Australia: Supreme Court refuses to allow plaintiff to amend pleadings where this would cause prejudice to defendant

In brief - Defendant would be denied opportunity to bring viable cross claim if plaintiff's application granted

The NSW Supreme Court held in Owners-SP 67635 v Metlej Developments Pty Ltd and others [2013] NSWSC 1564 that a plaintiff's application to amend its pleadings to add additional defects will not be allowed where a defendant, by the plaintiff's delay in requesting the amendment, is prevented from bringing a "viable and realistic" cross claim.

Owners corporation commences proceedings due to defects in residential building

The plaintiff, Owners-SP 67635, was an owners corporation of a residential building claiming a breach of statutory warranties under the Home Building Act 1989 (NSW) ("the Act") for a number of alleged defects. Metlej Developments Pty Limited were the builders and the second defendant and the third to fifth defendants were the developers of the building ("the defendants").

The final completion date was disputed by the parties, although completion had to have taken place by 19 March 2002, when registration of the strata plan took place.

Proceedings were commenced by the owners corporation in the Consumer, Trader and Tenancy Tribunal (CTTT) on 28 January 2009 and transferred to the Supreme Court on 7 October 2010 when it became apparent that the jurisdictional limit of the CTTT would be exceeded by the amount in issue.

Owners corporation seeks leave to include additional defects in claim

A list statement was filed on behalf of the owners corporation on 23 July 2011, which was amended in April 2012 (following revision and amendment of the Scott Schedule) and again in September 2012 (to remove the first defendant from the proceedings).

On 15 July 2013, the owners corporation filed a notice of motion ("the motion") seeking leave to amend its summons and list statement to include additional defects.

The motion was opposed by the defendants.

Defendants argue that allowing plaintiff to amend pleadings would result in injustice

The owners corporation sought to amend its pleadings to include mechanical ventilation defects in the claim. The defects were based upon an expert report received by the owners corporation on 27 March 2012 and served on the other parties on either 4 or 21 June 2012.

The damages identified by the owners corporation in respect of the newly identified defects were approximately $242,000.

The defendants opposed the motion on the basis that they:

  • would suffer a degree of injustice from the owners corporation's delay to file the motion which would result in prejudice because of an inability to file a potentially exonerating cross claim against the certifier and the architect;
  • deemed there to be an inappropriate particularisation of defects (an issue that was resolved between the parties and therefore not considered by the court).

Other cases where one party cannot bring a cross claim because of another party's delay

In consideration of the defendants' objection to the motion, His Honour looked at the principles for when leave may be granted to amend pleadings and in particular, where potential prejudice to a defendant's ability to pass on all or part of a claim was caused by the plaintiff's delay.

In Tekno Ceramics Pty Limited v Zdenko Milat [2003] NSWCA 254, the Court of Appeal considered whether the inability of the appellant to sue a third party caused it such prejudice so as to require the court to overturn the decision of the District Court.

The key question in this matter was whether the appellant's inability to bring a cross claim as a result of the respondent's delay had caused it prejudice. The court considered that on the facts, the cross claim was a viable one, with the loss of ability to bring the claim causing a prejudice that was "obvious and significant" (Foster AJA at [41]), with a conclusion that the District Court had erred in the exercise of its discretion by failing to take this into account.

Defendants would have had a viable cross claim against certifier of ventilation

In these proceedings, the court looked at the viability of the cross claims that the defendants claimed they were prevented from bringing and, in particular, against Accent Ventilation Pty Limited, which had certified the ventilation and issued compliance certificates for this work.

Elements of the mechanical ventilation that the owners corporation claimed were defective were covered by the scope of works of the certificates issued by Accent Ventilation. On this basis, it appeared for the court that there was a real claim to be made by the defendants.

Ten year limitation period for bringing building action

The ability to bring such a cross claim, however, was time barred because of the delay of the owners corporation in bringing the alleged defects to the attention of the defendants and the statutory bar to any potential cross claim imposed by section 109ZK of the Environmental Planning and Assessment Act 1979 (NSW) ("the EPA Act") which provides a limitation of 10 years from the date on which an Occupational Certificate was issued in which a building action may be brought.

On the basis that completion had occurred by 19 March 2002, the defendants would not be able to make a claim after 20 March 2012 and were therefore out of time to bring a cross claim against Accent Ventilation following the owners corporation's delay.

Proceedings against Building Insurer's Guarantee Corporation

The owners corporation responded with reference to the separate proceedings that were on foot against the insurer Building Insurers' Guarantee Corporation (BIGC).

In these separate proceedings, BIGC had consented to the same proposed amendments to the list statement which added the mechanical ventilation defect. This consent was relevant because in the event that BIGC was obliged to pay any sum to the owners corporation, it had a statutory right to recover an amount paid under sections 103M and 103N of the Act from the builder.

The owners corporation argued that if this element of the claim succeeded, prejudice could not be caused to the defendant builder, which could still face a claim from BIGC for the mechanical ventilation defects irrespective of its objection to the amendments in its own case and it was simply a case of facing the claim, with the only question being which set of proceedings this would occur in.

Although the defendants countered this argument with a claim that BIGC was subject to the same statutory limitation under S109ZK of the EPA Act, this point was not fully considered because the court thought it inappropriate to consider such an argument where BIGC was not a party to the proceedings. The court did, however, consider it sufficient to note that the bar may apply to a claim against the builder by BIGC.

Owners corporation's motion dismissed because defendants prevented from making cross claim

The court dismissed the motion by the owners corporation to amend its pleadings.

The viability of the cross claim that the defendants were prevented from making against Accent Ventilation was a key factor in this decision. The court was satisfied "that such potential cross-claim(s) appear 'viable and realistic, rather than fanciful or theoretical' (GIO General Ltd v Love [2009] NSWCA 269 at [40] per Handley AJA" (at [20]).

Further, it was enough for the court that the additional defects were already on foot in the proceedings against BIGC, with "limited utility" (at [35]) for the court in permitting the owners corporation to bring the same claim in these proceedings.

Suzie Hutchings James Neal
Construction and engineering
CBP Lawyers

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Mondaq Advice Centre (MACs)
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.