Ristic v Quasar Constructions (Commercial) Pty Ltd

[2022] NSWCATCD 86

Civil and Administrative Tribunal

New South Wales

Medium Neutral Citation:

Ristic v Quasar Constructions (Commercial) Pty Ltd [2022] NSWCATCD 86

Hearing dates:

6 May 2022

Date of orders:

20 June 2022

Decision date:

22 June 2022

Jurisdiction:

Consumer and Commercial Division

Before:

G. Sarginson, Senior Member

Decision:

(1) The name of the applicant is amended from Ivan Ristic to The Owners - Strata Plan No 100469.

(2) The amendment of the applicant’s name takes effect from 11 December 2021, being the date the original application in Matter HB 21/50520 was filed with the Tribunal.

(3) The proceedings are to be listed for directions before a Senior Member of the Tribunal at a date to be allocated by the Tribunal Registry.

Catchwords:

CIVIL PROCEDURE — Originating process — Amendment — Mistake in name of party — Substitution of party — Limitation period under s 18E Home Building Act 1989 for non-major defects — Date amendment takes effect

Legislation Cited:

Civil and Administrative Tribunal Act 2013 (NSW)

Civil and Administrative Tribunal Rules 2014 (NSW)

Civil Procedure Act 2005 (NSW)

Home Building Act 1989 (NSW)

Uniform Civil Procedure Rules 2005 (NSW)

Cases Cited:

Air Link Pty Limited v Paterson (No 2) [2003] NSWCA 251; 58 NSWLR 388

Belgravia Nominees Pty Ltd v Lowe Pty Ltd [2017] WASCA 127; 51 WAR 341

Bridge Shipping Pty Ltd v Grand Shipping SA (1991) 173 CLR 231

Captiv8 Pty Limited (in liquidation) v Bodger [2018] FCA 1801

Chorlton v Dickie (1879) 13 Ch D 160

Collgar Wind Farm Pty Ltd v RJE Global Pty Ltd [2021] WASC 367

Davies v Elsby Brothers Ltd [1961] 1 WLR 170; [1960] 3 All ER 672

Marlin Brands Australia Pty Ltd v Brando Aus Holdco Pty Ltd [2022] NSWCA 59

McGee v Yeomans [1977] 1 NSWLR 273

McInnes and Others v Wingecarribee Shire Council and Another (1987) 10 NSWLR 660

Mitry v Business Australia Capital Finance Pty Ltd (in liq) [2010] NSWCA 360

The Owners Strata Plan No. 73943 v 2 Elizabeth Bay Road Pty Ltd [2013] NSWSC 1769

Tomsimmat & Associates Pty Limited v G & R Investments Pty Ltd (1993) 25 IPR 545

Texts Cited:

Nil

Category:

Procedural rulings

Parties:

Ivan Ristic (Applicant)
Quasar Constructions (Commercial) Pty Ltd (Respondent)
The Owners - Strata Plan No. 100469 (Other party for purpose of interlocutory application)

Representation:

Counsel:
D. Kelly (Respondent)

Solicitors:
Swaab (Applicant)
Gillis Delaney Lawyers (Respondent)

File Number(s):

HB 21/50520

Publication restriction:

Nil

REASONS FOR DECISION

1. This is an interlocutory application to amend the name of the Applicant in the proceedings from Ivan Ristic to The Owners - Strata Plan No. 100469 (‘the owners corporation’).

2. In determining this application, the Tribunal notes that applicant left open a possible course of action that the owners corporation be joined as a party and the issue of when that joinder took effect be left to the final hearing. The respondent opposed such a course of action.

3. The Tribunal is satisfied that it is consistent with the guiding principle of the just, quick, cheap and efficient resolution of the real issues in dispute that the issue of whether the name of the applicant be amended be determined at this early stage of proceedings. The issue before the Tribunal is not a matter that involves detailed consideration of evidence or disputed facts and there is no appropriate reason to delay consideration of the issue until the final hearing.

4. In this decision, any reference to “the builder” is a reference to the respondent.

5. Although this interlocutory application was originally framed as an application to join the owners corporation as an applicant to the proceedings, that is not the substance of the interlocutory application. The order sought was to:

(join the owners corporation) to these proceedings as the named applicant in place of the existing named applicant, Ivan Ristic.

6. In other words, the owners corporation was not seeking to be joined as a party in addition to Mr Ristic. It sought to replace Mr Ristic as the applicant in the proceedings by way of the name of the applicant being amended. Mr Ristic did not seek to remain as a party to the proceedings if the applicant became “The Owners-Strata Plan No 100469” and he sought that the name of the applicant be amended to “The Owners-Strata Plan No 100469”.

7. The issue of whether the name of the applicant is amended has significant ramifications for both parties because of the applicable limitation period for breach of statutory warranties for building defects under the Home Building Act 1989 (NSW) (‘the HB Act’).

BACKGROUND

8. Mr Ristic is a Lot owner in a strata scheme building and the Chairperson of the strata committee of the owners corporation. Mr Ristic was elected Chairperson of the strata committee at a strata committee meeting immediately following the annual general meeting of the owners corporation on 15 March 2021.

9. The respondent is the builder of the strata scheme. By reason of ss 18C (1) and 18D (1) of the HB Act, both the owners corporation (in respect of common property of the strata scheme) and Lot owners (in respect of Lot property) have the benefit of the statutory warranties implied into residential building work contracts under s 18B of the HB Act. In circumstances where a strata building is constructed, the original contract is usually between the developer and the builder.

10. A final occupation certificate for the building was issued on 12 December 2019.

11. The strata scheme has 36 residential Lots within a four story building and an eight story building constructed over two levels of basement car parking.

12. In a strata scheme, most of the strata scheme building is common property. Common property is owned by the owners corporation. By reason of ss 4, 6, and 13 of the Strata Schemes Development Act 2015 (NSW) common property is any part or parcel of land not identified in the registered strata plan as a Lot; and (unless the registered strata plan otherwise identifies) the vertical boundary of a Lot is the inner surface of walls; and the horizontal boundary is the upper surface of the floor and under surface of the ceiling. Common property includes common infrastructure.

13. The Tribunal’s jurisdiction in residential building matters involving strata scheme residential buildings relevantly arises from ss 48A; 48K; s 3B, 3C,and 18E of the HB Act.

14. Relevantly, under s 18E (1) (a) of the HB Act “proceedings” for breach of statutory warranties under s 18B of the HB Act must be commenced “before the end of the warranty period for the breach”. Under s 18E (1) (b) of the HB Act, the warranty period is 6 years from a breach that results in a “major defect” and 2 years in “any other case”.

15. For building works that are complete, the time period commences from the date of completion of the work (s 18E (1) (c) of the HB Act).

16. What is a “major defect” is defined in s 18E (4) of the HB Act, and has been considered in authorities such as Stevenson v Ashton [2019] NSWSC 1689; and Ashton v Stevenson; Stevenson v Ashton [2020] NSWCATAP 233. It is unnecessary for the purpose of this interlocutory decision to set out the relevant principles that distinguish “major defects” from non-major defects.

17. Section 3C of the HB Act sets out the date of completion of work for the purpose of s 18E. By reason of s 3C (2) (a) of the HB Act in the circumstances of this matter, the warranty period commences from the date of the issue of the final occupation certificate (i.e. 12 December 2019).

18. Accordingly, both in respect of the owners corporation taking proceedings against the builder for breach of s 18B of the HB Act due to defects in common property; and for a Lot owner taking proceedings against the builder for breach of s 18B of the HB Act due to defects in Lot property, the time period for non-major defects expired on 12 December 2021.

19. On or about 6 November 2020, the owners corporation engaged its current Solicitors to provide advice regarding potential building defects.

20. On or about 10 November 2020 the owners corporation received legal advice regarding the applicable limitation period. That advice informed the owners corporation that to be within the limitation period for non-major defects it would have to commence legal proceedings by 12 December 2021.

21. On 15 March 2021, the strata committee passed a resolution at a meeting of the strata committee to obtain reports from a building consultant (Pinnacle Building Consultancy -‘Pinnacle’) and a fire safety expert (Credwell Consulting Pty Ltd).

22. By about early September 2021, the owners corporation received the expert report from Mr Stewart of Pinnacle. That report identified 165 defects and provided a scope of works to rectify the purported defects. Some of the defects are strongly arguable as major defects, involving water ingress issues into common property and structural issues. Other defects identified are more arguable as non-major defects.

23. In late September or early October 2021, the owners corporation received the fire safety report of Credwell Consulting Pty Ltd.

24. According to an affidavit of Mr Ristic affirmed on 14 April 2022; he and other members of the strata committee had a discussion between 24 November 2021 and 2 December 2021 about lodging a complaint on behalf of the owners corporation with NSW Fair Trading (which, by reason of ss 48C; 48D; 48I and 48J of the HB Act is a preliminary step to taking legal proceedings in the Tribunal). Those discussions occurred informally through a ‘WhatsApp’ group rather than a formal meeting of the strata committee or a general meeting of the owners corporation.

25. On 2 December 2021 Mr Ristic, after liaising with strata committee members, filed a complaint with NSW Fair Trading. The complaint identifies Mr Ristic as the complainant rather than the owners corporation, but the substance of the complaint clearly refers to common property defects.

26. On 8 December 2021, Mr Ristic received a letter from NSW Fair Trading stating that they could not investigate the dispute due to the complaint occurring within 3 months of the expiration of the statutory warranty period and that an application should be filed with NCAT as soon as possible.

27. On 8 December 2021 Mr Ristic had a further WhatsApp exchange, in which he stated:

IMPORTANT-we need to lodge our dispute with NCAT before next Friday otherwise its (sic) all void Fair Trading is sending me the letter to allow for that process to happen now.

28. The Treasurer of the strata committee Mr Zlatko Rooco Lesina responded as follows:

Sweet, what do you need from us so we can start prepping?

29. On at 9.48 am on 10 December 2021, Swaab Lawyers emailed the strata manager for the strata scheme Mr Jennings, referring to their legal advice dated 10 November 2020. The letter reminded the strata manager that the 2 year statutory warranty period for non-major defects would expire on 11 December 2021.

30. At 10.10 am on 10 December 2021, Mr Jennings responded by email as follows:

Thanks for sending this through. The Strata Committee has lodged a complaint through Fair Trading.

31. On 11 December 2021, Mr Ristic filed the application in the Tribunal. The application was lodged electronically. Mr Ristic is identified as the applicant under “Applicant Details”.

32. Under “Dispute Details” the NCAT application states:

Owners corp have engaged a company “Pinnacle Consultancy” and Acoustic consultants to undertake defects inspection of the newly built building.

Most defects are still outstanding and not being attended to.

The owners want to claim monies and costs accrued in getting the building fire compliant. Owners spent their own money to fix defects as we could not obtain the annual fire safety statement 1 year since construction.

A full list of defects is available with supporting documentation.

33. Under “Reasons for the Order(s)” the NCAT application states:

Home owners have engaged qualified consultants “Pinnacle Building Consultancy” to carry out building defects (sic) and assess them in accordance with relevant standards.

This report has been provided to the builder with minimal work being carried out, and most major work being ignored and avoided.

The owners corp want the defects as per the report to be rectified in accordance with building standards.

Defects report:

…

Additional works not mentioned in the report.

–Excessive structural cracking in the car park slabs.

–Barg capping that’s come off the building.

34. On 1 February 2022 the matter was listed for a directions hearing in the Tribunal. Charles SM made a direction that the applicant file and serve Points of Claim. Charles SM, at directions 3-4 noted that Mr Ristic had filed proceedings in his own name and it was unclear whether he was doing so on behalf of the owners corporation in respect of common property (to which the claim appeared to be in respect of).

35. The directions stated that if the claim related to common property, at the next directions hearing the Tribunal would “consider adding the owners corporation as a party to the proceedings as well as any individual lot owners affected by the alleged defects on lot property”.

36. Charles SM also directed that at the next directions hearing Mr Ristic “should provide evidence that the Owners Corporation either by resolution in general meeting or resolution of the strata committee has authorised the bringing of proceedings in the Tribunal in respect of defects on common property”.

37. On 21 February 2022 a general meeting of the owners corporation was held immediately after a strata committee meeting. Motions 3, 4 and 5 passed at the general meeting relate to the Tribunal proceedings.

38. Resolution 3 was that the owners corporation “ratify the decision of the strata committee to join the owners corporation as an applicant in the proceedings commenced on 11 December 2021…against the builder and developer…and continue these proceedings in respect of common property defects”.

39. Resolution 4 was that Mr Ristic be “authorised to represent those owners who agree in NCAT proceedings against Quasar in relation to the rectification of building defects within apartments” and Swaab Lawyers represent the owners corporation.

40. Resolution 5 was that owners agreed the defects list for “defects in apartments is complete, subject to a few amendments to be made by the Strata Manager following additional defects being reported by owners since the agenda was sent”.

41. Resolutions 2 and 3 of the strata committee meeting were “given the urgency of the matter” to join the owners corporation as an applicant to the NCAT proceedings against the builder and developer (sic) and “continue these proceedings in respect of common property defects”. Resolution 3 was to engage Swaab Lawyers to provide legal advice and act for the owners corporation in legal proceedings.

42. At a directions hearing in the Tribunal on 7 March 2022, Robertson SM set the application to “join” (sic) the owners corporation as an applicant to the proceedings down for an interlocutory hearing, and made directions regarding the filing and serving of evidence and submission in the interlocutory application. By this stage, both parties were legally represented in the proceedings.

43. As discussed previously, the matter was listed for interlocutory hearing on 6 May 2022. There were other related proceeding that were also listed and dealt with by way of procedural directions, but it is unnecessary to discuss those proceedings.

44. Mr S. Greenwood, Solicitor, appeared for the applicant; and Mr D. Kelly of Counsel, appeared for the respondent.

45. No application was made to join the developer, Tonuja Constructions Pty Ltd as a party to the proceedings.

WRITTEN SUBMISSIONS AND DOCUMENTS OF THE PARTIES

46. Both parties filed and served a written outline of submissions and affidavit evidence.

47. The applicant read and relied upon an affidavit of Mr Ristic dated 14 April 2022 comprising of 3 volumes. In addition, the applicant filed and served an Outline of Submissions dated 18 April 2022 and proposed Points of Claim.

48. In his affidavit, Mr Ristic stated that he thought when he was filing proceedings in the Tribunal on 11 December 2021 he thought he was doing so on behalf of the owners corporation and in respect of common property defects. According to Mr Ristic, he was mistaken by the online reference in the NCAT application form to “Applicant details” and thought that it sought his personal details rather than the name of the owners corporation.

49. The respondent read and relied upon an affidavit of Ms Nekrouchets, Solicitor, dated 5 May 2022. In addition the respondent filed and served an Outline of Submissions dated 5 May 2022.

50. Neither party required the other party’s deponent for cross examination.

51. Both parties made oral submissions on 6 May 2022 to supplement the written submissions, including referring to a number of authorities that had not been referenced in their respective written submissions.

CONSIDERATION

52. As discussed previously, this is not, in substance, an application to join the owners corporation as a separate party to the proceedings in addition to Mr Ristic.

53. There is no impediment to the owners corporation taking its own proceedings against the builder by filing a fresh application in the Tribunal, or being joined as a party to the proceedings in addition to Mr Ristic.

54. However, what the applicant (and the owners corporation) is seeking to avoid is the builder being only liable for major defects to common property, rather than all defects to common property. It is for that reason that it seeks to amend the name of the applicant in the proceedings filed on 11 December 2021 from Mr Ristic to the owners corporation.

Submissions of the Applicant

55. The submissions of the applicant are summarised as follows:

1. Mr Ristic clearly intended to file the NCAT proceedings in the name of the owners corporation in respect of the owners corporation suing the builder for defects to common property; rather than bringing proceedings himself for defects to property of his Lot.

2. The common law principle of Weldon v Neal (1887) 19 QBD 394 that an amendment will not be allowed to an originating process that allows a cause of action which is statute barred at the time of the amendment is not absolute. An exception is where there was a mistake or misnomer in the name of a party.

3. Mr Ristic misnamed the applicant and the amendment to the name of the applicant should be allowed. To refuse to do so would cause significant prejudice to the owners corporation, because it would be statue barred from suing the builder for non-major defects.

4. In oral submissions, the applicant referred to a number of authorities that had not been referred to in the written submissions. Many of these authorities involved decisions of the Tribunal or the Appeal Panel of the Tribunal granting leave to join parties to proceedings or amend the name of a party. However, the decisions referred to did not involve the potential limitation issue under s 18E of the HB Act and accordingly were of limited assistance.

Submissions of Respondent

56. The submission of the respondent are summarised as follows:

1. There is no power in the Civil and Administrative Tribunal Act 2013 (NSW)) (‘the NCAT Act’) to substitute one party for another in proceedings. Section 44 of the NCAT Act only allows a party to be joined to proceedings; or removed from proceedings.

2. At common law, an amendment will usually be granted to rectify an error in the name of a party as opposed to the situation where what is proposed is the substitution of one party for another. Limitation issues do not arise in the case of mere misnomer. However, this is not a case of mere misnomer.

3. Mr Ristic filed proceedings in his own name. He had standing to do so as a Lot owner. His proceedings were in respect of Lot property. The cause of action relied upon against the builder by the owners corporation is entirely different. There is no reason the owners corporation cannot take its own proceedings against the builder.

1. To allow the owners corporation to be substituted for Mr Ristic as applicant to the proceedings would defeat the purpose of having a limitation period in the HB Act. The owners corporation had legal advice warning them of the limitation period more than 12 months prior to its expiration. The owners corporation had ample opportunity to pass a Motion and take proceedings against the builder within the 2 year period from completion of the work, but failed to do so.

2. Mr Ristic made a conscious decision to file proceedings in his own name, in circumstances where, as a strata committee member, he knew or should reasonably have known the difference between commencing proceedings in his own name rather than in the name of the owners corporation. When he filed proceedings, no Resolution had been passed at a meeting of the owners corporation (or a meeting of the strata committee) to take legal proceedings against the builder for building defects.

3. The builder would suffer significant prejudice if the amendment was allowed, because it would be forced to meet a case that was, in part, statute barred. In essence, the builder would be deprived of a limitation defence.

Power of the Tribunal to Amend the Name of a Party

57. Sections 39, 40, 44, and 53 of the NCAT Act state as follows:

39   What constitutes an application

For the purposes of this Act, an application to the Tribunal includes a complaint, referral or other mechanism (however expressed) by means of which enabling legislation provides for a matter to be brought to the attention of the Tribunal for a decision.

40   Making of applications and appeals

An application or appeal to the Tribunal is to be made in the time and manner prescribed by enabling legislation or the procedural rules.

44   Parties and intervention

(1)  The Tribunal may order that a person be joined as a party to proceedings if the Tribunal considers that the person should be joined as a party.

(2)  The Tribunal may order that a person be removed as a party to proceedings if the Tribunal considers that the person has—

(a)  been improperly or unnecessarily joined, or

(b)  ceased to be a proper or necessary party.

(3)  For the avoidance of doubt, the member or members who constituted the Tribunal when it made an internally appealable decision cannot be made parties to an internal appeal against the decision.

(4)  The following persons may intervene and be heard in proceedings to which they are not already parties—

(a)  the Attorney General,

(b)  a Minister who administers the legislation that confers or imposes functions the exercise (or purported exercise) of which are in issue in the proceedings,

(c)  any other person who is authorised by this Act, enabling legislation or the procedural rules to intervene in the proceedings.

(5)  A Minister may (from money otherwise lawfully available for the purpose) authorise the payment to a party to the proceedings in which the Minister or the Minister’s delegate intervenes such costs (if any) as the Minister considers were reasonably incurred by that party in relation to the proceedings as a result of that intervention.

53   Amendments and irregularities

(1)  The Tribunal may, in any proceedings, make any amendments to any document (for example, an application or appeal) filed in connection with the proceedings that the Tribunal considers to be necessary in the interests of justice.

(2)  Any such amendment may be made—

(a)  at any stage of the proceedings, and

(b)  on such terms as the Tribunal thinks fit,

but may only be made after giving notice to the party to whom the amendment relates.

(3)  If a provision of this Act or the procedural rules is not complied with in relation to the commencement or conduct of proceedings, the failure to comply is to be treated as an irregularity and does not nullify the proceedings or any decision in the proceedings unless the Tribunal determines otherwise.

(4)  The Tribunal may, however, in dealing with any such irregularity, wholly or partly set aside the proceedings or a decision in the proceedings

58. Section 38 of the NCAT Act deals with the procedure of the Tribunal generally. It relevantly states as follows:

38   Procedure of Tribunal generally

(1)  The Tribunal may determine its own procedure in relation to any matter for which this Act or the procedural rules do not otherwise make provision.

(2)  The Tribunal is not bound by the rules of evidence and may inquire into and inform itself on any matter in such manner as it thinks fit, subject to the rules of natural justice.

…

(4)  The Tribunal is to act with as little formality as the circumstances of the case permit and according to equity, good conscience and the substantial merits of the case without regard to technicalities or legal forms.

…

59. In respect of the electronic filing of proceedings, Reg. 10 of the Civil and Administrative Tribunal Rules 2014 (NSW) states:

10   Electronic lodging of documents

(1)  In any proceedings in which the ECM system is available for use, a document may be lodged on behalf of a party, by means of the ECM system, by any of the following—

(a)  the party,

(b)  a person who has been directed to lodge the document by the party.

(2)  When lodged by means of the ECM system, a document that is required to be signed by a person is taken—

(a)  to have been duly signed, and

(b) to have been duly authenticated for the purposes of clause 5 of Schedule 1 to the Electronic Transactions Act 2000,

if the person’s name is printed where his or her signature would otherwise appear.

(3)  A document that is lodged by means of the ECM system is so lodged as soon as it is received and accepted by a registrar.

(4)  A registrar must accept a document that is lodged by means of the ECM system unless the registrar refuses to accept the document in accordance with any directions given under subrule (5).

Note—

See also rule 22.

(5)  The President may give directions in relation to the acceptance of documents lodged by means of the ECM system, either generally or for particular proceedings.

(6)  Notice, and the date, of the lodging and acceptance of a document is to be given, by means of the ECM system, to the person by whom the document was lodged.

60. Parties to proceedings are referred to in Reg 27 of the NCAT Rules as follows:

27   Parties to proceedings for general decision or administrative review decision

The parties to proceedings for a general decision or administrative review decision are—

(a)  the applicant, and

(b)  if an order or other decision is sought from the Tribunal in respect of a person or body (other than the applicant)—the person or body in respect of whom the order or other decision is sought, and

(c) if the Attorney General or another Minister intervenes in the proceedings under section 44 of the Act—the Attorney General or Minister, and

(d) any other person who is made a party to the proceedings by the Tribunal under section 44 of the Act, and

(e)  any other person required to be joined or treated as a party to the proceedings by a Division Schedule for a Division of the Tribunal, enabling legislation or the procedural rules.

Note—

In proceedings for an administrative review decision, the administrator who made (or is taken to have made) the administratively reviewable decision concerned would be the person or body referred to in paragraph (b).

The Principle in Weldon v Neal (1887) 19 QBD 394 (‘Weldon v Neal’)

61. Prior to Weldon v Neal, the common law principle was that amendment of a writ took effect from the date of the commencement of proceedings. This was known as the “relation back” doctrine. However, in Weldon v Neal, Lord Esher MR stated at 395:

We must act on the settled rule of practice, which is that amendments are not admissible when they prejudice the rights of the opposite party as existing at the date of such amendments. If an amendment were allowed setting up a cause of action, which, if the writ were issued in respect thereof at the date of the amendment, would be barred by the Statute of Limitations, it would be allowing the plaintiff to take advantage of her former writ to defeat the statute and taking away an existing right from the defendant, a proceeding which, as a general rule, would be, in my opinion, improper and unjust.

62. The principle in Weldon v Neal that the “relation back” doctrine did not apply to amendments which added a fresh cause of action that was barred by a limitation period led to a plethora of decisions which distinguished its application. The amendment could be allowed if there were “very peculiar circumstances” in the exercise of discretion to allow the amendment. Key matters were whether a new cause of action was being identified or merely an existing cause of action formulated in a different way; and whether the amendment sought was merely a “misdescription” of a defendant or whether the amendment had the effect of suing the defendant in a different capacity (McGee v Yeomans [1977] 1 NSWLR 273 at 277-278 per Glass JA ‘McGee v Yeomans).

63. The “finespun distinctions” and “rigid technicalities” (McGee v Yeomans at 280) of the principle in Weldon v Neal was changed by statue in different jurisdictions from the mid 1960’s onwards.

Statutory Intervention to Modify the Principle of Weldon v Neal

64. The history of such changes and applicable principles are discussed in decisions including McGee v Yeomans (in the context of the Supreme Court Rules 1970 (NSW); McInnes and Others v Wingecarribee Shire Council and Another (1987) 10 NSWLR 660 (in the context of Part 10 of the Land and Environment Court Rules 1980); Air Link Pty Limited v Paterson (No 2) [2003] NSWCA 251; 58 NSWLR 388 (in the context of Part 17 Rule 4 of the District Court Rules (NSW)); Bridge Shipping Pty Ltd v Grand Shipping SA (1991) 173 CLR 231 (in the context of Order 36.01 of the Supreme Court Rules (Vic)); Mitry v Business Australia Capital Finance Pty Ltd (in liq) [2010] NSWCA 360 (in the context of s 65 (2) (b) of the CP Act); Belgravia Nominees Pty Ltd v Lowe Pty Ltd [2017] WASCA 127; 51 WAR 341 and Collgar Wind Farm Pty Ltd v RJE Global Pty Ltd [2021] WASC 367 (in the context of O 25 r 5 of the Rules of the Supreme Court 1971 (WA)); and Marlin Brands Australia Pty Ltd v Brando Aus Holdco Pty Ltd [2022] NSWCA 59 (in respect of ss 64 and 65 of the Civil Procedure Act 2005 (NSW) and Rule 6.28 of the Uniform Civil Procedure Rules 2005 (NSW)).

Relevant Principles Under the Civil Procedure Act 2005 (NSW)

65. It is appropriate to refer to ss 64 and 65 of the Civil Procedure Act 2005 (NSW) (‘the CP Act’) and contrast those statutory provisions with the provisions in ss 44 and 53 of NCAT Act. Although the CP Act does not apply to the Tribunal, its legislative scheme is of assistance when interpreting the meaning of ss 44 and 53 of the NCAT Act in the context of an amendment that involves the operation of a limitation period.

66. Sections 64 and 65 of the CP Act state as follows:

64   Amendment of documents generally

(cf SCR Part 20, rules 1 and 4; DCR Part 17, rules 1 and 4)

(1)  At any stage of proceedings, the court may order—

(a)  that any document in the proceedings be amended, or

(b)  that leave be granted to a party to amend any document in the proceedings.

(2)  Subject to section 58, all necessary amendments are to be made for the purpose of determining the real questions raised by or otherwise depending on the proceedings, correcting any defect or error in the proceedings and avoiding multiplicity of proceedings.

(3)  An order under this section may be made even if the amendment would have the effect of adding or substituting a cause of action that has arisen after the commencement of the proceedings but, in that case, the date of commencement of the proceedings, in relation to that cause of action, is, subject to section 65, taken to be the date on which the amendment is made.

(4)  If there has been a mistake in the name of a party, this section applies to the person intended to be made a party as if he or she were a party.

(5)  This section does not apply to the amendment of a judgment, order or certificate.

65   Amendment of originating process after expiry of limitation period

(cf SCR Part 20, rule 4; DCR Part 17, rule 4)

(1)  This section applies to any proceedings commenced before the expiration of any relevant limitation period for the commencement of the proceedings.

(2) At any time after the expiration of the relevant limitation period, the plaintiff in any such proceedings may, with the leave of the court under section 64 (1) (b), amend the originating process so as—

(a)  to enable the plaintiff to maintain the proceedings in a capacity in which he or she has, since the proceedings were commenced, become entitled to bring and maintain the proceedings, or

(b)  to correct a mistake in the name of a party to the proceedings, whether or not the effect of the amendment is to substitute a new party, being a mistake that, in the court’s opinion, is neither misleading nor such as to cause reasonable doubt as to the identity of the person intended to be made a party, or

(c)  to add or substitute a new cause of action, together with a claim for relief on the new cause of action, being a new cause of action that, in the court’s opinion, arises from the same (or substantially the same) facts as those giving rise to an existing cause of action and claim for relief set out in the originating process.

(3)  Unless the court otherwise orders, an amendment made under this section is taken to have had effect as from the date on which the proceedings were commenced.

(4) This section does not limit the powers of the court under section 64.

(5)  This section has effect despite anything to the contrary in the Limitation Act 1969.

(6)  In this section, originating process, in relation to any proceedings, includes any pleading subsequently filed in the proceedings.

67. In respect of the operation of ss 64 and 65 of the CP Act, the builder submitted that by reason of Rule 6.28 and Rule 19.2 (4) of the Uniform Civil Procedure Rules 2005 (NSW) (‘UCPR’), the date upon which a party is “joined” or “added” to the proceedings is taken to be the date on which the order is made or the amended document is filed; or such later date as the court may specify so as to “preserve” any limitation defence the joined party may have.

68. However, there are two obvious difficulties with this submission. The first is that the UCPR is a regulatory provision that arises by reason of the CP Act (s 9 CP Act) and the UCPR does not take precedence over the CP Act. Accordingly, the UCPR does not override the provisions of s 65 of the CP Act. The second difficulty is that under Rule 6.32 (4) of the UCPR, if a party is substituted for another party “all things done in the proceedings have the same effect in relation to the new party as they had in relation to the old, subject to any other order by the court”. This reflects the common law position that when a party is substituted for another rather than added as a party, the person is placed in exactly the same position as the party replaced (Chorlton v Dickie (1879) 13 Ch D 160).

Is It Necessary In the Interests of Justice to Allow the Proposed Amendment?

69. The Tribunal is satisfied that it has the power under ss 44 and 53 of the NCAT Act to make an order that joins a fresh party to the proceedings by way of substituting the name of that party for the name of the applicant. The salient issue is what principles should be applied.

70. In other words, what is central to the dispute is what principles are applicable to the phrase “necessary in the interests of justice” under s 53 of the NCAT Act.

71. Sections 44 and 53 of the NCAT Act do not contain the same provisions as ss 64 and 65 of the CP Act. However, in the context of a dispute where the Tribunal’s jurisdiction under the HB Act is $500,000 and (on the basis of the expert reports obtained by the owners corporation) the amount claimed or in dispute is likely to be significant, the provisions of s 44 and 53 of the NCAT Act, in the circumstances of this matter, should be interpreted in a manner consistent with established legal principles as to whether a party can be joined to proceedings by way of substituting that party for an existing party.

72. The phrase “necessary in the interests of justice” in s 53 of the NCAT Act should not be interpreted in a manner that disregards the applicable principles under the CP Act and the common law. However, the Tribunal must also take into account that the Tribunal is not a Court of strict pleading by reason of s 38 (4) of the NCAT Act.

73. The applicable principles under the CP Act and the common law are as follows:

1. There is a general discretion under the inherent jurisdiction of a court or under applicable Rules of court to allow an amendment whenever justice so requires, including an amendment that may deprive a party of a limitation defence (McGee v Yeomans).

2. It will be necessary in the interests of justice (and consistent with s 64 (2) and (4) of the CP Act and s 65 (2) (b) and (3) of the CP Act) to make an order allowing an amendment to the name of a party (including an amendment that has the effect of joining a party and substituting that party for an existing party) if the amendment corrects a mistake in the name of the party to the proceedings.

3. It was the position in England for much of the 20^th century that an amendment would be allowed even if it deprived a defendant a right under the Statute of Limitations if the amendment involved the “mere” correction of a mistake, misnomer or misdescription in the name of the party (Davies v Elsby Brothers Ltd [1961] 1 WLR 170; [1960] 3 All ER 672).

4. A “mistake in the name of a party” must involve a situation where the applicant knows the person intended to be sued (or the person who is suing) by reference to some property or properties peculiar to the person, but is mistaken as to the name of the person. That is different to a mistake as to legal basis a correctly identified party is being sued, such as a misconception that liability could be imposed on a correctly identified party or the efficacy of suing a correctly identified party (Marlin Brands at [58]-[66] per Brereton JA and the legal authorities discussed therein including the judgement of McHugh J. in Bridge Shipping). In Marlin Brands, Brereton JA described the distinction as follows (at [60]):

In principle, the question is whether a plaintiff who deliberately chooses to sue the true defendant’s agent rather than the principal, believing that he or she is by that means effectively suing the principal, thereby makes a mistake in the name of the defendant. If the intention is to sue the person who is known to be the agent because he or she is the agent, then there is in my opinion no such mistake.

5. A mistake that a named party has standing to bring an application on behalf of other persons who do have standing is a mistake as to the name of the person rather than a mistake as to the legal basis upon which a person is suing. This occurred in McInnes v Wingecarribbee Shire Council, where the NSW Court of Appeal found that there was a mistake in the name of a party where the identified party bringing proceedings (who was a member of a local environmental society) did not have standing to file proceedings (being an appeal in the Land and Environment Court) on behalf of the society and was under the mistaken belief that he did have standing; and the limitation period for filing the appeal expired before the name of the appellant was sought to be amended. In Captiv8 Pty Limited (in liquidation) v Bodger [2018] FCA 1801 at [53] Gleeson J characterised this type of mistake as “a mistaken belief as to the identity of the person having the relevant standing to bring the action”.

6. Whether there has been a mistake in the name of a party is not considered retrospectively with the wisdom of hindsight, but according to the facts and circumstances which existed when the decision was made (Marlin Brands at [65] citing Tomsimmat & Associates Pty Limited v G & R Investments Pty Ltd (1993) 25 IPR 545 at 551).

5. Issues of prejudice to the other party are relevant matters to consider in the exercise of discretion.

74. The Tribunal notes that in the Western Australian decisions of Belgravia Nominees Pty Ltd v Lowe Pty Ltd [2017] WASCA 127; 51 WAR 341 and Collgar Wind Farm Pty Ltd v RJE Global Pty Ltd [2021] WASC 367 (‘Collgar Wind Farm’) it was held that the regulatory Rules of Court and the inherent jurisdiction of the Court to allow amendments could not override the operation of a defence under a statutory Limitation Act. However, those decisions are distinguished because the legislative provisions discussed are different to the provisions of the NCAT Act and the CP Act.

75. In any event, in Collgar Wind Farm it was held at [75]-[79] that the Court still had the power to grant an amendment to correct a misnomer or misdescription of a party pursuant to the principles in Davies v Elsby Brothers Ltd.

76. The Tribunal is satisfied that the mistake of Mr Ristic was a mistake in the name of the party rather than a mistake as to the legal basis of proceedings against the builder. It is clear that the application filed with the Tribunal on 11 December 2021 was in respect of defects to common property, because it clearly refers to “the building”; “defects”; “owners”; and “the owners corp. (sic) want the defects…to be rectified in accordance with building standards”.

77. There is no doubt that the substance of the application is in respect of a cause of action clearly based on defects to common property, rather than the individual Lot property of Mr Ristic. Further, there is no ambiguity in the sense that it is unclear whether or not proceedings are being brought in respect of defects to Lot property; or defects in respect of common property; or a mixture of both.

78. The relevant mistake is that Mr Ristic put his own name as applicant rather than the name of the owners corporation. That is the same type of mistake as occurred in McInnes v Wingecarribbee Shire Council. It is not a mistake as to the legal basis proceedings were being brought against the builder. The legal basis upon which proceedings were brought against the builder were in respect of defects to common property.

79. The builder’s submissions referred in detail to the delay in proceedings being taken after the owners corporation had received legal advice about the relevant limitation period and after they had obtained expert evidence. Although proceedings could have been taken at an earlier stage (and any issue arising from a mistake in the name of the applicant being resolved prior to 12 December 2021), the substance of the application clearly stated that the proceedings were being brought in respect of common property defects; not in respect of the Lot property of Mr Ristic.

80. Whilst there was delay between the owners corporation receiving legal advice; expert evidence; and proceedings being commenced in the Tribunal, there is no evidence that this delay causes any prejudice to the builder, in the sense that the builder is unable to obtain expert evidence in response; or that its evidence will be deleteriously affected by any delay. The only prejudice which the builder points towards is the expiration of the non-major defect two year limitation period under s 18E of the HB Act.

81. However, proceedings were commenced within the 2 year period with Mr Ristic mistakenly using his own name and address rather than the name of the owners corporation in the NCAT application he filed electronically. For reasons expressed previously, the Tribunal is satisfied that this was the type of mistake that the Tribunal should allow to be rectified by way of the name of the applicant being amended to that of the owners corporation.

82. It is necessary in the interests of justice to allow the amendment which substitutes the name of the owners corporation for the name of Mr Ristic and for that amendment to take effect from the date that NCAT proceedings were filed on 11 December 2021. The builder is not deprived of a defence under s 18E of the HB Act, because the substance of the application that was filed within the applicable limitation period under s 18E of the HB Act was for defects to common property. In any event, it remains open to the builder to adduce evidence and submissions that its work was not defective under s 18B of the HB Act, irrespective of the distinction between non-major defects and major defects.

83. Finally, the Tribunal acknowledges that when the proceedings were filed there had been no Motion passed at a strata committee meeting or general meeting of the owners corporation to take NCAT proceedings against the builder. However, by reason of s 103 (4) of the SSM Act, the failure to pass a resolution at a general meeting does not affect the validity of the proceedings and a retrospective resolution can be passed in any event (The Owners Strata Plan No. 73943 v 2 Elizabeth Bay Road Pty Ltd [2013] NSWSC 1769). The Tribunal is satisfied that the Resolutions passed at the general meeting on 21 February 2022 are sufficient to cure any failure to comply with s 103 of the SSM Act.

84. Although Mr Greenwood made an oral submission that there had not been a Resolution of the owners corporation passed retrospectively approving the taking of NCAT proceedings against the builder, it appears he misspoke in respect of that issue and overlooked the Resolutions passed on 21 February 2021.

85. As the Tribunal has determined the name of applicant is amended, the matter will be listed for a directions hearing at a date to be fixed by the Tribunal Registry. At that directions hearing, procedural directions will likely include the filing and serving of evidence; and may also include the matter being set down for a final hearing.

ORDERS

1. The name of the applicant is amended from Ivan Ristic to The Owners-Strata Plan No 100469.

2. The amendment of the applicant’s name takes effect from 11 December 2021, being the date the original application in Matter HB 21/50520 was filed with the Tribunal.

3. The proceedings are to be listed for directions before a Senior Member of the Tribunal at a date to be allocated by the Tribunal Registry.

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I hereby certify that this is a true and accurate record of the reasons for decision of the Civil and Administrative Tribunal of New South Wales.

Registrar

Decision last updated: 26 August 2022