FEDERAL COURT OF AUSTRALIA

Dickson Developments Precinct 2 Pty Ltd v Indesco Pty Ltd (in liq) [2026] FCA 948

ORDERS

THE COURT ORDERS THAT:

1.    The interlocutory application filed by the first respondent, dated 17 June 2026, is dismissed with costs.

2.    The applicants have leave to file an Amended Statement of Claim, substantially in the form of the draft behind Tab 5 of the Court Book, save to the extent that it contains any allegation against the second respondent of negligence or breach of contract in relation to the design or construction of the works other than allegations concerning the design or construction of drainage.

3.    Any Amended Statement of Claim filed pursuant to the leave granted in Order 2 above, is to be filed by 4:00pm on Friday 24 July 2026.

4.    The parties are to confer for the purposes of agreeing proposed consent orders providing for a timetable for the filing of amended pleadings consequential upon the filing of the Amended Statement of Claim, such orders (or competing orders if agreement is unable to be reached) to be provided to the chambers of Owens J by 4:00pm on Friday 31 July 2026.

5.    The applicants are to pay the costs of any party thrown away by reason of the Amended Statement of Claim including, without limitation, costs thrown away by reason of any adjournment of the hearing of the reference, or other step taken in the reference, attributable to the amendments.

6.    The applicants are to pay the second respondent's and the first cross-respondent's costs of the interlocutory application filed on 23 June 2026.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT

OWENS J:

1    These proceedings concern the collapse of a concrete shoring wall and piers that had been constructed as part of a redevelopment of land in the Australian Capital Territory that is being undertaken by the applicants.

2    The first respondent was engaged to provide structural engineering design services, and the second respondent was engaged to carry out the excavation, piling, shoring, and related structural and concrete works. In very broad terms, insofar as it is relevant for present purposes, the applicants contend that both the design (by the first respondent) and the construction (by the second respondent) of the shoring wall and piers was negligent and in breach of contract.

3    The second respondent’s defence pleads that the applicants’ claim is an apportionable claim, and nominates three entities, in addition to the first respondent, as concurrent wrongdoers. The second respondent has also filed a cross-claim against those three entities. Of those entities, only the first cross-respondent has taken a position in relation to the application that is presently before me. The second respondent sub-contracted to it the carrying out of anchoring and shoring works at the site, and thus the second respondent says that if, which it does not admit, the applicants’ allegations are made out, then the first cross-respondent is responsible.

4    On 10 March 2025, pursuant to section 54A of the Federal Court of Australia Act 1976 (Cth), I referred all issues in the proceeding to a referee, the Hon. Robert McDougall KC, for inquiry and report. In relation to the course of the reference from that date, it is sufficient for present purposes to observe that, on 5 November 2025, the referee fixed the hearing of the matter for two weeks commencing on 2 November 2026, and made detailed directions for the preparation and service of evidence, and other procedural matters.

5    On 17 June 2026, the matter resurfaced in this Court when the first respondent filed an interlocutory application by which it sought to strike out three paragraphs of the statement of claim filed on 8 August 2024. On 23 June 2026, the applicants filed their own interlocutory application seeking leave to amend their statement of claim. I listed both applications for hearing at the first available date following my return from leave.

6    The three paragraphs of the statement of claim that the first respondent sought to strike out formed the core of the applicants’ pleaded case on causation, loss and damage in relation to a cause of action for misleading and deceptive conduct under the Australian Consumer Law. The force of the first respondent’s contention that those paragraphs did not identify the causal link between the pleaded breach and loss, and were thus liable to be struck out, was undermined somewhat by the fact that a defence to those paragraphs had been filed on 24 October 2024, that no particulars had ever been sought in relation to them, that no complaint had ever been made about them before 13 May 2026, and that substantially the same asserted vice, if it existed, would be found in the pleading of causation, loss and damage in connection with the case against the first respondent in negligence and contract (paragraphs in relation to which the first respondent raised no objection). In any event, I was satisfied that the point lacked merit, and that any lack of clarity in relation to the applicants’ case could be addressed through such case management measures as may commend themselves to the referee. The parties affected by that issue informed me that they did not require reasons, and so I will say no more on that topic.

7    As for the applicants’ application, in part the proposed amendments were designed to meet the first respondent’s objections to the pleading of causation, loss and damage that was the subject of the earlier interlocutory application that I have just described. To that extent, while I did not consider the amendments to be necessary, nor did I think them harmful, and so I allowed them. There were also certain other relatively minor proposed amendments about which there was no real controversy.

8    Another aspect of the proposed amended pleading, however, generated significant controversy between the applicants, on the one hand, and the second respondent and first cross-respondent on the other. It is with that issue that these reasons are concerned.

9    To understand the point, it is necessary to describe relevant aspects of the applicants’ case against the second respondent in a little more detail than I have so far.

10    The applicant alleges that the second respondent constructed the relevant structural works negligently, or in breach of a contractual obligation to exercise reasonable skill, care and diligence. In the current statement of claim, the breach of both the tortious and contractual duties is pleaded in substantively the same terms. Taking the pleading in negligence as the example, it is alleged that:

[The second respondent] breached [the second respondent’s] Duty of Care by:

a.    Installing anchors without achieving full rock embedment;

b.    Installing anchors at angles of 30 degrees from horizontal rather than the 35 degrees specified for piers 60, 61, 62, 63 and 71, resulting in reduced rock embedment and anchor capacity; or

c.    Cutting through the pier reinforcement bars during anchor installation, thereby weakening the structural capacity of the piers at the point of the cut.

11    It is not necessary to know very much at all about that case to appreciate the significance of certain answers contained in a joint report prepared by the structural engineering experts retained by the parties following a conclave ordered by the referee. The unanimous opinion of those experts was, relevantly, as follows:

Did the work of installing the anchors, including the cutting of pier reinforcement bars, cause or contribute to the Collapse? For the purpose of answering this question, you are to assume that the anchor installation work did involve cutting the pier reinforcement bars.

No.

Whether the anchors at the area of the Collapse were installed without achieving full rock embedment?

The anchors failed structurally without debonding geotechnically and therefore full rock embedment appears to have been achieved.

Whether the anchors were adequately stress tested at the area of the Collapse? If not, why not?

The anchors were adequately stress tested to the load that was specified by [the first respondent]; however, that load was inadequate.

Whether the anchors were installed at the area of the Collapse at an angle different to that advised, and if so, in what respects?

[The first respondent] specified an anchor force of 120 kN at an angle of 15 degrees.

[The first cross-respondent] converted this to an anchor force of 142 kN at an angle of 35 degrees. This provides effectively the same horizontal restraint to the wall, as shown below:

120 kN x cos (15 degrees) = 116 kN

142 kN x cos (35 degrees) = 116 kN

[The first cross-respondent] did install some anchors at various angles around 35 degrees and as flat as 30 degrees. Those anchors that were closer to 30 degrees would provide more restraint to the wall and would have a higher factor of safety; therefore, they would not cause or contribute to failure.

…

Having regard to your answers above, did [the second respondent’s] selection and/or installation of anchors, including the cutting of pier reinforcement bars, cause or contribute to the Collapse?

No.

12    Tenaciously, the applicants’ proposed amended statement of claim maintains the existing allegations of breach, but supplements them with new allegations. Once again, the pleading of breach is substantively identical for both the contractual and tortious causes of action. The proposed pleading of breach in negligence is as follows (the proposed amendments are underlined):

[The second respondent] breached [the second respondent’s] Duty of Care by:

a.    Installing anchors without achieving full rock embedment;

b.    Installing anchors at angles of 30 degrees from horizontal rather than the 35 degrees specified for piers 60, 61, 62, 63 and 71, resulting in reduced rock embedment and anchor capacity;

ba.    Failing to design or construct the drainage within the shotcrete walls at all, or alternatively competently;

bb.    Failing to ensure that the drainage within the shotcrete walls was installed correctly and functioning, and was not obstructed;

bc.    Failing to ensure that [the second respondent] and any subcontractor appointed by it to carry out the works was adequately apprised of its obligations to install drainage and had available to it the necessary information to enable such drains to be properly installed; or

c.    Cutting through the pier reinforcement bars during anchor installation, thereby weakening the structural capacity of the piers at the point of the cut.

13    The origins of the new allegations, which for convenience I will call the applicants’ drainage case, can be traced to two of the joint expert reports prepared in the proceedings.

14    The first was the joint report produced by the geotechnical experts (that report was delivered on 2 December 2025). Relevantly:

(a)    In a preamble designed to present the experts’ understanding of the relevant background and facts, they said:

With respect to the presence of water:

…

(b)     There are photographs taken during construction … showing that at least some subsurface strip drains were grout-encased and appear to be ineffective. This potentially demonstrates a lack of action around addressing seepage as recommended by [the third cross-respondent] in their 10 August 2022 ACT Geo Report.

(c)    No evidence has been sighted by the Geotechnical Experts of any drainage-related remedial works being undertaken between the 10 August 2022 ACT Geo inspection and the Collapse.

(d)    There are post-failure photographs … that indicate the debris at towards southern end was potentially wetter than that at northern end.

(b)    The experts also said:

In addition, there is the potential for perched water tables and water filled tension cracks that would generate significant additional loads on the wall. These loads would be greater if the installed drainage was ineffective.

These have contributed to the cause of the failure.

15    The second report was the joint report of the structural engineers, to which I have already referred. That report was delivered on 30 March 2026, and included the following:

(a)    In response to a question asking them to identify “[a]ny other potential causes of the Collapse”, they said:

The … wall does not appear to have been designed to resist perched water pressures. It appears to rely upon the ground being fully drained. The evidence suggests that some of the drains may have been blocked and that perched water pressures were applied to the wall such that the pressures on the wall were significantly more than those presumably considered during the design of the wall.

(b)    Their response to the question “[w]hat is the degree to which each such cause contributed to the Collapse and which party was responsible” included the following:

A perched water table contributed to the anchor loading.

The perched water table existed because the back-of-wall drainage was not functioning such that it could prevent water pressures from acting on the wall.

A requirement for drainage was noted on the [first respondent’s] drawings, and drainage was installed by [the first cross-respondent].

(c)    In response to a question that asked if and to what extent the second respondent departed from the standard of skill, care and diligence reasonably to be expected of it, the experts said:

With respect to the Collapse, [the second respondent] could be partly responsible if it was responsible for the design and/or construction of the drains. In that circumstance, [the second respondent] could be responsible for the drain becoming blocked. [The second respondent] may have also been responsible for passing information from [the third cross-respondent] to other consultants/subcontractors (such as [the first respondent] and [the first cross-respondent]) and the designer of the drains. If [the second respondent] did not pass on this information, it may have been partly responsible for the drainage issue.

(d)    In response to a question concerning whether the second respondent and/or its subcontractors constructed the shoring system in accordance with the first respondent’s design, the experts said (inter alia):

In some instances, the strip drains may have been installed incorrectly. The photographs show the shotcrete wall being partially constructed with vertical strip drains that are not always against the soil face and that do not penetrate through the base of the wall to enable collected water to freely discharge.

(e)    In relation to the first cross-respondent, the experts said:

The drains may not have been installed with skill, care and diligence. In circumstances where the drains were not adequately installed (such as if they were not pinned against the soil face, if shotcrete was installed behind the drain, or if the drains did not protrude through the base of the wall such that water would be directed away from the wall …) then skill, care and diligence would not have been exercised.

(f)    When asked if they regarded any act or omission of (inter alia) the second respondent or the first cross-respondent as contributing to the collapse, the experts said:

The wall failed as a consequence of the combination of earth and water pressures acting on the wall and resulting in the anchor failing structurally (breaking). The water pressure and each factor which caused that water pressure therefore contributed to the Collapse. If the drain was not adequately installed, then the installation of that drain contributed to the Collapse.

Periodic inspections of critical elements are typically conducted. The experts do not know whose responsibility those inspections were or whether they were adequately performed. In circumstances where inadequate inspections were conducted, then the lack of those inspections would have contributed to the failure because they could have determined that the drainage was not adequately performing.

16    It may thus be seen that, although the applicants’ presently pleaded case did not raise any issue concerning drainage, in the context of the various experts’ consideration of the cause of the collapse, drainage was identified as a factor of apparent relevance. The applicants thus seek to amend their pleading to raise that issue.

17    The particular basis upon which the applicants sought to justify a grant of leave to amend evolved over time.

18    In the affidavit filed in support of the application, in the applicants’ counsel’s written submissions, and in the initial formulation of counsel’s oral submissions on the application, the applicants framed the amendments as directed simply to bringing the pleadings into conformity with the evidence in a manner akin to that described in Dare v Pulham (1982) 148 CLR 658 at 664.

19    In the course of oral argument, however, counsel for the applicants accepted that the proposed amendments went far beyond the rectification of a disconformity between evidence and particulars; what was proposed was a substantively new case that was on no view encompassed within the pleaded case. The true explanation for the amendments, it emerged, was that the expert conclave process had simultaneously revealed the hopelessness of the pleaded case, and the nature of the applicants’ real case. If the amendments were not allowed, it was submitted, then it followed that the result would be that the applicants would inevitably fail against the second respondent, without their real case against it ever being adjudicated upon. In those circumstances, it was said, the interests of justice strongly favoured a grant of leave.

20    The second respondent, and the first cross-respondent (who was interested in the fate of the application because of the likelihood that, if it were allowed, the second respondent would make corresponding amendments to its cross-claim), pointed to countervailing considerations that they submitted meant that leave should be refused:

(a)    First, it was submitted that the existing date for the hearing (2 November 2026) could not be maintained if the amendments were allowed. That was for reasons including:

(i)    The second respondent and the first cross-respondent would wish to retain new experts in new fields (hydrogeology, and hydrogeological engineering). It was submitted that there are few experts practising in those disciplines, and thus it may take some time to identify and retain a suitable expert. There would, in any event, be time required in order for any new expert to consider the issues, prepare a report, participate in any conclaves, and so forth.

(ii)    New lay evidence would also be likely to be necessary.

(iii)    The first cross-respondent may, depending on the nature of any consequential amendments made by the second respondent to its cross-claim, need to consider whether it should bring its own cross-claim against new parties (such as any party responsible for preparing the hydraulic drainage design). If that were to happen, then there is likely to be considerable delay.

(iv)    The first cross-respondent’s solicitor gave evidence that it would take, on the most favourable view, six months to complete the steps necessary to deal with the introduction of the new claim.

(b)    Next, even if the hearing date could be maintained, the second respondent and the first cross-respondent would be prejudiced by reason of being distracted from their preparations for the hearing by the need to investigate and prepare to meet the new drainage case.

(c)    Insofar as the explanation of the need for the amendments was concerned, it was submitted that the notion that the drainage case was the applicants’ only real case against the second respondent was inconsistent with the fact that the proposed amended statement of claim maintained the existing pleaded allegations.

(d)    Finally, there was said to be no, or no adequate, explanation for the applicants’ delay in applying for leave to amend to introduce the new claim:

(i)    The joint report of the geotechnical experts was received by the parties on 2 December 2025. This report was said to be sufficient, in itself, to put the applicants on notice of the existence of the drainage case.

(ii)    The applicants did not, however, commence work on reformulating their case until after receipt of the joint report of the structural engineering experts on 30 March 2026.

(iii)    Even then, the first time that the applicants circulated a proposed amended pleading with the drainage case was on 12 May 2026, and the application for leave to amend was not filed until 23 June 2026.

(iv)    That unexplained delay was submitted to be a sufficient reason in itself to warrant a refusal of leave. But more than that, the delay had led to wasted time and costs. For example, the parties had participated in a mediation in April 2026, which was conducted on the basis of the presently pleaded allegations only.

21    In response to those submissions, the applicants said:

(a)    It was not certain that the hearing date could not be maintained. The applicants submitted that it was not necessary for any new discipline of expertise to become involved, and that the issues were capable of being dealt with by the structural engineering experts in particular. Either way, there is enough time before the hearing is due to commence to accommodate the steps necessary to facilitate the fair determination of the new case.

(b)    While it could not be denied that the proposed amendments would result in the waste of some time and costs to date, there was still much to be done to ready the proceedings for hearing, and so the waste was not equivalent to those cases where an application to amend is made on the eve of (or during) a trial. For example, discovery is yet to take place, and there is still further evidence to be served, and conclaves to take place.

(c)    The new case was brought forward in a proposed amended pleading within a reasonable time of the applicants becoming aware of it. Although the geotechnical experts raised an issue concerning drainage in general terms in December 2025, the evidence of the structural engineering experts was more directly relevant to the existence of a claim against the second respondent. That is, as I understood the submission, the geotechnical evidence identified inadequate drainage as a possible cause, but it was likely to be the evidence of the structural engineering experts that would identify or allocate fault in relation to that cause. Once the structural engineering report was received, the applicants circulated their proposed pleading for the consideration of the parties within less than a month and a half.

22    The principles in accordance with which this application is to be decided are well known: see, fundamentally, Aon Risk Services Australia Limited v Australian National University (2009) 239 CLR 175. Critically, the discretion to grant leave to amend a pleading is to be exercised in accordance with the overarching purpose of the civil practice and procedure provisions articulated in section 37M of the Federal Court Act. The uncontroversial nature of those guiding principles relieves me of the need to set them out in any comprehensive manner. It is perhaps enough for present purposes to recall the following passages in the plurality’s judgment (at [94], [95], [98], [102], [103] and [112] (it may be observed that the references to rule 21 were to rule 21 of the Court Procedures Rules 2006 (ACT) which was in similar terms to section 37M of the Federal Court Act)):

… Where a party had had a sufficient opportunity to plead his or her case, it may be necessary for the court to make a decision which may produce a sense of injustice in that party, for the sake of doing justice to the opponent and to other litigants.

… To say that case management principles should only be applied “in extreme circumstances” to refuse an amendment implies that considerations such as delay and costs can never be as important as the raising of an arguable case; and it denies the wider effects of delay upon others.

…

Of course, a just resolution of proceedings remains the paramount purpose of r 21; but what is a “just resolution” is to be understood in light of the purposes and objectives stated. Speed and efficiency, in the sense of minimum delay and expense, are seen as essential to a just resolution of proceedings. This should not detract from a proper opportunity being given to the parties to plead their case, but it suggests that limits may be placed upon re-pleading, when delay and cost are taken into account. The Rule’s reference to the need to minimise costs implies that an order for costs may not always provide sufficient compensation and therefore achieve a just resolution. It cannot therefore be said that a just resolution requires that a party be permitted to raise any arguable case at any point in the proceedings, on payment of costs.

…

The objectives stated in r 21 do not require that every application for amendment should be refused because it involves the waste of some costs and some degree of delay, as it inevitably will. Factors such as the nature and importance of the amendment to the party applying cannot be overlooked. Whilst r 21 assumes some ill-effects will flow from the fact of a delay, that will not prevent the parties dealing with its particular effects in their case in more detail. It is the extent of the delay and the costs associated with it, together with the prejudice which might reasonably be assumed to follow and that which is shown, which are to be weighed against the grant of permission to a party to alter its case. Much may depend upon the point the litigation has reached relative to a trial when the application to amend is made. There may be cases where it may properly be concluded that a party has had sufficient opportunity to plead their case and that it is too late for a further amendment, having regard to the other party and other litigants awaiting trial dates. Rule 21 makes it plain that the extent and the effect of delay and costs are to be regarded as important considerations in the exercise of the court’s discretion. Invariably the exercise of that discretion will require an explanation to be given where there is delay in applying for amendment.

… Generally speaking, where a discretion is sought to be exercised in favour of one party, and to the disadvantage of another, an explanation will be called for. The importance attached by r 21 to the factor of delay will require that, in most cases where it is present, a party should explain it. Not only will they need to show that their application is brought in good faith, but they will also need to bring the circumstances giving rise to the amendment to the court’s attention, so that they may be weighed against the effects of any delay and the objectives of the Rules. …

…

A party has the right to bring proceedings. Parties have choices as to what claims are to be made and how they are to be framed. But limits will be placed upon their ability to effect changes to their pleadings, particularly if litigation is advanced. That is why, in seeking the just resolution of the dispute, reference is made to parties having a sufficient opportunity to identify the issues they seek to agitate.

23    There is considerable force in the second respondent’s, and the first cross-respondent’s, submissions. In particular:

(a)    Although I accept it is not inevitable, I proceed on the basis that it is likely that it will not be possible to maintain the current hearing date. Ultimately, of course, if the amendments are allowed, it will be a matter for the referee to determine whether the hearing should be vacated. But I exercise my discretion on the basis that the likely consequence of allowing the amendments will be that a hearing, that has been set down since November 2025, will be lost.

(b)    In particular, I do not accept the applicants’ submission that I should reject the claim that the second respondent and the first cross-respondent may reasonably wish to engage, and call evidence from, experts in new disciplines. In circumstances where I have sworn evidence from those parties’ solicitors (including on the basis of information and belief from one of the geotechnical experts that such new experts would be required), and no contradicting evidence, I accept that evidence. Of course, whether or not they ultimately choose to call such evidence is another question. The evidence that they would need such evidence was given before the applicants stated in argument before me that the applicants would rely in chief only on the evidence that has already been filed in support of the drainage case. But I accept that it is a matter that, at the very least, they would wish to explore.

(c)    The applicants were less than forthcoming in offering their true explanation for the need to amend. The suggestion that the amendments did nothing more than bring the particulars of the currently pleaded case into line with the evidence was not credible. It follows that the explanation offered, on oath, by the applicants’ solicitor was not correct. Until the point of oral argument on the application there had been, in effect, no proper explanation offered at all.

(d)    The quality of the explanation for why the proposed amendments were not brought forward sooner is relatively weak. There is no explanation for why the relevance of drainage was not discovered, or at least explored, by the applicants or their experts in advance of the expert conclaves. It is not suggested that any relevant piece of information necessary to the identification of that issue was not possessed by the applicants earlier, or could not have been discovered with reasonable diligence. While it may be accepted that the joint report of the geotechnical experts is less compelling in relation to suggesting the existence of the drainage case than that of the structural engineering experts, it was unreasonable for the applicants to do nothing in relation to the investigation of such a case until they received the structural engineering joint report.

(e)    I do not accept, however, that the period of one and a half months from when the applicants started work on developing their drainage case to when they served their proposed amended statement of claim is unreasonable. Perhaps that work could have been done a little more quickly, but I do not accept that any greater speed there would have made any meaningful difference to the ultimate analysis.

24    In light of those considerations, my decision on this application has been exceedingly finely balanced. Ultimately, however, I am persuaded that the applicants should be given leave to amend for the following reasons:

(a)    Although it is highly unsatisfactory that the true explanation for the applicants’ application emerged so late in the day, I am satisfied that it is in fact the case that the applicants’ seek leave to amend because their currently pleaded case against the second respondent cannot be maintained, and their only real case is the drainage case. That explanation should have been candidly advanced from the outset, on oath from the applicants’ solicitor. It should not have been left to emerge in the oral submissions of counsel. When I put to the applicants’ counsel that the validity of that explanation was significantly undermined by the maintenance of the existing pleaded case against the second respondent, he accepted, following the obtaining of instructions, that the existing case could not be maintained consistently with the explanation that was being advanced. Counsel thus accepted that if leave were granted, the existing case should be abandoned. It follows that the applicants have offered an explanation for the need for an amendment.

(b)    It is thus the case that, from the perspective of the applicants, these amendments are of the utmost importance. If the application for leave is refused, the effect will be to deny the applicants the ability to pursue any claim against the second respondent. The second respondent submitted that the applicants’ claim against the first respondent is very strong, and thus the loss of a potential claim against the second respondent was of little moment. But I am not, it should go without saying, in a position to assess the relative strength of the applicants’ claims against the two respondents. The result is that I must proceed on the basis that, by depriving the applicants of the right to prosecute its real claim against the second respondent, the consequence may be that the applicants are deprived of any remedy in relation to the collapse of the shoring wall. It is also possible that the result may be (by removing the second respondent from the picture) to foist upon the first respondent a greater share of the liability than it ought to bear in light of the true range of contributing causes of the collapse. There is no suggestion that the proposed case lacks substance. It follows that the refusal of leave to amend would, on any view, deprive the applicants of a substantial claim. It seems to me that an application to amend to bring forward a party’s only case is qualitatively different to an application to bring forward an additional, or expanded, case.

(c)    As the joint opinions of the geotechnical and structural engineering experts demonstrate, the true cause of the collapse will inevitably be an issue in the proceedings in any event. I accept that that is not the same thing as saying that legal responsibility for a particular cause will inevitably be an issue in the proceedings. But it does serve to demonstrate that the true reason why the collapse occurred is not a new issue in the proceedings. The extent to which the scope of the proceedings has been expanded must be viewed in that context.

(d)    Insofar as the applicants’ explanation for the delay in bringing forward this new case is concerned, I have already said that it leaves much to be desired. However:

(i)    There is no suggestion that the applicants withheld their real case (that is, having identified it, refrained from disclosing it), whether for tactical or other reasons. Even if the applicants should have identified that case sooner, the simple fact is they did not.

(ii)    It is also relevant to observe that it was only with the joint report of the structural engineering experts on 30 March 2026 that the hopelessness of the existing case crystallised. That is, while the possible existence of a claim in relation to drainage was raised by the geotechnical experts in December 2025, it was not clear at that point that such a case may be the only basis upon which liability might be established against the second respondent. That fact, in combination with the comparatively high-level observations of the geotechnical experts, provides some basis for the failure to progress the drainage case prior to receipt of the structural engineering experts’ report.

(iii)    The fact that the hearing date is some months away means that the wasted time and costs are not as great as they might have been. I have already mentioned that tasks such as discovery are yet to be undertaken. It follows that they will be carried out by reference to the new scope of the proceedings. All that is simply to observe, of course, that the consequences of an amendment are likely to increase in magnitude the closer it is made to a hearing date. This application was brought closer to the hearing date than it ought to have been, but not so close as to tip the scales decisively against it. That is not, of course, to diminish in any way the significance of what may prove to be considerable waste. But there would inevitably have been significant waste flowing from the complete abandonment of the existing claim, and its replacement with the drainage case, even if the application had been brought forward long ago. The wasted time and costs attributable to the delay from December 2025 to March 2026 is of a significantly lesser magnitude. It is difficult to be definitive about whether the hearing date could have been maintained had the claim been brought forward earlier in 2026.

(iv)    It is also relevant to observe a particular feature of the way in which the reference has been conducted. The referee ordered that conclaves of the parties’ experts should take place before the service of individual reports. The evident purpose of that manner of proceeding was to identify as early as possible what the real issues in dispute were. The existence of the drainage case, of course, emerged from those conclaves. In one sense, therefore, that process having yielded the issue in question, it is appropriate that it be taken into account in the determination of the proceedings.

25    It follows that notwithstanding the absence of an entirely satisfactory explanation for the applicants’ delay in bringing forward the application, and even having regard to the serious consequences of allowing the amendment, I am persuaded, by the slenderest of margins, that it would not be appropriate to deprive the applicants of the opportunity to bring forward their only real case against the second respondent.

26    The grant of leave will, of course, be on terms that the applicants pay the costs of any party that are thrown away by reason of the amendments. It will also be on terms, as the applicants accepted, that their existing case against the second respondent in relation to the design or construction of the works be removed from the pleading.

27    In circumstances where the applicants sought an indulgence, and having regard to the particular circumstances I have described, it is appropriate that the applicants pay the costs of the second respondent, and the first cross-respondent (as the only parties who took an active part in the argument on the applicants’ application, other than in relation to the issue of causation).

Associate:

Dated:    20 July 2026

SCHEDULE OF PARTIES