per Mason CJ and Brennan J (“Laws”).
[40] Paragraph [6(a)] of the ASOC states “The Defendant (a) allocated Lots to be Affordable Allotments including as listed in the table below”. Paragraph [6(b)] of the ASOC further qualifies the table by stating the Defendant “on the dates specified in the rightmost column of the table caused to be constructed and made available to Eligible Purchasers, Affordable Homes on each of those Affordable Allotments, pursuant to its obligations under the Development Agreement.”
[41] See also Stohl Aviation v Electrum Finance Pty Ltd (1984) 56 ALR 716 at 732.
[42] [1982] 2 NSWLR 38.
[43] Defendant’s submissions dated 9 October 2023 at paragraph [15].
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