The Owners - Strata Plan 82089 v Omaya Holdings Pty Ltd - [2024] NSWSC 1188 - NSWSC 2024 case summary

Supreme Court of NSW|2024-09-13|Before: Stevenson J

Solicitors: Sparke Helmore (Plaintiff) Norton Rose Fulbright (First to Third Defendants/First and Second Cross-Claimants) DLA Piper Australia (Fourth Defendant/First Cross-Defendant) Wotton & Kearney (Fifth Defendant/Second Cross-Claimant) File Number(s): 2018/190513

The "evidentiary admissions"

I doubt that the allegations made by the Developer and Omaya Investments in the Cross-Claim can truly be characterised as "admissions". The general rule is that allegations contained in pleadings are not admissible as an admission against the party filing them. [3] That is because pleadings are statements of the case the pleading party seeks to make, which are to be admitted or denied by the opposite side, and are not positive allegations of the truth of their contents. [4]
However, allegations in pleadings may involve an implied representation that the party filing the pleading honestly believed it had a fair chance or prospect of success. [5]
The matters in the Amended List Statement for the Cross-Claim that I have set out at [16] to [18] above appear to be clear allegations of the existence of a contract to the effect of the Alleged Contract.
The solicitor for the Developer and Omaya Investments has given the certificate that I have set out at [20] above.
I see that certificate as the representation by the Developer and Omaya Investments, by their solicitor, that there were reasonable grounds for believing that the allegations in the Cross-Claim could be made out.
I see this as a sufficient basis for the Owners Corporation to allege the existence of a contract to that effect.
It is true, as McGrath J observed, [6] that these allegations are made in the context of a Cross-Claim that assumes, contrary to the denials of the defendants in their List Response, that the Developer or Omaya Investments are found to be liable to the Owners Corporation.
In that sense, the allegations in the Cross-Claim are conditional, are predicated on and are only to be enlivened, in the sense of being pursued by the Developer and Omaya Investments, if the Owners Corporation makes those claims.
But the allegations I have set out are not made conditionally in the sense of being made if, and only if, the Owners Corporation succeeds against the Developer and Omaya Investments. That is, although the Developer and Omaya Investments would have no cause to prove the contract between them as against the architect and certifier were the Owners Corporation's claims to fail, their allegation that such a contract exists is not conditional on the Owners Corporation's success. As Mr Ashhurst SC put it, the Developer and Omaya Investments are not saying, vis-a-vis the architect and certifier "we only have a contract with you if we're liable to them".
To the extent that McGrath J has expressed a different view, [7] I respectfully disagree.
At the end of the day, the assertions made by the Developer and Omaya Investments in their Cross-Claim, and such representations as may be found to arise from them, may not be a sufficient basis upon which to establish the Alleged Contract.
But I see the case as being at least arguable, such that the Owners Corporation should be granted leave to make the allegation and endeavour to establish it at hearing.

The limitation point

Although the allegation of the Alleged Contract is new, in the sense that it has not previously been alleged, and would otherwise be out of time, it arises from the same facts as those giving rise to the cause of action hitherto pleaded as set out at [7] above and the pleading now made in substitution thereof.
I therefore propose to allow the amendment under ss 64(1)(b) and 65(2)(c) of the Civil Procedure Act 2005 (NSW).

Delay

The proposed amendment is made long after these proceedings were commenced, but only shortly after the defendants, for the first time, sought to agitate the question of Omaya Investments' involvement in the proceedings. [8]
I do not see delay as a relevant factor here.

Prejudice

A suggestion of prejudice was made on behalf of the defendants arising from an undertaking given to the Court by Mr Bechara not to deal with a property he owns elsewhere in Strathfield and the recent introduction of the State Environmental Planning Policy (Housing) Amendment (Transport Oriented Development) 2024 under the Environmental Planning and Assessment Act 1979 (NSW).
The effect of this policy was said to "significantly reduce" the value of that Strathfield property. How that could translate into relevant prejudice was not developed.

Decision

I grant the Owners Corporation leave to make the proposed amendments.
The Owners Corporation must pay the costs thrown away by the amendments.
The costs of the Owners Corporation's Notice of Motion filed on 23 August 2024 will be its costs in the cause.

Endnotes

The Owners - Strata Plan No. 82089 v Omaya Holding Pty Ltd [2024] NSWSC 992.
Rather than 2007, in the case of the architect.
Boileau v Rutlin (1848) 2 Ex 665 at 679-81; 154 ER 657 at 663 (Parke B); [1848] EngR 661; Buckmaster v Meiklejohn (1853) 8 Exch 634 at 637 (Parke B, Alderson and Martin BB agreeing); 155 ER 1506 at 1507; [1853] EngR 415; McKinlay v North Australian Co (1869) 3 SALR 135 at 139 (Wearing J); [1869] SALawRp 21; Austin v Austin [1905] VLR 564 at 566-7 (Hodges J); (1905) 11 ALR 337; [1905] VicLawRp 48; Kleeners Pty Ltd v Lee Tim (1959) 78 WN (NSW) 746 at 747-8 (Maguire J); British Thomson-Houston Co Ltd v British Insulated and Helsby Cables Ltd [1924] 1 Ch 203 at 206 (Russell J); British Thomson-Houston Co Ltd v British Insulated and Helsby Cables Ltd [1924] 2 Ch 160 at 164 (Pollock MR), at 170 (Atkin LJ).
Jamieson v R (1993) 177 CLR 574 at 580 (Deane and Dawson JJ); [1993] HCA 48 quoting Boileau v Rutlin (supra) at 680-81 (Parke B) and Laws v Australian Broadcasting Tribunal (1990) 170 CLR 70 at 85 (Mason CJ and Brennan J); [1990] HCA 31.
Spies v Commonwealth Bank of Australia (1991) 24 NSWLR 691 at 698-700 (Handley JA, Mahoney and Clarke JJA agreeing).
At [36]-[37].
At [38], [52] and [53].
See [7] and [8] above. 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: 19 September 2024

The Owners - Strata Plan 82089 v Omaya Holdings Pty Ltd

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