A plaintiff amends years into a proceeding to plead a new cause of action, and the defendant says it is out of time. At an interlocutory hearing nobody can say whether a limitation period has ended. Can the court grant leave to amend but defer the date the amendment takes effect, so that the defendant keeps whatever limitation defence it may have? In LK Smith Holdings Pty Ltd v FJA Holdings Pty Ltd [2026] QCA 209 the Queensland Court of Appeal said no, where the applicant has otherwise satisfied the requirements of r 376(4) and the only reason for the deferral is that uncertainty.
The decision was delivered on 20 October 2026. Crowley J wrote the reasons, with which Bond JA and Boddice JA agreed at [1] and [2]. The appeal from Muir J in LK Smith Holdings Pty Ltd v FJA Holdings Pty Ltd [2025] QSC 182 was allowed. The grant of leave was varied to rest on r 375(1) of the Uniform Civil Procedure Rules 1999 (Qld) (UCPR), the order deferring the amendments to 27 February 2025 was set aside, and the respondents were ordered to pay the costs of the appeal.
How the point arose
The appellants sued in December 2021 for debts said to arise from loans, at [5]. After a period of inaction, an amended statement of claim filed on 26 February 2025 recast the money as capital contributions which the parties had agreed to treat as loans, with a plea of estoppel by convention, at [6], [7] and [10]. The primary judge found a new cause of action that was “potentially out of time” but arose out of substantially the same facts, granted leave, and ordered that the amendments take effect from 27 February 2025, leaving limitation to trial, at [11]. The effective date matters only in one scenario. If a limitation period for the new claim ended after the proceeding started, relation back to 2021 would defeat that defence and a 2025 effective date would preserve it. If the period had ended before the proceeding started, the defence remains available either way; if it had not ended, or no period applies, there is no defence to preserve, at [51] and [52]. Which scenario applies was left for trial.
What the Court decided
| Question | Raised by | What the Court held | Effect on the appeal |
|---|---|---|---|
| Did the primary judge find the limitation period had ended? | Appellants | No positive finding was made, at [37] and [39] | Ground failed |
| Can r 376(4) be exercised if the court cannot decide whether the period has ended? | Respondents | No. That finding is an essential prerequisite, at [40] and [48] | Leave re-founded on r 375(1) |
| How is leave granted when limitation is uncertain? | Both parties had cited Mokrzecki | Under another source of power, such as s 16 of the Civil Proceedings Act 2011 (Qld) or r 375, by asking the r 376(4)(a) and (b) questions, at [51] and [53] | Held |
| Where the r 376(4)(a) and (b) requirements were otherwise satisfied, could the effective date be deferred because limitation was uncertain? | Appellants | No. Contrary to logic and to the policy of r 376(4), at [60], [66] and [71] | Decided the appeal. Order 2 set aside |
| Does “appropriate” in r 376(4)(a) allow leave conditioned on a later effective date? | Respondents | No. Prejudice that cannot be overcome is a reason to refuse leave, at [69] | Ground failed |
| Would the result be the same if the period had been found to have ended? | Not argued as a separate ground | Yes, at [76] | Considered obiter. An alternative on a hypothesis the Court rejected |
Rule 376 needs a finding, not a possibility
Rule 376 of the UCPR applies, by r 376(1), only “if a relevant period of limitation, current at the date the proceeding was started, has ended”. Crowley J described that at [20] as an essential common prerequisite for the discretions in r 376(2), (3) and (4). The consequence, at [40], is blunt: “Where the court is unable to make that determination, the court cannot exercise the power under r 376(4).”
The appellants argued that “potentially out of time” was really a finding that the period had ended. The Court did not accept that, at [37] and [39], so the primary judge had acted under a rule that was not engaged.
The Mokrzecki approach, now endorsed on appeal
That did not mean leave was unavailable. The Court endorsed the approach of McMurdo J in Mokrzecki v Popham [2013] QSC 123 and Applegarth J in Menegazzo v Pricewaterhousecoopers (A Firm) [2016] QSC 94, adopted in several first instance decisions, at [41] and [45]. At [51]: “In my view, this is the correct approach to take in a case like this where the court cannot determine whether a relevant limitation period has expired.”
On that approach the court does not exercise r 376(4) at all. The power to grant leave must come from another source, “such as the general power to grant leave to amend under s 16 of the CPA or UCPR r 375”, at [53]. The court then decides the application by reference to the r 376(4)(a) and (b) questions, whether leave is appropriate and whether the new cause of action arises out of the same or substantially the same facts, on the assumption that the period has ended, at [49]. The court should “make plain that the court is not purporting to exercise the discretion conferred by r 376(4)”, at [53]. The primary judge had, in substance, asked and answered the right questions, at [59]. Her error was in what she did next.
Why the deferral was an error
Rule 387(1) provides that if a document is amended under that part of the rules, the amendment “takes effect on and from the date of the document being amended”. At [24] the Court said that, subject to r 387(2) and (3), r 387(1) “applies in all cases where an amendment is made under any of the provisions of UCPR Part 3, Chapter 10, which includes r 375 and r 376(4)”. The parties agreed the deferral could not rest on r 387(3), which applies only to a cause of action arising after the proceeding started. “Rule 387(1) should have applied”, at [67].
The deeper reason is the purpose of r 376(4). At [61]: “The evident intent and policy of r 376(4) is that a grant of leave will defeat a limitation period defence.” Deferring the effective date once leave had been found appropriate “cut across the policy, purpose and intent of r 376(4) and deprived the appellants of the benefit of the leave that had been granted”, at [66]. The primary judge had decided leave should be granted, and “it was not open to her Honour to then defer the date for when the amendments would take effect”, at [60].
The respondents relied on s 14 of the Civil Proceedings Act 2011 (Qld), r 375 and r 367 as powers to condition leave. The Court rejected that justification at [68], while accepting that “other legislative provisions might enable a court to impose a condition upon a grant of leave to amend in other circumstances”. It also did not treat r 375 and s 16 as identical. At [70] it quoted Stimpson v O’Toole [2022] QCA 194 at [43], which said that r 387 “does not apply to an amendment allowed by the Court in the exercise of the power” conferred by s 16(2) of the Civil Proceedings Act. Because r 376 did not directly apply, it “would perhaps have been open” to make an order of the kind made, at [70]. At [71] the Court added that “the same might be said of r 375”, which allows leave “in the way and on the conditions the court considers appropriate”. That remark goes to the power to impose conditions. It does not qualify the statement at [24] that r 387(1) applies to amendments under r 375; the exclusion quoted from Stimpson concerns amendments under s 16(2). But in either case, even if the true source of the discretion is other than r 376(4), it would be contrary to logic and to the policy and purpose of r 376(4) to defer the effective date “where an applicant had otherwise satisfied the requirements of r 376(4), simply because there was uncertainty as to the expiration of a relevant limitation period”, at [71].
Prejudice goes to whether leave is given at all
The respondents also said that “appropriate” in r 376(4)(a) includes conditionally appropriate. The Court rejected that at [69]. It is not open to a court to be satisfied that leave is appropriate “but only if the effect of the amendments is postponed to a date that would render the grant of leave inutile”. If the prejudice cannot be overcome, or it would not be fair to grant leave, the court “would ordinarily refuse the r 376(4) application as it would not be ‘appropriate’ to give leave”. Crowley J said the same approach should be taken under the Mokrzecki approach.
Re-exercising the discretion under r 375, the Court granted leave without any deferral, at [73] to [75]. The bulk of the delay was explained by the appellants’ solicitor’s own workload, and the respondents’ prejudice “largely concerned the prospect of potential prejudice rather than any actual prejudice”, at [74] and [75].
What it changes for practitioners
For a plaintiff seeking leave to add a new cause of action where limitation is genuinely unclear, the application should not be framed under r 376(4) alone. It should invoke r 375 or s 16 of the Civil Proceedings Act, address the r 376(4)(a) and (b) questions directly, and ask the court to make plain it is proceeding on the Mokrzecki approach. The two sources differ. An amendment under r 375 takes effect from the date of the document amended under r 387(1), at [24] and [67]. For an amendment allowed under s 16(2), the Court quoted Stimpson at [70] for the proposition that r 387 does not apply. On either source, deferral simply because limitation is uncertain is ruled out where the r 376(4) requirements are otherwise satisfied, at [71]. The source of power is worth choosing deliberately.
For a defendant, where the r 376(4)(a) and (b) requirements are met, the fight is over whether leave should be granted, not over a fallback order postponing its effect because limitation is uncertain. Evidence of actual prejudice is likely to carry more weight at that hearing than assertions of potential prejudice, which the Court discounted here at [74] and [75]. Whether the limitation period has in fact expired remains for trial, at [39] and [52]. Nothing in the decision says the defence is gone.
Published 26 October 2026.
What remains unsettled
Several questions were left open. Whether, outside r 376, the general power could ever support a later effective date for some reason other than uncertainty about limitation: the Court said only that such an order “would perhaps have been open”, at [70], and that other provisions “might” allow conditions “in other circumstances”, at [68]. The position where the r 376(4) requirements are not met and limitation is uncertain, which Mokrzecki and Menegazzo addressed but which was not before the Court, at [44] and [46]. And whether the old rule of practice in Weldon v Neal still applies in Queensland, which the Court noted had been doubted in Anderson v Anderson [2026] QCA 50, at [63]. The alternative conclusion at [76] is considered obiter. The reasons are on AustLII.
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Amending a claim in a commercial dispute? Where a limitation period may have run, the source of power for leave and the evidence on prejudice both matter. Contact Fraser Lawyers to discuss where you stand. |
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