Strata Plan 87060 v Loulach Developments Pty Ltd

Further background

1. The building was the subject of development applications made by Loulach Developments, as the owner of the land, in 2008. It is a 14 storey commercial and residential building and was constructed between 2010 and 2012. The occupation certificate was issued on 4 July 2012.
2. On 28 September 2018, the Owners Corporation retained Helen Amanatiadis, from J S Mueller & Co, to provide legal advice in relation to defects that the Owners Corporation alleges exist in the building. By the time it retained Ms Amanatiadis, the Owners Corporation had obtained three reports from Noviion Engineering, dated 2 April 2018, 30 April 2018 and 4 September 2018, which detail the defects claimed in these proceedings.
3. The 2 April and 4 September reports relate to the external cladding of the building. The 4 September report identifies the defect as the use of non-compliant aluminium composite panel cladding with a core comprised of greater than 30% polyethylene (cladding defect). The 30 April report identifies 46 defects, such as water ingress through glass windows, moisture damage, balconies with only one drain and no overflow provision, insufficient falls in courtyards causing ponding and a lack of fire stopping collars fitted around multiple pipe penetration in the soffit of slabs, increasing fire risk.
4. On 25 October 2018, Ms Amanatiadis lodged a Government Information Public Access Act 2009 (NSW) informal access application with the City of Parramatta Council for a copy of all development documents in relation to the building.
5. On 16 November 2018, in response to her application, Ms Amanatiadis received an electronic bundle of documents and was also directed to Council's website for further information. The documents received by Ms Amanatiadis included three construction certificates issued by Dix Gardner Pty Limited dated 6 May 2010, 3 December 2010 and 3 February 2011, each of which names Loulach Developments as the builder. Of the other five documents received by Ms Amanatiadis, only one, being the occupation certificate, refers to Loulach Steel. The certificate refers to Loulach Steel as the "applicant" and to Loulach Developments as the "owner" of the property.
6. At the time, Ms Amanatiadis did not review the other documents relating to the development applications on Council's website. There are 40 documents accessible on that site. Five documents refer to Loulach Steel but not as the builder. According to Ms Amanatiadis, the five documents that refer to Loulach Steel are of a type that she would expect would ordinarily be obtained by a developer in seeking development consent, rather than documents that would be obtained or commissioned by a builder.
7. On 17 December 2018, Ms Amanatiadis wrote to Loulach Developments. Her letter refers to Loulach Developments as the developer and the builder, asserts that Loulach Developments had undertaken the residential building works in breach of the warranties implied under the HBA and demands that it take steps to rectify the defects referred to in the three expert reports which were enclosed with the letter. The letter also threatens to commence legal action against Loulach Developments if a satisfactory response is not received within 14 days.
8. On 7 January 2019, Ms Amanatiadis received a response from Janet Anne at "Loulach Steel Pty Ltd". Ms Anne's email was from a "kcnconstructions.com.au" email address and was copied to Simon Loulach. In her email, Ms Anne states that they would be doing their own investigations as to the defects listed in the expert reports and would let Ms Amanatiadis know if the defects are the builders' responsibility. The email also states: "Please be advised that we confirm Loulach Steel Pty Ltd shall proceed to carry out the remedial works that the builder is responsible for."
9. Between 14 January and 19 February 2019, Ms Amanatiadis and Ms Anne exchanged further emails. Ms Anne's emails used the "@kcnconstructions.com.au" email address and are copied to Simon Loulach. Ms Anne's email dated 19 February 2019 provides an update on each of the defects referred to in the expert reports. In summary, 12 were to be repaired, 18 were to be investigated, the cladding defect was to be the subject of advice from "Ignis Fore" on a "solution moving forward", and 15 were to be the subject of further response. There is no evidence of any further communications between the parties until these proceedings.
10. On 26 June 2019, the Owners Corporation commenced these proceedings. As noted above, in its technology and construction list statement the Owners Corporation asserts that Loulach Developments was the builder and developer of the building. It also asserts that the residential building works were completed on 4 July 2012, being the date on which the occupation certificate was issued.
11. On 10 July 2019, Loulach Developments instructed Maroun Draybi from Centurion Lawyers in relation to these proceedings. At that stage, Mr Draybi's firm was not instructed to act for Loulach Steel.
12. On 3 October 2019, Loulach Developments served its technology and construction list response in which it admitted it was the developer, denied it was the builder and stated that the builder was Loulach Steel, holding contractor license 194259C. The response also asserts that the building works were completed prior to 4 July 2012.
13. That day, Ms Amanatiadis wrote to Mr Draybi requesting the defendant's consent to the Owners Corporation's amendment to add Loulach Steel as a second defendant effective from the original date of filing the summons on 26 June 2019. As no response was received, Ms Amanatiadis sent a follow up letter on 7 November 2019.
14. On 18 November 2019, Mr Draybi wrote to Ms Amanatiadis and informed her that he had been instructed to act for Loulach Steel and that it refused to consent to the amendments on the basis that the claim made against it was commenced outside the seven year limitation period.
15. On 18 December 2019, the Owners Corporation filed its notice of motion seeking leave to file and serve an amended summons and further amended technology and construction list statement in the form annexed to Ms Amanatiadis' affidavit.

Application to amend

1. As noted above, the Owners Corporation's application to amend is made under ss 64 and 65 of the CPA.
2. Section 65 of the CPA relevantly provides: (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 section 64(1)(b), amend the originating process so as: … (b) to correct a mistake in the name of a party to the proceedings, whether or not the effect of the amendment is to substitute a new party, being a mistake that, in the court's opinion, is neither misleading nor such as to cause reasonable doubt as to the identity of the person intended to be made a party, …. (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 section 64. (5) This section has effect despite anything to the contrary in the Limitation Act 1969.
3. Pursuant to s 64(1)(b) of the CPA, the Court has power to grant leave to the Owners Corporation to amend its summons and technology and construction list statement at any stage of these proceedings.
4. Section 64(2) provides that, subject to s 58 of the CPA, 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.
5. Section 58(1) of the CPA provides that, in deciding whether to make any order for the amendment of a document, the Court must seek to act in accordance with the dictates of justice. In doing so, Court must have regard to the provisions of ss 56 and 57 of the CPA and may also have regard to the matters listed in s 58(2)(b) of the CPA to the extent to which it considers them relevant: Civil Procedure Act 2005 (NSW), s 58(2).

Preliminary issue - form of amendments

1. The draft technology and construction list statement referred to in the motion and annexed to Ms Amanatiadis' affidavit alleges that Loulach Developments was the builder (as well as the developer) or, in the alternative, that Loulach Steel was the builder.
2. In its written submissions, Loulach Steel contends that, as the Owners Corporation is seeking to join Loulach Steel and run an alternative and new case that it was the builder, the proposed amendments do not correct any mistake in the name of a party within the scope of s 65(2)(b). I agree with that submission. Continuing to allege that Loulach Developments was the builder and amending to join Loulach Steel in the same capacity does not, in my view, correct a mistake in the name of the builder originally sued, particularly where there is now no doubt as to who the builder was: Greenwood v Papademetri [2007] NSWCA 221 at [91].
3. At the commencement of the hearing, Counsel for the Owners Corporation stated that it was content to amend the list statement to allege that only Loulach Steel was the builder, rather than to assert it was the builder by way of an alternative case.
4. Loulach Steel's Counsel accepts, as do I, that this concession by the Owners Corporation deals with the submission about the form of the proposed amendments. I have, therefore, proceeded to consider the issues raised by the Owners Corporation's motion on the basis that the amendments, if allowed, will not be in the form of the documents annexed to Ms Amanatiadis' affidavit but will substitute Loulach Steel for Loulach Developments as the builder in the summons and technology and construction list statement.

Has there been a mistake in the name of the party?

1. On the basis of the Owners Corporation's concession, Counsel for Loulach Steel does not dispute that the amendments to be made by the Owners Corporation to its summons and list statement are to correct a mistake in the name of a party to the proceedings within the terms of s 65(2)(b) of the CPA. I am also of that opinion.
2. According to Ms Amanatiadis' evidence, the Owners Corporation intended to sue the builder and the developer. She had concluded that Loulach Developments was both based on the documents she received from Council and because the email responses from Ms Anne did not dispute or deny that Loulach Developments was the builder. She also interpreted Ms Anne's email dated 7 January 2019 to mean that Loulach Steel was a different and related entity to the builder (being Loulach Developments) and that it would carry out the remedial works for which Loulach Developments was responsible.
3. The terms of the Ms Amanatiadis' letter dated 17 December 2018 and the technology and construction list statement also made clear to Loulach Developments and Loulach Steel that the Owners Corporation intended to sue the builder and had made a mistake as to which "Loulach" entity matched that description.
4. In that context, the mistake that is being corrected was neither misleading nor such as to cause any reasonable doubt as to which party the Owners Corporation intended to sue, being the builder who the Owners Corporation misnamed. A mistake in the name of a person within the meaning of s 65(2)(b) can be made where a plaintiff, as here, intended to sue a person whom they know by a particular description but is mistaken as to the name of the person who answers that description: Bridge Shipping Pty Ltd v Grand Shipping SA (1991) 173 CLR 231; [1991] HCA 45 at 260-1; Sibroll Pty Ltd v Mitch Properties Pty Ltd [2007] NSWSC 579 at [38].

Should leave be granted in the exercise of the Court's discretion?

1. Even though the Owners Corporation's amendments are ones that are caught by the language of s 65(2)(b), the Court retains a discretion whether to permit them. That discretion is to be exercised in accordance with ss 58 and 64(2) of the CPA, which in turn requires the Court to have regard to ss 56 and 57 of the CPA: Greenwood v Papademetri [2007] NSWCA 221 at [35].
2. Thus, in this application, the Court may have regard to a range of factors including the nature and degree of any prejudice that Loulach Steel would suffer if the amendments were made; the knowledge Loulach Steel had of the proceedings during the limitation period; and other matters such as the facts that resulted in the limitation period having expired and any culpability for the delay in starting the action: Greenwood v Papademetri [2007] NSWCA 221 at [35] and [50].
3. Those factors needs to be weighed against the nature and importance of the amendments to the Owners Corporation and whether granting leave would provide for the just determination of the proceedings in a way that facilitates the just, quick and cheap resolution of the real issues in the proceedings: Civil Procedure Act 2005 (NSW), ss 56(1) and 57(1); Aon Risk Services Australia Limited v Australian National University (2009) 239 CLR 175; [2009] HCA 27 at [102].
4. Loulach Steel submits that the Court should, in the exercise of its discretion, refuse leave to amend. Its primary opposition is that granting the amendments will cause it real prejudice. It argues that the Owners Corporation's delay in commencing these proceedings until one week prior to the expiry of the seven year limitation period means that it has lost the opportunity to bring potentially valuable cross-claims against the sub-contractors who were responsible for the allegedly defective works.
5. Loulach Steel argues that the prejudice arising from the loss of its cross-claim is "obvious and significant" and typically decisive, citing Tekno Ceramics Pty Limited v Milat [2003] NSWCA 254 at [41]; The Owners - SP 67635 v Metlej Developments Pty Limited [2013] NSWSC 1564 at [12]; The Owners - Strata Plan 76841 v Ceerose Pty Ltd [2016] NSWSC 1545, supported on appeal in Owners Corporation Strata Plan 76841 v Ceerose Pty Ltd [2017] NSWCA 140 at [31] and [32].
6. As the Owners Corporation's Counsel noted, the cases cited by Loulach Steel did not deal with an amendment application to correct a mistake in the name of a party, as contemplated by s 65(2)(b) of the CPA.
7. In Tekno Ceramics, the Court of Appeal overturned a decision by a District Court Judge which granted an employee an extension of time of more than a year in which to bring an action against his employer for damages for personal injury. The employer had lost a viable cross-claim for contribution against a third party, but the prejudice occasioned by that loss had not been taken into account by the District Court Judge. In re-exercising the discretion, the Court of Appeal concluded that the prejudice was obvious and significant and meant it was not just and reasonable to extend the limitation period.
8. In this case, unlike in Tekno, the Court is not being asked to extend a limitation period. While the practical effect of an amendment by reason of s 65(2)(b) enables a claim to be brought against Loulach Steel that would otherwise be out of time, the default position is that an amendment to correct a mistake in the name of a party takes effect from the date the proceedings are commenced, unless the Court otherwise orders: Civil Procedure Act 2005 (NSW), s 65(3).
9. In Metlej and Ceerose, both building cases, the amendments sought to add additional defects to HBA warranty claims that had been brought in time and in respect of which the builders could no longer bring cross-claims as a result of the subsequent expiry of limitation periods. In both cases, the expert reports which identified the defects the subject of the proposed amendments were served well after the proceedings were commenced and after the critical dates on which the relevant limitation periods had expired. In those circumstances, and having been satisfied that the cross-claims were viable, the Court refused to grant leave to amend as the loss of the cross-claims resulted in prejudice that was significant and obvious.
10. The position in this case is, to my mind, different to that faced by the Courts in Metlej and Ceerose. Here, the defects the subject of the claims made in the proceedings were notified to Loulach Developments and, according to Loulach Steel's interpretation of Ms Anne's communications, to Loulach Steel itself, in December 2018 when the three expert reports were provided, well before the proceedings were commenced.
11. The evidence also indicates that the Loulach entities understood the nature of the defects in those reports. They responded to each defect and accepted responsibility for some of them. While a fourth expert report is also referred to in the particulars to the list statement, the evidence from Mr Draybi is that the fourth report refers to the defects in the earlier reports and responds to Ms Anne's email dated 19 February 2019, rather than raising new or different defects. In those circumstances, I am also not persuaded by Loulach Steel's submission that the particularisation of the defects by reference to the expert reports causes real difficulty in understanding the case against it or which cross-claims might be relevant. Nor do I accept that the approach to particularisation in the list statement is a basis on which leave to amend should be refused in this case.
12. The Owners Corporation submits that, as s 65(2)(b) is a remedial provision that enables proceedings that are out of time to be advanced due to a mistake, it necessarily means that any cross-claims made by a builder who is the correct party that is joined would be out of time. It follows, it submits, that the loss of a cross-claim by Loulach Steel should not be fatal to its application to amend. Put another way, if the loss of a cross-claim were fatal, then the provision would have no work to do.
13. To the extent the Owners Corporation suggests that the loss of viable cross-claims is not a relevant consideration, I am not persuaded by that submission. As noted at [36] and [37], the prejudice caused to Loulach Steel by the loss of cross-claims (assuming such prejudice is established) may be taken into account and weighed against the prejudice caused to the Owners Corporation if leave to amend is refused.
14. For the loss of cross-claims to amount to prejudice, Loulach Steel must show that it has been deprived of bringing cross-claims which were viable and realistic, rather than fanciful or theoretical: The Owners - SP 67635 v Metlej Developments Pty Limited [2013] NSWSC 1564 at [13]; Creevey v Barrois [2005] NSWCA 264 at [56].
15. In support of its submission that it has lost viable cross-claims, Loulach Steel relies on two affidavits from its solicitor, Mr Draybi. In his first affidavit, Mr Draybi summarises what he asserts to be the defects referred to in the expert reports and identifies "potentially liable sub-contractors" under seven general headings which appear to relate to the type of work the sub-contractors were engaged to provide or which materials were to be supplied. Mr Draybi's first affidavit exhibits more than 300 pages of documents relating to the named sub-contractors, such as invoices, payment claims under the Building and Construction Industry Security of Payment Act 1999 (NSW) (SOPA Act), emails relating to payments, installation certificates and other certifications of work done.
16. In his second affidavit, Mr Draybi identifies that all but two of the named sub-contractors continue to trade, namely Viewpoint Aluminium Windows & Doors Pty Limited and Vogue Windows Pty Limited who did work or supplied materials in relation to "windows and glazing". As they were deregistered in 2013 and 2014, some years prior to the limitation period expiring, Loulach Steel had no viable or realistic cross-claims against them: The Owners - Strata Plan 76841 v Ceerose Pty Ltd [2016] NSWSC 1545 at [75].
17. As to the nature of the cross-claims being asserted, Loulach Steel's Counsel identified that they were cross-claims for breaches of the warranties implied into contracts by s 18B(2) of the HBA. Those contracts would be the sub-contracts between Loulach Steel and its sub-contractors.
18. Thus, for Loulach Steel's cross-claims, the seven year period under s 18E of the HBA would run from the date the work was completed under the sub-contact, not from when completion took place under the main residential building works contract between Loulach Steel and the Owners Corporation's predecessor in title, or the notional contract between Loulach Developments as developer and the Owners Corporation: Owners - SP 74602 v Brookfield Australia Investments Limited [2015] NSWSC 1916 at [79]. Those dates may be coterminous but, as the Owners Corporation's Counsel submits, they may not be and will depend on what the sub-contracts provide and the dates of practical completion of the works: Home Building Act 1989 (NSW) ss 3B, 3C and 18B(2).
19. Based on the material produced to the Court, it is difficult to assess whether Loulach Steel had viable cross-claims against the other named sub-contractors in respect of the defects claimed in the proceedings and, if they existed, whether they were lost prior to or during the one week period after the date on which the proceedings were commenced. No sub-contracts are in evidence and Loulach Steel has not been explained how each particular sub-contractor named in Mr Draybi's affidavit is responsible for the failure that gives rise to the particular defects as identified by number and description in the three expert reports.
20. There are also documents which indicate that the works undertaken by the named sub-contractors were completed more than seven years before the commencement of the proceedings.
21. The installation certificates suggest that the works done by Universeal Waterproofing in respect of the internal wet areas were completed by 24 March 2012, with workmanship guaranteed for 10 years, and that the works in respect of the external wet areas were completed by 31 May 2012, with workmanship was guaranteed for seven years.
22. The documents relating to "cladding" sub-contractors include emails and final payment claims under the SOPA Act which suggest that any sub-contracted works were completed before 3 June 2012.
23. In relation to fire certification, the tax invoices from Innovative Fire Pty Ltd, the certificate of compliance provided by Extreme Fire Solutions and Electrical Services and a tax invoice from Defire (NSW) Pty Limited suggest that fire certification works were completed sometime during the period from 29 March to 30 May 2012.
24. The documents relating to the "glass handrails/balustrades", "plumbing" and "concreting" sub-contractors do not provide details of the dates the works were undertaken and the lay evidence does not address that issue.
25. There are three other sub-contractors who are asserted to be candidates for cross-claims relevant to the alleged defects, namely HKMA Engineers, a division of TRM Group Pty Limited, who prepared building structural documents and certified the structural elements of the building; Zahinar Architects, a division of TRM Group Pty Limited, who designed the building; and Joseph and Sylvania Chalhoub trading as Batifast Tiling, who carried out tiling work. No attempt is made to identify when the works in respect of those entities were carried out and completed or which particular defect their works relate to and which are said to give rise to potential cross-claims.
26. It is not fanciful to suggest that, at one time, Loulach Steel might have had cross-claims against one or other of the sub-contractors referred to in Mr Draybi's affidavit. However, based on the materials before the Court, I am persuaded by the submission advanced by the Owners Corporation that Loulach Steel has not established real prejudice as the asserted cross-claims were likely already lost when the proceedings were commenced.
27. Even if I were to accept that Loulach Steel had some cross-claims available to it as at the date the proceedings were commenced, I am not persuaded that it has established real prejudice by demonstrating that it was likely or viable for it to have brought them if it had been named as the builder when the proceedings were commenced and before any relevant limitation period expired. As the Owners Corporation submits, by the time Loulach Developments instructed Mr Draybi on 10 July 2019, the seven year limitation period based on the occupation certificate had expired. During that time, Loulach Developments had also failed to take steps which were available to it to deflect its liability by way of cross-claims against Loulach Steel and its sub-contractors.
28. Loulach Steel submits that the relevant delay causing prejudice is not the week or so between 26 June and 5 July 2019 but, for the purposes of s 58 of the CPA, is the period of many years of delay in bringing the proceedings. That delay, it submits, means that Loulach Steel lost its cross-claims in the "chaotic circumstances" that eventuated, which would not have occurred if the Owners Corporation had acted expeditiously and commenced the proceedings earlier.
29. The Owners Corporation contends that it is irrelevant to an application under s 65(2)(b) of the CPA that it commenced action only one week prior to the seven year limitation period expiring.
30. Section 58(2)(b)(ii) of the CPA permits the Court to take into account the extent to which a party has approached the proceedings with due expedition. That said, it does not seem to me that the Owners Corporation has been as tardy in commencing the proceedings as Loulach Steel contends, or that any delay in doing so has been shown to have led to real prejudice to Loulach Steel.
31. The three expert reports that identify the claimed defects were obtained by the Owners Corporation during 2018. The first report raises the possibility of the cladding defect and recommends laboratory testing. The third report outlines the results of that testing and details the nature of the cladding defect, which appears to be a significant defect as it relates to all of the panelling on the building's façade.
32. Within a few weeks of receiving the third report, the Owners Corporation instructed Ms Amanatiadis. Part of the delay in commencing proceedings after Ms Amanatiadis received the expert reports can be explained by the enquiries that she made through Council to ascertain the name of the builder and then engaging with Loulach Developments in an effort to have the defects rectified prior to commencing proceedings. In those circumstances, the relevant delay in commencing proceedings is, to my mind, better characterised as a matter a few months, rather than years.
33. Loulach Developments took thirteen weeks to serve its list response, which identified the mistake in the name of the builder, and another six and a half weeks to respond to the Owners Corporation's request to consent to an amendment to join Loulach Steel. Even if the Owners Corporation had acted expeditiously and commenced the proceedings earlier, say by early March 2019, based on Loulach Developments' approach to the proceedings, Loulach Steel was likely to have lost cross-claims by the time the mistake was identified. It would also have been in a very similar position to that which it would have been in if correctly named as a defendant when these proceedings were commenced.
34. Loulach Steel also submits that, in exercising its discretion, the Court should take into account the existence of "pointers" in other documents and information available to the Owners Corporation's solicitor prior to commencing proceedings that indicated that Loulach Steel was a relevant party. The existence of those pointers suggests, so Loulach Steel submits, that the Owners Corporation's solicitor was not as diligent as she should have been.
35. I am not persuaded by Loulach Steel's submission that the references to Loulach Steel in the Council documents and the reference to Loulach Steel on the NSW Fair Trading "Contractor and Tradespersons" licence check database as at 26 February 2020 are of significance in the exercise of the Court's discretion in this case.
36. As noted at [11], the documents received by Council and available on its website at the time of Ms Amanatiadis' inquiries named the builder as Loulach Developments. Ms Amanatiadis' understanding that Loulach Developments was the builder was then made clear in her letter to Loulach Developments dated 17 December 2018. Ms Anne's response was open to two interpretations, one of which was that Loulach Developments was the builder, as was accepted at the hearing. Based on Ms Amanatiadis' evidence, I am satisfied that a genuine mistake was made in naming Loulach Developments as the builder. That mistake is part of the foundation for my opinion that the Owners Corporation's application comes within the terms of s 65(2)(b) of the CPA.
37. This is a case in which the wrong party that was sued as the builder is a related company of the actual builder. Both the wrong and the right party were on notice that legal action might be taken against the builder and of the nature of the defects that were claimed to exist, well prior to the commencement of the proceedings. The emails from Ms Anne did not make clear that Loulach Steel was the builder, nor did the documents that were available from the Council.
38. As a related entity, and based on the communications involving Simon Loulach, I also consider it open to infer that Loulach Steel was on notice of the commencement of the proceedings, the nature of the claims made and the mistake in the name of the builder. While not obliged to do so, at the time the proceedings were commenced, it was open to Loulach Developments and Loulach Steel to correct the obvious mistake and inform the Owners Corporation that Loulach Steel was the builder. For whatever reason, nothing was said until 3 October 2019.
39. Having regard to all of these matters, it seems to me that the prejudice to Loulach Steel, to the extent it exists, is not solely of the Owners Corporation's creation or fault, as Loulach Steel contends.
40. As to case management, the Owners Corporation has not delayed bringing its application to amend. Granting leave to amend at this time would not be expected to lead to significant delays in the proceedings given the nature of the claims made, the stage the proceedings have reached and the relationship between the defendant and third party respondent.
41. Overall, this is a case which, in some respects, is finely balanced. Each party claims they will suffer prejudice if the outcome goes against them.
42. Having weighed all the factors and submissions, I have come to the conclusion that the dictates of justice favour the Owners Corporation being granted leave to amend. This is primarily because refusing leave would deny the Owners Corporation of the opportunity to have its defects claim against the builder heard and determined on its merits and it seeks to make the amendments by invoking a remedial provision to correct a mistake in the name of a party.
43. I am also not persuaded that Loulach Steel has established that it will suffer real and significant prejudice as a result of the loss of viable cross-claims that it was in a position to bring if it had been named as a party when the proceedings were commenced, or that any such prejudice outweighs the prejudice that would be occasioned to the Owners Corporation if leave to amend was refused. It is also significant, in my view, that the Owners Corporation has not delayed making the application to amend and that Loulach Steel has been on notice of the Owners Corporation's mistake, the nature of the defects and the proceedings during the limitation period.
44. Accordingly, I will grant leave to the Owners Corporation to amend its summons and technology and construction list statement on the basis proposed at the hearing, being that Loulach Steel is named as the builder in place of Loulach Developments and joined as a second defendant. In accordance with s 65(3) of the CPA, the amendment is to take effect from the date the proceedings were commenced on 26 June 2019.

Costs and orders

1. As to costs, the Owners Corporation submits that costs should follow the event and an order made in its favour.
2. Loulach Steel submits that, if the Owners Corporation succeeds in obtaining leave, each party should pay their own costs or that costs should be costs in the cause.
3. Subject to the Court rules, costs are in the Court's discretion and the Court has full power to determine by whom, to whom and to what extent costs are to be paid: Civil Procedure Act 2005 (NSW), s 98(1). While the Court's discretion is broad, it must be exercised judicially and consistently with the overriding mandate provided for in ss 56-60 of the Civil Procedure Act 2005 (NSW).
4. The usual rule is that costs follow the event, unless it appears that some other order should be made as to part or all of the costs: Uniform Civil Procedure Rules 2005 (NSW), r 42.1.
5. As a general rule, where a party seeks leave to amend or a dispensation of the Court, they would usually pay the costs of the application or each party would bear their own costs: Chahwan v Euphoric Pty Ltd [2009] NSWSC 805 at [41] - [43]; see also G E Dal Pont, Law of Costs (4th ed, 2018, Lexis Nexis Butterworths) at 14.36 and 14.37.
6. In this case, the Owners Corporation sought and has been granted leave to amend in what could be characterised as a dispensation provided by the CPA which enables it to pursue a case against Loulach Steel which was otherwise out of time. In those circumstances, while the Owners Corporation succeeded on its motion, I am not persuaded that costs should follow the event and consider that fairness dictates that some other costs order should be made, as contended for by Loulach Steel.
7. The amendments are made to correct a genuine mistake as to the name of a party and the misnamed party was on notice of that mistake. In that sense, they seek to clarify what was otherwise a correct pleading. In that context, and consistent with the default position provided for in r 42.7 of the Uniform Civil Procedure Rules 2005 (NSW), I consider it appropriate to treat the costs of the motion to be part of the costs of the proceedings and will order that they be costs in the cause.
8. For these reasons, I make the following orders and directions: 1. Pursuant to ss 64(1)(b) and 65(2)(b) of the Civil Procedure Act 2005 (NSW), grant leave to the plaintiff to amend its summons and technology and construction list statement to join Loulach Steel Pty Ltd as the second defendant and name it as the builder in substitution for Loulach Developments Pty Ltd, with the amendments to take effect from 26 June 2019. 2. The plaintiff to file and serve an amended summons and further amended technology and construction list statement on the defendant and Loulach Steel Pty Ltd by 20 May 2020. 3. List the proceedings for directions in the Technology and Construction List at 12.00pm on 22 May 2020. 4. The costs of the plaintiff's notice of motion filed on 18 December 2019 be costs in the cause. DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 22 December 2020