The Owners – Strata Plan No. 91684 v Parkview Constructions Pty Ltd

Date of orders: 19 May 2025

Decision date: 19 May 2025

Jurisdiction: Equity - Technology and Construction List

Before: Stevenson J

Decision: Leave to amend Cross Claim List Statement against WSP and Bates Smart refused; balance of Defendant’s Notice of Motion of 17 April 2025 stood over to 23 May 2025

Catchwords: CIVIL PROCEDURE – pleadings – amendment – late application for amendment of Technology and Construction Cross Claim List Statement – hearing imminent – pleading of causation – necessity to identify likely credible sequence of events that would have occurred but for impugned conduct

Cases Cited: Sergienko v AXL Financial Pty Ltd [2019] NSWSC 1610
The University of Sydney v Multiplex Constructions Pty Ltd (No 2) [2023] NSWSC 1019

Category: Procedural rulings

Parties: The Owners - Strata Plan No. 91684 (Plaintiff)
Parkview Constructions Pty Ltd (Defendant/First Cross-Defendant on First Cross-Claim/Cross-Claimant on Second Cross-Claim/Third Cross-Defendant on Fourth Cross-Claim/Applicant)
Sydney Olympic Park Authority (Second Defendant/ Cross-Claimant on First and Third Cross-Claims)
Site 3 Development Co. Pty Ltd (Second Cross-Defendant on First Cross-Claim/Fourth Cross-Defendant on Fourth Cross-Claim)
Jianshan Xiong (Second Cross-Defendant on Second and Third Cross-Claims/Respondent)
James Fong (Third Cross-Defendant on Second and Third Cross-Claims/Respondent)
Bates Smart Pty Ltd (Fourth Cross-Defendant on Second and Third Cross-Claims/Second Cross-Defendant on Fourth Cross-Claim/Respondent)
BG&E Facades Pty Ltd (Fifth Cross-Defendant on Second and Third Cross-Claims/Respondent)
McKenzie Group Consulting (NSW) Pty Ltd (Sixth Cross-Defendant on Second and Third Cross-Claims/Cross-Claimant on Fourth Cross-Claim/Respondent)
WSP Buildings Pty Ltd (First Cross-Defendant on Second, Third and Fourth Cross-Claims/Respondent)

Representation: Counsel:
M Ashhurst SC / L Corbett (Parkview Constructions Pty Ltd)
M Sheldon (Bates Smart Pty Ltd)
J Courtenay (McKenzie Group Consulting (NSW) Pty Ltd)
N Simpson SC (WSP Buildings Pty Ltd)
Solicitors:
Mills Oakley (Parkview Constructions Pty Ltd)
Clyde & Co Australia (Bates Smart Pty Ltd)
Colin Biggers & Paisley Pty Limited (McKenzie Group Consulting (NSW) Pty Ltd)
Johnson Winter Slattery (WSP Buildings Pty Ltd)

File Number(s): 2020/353796

JUDGMENT

1. These proceedings are listed for hearing before Nixon J for three weeks commencing 2 June 2025.

2. The plaintiff (the “Owners Corporation”) is the owners corporation of a strata development at Olympic Park. The Owners Corporation brings these proceedings against the developer, Sydney Olympic Park Authority, and the builder, Parkview Constructions Pty Ltd (“Parkview”).

3. One claim by the Owners Corporation relates to allegedly combustible aluminium composite cladding on the building (the “Cladding”).

4. In relation to the Cladding, Parkview has brought a cross claim against a fire engineer, WSP Buildings Pty Ltd (“WSP”), an architect, Bates & Smart Pty Ltd (“Bates Smart”), and a certifier, McKenzie Group Consulting (NSW) Pty Ltd (“McKenzie”).

5. I am dealing with Parkview’s application, made by Notice of Motion filed on 17 April 2025, to amend its Cross Claim List Statement (“Cross Claim”) against these parties.

6. Parkview has circulated six iterations of its proposed Cross Claim. I am dealing with the sixth and final iteration.

7. WSP and Bates Smart oppose the proposed amendments

8. The controversial aspects of the amendments go to the question of causation

9. Parkview alleges that each of WSP and Bates Smart acted in breach of their posited contractual and general law duties in relation to the Cladding and that, but for those breaches, Parkview would not be exposed to the Owners Corporation’s claim.

10. When a party alleges that but for the impugned conduct of a party a particular circumstance would or would not have come about, it is important for the pleading to “identify the likely credible sequence of events which would have occurred” but for the impugned conduct that would have led to that result. [1]

11. Parkview’s existing Cross Claim baldly asserts that “as a result” of the alleged breaches of contract and duty by WSP and Bates Smart, Parkview will suffer loss, being any damages payable to the Owners Corporation. [2]

12. WSP and Bates Smart have made no complaint about those allegations and have not sought particulars of them.

13. Parkview contends that the amendments seek to align its claim concerning the Cladding with expert evidence it has already served on WSP and Bates Smart, and had been responded to through expert evidence adduced by those parties.

14. That may be so, but it remains necessary that the pleading have the characteristics that I have set out at [10] above.

The claim against WSP

15. The proposed amended pleading against WSP is:

“22A WSP’s breach of contract alleged in C15, and its breach of its duty of care alleged in C17, caused Parkview loss or damage, because:

…

(b) But for WSP issuing the letter dated 25 August 2015, stating that in its opinion the [the Cladding was compliant], McKenzie would not have issued Occupation Certificate No. 15/120920-13 on 26 August 2025 or Occupation Certificate No. 15/120920-14 on 11 September 2015;

Particulars

McKenzie issued a Final Occupation Certificate Checklist on 30 June 2015, Item 33 of which stated ‘Please provide test reports for the external walls demonstrating that they are non-combustible when tested in accordance with AS 1530.1-1994.’

Subsequently, on or about 30 June 2015, on the advice of Janhgo [sic], McKenzie accepted that the [Cladding was] attachment [sic] to the external wall and did not need to be non-combustible, but needed to be assessed for compliance against Specification C1.1, cl 2.4(a).

On 27 July 2015, McKenzie advised Jangho about what information was required to demonstrate compliance with Specification C1.1, cl 2.4(a).

On 24 August 2015, McKenzie wrote in an email to Parkview that it was waiting on confirmation that the composite cladding complied with cl. 2.4(a)(ii)&(iii) of Specification C1.1 ‘to enable close out of the composite cladding’ and that this confirmation has been requested from a C10 accredited fire safety engineer.

On 25 August 2025, WSP sent a letter to McKenzie stating that ‘This letter serves to confirm that based on the documentation detailed in Table 1, that the proposed use of the ALUCOBEST Fire proof Aluminium Composite Panel (4 mm thickness) satisfies the requirements of BCA Clause 2.4(a)(ii)&(iii) of Specification C1.1.’

McKenzie Group issued Occupation Certificate No. 15/120920-13 on 26 August 2015.

On 11 September 2015, McKenzie Group issued Occupation Certificate No. 15/120920-14.49. This occupation certificate was expressed to cover the whole of the Australia Towers II project.

(c) But for McKenzie issuing the occupation certificates on 26 August 2015 and 11 September 2015, Parkview would not be exposed to the [Owners Corporation’s] claim, because:

i. Without the occupation certificate the strata plan would not have been registered; and

ii. The [Owners Corporation] could not have brought this claim against Parkview.” (Bolded emphasis in original.)

16. As can be seen, in proposed [C22A(b)] Parkview asserts that, but for WSP issuing a letter of 25 August 2015 stating its opinion that the Cladding was compliant, McKenzie, as the certifier, would not have issued the relevant Occupation Certificates.

17. Insofar as the particulars to [C22A(b)] set out the “likely sequence of credible events” said to lead to that conclusion, they amount to no more than an assertion that, as a matter of fact, the Occupation Certificates were issued after the 25 August 2015 letter.

18. Parkview’s case is that it is to be inferred that, absent the 25 August 2015 letter, McKenzie would not have issued the Occupation Certificates.

19. In proposed [C22A(c)] Parkview then asserts that, but for McKenzie issuing the Occupation Certificates, Parkview would not have been exposed to the Owners Corporation’s claim because “the” strata plan would not have been registered, and the Owners Corporation could not have brought “this” claim against it.

20. In argument, Mr Ashhurst SC, who appeared with Mr Corbett for Parkview, explained that Parkview’s case was that it followed from an assumption that McKenzie did not issue the Occupation Certificates that no strata plan would have issued in relation to a building with the allegedly combustible Cladding; and that it followed that Parkview would not be exposed to the Owners Corporation’s claim concerning such Cladding.

21. Mr Ashhurst did not suggest that these matters followed because, absent the Occupation Certificates, building work would have proceeded no further: a proposition which, if made, would have deserted reality bearing in mind the liquidated damages provision in the relevant building contract.

22. Rather, buried within Mr Ashhurst’s submission is the concomitant contention that, somehow, the building would have been completed with compliant Cladding.

23. But the proposed pleading does not explain how this would be so. It does not set out the likely credible sequence of events that would have led to this result.

24. An earlier iteration of the proposed amended Cross Claim did go some way in providing such an explanation. It asserted:

“If WSP had not issued the letter dated 25 August 2015 stating that in its opinion [the Cladding was compliant] the certifier would not have issued an occupation certificate and Parkview would have taken all necessary steps to ensure that it would not be exposed to the [Owners Corporation’s] claim including obtaining advice in relation to preparation of an ‘alternative solution’ or removing some of all of the [Cladding].”

25. As I set out below, [3] Parkview seeks to make a similar allegation in its proposed amended Cross Claim against Bates Smart, albeit one not referring to any steps to be taken by Parkview.

26. However, by the proposed pleading against WSP, Parkview purports to eschew the task of proving the counterfactual circumstance that would have existed absent McKenzie issuing the Occupation Certificates. In particular, the proposed pleading leaves unstated the critical integer of what Parkview itself, as the builder, would have done to deal with that circumstance.

27. Were that pleading to be allowed it would, in substance, throw upon WSP the onus of seeking to prove the counterfactual posited in the iteration of Parkview’s proposed Cross Claim set out at [24] above. That would not only be unfair but also, on the evidence before me, cannot be achieved in time for the hearing.

28. For those reasons, I decline to grant Parkview leave to amend its Cross Claim as sought.

29. It is true, as Mr Ashhurst emphasised, that this will leave the pleading of Parkview’s causation case as I have set out at [11] above. Mr Ashhurst stated that, at the very least, proposed [C22A] should be seen as representing the giving of particulars by Parkview of how it now proposes to prove its case on causation. It will be a matter for the trial judge to assess whether that is sufficient.

The claim against Bates Smart

30. As against Bates Smart, Parkview seeks to add to its allegations of breach of contract and duty an allegation that Bates Smart failed to make “sufficient inquiry” concerning the Cladding. [4]

31. Mr Sheldon, who appeared for Bates Smart, stated that Bates Smart may be able to deal with that further allegation provided it is adequately particularised prior to the commencement of the trial. Accordingly, I will leave to the trial judge the question whether Parkview should have leave to amend its Cross Claim to this effect.

32. As to causation, Parkview seeks to add [C32A] as follows:

“32A Bates Smart’s breach of its contract alleged in C30 and its breach of its duty of care alleged in C32 caused Parkview loss or damage, because:

a) if Bates Smart had made sufficient inquiry about, and sought confirmation of the specific [Cladding] product nominated by the façade sub-contractor and that the [Cladding] proposed to be used was non-combustible, when it reviewed Jangho’s shop drawings in June 2013, or when it approved samples of the [Cladding] on 10 April 2013, then the combustible [Cladding] would not have been installed on the [Owner’s Corporation’s] building because:

i. Bates Smart’s Architectural Specification revision A, dated 12 June 2013, specified [Cladding] for use on the facades of Tower D.

ii. Page 12 of that specification included the following requirements:

*‘*Composite Aluminium Sheet

Composite aluminium sheet shall be non-combustible.

Submit test results to verify that composite aluminium sheet is non-combustible.’

iii. In April 2013, Bates Smart approved samples of the [Cladding] product proposed to be used by Jangho without any test results verifying that the [Cladding] complied with its specification.

iv. McKenzie issued a construction certificate dated 18 July 2013 (CC. No. 4) which approved construction of Towers C & D for their full height based, inter alia, on Bates Smart’s specification dated 12 June 2013.

b) If Jangho had submitted ‘test results to verify that composite aluminium sheet is non-combustible’ at the time the product was approved by Bates Smart in April 2013, as required by Bates Smart’s specification, the test results would have confirmed that the [Cladding] was combustible an alternative (non-combustible) product would have been selected that complied with Bates Smart’s specification.

c) But for Bates Smart’s failure as alleged, Parkview would not be exposed to the [Owners Corporation’s] claim, because an alternative non-combustible product or material would have been approved for use on the façade.” (Bolded and italicised emphasis in original.)

33. Mr Ashhurst said that proposed [C32A(a)] and [C32A(b)] are intended to allege that if Bates Smart had made “sufficient inquiry” about the Cladding that the façade subcontractor, Jangho Curtain Wall Australia Pty Ltd, [5] proposed to use, then it would have required Jangho to submit the Cladding for the tests specified in Bates Smart’s specifications, and those tests would have revealed that the Cladding was combustible.

34. The difficulty is with proposed [C32A(c)].

35. Unlike its proposed Cross Claim against WSP, Parkview seeks here to explain why, but for Bates Smart’s alleged failure, it would not be exposed to the Owners Corporation’s claim; namely that an alternative non-combustible cladding “would have been approved for use on the façade”.

36. But the proposed pleading does not reveal how this result would have come about. It does not set out the likely credible sequence of events that would have led to this result. In particular, once again, the critical integer of what Parkview would have done is absent.

37. For that reason, I decline to grant Parkview leave to amend its Cross Claim to this effect.

38. The matters I have set out at [29] are also applicable in relation to Bates Smart.

Conclusion

39. Prayers 2, 3, 6 and 7 of Parkview’s Notice of Motion of 17 April 2025 as against WSP and Bates Smart must be dismissed with costs.

40. I understand that McKenzie does not oppose the amendments Parkview proposes in relation to the Cross Claim against McKenzie. Parkview and McKenzie should bring in agreed Short Minutes as to the orders they propose be made.

41. I invite the parties to bring in agreed Short Minutes as to the remaining relief sought by Parkview in its Notice of Motion. In the meantime, I will stand the remainder of the motion over to the motions callover on 23 May 2025.

Endnotes

See Sergienko v AXL Financial Pty Ltd [2019] NSWSC 1610 at [52] (Ward CJ in Eq, as the President then was) and my decision in The University of Sydney v Multiplex Constructions Pty Ltd (No 2) [2023] NSWSC 1019 at [42].

At [C23] and [C33].

See [32] and [35].

See proposed [C30A] and proposed amendments to [C31].

Now deregistered.