PROCEDURE – CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS –
COURT SUPERVISION – AMENDMENT – ORIGINATING
PROCESS, PLEADINGS ETC
– where the applicant and second respondent are the bodies corporate of
Source
Original judgment source is linked above.
Catchwords
PROCEDURE – CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS –COURT SUPERVISION – AMENDMENT – ORIGINATINGPROCESS, PLEADINGS ETC– where the applicant and second respondent are the bodies corporate ofneighbouring properties –where the applicant claims damages in negligenceand nuisance based on water and contaminated material allegedly leaking from thesecond respondent’s property into the applicant’s property –where the trial is listed to commence within two weeks– where theapplicant applies for leave to amend its statement of claim to relevantlyinclude allegations that the claimedloss occurred because the second respondentpermitted kitchen waste to be washed into a stormwater pit on its property, thatthestormwater system and the grease trap on the second respondent’sproperty did not comply with relevant standards and regulations,and that suchnon-compliance was a breach of a duty of care or created a nuisance –
where the respondent submitted that the
applicant had not adequately explained
the reason for the belated amendments, that the amendments were futile since the
new claims
had no prospect of success, and that certain material facts had not
been pleaded – whether leave should be granted for the
applicant to amend
their statement of claim – what costs orders should follow if leave is
granted
China v Smith (No 4) (2014) 99 ACSR 105
[2014] WASC 140,
cited
Corporation of the Franciscan Sisters of the Heart of Jesus (Qld) v
FERM Engineering Pty Ltd [2022] QSC 102, applied
Ghougassian v Fairfax
Community Newspapers Pty Ltd [2015] NSWCA 307, cited
Hartnett v Hynes
[2009] QSC 225, applied
Lee v Abedian [2017] 1 Qd R 549
[2016]
QSC 92, cited
Monto Coal 2 Pty Ltd v Sanrus Pty Ltd [2014] QCA
267, cited
Peden Pty Ltd v Bortoloazzo [2006] 2 Qd R 574
[2006] QCA
350, discussed
Yao v Fang [2025] QCA
86, cited
Uniform Civil Procedure Rules 1999 (Qld) r 386, r
470
Judgment (61 paragraphs)
[1]
PROCEDURE - CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS - COURT SUPERVISION - AMENDMENT - ORIGINATING PROCESS, PLEADINGS ETC - where the applicant and second respondent are the bodies corporate of neighbouring properties - where the applicant claims damages in negligence and nuisance based on water and contaminated material allegedly leaking from the second respondent's property into the applicant's property - where the trial is listed to commence within two weeks - where the applicant applies for leave to amend its statement of claim to relevantly include allegations that the claimed loss occurred because the second respondent permitted kitchen waste to be washed into a stormwater pit on its property, that the stormwater system and the grease trap on the second respondent's property did not comply with relevant standards and regulations, and that such non-compliance was a breach of a duty of care or created a nuisance - where the respondent submitted that the applicant had not adequately explained the reason for the belated amendments, that the amendments were futile since the new claims had no prospect of success, and that certain material facts had not been pleaded - whether leave should be granted for the applicant to amend their statement of claim - what costs orders should follow if leave is granted
[1] The applicant is the body corporate for a community title scheme situated at 19 Orchid Avenue, Surfers Paradise. The second respondent is the body corporate for a neighbouring community title scheme situated at 17 Orchid Avenue.
[2] The buildings share a retaining wall which is located on the common boundary between the two properties. In this proceeding, the applicant alleges that water and contaminated material has leaked, and continues to leak, through the retaining wall from 17 Orchid Avenue to 19 Orchid Avenue causing physical damage.[1] It claims damages for negligence or, alternatively, for nuisance. It also seeks relief in the form of mandatory injunctions which would compel the second respondent to take steps to address the issues which, on the applicant's case, have caused or contributed to the water and contaminated material leaking into 19 Orchid Avenue.
[12]
[3] The applicant now applies for leave to amend its statement of claim. It requires leave under r 470 of the Uniform Civil Procedure Rules1999 (Qld) (UCPR) to do so, because the proceeding has been set down for trial for four days commencing on 20 October 2025. The order setting the proceeding down for trial was made on 9 July 2025.
[4] On 26 September 2025, the applicant's solicitors gave notice to the second respondent's solicitors that the applicant intended to make further amendments to its statement of claim. The application for leave to amend and supporting material, including the proposed second further amended statement of claim (2FASOC), was filed on 7 October 2025. The application also sought referral to mediation. At the conclusion of the hearing of the application, I made orders referring the matter to mediation. This judgment deals with the remaining matters, namely the application for leave to amend and costs.
[13]
[5] The principles which apply to the exercise of the discretion to grant leave to amend were not in dispute. Those principles were summarised by Applegarth J in Hartnett v Hynes,[2] as follows:
[14]
"1. An application for leave to amend a pleading should not be approached on the basis that a party is entitled to raise an arguable claim, subject to payment of costs by way of compensation.
[15]
The discretion is guided by the purpose of the rules of civil procedure, namely the just and expeditious resolution of the real issues in dispute at a minimum of expense.
There is a distinction between amendments which are necessary for the just and expeditious resolution of 'the real issues in civil proceedings' and amendments which raise new claims and new issues.
The Court should not be seen to accede to applications made without adequate explanation or justification.
The existence of an explanation for the amendment is relevant to the Court's discretion, and '[i]nvariably the exercise of that discretion will require an explanation to be given where there is a delay in applying for amendment'.
The objective of the Court is to do justice according to law, and, subject to the need to sanction a party for breach of its undertaking to the Court and to the other parties to proceed in an expeditious way, a party is not to be punished for delay in applying for amendment.
Parties should have a proper opportunity to plead their case, but justice does not permit them to raise any arguable case at any point in the proceedings upon payment of costs.
The fact that the amendment will involve the waste of some costs and some degree of delay is not a sufficient reason to refuse leave to amend.
Justice requires consideration of the prejudice caused to other parties, other litigants and the Court if the amendment is allowed. This includes the strain the litigation imposes on litigants and witnesses.
The point the litigation has reached relative to a trial when the application to amend is made is relevant, particularly where, if allowed, the amendment will lead to a trial being adjourned, with adverse consequences on other litigants awaiting trial and the waste of public resources.
Even when an amendment does not lead to the adjournment of a trial or the vacation of fixed trial dates, a party that has had sufficient opportunity to plead their case may be denied leave to amend for the sake of doing justice to the other parties and to achieve the objective of the just and expeditious resolution of the real issues in dispute at a minimum of expense.
The applicant must satisfy the specific requirements of rules, such as UCPR 376(4) where it seeks to introduce a new cause of action after the expiry of a relevant limitation period."
[16]
[6] That summary was approved in Monto Coal 2 Pty Ltd v Sanrus Pty Ltd,[3] however it was described as a guide because the application of the principles will vary from case to case, with each case depending on its own circumstances.
[17]
[7] The amendments which the applicant proposes to make fall into three categories.[4]
[8] First, the applicant proposes to make amendments to the quantum of damages it claims. The proposed amendments comprise:
[18]
(a) the deletion of paragraphs 7 and 12(a) from the 2FASOC to remove a claim for damages of $575,575 for the cost of waterproofing the retaining wall between the two buildings;
(b) otherwise, adjusting the quantum claimed for damages for costs incurred by reason of the second respondent's alleged breach of duty and (or alternatively) nuisance as pleaded in paragraph 12(b), 12(d) and 12(e) of the 2FASOC.
[19]
[9] The second respondent does not oppose the grant of leave to the applicant to make these amendments. It will be necessary to return to these amendments, however, when considering the question of costs.
[10] Secondly, the applicant proposes to amend paragraphs 3(b) and 3(c) of the 2FASOC to plead that the leaking of water and contaminated material into 19 Orchid Avenue arose because the second respondent has allowed kitchen waste including fat and grease to be washed into the stormwater gully pit on 17 Orchid Avenue (Kitchen Waste Allegations), together with consequential amendments to paragraphs 4, 6, 8 and 10(d) of the 2FASOC to cross-refer to those allegations. Based on the Kitchen Waste Allegations, the applicant seeks to amend the mandatory injunctive relief it seeks to include an injunction compelling the second respondent to prevent kitchen waste being washed into the stormwater gully pit.
[11] Thirdly, the applicant proposes to plead in paragraphs 13 to 21 of the 2FASOC that the stormwater system and the grease trap on 17 Orchid Avenue do not comply with relevant building standards or local government regulations, and that such non-compliance constitutes a breach of the applicant's duty of care and (or alternatively) a nuisance (Non-compliance Allegations). Again, based on those allegations the applicant seeks to amend the mandatory injunctive relief it seeks to expressly require that the second respondent perform "all necessary works to the stormwater drainage system and grease trap to ensure compliance with all relevant standards and regulations".
[12] The second respondent opposes the application for leave to amend to plead the Kitchen Waste Allegations and the Non-compliance Allegations.
[13] Having regard to the short period until the trial is listed to commence (see point 10 in Applegarth J's summary of the relevant principles extracted at [5] above), it is important to note that the second respondent does not contend that the proposed amendments will lead to the trial being adjourned. The second respondent can meet those amendments in the time available before the trial commences and has already provided the applicant with a draft pleading in response to the proposed amendments.
[20]
(a) the applicant has not provided a satisfactory explanation for its delay in applying for leave to amend, particularly with respect to the claim based on the Kitchen Waste Allegations;
(b) the applicant has had sufficient opportunity to plead its case and should not be afforded any further indulgence in that respect;
(c) it would be futile to grant leave to amend because the proposed claims based on the Kitchen Waste Allegations and the Non-compliance Allegations do not have any prospect of success;
(d) the proposed pleading of the Non-compliance Allegations fails to adequately plead the material facts upon which the relief sought by those proposed claims is based.
[21]
[16] I turn then to consider each of these matters.
[22]
[17] The supporting affidavit sworn by the applicant's solicitor, Mr Radcliff, states that as long ago as November 2024, the applicant provided instructions that a restaurant business conducted from premises in 17 Orchid Avenue was continuing to wash kitchen waste including grease and fat into the stormwater drain immediately adjacent to the southern boundary of 19 Orchid Avenue. It is that conduct which forms the basis for the Kitchen Waste Allegations.
[18] It appears that, by 1 November 2024, the applicant's legal representatives were already aware of the possible existence of a claim for nuisance or negligence arising from waste being poured into the stormwater gully adjacent to the grease trap on 17 Orchid Avenue. On 1 November 2024, in an outline of submissions filed on an application to vacate a previous trial listing, counsel for the applicant referred to the possibility of such a claim arising from the conclusion expressed in a joint expert report provided to the parties on 24 October 2024 (referred to further at [25](c) below).
[19] Mr Radcliff's affidavit also exhibits a letter dated 3 September 2025 from the applicant's solicitors to the second respondent's solicitors. That letter stated that CCTV footage recorded in June and July 2025 showed the occupiers of the restaurant business at 17 Orchid Avenue pouring wastewater from the kitchen and other liquids into the stormwater gully pit. The letter also referred to CCTV footage which showed water escaping from the vicinity of the stormwater pipe during dry weather and flooding occurring after ten minutes of rainfall which was said to demonstrate surcharge and failure of the stormwater system on 17 Orchid Avenue.
[20] The 3 September 2025 letter also referred to expert reports obtained by the applicant between May and July 2025 and asserted that those reports demonstrated that the discharge of trade waste from 17 Orchid Avenue into the stormwater network was unlawful. It demanded that the second respondent take steps to (among other things) rectify the stormwater system to "ensure compliance with environmental and building standards".
[21] The second respondent's solicitors replied by letter dated 10 September 2025, rejecting the applicant's demands on the basis (among others) that the matters raised in the letter of 3 September 2025 had not been pleaded by the applicant.
[23]
Sufficient opportunity to plead the applicant's case
[24]
[25] The second respondent submits that, in circumstances where trial dates previously allocated for this proceeding were vacated to enable the applicant to obtain further evidence and plead its case, the applicant has had sufficient opportunity to plead its case. It relies on the following chronology:
[25]
(a) on 7 August 2024, the Resolution Registrar made an order by consent that the proceeding be listed for trial for three days commencing on 18 November 2024;
(b) on 19 August 2024, the applicant filed an application for an order that an expert be permitted to give evidence as to investigations recommended in a report by Mora Consulting Pty Ltd dated 26 June 2024, namely that smoke tests of the stormwater drainage system and sanitary drainage system on 17 Orchid Avenue be carried out. That application was resolved by agreement between the parties to jointly engage Mr Maxwell to carry out the recommended tests;
(c) Mr Maxwell performed the recommended tests and provided a report to the parties describing the outcome of those tests on 24 October 2024;
(d) on 29 October 2024, the applicant applied to vacate the trial dates on the basis that Mr Maxwell's report was confusing in places and failed to comply with r 429H;
(e) that application was heard by Kelly J on 1 November 2024. The trial dates were vacated and the applicant was granted leave to engage a further expert;
(f) the applicant subsequently obtained a series of further expert reports;
(g) the applicant filed a further amended statement of claim on 3 April 2025.
[26]
[26] It is clear, as the applicant accepts, that the proposed amendments for which leave is now sought have been raised at a late stage and leave to amend might have been sought at an earlier time. However, it seems to me that if a proposed amendment would not lead to the adjournment of a trial then to deny leave to amend on the basis that the party seeking to make the amendment has had sufficient opportunity to plead its case (see point 11 in Applegarth J's summary of the relevant principles extracted at [5] above), requires more than a conclusion that a party had the opportunity to plead the proposed amendment at an earlier stage of a proceeding. It requires balancing the effect of a refusal to grant leave to amend against prejudice to the second respondent in terms of increased costs and delay (short of a vacation of trial dates) resulting from the late application for leave to amend.
[27] In the circumstances of this case, I am not persuaded that prejudice to the second respondent in terms of increased cost and delay resulting from the applicant's failure to avail itself of earlier opportunities to plead the claims it now seeks to add by amendment is sufficient to warrant a refusal of leave to amend.
[27]
[28] The second respondent submits that granting leave to amend would serve no purpose because none of the proposed claims sought to be added by amendment has any prospects of success.
[28]
The proposed claims based on the Kitchen Waste Allegations
[29]
[29] By its proposed amended defence, the second respondent would (if leave to amend is granted) admit that kitchen waste has entered the stormwater gully pit from time to time. Nevertheless, the second respondent submits the proposed claims have no prospects of success for two reasons.
[30] First, the second respondent relies on evidence from both parties' experts that the stormwater drainage system on 17 Orchid Avenue has been satisfactorily repaired. On that basis, it submits that, although kitchen waste is being deposited into the stormwater drains from time to time, that waste will not escape from the system and affect 19 Orchid Avenue. The second respondent submits that conclusion is consistent with expert evidence that no contaminants or contaminated water is entering the basement of 19 Orchid Avenue. In circumstances where the applicant seeks to justify its proposed amendments as being required to ensure that its pleading properly reflects the expert evidence, the second respondent submits that the applicant ought not be permitted to pursue the proposed claims based on the Kitchen Waste Allegations in the face of the expert evidence just mentioned.
[31] I do not accept that the expert evidence identified by the second respondent means that the proposed claims based on the Kitchen Waste Allegations have no prospects of success. The applicant's case encompasses loss and damage caused by the ingress of water into the basement of 19 Orchid Avenue, as well as, or in the alternative to, loss and damage caused by the ingress of contaminated material. Expert evidence that contaminants are unlikely to escape the stormwater drainage system on 17 Orchid Avenue would not necessarily preclude the applicant from establishing that the ingress of water alone has caused it loss and damage. The question whether the introduction of kitchen waste into the stormwater drainage system has clogged the stormwater drainage system and thereby reduced its capacity to properly dissipate water during rain events is one that ought to be resolved at trial.
[32] Secondly, the second respondent relies on the fact that the stormwater drains are located on a part of 17 Orchid Avenue that is reserved for the exclusive use of the owner of Lot 1 in that building, and subject to a lease to the operator of the restaurant business conducted from Lot 1. To the extent that kitchen waste has been deposited into the stormwater drain, it appears that has been done by employees of that business.
[30]
The proposed claims based on the Non-compliance Allegations
[31]
[37] The particulars of the proposed allegation of non-compliance of the stormwater drainage system in paragraph 13 of the 2FASOC include a reference to paragraph 2.3 of Mr Maxwell's report dated 24 October 2024. In submitting that this aspect of the proposed claims have no prospects of success, the second respondent relies on evidence of its solicitor, Mr Mathews, that he had recently been informed by Mr Maxwell that: current Australian building standards apply to the construction of new buildings, renovation of existing buildings or changes of use of a property; absent those circumstances, existing buildings do not have to comply with current Australian building standards; and there is no obligation on owners of a building to upgrade components of the building or its services to comply with current Australian building standards as they change.
[38] The second respondent also relies upon statements in expert reports that the stormwater drainage system on 17 Orchid Avenue surcharges because of rain running down the vertical face of a six-level wall which was constructed on the southern boundary of 19 Orchid Avenue (the boundary shared with 17 Orchid Avenue) after the construction of the building on 17 Orchid Avenue. The second respondent submits that this expert evidence establishes that it is this structure on 19 Orchid Avenue that is the cause of the surcharge and flooding that leads to water leaking into the basement of 19 Orchid Avenue.
[39] The proposed allegation of non-compliance of the grease trap in paragraph 14 of the 2FASOC pleads that the grease trap is neither watertight nor gastight. In submitting that this aspect of the proposed claims have no prospects of success, the second respondent relies on emails which the applicant's solicitor sent to the second respondent's solicitor indicating that the applicant has replaced a broken lid on the grease trap.
[40] The time available to determine the application for leave to amend has not allowed me to consider the evidence identified by the second respondent in detail or to weigh that evidence against any contradictory evidence so as to conclude that the applicant's proposed claims based on the Non-compliance Allegations have no prospects of success. Even if it is assumed for the purposes of this application that Mr Maxwell will say there is no legal requirement to upgrade the building on 17 Orchid Avenue to ensure that it complies with current Australian building standards, I am not persuaded that this evidence would necessarily preclude a finding that a stormwater drainage system which does not discharge rainwater runoff to the level required of a system constructed in accordance with such standards is the cause of flooding due to surcharge from the system leading to water leaking into the basement of 19 Orchid Avenue so as to constitute a nuisance.
[32]
[43] If leave to amend is granted, paragraphs 13 and 14 would plead the Non-compliance Allegations in the following terms:
[33]
"13. Further or alternatively the stormwater system on 17 Orchid Avenue does not comply with Australian Standards and the National Construction Code as particularised in paragraph 2.3 of the report of Oska Consulting Group dated 24 October 2024 and AS3500 (Plumbing Code of practice) as set out in paragraph 43 of the report from ADG Engineers (AUST) Pty Ltd dated 23 June 2025.
[34]
Further the grease trap on 17 Orchid Avenue is not watertight nor gastight and accordingly does not comply with Gold Coast City Council regulations as particularised in paragraph 55 of the report from ADG Engineers (AUST) Pty Ltd dated 29 January 2025."
[35]
[44] Paragraphs 15 and 16 of the 2FASOC plead the proposed case in nuisance on the basis that the second respondent has refused "to carry out works to rectify" the non-compliance pleaded in paragraphs 13 and 14. The works which are required to rectify any of the alleged non-compliances are not identified in the 2FASOC.
[45] Paragraphs 19 and 20 of the 2FASOC plead the proposed case in negligence on the basis that the second respondent owed a duty, which it has breached, to take "reasonable steps" to ensure that the stormwater system and the grease trap on 17 Orchid Avenue comply with the standards and regulations pleaded in paragraphs 13 and 14. Again, the "reasonable steps" that the applicant says the second respondent was obliged to take to ensure compliance are not identified in the 2FASOC.
[46] The proposed case on causation arising from the Non-compliance Allegations would then be pleaded in paragraphs 17 and 18 of the 2FASOC as follows:
[36]
"17. The matters pleaded in paragraphs 13 and 14 herein contributed to the leakage of water and contaminated material through the retaining wall from 17 Orchid Avenue to 19 Orchid Avenue as pleaded in paragraphs 2 and 3 herein.
[37]
Further or alternatively it is reasonably foreseeable that if the second respondent did not take steps to ensure:-
[38]
(a) the stormwater system of 17 Orchid Avenue complied with Australian Standards and the National Construction Code as particularised in paragraph 13 herein; and
[39]
(b) the grease trap on 17 Orchid Avenue is watertight and gastight in accordance with the Gold Coast City Council regulations as particularised in paragraph 14 herein and the [applicant] would suffer loss and damage."
[40]
[47] The paragraphs from the expert reports relied upon as particulars in paragraph 13 are in the following terms:
[41]
(a) paragraph 2.3 of the report of Oska Consulting Group dated 24 October 2024 states:
[42]
"Cameron Maxwell (OSKA Hydraulic Consultants Director 'The Expert') attended site with the intention of attaining the required information to make judgement of the condition and adequacy of the existing gutters and downpipes of # 17 Orchid Avenue.
[43]
The council's record searches proved that there are no records of existing As-built plans of the existing Stormwater system on # 17 Orchid Avenue.
All pipework shown an [sic] attached stormwater plan has been derived from site inspection only.
Under current Australia Standards and NCC (National Construction Code) the existing system 'does not comply' (for the section of roof that applies to the north-eastern side of # 17 Orchid Avenue).
Whilst the downpipe and gutter system does not comply with current standards it is adequate for storm events up to 1 [sic, in] one year.
The inground stormwater system is the bigger issue at # 17 Orchid Avenue - the current system is made up of 100° pipe with 2 x 300 x 300 rainwater pits 1 x 100° RWO (Rain water outlet) 4 x 90 mm downpipes (from roof above) and 1 x 90mm wide grated drain (running along the southern boundary) total approximately (see attached plan) all connected to a 900 x 900 x 900 deep grated Stormwater pit with a single Stormwater pump capable of approximately 1L/S @ 3m/h with a total catchment area of approximately 322m2, this equates to:
28L/S - 1 in 100-year event
22L/S - 1 in 20-year event
10L/S - 1 in 1-year event
7L/S - 1 in 3 monthly event"
[44]
(b) paragraph 43 of the report from ADG Engineers (AUST) Pty Ltd dated 23 June 2025 states:
[45]
"The stormwater drainage of 17 Orchid Ave is not designed to accommodate a 1 in 20 year rainfall event as prescribed by AS3500 (Plumbing Code of practise). The system is limited by low falls, pump-duty point, pinched rising main and submerged exit lines.
[46]
REASON - A 1 in 20 year return period rainfall event would require a 40 to 50 litres per second discharge capacity. The current stormwater system is capable of approximately 8 litres per second discharge if the lines were clean."
[47]
[48] Paragraph 55 of the report from ADG Engineers (AUST) Pty Ltd dated 29 January 2025, which is relied on as particulars of paragraph 14 of the 2FASOC states:
[48]
"Greasy contaminants are evident in the courtyard stormwater drainage system of No 17 Orchid.
[49]
REASON - It is illegal to discharge contaminants into the stormwater system. It appears that the contaminants in the No 17 Orchid stormwater system originate form the courtyard grease trap. The grease trap at No 17 Orchid is not watertight nor gas tight. Current regulations require grease traps to be water and gas tight."
[50]
[49] The applicant submits that it has pleaded the material facts required to sustain the proposed claims based on the Non-compliance Allegations. It submits that the relevant material fact pleaded in each of paragraphs 13 and 14 is the fact that the stormwater system and the grease trap do not comply with the pleaded standards and regulations. The paragraphs from the expert reports cited as particulars of each of those allegations explain the basis upon which the applicant alleges non-compliance. The fact of breach of duty or the nuisance, as well as causation, are also adequately pleaded.
[50] I do not accept those submissions. In The Corporation of the Franciscan Sisters of the Heart of Jesus (Qld) v FERM Engineering Pty Ltd,[8] Crow J held that pleadings must be self-contained so as to define the issue for trial, and the fact that the true nature of a party's case can be gleaned from reading parts of an expert report is no answer to a failure to properly plead and particularise the case the party wishes to pursue.
[51] The proposed pleading of the claims based on the Non-compliance Allegations does not meet this requirement. It pleads a series of conclusions - that the stormwater system and the grease trap do not comply with relevant standards and regulations, that the second respondent's failure to take steps to ensure compliance amounted to a breach of duty or resulted in a nuisance, and that the non-compliance contributed to the water leakage into 19 Orchid Avenue - without pleading the facts required to establish that those conclusions should be drawn.
[52] In terms of the allegations of non-compliance themselves, the material facts which should have been pleaded are the specific requirement(s) imposed by each relevant standard or regulation that the stormwater system or the grease trap are alleged not to comply with and the reason why (in each case) the stormwater system or the grease trap is alleged not to comply with the relevant requirement. Paragraphs 13 and 14 do not set out a self-contained pleading of those facts. Even if one looks at the paragraphs of the expert reports relied on as particulars of each of paragraphs 13 and 14, I do not consider that those passages adequately explain the cause of each of the alleged non-compliances.
[53] As to the allegations of breach, it is not sufficient to simply plead that the second respondent has breached a duty which it owes to take "reasonable steps" to ensure compliance without pleading what those reasonable steps are. The same can be said of the failure to identify the nature of the "works" to rectify each of the alleged non-compliances that the second respondent refused to undertake rendering it liable for the nuisance. The "reasonable steps" and the "works" the applicant alleges would remedy each non-compliance are material facts which should have been pleaded.
[51]
[57] The applicant submits that costs should be reserved. In that respect, it does not distinguish between the costs of its application and the costs thrown away by the proposed amendments for which leave is granted.
[58] The second respondent submits that, in circumstances where the applicant seeks the indulgence of the court to make late amendments, it should pay both the costs of the application and the costs thrown away by reason of the amendments. Further, it submits that the applicant should pay those costs on the indemnity basis.
[59] As to the costs of the application, each party has enjoyed some measure of success. The applicant has obtained leave to make some of its proposed amendments but not others. Further, I made orders referring the matter to mediation which the second respondent opposed. In the circumstances, and notwithstanding the lateness of the application, I am not persuaded that the applicant should bear the costs of the application regardless of the outcome of the proceeding. In my view, the appropriate order is that the costs of the application be each party's costs in the proceeding. Further, I am not persuaded that, if the applicant is ultimately required to pay the second respondent's costs of the application, the circumstances in which the application has been made warrant an order that those costs be paid on the indemnity basis.
[60] As to costs thrown away, r 386(1) of the UCPR provides that costs thrown away as a result of an amendment made before a request for trial date is filed are to be paid by the party making the amendment unless the court orders otherwise. Rule 386(1) does not apply in this case because, as previously explained, the applicant required leave to amend under r 470 because the proceeding has been set down for trial. Nevertheless, I can see no reason (and the applicant did not advance any reason) why the position prescribed in r 386(1) should not also apply in the circumstances of the present case. I am satisfied that the applicant should pay costs thrown away as a result of the amendments for which leave is granted.
[61] As to the basis upon which those costs thrown away should be assessed, the court's discretion to order that costs be assessed on the indemnity basis is unfettered in terms of potential circumstances that may warrant such an order being made. Nevertheless, such orders are generally made where the court, by means of the order, indicates displeasure with the conduct of a party, especially where there is improper or unreasonable conduct which is such a departure from the norm as to warrant the court's costs sanction.
[52]
[1] The proceeding was originally commenced against two respondents. The first respondent, Mr Pugliese, was the chairman of the second respondent. The proceeding against Mr Pugliese was dismissed by consent on 8 August 2023.
[3][2014] QCA 267, [74]. See also the most recent reference to that summary in the Court of Appeal in Yao v Fang[2025] QCA 86, [36].
[55]
[4] Minor amendments are also proposed to the particulars to paragraph 2 of the 2 FASOC to change the reference to the second respondent as "second defendant" to a reference to "second respondent". Those amendments are not contentious.
[14] The applicant frankly accepts, as it must, that its application for leave to amend has been made late. Nevertheless, in circumstances where the second respondent accepts that it can deal with the amendments, and so will not be prejudiced by the trial having to be vacated, the applicant submits that granting leave to make the proposed amendments will facilitate the objective of doing justice according to law by permitting the court to resolve the real issues in dispute (see particularly point 6 in Applegarth J's summary of the relevant principles extracted at [5] above).
[15] The second respondent submits there are four reasons why the court should not exercise the discretion in favour of granting leave to amend:
[22] The explanation provided in Mr Radcliff's affidavit for the applicant's delay in applying for leave to amend is that senior counsel, who was briefed for the trial after the listing order was made on 9 July 2025, reviewed the expert reports and the letter from the second respondent's solicitors dated 10 September 2025 and, following that review, advised the applicant that it was necessary to amend its pleading so as to (among other things) ensure that the pleading properly reflected the expert evidence.
[23] As the second respondent submits, that explanation does not address the period from 1 November 2024 when it seems the applicant's legal representatives were apparently aware of the potential to plead a claim based on the Kitchen Waste Allegations but did not do so. Consequently, it is not clear whether the applicant's failure to plead such a claim earlier was the result of a strategic decision or some other reason.
[24] It is regrettable that the applicant has not been as forthcoming as might be expected in explaining its delay in applying for leave to amend, particularly the delay in pleading the Kitchen Waste Allegations. Nevertheless, I am not persuaded that the explanation for the applicant seeking leave to make the proposed amendments at this late stage - the receipt of senior counsel's advice after consideration of the letter of 10 September 2025 from the second respondent's solicitors - is so inadequate as to warrant refusing leave to amend absent some prejudice to the second respondent if leave is granted.
[33] In those circumstances, the second respondent submits that I would be bound at trial by the decision of the Court of Appeal in Peden Pty Ltd v Bortolazzo,[5] which affirmed the principle that a lessor is not responsible for a nuisance created by a tenant unless the lessor let the premises for a purpose calculated to cause a nuisance, that is, by express authorisation of the nuisance or in circumstances where the nuisance was certain to result from the purposes for which the property was being let. To extend the liability of a landlord for a nuisance created by a tenant more broadly would effectively allow neighbours with no contractual relationship with the lessor to influence the selection of the lessor's tenants.[6] The principle expressed in Peden can be contrasted to a narrower class of case where a landlord has been held liable to one tenant for a nuisance created by another tenant based on the terms of the respective leases, including a power under the lease to control the tenant who causes the nuisance.[7]
[34] The second respondent is not the lessor of Lot 1. Nevertheless, it submits that it is in an analogous position. In the proposed amended defence that has been prepared against the possibility that the applicant is granted leave to amend, the second respondent proposes to plead that it has no control over the stormwater gully pit or the kitchen staff and, for those reasons, it has not allowed kitchen waste to be washed into the stormwater gully pit.
[35] During the hearing of the application, the applicant indicated that the assertion the second respondent had no control over the tenant of Lot 1 is likely to be contested. It relies on an email which Mr Pugliese, the chairman of the second respondent, sent to Mr Duffy, the chairman of the applicant, on 13 July 2019, setting out steps that the second respondent had taken to address the issue of water leaking into 19 Orchid Avenue. The email included a statement that "[c]ompliance breach notices will be issued if any evidence of storm water drain trade waste going in". The applicant argues that this statement constitutes an acceptance by the second respondent that it is in a position, and had assumed an obligation, to exert control over the operator of the restaurant business to prevent waste being poured down the stormwater drainage system. If the applicant succeeds in establishing that factual proposition then it seems there would be some doubt as to whether the principle stated in Peden applies to this case.
[36] Ultimately, I am not satisfied that the prospects of success of the proposed claims based on the Kitchen Waste Allegations are so poor that to grant leave to make those amendments would be futile.
[41] Again, the issues raised by the evidence the second respondent has identified are matters that should be resolved at trial. I am not satisfied that the existence of this evidence means that the prospects of success of the proposed claims based on the Non-compliance Allegations are so poor that to grant leave to make those amendments would be futile.
[42] Having reached that point, I am satisfied that it is appropriate to exercise the discretion in favour of granting leave to the applicant to amend to plead the claims based on the Kitchen Waste Allegations. However, for reasons I now turn to, I have concluded that the form of the proposed pleading of the Non-Compliance Allegations is deficient.
[54] The causation pleading must provide a direct and unambiguous identification of the material facts relied on to establish the causal link the law requires between the alleged breach of duty or nuisance and loss suffered by the applicant.[9] Accordingly, the applicant should have pleaded the facts it relies on to assert that undertaking the "reasonable steps" or the "works" required to remedy each non-compliance would have meant it would not have suffered (or will not continue to suffer) loss or damage by reason of water or contaminated material leaking into the basement of 19 Orchid Avenue. To simply plead that the alleged failure to comply with standards and regulations "contributed" to such leakage falls well short of meeting this requirement.
[55] These are not mere technical deficiencies in the proposed amendments. They have the tendency to impair the court's ability to facilitate the just and expeditious resolution of the real issues in dispute between the parties at a minimum of expense. The most obvious example of this is the proposed amendment to the claim for injunctive relief to expressly require that the second respondent perform "all necessary works to the stormwater drainage system and grease trap to ensure compliance with all relevant standards and regulations". Given the deficiencies I have identified in the pleading of the proposed claims based on the Non-compliance Allegations, neither the second respondent nor the court can know what the applicant says are works that are necessary to ensure that the stormwater drainage system and the grease trap are each compliant with all relevant standards and regulations. Without those matters being identified the second respondent cannot properly address, and the court cannot determine, whether it would be appropriate to grant the mandatory injunctive relief the applicant seeks. Nor would it be possible to frame that injunctive relief in a way that ensures the second respondent would know what steps it would be required to take to comply with such an order.
[56] When these difficulties were raised during the hearing of the application, it was submitted on behalf of the applicant that the expert evidence would address such issues. With respect, that simply highlights the problem with this aspect of the proposed amendments. It is the pleading itself, and not the expert evidence, which should plead the material facts necessary to allow for the just and expeditious resolution of these issues. In circumstances where I have concluded that the proposed pleading of the claims based on the Non-compliance Allegations is not adequate to achieve that purpose, I refuse to grant leave to make those amendments.
[62] The second respondent submits that the same matters relied on to oppose the application for leave to amend - delay in applying for leave to amend, inadequate explanation for the delay, poor prospects, and failure to plead material facts - warrant an order for indemnity costs. I do not accept that submission.
[63] Although the application should have been made earlier and the explanation for the delay in applying for leave to amend is not as fulsome as might be expected, I am not persuaded that those circumstances mean that costs thrown away should be assessed on the indemnity basis. I have not accepted the submission that the proposed claims have such poor prospects of success as to render a grant of leave to amend futile. I have accepted the submission that the form in which the applicant proposes to plead the claims arising from the Non-compliance Allegations is deficient and this means that leave to make those amendments should be refused. I do not accept, however, that conclusion warrants the further step of ordering indemnity costs.
[64] The strongest argument the second respondent makes in favour of an order for indemnity costs concerns the applicant's delay in amending to remove the claim for the cost of waterproofing the retaining wall. The second respondent submits that the applicant persisted in pleading this claim for several years in circumstances where, based on the expert evidence, it should have recognised the claim was hopeless. During the hearing of the application, it was frankly accepted on behalf of the applicant that this aspect of the claims should have been removed from the pleading some time ago. In those circumstances, there is force in the applicant's submission.
[65] Against that submission, there are authorities which recognise that mere abandonment of a claim may not, of itself, be sufficient to warrant an order for indemnity costs because parties should not be discouraged from abandoning unwinnable claims, even at a late stage, by reason of the possibility of an order for indemnity costs.[10]
[66] On balance, I am not persuaded that the applicant's late amendment to remove the claim for the cost of waterproofing the retaining wall warrants an order that the costs thrown away by reason of that amendment should be assessed on the indemnity basis. The applicant should pay the costs thrown away by the amendments for which leave is granted on the standard basis.