Supreme Court New South Wales Medium Neutral Citation: In the matter of Dymocks Book Arcade Pty Limited [2013] NSWSC 298 Hearing dates: 4 February 2013 Decision date: 07 February 2013 Jurisdiction: Equity Division - Corporations List Before: Brereton J Decision: Leave to withdraw admissions granted. Catchwords: PRACTICE AND PROCEDURE - Admissions - leave to withdraw admissions - whether admissions wrongly and/or inadvertently made - balance of prejudice - whether prejudice to opponent outweighs desirability of hearing case on true legal basis Legislation Cited: (Cth) Trade Practices Act 1974, s52 (NSW) Civil Liability Act 2002, s 34(1)(a) (NSW) Environmental Planning & Assessment Act 1979, Pt 4C (NSW) Fair Trading Act 1987, s 42 (NSW) Law Reform (Miscellaneous Provisions) Act 1946, s5(1)(c) Cases Cited: Baldry v Jackson (1976) 2 NSWLR 415 Drabsch v Switzerland General Insurance Company Limited NSWSC (16 October 1996) (unreported) Dymocks v Capral [2010] NSWSC 195 Hill End Gold Limited v First Tiffany Resources Corporation [2008] NSWSC 866 Jeans v Commonwealth Bank of Australia Limited (2003) 204 ALR 327 Owners Corporation Strata Plan 61390 v Multiplex Corporate Agency Pty Limited (No 1) [2012] NSWSC 298 Silver v Dome Resources NL [2005] NSWSC 265 SLE Worldwide Australia Pty Limited v Wyatt Gallagher Bassett Pty Limited [2005] NSWSC 816 Category: Interlocutory applications Parties: Dymocks Book Arcade Pty Ltd (Plaintiff) Capral Limited (First Defendant) Peter Dalton Architects Pty Ltd (Second Defendant) Representation: Counsel: DA Hughes (Plaintiff) LW Chan (Second Defendant) Solicitors: Norton Rose Australia (Plaintiff) Colin Biggers & Paisley (First Defendant) Kennedys (Australasia) Pty Ltd (Second Defendant) File Number(s): 2009/ 298893-008 Judgment (ex tempore) 1HIS HONOUR: The plaintiff Dymocks Book Arcade Pty Limited is the owner of a building situated in a coastal setting on the New South Wales North Coast. Its aluminium roof is degrading by reason of corrosion. The first defendant Capral Limited supplied the roof sheeting and warranted that it would not corrode. The corrosion has been caused by an inappropriate fixing mechanism which was specified by the architects, the second defendant Peter Dalton Architects Pty Limited. Dymocks contends that the corrosion is widespread and that the whole of the roof sheeting requires replacement, at a cost approaching $1,000,000. Dymocks claims damages from Capral pursuant to a warranty provided by Capral in a deed. 2Dalton Architects were the architects for the whole of the building. Under their retainer, the design construction and finishes were to be of the highest standard. Dymocks also brings claims against Dalton Architects in negligence and under the (Cth) Trade Practices Act 1974, s 52 or its (NSW) Fair Trading Act 1987 equivalent. It alleges in this respect that the specification for the fixing mechanism was negligently prepared, and that the architect engaged in misleading and deceptive conduct in representing that the specification would be appropriate for the setting. 3By notice of motion filed on 7 December 2012, Dymocks seeks leave to withdraw an admission contained in its reply on filed 3 March 2010. The admission affects only Dalton Architects, the second defendant who appeared to oppose the motion. 4Dalton Architects, cross-claimed against four cross-defendants, namely ADCO Constructions (the builder), Dr Gregory Wallwork (a corrosion expert), J T Davies & Co Pty Limited (structural engineers), and Buildex (the manufacturer of the fittings utilised in the roof construction). Initially, the cross-claims were for contribution or indemnity from each of the second cross-defendants pursuant to the (NSW) Law Reform (Miscellaneous Provision) Act 1946 s 5(1)(c). 5In 2010, J T Davies & Co filed a motion seeking orders that the cross-claim against it be dismissed. The other cross-defendants supported that motion. The basis of their argument was that the claim for contribution was not available to Dalton Architects, as Dymocks' negligence claim against Dalton Architects was an "apportionable claim" within the meaning of the Civil Liability Act, whereby there was nothing in respect of which contribution could be sought, given that Dalton's share of any damages would be reduced proportionately having regard to any responsibility of the second cross-defendants. 6On 26 February 2010, McDougall J heard that motion and, in the course of the hearing, asked counsel for Dymocks whether the negligence claim was an apportionable claim, and following an exchange observed: "If you do not make the concession then you risk being ordered to pay costs on an indemnity basis". Subsequently, his Honour directed the plaintiff Dymocks to file a reply, setting out its position in respect of whether or not its negligence claim against Dalton Architects was an apportionable claim [see Dymocks v Capral [2010] NSWSC 195 [16]]. 7Thereafter, on 3 March 2010, Dymocks added its Trade Practices claim against Dalton Architects. On any view, that claim is not an apportionable claim. On the same date, Dymocks filed its reply, pursuant to his Honour's direction, in which it admitted that the negligence claim was an apportionable claim within the (NSW) Civil Liability Act 2002, s 34(1)(a). 8There is no significant dispute as to the applicable principles, which were expounded by Santow J, as he then was, in Drabsch v Switzerland General Insurance Company Limited NSWSC, 16 October 1996, (unreported), as follows (at pp 7 - 8): 1. Where a party under no apparent disability makes a clear and distinct admission which is accepted by its opponent and acted upon, for reasons of policy and the due conduct of the business of the Court, an application to withdraw the admission, especially at appeal, should not be freely granted [Coopers Brewery Ltd v Panfida Foods Ltd (1992) 26 NSWLR 738 per Rogers CJ Comm D, followed in IOL Petroleum Ltd v O'Neill per Young J (17 November 1995, unreported) and Apex Pallett Hire Pty Ltd v Brambles Holdings Ltd (Full Supreme Court of Victoria, 8 April 1988, unreported)]; 2. The question is one for the reviewing judge to consider in the context of each particular appeal, with the general guideline being that the person seeking on a review to withdraw a concession made should provide some good reason why the judge should disturb what was previously common ground or conceded; IOL Petroleum Ltd v O'Neill (supra), in the context of withdrawing a concession made before the registrar; 3. Where a Court is satisfied that admissions have been made after consideration and advice such as from the parties' expert and after a full opportunity to consider its case and whether the admissions should be made, admissions so made with deliberateness and formality would ordinarily not be permitted to be withdrawn; Coopers Brewery Ltd v Panfida Foods Ltd (supra) at 745 and 748. Thus a Court would not lend its approval to the withdrawal of admissions where, by analogy with the making of amendments, this is actuated by purely tactical reasons; compare Devae Prufcoat Pty Ltd v Altex Industrial Paints Ltd (Cole J, 15 March 1989, unreported) 4. It will usually be appropriate to grant leave to withdraw an admission where it is shown that the admission is contrary to the actual facts. Leave may also be appropriate where circumstances show that the admission was made inadvertently or without due consideration of material matters. Irrespective of whether the admission has or has not been formally made, leave may be refused if the other party has changed its position in reliance upon the admission; H Clark (Doncaster) Ltd v Wilkinson (supra), in that respect not doubted; 5. Following Cohen v McWilliam & Anor, a Court is not obliged to give decisive weight to Court efficiency, such that a party who wishes to defend its claim is entitled to a hearing on the merits, with costs orders being available as a means of compensating the other party for any costs thereby unnecessarily incurred or not fairly visited upon another party. 9That summary has been repeatedly endorsed: see Silver v Dome Resources NL [2005] NSWSC 265, [8] - [9] [Hamilton J]; Jeans v Commonwealth Bank of Australia Limited [2003] 204 ALR 327 [18] (Hill, Madgwick and Conti JJ); SLE Worldwide Australia Pty Limited v Wyatt Gallagher Bassett Pty Limited [2005] NSWSC 816, [55] - [56] (White J); and Hill End Gold Limited v First Tiffany Resources Corporation [2008] NSWSC 866, [31] (Brereton J). In Jeans, the Full Federal Court said (at [18]) that the true position was that there was no principle that admissions might or might not be withdrawn; the Court had a broad discretion to weigh up all matters with the overall question being to ensure that there was a fair trial. 10In SLE Worldwide, White J said (at [56]) that this general approach was guided by the principles expounded by Santow J: It is legitimate and it may be necessary to consider whether the party making the admission did so deliberately, or whether he did so in error, whether the significance of the admission has changed since it was made, for example by reason of other amendments, or whether new evidence has come to light. In this case there is no suggestion that the admission was made in error. There has been no change to the pleadings which has altered the significance of the admissions. It is not suggested that new evidence has come to light which justifies their withdrawal. Where a party, who is legally advised and does not suffer any disability, deliberately and without mistake, admits liability in whole or in part, and there are no relevant changes of circumstance, prima facie, justice or fairness to both parties does not require that it be allowed to change its mind. That is why admissions made with deliberateness and formality are not ordinarily permitted to be withdrawn. 11His Honour then proceeded to hold (at [57]). It was not sufficient reason to permit SLE to withdraw its admission of liability that, on some grounds, it was reasonably arguable that SLE might not be liable: I therefore start from the position that the admissions deliberately and formally made should not be permitted to be withdrawn, unless sufficient cause is shown why they should be. I accept that on some of the grounds upon which the case between SLE and WGB might be decided, or the cross-claim between WGB and Gerling might be decided, it is reasonably arguable, considering only the terms of the two agreements and the pleadings, that SLE might not be liable to indemnify Gerling in respect of the disputed deductions. I do not consider that to be a sufficient reason for permitting SLE to withdraw the admissions. The prejudice to Gerling cannot only be measured in terms of the additional cost which it will incur in the litigation, or the costs thrown away by reason of the amendments. The prolongation of the litigation, which has already been prolonged for too long, with the inevitable expenditure of executives' time, is part of the prejudice which Gerling will suffer if the amendments are allowed. 12Ultimately, consistent with what the Full Federal Court suggested in Jeans, "the question is one of the attainment of justice rather than trying to apply an artificial approach" [Sirius Shipping Corporation v Ship 'Sunrise' [2006] NSWSC 164, [4] (Young CJ in Eq). And as the then Chief Judge has elsewhere observed, [For The Good Times Pty Limited v Coltern Pty Limited [2007] NSWSC 108 [3]]: Essentially, the court is after the truth ... thus, in principle, an erroneous admission should be able to be withdrawn unless other factors outweigh. The principal factor that might outweigh is that there is such great prejudice to the other party, because of the way in which that party has prepared his or her case on the basis of the admission, that the leave should not be given. 13The dichotomy presented by his Honour in the passage just referred to - namely, that an erroneous admission should be able to be withdrawn unless other factors outweigh and, on the other hand, that the chief outweighing factor is usually that there is such great prejudice to the other party that leave should not be given - is exactly the dichotomy that presents itself for decision and valuation in this case. 14First, it is clear that the admission was wrongly made. It was made before the decision of Pembroke J in Owners Corporation Strata Plan 61390 v Multiplex Corporate Agency Pty Limited (No 1) [2012] NSWSC 298, in which his Honour explained why a claim to which Part 4C of the (NSW) Environmental Planning and Assessment Act 1979 does not apply is excluded from the operation of Part 4 of the Civil Liability Act. His Honour's judgment was given in or about, March 2012. No party on the present application contends, as a matter of law, that the admission was correctly made. When it was made, the admission was assumed to represent the law, before the transitional provisions were closely examined by Pembroke J in the case to which I have referred. It was only as a result of that judgment that either party adverted to what was established by that judgment to be the correct position. 15Next, the admission was one of law, not of fact. It therefore does not require the adducing of evidence to answer its withdrawal. 16Essentially, for the reasons I have already explained, the admission may be regarded as having been made inadvertently. No one was alert to the true legal position as subsequently established by Pembroke J's judgment. 17In those circumstances, there would, prima facie, be a strong case to permit the admission to be withdrawn, in the absence of prejudice to the defendants such as to outweigh the desirability that the Court decide the case on a true rather than a false legal basis. 18However, the second defendant advances what, at least at first sight, appears to be a strong case of prejudice. To understand this requires some examination of the prior pleadings. Essentially, the prejudice claimed by the second defendant is that, as a result of the making of the admission, it discontinued claims which it had against the second cross-defendants and, in three of the four cases, paid their costs; and that to rejoin those cross-defendants to the proceedings at this stage, if possible, would seriously jeopardise the trial of the proceedings which is due to commence this month. 19As I have said, consideration of this argument requires some examination of the pleadings. In their first cross-claim, as initially filed on 23 October 2009, Dalton Architects pleaded its cross-claim against Mr Wallwork as follows: 1. As to the First Cross-Defendant ("Wallwork"), the Cross-Claimant ("Architect") says as follows (paragraphs 2 to 8): For the purpose only of the First Cross-Claim against Wallwork, the Architect repeats paragraphs 11 to 34 of the Plaintiff's Contentions set forth in the Plaintiff's List Statement filed in these proceedings. 2. On the instruction of John Forsyth (alternatively, on the instruction of the Plaintiff), and on behalf of one or both of them, the Architect engaged Wallwork to provide advice to the Architect on corrosion protection for the roof metals and, in particular, the requirements of clauses 8.6 and 8.10 of the Specification in so far as they related to corrosion; 3. Wallwork advised the Architect that roofing screws, as described in clause 8.6 of the Specification, were suitable, from a corrosion perspective, as a mechanism, for fixing the roof sheeting to the steel members below. 4. Wallwork advised the Architect to have regard to Australian Standard AS 1562 and in particular Table 3.2 therein, in relation to what was good practice in salt laden marine atmospheres. 5. In writing clauses 8.6 and 8.10 of the Specification, the Architect relied on the advice of Wallwork. 6. If, as alleged in paragraph 50 of the Plaintiff's List Statement, the Architect was negligent (which is denied), the Architect says that this was because the advice of Wallwork was incorrect or inadequate. 7. In the premises, Wallwork is a tortfeasor liable in respect of the same damage and the Architect claims indemnity, alternatively contribution, pursuant to section 5 of the Law Reform (Miscellaneous Provisions) Act 1946. 8. In the premises, Wallwork is a tortfeasor liable in respect of the same damage and the Architect claims indemnity, alternatively contribution, pursuant to section 5 of the Law Reform (Miscellaneous Provisions) Act 1946 20It will be observed that the claim, as then pleaded, was solely one for contribution or indemnity under s 5(1)(c). 21On 3 February 2010, Dalton Architects filed a notice of motion seeking leave to amend their cross-claim by adding to the s 5(1)(c) claim, a claim under the (NSW) Fair Trading Act 1987, s 42. The proposed amended claim was as follows: 1. As to the First Cross-Defendant ("Wallwork"), the Cross-Claimant ("Architect") says as follows (paragraphs 2 to 8): 2. For the purpose only of the First Cross-Claim against Wallwork, the Architect repeats paragraphs 11 to 34 of the Plaintiff's Contentions set forth in the Plaintiff's List Statement filed in these proceedings. 3. On the instruction of John Forsyth (alternatively, on the instruction of the Plaintiff), and on behalf of one or both of them, the Architect engaged Wallwork to provide advice to the Architect on corrosion protection for the roof metals and, in particular, the requirements of clauses 8.6 and 8.10 of the Specification in so far as they related to corrosion ("the corrosion retainer"). 3A. Wallwork knew, or should have known, that the Architect was not an expert on matters relating to corrosion of metals, especially in a marine environment; and the Architect would rely on the advice of Wallwork on matters relating to corrosion of metals in a marine environment. 3B. In the circumstances and by reason of his entry into the corrosion retainer, Wallwork owed to the Plaintiff and to the Architect a duty of care. 4. Wallwork advised the Architect that roofing screws, as described in clause 8.6 of the Specification ("the Buildex Screws"), were suitable, from a corrosion perspective, as a mechanism, for fixing the roof sheeting to the steel members below ("the corrosion representation"). 5. Wallwork advised the Architect to have regard to Australian Standard AS 1562 and in particular Table 3.2 therein, in relation to what was good practice in salt laden marine atmospheres ("the Standard advice"). 6. Induced by and acting in reliance upon the corrosion representation and the Standard advice in writing clauses 8.6 and 8.10 of the Specification, the Architect specified the Buildex Screws and referred to Australian Standard AS1562. 7. If, as alleged in paragraph 50 of the Plaintiff's List Statement, the Architect was negligent (which is denied), the Architect says that the loss and damage suffered by the plaintiff was caused or contributed to by Wallwork because the Architect relied upon: a. the corrosion representation, which was incorrect; and b. the Standard advice, which was incorrect or inadequate. 7A. By his conduct, Wallwork breached the duty of care he owed to both the plaintiff and the Architect. Particulars i. The corrosion representation was incorrect. ii. The Standard advice was incorrect or inadequate. 8. In the premises, Wallwork is a tortfeasor liable in respect of the same loss and damage. 8A. In the event that the Architect is found liable for loss and damage claimed by the Plaintiff the Architect claims: damages for breach of duty; alternatively indemnity, and/or contribution, pursuant to section 5 of the Law Reform (Miscellaneous Provisions) Act 1946; interest; and costs. 8B. Further and in the alternative, the corrosion representation and the Standard advice: a. were made in trade and commerce; b. as to the corrosion representation, was a representation as to a future matter; c. were relied upon by the Architect in preparing the Specification; and d. constituted conduct that was misleading and/or deceptive or conduct that was likely to mislead or deceive, in breach of section 42 of the Fair Trading Act 1987 (NSW). 8C. In the event that the Architect is found liable for loss and damage claimed by the Plaintiff, the Architect claims damages from Wallwork pursuant to section 68 of the Fair Trading Act 1987 (NSW).] 22It will be observed that precisely the same conduct was alleged to constitute the cross-defendant Mr Wallwork's negligence, as was alleged to constitute his breach of s 42. 23On 12 March 2010, the motion having been heard before McDougall J, as above mentioned, Dalton Architects filed an amended cross-claim which, in light of the concession that the negligence claim was an apportionable claim, omitted the s 5(1)(c) claim and maintained only the s 42 claim, as follows: 1. As to the first defendant ("Wallwork"), the cross-claimant ("Architect") says as follows (paragraphs 2 to 8A): 2. For the purposes only of the First Cross-Claim against Wallwork, the Architect repeats paragraphs 11 to 34 of the Plaintiff's Contentions set forth in the Plaintiff's List Statement filed in these proceedings. 3. On the instruction of John Forsyth (alternatively, on the instruction fo the plaintiff), and on behalf of one or both of them, the Architect engaged Wallwork to provide advice to the Architect on corrosion protections for the roof metals and, in particular, the requirements of clauses 8.6 and 8.10 of the specification in so far as they related to corrosion. 4. Wallwork advised the Architect that roofing screws, as described in clause 8.6 of the Specification ("the Buildex Screws"), were suitable, from a corrosion perspective, as a mechanism, for fixing the roof sheeting to the steel members below ("the corrosion representation"). 5. Wallwork advised the architect to have regard to the Australian Standard AS 1562 and in particular Table 3.2 therein, in relation to what was good practice in salt laden marine atmospheres ("the standard advice"). 6. Induced by and acting in reliance upon the corrosion representations and the Standard advice in writing clauses 8/6 and 8.10 of the Specification, the Architect specified the Buildex Screws and referred to Australian Standard AS 1562. 7. If, as alleged in paragraph 51I of the Plaintiff's List Statement, the Architect engaged in misleading and deceptive condunt (which is denied) the Architect says that the loss and damage suffered by the plaintiff was caused or contributed to by Wallwork because ethe Architect relied upon; (a) the corrosion representation, which was incorrect; and (b) the Standard advice, which was incorrect of inadequate. 7A. By his conduct, Wallwork engaged in misleading and deceptive conduct Particulars (i) the corrosion representation was incorrect. (ii) the Standard advice was incorrect or inadequate. 8. The corrosion representation and the Standard advice: (a) were made in trade and commerce; (b) as to the corrosion representation, was a representation as to a future matter; (c) were relied upon by the Architect in preparing the specification; and (d) constituted conduct that was misleading and/or deceptive or conduct that was likely to mislead or deceive or deceive, in breach of section 42 of the (NSW) Fair Trading Act 1987. 8A. in the event that the Architect is found liable for loss and damage claimed by the Plaintiff, the Architect claims damages from Wallwork pursuant to section 68 of the (NSW) Fair Trading Act 1987. 24It will be seen that this had the effect of introducing the Trade Practices claim and omitting the s 5(1)(c) claim, but in circumstances where the underlying material facts pleaded did not alter. 25On 8 June 2010, or thereabouts, Dalton Architects discontinued their cross-claim against ADCO and paid ADCO's costs of $12,000. 26Between about January and June 2012 Dalton Architects, by their lawyers, negotiated with the remaining cross-defendants with a view to discontinuing the cross-claims against them, and each of those cross-claims was ultimately discontinued against Mr Wallwork, on the basis that there be no order as to costs, and against the others, on the basis that they be paid $30,000 and $35,000 costs respectively. 27In this context, the solicitor for Dalton Architects, Ms Golovanoff, deposed in her affidavit relied on in opposition to the present application as follows: 61. Had Dymocks not made the concession in paragraph 7 of its reply Dalton ma have, and probably would have, taken a difference course when it determined to settle the cross claims. It is likely that it would have continued to pursue the section 5 claims against each of the cross defendants even if Dalton had abandoned those parts of the claim for misleading and deceptive conduct. 62. If Dymocks is permitted to withdraw its admission and to amend its reply in the manner sought, then I anticipate that Dalton will need to consider commencing fresh cross claims against Wallwork, Davies, ADCO and Buildex, reintroducing the section 5 claims that had been abandoned. 63. It is unlikely, in my experience that those proposed cross defendants would be capable of defending a cross claim set down for hearing commencing on 18 February 2013. In that case, I expect that the joinder of those parties will necessitate the vacation of the hearing and cause significant further delay to the matter including the time required for the cross defendants to file and serve list responses, to prepare evidence and prepare for the hearing. 64. A hearing that involves an additional four parties is likely in my opinion to require more hearing time than the 10 days that has currently been set aside. Having regard to the work involved in preparing the case it is unlikely that a new hearing date with an estimate of more than the current 10 days would be able to commence in the first half of 2013. 65. Mr Dalton is the principal of the second defendant and the only lay witness for the (sic) Dalton. I am informed and verily believe that: a. He is 72 years of age and throughout the course of 2012 has been treated for prostate cancer. b. He is currently under the care of Dr Phillip Stricker. c. Mr Dalton has completed a course of treatment and is due to be reviewed by Dr Stricker in January 2013. d. The current hearing dates if they are completed as anticipated fall within a window that is suitable because they are unlikely to conflict with any further treatment that in the event that any is required once he consults Dr Stricker again in January 2013. e. A later hearing date in the year or further away my interfere with any further treatment if it is required. 66. Further delay also introduces significant uncertainty as to the availability of Mr Dalton as a witness. 67. Dalton has also incurred approximately $77,000 settling the cross claims, as well as Dalton's costs in procuring the settlements. All of those costs will have been thrown away, should Dymocks be permitted to amend its Reply. 28As I have said, at first sight that makes a compelling case of prejudice. However, there was produced on notice documents that recorded the advice given to Dalton Architects, or their insurer, in connection with the negotiations that led to the discontinuances, McDougall J having earlier held that privilege in this material had been waived. In cross-examination, Ms Golovanoff conceded (at transcript 6.42 and again at 7.12), that there was no basis for any claim for contribution against ADCO. 29It emerged, in particular from an advice given by the solicitors for Dalton Architects on 27 January 2012, that the impetus for the negotiations that culminated in the discontinuances were: Two issues confront the insured in maintaining this cross-claim: a. There is inadequate evidence of the alleged representation; and b. The insured does not have appeared to have relied upon the representation to a sufficient extent so as to convince a court that it was causative of loss. 30Further parts of that advice make clear that those advising Dalton Architects were very concerned that they would not be able to prove a case against any of the remaining cross-defendants, and in particular that the evidence available was insufficient to prove that the pleaded representations had in fact been made, and that the evidence was insufficient to establish that those representations if made, had been relied upon in any relevant way. 31The evidence and argument focussed on the case against Mr Wallwork, as did the advice of 27 January 2012. Ms Golovanoff said that the advice related only to the Trade Practices claim and not to any potential claim for contribution in respect of the negligence claim. This is no specious assertion, and is corroborated by paragraph 48 of the advice, which drew that distinction, I accept that that distinction was one that was in Ms Golovanoff's mind at the time. However, that is not the end of it, when one comes to examine the matter objectively. 32The s 5(1)(c) cross-claim, as pleaded, relied upon precisely the same representations as the Trade Practices cross-claim. Reliance is just as material to liability for negligent advice as it is to liability for misleading advice. I do not overlook the conceptual difference between a claim for contribution and what might be called a direct Trade Practices Act claim. In the first, one is concerned with breach of a duty owed by Mr Wallwork to Dymocks and loss occasioned to Dymocks as a result. In the secondm one is concerned with misleading or deceptive advice given by Mr Wallwork to Mr Dalton and relied on by him in a way which caused him to incur liability to Dymocks. However, in the way in which this case was pleaded, those conceptual differences are essentially irrelevant, because the loss to Dymocks from Mr Wallwork's hypothetically negligent advice was said to be caused by Mr Dalton acting on that advice. 33It seems to me that, having regard to the way in which the s 5(1)(c) case was pleaded, as apparent above, there was no relevant distinction between it and the Trade Practices case, when it comes to considering the deficiencies referred to in the advice of 27 January 2012. If there was insufficient evidence to prove the representations relied on, on balance of probabilities, then that was as much a difficulty with the s 5(1)(c) case, as it had been articulated, as it was with the Trade Practices case. If it was the view that there was insufficient evidence to establish that Mr Dalton had relied on Mr Wallwork's advice for the purposes of the Trade Practices case, it equally followed that it was not going to be possible to prove that he relied upon it in a way that caused Dymocks loss for the purposes of the negligence case. Accordingly, it seems to me that the deficiencies that concerned the lawyers in January 2012 and led to the discontinuance of the Trade Practices proceedings were equally applicable to the negligence proceedings. 34There was a further reason for discontinuing the proceedings against Mr Wallwork, which was equally applicable to the negligence proceedings, namely, the observation that he was retired, in his mid 80s, and did not appear to have any insurance, so that even if successful against him there was doubt that he would be in a position to meet any judgment. The conclusion that, in the circumstances, an offer that he "walk away" from the case and bear his own costs was appealing, was equally applicable to a negligence claim as it is was to the Trade Practices claim. 35So far as Buildex was concerned, the case was even more clear-cut. As the advice recorded, "The problem is more significant," and elsewhere reference was made to, "The total lack of evidence against Buildex," such that: Every step should be taken to discontinue the cross-claim as it is almost a certainty that the insured will not succeed against Buildex at any contested hearing. 36In discussions between the solicitor and counsel, the decision to discontinue against Buildex was described as a "no brainer". 37So far as J T Davies & Co are concerned, the advice recorded that the same considerations applied as to Mr Wallwork. In a conversation between solicitor and counsel the claim against J T Davies was described as being in not much better plight than that against Buildex. 38In those circumstances, although I accept that when the advice was given in January 2012 and the discontinuances were subsequently negotiated, the lawyers turned their mind to the Trade Practices claim that was then on foot, rather than to the negligence claim, I am satisfied that, had they turned their mind to a negligence claim, exactly the same considerations would have impelled them to reach exactly the same decision in respect of the negligence claims. 39In June 2012, after learning of Pembroke J's decision, the plaintiff gave some notice of their intention to seek leave to withdrawal the admission. There was at that time no response indicating that there would be opposition to their doing so. On the other hand, the notice foreshadowed that such an amendment and others would be circulated after the evidence was closed, and there was some considerable delay in the closure of that evidence. 40As I have recorded, the motion was ultimately not filed until 7 December 2012. It came before me for hearing in vacation and, because of the state of the vacation list, the parties very helpfully agreed to adjourn the matter to the first week of the new term. 41I accept that, were the former cross-defendants to be rejoined to the proceedings at this stage, it is unreasonable to expect that they would be able to be ready for a trial commencing later this month. In that context, it is important to observe that, as is recorded in paragraph 13 of Dymocks' written submissions: The hearing of these proceedings is listed to commence on 18 February 2013. No party to the proceedings wants to see that date vacated. Dymocks has made it plain, and repeats, that if the court considers that the amendment should be permitted but that this would cause the vacation of the hearing date it would withdraw the motion. 42I have already set out Ms Golovanoff's evidence, in particular in paragraph 62 of her affidavit, that: If Dymocks is permitted to withdraw its admission and to amend its reply in the manner sought then I anticipate that Dalton will need to consider commencing fresh cross-claims against Wallwork, Davies ADCO and Buildex, reintroducing the s 5 claims that had been abandoned. 43While there was some suggestion that those cross-defendants might contend that the proceedings against them had been compromised, I do not think that such an argument could succeed. The proceedings were discontinued, not dismissed; and no cross-defendant insisted on or procured a release. In those circumstances, there is no res judicata preventing the renewal of the claims. 44Next, a cross-claim for indemnity or contribution under s 5(1)(c), though it can be brought by a third party proceeding in the original proceedings, does not in law for the purposes of limitation statutes accrue until judgment is given against the defendant on the substantive claim [Baldry v Jackson (1976) 2 NSWLR 415]. 45In those circumstances it seems to me that, even though it would be unreasonable to expect any such cross-claim to proceed at the hearing to commence later this month, it is wrong to submit, as the defendant did, that granting leave to amend would have the effect of denying the defendant at the outset the opportunity to bring any such cross-claim. Such a cross-claim could still be brought after judgment in the main proceedings. It may be said that that is not the most desirable way of conducting proceedings, and that the third party procedure is preferable; but in weighing the various considerations of prejudice, the unlikelihood that any such cross-claim would in fact be brought is also a relevant consideration. 46Of great significance on this issue is what I consider to be the equivocal state of the defendant's evidence on the topic. In the light of Dymocks' statement that it would withdraw the motion if the court considered that amendment would cause the vacation of the hearing date, something more than mere anticipation that Dalton would need to "consider" commencing fresh cross-claims was required. The evidence did not rise above that. Indeed, in cross-examination, Ms Golovanoff said (transcript 12 lines 18 to 24), when asked whether she had formed a view as to whether her client would need to consider commencing fresh cross-claims: "I have not taken instructions and I haven't formed a view". 47In respect of the claim against J T Davies & Co, when asked whether it would be the same, that she had turned her mind at all as to whether in fact she would recommended commencing a fresh cross-claim, she answered, "I would seriously consider it with Mr Wallwork," and in respect of Buildex, when asked, "Would you agree with me that it is even less likely that you would be in a position to recommend that one be recommenced, as compared to Dr Wallwork or Jack Davies?", she answered, "I haven't considered it". As I have said, in circumstances where Dymocks had indicated that it would withdraw the motion if there were jeopardy to the hearing date, it behoved the defendants to do more than not give consideration to the question. 48In those circumstances, I am quite unsatisfied that the prejudice to the second defendant from permitting the withdrawal of the admission outweighs the desirability of the court hearing the case on a true, rather than a false, legal basis. For those reasons, I make orders 1 and 2 in the motion filed 7 December 2012. 49However, as it seems to me that the plaintiff has needed an indulgence from the court to obtain leave to withdraw the admission, and as it cannot be said that opposition to it was unarguable, prima facie the plaintiff should pay the second defendant's costs of the motion. Counsel addressed as to costs 50The question is not straightforward. On the one hand, it is an application of the type to which the indulgence rule would ordinarily apply. On the other, what has happened is that an apparently strong but, on examination, specious, case of prejudice, has been advanced. Balancing those considerations, I think the proper course is that neither party should have their costs of the motion, but the plaintiff must pay the costs occasioned or thrown away by the amendment. 51I make no order as to the costs of the motion, to the intent that each party bear its own costs of the motion. 52I order that the plaintiff pay the second defendant's costs of and occasioned or thrown away by the amendment permitted by the orders I have just made. ********** DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 08 April 2013