T&F Mechanical Repairs Pty Ltd v Helou and Anor

Plaintiff - T&F Mechanical Repairs Pty Ltd PARTIES : First Defendant - Samuel Michael Helou Second Defendant - Faye Helou

COUNSEL : Mr S Johnson - Plaintiff Mr JT Svahla - Defendants

SOLICITORS : Hall Partners - Plaintiff Houston Dearn O'Conner - Defendants

• 20 - IN THE SUPREME COURT OF NEW SOUTH WALES COMMON LAW DIVISION

2010/62950 T&F MECHANICAL REPAIRS PTY LTD v HELOU AND ANOR

JUDGMENT 1 HER HONOUR: On 17 August 2010, the defendants filed a motion seeking the dismissal of the proceedings. On 30 August, the plaintiff filed a motion seeking leave to amend the summons and points of claim which had earlier been filed. At the hearing the parties' discussions resulted in a number of consent orders being made. The parties have now addressed written submissions to the amendment application. 2 The proceedings concern a lease entered by the defendants with Biondo Pty Limited, which was later transferred to the plaintiff and registered. The lease was varied in March 2006 between the plaintiff and the defendants. At issue between the parties is whether or not an option has been validly exercised, or whether the lease has been brought to an end. 3 The proceedings were commenced by summons filed on 10 March 2010. The lease was due to expire on 30 June 2010. By its summons the plaintiff sought a declaration that it had validly exercised the option for lease in January 2010, as well as an order for specific performance of the option and an order restraining re-entry. No relief was specifically sought under the Conveyancing Act 1919, even though notices under s 129(1) in respect of twenty two breaches which the defendants required to be rectified had been served by the defendants on 30 September 2009 and a notice under s 133E, in relation to sixteen identified breaches of the lease had been served on 12 February 2010. That latter notice expressly referred to the plaintiff's purported exercise of the option. 4 On 12 March 2010, a second s 133E notice was served by the plaintiff, in relation to eighteen further breaches said to have occurred after the purported exercise of the option. 5 In the points of claim document filed in April, the plaintiff referred to the first two s 133E notices. It alleged that it had not breached the lease and/or that such breaches were not material breaches and/or were breaches which the defendants had done everything reasonably possible to accommodate and in the Court's discretion, ought to be excused and/or were fabrications. It was alleged that the notices were issued in order to frustrate the plaintiff's efforts to validly exercise the option and not for any lawful reason. Declarations and orders under s 133F(2), (3) and (4) and the Court's inherent jurisdiction were sought, to have the notices set aside. Such relief had not been sought in the summons. Nor was it amended to seek such orders. 6 On 25 March and 28 May, further notices of breach were served under s 129(1). In March the defendants reserved their rights to terminate the lease in respect of the breaches. In May the defendants advised that if the breaches were not remedied, they would regard themselves as legally justified to terminate the lease. It was proposed that the plaintiff hold future rent moneys in trust, pending the outcome of the proceedings. The defendants did not wish to receive rent, as they did not want any suggestion that compliance with the breaches would be waived. On 10 June, a third s 133E notice was served in relation to two further breaches, as well as a fourth notice under s 129, with advice that if not remedied, the defendants would regard themselves as legally justified in terminating the lease on 24 June. Still the plaintiff took no steps to deal with the notices. 7 The defendants then terminated the lease. The plaintiff disputed their right to do so, taking the view that the option had been validly exercised. The parties later came to an arrangement as to how rent moneys were to be dealt with, to avoid the defendants taking possession of the premises by re-entry. 8 On 29 June 2010, the defendants filed a cross claim seeking, amongst other things, a declaration that the lease was effectively terminated on or by 29 June 2010, as well as orders that the exercise of the option was legally invalid and ineffective. 9 The plaintiff asserts that it validly exercised the option and now seeks to amend its summons, amongst other things to seek orders under s 129 of the Conveyancing Act, or the Court's inherent jurisdiction, for relief against forfeiture. Orders under s 133F, for relief in respect of the breaches by the plaintiff of its obligations under the lease, set forth in the s 133E notices, are also sought. The defendants oppose the amendment. 10 The issue to be determined depends on the exercise of discretions granted in s 64 and s 65 of the Civil Procedure Act 2005. They provide: 64 Amendment of documents generally (cf SCR Part 20, rules 1 and 4; DCR Part 17, rules 1 and 4) (1) At any stage of proceedings, 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 section 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. (3) An order under this section may be made even if the amendment would have the effect of adding or substituting a cause of action that has arisen after the commencement of the proceedings but, in that case, the date of commencement of the proceedings, in relation to that cause of action, is, subject to section 65, taken to be the date on which the amendment is made. (4) If there has been a mistake in the name of a party, this section applies to the person intended to be made a party as if he or she were a party. (5) This section does not apply to the amendment of a judgment, order or certificate 65 Amendment of originating process after expiry of limitation period (cf SCR Part 20, rule 4; DCR Part 17, rule 4) (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: (a) to enable the plaintiff to maintain the proceedings in a capacity in which he or she has, since the proceedings were commenced, become entitled to bring and maintain the proceedings, or (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, or (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 section 64. (5) This section has effect despite anything to the contrary in the Limitation Act 1969. (6) In this section, originating process, in relation to any proceedings, includes any pleading subsequently filed in the proceedings. 11 The defendants' case is that the discretions sought to be exercised are either not available to be exercised in favour of the plaintiff, or in the circumstances ought not to be exercised in its favour. The issues lying between the parties must be considered in the light of the relevant provisions of the Conveyancing Act. Sections 129, 133E, 133F and 133G provide: 129 Restrictions on and relief against forfeiture of lease (1) A right of re-entry or forfeiture under any proviso or stipulation in a lease, for a breach of any covenant, condition, or agreement (express or implied) in the lease, shall not be enforceable by action or otherwise unless and until the lessor serves on the lessee a notice: (a) specifying the particular breach complained of, and (b) if the breach is capable of remedy, requiring the lessee to remedy the breach, and (c) in case the lessor claims compensation in money for the breach, requiring the lessee to pay the same, and the lessee fails within a reasonable time thereafter to remedy the breach, if it is capable of remedy, and where compensation in money is required to pay reasonable compensation to the satisfaction of the lessor for the breach. (2) Where a lessor is proceeding by action or otherwise to enforce such a right of re-entry or forfeiture, or has re-entered without action the lessee may personally bring a suit and apply to the Court for relief; and the Court, having regard to the proceedings and conduct of the parties under the foregoing provisions of this section, and to all the other circumstances, may grant or refuse relief, as it thinks fit; and in case of relief may grant the same on such terms (if any) as to costs, expenses, damages, compensation, penalty or otherwise, including the granting of an injunction to restrain any like breach in the future, as the Court in the circumstances of each case thinks fit. (2A) If such right of re-entry or forfeiture arises under a lease for a term of ten years or upwards by reason of a breach of a covenant by the lessee that the lessee will not make alterations in the demised premises without the consent of the lessor, and if it shall be proved to the satisfaction of the Court that the alterations made or proposed to be made have been or may be made without substantial injury to the lessor the Court may grant relief on such terms as the Court may think proper. (3) The provisions of subsection (1) shall not extend to a covenant or condition or agreement against doing, committing, or suffering anything whereby or by means whereof either alone or with other circumstances any licence under the Liquor Act 2007 is or may be endangered, or is or may be liable to lapse or be suspended, cancelled or refused. (4) This section applies although the proviso or stipulation under which the right of re-entry or forfeiture accrues is inserted in the lease in pursuance of the directions of any Act of Parliament. (5) For the purposes of this section a lease limited to continue as long only as the lessee abstains from committing a breach of covenant shall be and take effect as a lease to continue for any longer term for which it could subsist, but determinable by a proviso for re-entry on such a breach. (6) This section does not extend: (a) to any Crown lease or to any lease granted by an owner under section 69 of the Mining Act 1906 , or to any lease or tenancy for a term of one year or less, or (b) to a covenant, condition, or agreement against the assigning, under-letting, parting with the possession or disposing of the land leased where the breach occurred before the commencement of the Conveyancing (Amendment) Act 1930, or (c) to a condition for forfeiture on the taking in execution of the lessee's interest in any lease of: (i) agricultural or pastoral land, (ii) mines or minerals, (iii) a house used or intended to be used as licensed premises under the Liquor Act 2007, (iv) a house let as a dwelling-house, with the use of any furniture, books, works of art, or other chattels not being in the nature of fixtures, (v) any property with respect to which the personal qualifications of the tenant are of importance for the preservation of the value or character of the property, or on the ground of neighbourhood to the lessor or to any person holding under the lessor, (d) in case of a mining lease to a covenant, condition, or agreement for allowing the lessor to have access to or inspect books, accounts, records, weighing-machines, or other things, or to enter or inspect the mine or the workings thereof, (e) to a condition for forfeiture on the taking in execution of the lessee's interest in any lease (other than a lease mentioned in paragraph (c)) after the expiration of one year from the date of the taking in execution, provided the lessee's interest be not sold within such one year: But if the lessee's interest be sold within such one year this section shall extend and be applicable to such condition for forfeiture. (7) (Repealed) (8) This section shall not affect the law relating to re-entry or forfeiture or relief in case of non-payment of rent. (9) The notice mentioned in this section shall be in the form set out in the Sixth Schedule or to a similar effect. (10) This section applies to leases made either before or after the commencement of this Act, and shall have effect notwithstanding any stipulation to the contrary. 133E Breach of certain obligations not to preclude option except in certain circumstances (1) This section applies to a lease that contains: (a) an option exercisable by the lessee, and (b) provision by which the lessee's entitlement to the option is made to depend on performance by the lessee of any specified obligation, whether such performance is required before, or after, or before and after, the giving of any notice by which the option is exercised. (2) Despite any provision of the kind referred to in subsection (1) (b), no breach by the lessee of any relevant obligation precludes the lessee's entitlement to the option unless: (a) the prescribed notice has been served on the lessee in respect of the breach, and (b) the lessee's rights are extinguished in relation to the notice. (3) In subsection (2): breach of an obligation includes, where the obligation requires any thing to be done, any neglect or failure to do the thing concerned. obligation includes any agreement, covenant, condition or stipulation by which the lessee is required to do or refrain from doing any thing. prescribed notice means a notice in writing: (a) specifying the lessee's breach of the relevant obligation and served on the lessee: (i) within 14 days after the giving of a notice by which the option is exercised, if the breach occurred before the giving of that notice, or (ii) within 14 days after the breach, if the breach occurred after the giving of that notice, and (b) states that, subject to any order of the court under section 133F, the lessor proposes to treat the breach as precluding the lessee from entitlement to the option. (4) For the purposes of subsection (2) (b), the lessee's rights are extinguished in relation to a prescribed notice: (a) if an order for relief against the effect of the breach in relation to the lessee's entitlement to the option is not sought from the court within one month after service of the prescribed notice, or (b) if proceedings in which such relief is sought are disposed of, in so far as they relate to that relief, otherwise than by granting relief, or (c) if such relief is granted on terms to be complied with by the lessee before compliance by the lessor with the order granting relief, and the lessee fails to comply with those terms within the time stipulated by the court for the purpose. 133F Court may grant relief from breach of certain obligations (1) Relief referred to in section 133E may be sought: (a) in proceedings instituted in the court for the purpose, or (b) in proceedings in the court in which: (i) the existence of an alleged breach by the lessee of the lessee's obligations under the lease, or (ii) the effect of the breach from which relief is sought, is in issue. (2) The court may, in proceedings in which relief referred to in section 133E is sought: (a) make such orders (including orders affecting an assignee of the reversion) as it thinks fit for the purpose of granting the relief sought, or (b) refuse to grant the relief sought. (3) The court may, in proceedings referred to in subsection (2), take into consideration: (a) the nature of the breach complained of, (b) the extent to which, at the date of the institution of the proceedings, the lessor was prejudiced by the breach, (c) the conduct of the lessor and the lessee, including conduct after the giving of the prescribed notice referred to in section 133E (2), (d) the rights of persons other than the lessor and the lessee, (e) the operation of section 133G, and (f) any other circumstances considered by the court to be relevant. (4) The court: (a) may make an order under subsection (2) on such terms as to costs, damages, compensation or penalty, or on such other terms, as the court thinks fit, and (b) may make any consequential or ancillary order it considers necessary to give effect to an order made under that subsection. 133G Lease to continue in force until issue decided (1) Except as otherwise provided by this section or by an order of the court, a lease that would otherwise expire during any of the following periods is continued in force by this subsection until the end of the period concerned: (a) a period of 14 days referred to in paragraph (a) of the definition of prescribed notice in section 133E (3), (b) a period of one month referred to in section 133E (4) (a), (c) the period commencing with the commencement of proceedings referred to in section 133E (4) (b) and ending at the time when: (i) those proceedings are disposed of in the manner referred to in that paragraph, or (ii) effect is given to orders made by the court in granting relief referred to in that paragraph, in so far as such orders affect the lessor or relate to an assurance by the lessee. (2) Paragraph (c) of subsection (1): (a) does not apply to or in respect of a lease that, but for that paragraph, would continue in force for a period longer than the period for which it is, by the operation of that paragraph, continued in force, and (b) does not, where a lessee fails to comply with terms imposed upon the lessee pursuant to paragraph (a) of subsection (4) of section 133F, operate to continue the lease in force beyond the time of that failure by the lessee. (3) Where, under subsection (1), a lease continues in force after the day on which, but for that subsection, it would expire: (a) the lease so continues in force subject to the provisions, stipulations, covenants, conditions and agreements in the lease (other than those relating to the term and the option contained in the lease) but without prejudice to any rights or remedies of the lessor or lessee in relation to the lease, and (b) the lessee, if the lease is of land under the provisions of the Real Property Act 1900 and the lessee is in possession of the demised premises, has the protection of paragraph (d) of section 42 of that Act as if the lease were a tenancy referred to in that paragraph. (4) Subject to subsection (5), where, pursuant to an option contained in a lease continued in force under subsection (1), the lease is renewed or a new lease is granted, the period during which the lease was so continued in force shall be deemed to be part of the term for which the lease was renewed or the new lease granted, and any lease granted pursuant to an exercise of the option shall be expressed to have commenced when the lease containing the option would, but for subsection (1), have expired. (5) Subsection (4) does not apply to or in respect of a lease that stipulates for the commencement of any lease granted pursuant to an exercise of the option contained therein on a day that is later than the day on which the lease so granted would, but for this subsection, commence under subsection (4). Section 129 notices 12 It is apparent that the Conveyancing Act has ameliorated the common law as to the consequences of a lessee's breaches of its obligations under a lease, particularly in so far as forfeiture for breach and the exercise of an option are concerned. 13 There is no limitation as to the time by which an application for relief under s 129(2) must be brought. Given what was at issue between the parties when the proceedings were commenced, that there was a need for relief under s 129 to be sought was made clear by the bringing of the cross claim, if the case which the plaintiff was seeking to make out by its summons, was to be preserved. 14 Thus it was that on 30 August that the plaintiff sought to amend the summons to rely on s 129. So understood, it seems to me that justice requires that this amendment be permitted. 15 By their cross claim the defendants are plainly seeking relief of the kind contemplated by s 129(2). It follows that in accordance with the provisions of s 56 of the Civil Procedure Act, the plaintiff must be permitted to amend to seek orders under s 129. That will ensure that the real questions raised by or otherwise depending on the proceedings, will be resolved in these proceedings. There is no limitation problem here and the relief sought plainly rests on 'the same (or substantially the same) facts as those giving rise to' the claims originally advanced in the parties respective pleadings, as s 65(2)(c)contemplates. 16 There is no real difficulty as to the time from which the amendment is to operate. That is a matter of discretion. As to the notices given after the commencement of the proceedings, the amendment should as a matter of logic operate only from the date of service of the notice, no cause of action existing in respect of any notice, prior to its service.

Section 133E notices 17 The situation as to these amendments is not so clear. As a general rule leave to amend should be granted if the application is made in a timely manner and for a proper purpose, especially where an existing claim is merely being reformulated, within the scope of the existing factual issues. A number of countervailing factors must be considered. 18 The approach to be followed is that discussed in Greater Lithgow City Council v Wolfenden [2007] NSWCA 180 by reference to McGee v Yeomans [1977] 1 NSWLR 273 at 280, where Glass JA said of the discretion at that time provided for in the Rules:

"The exercise of the discretion is unfettered by any rules of practice… The discretion, having been set free, should not again be confined by rigid technicalities. The Court hearing the application will necessarily have regard to the hardship of the plaintiff, if the amendment is refused, and the prejudice to the defendant, if it is granted. It must also consider all other relevant circumstances, such as the fault of the plaintiff or his advisers, the period of time since the limitation has expired, and the defendant's knowledge of the new cause of action …"

19 Regard must now also be had to the High Court's approach in Aon Risk Services Australia Ltd v Australian National University [2009] HCA 27; (2009) 258 ALR 14, where the views taken included that questions of prejudice must also be considered on the basis that a costs order in favour of the defendant is not always a basis upon which it may be concluded that questions of prejudice can be justly resolved. 20 This is not a case of a late amendment, shortly before trial, but raises the question of whether the amendment is a timely one, given the parties' respective conduct. The defendants' case was that the plaintiff's original pleadings raised against them serious allegations of unparticularised fraud premised on the basis that the plaintiff had not committed breaches of the lease alleged in the notice. It was also argued that the plaintiff had not been proactive in its pursuit of the proceedings, had failed to have regard to Court timetables and had provided no explanation for this conduct, which did not adhere to its obligations under the Civil Procedure Act. The further amendment now sought would introduce further delays. I accept that these are matters requiring consideration. 21 I also accept that the question which arises for determination is caught up with the effect of the statutory scheme in question. The defendants argued that the application must be considered in the absence of any proper explanation as to why orders as to the three s 133E(2) notices were not sought within the time prescribed in s 133E, a matter which the High Court emphasised in Aon also needs to be considered. It may also not be overlooked, however, that s 65 of the Civil Procedure Act expressly empowers a grant of leave such as that here sought, even in relation to a statute barred claim, if there are new causes of action and claims for relief which have arisen from the same (or substantially the same) facts as those giving rise to the existing cause of action and relief claimed in the proceedings. 22 This is plainly a case where, if the leave sought is not granted, the orders now sought to be pursued in relation to the three notices may not be sought in other proceedings, given the limitation period fixed in s 133E. There will thus be no multiplicity of proceedings, if the amendment sought is refused, but the consequences, so far as the plaintiff is concerned, will obviously therefore be very serious. That is another matter which must be considered, when determining what justice here demands. 23 It seems unquestionable that the failure to seek relief under s 133E in relation to the three notices can only have been as the result of a mistake. The April points of claim certainly referred to such orders being sought in relation to the first two notices. This is another matter to be weighed in the balance. The discussion in Aon at [73] - [83] is thus relevant, particularly at [82] - [83] where it was observed:

"[82] The need for amendment will often arise because of some error or mistake having been made in the drafting of the existing pleading or in a judgment about what is to be pleaded in it. But it is not the existence of such a mistake that founds the grant of leave under rules such as r 501(a), although it may be relevant to show that the application is bona fide 174 . What needs to be shown for leave to amend to be given, as the cases referred to above illustrate, is that the controversy or issue was in existence prior to the application for amendment being made. It is only then that it is necessary for the court to allow it properly to be raised to enable a determination upon it.

[83] The existence of a controversy may be seen in the way in which the matter had already been pleaded, albeit inferentially, in Tildesley v Harper and Dwyer v O'Mullen ; or where the issue is raised by another party in the same proceedings but in respect of which the party applying was inextricably involved, as in Cropper v Smith . It may be present in the nature of the bargain struck, as in O'Keefe v Williams . A consideration of these cases does not suggest that an unduly narrow approach should be taken to what are the real issues in controversy, although they are not, or are not sufficiently, expressed in the pleading."

24 It appears that it was the filing of the cross claim which led to the realisation that orders under s 133E had to be expressly sought in the summons in relation to all three notices, if the case which the plaintiff had sought to make out from the outset, that it had validly exercised its option and was entitled to remain in occupation under a new lease, was to have any prospect of succeeding. 25 The importance of the amendment to the plaintiff can thus readily be seen, but the resulting detriment to the defendants, if the leave sought is granted, is also a matter which may not be overlooked. 26 The effect of s 133E(4) was that the plaintiff's statutory rights in relation to the breaches of which it was given notice in the first s 133E notice served on 12 February 2010, expired in March, when it failed to seek an order for relief from the effect of those breaches, within one month of that service. The plaintiff's rights in respect of the further breaches dealt with in the second notice were extinguished in April, when it failed to seek an order for relief within one month of 11 March 2010 and in relation to the third s 133E notice its rights were extinguished in July, when it failed to seek an order within one month of 10 June 1010, when the third notice was served. The parties are disagreed as to a variety of matters about those notices, including the effect of the service of multiple notices and whether or not they raise separate breaches. 27 Even though the April points of claim had referred to orders under s 133E, it was only after the purported termination of the lease and the filing of the cross claim on 29 June, that the proposed amendment of the summons was pursued in the motion filed on 30 August. The plaintiff had then long been on notice of the defendants' intentions, but had failed to take the steps necessary to challenge the notices under s 133E in its summons. Conversely, since April the defendants had been aware of the orders which the plaintiffs wished to pursue as to the s 133E notices. 28 These are clearly proceedings in which 'the existence of an alleged breach by the lessee of the lessee's obligations under the lease' is in issue, so that relief under s 133F could have been sought in relation to the three s 133E notices in these proceedings, within the time frame provided. 29 Alternatively, separate proceedings for relief could have been initiated in relation to the notices. Neither course was adopted, with the result that s 133E(4) has taken effect in relation to all of the notices and the plaintiff's rights in relation to those notices have been extinguished. No causes of action remain to be pursued in relation to those notices, unless the Court exercises the discretion sought, a matter on which the defendants were unquestionably entitled to rely in support of their cross claim and in their resistance of the relief now sought. 30 It was thus argued that the statutory scheme established by Division 4 of the Conveyancing Act, which permits tenants to challenge notices given by landlords alleging breaches of the obligations imposed upon them by a lease, would shape the way in which the discretion here sought would be exercised. Any application to amend made after the expiry of the term of a lease, would require an exceptional case to be established, if what the dictates of justice require was to be met. This was not such a case. 31 There is obvious force in that argument, but the fact that s 65 itself permits leave to amend being granted in a situation such as this, may not be overlooked. 32 The defendants relied on the recent judgment of the Court of Appeal in Macquarie International Health Clinic Pty Ltd v Sydney South West Area Health Service [2010] NSWCA 268, where s 129 of the Conveyancing Act and what notices issued under that section must contain, were considered, to support its opposition to leave to amend being granted. The plaintiff argued that this decision was not relevant to the matters which here arose for determination. 33 Reliance on this decision underscored, it seems to me, the fact that the amendment sought would introduce substantial new claims into the proceedings, which do not arise on the case initially brought by the plaintiff. Nevertheless, that the defendants have known of the case which the plaintiff wishes to put since April in relation to the s 133E notices, may also not be overlooked. 34 The plaintiff conceded that it has altered its approach from an initial denial of any breaches, to one where relief under s 133E is sought to be pressed. There are questions alive between the parties as to the circumstances and manner of issuing s 133E notices and their effect. The fact that the claims which the plaintiff wishes to advance in relation to the s 133E notices might be arguable, is of itself a matter which weighs in favour of the leave sought being granted. 35 In resolving this controversy, attention must be paid to the overriding purpose specified in s 56 of the Civil Procedure Act, namely that in exercising its discretions the Court must facilitate 'the just, quick and cheap resolution of the real issues in the proceedings'. Would this be achieved by the grant or refusal of the amendment sought? The real issues in the proceedings must be determined as at the time that the proceedings were commenced (per Aon), but it must also be considered that in this case, some of the issues now lying between the parties arose later, with the giving of notices after the commencement of the proceedings. It is in that context that the existence of the issues now sought to be pressed has been apparent at least since April, must be considered. 36 The parties were also disagreed as to whether the circumstances permit the conclusion that the relief sought falls within s 65(2)(c) as arising out of the same (or substantially the same) facts as those giving rise to the existing cause of action and relief claimed in the originating summons. This requires that some impressions be formed, on the basis of the material relied on. 37 The defendants argued that relief under s 65(2)(c) is not available, because initially the plaintiff denied any breaches, alleging fraud by the defendants in relation to the breaches alleged. Now relief is to be sought as to the breaches notified in the three notices. The result of this change in approach must be that it may not be concluded that the new cause of action arises from the same, or substantially the same, facts as those on which the original cause of action rested. 38 Obviously enough the proceedings are entirely concerned with the lease and the circumstances in which the plaintiff asserts it exercised its right under the option and the defendants assert that the lease has validly been brought to an end. By their s 133E notices, the defendants alleged that the plaintiff had breached various of their obligations under the lease. The result of the failure to challenge those notices was that the plaintiff's rights in relation to the notices were extinguished. Even so it seems to me that the relief sought in relation to the first notice, must rest on the same facts as those on which the plaintiff's existing claims and the defence of these claims are pursued. While it was initially claimed that the plaintiff's conduct did not amount to breaches of the lease, it is now accepted that there has been breach, but that in the circumstances, relief under s 133F would be granted. 39 The same conclusion does not follow in relation to the two subsequent notices, because they were issued after the proceedings commenced. Nevertheless, the cross claim which the defendants have brought must also be considered. It was brought after the service of all three notices. Of necessity it seems to me that the case which the defendants wish to make out, thus rests on the same (or substantially the same) facts on which the plaintiff's case in relation to the s 133E notices will rest. 40 The defendants also relied on the effect of s 65(3). The second and third notices relate to breaches which did not exist in March 2010, at the commencement of the proceedings. Any amendment would have to take effect subsequently. It was argued that the other obvious dates, either the date the amendment was sought, or the date of the order, would still be outside the period specified in s 133E(4). Such amendment would be futile. I cannot accept that submission. 41 The date from which any amendment would operate is a discretionary matter. Any appropriate date of operation may be selected, including one which would bring the relief sought within the statutory limitation period. It follows that this argument does not preclude the relief sought being granted. 42 That being so, it seems to me that weighing in the balance all of the matters to which I have referred, the leave sought must be granted, as a matter of justice between these parties. Had the defendants not been aware since April of the case which the plaintiff wished to advance in relation to the first two s 133E notices, a different course may have had to be taken. In the face of that advice, I have concluded that justice demands the granting of the relief sought. The amendment in relation to the first notice is to operate from the commencement of the proceedings and in relation to the two later notices, from the date of their service.

Costs 43 Finally it is necessary to deal with the question of costs. While costs cannot deal with the consequences of every adverse order made, I am satisfied that justice requires that the price of the belated amendment sought to be made to the plaintiff's pleadings must be a costs order in favour of the defendants. That will go some way to balancing the competing interests which have here arisen, even though it must be accepted that it does not ameliorate all of the negative consequences which flow from the granting of the relief sought.

Orders 44 For the reasons given, I order that the plaintiff be permitted to amend the summons and points of claim in the terms sought. The plaintiff is to bear the defendants' costs of the motion and the costs thrown away as the result of the granting of this leave. **********

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