In brief

The case of Hyacinth Developments Pty Ltd v Scenic Rim Regional Council & Ors [2018] QSC 230 concerned two interlocutory applications in respect of a claim by Hyacinth Developments Pty Ltd (Applicant) for negligence against the Scenic Rim Regional Council (Council) and for negligence and a breach of the Trade Practices Act 1974 (Cth) (TPA) against the Applicant's town planning consultants (Town Planners). The first interlocutory application was brought by the Applicant, seeking leave to amend the statement of claim. The second interlocutory application was brought by the Council and the Town Planners, seeking summary judgment or to strike out the second further amended statement of claim.

The Court held that the application for summary judgment sought by the Council and the Town Planners was not appropriate in the circumstances as the Applicant had, in the Court's view, "a real, not fanciful, prospect of success in the action" (at [16]). The Court found that it was appropriate to grant the Applicant leave to amend the statement of claim as the proposed amendments arose out of the same or substantially the same facts that had already been alleged. The Court additionally dismissed the Council's and Town Planners' application for the Applicant's second further amended statement of claim to be struck out.

Background

The Applicant relevantly communicated with the Council about a desire to develop land located at North Tamborine, Queensland. The Applicant alleged that the Council made representations to the Applicant that the development proposal was acceptable and that it could be progressed as a minor change to an existing development approval without the necessity for advertising or public notification.

The Applicant alleged that, in reliance on the representations, it entered into a put and call option deed and settled its purchase of the land on 1 November 2005. Before settlement, the Council had approved two minor change applications and approved a further minor change application made by the Applicant and the Town Planners on 12 December 2006. 

Unbeknownst to the Applicant, there had been active public opposition to earlier proposals to develop the land led by a community group, "Tamborine Mountain Progress Association Incorporated".  

The Tamborine Mountain Progress Association Incorporated became aware of the proposed development and commenced proceedings in the Planning and Environment Court to object to the proposed development. In those proceedings, the Council conceded that approving the minor change applications were beyond its power as they constituted development requiring an impact assessable development application. 

Tamborine Mountain Progress Association Incorporated was ultimately successful in its objection and the Planning and Environment Court made declarations that the approvals were beyond power and had no lawful effect. The Applicant in 2009 lost its financial support for the proposed development and in doing so went into liquidation, sold the land and could not apply for new development approvals.

In coming out of external administration and restoring its original director in 2015, the Applicant commenced proceedings seeking damages for negligence against the Council. The Applicant also pursued damages for negligence and breach of the TPA against the Town Planners as the Applicant alleged that they had, at relevant times, given advice to the Applicant in relation to the purchase of the subject land and the proposed development. 

Application to amend statement of claim

The Court allowed the Applicant's application for leave to further amend its statement of claim and considered the following issues in making that finding:

1. whether a summary judgment should be allowed in relation to:

(a) whether the Applicant's action was brought "out of time" and;

(b) whether the Applicant had a real prospect of succeeding in the claim;

2. whether the form of the proposed amended statement of claim was defective to justify a strike out; and

3. whether the Applicant should be granted leave to amend the statement of claim to include two new causes of action.

Application for summary judgment

The Uniform Civil Procedure Rules 1999 states that a defendant may apply to the Court for a judgment against a plaintiff if the Court is satisfied that the plaintiff has no real prospect of succeeding its claim and that there is no need for a trial of the claim.

Relevantly, the Council argued that the Court should allow the application for summary judgment as the Applicant's action was brought out of time. The Council argued that the Applicant suffered the loss as soon as it was bound to purchase the land, as the "package of rights" that was acquired by the Applicant when it purchased the land was less valuable than the purchase price. Subsequently, the Council argued that the cause of action arose on the date of the occurred loss, which was outside of the limitation period. 

In response to the Council's submissions, the Applicant argued that the loss was not crystallised until the decision in Tamborine Mountain Association Inc v Scenic Rim Regional Council & Anor [2009] QPEC 98 at which time the Planning and Environment Court made the declaration that the relevant development approvals were void. The Applicant further argued that the authorities relied upon by the Council and the Town Planners should be distinguished as the undiscovered defects to the land existed before the land was purchased. This was in contrast to the present case as the Applicant did not receive significantly less than it should have for the land. 

The Court agreed with the Applicant's arguments and held that the limitation of actions defence was not so compelling as to justify summary judgment for the Council and the Town Planners. The Court adopted a similar approach to the decision of Wardley Australia Ltd v Western Australia (1992) 175 CLR 514 in which the High Court held that it is: 

"undesirable that limitation questions of the kind under consideration should be decided in interlocutory proceedings in advance of the hearing of the action, except in the clearest of cases. Generally speaking, in such proceedings, insufficient is known of the damage sustained by the plaintiff and of the circumstances in which it was sustained to justify a confident answer to the question."

In considering the Applicant's argument the Court found that the Applicant had a "real, not fanciful, prospect of success in the action" and therefore could not justify awarding a summary judgment. 

Form of amended statement of claim

The Council also made a number of complaints regarding the form of the proposed amended statement of claim. The Council firstly argued that part of the amended statement of claim relevant to a breach of the TPA for misleading or deceptive conduct against the Council should be struck out. 

The Court found that it could not substantiate the Council's application to strike out part of the proposed amended statement of claim as the only action that was advanced by the Applicant, relevant to a breach of section 52 of the TPA, was against the Town Planners and not the Council. 

The Council further argued that there were deficiencies in the pleading relating to the duty of care owed by the Council to the Applicant. The relevant paragraph contained allegations about why the Applicant believed the Council owed it a duty of care but did not allege that the Council did owe the Applicant a duty of care. 

The Court held that although the pleading was poorly constructed, reading the relevant paragraphs together did amount to a sufficient pleading in relation to both owing a duty and a breach of the duty. 

Leave to amend statement of claim

The Applicant applied to the Court to seek leave to further amend its statement of claim to include two new causes of action. The first new cause of action that the Applicant sought to plead in its amended statement of claim was to supplement the existing pleading relating to the Town Planners. Relevantly, the amendments stated (at [27]) that: 

"the town planner failed to correct or qualify the minor change representation; and … that, by failing to correct or qualify the minor change representation, the town planner engaged in conduct which was misleading or deceptive contrary to s 52 of the TPA."

The second new cause of action alleged that the Council had failed to disclose active public opposition to the Applicant's proposed development and in doing so the Council had breached its duty of care that it owed to the Applicant. It further alleged that the Council and the Town Planners were aware of public opposition to earlier proposals to develop the land and that the Council had breached its duty of care by providing incomplete and incorrect information to the Applicant prior to the settlement of the purchase of the land.

The Applicant argued that the new causes of action arose out of the same, or substantially the same, facts that had already been pleaded and were closely connected to its existing case. The Applicant also argued that no prejudice would be occasioned to the Council or Town Planners due to the amendments.

The Court agreed with the Applicant and held that the proposed amendments would not cause unfair prejudice for the Council and the Town Planners as the issues pleaded have always been factually relevant. The Court also found that the new causes of action had arisen out of conduct that was closely connected to the Applicant's existing case and that the amendments sought should be made. 

Amendments made relevant to causation and loss

In addition to the two new causes of action, the Applicant also sought to amend the existing pleading relating to causation and loss. The Applicant sought to include allegations that, but for the actions of the Council and the Town Planners, the Applicant would not have purchased the land and consequently would not have suffered loss in the form of wasted expenditure and loss of opportunity. 

The Applicant argued that the amendments sought merely refined the way in which it pleaded causation and loss and it did not introduce a new cause of action. The Applicant relied upon the following from Jobbins v Capel Court Corporation Ltd (1989) 25 FCR 266 (at [45]):

"where damage is an element of the cause of action, a new cause of action generally does not arise in respect of different and separate items of loss and damage, there being, instead, only a single cause of action."

The Applicant also argued that, in the alternative, if it was wrong, it should be granted leave to amend the statement of claim as the allegations arose out of substantially the same facts as those that had already been pleaded. 

The Court agreed with the Applicant and held that the amendments with respect to causation and loss did not introduce a new cause of action. The Court additionally held that, if it was wrong in its approach, it was also of the view that the allegations had arisen out of the same facts or substantially the same facts that were already pleaded by the Applicant. 

In those circumstances, the Court granted leave to the Applicant to amend its statement of claim. The Court dismissed the application for summary judgment and the application to strike out the proposed amended statement of claim.

This is commentary published by Colin Biggers & Paisley for general information purposes only. This should not be relied on as specific advice. You should seek your own legal and other advice for any question, or for any specific situation or proposal, before making any final decision. The content also is subject to change. A person listed may not be admitted as a lawyer in all States and Territories. © Colin Biggers & Paisley, Australia 2019.

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