The Owners - Strata Plan No. 68372 v Allianz Australia Insurance Limited
[2013] NSWSC 1095
•06 August 2013
Supreme Court
New South Wales
Medium Neutral Citation: The Owners - Strata Plan No. 68372 v Allianz Australia Insurance Limited [2013] NSWSC 1095 Hearing dates: 6 August 2013 Decision date: 06 August 2013 Jurisdiction: Equity Division - Technology and Construction List Before: Stevenson J Decision: Amendments allowed in part
Catchwords: PRACTICE AND PROCEDURE - amendments to defence and cross-claim - whether application to amend made too late and would cause undue prejudice Legislation Cited: Civil Liability Act 2002
Home Building Act 1989Cases Cited: HSD Co Pty Ltd v Masu Financial Management Pty Ltd [2008] NSWSC 1279 Permanent Custodians Limited v King [2010] NSWSC 509
Strata Plan 68372 v Allianz [2012] NSWSC 691Category: Interlocutory applications Parties: GEO Developments Pty Ltd (applicant / third defendant)
The Owners of Strata Plan 68372 (respondent / plaintiff)Representation: Counsel:
M Henry (applicant / third defendant)
M R Gracie with D Neggo and R Raffell (respondent / plaintiff)
Solicitors:
Arnold Bloch Leibler (applicant / third defendant)
Crisp Legal (respondent / plaintiff)
File Number(s): SC 2007/266664 Publication restriction: Nil
EX TEMPORE Judgment (Revised)
These proceedings were commenced in 2007. The plaintiff sues the defendants in relation to alleged defects in the common property of a substantial strata title development at Thornleigh. The first and second defendants are insurers. The plaintiff sues them, under insurance policies, for indemnity in respect of alleged breaches of the factory warranties proscribed in Pt 2C of the Home Building Act 1989. The builder of the development, Rubikcon Pty Ltd, is in liquidation.
The third defendant, GEO Developments Pty Ltd, was the owner of the property. It was joined as a party to the proceedings in March 2010. The plaintiff alleges that, by reason of s 18C and s 18D of the Home Building Act, GEO is liable to it for the same breaches of statutory warranties as are alleged against the first two defendants. The plaintiff also sues GEO in negligence in respect of the same defects.
By Notice of Motion filed on 22 July 2013 GEO seeks to amend its Defence and Cross-Summons. Those amendments were foreshadowed by correspondence on 18 July 2013. The first and second defendants consent to the amendments.
The plaintiff has nothing to say concerning the proposed amendments to the Cross-Claim but resists the substantial part of the amendments sought in respect of the Defence.
On 28 June 2013, Hammerschlag J ordered that the whole proceedings be referred to Ms Janet Grey for enquiry and report. Ms Grey has fixed the matter for a hearing of slightly less than four weeks, commencing on 9 September 2013; that is a little under four weeks from now.
The proposed amendments to GEO's Defence concern the proportionate liability provisions in Pt 4 of the Civil Liability Act 2002. By the proposed amendments GEO seeks to: -
(a) particularise existing allegations in respect of the two concurrent wrongdoers already named in its Defence, namely Rubikcon and Geotech Testing Pty Ltd; and
(b) add a third concurrent wrongdoer, Mepstead & Associates Pty Ltd.
Geotech was a geotechnical engineer engaged in relation to the Thornleigh project. Mepstead was the superintendent of the project.
The plaintiff does not oppose the amendments proposed in relation to Rubikcon. GEO's existing Defence already alleges that Rubikcon is a "concurrent wrongdoer". The amendment merely adds particularity to that allegation. Those particulars repeat allegations currently made by the plaintiff in respect of Rubikcon.
The plaintiff, however, opposes the amendments sought by GEO concerning Geotech.
I must say it is hard to see why the plaintiff does oppose this amendment. As with Rubikcon, the existing Defence alleges that Geotech is a "concurrent wrongdoer". The amendment adds, as particulars, the allegations formerly made by the plaintiff against Geotech. I say "formerly" because Geotech is no longer a defendant in the proceedings. Between 11 November 2011 and 18 June 2012, Geotech was the fourth defendant. By judgment delivered on 18 June 2012, McDougall J dismissed the plaintiff's proceedings against Geotech upon the basis that the proceedings were out of time: Strata Plan 68372 v Allianz [2012] NSWSC 691.
The correspondence between the solicitors for the parties in late June of this year shows that the plaintiff was aware that GEO contended that one of the issues for determination in the proceedings included the "quantum of any respective liability of any alleged concurrent wrongdoers".
The parties have exchanged expert reports dealing with, amongst other things, the role played by Geotech. The reports have been prepared by Mr B F Walker for the plaintiff, and Dr Peter Redman for GEO. Those reports deal with Geotech's role. Mr Gracie, who appears with Mr Neggo and Mr Raffell for the plaintiff, candidly accepted that there "should not be a problem" for Mr Walker to deal with the Geotech issue.
The plaintiff submitted that, following the dismissal by McDougall J of the plaintiff's claim against Geotech, the plaintiff's pleading "reverted" to its form prior to the joinder of Geotech and, accordingly that "[t]he matter set out in the third defendant's amended defence concerning Geotech cannot be of any ongoing effect". I do not accept that submission. The pleadings of the third defendant remain in whatever form they were when McDougall J dealt with the application concerning Geotech and were not affected by it.
GEO has, at all relevant times, alleged that Geotech was a concurrent wrongdoer. Such problems as may have existed concerning the manner in which, hitherto, GEO pleaded its case concerning Geotech (for example see HSD Co Pty Ltd v Masu Financial Management Pty Ltd [2008] NSWSC 1279 at [17] - [18] per Rothman J and Permanent Custodians Limited v King [2010] NSWSC 509 at [19] per Schmidt J) will, in substance be cured by the adoption by the third defendant of the plaintiff's former pleading against Geotech.
I propose to allow the amendment.
The remaining amendment concerns Mepstead, the superintendent of the project.
In my opinion, different considerations arise in relation to this aspect of the application.
First, as Mr Henry, who appeared for GEO, candidly accepted, GEO has, for some time, had available to it material sufficient to enable it to make the amendment now proposed. Dr Redman, GEO's expert, dealt in terms with the alleged shortcomings of Mepstead's supervision of the project in his report of 29 August 2012.
Second, Mr Gracie submits, and I accept, that, were the amendment to be allowed, he will have to consider, and the plaintiff will have to decide, whether to join Mepstead as a defendant. Mr Henry submits that it is obvious from the terms of McDougall J's judgment of 18 June 2012 that the plaintiff is now out of time to sue Mepstead. Nonetheless, I accept this is a matter that Mr Gracie will have to consider so that the plaintiff can make an informed decision as to what course is to be followed.
Third, and perhaps most substantially, Mr Gracie submits that the plaintiff will need to consider what evidence it should adduce to demonstrate Mepstead's "responsibility for the damage or loss" and for the purposes of s 35 of the Civil Liability Act.
Mr Henry informs me that GEO's case will be documentary and will be included in the proposed tender bundle before the referee. However, there are at the moment critical documents that the plaintiff has not seen, including two contracts between GEO and B&D Constructions Pty Ltd relevant to the compaction of the earthworks.
Further, if the amendment were allowed, the plaintiff would have to consider what further evidence is available to it, including from its expert Mr Walker. I accept that Mr Walker has, in his response to Dr Redman, dealt in some degree with Mepstead's role. However, Mr Gracie submits, and I accept, that the plaintiff will need to place before Mr Walker further material to focus Mr Walker's attention on the Mepstead aspect of the matter in particular.
Such material will include all records of geotechnical testing by Geotech, details of the work done by earthwork contractors and the instructions given by Mepstead concerning their frequency and location of testing.
An added complication is that Mr Walker is not available to attend to any of these tasks, because of other professional commitments, until 21 August 2013.
Further, Mr Gracie informs me, and I accept, that there is a vast amount of material to consider; apparently some 37 volumes. It may well be that much of that material has already been considered. However, if the amendment were allowed, it would have to be considered afresh, with particular focus on Mepstead's involvement.
As I have said, the reference is due to commence on 9 September 2013. The conclusion to which I have come is that the application to amend has been made too late. It could have been made almost a year ago. To allow the amendment now would, in my opinion, impose a significant and unjustifiable distraction on the plaintiff and those advising it, and at a time when the hearing is imminent.
I will permit the amendments proposed in par 51(b), par (d) and par (e) of the Further Amended Defence. I refuse to grant GEO leave to make the amendments sought in par 51(f).
I will make the orders concerning the amendment to the Cross-Claim.
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Decision last updated: 13 August 2013
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