Zonebar Pty Ltd v Global Management Corporation Pty Ltd & Anor [2009] QCA 121

Court of Appeal (Qld)|2009-05-08|Before: Keane JA, White and Wilson JJ, Separate reasons for, judgment of each member of the Court, each concurring as to the orders, made

[1] KEANE JA: In 2003 Zonebar Pty Ltd ("Zonebar") commenced proceedings against the respondents seeking to recover damages for losses allegedly suffered in transactions which occurred between 1999 and 2001. The action proceeded at a pace which was so leisurely that by November 2006 Zonebar was obliged to seek leave to proceed because a step in the proceedings had not been taken for two years.

[2] In October 2008 Zonebar sought to amend what was then its fifth amended statement of claim to raise a claim which the respondents contended was a new cause of action which was barred by the effluxion of time. The learned primary judge refused to allow this amendment to be made.

[3] Zonebar now seeks to appeal against that decision. Because the appeal was commenced late, an extension of time would be required to enable the appeal to proceed. If there were any merit in the appeal, one would expect that the necessary extension would be granted because the respondents have not been prejudiced by the late filing of the notice of appeal. I have come to the firm conclusion, however, that the appeal is so entirely without merit that no occasion for the grant of the extension arises.

[4] In order to explain the reasons which have led me to this conclusion, I must first summarise the claims made by Zonebar in the action and by the disputed amendment. I will then summarise the issues before the learned primary judge and his Honour's reasons for decision. I will then discuss the arguments advanced by Zonebar in this Court.

[5] Zonebar was the owner and developer of land at Springwood. The first respondent had been engaged by Zonebar to provide project management and supervisory services in connection with the development and construction of the project. The second respondent was a director of the first respondent.

[6] In the action, Zonebar alleged that the respondents had failed to exercise reasonable care and diligence in advising Zonebar in relation to the approvals necessary for the development from the local authority. Zonebar also sought relief against the respondents for loss caused by contraventions of the Trade Practices Act 1974 (Cth).

[7] Prior to the disputed amendment, Zonebar had pleaded that it was a term of the agreement under which the first respondent had been engaged that the respondents would perform their obligations under the management agreement "with the skill, care and diligence reasonably expected of a person which was, or represented itself to be, experienced and expert in managing industrial development projects ... in relation to ... making or causing to be made development, re-zoning, subdivision, civil works and building applications to" the local authority. Zonebar went on to allege that it had suffered loss as a result of the respondents' failure to discharge that obligation in a timely fashion. It alleged that it had suffered loss because of delays in the realisation of the project.

[8] Zonebar had pleaded that part of the development referred to as Lot 100 became the subject of a revised development approval from the local authority on 22 December 2000. It had not alleged that it suffered any loss as a result of that approval or that such loss was caused by misconduct on the part of the respondents.

[9] The disputed amendment sought to make a claim to recover loss allegedly suffered by Zonebar as a result of the creation and dedication of Lot 100 as part of a revision of the development approval for the project. Zonebar alleged that the respondents had failed to advise Zonebar that it should have opposed rather than consented to the revision of the development approval. It alleged that the respondents failed to advise it to oppose the local authority requirement that each other lot in the development should have 10 per cent free space. Zonebar also alleged that the respondents had failed to advise it that it had a right to compensation under the Integrated Planning Act 1997 (Qld) ("the IPA").

[10] It is convenient to refer to his Honour's reasons at this point as they provide a convenient summary of allegations already made in the action by way of contrast with the allegations made by the disputed amendment. His Honour said:[1]

"Central to the Lot 100 claims made in the 6ASOC is the allegation in paragraph 14 that the first defendant advised and represented to the plaintiff 'that it was required to dedicate and transfer for no consideration to Council or the State of Queensland future Lot 100 ('the Lot 100 representation').' This was a completely new allegation, made for the first time in the 6ASOC. It did not arise out of, nor was it a further particularisation of, facts or matters which had been pleaded in previous versions of the statement of claim.

Paragraph 73(c) of the 6ASOC pleads, relevantly, that the first defendant 'failed, neglected or omitted to advise, inform or warn [the plaintiff] and/or to take the necessary steps or actions to procure or effect ... the excision of that part of Lot 100 which was not required to be dedicated or transferred as public reserve, nor to obtain compensation of true market value therefore [sic] for [the plaintiff], as stated in paragraph 105.' This is then alleged, in paragraph 75 (set out above) to constitute a breach of the various duties pleaded elsewhere in the 6ASOC. Once again, this is a completely new factual allegation, which in no way arises out of, or further particularises, the cases which had been posited in the early iterations of the statement of claim.

It follows, and indeed it is apparent on the face of the 6ASOC, that the matters alleged in paragraph 105 of the 6ASOC, which are expressly pleaded to arise 'further to paragraphs 14, 73 and 74' are completely new claims and allegations.

Similarly, it is abundantly clear that the facts and matters referred to in the proposed new paragraphs set out in Attachment A are completely new allegations which are not even made in the 6ASOC."

[11] Relevantly for the purposes of this appeal, the issues which arose for determination were whether the new allegations in relation to Lot 100 gave rise to a new cause of action, and, if that question was resolved against Zonebar, whether r 376 of the Uniform Civil Procedure Rules 1999 (Qld) ("the UCPR") might be invoked to permit the amendment to be made notwithstanding the expiration of the limitation period applicable to the new cause of action.

Rule 376 of the UCPR

[12] It is convenient here to note that r 376 of the UCPR provides relevantly as follows:

"(1) This rule applies in relation to an application, in a proceeding, for leave to make an amendment mentioned in this rule if a relevant period of limitation, current at the date the proceeding was started, has ended.

(4) The court may give leave to make an amendment to include a new cause of action only if-

(b) the new cause of action arises out of the same facts or substantially the same facts as a cause of action for which relief has already been claimed in the proceeding by the party applying for leave to make the amendment."

[13] As noted above, the learned primary judge observed that the allegation of breach of duty or contravention of the Trade Practices Act on the part of the respondents in relation to the response Zonebar should take to the development approval was a "completely new allegation". His Honour went on to conclude:[2]

"In enquiring whether the effect of the paragraphs in the 6ASOC and Attachment A to which I have just referred is to include new causes of action, it is no answer to say, as the plaintiff now does, that previous versions of the statement of claim all alleged a breach of duty by the defendants in respect to Local Government approvals or that claim had previously been made pursuant to the TPA in respect to other representations made by the defendants.

In Balsato v Campbell ([2006] QSC 191), Philip McMurdo J said (at [8]):

'The term 'cause of action' was defined in Cooke v Gill as being 'every fact which is material to be proved to entitle the plaintiff to succeed', a definition which many judgments have employed in the context of this rule or its equivalent: see e.g. Allonnor Pty Ltd v Doran per McPherson JA. But it has not been applied literally, for otherwise any new fact to be added to a plaintiff's case would be treated as raising a new cause of action which required leave in the context of a rule such as r 376(4). So in Allonnor Pty Ltd v Doran for example, there is an indication of what the Court of Appeal in Thomas v State of Queensland subsequently endorsed as a 'fairly broad brush comparison between the nature of the original claim and that to which it is sought to be amended'. The dividing line is between the addition of facts which involve a new cause of action and those which are simply further particulars of the cause already claimed, and its location involves a question of degree which can be argued, one way or the other, by the level of abstraction at which a plaintiff's case is described. Some illustrative guidance is provided by Allonnor Pty Ltd v Doran, Thomas v State of Queensland and another judgment of the Court of Appeal, Central Sawmilling No. 1 Pty Ltd & Ors v State of Queensland.'

It is clear in the present case that the Lot 100 claims now sought to be advanced by the plaintiff involve different factual allegations, different breaches of contractual, statutory and common law duties and different claims for damage that had previously been pleaded. (See, for comparison, Thomas v State of Queensland ([2001] QCA 336 at [16])). In my view, these paragraphs would seek to raise new causes of action."

[14] His Honour held that the causes of action which Zonebar sought to pursue by these amendments were time-barred.[3] There is no challenge to his Honour's conclusion in this regard, and so it is not necessary to delve into the reasons for his Honour's decision on this point.

[15] The learned primary judge then considered whether any new cause of action which Zonebar sought to litigate "arises out of the same facts or substantially the same facts as a cause of action for which relief has already been claimed in the proceeding" by it in accordance with r 376(4)(b) of the UCPR. On this issue, his Honour concluded:[4]

"True it is, as Thomas JA said in Draney v Barry ([2002] 1 Qd R 145) that 'substantially the same facts' should not be read as tantamount to the same facts, and the need to prove some additional facts is not necessarily fatal to a favourable exercise of the discretion under rule 376(4). As his Honour said:

'If the necessary additional facts to support a new cause of action arise out of substantially the same story as that which would have been told to support the original cause of action, the fact that there is a changed focus with elucidation of additional details should not of itself prevent a finding that a new cause of action arises out of substantially the same facts.'

Even the most generous view for the plaintiffs, however, could not make good such a contention in the present case. I have referred above to the fact that the Lot 100 claims now sought to be advanced in the 6ASOC involve different factual allegations, different breaches of contractual, statutory and common law duties, and different claims for damage than had previously been pleaded. The novelty of the case sought to be advanced in Attachment A is even more apparent. It is clear, in my view, that these causes of action do not arise out of substantially the same facts as the causes of action which have previously been pleaded.

It follows that the amendments contained in the 6ASOC to raise the Lot 100 claims were impermissible as amendments for which leave was required but had not been obtained. For the reasons I have just set out at length, I would not now grant such leave, to the extent that the amendments seek to introduce new causes of action in respect of which these limitation periods have expired. Nor would I grant leave to make further amendments to the statement of claim to incorporate the proposed paragraph set out in Attachment A to the plaintiff's application."

[16] Zonebar argues that the learned primary judge erred in treating the causes of action in relation to Lot 100 as new and in failing to appreciate that, if they were new, they nevertheless fell within r 376(4)(b) of the UCPR in that they arose out of substantially the same facts as the causes of action for which relief had already been claimed in the action.

[17] Prior to the disputed amendments, Zonebar's statement of claim set up breaches of duty on the part of the respondents in connection with the construction of retail warehouses on Lots 7 and 8, the making of representations by the respondents in relation to the amount and timing of necessary capital investment in the project and the appointment of a builder for the works on Lots 7 and 8. There were also allegations that the first respondent failed to advise Zonebar that a number of approvals were required from the local authority before the scheme for the development could proceed.

[18] It is clear that Zonebar had not, prior to the disputed amendment, sought to advance a claim based on the respondents' acts or omissions in respect of its dealings with the local authority in respect of Lot 100. Zonebar argues, nevertheless, that it had made claims relating to the failure of the respondents to meet their obligation of reasonable skill, care and diligence in relation to rezoning applications to the local authority. But no allegations had been made in relation to the particular exigencies of the rezoning application in respect of which reasonable skill, care and diligence were required in relation to Lot 100, or the acts and omissions which are now said to have breached that obligation. Nor had Zonebar made an allegation that any loss had been suffered by it as a result of the creation of Lot 100.

[19] The only mention made of Lot 100 in Zonebar's statement of claim before the disputed amendment was that its land was subdivided on 29 August 2001 to create Lot 100 and that it was dedicated to the Crown as parkland reserve. There was no suggestion that the creation and dedication occurred as a result of any act or omission on the part of the respondents much less that such act or omission involved a breach of duty or a contravention of the Trade Practices Act. Nor was it alleged that the dedication of the land to the Crown as parkland was a loss suffered by Zonebar.

[20] There can be no doubt that if Zonebar had sought to lead evidence in support of the allegations the subject of the disputed amendment at a trial on the unamended statement of claim, the evidence would have been objectionable on the grounds of surprise and irrelevance.[5] In these circumstances, it is undeniably correct to say, as the learned primary judge held, that the causes of action raised by these allegations are new.

[21] Zonebar's previous pleading contained no hint that it was propounding a case that the defaults of the respondents had led to the dedication of the parkland associated with Lot 100 or that this dedication had caused Zonebar loss. Nor was there any allegation that the respondents were duty-bound to advise it of its right to compensation or that they had defaulted in the performance of that duty. Nor was there any allegation that the respondents had misled Zonebar in that regard.

[22] Allegations of acts or omissions on the part of the respondents apt to establish the liability newly asserted by Zonebar in the amendments were simply absent from its previous pleading. Even on the view of r 376(4)(b) of the UCPR most generous to it, these new causes of action do not arise out of the same or substantially the same facts as the causes of action for which relief had already been claimed.

[23] On the approach advanced by Zonebar, in a case where a contract imposes two separate obligations, A and B, upon a defendant, an allegation of a breach of obligation B would be held to arise out of substantially the same facts as were previously pleaded simply because the previous pleading referred to the contract and alleged breach of A.[6] To accept such an outcome would be to make a mockery of the requirement in r 376(4)(b) of the UCPR that the new cause of action must arise out of "substantially the same facts" as those already pleaded. The substance of the new cause of action is different in terms of the acts or omissions which give rise to it, and the adverse consequences for which damages are claimed.

[24] In the course of argument in this Court, Mr Coulsen of Counsel for Zonebar sought to argue that the new cause of action arose out of substantially the same facts as the causes of action previously pleaded because in each case it was advancing a claim for damages for a breach of the obligation of reasonable skill, care and diligence in the ongoing management of the project, which project included the rezoning applications involved therein. This argument must be rejected for the reasons stated in Wolfe v State of Queensland:[7]

"The determination of the question of whether an act or omission involves a breach of a duty of care depends upon the identification of the particular facts said to reveal a breach of the duty. In Romeo v Conservation Commission of the Northern Territory ((1998) 192 CLR 431 at 479 [127]), Kirby J emphasised that:

'it is the reasonableness of a defendant's actions or inactions, when faced with the relevant risk, which is critical in determining whether a duty of care has been breached. The question whether the defendant has met the requisite standard of the reasonable person must be assessed on the facts of each case ...'

Similarly, in Yi v The Service Arena Pty Ltd ([2001] NSWCA 400 at [25]), Mason P referred to the statement of McHugh J in Perre v Apand Pty Ltd ((1999) [1999] HCA 36; 198 CLR 180 at 211) when he observed that: 'The extent of a duty falls for decision in relation to 'concrete facts arising from real life activities'.'

In Pianta v BHP Australia Coal Limited ([1996] 1 Qd R 65 at 68 cited with approval in Allonnor Pty Ltd v Doran [1998] QCA 372 at [13]), this Court adopted this similar approach to the determination of whether it can be said that a new cause of action is pleaded and whether it depends on facts which are not substantially the same. The Court said:

'The facts out of which each of the causes of action arose were those giving rise to the duty of care, those which constituted a breach of that duty and the fact of injury. The submission that the duties of care owed by the respondent to the applicant in each case were the same because the parties were the same and they were, in each case, in the relationship of employer and employee is correct only in a general sense. Relevantly the precise duties owed are correlative to the breaches of those duties and, as the applicant conceded, the facts constituting the breaches of duty in each case were quite different; neither the same nor substantially the same.'"

[25] A breach of duty on the part of the respondents which involved a failure on their part to advise Zonebar in relation to the excision of part of Lot 100 or to obtain compensation for that part was not pleaded, or even hinted at, in its fifth amended statement of claim.

[26] In my respectful opinion, the arguments advanced by Zonebar in this Court cannot be sustained.

[27] The appeal which Zonebar seeks to pursue is without merit. Accordingly,

I consider that the application for an extension of time should be refused and the notice of appeal should be struck out.

[28] Zonebar should pay the respondents' costs of and incidental to the application and notice of appeal.

[29] WHITE J: I agree with the reasons and orders proposed by Keane JA.

[30] WILSON J: I agree with the orders proposed by Keane JA, and with his Honour's reasons for judgment.

[1] Zonebar Pty Ltd v Global Management Corporation Pty Ltd & Anor [2008] QSC 263 at [39] - [42].

[2] [2008] QSC 263 at [43] - [45] (citations footnoted in original)

[4] [2008] QSC 263 at [70] - [72] (citation footnoted in original).

[5] Cf Wolfe v State of Queensland [2008] QCA 113 at [12].

Integrated Planning Act 1997(Qld)

Civil Procedure Rules 1999

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