//
© 2026 Zoe. All rights reserved.
Zoe is a legal information platform. Always consult the Federal Register of Legislation for authoritative text.
[2026] NSWCA 126
respondent. The amended notice of appeal was dismissed with costs.
The Court of Appeal dismissed the builder’s appeal. Atlanta had been denied an opportunity to address the judge’s refusal of consent orders, but that did not affect the result: the proposed amendment was exceptionally late, inconsistent, and did not show a clear contractual entitlement. Atlanta also did not prove its lost profits. An industry margin and a margin for variations did not establish what Atlanta would have earned on the remaining fixed-price work, and it had not provided evidence of its likely completion costs. The Court found no error in refusing Atlanta an award of costs. This analysis is general legal information, not legal advice; Zoe can make mistakes; a qualified Australian lawyer should check it before it is acted on, relied on, or used.
AI-generated legal information, not legal advice. Zoe can make mistakes. Check the cited source, and for advice about your situation consult a qualified Australian lawyer.
2,473 words · generated 05/10/2026
3 cited instruments linked from this judgment.
Atlanta Building Pty Ltd contracted with David Abela and Rebecca Amos to build a dwelling at Bangalow under a standard-form residential building contract signed on 24 November 2019. The contract price was fixed at $2,699,258.10, excluding variations [9]. The works did not reach completion. The owners’ separation and divorce contributed to interruptions, and Atlanta terminated the contract on 20 August 2021 [35], [37].
The payment structure became important. The contract required a 10% deposit, defined as a part-payment towards the contract price, and provided that the deposit would be accounted for when a payment claim was assessed after practical completion [11]–[13]. But the Stage Payments Schedule incorrectly listed “Deposit” as the first of 15 work stages [16], [18]. The Court described this as a misunderstanding of how the standard form contract was intended to operate: the deposit was not itself a stage of work, but an amount paid or payable on account of the work and credited against it at completion [18].
The contract also allowed cash retention as security. The parties recorded a possible cash retention of 5% of the contract price, but the primary judge found that no retention money was actually withheld. The owners paid only half the deposit, and the parties had agreed that the balance need not be paid in cash if no retention money was held and Atlanta’s invoices were paid [20]–[22].
Atlanta sued for several amounts. At the end of trial it sought, for the first time, leave to add a claim for an amount variously described as an unpaid deposit, unpaid contract works, or retention. Different versions produced different figures: $134,962.91, $135,034.90, and $123,325.18 [52]–[55], [66]. The primary judge refused leave. In an earlier judgment, the judge mistakenly included $123,325.18 in the award, but corrected that error in the later judgment [67], [72]–[73].
The primary judge also rejected Atlanta’s $171,106.66 lost-profits claim. Atlanta said it would have earned a 15% margin on the unfinished portion of the contract, but did not prove its actual likely costs of completing the work [65]. Finally, the primary judge refused Atlanta’s costs. On appeal, Atlanta challenged the refusal of the amendment, the lost-profits decision, and the costs order. The Court of Appeal dismissed the appeal with costs [102]–[103].
The Court first treated the amendment issue as a discretionary decision. Under the approach stated in House v The King, an appellant challenging a discretionary decision must establish an error and show that it was material [80]. For procedural matters, whether the order caused injustice is also relevant, drawing on Adam P Brown Male Fashions [80].
There had been procedural errors. The primary judge said that Atlanta had been directed to file a notice of motion supported by affidavit, although no such direction had been made. The judge had instead invited Atlanta to discuss the amendment with the other side and said a motion with evidence would be needed if it was not consented to [82]. Further, the judge did not tell the parties that she intended to refuse the consent orders, so Atlanta lost an opportunity to make submissions on that request [83].
Those errors did not require appellate intervention. Applying the practical-injustice approach, the Court asked whether further information or submissions could possibly have made a difference [81]. Atlanta’s counsel had already explained the proposed amendment and its lateness. On appeal, Atlanta did not identify additional factual material or submissions that could have been put to the primary judge [84], [86].
The amendment was also exceptionally late. The proceedings had been on foot since 2023, and Atlanta had been represented by the same lawyers through the trial [85]. The proposed pleading was internally inconsistent: it claimed $134,962.91 as the unpaid Stage 1 amount, while the earlier pleaded table implied a shortfall of $123,325.18. Other evidence generated still another amount, $135,034.90 [66], [87]. The Court accepted that the figures might be explained by errors in the underlying table, but noted that no clear, satisfactory explanation had been offered and the discrepancies were not apparent without detailed analysis [87].
The contractual entitlement was also uncertain. Given the stage the proceedings had reached, the Court considered that leave would only have been appropriate if it were clear that Atlanta was entitled to succeed. Instead, success depended on difficult questions about the contract’s stage-payment and deposit provisions, retention, the parties’ later agreement, and the architect’s termination [88]. The Court did not decide those construction questions. It held that the late amendment was properly refused and, without the amendment, the existing pleading did not claim the $123,325.18 [89].
The lost-profits claim failed for a distinct evidentiary reason. Atlanta relied on a 15% margin, but its expert had selected that figure as the midpoint of a general industry range of 10–20%. The expert also referred to the 15% margin used for contract variations. The Court held that neither fact established the profit Atlanta was likely to make on this particular fixed-price contract [92]. What mattered was the likely cost to Atlanta of completing the remaining work, compared with the contract price. Evidence of those likely costs could have been given, but was not [93].
On costs, the Court did not decide whether UCPR r 42.34 applied to proceedings transferred from the District Court to the Supreme Court. It was enough that the primary judge had a costs discretion under r 42.1 in any event, and could consider the amount recovered, forum, the claims on which Atlanta failed, and its disproportionate legal costs [100]. No error was shown.
The judgment does not purport to announce a new general test for amendment, procedural fairness, damages, or costs. It applies established principles to a particular litigation history.
For amendments, the Court relied on the discretionary framework in Pt 6 Div 1 of the Civil Procedure Act 2005 (NSW), and on the restraint applicable to appellate review under House v The King [80]. It also applied the established idea that an error must be material: ordinarily, an error warrants intervention only if it deprived the party of the possibility of a successful outcome [80]. In a procedural-fairness challenge, the inquiry is practical rather than formal. The Court drew on Ex parte Lam and Stead to frame the question as whether the lost opportunity to make submissions could have made a difference [81].
The decision’s practical contribution is its application of those principles to an extremely late amendment. Even where consent is obtained, the judge remains responsible for deciding whether leave should be granted [80]. Consent does not eliminate the court’s discretion or the need to consider the consequences for the other party and the progress of the case. Here, the proposal came after trial, and the claimed basis and amount were unclear. The Court held that those features could support refusal even though Atlanta had not been properly notified before the consent request was rejected [84]–[89].
On damages, the judgment applies the principle that a claimant should provide evidence with as much certainty and particularity as the circumstances permit. The Court relied on Financialstrategy.com.au and Placer for the proposition that a party cannot invite speculation where more specific evidence was possible [93]. Its focus was not that lost profits are inherently incapable of proof, but that Atlanta had not produced the available evidence needed to quantify this particular loss.
For costs, the judgment leaves the interpretive question about UCPR r 42.34 open. The rule addresses costs in Supreme Court proceedings where the plaintiff’s judgment is less than $500,000 and the matter could have been commenced in the District Court [99]. The Court did not determine whether it covered this case, because the primary judge could refuse costs under the general discretion in r 42.1 [100]. The decision therefore does not settle the rule’s application to transferred proceedings.
At [80], the Court says a decision on leave to amend “is a matter of judicial discretion” even when the amendment is proposed by consent. In plain English, agreement between parties does not itself compel the court to approve a late change to the case.
At [81], the Court explains that procedural fairness is assessed as a matter of “practical justice” and asks whether further information could possibly have made a difference. This makes the inquiry concrete: a failure to hear a party is important, but the appellate court also asks whether the missed opportunity could have affected the outcome.
At [83], the Court expressly recognises that Atlanta was denied the opportunity to be heard about the requested consent orders. At [84], however, it concludes that the denial was not material because there was nothing more Atlanta could have said that could have changed the result. The distinction matters: identifying a procedural error is not the same as establishing a basis to overturn the decision.
At [87], the Court explains that the proposed pleading’s figures did not align. The new pleading claimed $134,962.91, the earlier table produced $123,325.18, and the expert evidence included $135,034.90. In plain English, a claim that changes amount and description, without a clear reconciliation, makes it difficult for a court and opponent to understand what is being claimed.
At [88], the Court says it would only have been appropriate to allow the amendment if entitlement were clear at that late stage. That does not mean a claimant must conclusively prove an amended claim before pleading it in every case. The passage is tied to the exceptional procedural stage here: the trial had ended, and determining entitlement would have required resolving difficult contractual questions.
At [92], the Court distinguishes a general contractor margin from evidence of profit on the specific contract. An industry norm can describe the market generally, but it does not by itself show the likely difference between this contract’s remaining price and Atlanta’s likely completion costs.
At [93], the Court identifies the missing kind of evidence: the expert could have estimated the actual likely costs of completing the work. The point is that uncertainty in damages does not justify speculation where available evidence could provide greater particularity.
At [100], the Court lists matters relevant to costs: the amount of the judgment, the proper forum, the claims lost, and disproportionate costs. It does not decide whether the special rule in r 42.34 applied, because the ordinary costs discretion was sufficient to resolve the appeal.
The amendment reasoning is most relevant where a party asks to change its case at or after trial, particularly where the proposed amendment introduces a new claim rather than merely clarifying an existing one. The judgment highlights circumstances that may weigh against late leave: proceedings have been on foot for a substantial period; the party has had legal representation throughout; the amendment arrives after the evidentiary hearing; it would require the opponent to incur further costs; and the proposed pleading contains inconsistent figures or characterisations [85]–[88].
The procedural-fairness discussion is relevant where a judge decides an application or request without giving a party the opportunity to address the intended result. The judgment distinguishes the existence of a denial from its materiality. The practical question is whether the party can identify information or submissions that might have affected the decision [81], [83]–[86].
The lost-profits reasoning is relevant where a claimant seeks profits said to have been lost after termination or breach of a fixed-price contract, and relies on general margins rather than project-specific costs. The judgment indicates that industry averages, historic business profitability, or a percentage used for pricing variations may not establish expected profit on the unperformed portion of a particular fixed-price contract [92]. Its reasoning is especially pertinent where evidence about the costs of completing the remaining work was available but not adduced [93].
The costs discussion is relevant where the successful party obtains a modest judgment in the Supreme Court, the matter could have been heard in a lower court, the successful party failed on substantial parts of its case, or legal costs are disproportionate to the amount recovered [95]–[100]. The judgment does not establish that any one factor is decisive. It confirms that the primary judge may weigh them in exercising the relevant discretion.
The supplied judgment contains no later judicial treatment of Atlanta Building Pty Ltd v Abela [2026] NSWCA 126. It is therefore not possible, from the provided material, to say whether later courts have followed, distinguished, applied, or questioned it.
The judgment itself identifies relevant authorities that it used. It applies the discretionary-review principles in House v The King [80], and cites Australian Health & Nutrition Association Ltd v Hive Marketing Group Pty Ltd, Nobarani v Mariconte, and Adam P Brown Male Fashions Pty Ltd v Philip Morris Inc on materiality and injustice [80]. It cites Clements for the proposition that an error for the purposes of House v The King can include a denial of procedural fairness, and relies on AAM17, Ex parte Lam, and Stead in explaining the practical-fairness inquiry [81]. For the evidentiary approach to lost profits, it applies Financialstrategy.com.au and Placer [93].
Those are the relationships stated in this judgment. They do not establish how subsequent courts have treated the present appeal decision.
The Court did not determine whether Atlanta would have been contractually entitled to some or all of the unpaid deposit if the claim had been properly pleaded. The contract’s treatment of the deposit on early termination was confused by the mistaken inclusion of the deposit as a stage, the parties’ subsequent agreement about payment and retention, and the fact that the architect’s retainer had ended [18], [88]. Because the amendment was refused, those contractual construction issues were unnecessary to resolve [89].
The judgment also does not determine whether the unpaid amount could have been recovered on a quantum meruit basis. The Court described the basis of that ground as obscure and noted the difficulty of relying on quantum meruit for work performed under a contract that specified payments for the work [78]. It disposed of the related ground because there was no pleaded claim, rather than deciding a broader rule about when a contractual claimant could recover on that basis [89].
The Court did not decide whether UCPR r 42.34 applies when proceedings begin in the District Court and are later transferred to the Supreme Court [100]. Nor does the judgment state what evidence, in another case, will always be sufficient to prove lost profits. It holds only that the evidence Atlanta relied on was insufficient in the circumstances and that evidence of actual likely completion costs was possible [92]–[93].
This is general legal information, not legal advice. Zoe can make mistakes. Before acting on, relying on, or using this analysis, have it checked by a qualified Australian lawyer.
Source: NSW Caselaw (www.caselaw.nsw.gov.au). Converted to plain text by ZoeLaw. Not the official version.
Medium Neutral Citation: Atlanta Building Pty Ltd v Abela [2026] NSWCA 126
Hearing dates: 10 June 2026
Date of orders: 6 July 2026
Decision date: 06 July 2026
Before: Leeming JA at [1]
Ball JA at [2]
Free JA at [104]
Decision: The appeal be dismissed with costs.
Catchwords: CIVIL PROCEDURE – amendment – where appellant sought leave at conclusion of trial to add a claim not previously pleaded – where request made on the day after trial for consent orders giving leave to amend – where request to make the consent orders was refused by primary judge without hearing further from the parties – where proposed amended pleading extremely late, internally inconsistent and without clear prospects of success – no material denial of procedural fairness
BUILDING AND CONSTRUCTION – appeal against refusal of appellant builder’s claim for lost profits following termination of fixed-price residential building contract – where appellant asserted it would have achieved a profit margin of 15% on the balance of the contract price – no evidence adduced of appellant’s actual likely costs of completing the works – claim not established
Legislation Cited: Civil Procedure Act 2005 (NSW), ss 56(1), 100, Pt 6 Div 1
Practice Note SC Gen 5
Uniform Civil Procedure Rules 2005 (NSW), rr 36.16(1); 36.16(3A); 42.1, 42.34
Cases Cited: Adam P Brown Male Fashions Pty Ltd v Philip Morris Inc (1981) 148 CLR 170; [1981] HCA 39
Atlanta Building Pty Ltd v Abela (No 3) [2025] NSWSC 730
Atlanta Building Pty Ltd v Abela (No 4) [2025] NSWSC 1277
Australian Health & Nutrition Association Ltd v Hive Marketing Group Pty Ltd (2019) 99 NSWLR 419; [2019] NSWCA 61
Clements v Independent Indigenous Advisory Committee [2003] FCAFC 143; (2003) 131 FCR 28
Financialstrategy.com.au Pty Ltd (in liq) v Bailey Roberts Group Pty Limited (in liq) [2026] NSWCA 74
House v The King (1936) 55 CLR 499; [1936] HCA 40
Minister for Immigration, Citizenship, Migrant Services and Multicultural Affairs v AAM17 (2021) 272 CLR 329; [2021] HCA 6
Nobarani v Mariconte (2018) 265 CLR 236; [2018] HCA 36
Placer (Granny Smith) Pty Ltd v Thiess Contractors Pty Ltd (2003) 77 ALJR 768; [2003] HCA 10
Re Minister for Immigration and Multicultural and Indigenous Affairs; Ex parte Lam (2003) 214 CLR 1; [2003] HCA 6
Stead v State Government Insurance Commission (1986) 161 CLR 141; [1986] HCA 54
Category: Principal judgment
Parties: Atlanta Building Pty Ltd (ACN 001 192 463) (Appellant)
David Abela (First Respondent)
Rebecca Amos (Second Respondent)
Representation: Counsel:
T Lynch SC with MJH Waters (Appellant)
G Donnellan with J Rogers (Second Respondent)
Solicitors:
Yates Beaggi Lawyers (Appellant)
No Appearance (First Respondent)
Mark O’Brien Legal (Second Respondent)
File Number(s): 2025/435671
Publication restriction: Nil
[This headnote is not to be read as part of the judgment]
In 2019, Mr David Abela and Ms Rebecca Amos, then a married couple, engaged Atlanta Building Pty Ltd (Atlanta) to construct a new dwelling on a property owned by them in Bangalow, NSW. They did so under a standard form Australian Building Industry Simple Works Contract (the Contract) for a fixed price of $2,699,258.10. The Contract provided for: (a) the payment of a deposit of 10% of the contract price; (b) the making of payment claims and payment of the contract price in stages in accordance with a Stage Payments Schedule; (c) an entitlement on the part of Mr Abela and Ms Amos to retain, as security for the performance of Atlanta’s obligations, up to 10% of each progress payment until the value held equated to 5% of the contract price, with such money to be held on trust for Atlanta; and (d) the deposit to be taken into account when Atlanta submitted its claim for payment once practical completion had been achieved. However, the Stage Payments Schedule erroneously included the deposit as the first stage of the works. The works were never completed, due to Mr Abela and Ms Amos’s separation and divorce. Only half of the deposit was paid by Mr Abela and Ms Amos. No cash retention was withheld. Atlanta terminated the Contract in August 2021 and commenced proceedings against Mr Abela and Ms Amos in the District Court of NSW, which were ultimately transferred to the Supreme Court. As Mr Abela entered bankruptcy, only the claim against Ms Amos remained for determination.
At trial, Atlanta claimed, among other things, damages of $171,106.66 for loss of profit on the balance of the contract price. Although it succeeded in relation to other aspects of its claim, the claim for lost profits was rejected by the primary judge, on the basis that Atlanta had not discharged its onus of proving its loss of profits claim.
At the conclusion of the trial, Atlanta sought leave to amend its pleading to claim $134,962.91 variously described as the balance of an unpaid deposit or an amount for unpaid contract works, which had not been claimed in previous versions of its pleading nor various iterations of its schedule of damages. On 2 July 2025, the day after the trial, Atlanta requested that orders be made with Ms Amos’s consent for the filing of an amended pleading. The primary judge refused that request. However, her Honour erroneously included in the judgment she gave in Atlanta’s favour an amount of $123,325.18, which related to the same head of loss as the $134,962.91. That error was corrected in a subsequent judgment. The primary judge also concluded that there would be no order as to the costs of the proceedings.
Atlanta appealed to this Court against (1) the primary judge’s refusal to allow the amendment to claim the $134,962.91 (although on appeal the appropriate amount was said to be $123,325.18), (2) her Honour’s rejection of the claim for lost profits, and (3) her Honour’s judgment in relation to costs.
The Court held (Ball JA, Leeming and Free JJA agreeing) dismissing the appeal:
As to Issue (1)
Minister for Immigration, Citizenship, Migrant Services and Multicultural Affairs v AAM17 (2021) 272 CLR 329; [2021] HCA 6; Stead v State Government Insurance Commission (1986) 161 CLR 141; [1986] HCA 54, cited.
As to Issue (2)
Financialstrategy.com.au Pty Ltd (in liq) v Bailey Roberts Group Pty Limited (in liq) [2026] NSWCA 74; Placer (Granny Smith) Pty Ltd v Thiess Contractors Pty Ltd (2003) 77 ALJR 768; [2003] HCA 10, applied.
As to Issue (3)
LEEMING JA: I agree with Ball JA.
BALL JA: By an amended notice of appeal filed on 1 June 2026, Atlanta Building Pty Ltd (Atlanta) appeals against orders made by Peden J on 9 July 2025 (see Atlanta Building Pty Ltd v Abela (No 3) [2025] NSWSC 730 (First Primary Judgment or PJ1)) as varied by orders made on 29 October 2025: see Atlanta Building Pty Ltd v Abela (No 4) [2025] NSWSC 1277 (Second Primary Judgment or PJ2). The combined effect of those orders relevantly was to reject Atlanta’s claim against Ms Rebecca Amos for two amounts said to be due to it following termination by Ms Amos of a residential building contract by which Atlanta agreed to construct a house on land owned by Ms Amos and her then husband, Mr David Abela, in Bangalow, NSW (the Property).
One of those two amounts was an amount of $134,962.91 (although other figures were advanced during the hearing) that was variously described as the balance of an unpaid deposit or an amount for unpaid contract works. Atlanta sought at the end of the hearing to include that amount in its claim, for the reasons given in PJ1[72]-[85]. The primary judge refused that application. Despite that conclusion, her Honour erroneously included in the judgment she gave in Atlanta’s favour an amount of $123,325.18, which related to the same head of loss as the $134,962.91. That error was corrected in the Second Primary Judgment.
The other claim rejected by the primary judge was a claim for $171,106.66 together with interest on that amount that was said to be recoverable as damages for lost profit on the contract. Her Honour rejected that claim for the reasons given in PJ1[19]-[27]. In the Second Primary Judgment, the primary judge also rejected Atlanta’s claim for costs and ordered that each party bear their own costs of the proceedings.
Atlanta appeals against the primary judge’s refusal to allow the amendment to claim the $134,962.91, although the amount is now said to be $123,325.18. It contends that the amendment should have been allowed and the claim should have succeeded. It also appeals against her Honour’s rejection of the claim for the second amount and her Honour’s judgment in relation to costs.
In response to Atlanta’s claim for the $123,325.18, Ms Amos has filed a notice of contention the effect of which is that the primary judge ought to have concluded that that amount was not payable under the contract. More will be said about the notice of contention later in this judgment.
On 24 November 2019, Mr Abela and Ms Amos signed a residential building contract (the Contract) with Atlanta for the construction of a new dwelling on the Property. The Contract was in the form of a standard form Australian Building Industry Simple Works Contract, with some special conditions that are of no present relevance. The Contract identified Mr Abela and Ms Amos as the “owner” and Atlanta as the “contractor”. It was for a fixed‑price of $2,699,258.10, although a number of variations were issued and paid. Following the approach adopted by the parties, the figures referred to throughout this judgment do not include amounts claimed and paid for variations.
The Contract provided that it would be administered by an architect, who would be Mr Abela and Ms Amos’s agent for giving instructions to Atlanta and agreeing to variations, and who would be responsible for acting as assessor, valuer or certifier. To that end, Mr Abela and Ms Amos engaged Mr John Bornas of Workroom Design Pty Ltd, but in April 2020 terminated his retainer and started to deal with Atlanta directly. This had the effect, as the primary judge observed, that the clauses in the Contract “requiring the architect to provide instructions and assess Atlanta’s claims could not operate on their terms”: PJ1[2].
The Contract provided for Mr Abela and Ms Amos to pay a deposit of 10% of the contract price (that is, $269,925.81). “Deposit” was defined in the Contract as “a part-payment towards the ***contract price inclusive of ***GST payable in accordance with clauses N16, N17 and item 30 of schedule 1”.
Clauses N16 and N17 provided:
N16 Payment of *deposit
.1 If the owner is required by item 30a of schedule 1 to provide a *deposit to the contractor, the owner must provide the *deposit within the period shown in item 10 of schedule 1 after the contractor has complied with clause C3 and section E (as applicable).
.2 If the owner is required by item 30a of schedule 1 to provide a *deposit to the contractor, the contractor must:
a only apply the *deposit towards the contractor’s *cost of building work and to no other purpose.
b not make any request, claim or demand on the owner to pay the *deposit unless and until the contractor has complied with clause C3 (if applicable according to clause C1.1b) and has obtained all insurances under Section E, as well as home warranty insurance (or equivalent).
.3 In calculating the *deposit amount stated in item 30b of schedule 1, the percentage (if applicable) of the *contract price must not be higher than the applicable maximum limit set out in the [Home Building Act 1989 (NSW)].
N17 Time for assessing *deposit
.1 The architect must assess the *deposit only after the time the contractor submits the claim immediately after *practical completion.
.2 When assessing that claim under clause N4, the architect must assess the *deposit by deducting from any amount owed by the owner to the contractor in this claim, the *deposit paid by the owner under clause N16.2. [emphasis in original]
The effect of those clauses was twofold. First, the deposit was to be paid within 14 days of Atlanta obtaining the insurances required by Section E of the Contract (that is, public liability and contract works insurance). Second, it was to be taken into account when Atlanta submitted its claim for payment once practical completion had been achieved, as a reduction of amounts owed by Mr Abela and Ms Amos to Atlanta.
By virtue of item 22 of schedule 1, the date for practical completion was “12 months from receipt of deposit payment”. Part of the deposit was paid on 10 December 2019. Consequently, according to Atlanta, practical completion was to be achieved by 10 December 2020.
The contract price was to be paid in stages in accordance with the procedure set out in cl N3, which relevantly provided:
N3 Stage payment claims - procedure for contractor
.1 The contractor may submit to the architect one claim for each stage shown in schedule 11, on or after the date the contractor claims that the stage has reached *stage completion. The claim is not a *tax invoice.
.2 For the purposes of this section N, *stage completion means that the *necessary work for the stage being claimed is, in the reasonable opinion of the architect, complete, except for:
a *defects or defective work and
b incomplete *necessary work of a minor nature
that will not compromise the performance of the *necessary work required for the next stage and which are capable of being rectified in the next or a subsequent stage. [emphasis in original]
| | Description of works comprising each stage of the *works | Claim amount for stage (incl. GST) | | 1. | Deposit | $269,925.81 | | 2. | Site establishment & excavation | $134,962.91 | | 3. | Concrete slabs – basement level | $134,962.91 | | 4. | Concrete slabs – ground level | $269,925.81 | | 5. | Timber framing – floor & wall framing | $202,444.36 | | 6. | Structural steel supply / install | $134,962.91 | | 7. | Timber framing – roof | $202,444.36 | | 8. | Window – supply / install | $202,444.36 | | 9. | Wall timber battens | $134,962.91 | | 10. | Roof timber battens | $202,444.36 | | 11. | Gyprocking | $134,962.91 | | 12. | Waterproofing / tiling | $202,444.36 | | 13. | Joinery | $202,444.36 | | 14. | Painting | $134,962.91 | | 15. | Practical completion | $134,962.91 | | | Total of all claims (incl. GST)* | $2,699,258.10 |
*Note: The total of all claims stated above must equal the *contract price in item 4 of schedule 1.
Clause N4 required the architect, on receipt of a claim under cl N3.1, to attend the site, inspect the works for that stage, assess whether the stage had reached stage completion, and issue to the contractor and the owner a certificate setting out any payment due to either party. If stage completion had been reached, the contractor was entitled to the dollar amount set out in Schedule 11 for that stage. If not, the architect could issue instructions for the contractor to complete the stage. Clause N4.4 provided that, when assessing a claim for a progress payment, the architect must take account of each of a number of factors, including adjustments to the cost of building work, variations completed during the stage, an allowance for cash retention, and “if applicable under clause N17, the amount of the ***deposit paid by the owner under clause N16.1”. Clause N5 provided that on receipt of a certificate from the architect, the party to be paid must deliver the certificate to the other party, and, if registered for GST, deliver a tax invoice equal in value to the certificate at the same time. A certificate or tax invoice once issued was to be paid within 14 calendar days. Although cl N15 dealt with the payment of interest on overdue amounts and provided that interest must be paid at the rate shown in Item 28 of Schedule 1, Item 28 provided that the interest rate was “N/A”.
It can be seen from the provisions of the Contract that in completing Schedule 11 the parties misunderstood how the standard form contract was intended to operate. The deposit was not a stage of the works. It should not have been included in the schedule and did not form part of the contract price for the works. Rather, it was intended to be an amount paid or payable on account of that work which would be credited against the work on completion. One consequence of including the payment of the deposit as a stage in the works is that it was unclear how the deposit was to be treated on early termination of the Contract. As will become apparent, the incorrect treatment of the deposit in the Contract became the source of a great deal of confusion in the conduct of Atlanta’s claim.
The Contract also included a framework for the contractor to give security if required by the owner, either by way of an unconditional bank guarantee or cash retention. Clause C2 provided:
C2 Security to owner by cash retention
.1 If the security provided by the contractor is cash retention, the owner may withhold up to 10% of each progress payment until the value held equates to the percentage shown in item 8 of schedule 1 of the *contract price.
.2 The owner must hold the cash retention, including interest earned on it, less any bank fees or charges on the account, as trustee for the contractor in a separate bank account.
.3 A legal or accounting practice’s trust account will not discharge the owner’s obligations under clause C2.2.
In Items 7 and 8 of Schedule 1, the parties indicated that security was required, and it would be given in the form of a cash retention of 5% of the contract price.
Subject to a right of the owner to draw on the security provided for in cll C4 and C5, half of the cash retention would be released on practical completion, and the other half would be released once the architect issued a final certificate for the works or a certificate where the Contract was terminated by the owner or contractor in accordance with Section Q: cl C6, C7.
The primary judge found that Ms Amos and Mr Abela paid only half of the deposit, that Ms Amos and Mr Abela did not retain any money as “retention money”, and that “the parties had agreed that Ms Amos and Mr Abela would not be required to pay the final 5% of the deposit in cash (being the same amount as the total possible retention money sum), if they did not keep any retention money and paid the whole of Atlanta’s invoices”: see PJ1[92]. There is no challenge to any of those findings on appeal.
Section Q of the Contract provided for termination of the contractor’s engagement by either the contractor or the owner. Clauses Q12 to Q14 conferred a right on the contractor by written notice to terminate its engagement after giving notice of suspension of the works, or, in the case of an insolvency in relation to the owner, immediately. Clause Q15 provided that, if the contract was terminated in those circumstances, the owner had to pay the contractor “the amount the owner would have had to pay if the owner had wrongfully repudiated the contract”, and that amount would be assessed by the architect after the making of a claim by the owner. The certificate issued by the architect in relation to that claim would take the place of a final certificate, which would engage the provisions relating to the release of the security.
| Contract Deposit - 10% | $269,925.81 | | Extra cost of home warranty insurance | $11,601.73 |
On 27 November 2019, by email time stamped 12:38pm, Atlanta issued to Rebecca and David the certificate of insurances for the Contract together with a tax invoice for the deposit. The tax invoice was for a sum of $269,925.81… Within the email I stated, in part: “For the Atlanta Building invoice I have included the 10% amount for the deposit even though you will only be paying 5% first up and the remaining 5% after the construction certificate” …
Atlanta commenced the works on 3 December 2019.
On 10 December 2019, Mr Abela and Ms Amos paid half of the deposit, along with part of the cost claimed in respect of home warranty insurance. As is apparent from emails from Mr Paton set out below, an amount of $6,564.63 in respect of that insurance remained outstanding. That amount was paid some months later.
On 11 December 2019, Atlanta issued a tax invoice for $121,466.62 (Progress Claim 1) in the following terms:
| Progress Payment No 1 - Site establishment & Excavation | $134,962.91 | | Retention Money | -$13,496.29 |
On 13 December 2019, the architect issued a stage payment certificate in respect of Progress Claim 1 for $121,466.62, being $134,962.91 less cash retention of $13,496.29. However, Atlanta accepts that Mr Abela and Ms Amos paid the full amount of the progress claim.
On 16 December 2019, Mr Paton emailed Ms Amos attaching the architect’s claim certificate, stating:
Please see attached the claim certificate approval from [the architect].
I have re-attached the invoices for you. Please note Invoice number 1200 has been amended to take into account the retention money as per contract.
This amount is to be deposited into the trust account.
Please note there is also a balance of $6,564.63 owing on the first deposit invoice. The remaining 5% is to be paid early next year as we agreed.
| Progress Payment No 2 – Lower Concrete Slabs | $134,962.91 |
On 19 February 2020, the architect issued a stage payment certificate in respect of “Stage 3 Concrete slabs – Basement level” for $121,466.62, evidently being $134,962.91 less cash retention of $13,496.29. The certificate stated that, as at that date, the total cost of certified building work was $269,925.81 and cash retention of $26,992.58 had been withheld. Even so, Atlanta accepts that no monies were retained. The architect did not certify any other progress claims. His engagement was terminated in April 2020.
On 27 March 2020, Mr Paton and Ms Amos had a conversation about the works, the terms of which were disputed. Mr Paton deposed that he pressed for payment of the balance of the deposit, while Ms Amos deposed that the deposit was not discussed because they had an agreement that Atlanta would proceed with a 5% deposit on the basis that no cash retention would be withheld. That evening, Ms Amos sent an email to Mr Paton in the following terms:
As discussed today, we are keen to get the outstanding $29k to you asap, acknowledging we’ve had a few delays from our side. We can make the following work:
- I can transfer $20k today
- The remaining $9k to be paid by the end of April
We will also work with our financial controller to put the 5% retention money into a bank guarantee (noting this will take a couple of months); and in the meantime will pay your invoices in full (rather than take out 10% of each invoice for retention)
After speaking with my accountant we have come to the following conclusions:
• Please pay $20k ASAP as noted last Friday the 27th of March. No funds received as of today.
• Please pay the $9k within 14 days as this is now 105 days overdue.
• Atlanta to receive full amounts of the progress payments paid by the bank as noted below.
• The retention amount is 5% of the contract sum which equates to $134,962.91. Bank guarantee to be made for this amount. Need a specific timeframe for this to be established and adhered to. Please advise.
• On practical completion 50% of the bank guarantee is to be paid as per contract conditions. The remaining amount paid on expiry of the contract defects period.
• The balance of invoice 1117 [that is, the Deposit Invoice] is $6,564.63 to be paid within 14 days. This is now 121 days overdue.
This is the best we can manage based on our advice from my accountant.
Could you please respond with approval or any queries you may have?
Looking forward to getting moving again on site
We request confirmation, in the form of a statement from the bank holding this cash, that the cash security is currently held in this manner and has been since the retention was withheld at the time of the deposit payment.
If the retention is not being held in this manner, we require this issue to be remedied immediately and the deposition of interest included in the remedy provided.
In the event that the withholding of the cash security has and continues to be non-compliant with the contractual obligation, we consider this letter to be issued as a notice of claim to adjust the Contract, as nominated by Condition H1.1(b) and require these actions to be remedied in accordance with the contractual obligations.
Atlanta did not receive a satisfactory response to that letter. Accordingly, on 20 August 2021, it terminated the Contract: see PJ1[4]. It issued a “final invoice” on 1 September 2021 (the Final Invoice) claiming payment of $212,411.72 made up of a number of items, including $134,962.91 in respect of “Retention money held to be returned (termination, as repudiation)”.
In December 2021, Atlanta commenced proceedings in the District Court of NSW seeking the $212,411.72 plus interest. The proceedings were transferred to the NSW Civil and Administrative Tribunal (NCAT), but after Mr Abela filed a cross claim seeking more than $1,000,000 in damages the proceedings were transferred to the Supreme Court: see PJ2[4].
On 9 May 2024, the Federal Circuit and Family Court of Australia (Division 1) made final orders in the divorce proceedings between Ms Amos and Mr Abela, which included that the Property be sold in its unfinished state under Ms Amos’s direction, and that the proceeds of sale be directed towards the discharge of the bank finance. The Court also ordered that Mr Abela indemnify Ms Amos for any liability she was found to have to Atlanta, although, as the primary judge pointed out, that indemnity is worthless because Mr Abela is now an undischarged bankrupt, with the result that only the claim against Ms Amos needed to be determined: PJ1[8]. The Property was sold in October 2024.
The conduct of Atlanta’s claim was not satisfactory. As the primary judge observed, the amount claimed by it at trial varied widely. But it was never very substantial, and certainly did not justify the excessive costs devoted to it (as to which, see paras [95]-[96] below).
In its Technology and Construction List Statement (List Statement), which was filed on 7 June 2023, Atlanta alleged that it had issued seven Payment Claims and had received payment in response to those claims as set out in the table at para 7.2 of the List Statement, which was in the following terms:
| Stage | Certified | Amount Paid | Claim Date | Paid Date | | 1 | $269,925.81 | $140,000.00 | 25/11/2019 | 10/12/19 | | 2 | $134,926.91 | $105,629.57 $20,000.00 $6,564.63 $9,333.34 | 11/12/2019 11/12/2019 25/11/2019 11/12/2019 | 14/1/2020 31/3/2020 1/4/2020 8/4/2020 | | 3 | $134,926.91 | $134,926.91 | 14/2/2020 | 28/2/2020 | | 4 | $269,925.81 | $269,925.81 | 6/8/2020 | 1/9/2020 | | 5 | $202,444.36 | $202,444.36 | 24/11/2020 | 29/12/2020 | | 6 | $134,926.91 | $134,926.91 | 2/9/2020 | 24/9/2020 | | 7 | $202,444.36 | $202,444.36 | 24/12/2020 | 1/4/2021 | | Total | $1,349,521.07 | $1,226,195.89 | | |
According to this table, the difference between the amount that Atlanta had invoiced (and was entitled to be paid) and the amount that it had received was $123,325.18. However, several aspects of the table are incorrect. The table suggests that the Deposit Invoice was the first payment claim and that $269,925.81 of the claim was “certified”. In fact, the Deposit Invoice was issued before works commenced. It was never “certified” by the architect, nor were the invoices issued in respect of Stages 4 to 7. Further, it is apparent from the Deposit Invoice and an email sent by Mr Paton to Ms Amos on 16 December 2019 that that invoice also included an amount of $11,601.73 for the extra cost of home warranty insurance. By paying $140,000.00, Ms Amos and Mr Abela paid part of that amount. As has already been mentioned, they paid the balance of $6,564.63 several months later. The result, however, is that they paid $134,962.90 in respect of the deposit, not $140,000 as the table suggests. Moreover, the amounts in respect of Stages 2, 3, and 6 differ from the figures in the Stage Payments Schedule and the invoices issued in respect of those Stages (the “2” and the “6” have been transposed).
Paragraph 15 of the List Statement particularised Atlanta’s loss and damage as comprising (1) interest on late payments made by Mr Abela and Ms Amos, (2) its invoiced delay costs relating to the two stoppages, together with the amount of its Final Invoice, and (3) loss of profits on the balance of the contract price. In the alternative to its claim in respect of the first two heads of damage, Atlanta sought to be paid a quantum meruit for the unpaid work that it had done “being those Works and Additional [sic] set out in the Progress Claims, Delay Progress Claims and [the Final Invoice] …”: List Statement paras 17-21. Although the List Statement pleaded that it was a term of the Contract that Mr Abela and Ms Amos would pay a deposit of $269,925.81 to be deducted from any amount owed to Atlanta immediately after practical completion, there was no claim for the unpaid balance of the Deposit Invoice.
In its opening written submissions filed on 27 June 2025, Atlanta’s claim was put as follows:
| (a) | Loss of profit | $171,106.66 | | (b) | Quantum meruit for work past PC 7 | $37,811.31 | | (c) | Margin of 15% on (b) above | $5,671.69 | | (d) | Quantum meruit for invoiced delay costs for stoppage number 1 | $6,223.66 | | (e) | Quantum meruit for invoiced delay costs for stoppage number 2 | $11,202.81 | | (f) | Quantum meruit for other delay costs not invoiced | $235,083.37 | | (g) | Quantum meruit for demobilisation after termination | $18,004.27 | | | Total | $485,103.77 |
Again, there was no reference to the claim for the unpaid balance of the Deposit Invoice.
| Loss of Profit | $171,106.66 | | Invoiced delay costs for stoppage 1 • 8 Aug 2020 – 20 October 2020 | $6,233.66 | | Invoiced delay costs for stoppage 2 • 8 Feb 2021 – 1 April 2021 | $11,202.81 | | Delay costs not invoiced • 8 Aug 2020 – 20 October 2020 | $61,797.84 | | Delay costs not invoiced • 8 Feb 2021 – 1 April 2021 | $108,671.71 | | Demobilisation costs | $18,004.27 |
The value of the quantum meruit claim was derived from a report dated 27 March 2024 that had been prepared by Mr David Madden, a quantity surveyor.
In his report, Mr Madden asserted that there was a shortfall of $135,034.89 between the “value of the contract works” Atlanta had completed in relation to “Stage 1 to Stage 7”, and the amount it had been paid in respect of those works. Mr Madden took the “value of the contract works” to be the amount of the deposit and the amount of the other invoices issued by Atlanta, which Mr Madden said was $1,349,629.05. (The correct total of those amounts is $1,349,629.07, but this discrepancy was not raised before the primary judge.) Mr Madden also set out the amount that Atlanta had received in respect of those invoices, which was said to total $1,201,594.16. On that basis, according to Mr Madden’s calculations, the amount that Atlanta had been underpaid in respect of the work it had done on a contractual basis (leaving aside the roofing work) was $135,034.89. Like the table in the List Statement, that calculation assumed that the deposit was the amount claimed and payable in respect of “Stage 1”. But unlike that table, Mr Madden’s calculation did not take into account the payments made by Ms Amos and Mr Abela in respect of the home warranty insurance which was also claimed in the Deposit Invoice.
In setting out the amounts paid under the Contract, Mr Madden expressed the view that “Based on my review and estimate of the costs of works, I opine that Stage 1 Payment of $269,925.81 together with Stage 2 payment of $134,962.91, actually forms part of the costs for site establishment/preliminaries and the substructure works and the related margin”.
The existence of an unpaid portion of the Deposit Invoice was referred to in various ways in Mr Klooster’s submissions to the primary judge, not all of which were clear or consistent. As Mr Lynch SC (who appeared for Atlanta at the hearing of the appeal) put it, “the point was somewhat appreciated but not articulated”.
Mr Klooster opened Atlanta’s case on the basis that “the deposit forms part of the construction works and is, in fact, a contribution to site establishment and excavation costs and Mr Madden's opinion supports that position”. However, also during opening submissions Mr Klooster said it was Atlanta’s case that an agreement had been reached for Ms Amos and Mr Abela to pay half of the deposit in cash and provide the other half of the deposit in the form of a bank guarantee, which would be retained by Atlanta and kept “as part of the contract price”. That was consistent with evidence given by Mr Paton during cross examination later that day.
On the second day of the hearing, during its closing submissions, Atlanta sought and was granted leave to amend its List Statement to include the amounts of un-invoiced delay costs, the demobilisation costs and the particularised amount of its loss of profit. Ms Amos only challenged the claim for loss of profits and the un-invoiced delay costs: see PJ1[16]. In closing submissions, counsel for Ms Amos submitted that because of the mechanisms in the Contract for the adjustment of the deposit at practical completion, the deposit paid by Ms Amos and Mr Abela of 5% of the contract price was not an “unconditional and irrecoverable payment” and ought to be set off against the damages payable by Ms Amos: see PJ1[17].
Can I start on the back foot, your Honour, and I need to frankly concede this is my fault and no-one else’s. If your Honour goes to MFI 3 [the report of Mr Madden] at p 226 - and this is not in the schedule of damages in any iteration that’s been provided to your Honour, but there is a claim pressed, your Honour will see, for contract works. There is an underpayment claim. There is a claim pressed of $135,034.90, and I apologise that has not been raised until now, but it forms part of the claim.
Mr Klooster referred to part of Mr Madden’s assessment of the value of the contract works performed by Atlanta, in which he asserted that there was a shortfall between the value of those works (that is, the total of the deposit and the other invoices issued by Atlanta) and the amount paid, in the sum of $135,034.89. This, in effect, related to the half of the deposit which Mr Abela and Ms Amos did not pay, and small shortfalls in the amounts paid in respect of Stages 3 and 6 predicated on the assumption, consistent with para 7.2 of the List Statement and the letter of instruction issued to Mr Madden, that the amounts paid in respect of each of those stages was $134,926.91, and not $134,962.91, the actual amount of each invoice.
The primary judge identified that the claim Mr Klooster sought to make was not pleaded. That led to the following exchange:
KLOOSTER: To the extent required, I seek leave to amend. My friend’s understood the case.
HER HONOUR: I haven’t understood the case.
KLOOSTER: It’s pressed, your Honour. It’s a claim that is made, and I said it’s an error that arises through my making.
HER HONOUR: In reply, at the end of the case, after you’ve amended, with two counsel briefed and a solicitor.
KLOOSTER: It’s not ideal, your Honour, I accept that. But it is an important amendment and it’s an important aspect of my client’s claim that’s been raised on evidence from the outset and pleaded. At least the material facts have been pleaded from the outset in para 7.2.
KLOOSTER: … But it doesn’t really make any difference even if it was claimed as the part payment of the deposit, it’s still monies that are owed to my client. Because under the contract, my client’s entitled for a full 10% deposit and 5% retention to be retained, may be retained by the owners or paid to my client. So, the total amount my client’s entitled to is 15%. What it received was 10%, it received a 5% cash deposit and 5% further payments of retention to satisfy the deposit of 10%. What is missing is the additional 5% which is claimed here…
HER HONOUR: But the additional 5% would be [retained for] the life of the contract.
KLOOSTER: It would be held until practical completion and then half of it’s released, and then the balanced half is released after the defects liability period expires. But it is my client’s money in the sense that unless it is used to satisfy or to pay for defects, it comes to my client at the end, and it’s always my client’s money. And there’s an express clause for the owners to hold it on trust for my client if they elect to do so under the retention provisions of the contract. So, there’s a 5% shortfall either way you cut it, your Honour, whether you treat it as the deposit or as the retention, my client’s been short-changed by 5%, and that’s the claim that Mr [Madden has] identified and which I have failed to identify for your Honour until now.
Mr Klooster, I’m not giving you leave. You can make an application. You can talk and see if it is consented to or not. If it’s not, then you’ll need to bring a motion with evidence explaining what has happened and why it ought to be allowed at this stage. That will unfortunately incur further costs for everybody, and I’m raising it now with the legal practitioners here that I have grave concerns about the proportionality of the legal costs incurred in this case for the quantum that is in dispute. When I give a judgment, which will be very soon, I’ll make directions about what is going to happen in relation to argument about costs and capping of costs in this matter. In the meantime, I would continue to encourage the parties to attempt to resolve this. I suspect it’s gone too far and the fight is now about costs.
1. Subject to these orders, leave be granted for [Atlanta] to file a further amended list statement (ALS) in the form provided to [Ms Amos’s] representatives on 1 July 2025 and the Schedule of Damages provided to [Ms Amos’s] representatives on 2 July 2025.
2. [Ms Amos] is granted leave to file submissions not exceeding 3 pages in length in relation to:
(a) the matters raised by way of the proposed amendments; and
(b) the contentions raised by [Atlanta] in closing submissions as to “provisional sums” and “prime costs sums”, with such submissions to be filed by 5 pm on 3 July 2025.
3. No adverse inference is to be drawn against [Ms Amos] based on any failure to cross examine either of [Atlanta’s] witnesses in relation to the subject of the amendments.
4. Costs in the cause. (emphasis in original)
The email concluded: “Please advise whether her Honour agrees to making the proposed orders”.
It is useful to set out the relevant parts of the Further Amended List Statement and Schedule of Damages in full. Paragraph 10.6 of the Further Amended List Statement was amended to read:
10.6 The Defendants failed to pay the Progress Claims for the Works and Additional Works referred to in paragraph 7 above within the time frame required under the Contract, or in full with respect to Stage 1 referred to in paragraph 7.2 above.
Particulars
(a) A summary of the late payments appears at Annexure R to the Affidavit of Cameron Paton sworn 22 August 2022.
(b) Further particulars may be provided as part of the evidence to be served in these proceedings. The Defendants paid $134,962.91 on 10 December 2019 in partial satisfaction of Stage 1.
(c) Affidavit of Rebecca Amos sworn 11 November 2024 at [92(b)]. (emphasis in original)
15.5 $134,962.91 being the shortfall payment for Stage 1 referred to in paragraph 10.6 above, or alternatively $134,962.91 owed as retention monies owed under the Contract for the reasons expressed in paragraph 4.3 of the Technology & Construction List Reply filed on 10 November 2023. (emphasis in original)
4.3 In response to paragraph 4(c):
(a) Says that the architect certified the retention amounts for each progress claim issued under the Contract and provided those certificate(s) to [Ms Amos].
(b) Relies on the terms of the Contract as if the complete terms were set out herein including clause C1 of the Contract which expressly states that [Ms Amos] may, but is not obliged to, withhold 10% of each progress payment until 5% of the contract price has been reached.
(c) Says that [Atlanta] is entitled to any retention monies under the Contract in any event as the Contract has been lawfully terminated and the defects liability period has expired.
(d) Otherwise does not admit the allegations.
Money owed as shortfall payment for Stage 1, or alternatively owed as retention monies owed for contract works completed and invoiced by [Atlanta] (to the extent the Defendants released and paid retention monies to [Atlanta] to satisfy the shortfall payment of Stage 1).
Atlanta succeeded on its claims for (1) the invoiced delay costs: PJ1[52]-[53]; (2) costs of works performed after Atlanta’s claim for Stage 7 (which the primary judge preferred to deal with on the basis of an implied contract rather than quantum meruit): PJ1[61]-[71]; and (3) demobilisation costs of $18,004.27: PJ1[74]. The primary judge found that the un-invoiced delay costs claimed by Atlanta were too remote and not recoverable: see PJ1[55]ff. There is no challenge to that conclusion.
The primary judge refused Atlanta’s claim for $171,106.66 for lost profits on the balance of the contract price. That amount had been calculated as “15% of the uncompleted and unpaid construction works under the [Contract]”. The 15% was derived from the opinion of Mr Madden and from evidence given by Mr Paton, who said that “Atlanta enjoys a profit of approximately 15% from turnover under each contract it completes”: PJ1[22]-[23]. The primary judge considered that Atlanta had not discharged its onus of proving its loss of profits claim, because it had not proved its actual likely costs of completing the works.
In relation to Atlanta’s request for leave to amend to introduce a claim for the unpaid portion of the deposit, her Honour said:
[78] Leave was not granted at the time, because no pleading had been prepared for Ms Amos to consider. Atlanta was directed that an application for leave to further amend would require a notice of motion with a supporting affidavit.
[79] Instead, after business hours on 2 July 2025, Atlanta’s counsel sent to Chambers an email asking the Court to make proposed consent orders, and attaching a proposed further amended list statement and yet another version of the “schedule of damages”.
[80] The proceedings have been on foot in this Court since June 2023 (and earlier in NCAT), and Atlanta has always briefed the same solicitors and counsel, including at times senior counsel. Atlanta ought to have had a clear understanding of its case by and during the trial. No explanation for the delayed proposed amendment was given on affidavit as directed.
[81] To allow the amendment would be to require Ms Amos to incur more costs meeting the claim and filing further submissions; it would be contrary to the “just, quick and cheap resolution” of the issues in these proceedings: s 56(1) Civil Procedure Act 2005 (NSW) (CPA).
[82] Further, I would not have granted leave to amend because the proposed 2 July 2025 amended pleading is internally inconsistent.
[83] Mr Klooster had identified paragraph 7.2 (in the previous pleading) as “the material facts on which the claim is based”. It pleads a table of invoices issued for various stages of works and amounts paid to demonstrate a shortfall.
[84] At the new paragraph 10.6 it is alleged that the defendants failed to pay the progress claims “in full with respect to Stage 1 referred to in paragraph 7.2 above”. It particularises an affidavit of Mr Paton dated 22 August 2022, which was not in evidence, and pre-dated the commencement of these proceedings. It also particularises that Ms Amos paid $134,962.91 towards the stage 1 amount of $269,925.81.
[85] However, that paragraph 10.6 is inconsistent with paragraph 7.2, which pleads that $140,000 (not $134,962.91) was paid towards the stage 1 amount. Therefore, the “shortfall” for Stage 1 based on paragraph 7.2 would be $129,925.81. However, the overall shortfall for all invoices in paragraph 7.2 is only $123,325.18, arrived at from the total pleaded invoiced amount of $1,349,521.07 less the $1,226,195.89 pleaded as having been paid.
[86] Confusingly, in submissions to support an “underpayment claim”, Atlanta relied on yet another amount of $135,034.90 found in Mr Madden’s evidence. Mr Klooster accepted: “It’s slightly different [to the deposit sum], correct, your Honour, but it is still the shortfall in the deposit which is really what the claim is. The 5% of the outstanding deposit”. How Mr Madden came to a different figure was not clearly explained in his evidence or in Mr Klooster’s submissions.
[87] Therefore, based on its previous pleadings filed with leave, evidence, and submissions, Atlanta claimed the following different amounts allegedly for the same shortfall:
(1) $134,962.91 found in the final payment claim dated 1 September 2021, for “retention money held to be returned (termination, as repudiation)”;
(2) $135,034.90 found in Mr Madden’s evidence; or
(3) $123,325.18 based on a mathematical calculation of the amounts pleaded as having been invoiced and paid in paragraph 7.2 of the list statement.
[94] Ms Amos admitted paragraph 7.2 of the [List Statement], save as to the Stage 1 payments, because she had relied upon the agreement of the parties that the second half of the deposit need not be paid, if no retention money was held. That agreement was complied with by the parties up to stage 7 and then the [Contract] was terminated.
[95] On termination of the [Contract], Atlanta was entitled to be placed in the position it expected to be in, had the [Contract] been performed. That would have entitled Atlanta to be paid the outstanding sums payable under the [Contract], including any unpaid deposit.
[96] Based on its pleaded paragraph 7.2, I consider Atlanta is entitled to $123,325.18.
[99] The claim for the offsetting of the deposit was not the subject of opening written submissions, but in oral closing submissions, counsel for Ms Amos stated:
…if there were competing claims … between the parties that required a payment to the owner, then the retention moneys and the deposits are used to balance the competing claims at the end of the day, as an offsetting mechanism.
[100] However, Ms Amos brought no “competing” or “offsetting claim”, in relation to which the “mechanism” might have work to do.
[101] A vague submission was also made that the [Contract] did not refer to any particular work, to which the deposit was to be put. It might be accepted that is so. However, the [Contract] makes plain that the deposit could only be applied “towards the contractor’s cost of building work and to no other purpose”: clause N16.2(a). There is no suggestion that Atlanta did not do that.
[102] I reject the submission that Ms Amos has any entitlement to a set off in relation to the deposit.
Finally, the primary judge refused to allow interest on the amount of $123,325.18 awarded to Atlanta, either as a matter of contract or under s 100 of the Civil Procedure Act 2005 (NSW) (CP Act). As far as the Contract was concerned, this was because the parties had indicated that the applicable interest rate for overdue payments was “N/A”, which indicated to the primary judge that the parties had deliberately chosen not to activate the interest clause in the Contract: PJ1[104]. The primary judge otherwise did not consider it appropriate to award interest under s 100 of the CP Act on that sum in circumstances where “Atlanta’s claimed sum was constantly shifting” and Atlanta “never issued an invoice for the outstanding amount of $123,325.18 payable under the [Contract] (rather than issuing an invoice for a different amount of ’retention money’)”: PJ1[108]. The primary judge allowed interest on the other amounts claimed by Atlanta, on which it had succeeded against Ms Amos: PJ1[109].
The effect of those conclusions was that Atlanta was entitled to judgment against Ms Amos for $196,577.23 plus some interest: PJ1[110]. The primary judge made orders which included that Ms Amos pay Atlanta $196,577.23. The primary judge also expressed concern about the disparity between the costs of the proceedings and the judgment sum and ordered the solicitors on record to provide affidavits in relation to their costs and the potential application of Supreme Court Practice Note SC Gen 5: PJ1[114] (relating to costs orders against legal practitioners).
On 16 July 2025, Ms Amos filed a notice of motion under rr 36.16(1) and 36.16(3A) of the Uniform Civil Procedure Rules 2005 (NSW) (UCPR) seeking that the orders made on 9 July 2025 be varied to require Ms Amos to pay $73,252.05, rather than $196,577.23. This motion and the issue of costs were dealt with in the Second Primary Judgment.
The primary judge accepted that she had misapprehended Atlanta’s claim as including the sum of $123,325.18, when that sum did not arise on the existing pleading. The primary judge said:
[22] In her application to have the [First Primary Judgment] varied, Ms Amos submitted that the Court misapprehended the nature of Atlanta’s claim awarding it the pleaded shortfall at paragraph 7.2, when that amount was not referrable to an underpayment of any staged works but was in fact the underpaid deposit.
[23] I accept that there was an error in including in the [First Primary Judgment] for Atlanta the amount of the paragraph 7.2 shortfall, which was not claimed at the hearing. A claim for the unpaid deposit was only raised during closing submissions and leave to bring that claim late was refused.
…
[26] I accept that the intention of the [First Primary Judgment], including refusal to allow a late amendment to add a claim for the unpaid deposit, was that Atlanta was held to its pleadings and was not entitled to any sum for an unpaid deposit. That error was not caused by Ms Amos, who was entitled to rely upon her denial of the “Stage 1 Payment Claim” and the Court’s refusal to allow Atlanta to bring any claim concerning the underpayment of the deposit, without taking any further step. I accept that the particular invoice in question never amounted to a “stage” of the building works.
[27] Therefore, I misapprehended Atlanta’s claim for the repayment of debt as including the sum of $123,325.18, when that sum related to a deposit invoice and not an invoice for works completed. This misapprehension meant that the orders did not accord with the intention of the [First Primary Judgment].
The primary judge indicated that the First Primary Judgment would be varied to reduce the judgment sum to $73,252.05: PJ2[28].
In relation to costs, the primary judge concluded that there would be no order as to costs, “primarily because Atlanta ought to have transferred the case to the District Court, as it was seeking damages for breach of contract of less than $500,000”: PJ2[3].
By Ground 1 and 2, Atlanta challenges the primary judge’s refusal of leave for Atlanta to amend, including because of a denial of procedural fairness. Ground 3 deals with the primary judge’s characterisation of the amount of $123,325.18 in the First Primary Judgment. Ground 4 deals with the failure of Atlanta’s claim for loss of profits. Ground 5 is concerned with the refusal of interest on Atlanta’s claim for “unpaid contract works in the sum of $123,325.18” and its alleged lost profits. Ground 7 challenges the exercise of the primary judge’s discretion as to costs.
Ground 6 in the amended notice of appeal relates to an alleged failure by the primary judge to deal with a claim by Atlanta for the $123,325.18 on a quantum meruit basis. This ground was abandoned in Atlanta’s written submissions filed on 2 June 2026 but was sought to be reinstated during the hearing of the appeal. It will be necessary to say more about it later in this judgment.
In the event it succeeds, Atlanta seeks orders for judgment in its favour of $367,683.89 with interest from 7 June 2023, an order for its costs of the proceedings below on the ordinary basis, and its costs of the appeal.
Grounds 1, 2, 3 and 6 and the notice of contention may be taken together. In essence, what is alleged in grounds 1 and 2 is that the primary judge erred in failing to allow the amendment because (1) the amendment was by consent, (2) contrary to what was said in the First Primary Judgment, the primary judge had not said at the hearing that if Atlanta wished to pursue its application for leave to make the amendment it had to file an affidavit in support of the amendment; (3) contrary to the conclusions of the primary judge, the proposed amendment was not internally inconsistent; and (4) the primary judge failed to accord Atlanta procedural fairness because she did not give it an opportunity to be heard on the proposed amendment. Ground 3 alleges that the primary judge erred in failing to find that Atlanta had a contractual right to recover the unpaid balance of the Deposit Invoice. Ground 6 (abandoned and then pursued) claims the same sum on a quantum meruit basis. Ground 3 largely depends on a finding that the primary judge ought to have permitted the amendment, although there is a suggestion in some of Atlanta’s submissions that the pleading in the existing List Statement of a shortfall in the amount that had been invoiced and the amount that had been paid was a sufficient pleading of that claim. The basis of ground 6 remains obscure. Why Atlanta would be entitled to recover on a quantum meruit basis for work done under a contract that provided specific payments for that work is unclear. Ultimately, Atlanta’s point seemed to be that the evidence of Mr Madden of the “value of the contract works” supported the contract price, even though the contract price included an amount of $269,925.81 payable as a deposit rather than for work done. Mr Madden himself sought to overcome that problem by expressing the opinion that that the deposit related to site establishment and excavation costs. But that opinion was plainly inadmissible, as the primary judge recognised when she indicated that she would read the opinion only as a submission following an objection by junior counsel for Ms Amos.
By her notice of contention, Ms Amos contends that, on the correct construction of the Contract, Atlanta only became entitled unconditionally to the deposit on completion of the Contract and in accordance with the adjustment mechanism in Section N of the Contract. None of that occurred. Consequently, she contends that the primary judge ought to have found that the unpaid deposit was not recoverable.
A decision whether to grant leave for a party to amend a claim at or after a hearing is a matter of judicial discretion, to be exercised in accordance with the guiding principles set out in Pt 6, Div 1 of the CP Act. That is so even where the amendment is proposed to be made by consent. It is a quintessentially discretionary decision to which the principles of restraint in House v The King (1936) 55 CLR 499; [1936] HCA 40 (House v The King) apply. Atlanta must show not only that the primary judge erred — whether by making an error of principle or fact, taking into account some irrelevant consideration, failing to take into account some material consideration, or by arriving at a result so unreasonable or unjust as to suggest that one of the foregoing categories of error occurred — but also that any error was material. That is because ordinarily only errors which are material in the sense that they deprive the party of the possibility of a successful outcome will warrant appellate intervention: see (2019) 99 NSWLR 419; [2019] NSWCA 61 at [3], citing (2018) 265 CLR 236 at [37]-[38]; [2018] HCA 36. Moreover, as a decision on a matter of practice and procedure, the question of injustice flowing from the order appealed from will generally be a relevant and necessary consideration: (1981) 148 CLR 170 at 177; [1981] HCA 39.
Ground 4 contends that the primary judge erred in finding that Atlanta failed to discharge its onus of proving its claim for lost profits.
The primary judge’s approach to the claim for lost profits is set out at PJ1[23]-[27] as follows:
[23] Further, Mr Paton gave evidence that “Atlanta enjoys a profit of approximately 15% from turnover under each contract it completes”. In relation to this particular contract, his evidence was that the “amount of profit lost by Atlanta is calculated based upon the actual cost of Atlanta completing the Works which is estimated to be 15% of the Contract value”. However, he did not explain what the “actual cost” to Atlanta was, either at the time of formation or the time of breach. Nor did Mr Madden consider the actual market costs of the unperformed works at the time of breach in 2021, in circumstances where the contract price was agreed in August 2019, based on prices Mr Paton had obtained before then.
[24] Ms Amos submitted that it was not possible to calculate Atlanta’s lost profits, because there was no evidence of the actual market prices of materials at the time of breach in 2021, when the construction industry was facing significant cost increases because of supply issues caused by the COVID-19 pandemic. Mr Madden considered that during 2021 and 2022 costs increased, sometimes by 15%.
[25] Atlanta submitted that it ought not be concluded that there was any real impact on likely profit by reason of COVID-19 or otherwise, because:
(1) Practical completion was due by August 2021, and COVID-19 price increases had not really been experienced by then;
(2) Under the contract, Atlanta was entitled to pass on to Ms Amos any increase in prime cost sums (such as garage door, tiles, lights, timbers), and provisional sums (such as electrical, gyprock, painting, joinery supply and installation): schedules 6 and 7 and clause N1. Most of the incomplete contracted construction work concerned specified prime and provisional costs and therefore if market prices did increase, then those increases would have been passed onto Ms Amos as part of the contract and would not have affected the profit.
[26] Even if it is assumed that Atlanta would have been contractually entitled to pass increased costs of “most” of the uncompleted work elements onto Ms Amos, it would have been a simple matter for Atlanta to prove its “actual (likely) cost” of completing the works. In determining the contract price, Mr Paton had obtained quotes for the various components and must have factored in the cost to Atlanta of its own workers and overheads. Further, Mr Madden could have been asked to opine on the likely cost of the works to Atlanta, and the impact on price changes, including with regard to the contract mechanisms to pass on increases to prime and provisional costs. For example, Mr Madden could have identified which components of the work would have been affected by price increases in 2021 and borne by Atlanta. Mr Paton accepted that there was no certainty that Atlanta would make the profit envisaged.
[27] Atlanta has failed to discharge its onus of proving with certainty its loss of profits claim, where such certainty was possible. It is not appropriate for the Court to speculate on the quantum of Atlanta’s lost profits. In those circumstances, I am not satisfied that Atlanta has proved it has suffered any compensable loss by way of loss of profits.
The conclusion of the primary judge was correct. Mr Paton’s bald statement that “Atlanta enjoys a profit of approximately 15% from turnover under each contract it completes” was not admissible evidence of the profit that Atlanta would have earned on the balance of the contract in question. Mr Paton’s evidence that “the amount of profit lost by Atlanta is calculated based upon the actual cost of Atlanta completing the Works which is estimated to be 15% of the Contract value” had, in fact, been rejected. The only evidence in support of a profit margin of 15% was given by Mr Madden. However, Mr Madden did not derive that figure by estimating the cost of completing the work and comparing it with the contract price. Rather, as the primary judge observed, the figure of 15% was taken as the midpoint of the “usual contractor margin in the industry, which was between 10 and 20%”, and which Mr Madden thought was supported by the fact that the Contract provided for a margin of 15% in calculating the costs of variations under the Contract: see PJ1[22]. But again, the margin achieved or applied across the industry was not evidence of the profit that Atlanta was likely to earn on a specific fixed-price contract. And the fact that the parties agreed to a margin of 15% for variations that would be priced on a cost-plus basis was not a sound reason for concluding that that was the profit that Atlanta would be likely to earn on the fixed-price component of the Contract.
It was open for Mr Madden to give evidence of the actual likely costs of completing the work. As the primary judge correctly observed, this was a case where a party has fallen short in adducing evidence of a kind that permits certainty and particularity, where such certainty was possible: see Financialstrategy.com.au Pty Ltd (in liq) v Bailey Roberts Group Pty Limited (in liq) [2026] NSWCA 74 at [119], citing Placer (Granny Smith) Pty Ltd v Thiess Contractors Pty Ltd (2003) 77 ALJR 768; [2003] HCA 10 at [38]. Ground 4 should be rejected.
[3] I have decided there will be no order as to costs, primarily because Atlanta ought to have transferred the case to the District Court, as it was seeking damages for breach of contract of less than $500,000: see Uniform Civil Procedure Rules 2005 (NSW) r 42.34 (UCPR).
[4] The matter came to this Court as follows. Atlanta had commenced the proceedings in the District Court seeking $212,411.72 plus interest. Then the proceedings were transferred to NCAT. When Mr Abela filed his cross-claim seeking more than $1,000,000 in damages against Atlanta the whole proceedings were transferred to this Court. That cross-claim was dismissed in February 2025. Atlanta’s counsel, Mr Klooster, accepted that from that time it was “open to … seek to have the matter transferred back to the District Court.” It is the case that, at all times, Atlanta’s claim ought to have been, and was, commenced in the District Court and there was no reason for its claim to be heard in this Court.
[5] Mr Klooster raised two reasons he considered it appropriate for Atlanta to continue the matter in this Court and this List, both of which I reject.
[6] His first submission was that the list judge, Stevenson J, condoned the matter remaining in the Technology & Construction List because his Honour was “well appraised of the issues raised by the parties”, because Mr Abela had the default judgment against him set aside. However, Mr Klooster did not suggest that at any time Atlanta informed any judge of the quantum of its claim. Ms Amos was unrepresented at the directions hearing when the matter was allocated hearing dates and opposed such an order. I consider it was incumbent on Atlanta’s legal representatives to assist the Court in allocating the matter to an appropriate forum; it is not for busy list judges to interrogate whether a transfer is necessary because of the low quantum of the claim. Atlanta’s case ought to have been heard in the District Court.
[7] I also reject Mr Klooster’s submission that it was “just, quick and cheap” for Atlanta to take advantage of what he said was the efficiency of the List, because the District Court could not provide a hearing date as quickly. No evidence was provided for that submission, and I reject it.
[8] I consider that UCPR 42.34 applies here, and Atlanta is not entitled to its costs. Atlanta obtained a judgment well below the $500,000 threshold identified in that rule, apparently knowing it remained in the inappropriate forum, contrary to the rule.
[9] In the alternative, I consider there ought to be no order as to costs because Atlanta failed on most of its claim, and Atlanta’s choice to spend a large sum on legal costs does not mean those costs must be funded by Ms Amos: see eg CJD Equipment v A&C Constructions [2010] NSWSC 502 at [10] (McDougall J). It would be unjust to Ms Amos to award Atlanta any costs where it ran its case with no clarity as to the amount it claimed.
Later in the Second Primary Judgment the primary judge pointed out that “Atlanta’s legal costs from commencement to the costs hearing are close to $1,300,000”: PJ2[33].
The first aspect of Ground 7 (paras 7.1 and 7.2) in effect contends that the primary judge ought to have found that Stevenson J was appraised of the issues raised by the parties, including the quantum of Atlanta’s claim against Ms Amos, on 21 February 2025 when his Honour set the claim down for hearing. This aspect of the ground goes nowhere. The fact that Stevenson J was involved in entering and later setting aside a default judgment against Mr Abela in the amount of $830,154.04 says nothing of his Honour’s knowledge of the value of the claim against Ms Amos, still less that his Honour formed the view that it was appropriate for that claim to continue in the Supreme Court rather than the District Court.
In any event, what Stevenson J knew or did not know about the details of Atlanta’s claim is of little relevance to the exercise of the costs discretion by the primary judge.
UCPR r 42.34 provides:
42.34 Costs order not to be made in proceedings in Supreme Court unless Court satisfied proceedings in appropriate court
(1) This rule applies if—
(a) in proceedings in the Supreme Court, other than defamation proceedings, a plaintiff has obtained a judgment against the defendant or, if more than one defendant, against all the defendants, in an amount of less than $500,000, and
(b) the plaintiff would, apart from this rule, be entitled to an order for costs against the defendant or defendants.
(2) If the proceedings could have been commenced in the District Court, an order for costs must not be made unless the Supreme Court is satisfied that the commencement and continuation of the proceedings in the Supreme Court was warranted.
It is not entirely clear whether this rule applies where proceedings were transferred from the District Court to the Supreme Court. On its face, the rule only seems to apply where proceedings that could have been commenced in the District Court were commenced in the Supreme Court. However, it is not necessary to resolve that issue in this case. Plainly, the primary judge had a discretion either to award costs under UCPR r 42.34 if that rule applies or to refuse to award costs under UCPR r 42.1 if r 42.34 does not apply. In exercising that discretion in either case, the primary judge was entitled to take into account the amount of the judgment, the fact that the proceedings could have been transferred to the District Court and the appropriateness of doing so in the circumstances of the case, the number of issues on which Atlanta failed and the disproportionate costs it incurred in the proceedings. Taking those matters into account, no error has been shown in the conclusion reached by the primary judge.
Ground 7 must, therefore, be rejected.
It follows that the amended notice of appeal must be dismissed. There is no reason why costs ought not follow the event.
For those reasons, the appeal should be dismissed with costs.
FREE JA: I agree with Ball JA.
**********
Atlanta Building Pty Ltd
Abela
[2026] NSWCA 74
[1936] HCA 40
[2003] HCA 10
[2003] HCA 6
(1981) 148 CLR 170
(2019) 99 NSWLR 419
(2003) 131 FCR 28
(1936) 55 CLR 499
(2021) 272 CLR 329
(2018) 265 CLR 236
(2003) 77 ALJR 768
(2003) 214 CLR 1
(1986) 161 CLR 141
The amended notice of appeal was dismissed with costs.
For the reasons that follow, the appeal must be dismissed.
In his closing submissions in reply, Mr Klooster, sought leave to amend Atlanta’s List Statement again to include for the first time an underpayment claim. He gave this explanation:
An error of law for the purposes of House v The King can include a denial of procedural fairness: Clements v Independent Indigenous Advisory Committee [2003] FCAFC 143; (2003) 131 FCR 28 at [8]. Atlanta was entitled to procedural fairness in relation to the orders sought on 2 July 2025. That was despite the trial having concluded, as the request for the consent orders to be made was a matter requiring the primary judge’s consideration: see Minister for Immigration, Citizenship, Migrant Services and Multicultural Affairs v AAM17 (2021) 272 CLR 329 at [22] (note 38); [2021] HCA 6. The question of the content of the primary judge’s obligation to afford Atlanta procedural fairness is one of practical justice: see Re Minister for Immigration and Multicultural and Indigenous Affairs; Ex parte Lam (2003) 214 CLR 1; [2003] HCA 6 at [37]. Much like the question of materiality when assessing an error for the purposes of House v The King, any denial of procedural fairness must have the effect of working some practical injustice. In a case where the alleged denial of procedural fairness affects the ability of a party to make submissions, the existence of practical injustice may be identified by asking the question posed by the High Court in Stead v State Government Insurance Commission (1986) 161 CLR 141 at 145; [1986] HCA 54: would further information possibly have made any difference?
So far as the primary judge refused to make the consent orders on the basis that Atlanta had been directed to file a notice of motion and supporting affidavit seeking leave to amend, the primary judge was in error. No such direction had been made. The primary judge had instead invited Mr Klooster to discuss the amendment with his opponent and had said that, if the amendment was not consented to, Atlanta should “bring a motion with evidence explaining what has happened and why it ought to be allowed at this stage”.
So far as the primary judge did not inform the parties of her intention to refuse to make the consent orders, Atlanta was denied the opportunity to be heard in relation to why the orders should be made, and to that extent was denied procedural fairness.
These conclusions raise the question whether the errors were material. In my opinion, they were not, because there was nothing that Atlanta could have said in relation to the amendment beyond what Mr Klooster had said at the conclusion of the hearing that could have affected the outcome.
The primary judge gave two broad reasons for refusing the amendment. The first was that it would have been contrary to the “just, quick and cheap resolution” of the issues of the proceedings to allow the amendment because it would have involved Ms Amos incurring more costs meeting the claim and filing further submissions in circumstances where the proceedings “have been on foot in this Court since June 2023 (and earlier in NCAT)” and where Atlanta had been represented throughout that time by the same lawyers and “ought to have had a clear understanding of its case by and during the trial”: PJ1[80], [81]. Second, her Honour said that she would have refused leave in any event because “the … amended pleading is internally inconsistent”: PJ1[82].
In relation to the first reason, Mr Klooster did make submissions about the proposed amendment before the primary judge, and gave an explanation for its lateness. On appeal, Mr Lynch did not suggest that there were other factual matters that could have been put before the primary judge, or that any further submissions could have been made beyond those put by Mr Klooster. The extreme lateness of the amendment together with the other matters referred to by the primary judge themselves provided a sufficient basis for refusing the amendment.
In relation to the second reason, the primary judge was correct to conclude that the Further Amended List Statement was internally inconsistent, and there was nothing that Atlanta could have said to change that. The Further Amended List Statement sought $134,962.91 as an amount due under the Contract. That amount, which is half of the deposit or 5% of the contract price, was plainly inconsistent with the “shortfall” of $123,325.18 that can be calculated from the table set out in para 7.2 of the List Statement, and which Atlanta seeks on appeal. As has been explained above, the figure derived from the table contains errors. But none of them would have been apparent to the primary judge, and it is doubtful that Atlanta could have given any satisfactory explanation of the discrepancy, when none was clearly proffered on appeal and where the explanation only emerges from a laborious analysis of the evidence.
In addition to those matters, given the stage the proceedings had reached, it would only have been appropriate to allow the amendment if it was clear that Atlanta was entitled to succeed on the amended claim. However, the position was far from clear. Whether Atlanta was entitled to succeed on the claim depended on difficult questions of construction concerning the relationship between cl N3 and Schedule 11 and the provisions of the Contract relating to the deposit and retention amounts as varied by the parties’ subsequent agreement and in a context where the retainer of the architect had been terminated. Absent the amendment, it was unnecessary for the primary judge to address those issues. On appeal, Atlanta made no real attempt to explain how the Contract worked in those circumstances in a way that meant that it was entitled to the whole of the deposit, notwithstanding that the Contract was terminated early. Mr Madden’s assessment of what was reasonable did not provide a proper basis for the award of what could only have been a contractual entitlement.
For those reasons, the primary judge was correct to refuse the amendment. Grounds 1 and 2 are not made out. Absent the amendment, there was no pleaded claim for the $123,325.18. Certainly, the table pleaded in para 7.2 did not meet that description. Nor did the inclusion of the amount of the Final Invoice in Atlanta’s pleaded quantum meruit claim, where that invoice had sought payment of $134,962.91 in respect of “retention money”. And absent a pleaded claim there was no basis on which the primary judge could have awarded the $123,325.18. That conclusion is sufficient to dispose of grounds 3 and 6 (and the question whether ground 6 should be reinstated) and makes it unnecessary to consider the notice of contention further.