Dymocks Book Arcade Pty Ltd v Capral Ltd

Judgment 1HER HONOUR: Before me for hearing on 18 November 2011 was an interlocutory application by the plaintiff (Dymocks) seeking leave to amend its Summons and further to amend its Amended Technology and Construction List Statement in proceedings which were commenced on 10 September 2009 arising out of defects identified in the construction of a roof on a property at Grassy Head. 2The first defendant (Capral), which manufactured and supplied the roof sheeting material used in the construction of the roof, consents to such leave being granted (and appeared at the hearing of Dymocks' notice of motion only to seek consequential orders in relation to a cross-claim it has already served, and to which a defence has been filed, but now formally seeks leave to file and/or to amend following the outcome of Dymocks' application). 3The second defendant (Dalton), the architectural firm responsible for the design/specification of the roof, opposes the grant of leave (other than for what may be described as non-controversial amendments) primarily on the basis that the amendments will introduce a new cause of action that is statute barred but also on the basis of the prejudice likely to arise from the introduction of a new factual dispute some 22 years or so after construction of the building. 4I heard the application and subsequently made orders in chambers on 18 November 2011, granting leave for the amendment of the Summons and Amended Technology and Construction List Statement (with consequential orders in relation to Capral's cross-claim). I indicated that I would publish my reasons for so doing as soon as I could. These are those reasons. Relevant statutory provisions and applicable principles 5Sections 64 and 65 of the Civil Procedure Act 2005 (NSW) relevantly provide as follows: 64(1) At any stage of procee d ings, the court may order: (a) that any document in the proceedings be amended, or (b) that leave be granted to a party to amend any document in the proceedings. (2) Subject to s 58, all necessary amendments are to be made for the purpose of determining the real questions raised by or otherwise depending on the proceedings, correcting any defect or error in the proceedings and avoiding multiplicity of proceedings. ... 65(1) This section applies to any proceedings commenced before the expiration of any relevant limitation period for the commencement of the proceedings. (2) At any time after the expiration of the relevant limitation period, the plaintiff in any such proceedings may, with the leave of the court under s 64(1)(b), amend the originating process so as: ... (c) to add or substitute a new cause of action, together with a claim for relief on the new cause of action, being a new cause of action that, in the court's opinion, arises from the same (or substantially the same) facts as those giving rise to an existing cause of action and claim for relief set out in the originating process. (3) Unless the court otherwise orders, an amendment made under this section is taken to have had effect as from the date on which the proceedings were commenced. (4) This section does not limit the powers of the court under s 64. (5) This section has effect despite anything to the contrary in the Limitation Act 1969 . ... 6In Aon Risk Services Australia Ltd v Australian National University [2009] HCA 27; (2009) 258 ALR 14, the High Court said (from [14]): There is a distinction between the discretion of a court to allow a party to amend its pleading on that party's motion and the requirement to make all such amendments as may be necessary to determine the real questions in controversy. That requirement engages with the authority conferred on the court to make amendments of its own motion. The point was made in 1887 by the Full Court of the Supreme Court of Victoria in Dwyer v O'Mullen in relation to O XXVIII r 1 of the 1875 Rules. Higinbotham CJ said of the last clause of the rule that it: makes an amendment mandatory. The judge is under the obligation of making an amendment, but only for a certain purpose and in certain cases - for the purpose of determining the real question in controversy between the parties - that being expressed in many cases to be the question which the parties had agitated between themselves, and had come to trial upon. ... An important aspect of the approach taken by the plurality in J L Holdings was that it proceeded upon an assumption that a party should be permitted to amend to raise an arguable issue subject to the payment of costs occasioned by the amendment. So stated it suggests that a party has something approaching a right to an amendment. That is not the case. The "right" spoken of in Cropper v Smith needs to be understood in the context of that case and the Rule, which required amendment to permit the determination of a matter already in issue. It is more accurate to say that parties have the right to invoke the jurisdiction and the powers of the court in order to seek a resolution of their dispute. Subject to any rights to amend without leave given to the parties by the rules of court, the question of further amendment of a party's claim is dependent upon the exercise of the court's discretionary power. 7The exercise of the discretion to grant or refuse leave must not only be in accordance with s 64(2) of the Civil Procedure Act ( Greenwood v Papademetri [2007] NSWCA 221 (at [35])), it must also adhere to the "dictates of justice" (ss 56, 57 and 58 of the Civil Procedure Act). Those matters will generally require consideration of the nature and degree of any prejudice that may be suffered by the grant or refusal of the application ( Itek Graphix Pty Ltd v Elliott [2002] NSWCA 104; (2002) 54 NSWLR 207). Where the proposed amendment to the pleading satisfies the express criteria in s 65(2) of the Act, it is suggested that it will be unlikely that a person opposing the grant of leave will be able to demonstrate material prejudice ( Ritchie's Uniform Civil Procedure at [65.45]). 8The exercise of discretion necessarily involves a balancing exercise ( Cement Australia Pty Ltd v Australian Competition and Consumer Commission [2010] FCAFC 101; (2010) 187 FCR 261 at [51] and [66]) having regard to the circumstances of the particular case. 9In Cement Australia , their Honours (Keane CJ, Gilmour and Logan JJ), said at [45]: Before turning to the particular grounds of complaint agitated in this Court by the Cement Australia parties, we should observe that insofar as the trial judge gave significant weight to the consideration that the achievement of justice in the particular case before him favoured allowing the amendment, that was not contrary to the decision in Aon Risk or anything in s 37M or s 37N of the Federal Court Act. Nothing in Aon Risk or the Federal Court Act suggests that this consideration is not relevant to the exercise of the discretion to permit or refuse an amendment. Rather, the point made in Aon Risk is that this consideration must not be allowed to trump other relevant considerations, including considerations of the kind reflected in ss 37M and 37N of the Federal Court Act. and at [51]: Aon Risk is not a one size fits all case. Whilst various factors are identified in the judgment as relevant to the exercise of discretion, the weight to be given to these factors, individually and in combination, and the outcome of that balancing process, may vary depending on the facts in the individual case. As the plurality in Aon Risk observed at [75], statements made in cases concerning amendment of pleadings are best understood by reference to the circumstances of those cases, even if they are stated in terms of general application. 10In Aon at [102], the factors to be weighed in the exercise of this discretion were said to include the nature and importance of the amendments to the plaintiff; the effect of the proposed amendments on the defendant; the delay in making the amendments; and, where there is delay in applying for amendment, whether an adequate explanation for the delay has been given. There, Gummow, Hayne, Crennan, Kiefel and Bell JJ said (at [98]) that the requirements for speed and efficiency "should not detract from a proper opportunity being given to the parties to plead their case" and at [102] that "The objectives stated in [the relevant rule there under consideration] do not require that every application for amendment should be refused because it involves the waste of some costs and some degree of delay, as it inevitably will". One of the factors to be weighed in the balance is the point the litigation had reached, relative to a trial, when the application to amend is made.

Existing claims 11Dymocks' existing claims against Dalton are identified in its Amended Technology and Construction List Statement (filed on 26 February 2010). Relevantly, Dymocks alleges that Dalton owed Dymocks a duty of care in the provision of advice and services to Dymocks in relation to the design and construction of the building, including in specifying a fastener/fastening system which would not cause or permit the roof sheeting to corrode (C46 - C50). 12It is alleged that the fasteners comprised a screw, steel saddle and washer (C23) and that the design/specification of the fasteners was deficient and negligent (C33). 13At [C50] it is alleged that Dalton breached the duty of care owed to Dymocks, inter alia, "by specifying a fastener which was bound to cause the roof to corrode". 14Dymocks has also raised a cause of action for misleading and deceptive conduct under s 52 of the Trade Practices Act 1974 (Cth) based, inter alia , on the alleged representation by Dalton that the specification for the roof would provide adequate corrosion protection for the roof ([C51]). (This cause of action was the subject of the amendments, not opposed by Dalton, for which leave was granted by Hammerschlag J on 4 March 2010.) 15On 26 March 2010, Dalton amended its Technology and Construction List Response to raise, by way of defence, inter alia the allegation that it acted in a manner that was widely accepted in Australia by peer professional opinion as competent professional practice (i.e. a defence as provided by s 5O of the Civil Liability Act 2002 (NSW)). Senior Counsel for Dymocks (Mr Miller SC) notes that the Amended Technology and Construction List Response was verified by Mr Peter Dalton, the principal of Dalton, who undertook the architectural works in question (a fact on which reliance is placed when considering the issue of prejudice due to Mr Dalton's age). Amendments now sought to be made 16The amendments for which leave is now sought fall within a number of different categories: (a)amendments concerning Capral (those not being opposed) contained in [C42], [C42A], [C42B], [C42C]; (b)amendments to [C33] to make it clear that the allegation as to deficient/negligent design or specification of fasteners applied irrespective of which of three types of steel screws were utilised and (in sub-para (f)) to specify an additional respect in which it is said that the design or the specification of the fasteners by Dalton was deficient and negligent (namely, that the steel saddles were likely to corrode) and consequentially to add a reference to the corrosion of the steel saddle in [C34]; (c)amendments to include the additional allegations in [C50] that Dalton breached the duty of care to Dymocks in relation to the steel saddle deficiency and non compliance with accepted professional practice (both by inclusion of particulars to (a) and by adding new sub-paragraphs (c) - (i) and a new particular to (j) as set out below); and (d)a corresponding amendment to add an additional aspect to the "Roof Representations" which Dymocks contends were made by Dalton (in [C51A]). 17The contentious amendments for the main part are those sought to be made to [C50]. I reproduce them below (the proposed insertions being emboldened): [50] Having regard to the Damage pleaded at paragraphs 31 to 34 above, the Architect breached his duty of care to Dymocks: (a) by specifying the use of a fastener which was bound to cause the roof to corrode when exposed to a corrosive marine environment; Particulars The Architect failed, but ought to have, specified: (i)the elongation of the pre-drilled holes for the fixing of the roof sheeting to allow the sheeting to move beyond that set out in AS1562-1980 ; (ii)a grommet to be manufactured and installed into the pre-drilled holes or other electrically insulating material ; (iii)a slip surface for the EPDM seals ; (iv)either the exact manufacturers instructions or alternatively a complete detailing of the work ; (v)a caution that the saddles should not have direct contact with the aluminium roofing ; (vi)the thickness of the Zincalume coating for the saddles ; (vii)protection against galvanic corrosion for the underside of the roof ; (viii)how contact between the stainless steel roofing screws and structural steel purlins should have been dealt with on site . (b) by specifying the use of a fastener which did cause the roof to corrode; and (c) by specifying a fastener which contained a steel saddle which was bound to corrode; (d) by failing to properly investigate and take into account the severe marine atmosphere in which the Building was to be located and the impact of that atmosphere on the risk of galvanic corrosion; (e) by failing to conduct all necessary research of review all available and relevant literature and standards to prepare Specification(s) for the construction of the Building in that location; (f) by failing to carry out enquiries with relevant industry bodies or metallurgy specialists about the risk of galvanic corrosion occurring; (g) by failing to take into account, reference or include all standards (in particular AS2312 -1984) relevant to construction of the Building in that location in his Specification(s); (h) by failing to provide adequate and specific guidance to the builder, contractors or sub-contractors in his Specification(s) to avoid the risk of galvanic corrosion occurring; (i) by failing to warn Dymocks of the risk of galvanic corrosion occurring; (j) by failing to inspect the Fasteners prior to, or after, their installation to ascertain whether they were suitable for the Building in the circumstances. Particulars (i)The design of the fastener system permitted two dissimilar metals, namely stainless steel and aluminium, to come into contact with each other thereby resulting in galvanic corrosion. (ii)The design of the fastener system permitted saltwater and rainwater to penetrate the fastener sheeting joints. (iii)No insulation material was located between the stainless steel fastening screw shank of the fixing device and the roof sheeting. (iv)The absence of such insulation material permitted an electrolysis reaction to occur and subsequent corrosion of the roof sheeting. (v)Washers in contact with the stainless steel screws and roof sheeting contained carbon or graphite such as to make the washers electrically conductive. (vi)The absence of a suitable coat of anti-corrosion low moisture transmission coating to the contact surfaces of incompatible metals. (vii)The steel saddles being zincalume seals coated with polyvinyl diflouride did not resist corrosion . 18Thus, it is submitted that the existing allegations of breach in [C50] of the proposed Further Amended Technology and Construction List Statement are being refined or expanded to include: (a) further development of the allegations based on the specification of dissimilar metals leading to galvanic corrosion [50(a) particulars (d) to (i)];and (b) allegations concerning the adequacy of the specified coating for the steel saddles [50(c), and particular (vii) to 50(i), 51A(e), 51J and 51K]. 19The manner in which (broadly speaking) the breaches of duty in relation to the use of the fastener have to date been particularised, as referred to above, has been by reference to the fact that the design or specification permitted two dissimilar metals (stainless steel and aluminium) to come into contact, which it is said resulted in galvanic corrosion. The additional respect in which it is now sought to be contended that specification of the fasteners amounted to a breach of the duty of care, is that the specification was of fasteners comprised of particular component parts (i.e. the steel saddles) that were coated with a particular substance, and bound to corrode. Nature of proposed amendments 20Mr Miller submits that the proposed amendments do not add any new cause of action and simply add matters largely by way of particularisation and refinement as to the manner in which Dymocks puts its case. Reference is made in this regard to Chahwan v Euphoric Pty Ltd [2009] NSWSC 805; (2009) 73 ACSR 252 at [27] as to the distinction there drawn by Brereton J between "matters" and "causes of action". In Chahwan , his Honour considered that the proposed amendments did not add or substitute a new cause of action at all (the cause of action in that case, for a declaration that a mortgage was held on trust, having already been pleaded "as were the facts necessary to sustain that cause of action"). His Honour drew a distinction between the addition of a couple of "matters" that might be material facts in a cause of action already pleaded "to make explicit the basis upon which the plaintiff says he was standing" and the cause of action itself, referring to Baldry v Jackson [1976] 1 NSWLR 19). 21Reference is also made by Mr Miller in this context to Ingot Capital Investments Pty Ltd v Macquarie Equity Capital Markets Ltd (No 3) [2005] NSWSC 255 at [41] which I consider below. 22The substantive opposition to leave being granted in respect of the amendments is predicated on the characterisation of the amendments as adding a new cause of action (rather than simply a new or refined particular of negligence as Mr Millar contends). In that regard, it is accepted that if the amendments do introduce a new cause of action it is one that would be statute barred. Dymocks discovered (or claims to have discovered) the roof corrosion on 18 September 2003. These proceedings were commenced on 10 September 2009. 23Senior Counsel for Dalton (Mr Roberts SC) contends that the allegations now sought to be made go beyond the existing allegations of breach of duty of care (and misleading and deceptive conduct), since the factual basis for each of the existing causes of action stems from the specification of a fixing system that allowed dissimilar metals to come into contact with one another (something that it is said will largely be determined by reference to the relevant Australian Standard (AS1562-1980), an extract of which is Exhibit 1 on this application, which appears to have permitted aluminium and stainless steel to be in contact at least in some circumstances). 24Insofar as the new paragraphs specify a particular type of steel saddle (steel zincalume) with a particular type of coating (polyvinyl diflouride), which is alleged to be inadequate to resist corrosion in the particular environment in which the building is located, Mr Roberts submits these assert a new (statute barred) cause of action. It is not suggested that this new cause of action does not arise out of substantially the same set of facts. 25At the outset, I note that the present application (as was the case in Ingot ) does not concern pleadings in the strict sense. Like Ingot , it concerns what his Honour described as "quasi-pleadings" according to the practice note applicable in the Commercial List (in this case, in the Technology and Construction List of the Commercial List). 26In Ingot , McDougall J observed (at [44]) that, insofar as one of the functions of pleadings (in the proper sense of the word) is to enable the party against whom the pleading is propounded to understand the nature of the claim that it is required to meet (and hence part of the process by which procedural fairness is afforded to litigants), the same function is served by the "quasi-pleadings" utilised in the Commercial List. His Honour there also noted that in this List, the parties' contentions are required, among other things, to avoid formality "whilst, at the same time, identifying the material facts relied upon and giving adequate particulars and the legal grounds for relief" (at [45]). In that context, his Honour approached the question for leave to amend that was there before him expressly bearing in mind what had been said by Lander J (albeit in a context of proper pleadings) in Arthur Young v Tieco International (1995) 182 LSJS 367 at 370: Whether the material facts and whether sufficient particulars have been pleaded must depend upon the cause of action, the complexities of the case and the whole of the circumstances of the case. None of those matters can be considered in isolation any more than each of the paragraphs of the pleading can be considered in isolation. When the Court considers a pleading it will not consider the pleading with the same degree of scrutiny which the courts are required to give to an Act of Parliament. With the complexities of modern litigation, a pleader can usually point to some deficiency in the opponent's pleadings. One can usually, if one approaches the matter with a critical eye, identify some failing in a pleading. But that is not the approach that in this age ought to be adopted. A court would not sit down in the manner of a nineteenth century pleader seeking to find an error capable of sending a party away to re-plead his claim or defence. Such a technical approach is inconsistent with modern litigation and inconsistent with the court's function which is to try to arrive at a just result. A successful result, if arrived at, after too great an expense may not be considered by even the successful party to be a just result. A court ought to approach a consideration of the adequacy of a pleading seeking to answer the ultimate question; does the pleading give fair notice of the case to be made against the other party at trial, thereby minimising the risk of injustice resulting from surprise. 27With the above in mind, and particularly having regard to the fact that here the question is not as to pleadings in the strict sense, I note that there is nevertheless a traditional distinction drawn between the pleading of material facts necessary to identify a cause of action and the particularisation of such facts as pleaded; the latter being required (as necessary) to enable the opposite party to identify the case required to be met (the extent of particulars so required depending both on judgment and on the circumstances of the individual case: Philipps v Philipps (1878) 4 QBD 127 at [139]; Ratcliffe v Evans [1892] 2 QB 524 at [532]) but not taking the place of pleading per se (which has a number of consequences, including that there is no need to plead to a particular and that the provision of particulars does not cure a "bad" pleading). 28Thus, in Bruce v Odhams Press Ltd [1936] 1 KB 697 at 712-713, Scott LJ considered the function of particulars (as distinct from the requirement to plead material facts) as being that of filling in the picture of the cause of action with sufficiently detailed information to put the defendant on guard as to the case it has to meet and to enable preparation for trial (whereas the pleading of material facts was said to be necessary for the purpose of formulating a complete cause of action). Scott LJ said the following, at 712-713: The cardinal provision in r 4 is that the statement of claim must state the material facts. The word "material" means necessary for the purpose of formulating a complete cause of action; and if any one "material" fact is omitted, the statement of claim is bad; it is "demurrable" in the old phraseology, and in the new is liable to be "struck out" under Order XXV, r 4: see Philipps v Philipps (1878) 4 QBD 127; or "a further and better statement of claim" may be ordered under Order XIX, r 7. The function of "particulars" under r 6 is quite different. They are not to be used in order to fill material gaps in a demurrable statement of claim - gaps which ought to have been filled by appropriate statements of the various material facts which together constitute the plaintiff's cause of action. The use of particulars is intended to meet a further and quite separate requirement of pleading, imposed in fairness and justice to the defendant. Their function is to fill in the picture of the plaintiff's cause of action with information sufficiently detailed to put the defendant on his guard as to the case he has to meet and to enable him to prepare for trial. Consequently in strictness particulars cannot cure a bad statement of claim. But in practice it is often difficult to distinguish between a "material fact" and a "particular" piece of information which it is reasonable to give the defendant in order to tell him the case he has to meet; hence in the nature of things there is often overlapping. And the practice of sometimes putting particulars into the statement of claim and sometimes delivering them afterwards either voluntarily, or upon request or order, without any reflection as to the true legal ground upon which they are to be given has become so common that it has tended to obscure the very real distinction between them. 29In Pinson v Lloyds and National Provincial Foreign Bank Ltd [1941] 2 KB 72 at 75-76, Scott LJ reiterated the views expressed in Odhams and said: ... All the material facts constituting the cause of action ought already to have been plainly stated in the pleading itself, as required by Order XIX, r 4, the plainest and most fundamental of all the rules of pleading. The proper function of particulars is not to state the material facts omitted from the statement of claim in order, by filling the gaps, to make good an inherently bad pleading, however common that pernicious practice may have become. On this topic I made some observations in Bruce v Odhams Press Ltd , and will not repeat them beyond saying that I still hold the opinion that it is not the function of particulars to take the place of necessary averments in the pleading. Their function is to put the opposite party on his guard and prevent him being taken by surprise at the trial of an action, the "material facts" of which should have been already averred. Nor have mere statements of evidence as such a place in particulars, any more than in the pleading, although the dividing line between statements which contain sufficient indication to prepare the opponent's mind for what he will have to meet at the trial and mere statements of evidence is sometimes hard to draw and should not invite meticulous criticism. 30Similarly, in Goldsmith v Sandilands [2002] HCA 31; (2002) 190 ALR 370 Gleeson CJ stated (at [2]): The facts in issue in a civil action case emerge from the pleadings, which, in turn, are framed in light of the legal principles governing the case. Facts relevant to facts in issue emerge from the particulars and the evidence. The function of particulars is not to expand the issues defined by the pleadings, but "to fill in the picture of the plaintiff's cause of action with information sufficiently detailed to put the defendant on his guard as to the case he has to meet and to enable him to prepare for trial". 31In essence, the change proposed to be made to the List Statement is that the way in which the fastener is said to be defective (or bound to cause corrosion) has been expanded to include reference to the coating of the steel saddles. There is already an allegation that the fasteners (which were comprised, inter alia , of steel saddles) caused roof corrosion. In other words, the cause of action remains that of a claim in negligence for breach of a duty of care in the advice given as to the construction of the roof causing damages to be suffered; the material facts alleged as giving rise to that cause of action include that the fastener (a component part of which included the steel saddle) specified for use was bound to cause corrosion; the particulars then 'fill out the picture' by putting the defendants on notice of the way in which the specified fastener is alleged to have been bound to cause corrosion. There are not two (separate) roof defects alleged. The defect in question is still the corrosion of the roof caused by the particular fasteners specified to be used in the construction of the roof. There are now, however, two ways in which the fastener is said to be deficient or by reference to which it was bound to cause corrosion. I therefore consider that (however informally one looks at the quasi-pleading) the amendments to [C50] are in the nature of a particular of negligence or expansion of the existing allegations of a material fact, i.e. part of an existing cause of action not a new cause of action. (The allegations of breach referable to accepted peer professional practice likewise expand the existing causes of action but are based on the same underlying issue - design/specification of fasteners (complete with steel saddles). 32It seems to me that this can be tested by the proposition that if this is a discrete (and separate) allegation of negligence then the material contained in the existing particulars ought not to have been included as particulars in the first place, yet there is no suggestion that issue was taken with this. If the allegations could have been wholly comprised in the particulars then they must relate to the existing pleading. 33I therefore accept the proposition that no new cause of action is being alleged. This is relevant because if the proposed amendments do not add or substitute a new cause of action, then there is no prejudice caused to Dalton from the application of the general principle recognised in the Act, namely that the amendments take effect from the date of the commencement of the proceedings (see Ingot at [7]) and no need to consider exercising the discretion to specify a different date from which the pleadings are to take effect. 34As to the importance of the amendments, that being one of the factors to which Aon says regard is to be had, it is not possible at this stage to assess the importance of the amendments to the plaintiff's case. Suffice to say that I accept that it must be a matter of importance that there be no question of surprise in relation to the allegations being made - hence the need for a complete picture of the manner in which it is alleged that the fasteners were deficient and that the design/specification was negligent. Effect of proposed amendments on defendants - Limitation period 35Reliance was placed by Mr Roberts on what was said by Basten JA in Cyril Smith & Associates Pty Ltd v Owners Strata Plan No 64970 [2011] NSWCA 181 to the effect that accrual of a cause of action in relation to building defects (there a defect in windows that were not watertight) did not depend upon knowledge of the cause of the defect. At [24] his Honour said: Those cases [ Hawkins and Pullen ] are authority, at most, for the proposition that it is the physical defect which must be known or manifest, not that the cause of the defect must be identifiable. The relevant defect in the building was not the design, installation or inspection of the windows, but the windows themselves. Once it was appreciated that the windows themselves were defective (in that they were not adequately watertight) the defect was known. The physical consequence of the defect, namely the ingress of water, was not itself the defect, although it might well have been sufficient to lead a reasonable person to make inquiry and thus discover the defect. In this respect, there is an important distinction between a case of water penetration into a room, where the point ingress can readily be investigated, and the adequacy of footings or foundations to a building, which can often only be inspected with difficulty: cf Strata Plan 50946 v Multiplex, above at [21]. and at [33]: Knowledge that the windows were defective did not, of course, mean that the Owners Corporation knew who was responsible for the defect, but the time within which it needed to ascertain who was responsible and, if necessary, commence proceedings, had started to run. It failed to act within six years of the accrual of the cause of action and the proceedings brought in respect of the defect were, accordingly, statute barred as against the appellant. 36I accept that the evidence shows that Dymocks had knowledge of the roof corrosion at least by September 2003 (if not earlier). The fact that it may not have been appreciated, until some time much later, that this was due to the particular coating of the steel saddles comprising part of the fasteners does not mean that the defect was known only at that point. Indeed Mr Miller accepted that, if the coating of the steel saddle was a separate defect giving rise to a separate cause of action, then that cause of action would be statute barred and leave would then be necessary under s 65(2). 37That said, Mr Miller noted that it has been said to be generally undesirable that limitations questions should be decided in interlocutory proceedings (as at that stage insufficient is known of the damage sustained and the circumstances in which it was sustained) referring to Wardley Australia Ltd v Western Australia (1992) 175 CLR 514 at 533. 38In Owners Corporation Strata Plan 61390 v Multiplex Corporate Agency Pty Ltd & ors (unreported, McDougall J, 30 April 2010), on which Mr Roberts relies, McDougall J said (at [18] - [19]): Some of the problems faced by the Owners Corporation flow from its decision to commence proceedings on the last day before the expiry of the limitation period relevant to its causes of action alleged against the various defendants. As a result, to the extent that the existence of other possible defects has emerged through the interlocutory procedures that have occurred to date, any attempt made by the Owners Corporation to claim against those other potential defendants will meet the same response. But that seems to me to be an inevitable consequence of the decision (taken for whatever reason) to delay the commencement of proceedings in the way that I have indicated. I accept that if the relief sought against WTP can be justified under s 65 of the Civil Procedure Act then, unless the Court orders otherwise, the amendments would take effect from the date of the commencement of the proceedings and thus would be within time. But the Court does have a power to order otherwise. In this case, there is nothing to suggest that it would be just to deprive WTP of the Limitation Act defence that it has available to it . It is to be noted, in this context, that the Court's powers in relation to amendment set out in ss 64 and 65 of the Civil Procedure Act are to be exercised in accordance with s 58. Section 58 requires the Court to have regard to the dictates of justice. In doing so, the Court is required to have regard to, among other things, the overriding purpose set out in s 56. (my emphasis) 39His Honour concluded at [23]: For those reasons, as I have indicated, the dictates of justice informed by, among other things, the overriding purpose set out in s 56 of the Civil Procedure Act mean that even if there is power to do what is sought against WTP (and I have no doubt that there is) it would be unjust, and not conformable with the just, quick and cheap resolution of the real issues in the proceedings, to deprive WTP through that process of what is in my view a crystal clear Limitation Act defence. 40There would be much to commend that approach in the present case if the "steel saddle" issue was a separate cause of action in negligence. However, in the present case I do not consider the amendments to give rise to new causes of action. The steel saddle component of the fastener was already encompassed by the broad pleading of negligence in the specification of a fastener (by definition including the steel saddles) that was bound to corrode. Delay/prejudice - discretionary matters 41I turn then to the related questions of delay and prejudice. Mr Roberts points to the delay of four years (from April 2007 until May 2011) from the first report of the plaintiff's expert metallurgist, Professor Young (in April 2007) in which corrosion to the saddle was noted and the delay since the commencement of the proceedings to brief an expert to consider the architectural aspects of the fastener design. The relevant delay, however, in the context of the amendments now sought, is from the commencement of the proceedings. Dymocks' explanation as to why the amendments are only sought to be made at this stage of the proceedings is provided in the affidavit of its solicitor, Ms Nadia Janisz, sworn 7 November 2011 at [12] - [14], namely that the import of the steel saddle corrosion had not been appreciated until the finalisation and service of the May 2011 report. Mr Roberts notes that Ms Janisz has not said what it was in the May 2011 report by Professor Young that caused a different understanding in this regard (and criticism was made of the fact that the latest expert report was not even commissioned until May 2011). However, Ms Janisz was not cross-examined on her explanation. 42Mr Miller quite candidly took responsibility for part of the delay, in informing me that there was at one stage consideration given as to whether that evidence would more appropriately be dealt with in reply (that presumably led to the forensic decision to make the present application). It is said that these matters could have been raised by way of reply in any event, having regard to the defence based on s 50 of the Civil Liability Act and Dalton's contention that it did exercise reasonable care in preparing the specification ([C49] of the List Response) and acted in a manner that was widely accepted in Australia by peer professional opinion as competent professional practice). (In that regard, if the matters could be raised in reply in any event, there can be no evidentiary prejudice raised by their late inclusion in the primary claim for relief.) 43I consider that there has been an adequate explanation for the delay, perhaps not as fulsome by reference to the detail of Professor Young's report as Dalton might wish, but there was nevertheless a very clear statement (which I accept) to the effect that the significance of the corrosion to the steel saddle (as part of the fastener) was not understood or appreciated at the time. It seems to me that this is different from the making of a deliberate decision not to raise such an issue and then later changing one's mind on that position (as was the case in Aon ). 44Mr Roberts emphasises that the steel saddle claim is one that will depend on whether Dalton acted reasonably in specifying the particular materials, namely the zincalume saddles coated with polyvinyl diflouride, and that the manner in which Dymocks pleads the steel saddle claim potentially casts an onus (or at least an evidentiary burden) on Dalton to justify its selection of those materials more than 22 years ago and to demonstrate that it acted reasonably in specifying their use. The evidence on which Dalton will seek to rely in respect of factual matters relevant to the claim against the company is that Mr Dalton, who is the person within Dalton who undertook the work relevant to the project and who was responsible for preparing the specification. Mr Dalton is over 70 years old and hence expanding the claim to include allegations in relation to the coating of the fasteners will presumably involve him considering the basis for design decisions taken some time ago. 45Mr Miller submits, however, that there is nothing in the evidence on this application as to Mr Dalton's recollection (or ability to recollect matters) in relation to the relevant allegations; the existence of any documents to which Mr Dalton may have access that might assist in refreshing his memory; or what additional matters will have to be considered in relation to the proposed amendments which would not have to be considered in any event so as to deal with the existing matters which are contended in both Dymocks' list statement and Dalton's list response. Insofar as Mr Dalton was capable in March this year of verifying the first report, it is submitted that this is evidence of his capacity to recall and understand the factual issues even though those go back some 22 or more years. (Moreover, I note even though reliance might be able to be placed on the Australian standard in relation to the existing design issue, there is nothing to suggest that Mr Dalton would not (but for the coating issue now raised) have given no evidence or that he would not in any event have been required to turn him mind to events of over 22 years ago.) 46Further, as Mr Miller notes, Dalton has not yet served its lay or expert evidence and it is not suggested that it will suffer prejudice in the form of having to adduce additional evidence from that which would otherwise have been adduced so as to deal with the matters which are now sought to be pleaded. 47In relation to the question of delay and prejudice, the High Court in Jackamarra v Krakouer [1998] HCA 27 at 29; (1998) 195 CLR 516 said: ... Delay will almost always impede the proper disposition of any case that does not come to trial promptly. Memories fade; records may be lost. The impediments are many, varied and obvious. Those impediments may be overcome but their presence is an added burden for both the litigants and the court that must try the case. Delay in a case will almost always add to the costs. The case takes longer to prepare and to try because the events are no longer fresh in the minds of those who will give evidence. Costs, therefore, increase. ... Each day's delay in bringing a case to trial and final judgment simply prolongs the uncertainty and worry felt by the litigants. 48Although it might be said there has been no (or limited) evidence as to any particular prejudice suffered or likely to be suffered by Dalton, there would in any event remain to be weighed in the balance the likelihood of prejudice (sometimes referred to as "presumptive prejudice") of this kind referred to by McHugh J in Brisbane South Regional Health Authority v Taylor [1996] HCA 25; (1996) 186 CLR 541 at 552 - 553 (whether that should be regarded as "presumptive" prejudice or "actual" prejudice being unnecessary to determine in the present application). 49In the Brisbane Health case , McHugh J said, in the context of considering exercise of a discretion to extend time, (at 552 - 553): The enactment of time limitations has been driven by the general perception that "[w]here there is delay the whole quality of justice deteriorates". Sometimes the deterioration in quality is palpable, as in the case where a crucial witness is dead or an important document has been destroyed. But sometimes, perhaps more often than we realise, the deterioration in quality is not recognisable even by the parties. Prejudice may exist without the parties or anybody else realising that it exists. As the United States Supreme Court pointed out in Barker v Wingo , "what has been forgotten can rarely be shown". So, it must often happen that important, perhaps decisive, evidence has disappeared without anybody now "knowing" that it ever existed. Similarly, it must often happen that time will diminish the significance of a known fact or circumstance because its relationship to the cause of action is no longer as apparent as it was when the cause of action arose. A verdict may appear well based on the evidence given in the proceedings, but, if the tribunal of fact had all the evidence concerning the matter, an opposite result may have ensued. The longer the delay in commencing proceedings, the more likely it is that the case will be decided on less evidence than was available to the parties at the time that the cause of action arose. ... The effect of delay on the quality of justice is no doubt one of the most important influences motivating a legislature to enact limitation periods for commencing actions. But it is not the only one. Courts and commentators have perceived four broad rationales for the enactment of limitation periods [this exposition having been noted with apparent approval by Spigelman CJ in BP Australia Ltd v Brown & ors [2003] NSWCA 216; (2003) 58 NSWLR 322]. First, as time goes by, relevant evidence is likely to be lost . Second, it is oppressive, even "cruel", to a defendant to allow an action to be brought long after the circumstances which gave rise to it have passed. Third, people should be able to arrange their affairs and utilise their resources on the basis that claims can no longer be made against them. Insurers, public institutions and businesses, particularly limited liability companies, have a significant interest in knowing that they have no liabilities beyond a definite period. 50That said, in Agricultural & Rural Finance Pty Ltd v Kirk & Anor [2011] NSWCA 67; (2011) 82 ACSR 390 Tobias JA, in the context of considering exercise of a discretion to extend time for service of pleadings, said (at [192]): Although I accept the principle of presumptive prejudice is applicable to a case such as the present, I do not think that it should carry much weight when balancing the various factors which the court is required to take into account in the re-exercise of the relevant discretion. 51Similarly, in New Cap Reinsurance Corporation v Reaseguros Alianza SA [2004] NSWSC 787; (2004) 186 FLR 175, White J, considering an application to extend the time period under s 588FF(3)(b), and referring to the rationales for the enactment of limitation periods to which McHugh J had referred in Brisbane Health, went on to say, at [55]: In Itek Graphix Pty Ltd v Elliott (2002) 54 NSWLR 207 at 224, Ipp AJA identified the issue of prejudice as being one which ordinarily should be of paramount importance. But the absence of prejudice is not itself decisive. It is rather a relevant factor to be taken into account in the exercise of the general discretion. ( BP Australia Ltd v Brown at 358). (my emphasis) 52The prejudice from an evidentiary perspective in the present case does not go beyond what has been described as the 'presumptive' prejudice of deterioration in the memory of witnesses (as discussed by McHugh J in the passage from the Brisbane Health case extracted above). There is no suggestion that Mr Dalton is presently incapable of giving instructions or remembering the kind of decisions made in relation to building construction some time ago. I accept that if the evidence turns on decisions as to the use of sealed fasteners some 22 years ago, this will require an explanation of decisions made quite some time ago and that the frailty of his memory will then come into the equation. No doubt that will be taken into account in assessing all of the evidence in due course. However, I am not satisfied that this is any greater prejudice than the existing need for Mr Dalton (potentially at least) to give evidence as to the use of the fasteners (comprising the steel saddle) going back to that same period of time. 53Insofar as the context in which this discretion is to be issued includes the mandatory requirements in ss 56-59 of the Civil Procedure Act , I note what was said in Hans Pet Constructions Pty Ltd v Cassar [2009] NSWCA 230 at [36], by Allsop ACJ (with whom Campbell and Young JJA agreed) namely that these provisions (together with ss 60 and 61 of the Act) bring about: a new statutory balance among various factors in litigation including court and party efficiency and the delivery of individual justice. Delay and case backlog are not merely factors affecting the public cost of delivering justice, they corrode the ability of the courts to provide individual justice. 54However, it is not apparent that significant delay to the conduct of the case will be caused by the amendments now sought to be made.

Conclusion 55In Aon , the application for leave to amend was brought late (during the time set for the trial) and followed a deliberate tactical decision made some time before not to seek that amendment in circumstances where no explanation had been given by the plaintiff for the delay in seeking leave to amend ( Aon at [106]-[109]). The amendment sought was one that would have resulted in the trial being abandoned, in circumstances where there was a question whether an order for costs (even indemnity costs), would overcome the prejudicial effects on the defendant ( Aon at [104]). There, the outcome of the amendments, if permitted, was that the defendants would be required to defend again as from the beginning ( Aon at [104]).) 56That is not the case here. The application is brought prior to the service of evidence by the defendants and before any hearing date has been set. Although there was consideration to a different course of action, there was no suggestion of a final forensic decision until the amendment was sought. 57In summary, I consider that there has been a sufficient explanation for the delay proffered in it being that the import of the corrosion to the steel saddles were not perceived until Professor Young's latest report. The fact that an architectural expert was not retained before then (in an architect's negligence case) does not in my mind gainsay the explanation proffered. 58I accept there is presumptive prejudice (as there must be in all cases of not insubstantial delay) but I am not persuaded that this outweighs the public interest (as evinced in the statutory provisions referred to above) for the real issues in the proceedings to be ventilated. The application comes at a stage of the trial where it will not result in the vacation of a hearing date (and, in fact, before Dalton has been required to put on its lay and expert evidence). Further, I consider that the evidentiary need to obtain evidence from Mr Dalton is likely to have arisen in any event by the s 5O Civil Liability Act defence. 59In these circumstances, while costs are not a panacea for all ills, I consider that the making of costs orders in relation to the amendments removes the bulk of the prejudice that has arisen by the delay in this regard. 60Accordingly, I made orders on 18 November 2011 permitting the amendment and for costs of the motion and costs thrown away by the amendment to be borne by Dymocks (with consequential orders for the filing of the respective documents and the amended cross-claim foreshadowed by Capral..

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