Advantage Credit Union Ltd v Rothnie - [2005] WASC 63

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS

CITATION: ADVANTAGE CREDIT UNION LTD -v- ROTHNIE & ANOR [2005] WASC 63

CORAM: MASTER NEWNES

HEARD: 12 APRIL 2005

DELIVERED : 29 APRIL 2005

FILE NO/S: CIV 1752 of 2003

BETWEEN: ADVANTAGE CREDIT UNION LTD (ACN 087 651 303)
Plaintiff
AND
IAN DAVID ROTHNIE
VIOLET ANNE ROTHNIE
Defendants

Catchwords:

Practice and procedure - Application under O 21 r 5(3) to change name of plaintiff - Debt assigned to applicant and assignor then deregistered - Action commenced against debtor in name of assignor after assignor deregistered - Application to change name of plaintiff to assignee - Whether O 21 r 5(3) applies - Whether O 21 r 5(3) applies after judgment entered - Turns on own facts

Legislation:

Rules of the Supreme Court, O 21 r 5(3)

Result:

Application granted

Category: B

Representation:

Counsel:

Plaintiff: Mr P S Bates
Defendants: Mr K E F Yin

Solicitors:

Plaintiff: CBA Legal
Defendants: Galic & Co

Case(s) referred to in judgment(s):

Advantage Credit Union Ltd v Rothnie & Anor [2004] WASC 208
Boschetti v Carr [2000] WASC 228
Bridge Shipping Pty Ltd v Grand Shipping SA (1991) 173 CLR 231
J Robertson & Co Ltd (in liq) v Ferguson Transformers Pty Ltd (1970) 44 ALJR 441
Singh v Atombrook Ltd (1989) 1 All ER 385
Spray Irrigation Pty Ltd v Hoette (1963) NSWR 1440

Case(s) also cited:

Nil

MASTER NEWNES: This is an application under O 21 r 5(3) of the Rules of the Supreme Court to change the name of the plaintiff.
The current proceedings were commenced by Advantage Credit Union Limited ("Advantage") on 27 June 2003 claiming possession of certain property pursuant to a mortgage, the sum of $192,812.79 under an overdraft loan agreement and interest on that sum. A default judgment was regularly entered against the defendants on 13 January 2004. An application by the defendants to set aside the default judgment was dismissed: Advantage Credit Union Ltd v Rothnie & Anor [2004] WASC 208. Since that time a writ of possession has been issued in the name of Advantage seeking possession of the secured property.
It has recently emerged that Advantage was deregistered on 9 June 2002, some 12 months before the action was commenced. The current application is to change the name of the plaintiff in the action to Australian National Credit Union Limited.
The circumstances giving rise to the current application were not in issue on this application. The overdraft loan agreement and the mortgage which were the subject of the action were entered into between Advantage and the defendants in April 2000. Shortly afterwards, Advantage applied to the Australian Prudential Regulation Authority ("APRA") under s 10 of the Financial Sector (Transfers of Business) Act 1999 (Cth) (the “Act”) for approval of a total transfer of business from Advantage to Endeavour Credit Union Limited. On 19 December 2000 APRA issued a certificate of transfer under s 18 of the Act. The certificate provided that it would come into force, and the transfer of business would take effect on 1 January 2001.
Section 22 of the Act provides, so far as relevant:
"(1)When the certificate of transfer comes into force, the receiving body becomes the successor in law of the transferring body, to the extent of the transfer. In particular:
(a)if the transfer is a total transfer - all the assets and liabilities of the transferring body, wherever those assets and liabilities are located, become (respectively) assets and liabilities of the receiving body without any transfer, conveyance or assignment; and
(b)…
(c)to the extent of the transfer, the duties, obligations, immunities, rights and privileges applying to the transferring body apply to the receiving body.
…
(5) … if the transfer is a total transfer, on and after the day when the certificate comes into force, each translated instrument continues to have effect, according to its tenor, as if a reference in the instrument to the transferring body were a reference to the receiving body. For this purpose:
'translated instrument' means an instrument (including an Act or other legislative instrument) subsisting immediately before the day when the certificate comes into force:
(a)to which the transferring body is a party; or
(b)that was given to, by or in favour of, the transferring body; or
(c)that refers to the transferring body; or
(d)under which money is, or may become, payable, or other property is, or may become, liable to be transferred, to or by the transferring body."
On or about 8 January 2001 Endeavour Credit Union Limited changed its name to Endeavour Advantage Credit Union Limited. On or about 3 September 2001 Endeavour Advantage Credit Union Limited changed its name to Australian National Credit Union Limited ("ANCU").
On or about 9 June 2002 Advantage Credit Union Limited was voluntarily deregistered at the Australian Securities and Investment Commission.
On or about 21 January 2003 the defendants were in default under the overdraft loan agreement. The money payable under that agreement was secured by the mortgage. As a result of the transfer of business the money was payable to ANCU and ANCU was entitled to enforce the overdraft loan agreement and the mortgage. On 24 January 2003 ANCU sent default notices to the defendants demanding they rectify the defaults within 30 days. The defaults were not rectified and ANCU instructed solicitors to institute legal action against the defendants. At the time Advantage was still registered on the certificate of title of the secured land as the mortgagee. By virtue of s 22 of the Act, no conveyance of the interest in the mortgage from Advantage to ANCU was, of course, necessary.
It appears that when the solicitors (who are not the plaintiff's current solicitors) instituted the proceedings they took the name of the plaintiff from the certificate of title and commenced the proceedings in the name of Advantage. The fact that Advantage is not the proper plaintiff has only recently come to light.
The plaintiff seeks leave to amend the writ of summons and all subsequent pleadings to change the name of the plaintiff from Advantage to ANCU, pursuant to O 21 r 5(3).
The defendants oppose the application, saying that O 21 r 5 does not permit a change of name in the present circumstances. It was submitted that the proceedings were commenced in the name of a deregistered company, which therefore had ceased to exist pursuant to s 601AD of the Corporations Act. Accordingly, the proceedings are a nullity. It was further submitted that what is now sought is not to change the name of the plaintiff, but rather to substitute a new party as plaintiff. It was also argued that O 21 r 5 has no application after judgment has been entered in an action.
The plaintiff says that the actual entity which was entitled to sue, and which is entitled to the relief sought, was ANCU but by a clerical error the action was commenced in the name of a non‑existent entity, Advantage. This was simply an error of misnomer or a misdescription. The plaintiff is not seeking to change the plaintiff but simply to correct the name of the party which has brought the action and which is the only entity entitled to the relief sought in the action.
Order 21 r 5(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 party intending to sue or, as the case may be, intended to be sued."
In Bridge Shipping Pty Ltd v Grand Shipping SA (1991) 173 CLR 231 the High Court considered a Victorian rule in all material respects to the same effect as O 21 r 5(3). In that case, goods had been damaged in transit by sea from Brazil to Perth. The owner of the goods sued the defendant, who had been engaged to arrange the carriage. The defendant issued a third party notice against the registered owner of the vessel. The defendant later discovered that at the time of the carriage the vessel had been under charter to another company, which had therefore been the carrier of the goods. The defendant applied to substitute the charterer as third party in place of the owner. The High Court unanimously concluded that in issuing the third party notice against the owner the defendant had not made a mistake "in the name of a party" because it had always intended to sue the owner of the vessel, believing that its right of action lay against the owner. McHugh J (with whom Brennan and Deane JJ agreed), having reviewed the English and Australian authorities, said (at 259 – 61):
"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, eg 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 [Holmes v Permanent Trustee Co of New South Wales Ltd (1932) 47 CLR 113 at 119]. 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."
All of the members of the Court referred with approval to, among other cases, Rainbow Spray Irrigation Pty Ltd v Hoette (1963) NSWR 1440. In that case the plaintiff was incorrectly named and an application to amend the name was made. The plaintiff had commenced and conducted the proceedings as "Rainbow Spray Irrigation Pty Limited" and applied to amend the name to read "Rainbow Spray Sales Pty Limited". There were, at the material time, two companies in existence with those names. Walsh J concluded that he should regard it not as a matter of substituting one plaintiff for another but rather as a case of error in naming the true plaintiff and it was appropriate to consider the action from the time of the writ onwards to have been, and to have been intended to be, an action by Rainbow Spray Sales Pty Ltd.
In J Robertson & Co Ltd (in liq) v Ferguson Transformers Pty Ltd (1970) 44 ALJR 441 an amendment was allowed to the name of a defendant by substituting "Phillip Industries Pty Ltd" for "Phillip Electrical Pty Ltd". Walsh J held that the original description of the defendant was a misnomer. The dealing which had given rise to the cause of action had been with Phillip Electrical Industries Pty Ltd. After that time but before commencement of proceedings that company purchased another company and Phillip Electrical Industries Pty Ltd changed its name to Phillip Industries Pty Ltd. The company which it purchased changed its name to Phillip Electrical Pty Ltd. The plaintiff applied to amend the name of the defendant and in the alternative sought leave to strike out the defendant and substitute Phillip Industries Pty Ltd. At the time of the application the limitation period had expired. Walsh J said (at 443):
" … in so far as the distinction between substituting a party on the one hand and correcting a misnomer on the other may be relevant in deciding whether an amendment should be allowed or refused, it is proper to treat this as a case of misnomer. 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 recognised in the cases but in my opinion it has not been laid down that it is decisive."
In the present case, I consider that what is sought is a change of name to correct a misnomer within O 21 r 5(3). ANCU was the only party to whom the relevant obligations of the defendants were owed at the time the proceedings were commenced. No obligations were owed to Advantage and it had ceased to exist. ANCU instructed solicitors to commence proceedings against the defendants to enforce ANCU's rights. The solicitors, due to clerical error, commenced proceedings in the name of Advantage. The mistake was as to the name of the entity answering the description of the party entitled to enforce the overdraft loan agreement and the mortgage. That, in my view, was a mistake in the name of the party. On the evidence, it was a genuine mistake.
It is also necessary in an application under O 21 r5(3) for the Court to be satisfied that the mistake was not misleading or such as to cause any reasonable doubt as the identity party intending to sue. In the present case, the default notices were served by ANCU. The defendants knew the proceedings were brought by the person entitled to enforce the overdraft loan agreement and the mortgage. The precise identity of the lender and mortgagee was of no moment to the defendants. There is nothing to suggest that they were misled in any respect and no submission to that effect was advanced on this application.
I do not consider there is any substance in the contention by the defendants that as Advantage had ceased to exist before the proceedings were commenced the proceedings were a nullity and therefore O 21 r 5(3) could have no application.
It is the case that where an amendment is made to the name of a party it will relate back to the commencement of the action. But as Dawson J observed in Bridge Shipping (at 238):
"What is important is the distinction between the correction of a misnomer or misdescription, … and the addition or substitution of parties for the parties originally joined …. The correction of a misnomer or misdescription does not involve the substitution of a new party except in a technical or formal sense, since the party after the correction is the same party as was misnamed or misdescribed. In such a case, at least as a matter of theory, no question of defeating a statute of limitations arises."
In my view, it equally follows that the effect of the mistake is not to render the proceedings a nullity where a non-existent entity has been incorrectly named as the party to the proceedings and the misnomer or misdescription is corrected. The proceedings have not been commenced by a non-existent entity but by an entity that has been misnamed or misdescribed. The party is the same throughout but the name of the party has been corrected.
It was also argued on behalf of the defendants that an amendment under O 21 r 5 is not available after judgment has been entered. I do not accept that submission. There is nothing in the rule that would warrant reading it in such a limited way. O 21 r 5 provides that the Court may allow an amendment "at any stage of the proceedings". That, in my view, includes after judgment. If authority for that proposition be needed it is to be found in Singh v Atombrook Ltd (1989) 1 All ER 385, where the English Court of Appeal held in respect of an identically worded English rule that the Court had power to permit the correction of the name of the defendant even after judgment had been entered. That case has been followed in this Court in Boschetti v Carr [2000] WASC 228, in relation to an application to amend the statement of claim.
I am satisfied that the Court may allow the correction of the name of the plaintiff after judgment has been entered and that there is nothing in the circumstances of this case that should cause it to decline it to do so.
In my view, the plaintiff has made out its case and I would order that the name of the plaintiff in the writ of summons and in the action be amended to Australian National Credit Union Limited ACN.
I will hear the parties on the precise form of orders and on the question of costs.