Julie Whitehead  |  Matt Hammond  |  Eva Squire

Devine Constructions Pty Ltd v Stowe Australia Pty Ltd & Ors (No 2) [2022] QSC 272

Key takeout

Parties should bear in mind relevant limitation periods when seeking to amend pleadings.

Where a limitation period may have expired, a court will consider whether the amended pleadings raise causes of action that arise from the same, or substantially the same, facts as the original claim. If not, the new cause of action may take effect at a later date than the original pleadings which will, in turn, affect the prospects of a successful limitation defence.

Facts

Devine Constructions Pty Ltd (Devine) was the head contractor in a project involving the construction of three residential towers. Devine engaged various subcontractors to construct the towers and provide certification services. By the end of 2013, the towers were complete and were occupied by residents.

In 2013, a building inspector identified non-compliant fireproofing in the walls of the residential towers. Devine engaged third-party contractors to carry out rectification works at a cost of approximately $2.6 million. To recover this cost, Devine commenced proceedings in March 2018 against the five original subcontractors seeking damages for breach of contract, negligence and misleading and deceptive conduct.

In October 2022, Devine sought leave to file an amended pleading which alleged new causes of action against the subcontractors.  The ordinary position under r 387(1) of the Uniform Civil Procedure Rules 1999 (Qld) (UCPR) is that amendments take effect from the date of the document being amended.  Here, that date was 29 March 2018, when Devine filed its original claim and statement of claim. The central issue for consideration in this case was whether the proposed amendments take place from March 2018, or when leave to amend was granted, being 23 November 2022.

The date of the amendments was relevant because of potential limitation of action defences available to the subcontractors. Under Section 10 of the Limitation of Actions Act 1974 (Qld) an action in contract or tort cannot be brought more than 6 years from the date on which the cause of action arose. The subcontractors submitted that if the amendments took effect on 23 November 2022, it would be open to them to raise a limitation defence within the 6-year limitation period. If no such order was made, the amendments would take effect in March 2018 and the subcontractors were likely to be deprived of a limitation defence.

Decision

Crowley J applied the principles set out in s 376 of the UCPR, which applies where a party seeks to make an amendment to a proceeding where a relevant period of limitation has ended. Rule 376(4) provides that the court may only allow such an amendment if 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.

While it was not appropriate in this case to determine whether the relevant period of limitation had in fact ended, the requirements of r 376(4) should be used to determine the effective date of the amendments. If the new causes of action arose out of the same or substantially the same facts as the earlier claim, they should be taken to arise on same date as the originating proceedings (29 March 2018). If not, they should take effect from some later date, such as the date leave to amend was granted.

Accordingly, the relevant question was whether the new causes of action pleaded in the amended pleading arose out of ‘the same or substantially the same’ facts as the original statement of claim. This requirement will be satisfied where the new causes of action rely on additional facts, as long as those facts arise out of ‘substantially the same story’ as originally pleaded.

His Honour considered three new causes of action:

1. The first involved Devine pleading it was entitled to rely on a contractual indemnity. While this claim relied on newly pleaded clauses of the contract, His Honour found that it arose out of substantially the same story as the claims in the earlier pleadings, albeit with a change in focus on the clauses of the (already pleaded) contract.
2. Devine claimed the rectification cost as a debt due, relying upon the provisions of certain fire safety legislation. Again, although this claim involved new facts, it was found to still arise from the same story as the original claim.
3. Devine alleged that the subcontractors had not complied with a contractual direction to rectify. While the making of the direction was an additional fact, it complied with the story that would be told to support the earlier causes of action at trial.

Having made those findings, Crowley J refused to make the order sought by the subcontractors that the new causes of action would take effect on the date leave to amend was granted. The causes of action in the amended pleading took effect from the date of the original claim and statement of claim, being 29 March 2018.