Bridge Shipping Pty Ltd v Grand Shipping SA

(2) In this Order "document" includes originating process, an indorsement of claim on originating process and a pleading.

(4) A mistake in the name of a party may be corrected under paragraph (1), whether or not the effect is to substitute another person as a party.

(5) Where an order to correct a mistake in the name of a party has the effect of substituting another person as a party, the proceeding shall be taken to have commenced with respect to that person on the day the proceeding commenced.

(6) The Court may, notwithstanding the expiry of any relevant limitation period after the day a proceeding is commenced, make an order under paragraph (1) where it is satisfied that any other party to the proceeding would not by reason of the order be prejudiced in the conduct of his claim or defence in a way that could not be fairly met by an adjournment, an award of costs or otherwise.

(7) For the purpose of paragraph (6) "any other party to the proceeding" includes a person who is substituted as a party by virtue of an order made to correct a mistake in the name of a party.

In May 1986, the vessel " Green Sand " left Brazil en route to Melbourne. On board were thirty-two containers of tobacco owned by Philip Morris Ltd. That company had engaged the appellant, Bridge Shipping Pty. Ltd. ("Bridge"), to arrange for the carriage of those containers to Melbourne. Bridge employed another company to arrange the carriage of the goods and was unaware of the identity of the carrier. On 12 May 1986, the ship's master issued bills of lading in respect of the containers. The bills did not name the carrier. When the vessel arrived in Melbourne, a number of containers were missing and the contents of others were damaged.

On 8 January 1987, Philip Morris Ltd. issued a writ claiming damages against Bridge. Bridge sought contribution or indemnity from the person responsible for the damage. The solicitor for Bridge conducted a search of the Lloyd's Register. The search revealed that the registered owner of the vessel was Grand Shipping S.A. ("Grand"). Bridge then issued a third party notice against Grand. It was not until 29 September 1987 when Grand delivered its defence to the third party claim that the solicitor for Bridge discovered that, by a bareboat charter agreement made in Tokyo in 1984, Grand had chartered the " Green Sand " to Rainbow Line S.A. ("Rainbow") and that Rainbow had been the carrier of the tobacco.

The defence to the third party proceedings was not delivered until after the time for suing Rainbow for indemnity or contribution had expired. In an attempt to overcome this difficulty Bridge made an application under r. 36.01 to substitute Rainbow as a party for Grand. However, Master Brett refused the application. King J. dismissed an appeal from the Master's decision. An appeal to the Full Court of the Supreme Court of Victoria (Crockett, Kaye and Southwell JJ.) against the decision of King J. was unanimously dismissed. Pursuant to the grant of special leave, Bridge now appeals to this Court against the order of the Full Court.

Bridge contends that the case is within r. 36.01(4) because the mistake which it made was a mistake as to which person or corporation fell within the description of the carrier of the tobacco. Bridge says that the mistake which it made was not a mistake as to the category of persons who were subject to the legal liability. If, for example, Bridge had mistakenly sued the wharfinger, thinking it was liable, and now wished to sue the carrier, it concedes that there would not be a mistake "in the name of a party". But Bridge contends that, since it has made a mistake as to the name of the carrier, it has made a "mistake in the name of a party" within the meaning of r. 36.01(4). In the Full Court, Crockett J., with whose judgment Kaye and Southwell JJ. agreed, held that the class of mistake with which the sub-rule deals is more limited. His Honour said:

I should have thought that the better view is that the rule as to correction of a mistake in the name of a party was intended to (and, in fact, must) be confined to mere cases of misnomer, misdescription, typographical or clerical error and the like. That is to say, cases in which there was no merit in the joined defendant's being able to claim immunity from action nor hardship to him by his inability to rely on a time bar. Accordingly, despite r. 36 in general being remedial in its operation, sub-r. (5) [sic] [sub-r. (4)] should, I consider, be strictly construed. His Honour went on to say: It [Bridge] never intended to sue Rainbow. That was because it made an error as to who was the carrier. That mistake was not one as to the name of the person it intended to sue. It was a mistake as to the identity of the person sued. That is not a mistake of the kind that should allow Rainbow to be deprived of its time-bar defence. Nor should the rule be construed so as to permit such a deprivation. If the reasoning of the Full Court in the present case is correct, the enactment of r. 36.01 has made little, if any, difference to the pre-1986 position.

Rule 36 was introduced into the Supreme Court Rules in 1986. Before that time, the practice in Victoria was that, where a person was entitled to rely on a defence of the statute of limitations, an amendment to substitute him or her as a party would be permitted only in cases of misnomer, misdescription or clerical error [35] . The decisions in Sorati and Hubbard Assoc were based on the practice concerning amendment which applied in England for much of this century. In Davies v Elsby Bros Ltd [36] , the Court of Appeal held that a plaintiff could not be permitted to amend "if that would deprive the defendant of the benefit to which he had become entitled as of right under the Statute of Limitations" and "the amendment involves the addition of a party and not the mere correction of a misnomer" [37] . Devlin L.J. said [38] :

I think that the test must be: how would a reasonable person receiving the document take it? If, in all the circumstances of the case and looking at the document as a whole, he would say to himself: "Of course it must mean me, but they have got my name wrong," then there is a case of mere misnomer. If, on the other hand, he would say: "I cannot tell from the document itself whether they mean me or not and I shall have to make inquiries," then it seems to me that one is getting beyond the realm of misnomer. 1. Attorney-General (Eng) v Sorati [1969] VR. 88, at pp. 94-95; Hubbard Assoc v Attorney-General (Vict) [1976] VR. 119, at pp. 126-128. 2. [1961] 1 W.L.R. 170; [1960] 3 All E.R. 672. 3. ibid., at p. 173; p. 674. 4. ibid., at p. 176; p. 676.

In Davies , the plaintiff had issued a writ against "Elsby Bros. - a firm" for damages for negligence in respect of injuries sustained during the course of his employment. The date of injury was not specified in the writ. Originally, the plaintiff had been employed by the firm of Elsby Bros., but in 1955 that firm's business was taken over by Elsby Bros. Ltd. The plaintiff's injury occurred in 1956. The Court of Appeal dismissed an appeal against a decision of Elwes J. who had held that the writ could not be amended by striking out the words "a firm" and adding the word "Limited" to "Elsby Brothers" because the plaintiff's claim against the company was barred by a statute of limitations.

The principle in Davies was applied in Whittam v W J Daniel & Co Ltd [39] where, however, the decision went the other way. There the plaintiff had issued a writ against "W.J. Daniels & Co. (a firm)". Later the Master allowed the amendment of the writ by substituting as defendant "W.J. Daniel & Co. Ltd.". The Court of Appeal upheld the Master's order. Danckwerts L.J. said that the case was distinguishable from Davies "because in the present case there is no other entity to which the description in the writ could be taken to refer" [40] .

In J Robertson & Co Ltd (In liq) v Ferguson Transformers Pty Ltd [41] in this Court, Walsh J. applied the test stated by Devlin L.J. in Davies but allowed a plaintiff to amend its writ from "Philips Electrical Pty. Ltd." to "Philips Industries Pty. Ltd.". His Honour said [42] :

It has been held, in my opinion correctly, that a misdescription of a corporate body is capable of being regarded as a mere misnomer and of being corrected by amendment in the same way as the misnomer of a natural person It must be acknowledged, however, that when, as in the present case, there were two companies in existence to which the writ could refer, it is more difficult to regard the name of one of them, set out in the writ, as being a misnomer, than it would be if there were no other entity in existence than the one to which the writ was intended to refer. The importance of this consideration has been recognized in the cases but in my opinion it has not been laid down that it is decisive. However, this Court had no rule equivalent to r. 36.01. 1. (1970) 44 A.L.J.R. 441. 2. ibid., at p. 443.

Nevertheless, the principle in Davies was capable of working injustice as the decision in that case demonstrated. Consequently, the power to make amendments was changed in England by the promulgation of O. 20, r. 5 of the Supreme Court Rules which empowers the Court to allow a plaintiff to amend the writ or a party to amend his or her pleading on such terms as may be just. Sub-rule (2) enables an application for leave to make an amendment to be made "after any relevant period of limitation current at the date of issue of the writ has expired" if the court thinks it is just to do so. Sub-rule (3) provides:

An amendment to correct the name of a party may be allowed under paragraph (2) notwithstanding that it is alleged that the effect of the amendment will be to substitute a new party if the Court is satisfied that the mistake sought to be corrected was a genuine mistake and was not misleading or such as to cause any reasonable doubt as to the identity of the person intending to sue or, as the case may be, intended to be sued.

In Mitchell v Harris Engineering Co Ltd [43] , Lord Denning M.R. said:

Sub-rule (3) has removed the injustice caused by the decision in Davies v Elsby Bros 1. [1967] 2 Q.B. 703, at p. 718.

In Evans Constructions Co Ltd v Charrington & Co Ltd [44] , the Court of Appeal, by majority, gave O. 20, r. 5 a wide meaning. In August 1970, Evans Constructions Co. Ltd. ("Evans") had taken a lease of various buildings from Charrington & Co. Ltd. ("Charringtons") for use in connection with its business. Charringtons assigned the reversion to Bass Ltd. ("Bass"), another company in the same commercial group, but continued to act as managing agent for Bass. In 1981, Charringtons, as agent for Bass, wrote to Evans enclosing a notice terminating the tenancy in April 1982. Under the Landlord and Tenant Act 1954 UK, Evans was entitled to apply to the County Court for a new tenancy. The application had to be made not less than two months nor more than four months after the serving of the landlord's notice. The application which Evans made to the County Court contained the error that Charringtons was the other party to the lease and the respondent to the application. Subsequently, Evans sought to join Bass as an additional respondent. The County Court allowed the application under the provisions contained in O. 20, r. 5. The Court of Appeal dismissed the appeal but decided that Bass should be substituted for Charringtons.

On appeal, Donaldson L.J. accepted that it was the intention of the solicitor for Evans to sue the relevant landlord. Accordingly, his Lordship found that there was a genuine mistake of a character to which O. 20, r. 5(3) could apply. Donaldson L.J. said [45] :

In applying Ord. 20, r. 5(3) it is, in my judgment, important to bear in mind that there is a real distinction between suing A in the mistaken belief that A is the party who is responsible for the matters complained of and seeking to sue B, but mistakenly describing or naming him as A, and thereby ending up suing A instead of B. The rule is designed to correct the latter and not the former category of mistake. Which category is involved in any particular case depends upon the intentions of the person making the mistake and they have to be determined on the evidence in the light of all the surrounding circumstances. Waller L.J. who dissented said [46] : In the present case there was no mistake as to name. Mr. Greenwood, Evans' solicitor, in his affidavit frankly stated he thought Charringtons was the landlord. The mistake here was not a mistake as to name; it was a mistake as to identity. 1. [1983] Q.B., at p. 821. 2. ibid., at p. 816.

In Central Insurance Co Ltd v Seacalf Shipping Corporation (The Aiolos) [47] , the Court of Appeal refused to extend Evans v Charrington to a case where the applicants were mistaken as to the nature of the rights which they had as plaintiffs. The Court upheld the refusal of an application to add the names of the buyers of goods to the names of the plaintiffs who were the insurers of the buyers. The insurers had sued the defendants in reliance on their rights of subrogation under their contracts of insurance with the buyers. Oliver L.J. said [48] :

The analogy which Mr. Gruder seeks to draw with the Charrington case is not, in my judgment a permissible one. No doubt if the fact were that the actual insurer was not the plaintiff, but, say, a subsidiary company there could or might be a true analogy with that case. But the instant case was not a case, as was the Charrington case, of a mistaken belief that the person made party to the proceedings fulfilled a particular description, videlicet that of landlord or insurer, but a case of an erroneous belief that the plaintiff, because he was in fact what he was thought to be, that is, the insurer, had as a result of that certain legal rights which he did not in fact have. There was therefore no error either as to the name or as to the identity of the party which fell to be corrected, but simply an error of law as to the rights possessed by the correctly identified party. Order 20, r. 5(3) simply does not extend to this sort of error and the application under this rule must, therefore, fail. 1. [1983] 2 Lloyd's Rep. 25. 2. ibid., at pp. 30-31.

Evans v Charrington was followed by Clarke J. in Lloyd Steel (Aust) Pty Ltd v Jade Shipping SA [49] . His Honour had to consider an application under Pt 20, r. 4 of the Supreme Court Rules N.S.W. in circumstances which were not materially different from the circumstances of the present case. Part 20, r. 4 relevantly provided:

(1) Where any relevant period of limitation expires after the date of filing of a statement of claim and after that expiry an application is made under rule 1 for leave to amend the statement of claim by making the amendment mentioned in any of subrules (2), (3), (4) and (5), the Court may in the circumstances mentioned in that subrule make an order giving leave accordingly, notwithstanding that that period has expired.

(3) Where there has been a mistake in the name of a party and the Court is satisfied that the mistake was not misleading nor such as to cause reasonable doubt as to the identity of the person intended to be made a party, the Court may make an order for leave to make an amendment to correct the mistake, whether or not the effect of the amendment is to substitute a new party.

Clarke J. said that he found the statement of Donaldson L.J. in Evans v Charrington "utterly persuasive" [50] . 1. (1985) 1 N.S.W.L.R. 212. 2. ibid., at p. 218.

Despite the similarity between r. 36.01 and O. 20 of the English Rules and Pt 20 of the New South Wales Rules, however, the Full Court of the Supreme Court of Victoria in the present case refused to follow Evans v Charrington and Lloyd Steel and the reasoning which is the basis of those decisions. In Teys Bros Pty Ltd v ANL Cargo Operations Pty Ltd [51] , Cooper J. also distinguished Evans v Charrington and Lloyd Steel and gave O. 32 of the Rules of the Supreme Court of Queensland a narrow construction despite its similarity to O. 20. Cooper J. said [52] :

The test as to misnomer to be applied in this Court is that formulated by Devlin L.J. in Davies v Elsby Bros Ltd [53] . Later his Honour said [54] : The test as to misnomer adopted by the majority of the Court of Appeal in Evans Ltd v Charrington & Co Ltd is not consistent with the test to be applied in Queensland as laid down in the decisions of the Full Court to which I have earlier referred. Importantly, Donaldson L.J. (as he then was) construed O. 20 r. 5(3) as "reflecting and overruling the objection which prevailed in Beardmore Motors Ltd v Birch Bros (Properties) Ltd [55] and in Davies v Elsby Bros Ltd [56] ". Such a view cannot stand with the decisions of this Court subsequent to 1965, when O. 32, r. 1(3) was introduced into the Rules, continuing to apply Davies v Elsby Bros Ltd as the authoritative statement of the test relevant to the application of the Rules. The dissenting judgment of Waller L.J. is, in my view, closer to the position which is applied in this State. 1. [1990] 2 Qd R. 288. 2. ibid., at p. 292. 3. [1961] 1 W.L.R, at p. 176; [1960] 3 All E.R., at p. 676. 4. ibid., at p. 294. 5. [1959] Ch. 298. 6. [1961] 1 W.L.R. 170; [1960] 3 All E.R. 672.

His Honour's reference to the decisions of the Full Court was a reference to Harstoff v Allen [57] , Lynch v Keddell [58] and Lynch v Keddell [No 2] [59] . In Harstoff both parties to the appeal accepted that, in a case where a limitation period had expired, the test to be applied in determining whether an amendment should be applied was that formulated by Devlin L.J. in Davies . In Lynch v Keddell , the Full Court held that, when an application to join a defendant was made after the expiration of a limitation period, the discretion to order the joinder was to be exercised only in peculiar or special circumstances. However, Lynch v Keddell was not a case where the plaintiff claimed that she had made "a mistake in the name of a party".

1. [1967] Qd R. 211. 2. [1985] 2 Qd R. 103. 3. [1990] 1 Qd R. 10.

Having regard to the history of O. 20, r. 5(3) of the English Rules, it is obvious, as the English Court of Appeal pointed out in Mitchell v Harris Engineering , that the sub-rule was intended to overcome the decision in cases such as Davies . There is no reason why its Australian counterparts should be given a more restricted meaning. Consequently, in so far as cases in Queensland and the judgment of the Full Court of the Supreme Court of Victoria in the present case suggest that such a rule applies only to misnomers and that Davies is still a relevant decision, they were wrongly decided and should be overruled. The more difficult decision, however, is to determine the scope of such rules and in particular r. 36.01(4).

The concluding words of sub-r. (4) "whether or not the effect is to substitute another person as a party" enable a plaintiff to substitute one person for another person as a party to the action. Those words also imply that the fact that the plaintiff intended to sue the person who was sued does not prevent the sub-rule applying provided that there was a mistake in the name of the person sued. Moreover, a plaintiff may make "a mistake in the name of a party" not only because the plaintiff mistakenly believes that a certain person, whom the plaintiff can otherwise identify, bears a certain name but also because the plaintiff mistakenly believes that a person who answers a particular description bears a certain name. Thus, a plaintiff may make a mistake "in the name of a party" because, although intending to sue a particular person whom the plaintiff knows by sight, the plaintiff is mistaken as to that person's name. Equally, the plaintiff may make a mistake "in the name of a party" because, although intending to sue a person whom the plaintiff knows by a particular description, e.g. the driver of a certain car, the plaintiff is mistaken as to the name of the person who answers that description. In both cases, the plaintiff knows the person intended to be sued by reference to some property or properties which is or are peculiar to that person but is mistaken as to the name of that person. In the first case, the properties which identify the person are personal characteristics; in the second case, they are the properties which are of the essence of the description of that person. But for the purpose of sub-r. (4) that distinction is irrelevant. In both cases, the plaintiff was mistaken only as to the name of the person intended to be sued. There is no warrant for treating sub-r. (4) as dealing only with the case where the properties which identify the party are inherent properties. That is, there is no warrant for treating sub-r. (4) as dealing only with the case where the plaintiff says: "The person I wish to substitute as a party is that entity which I identified by certain inherent properties peculiar to it but whose name I mistakenly believed was X." The sub-rule applies equally to the case where the plaintiff says: "The person I wish to substitute as a party is that entity which I identified by reference to certain properties which are true of it and of no one else and whose name I mistakenly believed was X." In both cases, a mistake in the name of the party has occurred and can be seen to have occurred only because the person sued does not have or is not identified by some property or properties which is or are peculiar to the person intended to be sued and to no one else.

Rule 36.01(4) is a remedial rule and should be given a beneficial interpretation. It is proper to give it the widest interpretation which its language will permit [60] . It should be interpreted to cover not only cases of misnomer, clerical error and misdescription but also cases where the plaintiff, intending to sue a person he or she identifies by a particular description, was mistaken as to the name of the person who answers that description. In my opinion, Evans v Charrington and Lloyd Steel were correctly decided.

1. Holmes v Permanent Trustee Co of New South Wales Ltd (1932), 47 C.L.R. 113, at p. 119.

To give the rule the meaning for which Bridge contends does not mean that a person can sue any person and then at a later time substitute another person for the original defendant. The rule imposes three limitations on a person's right to amend. First, there must be a mistake. Secondly, the mistake must be "in the name of a party". Thirdly, the court may only make the order where it is satisfied that any other party to the proceeding would not by reason of the order be prejudiced in the conduct of his or her claim or defence in a way that could not be fairly met by an adjournment, an award of costs or otherwise: r. 36.01(6).

Paragraph 3 of the statement of claim, which Bridge served with the third party notice, alleged that "Grand Shipping is and at all times material was the owner of the vessel " Green Sand " ". Paragraph 5 alleged that the bill of lading, issued in respect of the thirty-two containers of tobacco, "was issued on behalf of the authority of the Master of the said ship". Paragraph 6 alleged that Grand owed to Bridge "in relation to the voyage in respect of which the bill was issued a duty" to make the ship seaworthy, to properly man and equip it and to make those parts of the ship carrying the cargo fit and safe for the "reception, carriage and preservation thereof". Paragraph 7 alleged a further or alternative duty "to keep and care for the cargo and containers".

My initial reaction to this statement of claim was that, despite its form, Bridge had impliedly intended to sue the carrier of the tobacco but was mistaken as to its name. But further thinking on the matter has caused me to change my mind. The conclusion that Bridge impliedly intended to sue the carrier is inconsistent with the terms of the statement of claim, with the inferences to be drawn from that document, and with the affidavit evidence of Bridge's solicitor seeking to explain the mistake.

If Bridge had intended to sue the carrier and had mistakenly believed that the name of the carrier was Grand, it would follow that Bridge had made a mistake "in the name of a party". In The "Al Tawwab" [61] , Lloyd L.J. said:

In one sense a plaintiff always intends to sue the person who is liable for the wrong which he has suffered. But the test cannot be as wide as that. Otherwise there could never be any doubt as to the person intended to be sued, and leave to amend would always be given. So there must be some narrower test. In Mitchell v Harris Engineering the identity of the person intended to be sued was the plaintiff's employers. In Evans v Charrington it was the current landlord. In Thistle Hotels v McAlpine [62] the identity of the person intending to sue was the proprietor of the hotel. In The Joanna Borchard [63] it was the cargo-owner or consignee. In all these cases it was possible to identify the intending plaintiff or intended defendant by reference to a description which was more or less specific to the particular case. Thus if, in the case of an intended defendant, the plaintiff gets the right description but the wrong name, there is unlikely to be any doubt as to the identity of the person intended to be sued. But if he gets the wrong description, it will be otherwise. 1. [1991] 1 Lloyd's Rep. 201, at p. 207. 2. Unreported; Court of Appeal; 6 April 1989. 3. [1988] 2 Lloyd's Rep. 274.

The statement of claim in the present case does not indicate that Bridge sued Grand because it believed that Grand was the carrier but was mistaken as to the name of the carrier. To the contrary, the allegation in par. 3 that Grand was "the owner of the vessel" at all material times indicates that Bridge intended to sue Grand because it believed that Grand was the owner of the vessel. The correctness of that conclusion is confirmed by the affidavit of Bridge's solicitor who swore that he "was concerned to preserve Bridge Shipping's rights against the Owner of such vessel".

Bridge made no mistake as to description of the party which it wished to sue. It intended to sue the owner and did so. Bridge's mistake was not one of misnomer, clerical error or misdescription. Nor was it one where, intending to sue a person whom it identified by a particular description, it was mistaken as to the name of the person who answered that description. The present case is different, therefore, from Lloyd Steel where Clarke J. accepted that the plaintiff's solicitor had "instituted the proceedings because he believed, as a result of his searches of the Lloyd's Register, that the first named defendant in each case was the carrier" [64] . The mistake which Bridge made was that it believed that it had rights against the owner of the vessel. But that was not a mistake "in the name of a party".