The Owners - Strata Plan No 16460 v Hunter Water Corporation

Decision date: 20 August 2025

Jurisdiction: Common Law

Before: Elkaim AJ

Decision: 1. The plaintiffs have leave to file, serve, and rely upon the amended statement of claim in the form annexed to the affidavit of Ms Lazarou dated 12 August 2025.
2. The plaintiffs are to pay any of the defendant’s costs occasioned by the amendment.

Catchwords: CIVIL PROCEDURE — Originating process — Amendment — Plaintiffs seek to add a new claim — Where application is late — Where claim may be untenable — Where claim would be heard on evidence already before the Court — Where there is no prejudice to the defendant

Legislation Cited: Hunter Water Act 1991 (NSW), s 22
Electricity Industry Act 2000 (Vic)
Water Board Act 1987 (NSW)

Cases Cited: Rushcutters Investments Pty Ltd v The Water Board (1989) 68 LGRA 128
Sleeman v SPI Electricity Pty Ltd [2014] VSCA 243

Category: Procedural rulings

Parties: The Owners - Strata Plan No 16460 (Plaintiff)
Hunter Water Corporation (Defendant)

Representation: Counsel:
M J Dawson (Plaintiff)
V Chan (Plaintiff)
M T McCulloch SC (Defendant)
S J Maybury (Defendant)
Solicitors:
Mills Oakley (Plaintiff)
Makinson d'Apice Lawyers (Defendant)

File Number(s): 2020/77341

Publication restriction: No

JUDGMENT

1. The plaintiffs wish to amend their statement of claim. The new pleading adds a claim under s 22 of the Hunter Water Act 1991 (NSW). The section allows for compensation to be paid by the Corporation (the defendant) to “all persons who suffer damage by the exercise of the functions” of the Corporation.

2. The amendment is sought in a notice of motion filed in court and supported by an affidavit of Ms Amanda Lazarou, the plaintiffs’ solicitor.

3. The amendment is opposed because it “is not properly pleaded” and is very late. Although later changed to commence on 19 August 2025, the matter had been set down to commence on 18 August 2025, with an estimate of 10 days.

4. The pleading point seems to be that the s 22 claim is simply tacked on at the end without any reference to the material facts upon which the claim is based.

5. There is no doubt the amendment is late. According to Ms Lazarou’s affidavit the requirement for the amendment was only discovered on 8 August 2025, during preparation of submissions for the hearing. This explanation seems to be code for ‘we never picked it up beforehand’. This is hardly a sound explanation.

6. More importantly however, is whether the defendant suffers any prejudice from the amendment.

7. At a prima facie level, I also think there are viable arguments that the amendment is doomed to failure, and it would be wrong to permit a futile argument to proceed. For example, s 22(1) states:

The Corporation, in exercising its functions under this Division, is to do as little damage as practicable and is, subject to this Division, to compensate all persons who suffer damage by the exercise of the functions.

8. The beginning words of the subsection refer to “functions under this Division”. The functions are arguably only those described in s 20, namely where the Corporation enters land belonging to another person or entity. That is not the case here. The water main was not on property belonging to the plaintiffs and the repair work did not involve entry onto the plaintiffs’ land.

9. The entry point was the subject of a decision of the Court of Appeal of Victoria in Sleeman v SPI Electricity Pty Ltd [2014] VSCA 243 where a similar provision in the Electricity Industry Act 2000 (Vic) was considered. After reviewing a number of authorities, the court stated at [92]:

The authorities discussed at [82]–[91] above demonstrate that statutory compensation schemes that are comparable to the scheme in s 93(2) of the Act are confined to owners of land upon which work has been undertaken in the exercise of statutory powers. In none of the cases has statutory compensation been awarded to an owner of land which has not been entered for the purpose of undertaking such work even though that land has been adversely affected by work undertaken on neighbouring land. It follows that these authorities support the interpretation of s 93(2) set out at [63] above.

10. Another reason why the amendment might be untenable arises from the decision of Brownie J in Rushcutters Investments Pty Ltd v The Water Board (1989) 68 LGRA 128. His Honour was dealing with a similar section to s 22 in the Water Board Act 1987 (NSW) and stated at p 129:

“The Water Board Act has amongst its progenitors the Metropolitan Water and Sewerage Act 1880 (NSW) and the Metropolitan Water Sewerage and Drainage Act 1924 (NSW). Arguments similar to those raised by the defendant in the present case were considered by the Full Court in Graham v Board of Water Supply & Sewerage (1891) 12 NSWLR 287 and by the High Court in the Metropolitan Water Sewerage & Drainage Board v O K Elliott Pty Ltd (1934) 52 CLR 134; 12 LGR 50 and in each of those cases were rejected.

In Graham v Board of Water Supply & Drainage, Darley CJ (at 289-290) distinguished cases where a statute makes no provision for the payment of compensation, in which event someone injured by the negligent performance of the authorised works might sue in tort, and cases where the statute makes provision for the payment of compensation, in which case statutory compensation is payable if the work is done without negligence, whereas if the work is done negligently the injured persons' remedy comes from the common law and not from the statute.”

11. Notwithstanding the apparent strength of the futility case, counsel for the plaintiff stated: “I’ll endeavour to explain to the contrary.”

12. In favour of the plaintiff, the compensation that might be ordered under s 22 for physical damage suffered by the plaintiffs has been agreed leaving only the entitlement to the compensation in issue. According to Ms Lazarou, establishing the entitlement, and defending against it, will not require an adjournment and will not require “any additional evidence or hearing time”.

13. As far as the defendant’s point about the pleading not containing the material facts, I think the material facts are already pleaded in the substance of the existing statement of claim. The facts said to support the allegations of nuisance and negligence are the same facts which would be used to establish the right to compensation under s 22.

14. The amendment is obviously very late, and the explanation is not very good. However, the absence of any prejudice to the defendant and the lack of any need for further evidence or delay I think enables me to say that it is in the interests of justice to allow the amendment. All issues between the parties should be considered and if the amendment allows this to be done within the hearing time already allocated then I think it is permissible.

15. The plaintiff will need to overcome the difficulties I have outlined above which I think can be left to final submissions. The position would almost certainly have been different if the amendment would have required further evidence.

16. Accordingly, I make the following orders:

17. The plaintiffs have leave to file, serve, and rely upon the amended statement of claim in the form annexed to the affidavit of Ms Lazarou dated 12 August 2025.

18. The plaintiffs are to pay any of the defendant’s costs occasioned by the amendment.

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