Bhatia v Malaysian Airline System Berhad
[2018] FCA 1471
•2 October 2018
FEDERAL COURT OF AUSTRALIA
Bhatia v Malaysian Airline System Berhad [2018] FCA 1471
File number: SAD 129 of 2018 Judge: CHARLESWORTH J Date of judgment: 2 October 2018 Catchwords: PRACTICE AND PROCEDURE – applicant asserting right to damages against an airline carrier under the Civil Aviation (Carriers’ Liability) Act 1959 (Cth) – statutory cause of action – Commonwealth enactment giving international convention force of law – convention providing that right to damages extinguished if action not brought within two years – applicant started a proceeding within two years joining wrong entity as respondent – application to amend name of respondent after passage of two years – whether right to damages against proposed respondent extinguished – proposed order would have effect of substituting a person as a party in the proceeding – whether Court rule provides for relation back of time in which proceeding starts against substituting party – amendment under r 8.21 of the Federal Court Rules 2011 (Cth) cannot operate to revive extinguished right to damages – legislation providing for limitation of actions defence inapplicable – amendment application dismissed Legislation: Civil Aviation (Carriers’ Liability) Act 1959 (Cth) ss 9B, 9E, 28, 34, 35, Pts IA, IV, Sch 1A
Judiciary Act 1903 (Cth) ss 39B(1A), 79
Limitation of Actions Act 1958 (Vic) s 34
Federal Court Rules 2011 (Cth) rr 8.01, 8.21, 8.22
Supreme Court (General Civil Procedure) Rules 1996 (Vic)
Cases cited: Agtrack (NT) Pty Ltd v Hatfield (2005) 223 CLR 251
Air Link Pty Ltd v Paterson (2005) 223 CLR 283
Australian Iron & Steel v Hoogland (1962) 108 CLR 471
Bridge Shipping Pty Ltd v Grand Shipping SA (1991) 173 CLR 231
Environinvest Ltd (in liq) v Former Partnership of Webster, White, Grindley, Nairn, Newman, Peters and Miller (2012) 208 FCR 376
Fothergill v Monarch Airlines Ltd [1981] AC 251
Hall v Heart of England Balloons Ltd v Anor [2010] Vol 1 Llloyd’s Rep 373
In re Deep Vein Thrombosis and Air Travel Group Litigation [2006] 1 AC 495
Laroche v Spirit of Adventure (UK) Ltd [2008] 4 All ER 494
Laroche v Spirit of Adventure (UK) Ltd [2009] QB 778
Milor Srl v British Airways Plc [1996] QB 702
Morris v KLM Royal Dutch Airlines [2002] 2 AC 628
Re McBain; Ex parte Australian Catholic Bishops Conference (2002) 209 CLR 372
Sidhu v British Airways Plc [1997] AC 430
Date of hearing: 18 September 2018 Registry: South Australia Division: General Division National Practice Area Other Federal Jurisdiction Category: Catchwords Number of paragraphs: 65 Counsel for the Applicant: Mr R Royal Solicitor for the Applicant: Shine Lawyers Counsel for the Respondent: Mr B Lloyd Solicitor for the Respondent: Clyde & Co Australia ORDERS
SAD 129 of 2018 BETWEEN: SAJAN SINGH BHATIA
Applicant
AND: MALAYSIAN AIRLINE SYSTEM BERHAD (ARBN 000 996 903)
Respondent
MALAYSIA AIRLINES BERHAD (ARBN 607 352 894)
Intervener
JUDGE:
CHARLESWORTH J
DATE OF ORDER:
2 OCTOBER 2018
THE COURT ORDERS THAT:
1.The applicant’s interlocutory application filed on 31 August 2018 is dismissed.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
REASONS FOR JUDGMENT
CHARLESWORTH J:
Dr Sajan Singh Bhatia filed an originating application and statement of claim in this Court on 4 June 2018 claiming damages against the respondent for personal injuries he allegedly suffered on board Malaysian Airlines Flight MH1 between London and Kuala Lumpur on 5 June 2016. The only respondent named on both the originating application and the statement of claim is Malaysian Airline System Berhad (ARBN 000 996 903) (MAS).
Dr Bhatia’s right to damages is governed by the Civil Aviation (Carriers’ Liability) Act 1959 (Cth) (the CACL Act). The Convention for the Unification of Certain Rules for International Carriage by Air 1999 (the Convention) forms Sch 1A to the CACL Act. The Convention has the force of law in Australia in relation to any carriage by air to which it applies: CACL Act, Pt IA, s 9B.
Chapter III of the Convention is titled “Liability of the Carrier”. Article 17(1) relevantly provides that “the carrier” is liable for damage sustained in case of bodily injury of a passenger upon condition only that the accident which caused the injury took place on board the aircraft or in the course of any operations of embarking or disembarking. Dr Bhatia has no cause of action against the carrier except that cause provided for by the Convention: see s 9E of the CACL.
Malaysian Airlines Flight MH1 between London and Kuala Lumpur was a carriage by air to which the Convention applies. However, MAS was not “the carrier” in respect of that flight. To the extent that Dr Bhatia has (or ever had) a right to damages for injury sustained on that flight, his rights are against Malaysia Airlines Berhad (ARBN 607 352 894) (MAB). MAS and MAB are separate legal entities. MAS is a company under external administration. So much is not in dispute.
By interlocutory application filed on 31 August 2018 Dr Bhatia seeks orders “to correct the name and title of the Respondent and to correct the identity of the Respondent to the proceedings from Malaysian Airline System Berhad (ARBN 000 996 903) to Malaysia Airlines Berhad (ARBN 607 352 894)”. The application is brought pursuant to r 8.21 of the Federal Court Rules 2011 (Cth) (extracted at [42] below). It confers a discretionary power on this Court to grant leave to a party to amend an originating application for certain purposes.
With the leave of the Court, MAB intervened in the proceedings for the purpose of making submissions in opposition to Dr Bhatia’s interlocutory application. It agreed with and adopted written and oral submissions made on behalf of MAS by Counsel retained to act for both entities.
MAB and MAS oppose the interlocutory application on the grounds that any right to damages previously enjoyed by Dr Bhatia as against MAB, and any corresponding liability of MAB, have been extinguished and cannot be revived by an order of this Court in the exercise of its discretionary powers under r 8.21 of the Rules or otherwise.
ISSUES AND OUTCOME
Article 33 of the Convention is titled “Jurisdiction”. It provides, in part:
1. An action for damages must be brought, at the option of the plaintiff, in the territory of one of the States Parties, either before the court of the domicile of the carrier or of its principal place of business, or where it has a place of business through which the contract has been made or before the court at the place of destination.
…
4. Questions of procedure shall be governed by the law of the court seised of the case.
Article 35 of the Convention is critical. It states:
Article 35 — Limitation of Actions
1. The right to damages shall be extinguished if an action is not brought within a period of two years, reckoned from the date of arrival at the destination, or from the date on which the aircraft ought to have arrived, or from the date on which the carriage stopped.
2. The method of calculating that period shall be determined by the law of the court seised of the case.
Dr Bhatia acknowledges that his substantive right to damages (and the carrier’s corresponding liability) would be extinguished if an “action” has not been “brought” within two years reckoned from 5 June 2016. Dr Bhatia further acknowledges that Art 35 operates differently from statutes erecting limitation periods within which an existing right may be enforced. The significance of that difference will be discussed in due course.
There being no dispute that the effect of Art 35 is to extinguish a substantive right to damages (and any corresponding liability) if an action has not been brought, the questions to be determined are:
(1)did Dr Bhatia bring an action within the meaning of Art 35(1) within two years of 5 June 2016 so that his right to damages against MAB is not extinguished?
(2)if so, is this Court’s discretionary power to make an order pursuant to r 8.21 of the Rules enlivened on the facts? and
(3)if so, should the Court make the orders sought on the interlocutory application in the exercise of its discretion?
I have concluded that the first question must be answered no. Nothing in r 8.21 of the Rules can alter that conclusion, even if the Court’s discretion to make the orders were enlivened on the facts. It follows that Dr Bhatia’s interlocutory application should be dismissed.
CONSIDERATION
The principles for construing an international convention are conveniently summarised by Eady J (in relation to the antecedent Warsaw Convention) in Laroche v Spirit of Adventure (UK) Ltd [2008] 4 All ER 494 at [24]. In a passage approved on appeal in Laroche v Spirit of Adventure (UK) Ltd [2009] QB 778 (at [14]), his Honour said:
…
It follows that it is necessary to apply the following principles when construing [the Convention]: (i) The starting point is to consider the natural meaning of the language of the article itself. (ii) It is necessary to consider the Convention as a whole and give it a purposive interpretation. (iii) The language of an international convention should be interpreted ‘unconstrained by technical rules of English law, or by English legal precedent, but on broad principles of general acceptation’. (iv) It is legitimate to have regard to the … legislative history in order to resolve ambiguities or obscurities in the enacting words, but only where the material is publicly available and clearly points to a definite legislative intention. (v) It is legitimate to have regard to any subsequent practice in the application of the treaty which establishes the agreement of the parties regarding its interpretation. (vi) Assistance can be sought from the relevant jurisprudence of this country and of other jurisdictions, and respect should be paid to relevant decisions of courts of other signatories to the Convention, particularly those of high standing.
…
His Honour referred to Fothergill v Monarch Airlines Ltd [1981] AC 251; Sidhu v British Airways Plc [1997] AC 430; Morris v KLM Royal Dutch Airlines [2002] 2 AC 628 and In re Deep Vein Thrombosis and Air Travel Group Litigation [2006] 1 AC 495.
Construed in context, the phrase “right to damages” in Art 35 is a reference to that right to damages maintainable against the carrier having the corresponding liability created under Art 17 of the Convention.
A dispute as to the existence of that right may only be determined by a court having jurisdiction in accordance with Art 33(1) or (2). Read in context, an “action” asserting the right to damages will be “brought” on the date upon which the Court’s jurisdiction is invoked in respect of the determination and enforcement of the right in question. Whether the Court’s jurisdiction has been validly invoked may depend on procedural rules of the Court, as contemplated by Art 33(4). Subject to what follows, the date on which the jurisdiction is invoked may also be reckoned in accordance with the Court’s procedural rules, as contemplated by Art 35(2).
There can be no doubt that by filing the originating application on 4 June 2018, Dr Bhatia started a proceeding in this Court: see r 8.01 of the Rules. The proceeding was started within two years from the date on which the relevant carriage stopped. A different and more difficult question is whether by filing the originating application and statement of claim, Dr Bhatia “brought” an “action” for the purpose of Art 35 of the Convention.
To answer that question, it is necessary to construe the words “action” and “brought” in Art 35. It is also necessary to consider the extent to which the procedural rules of this Court can permissibly bear on the question of whether or not any right to damages against MAB has been extinguished. That, too, must turn on the construction of the Convention.
What, then, is an “action”?
In Agtrack (NT) Pty Ltd v Hatfield (2005) 223 CLR 251 the High Court considered this question in the context of a matter arising under Pt IV of the CACL Act, which governs the rights and liabilities of passengers and carriers in relation to air carriage within Australia. Section 34 of the CACL Act is to substantively the same effect as Art 35(1) of the Convention in its application to international carriage. Section 35(2) of the CACL Act is relevantly to the same effect as s 9E, such that a carrier’s liability under Pt IV is in substitution for any civil liability of the carrier under any other law. The liability of a carrier under Pt IV is created by s 28, expressed in equivalent terms to Art 17 of the Convention.
Mrs Hatfield commenced a proceeding in the Supreme Court of Victoria claiming damages for her own benefit as the widow of a passenger who was killed when the aircraft in which he was travelling crashed in the Northern Territory. The proceeding was commenced within two years of the accident. The flight was a charter flight operated by the named defendant, Spring Air. Unlike the present case, no issue arose as to whether Mrs Hatfield had correctly named or identified the person against whom she intended to assert rights.
As originally filed, Mrs Hatfield’s pleading alleged that Spring Air was liable in contract and in negligence. Neither the writ nor the pleading contained an express reference to the CACL Act.
After the two year period had expired, Mrs Hatfield made an application pursuant to the Supreme Court (General Civil Procedure) Rules 1996 (Vic) to amend her pleading so as to make express reference to the CACL Act. The carrier argued that Mrs Hatfield had not brought an action under the CACL Act within the limitation period prescribed in s 34 and so contended that her right to damages was extinguished.
The judge at first instance applied the rules of pleading in that Court and concluded that Mrs Hatfield’s pleading was insufficient to allege liability under the CACL Act such that the two year period specified in s 34 had expired. The amendment was nonetheless allowed on the premise that s 34(1) of the Limitation of Actions Act 1958 (Vic) empowered the Court to allow an amendment to be made after a limitation period had expired. The Court of Appeal upheld the decision of the primary judge.
The High Court identified that Mrs Hatfield’s claim engaged federal jurisdiction, irrespective of the content of her pleadings. Accordingly, it was necessary to identify the applicable law in accordance with the Judiciary Act 1903 (Cth). Section 79 of that Act operated to pick up, as a surrogate law of the Commonwealth, the procedural laws of Victoria, provided that the laws were “applicable” and that a law of the Commonwealth did not otherwise provide.
The Court held that Mrs Hatfield’s pleading, in its unamended form, alleged sufficient facts to found Spring Air’s liability under the CACL Act, notwithstanding that it did not expressly invoke the statute in accordance with the rules of pleading. The pleading rule was picked up as a surrogate law of the Commonwealth under s 79 of the Judiciary Act and the amendment allowed to ensure compliance with the rule. However, the rule could not determine whether an action had been brought within the meaning of s 34 of the CACL Act, which contained no requirement that an “action” be one in which the CACL Act was expressly adverted to in a legal process: Gleeson CJ, McHugh, Gummow, Hayne and Heydon JJ at [38], [39].
As Mrs Hatfield’s right to damages against Spring Air had not been extinguished, the amendment was allowed, but not because of anything contained in s 34 of the Limitation of Actions Act. All members of the Court went on to find that the Limitation of Actions Act could have no application, even if Mrs Hatfield had not brought an action within two years of the accident. The word “extinguish”, the plurality held, meant just that: Gleeson CJ, McHugh, Gummow, Hayne and Heydon JJ at [16]. Their Honours referred to authorities concerning the Warsaw Convention, including Milor Srl v British Airways Plc [1996] QB 702 in which Phillips LJ said, of the equivalent to Art 33(4) of the Convention (at 707):
In my judgment, that general provision cannot give validity to a rule of procedure of the court seised of the case that is in conflict with an express provision of the Convention. By way of example, the procedural law of the chosen forum imposed a 12-month limitation period, it does not seem to me that this could displace the two-year period of limitation laid down by article 29 of the [Warsaw] Convention.
Their Honours continued:
49 …
In Shawcross and Beaumont, Air Law, it is said respecting Art 29:
‘If the right of action is ‘extinguished’, it would seem that it is completely destroyed and not merely rendered unenforceable by action.’
50In Kahn v Trans World Airlines Inc, the Appellate Division of the Supreme Court of New York gave detailed consideration to the travaux préparatoires of the Warsaw Convention. The Court concluded from these materials:
‘Based upon the foregoing, it is abundantly clear that the delegates to the Warsaw Convention expressly desired to remove those actions governed by the Convention from the uncertainty which would attach were they to be subjected to the various tolling provisions of the laws of the member states, and that the two year time limitation specified in Art 29 was intended to be absolute – barring any action which had not been commenced within the two year period. Moreover, it is equally clear from the delegates’ discussion that the only matter to be referred to the forum court by para 2 of the present Art 29 was the determination of whether the plaintiff had taken the necessary measures within the two year period to invoke that particular court’s jurisdiction over the action.’
The Court added:
‘[I]t is readily apparent that the time limitation incorporated in Art 29 was intended to be in the nature of a condition precedent to suit, and that it was never intended to be extended or tolled by infancy or other incapacity. In addition, such an intent on the part of the draftsmen is fully consistent with one of the Convention’s overall purposes – that of establishing ‘a uniform body of world-wide liability rules to govern international aviation’.’
The South Australian Full Court reached a conclusion to similar effect in Timeny v British Airways Plc.
51The result is that there is a strong body of authority construing Art 29 of the Warsaw Convention as imposing a condition which is of the essence of the right to damages rather than providing for no more than a bar to the enforcement of an existing right. Such a distinction is well understood in Australian law and thus is readily accommodated in the drafting of s 34 of the Carriers’ Act.
(footnotes omitted)
See also Air Link Pty Ltd v Paterson (2005) 223 CLR 283.
That a procedural law affecting limitation periods cannot operate in a manner inconsistent with the extinguishment brought about by Art 35 is confirmed by the Queen’s Bench in Laroche. The relevant issue in that case was whether a domestic law regulating proceedings against a company in liquidation could apply to suspend the two year period specified in Art 29 of the Warsaw Convention. Dyson LJ (with whom Mummery and Jacob LJJ agreed) said it could not:
69 … It is (rightly) not disputed by [the plaintiff] that article 29 provides a substantive and not merely a procedural time bar: see per Lord Wilberforce in Aries Tanker Corpn v Total Transport Ltd [1977] 1 WLR 185, 188. It is also (again rightly) not disputed that [the Convention] provides a code that is exclusive of any resort to the rules of domestic law.
70 The judge was in my view right to hold, at paras 48 – 51, that article 29(2) does not permit the two–year period to be suspended, interrupted or extended by reference to domestic law. The only thing that it leaves the determination by the court seised of the case is the calculation of the precise dates of the beginning and end of the relevant two-year period and the determination of whether the action has been brought within that two-year period.
His Lordship continued:
74 So to interpret article 29(1) would also further the object of the Convention that it was to be ‘a uniform international code, which could be applied by the courts of all the high contracting parties without reference to the rules of their own domestic law’: see per Lord Hope in Sidhu v British Airways plc [1997] AC 430, 453C-D.
75 I also accept the submission of Mr Lawson that this interpretation is consistent with the rule that a general provision (such as article 29 (2)) cannot give validity to a rule of procedure of the court seised of the case that is in conflict with an express provision of the Convention. …
Returning to the present case, Dr Bhatia’s statement of claim alleges sufficient facts against the person named as the respondent. Considered against the rules of pleading applicable in this Court, the pleading is a model of compliance. The pleaded allegations are “sufficient” in the sense that if proven the alleged facts would establish the liability of the named respondent under Art 17 of the Convention and so entitle Dr Bhatia to a remedy against that person.
As can be seen, the “defect” sought to be corrected by Dr Bhatia is of a different kind to that alleged to have affected Mrs Hatfield’s case: on 4 June 2018 Dr Bhatia started a perfectly constituted proceeding against a person against whom he has no right to damages. Expressed another way, he cannot prove the critical facts alleged in the statement of claim to establish a right to damages against the named respondent MAS because he cannot prove that MAS was the carrier. As presently constituted, the proceedings started on 4 June 2018 are bound to fail. All of that tends toward a conclusion that the proceeding is not an “action” against MAB suffering from a mere procedural irregularity. Rather, it is a hopeless proceeding against MAS.
The Convention has as its purpose the uniformity and certainty of the law, among its signatories, in relation to (relevantly) personal injury suffered by passengers in the course of international air carriage to which it applies. The rights created by the Convention (given the force of law in Australia) are rights enjoyed by persons referred to as “passengers”. The corresponding liabilities are imposed upon persons referred to as “carriers”. The word “action” in Art 35 must be given a construction that advances the object of providing certainty in the legal relationship between these two persons. The “right to damages” subject to extinguishment under Art 35, may naturally be understood as referring to the right possessed by one person that is enforceable against another person having a corresponding liability. It follows that the steps necessary to bring an “action” must include steps sufficient to invoke the jurisdiction of a court to determine the controversy concerning the respective rights and liabilities of the first person in relation to the second. Thus, the words “brought” and “action” must be understood as referring to a process by which the disputed rights and liabilities of the two persons come before a court for adjudication.
Before this Court is a matter arising under a law of the Parliament, in respect of which the Court has jurisdiction under s 39B(1A)(c) of the Judiciary Act. It is a properly constituted “matter” in that it raises a justiciable controversy in which respective rights and liabilities of the parties are to be adjudicated: Re McBain; Ex parte Australian Catholic Bishops Conference (2002) 209 CLR 372. As Dr Bhatia cannot prove that MAS is the person liable under Art 17, the controversy, as presently framed, must inevitably be decided in favour of MAS. In my view, none of that gives this proceeding the character of an “action” that has been “brought” within the time specified in Art 35 of the Convention sufficient to save Dr Bhatia’s right to damages against MAB from extinguishment. The controversy between the rights and liabilities of Dr Bhatia and MAB are not currently before the Court for adjudication.
For Dr Bhatia it is submitted that the statement of claim in its present form fairly alleges all of the essential facts necessary to found a claim against “the carrier”. In my view, that is an abstract submission that ought not to be accepted.
The purpose of the pleading is to communicate to the Court and to the other party the facts upon which the applicant relies to found his entitlement to the remedy specified against the other party named in the originating application. The remedy sought on the originating application is a remedy against MAS, not MAB. Accordingly, the statement of claim is to be understood as asserting the facts upon which a right to damages against MAS is founded.
The statement of claim itself fairly reads that way. It names, in its title, MAS as the respondent. The substantive pleas then allege all of the facts necessary to found a claim under the Convention against “the Respondent”. The word “Respondent” can only be understood as a reference to MAS and only MAS.
It may be fairly inferred, and I so find, that it was the subjective intention of Dr Bhatia, through his advisors, to bring an action for damages in this Court against the person having the corresponding liability to pay. So much may be inferred from the statement of claim itself without resort to affidavit evidence upon which Dr Bhatia relied to explain how it was that MAS came to be named as the only respondent. However, the question is not whether Dr Bhatia intended to commence an action against MAB on 4 June 2018. The question is whether he did so in fact.
In my view, for the step taken by Dr Bhatia on 4 June 2018 to be characterised as the bringing of an action asserting a right against the person having the corresponding liability, it would be necessary for Dr Bhatia to make the very amendment for which leave is sought on his interlocutory application. More than that, Dr Bhatia requires the amendment to take effect as and from the date that he started this proceeding.
It remains necessary to explain why an order under r 8.21 of the Rules could not assist Dr Bhatia on the question of whether he brought an action in the requisite sense.
Rule 8.21 is to be read in conjunction with 8.22:
8.21 Amendment generally
(1)An applicant may apply to the Court for leave to amend an originating application for any reason, including:
…
(c)to correct a mistake in the name of a party to the proceeding; or
(d)to correct the identity of a party to the proceeding; or
…
(f)to substitute a person for a party to the proceeding; or
…
(2)An applicant may apply to the Court for leave to amend an originating application in accordance with paragraph (1)(c), (d), (e) or subparagraph (g)(i) even if the application is made after the end of any relevant period of limitation applying at the date the proceeding was started.
8.22 Date on which amendment takes effect
If an originating application is amended with the effect that another person is substituted as a party to the proceeding, the proceeding is to be taken to have started for that person on the day the originating application is amended.
Dr Bhatia relies on two affidavits in support of his contention that the conditions for making an order under r 8.21(1)(c) or (d) are satisfied. The first was sworn by his solicitor on 31 August 2018. The second was sworn by the same solicitor on 12 September 2018.
MAS and MAB objected to the Court receiving and reading the second affidavit on the ground that it was filed on behalf of Dr Bhatia outside of the time frame specified by the Court’s orders and during an adjournment period after argument on the interlocutory application had commenced.
I do not consider MAS or MAB to be prejudiced by the late introduction of the affidavit into evidence in any way that would justify its rejection. Mindful of the ultimate consequences for Dr Bhatia in the outcome of this interlocutory application, I will read the second affidavit and proceed to consider the issues on their merits.
The affidavits assert, and I accept, that the naming of MAS as respondent to the proceeding resulted from a mistake on the part of the solicitor. I do not accept that the mistake was a “mistake in the name of a party” to the proceeding within the meaning of r 8.21(c). MAS is misnamed in the sense that it is a company in external administration and so should have been identified with nomenclature identifying that status, but that is not the mistake that Dr Bhatia seeks to remedy.
Nor am I satisfied that there is a clerical error in the naming of a person intended to be joined as a party.
I find that the solicitor proceeded on the mistaken assumption that the entity that was the carrier of flight MH1, and so liable to pay Dr Bhatia damages, was MAS. That finding is reinforced by the identification of MAS by the distinct ARBN identifier. There was no “misnomer”. The solicitor’s mistake was not realised until 10 August 2018 when the solicitor received correspondence from solicitors for MAS denying liability on the basis that MAS was not the carrier.
In Bridge Shipping Pty Ltd v Grand Shipping SA (1991) 173 CLR 231, Dawson J said (at 242):
A mistake in the name of a party is not, to my mind, the same thing as a mistake in the identity of that party. In other words, one may intend to sue the landlord but be mistaken in the belief that X is the landlord. That is not to mistake the name of X, but to mistake the identity of the landlord.
This distinction explains the difference in wording between r 8.21(1)(c) and r 8.21(1)(d).
The defendant in Bridge Shipping had issued a third party notice to a company it mistakenly believed to be the registered owner of the vessel and the carrier of goods. The defendant later discovered that the vessel had been under charter to another company which had been the carrier of the goods. The defendant applied for an order to amend the third party notice under r 36.01 of the rules of the Supreme Court of Victoria. Rule 36.01(1) provided that, for certain purposes, the Court may grant leave to a party to amend any document in the proceeding. The rule was construed so as to cover not only cases of misnomer and clerical error but also cases in which a plaintiff, intending to sue a person having a particular description, was mistaken as to the name of the person who answered that description. The defendant had, the Court held, been mistaken as to the name of the person who answered the description of the carrier of the vessel and accordingly, the amendment should be allowed. Importantly, the rule empowered the Court to make the amendment “whether or not the effect is to substitute another person as a party”. It was not necessary for the Court to determine whether the order had that effect.
Let it be supposed that an order were made pursuant to r 8.21(1)(d) in this proceeding to correct the identity of a party to the proceeding. Such an order may be premised on my finding that Dr Bhatia intended to sue the carrier but was mistaken as to the identity of the person who was the carrier in fact: Bridge Shipping; Environinvest Ltd (in liq) v Former Partnership of Webster, White, Grindley, Nairn, Newman, Peters and Miller (2012) 208 FCR 376. The practical and legal effect of that order would be to name MAB as the respondent for the first time and the proceeding against MAS would be abandoned.
If the effect of that order was to substitute “another person” for a party to this proceeding within the meaning of r 8.22 the proceeding would be taken to have started for that person on the day the originating application were amended.
I reject Dr Bhatia’s submission that no substitution could occur because MAS, as a company under external administration is not a “legal entity”. In my view, there would be substitution of a person (MAB) as a party (respondent) in the proceeding within the meaning of r 8.22 if the order permitting the amendment were to be made. However, as at the date of the proposed amendment, Dr Bhatia could have no right to damages against MAB.
Even if I am wrong in my conclusion that there would be a substitution “of a person for a party” within the mearing of r 8.22, in my view an order under r 8.21 could not validly operate to back-date the amendment to 4 June 2018 in any event.
In Environinvest, Gordon J held that where an order is made pursuant to r 8.21(1)(d), r 8.22 can have no application, even if there be a substitution of parties “in a technical sense”. Her Honour’s reasoning was premised on the construction of r 8.21 and r 8.22 as a whole in a context in which it remained available to the incoming (technically substituting) party to plead, as a defence, the applicable limitation of actions statute (at [34]). Her Honour’s discretion to make the order under r 8.21(1)(d) was informed by the established principle that the question of the merits of any limitation defence should not be finally determined at an interlocutory trial but rather deferred for determination at trial. Implicit in her Honour’s judgment is the recognition that it would remain open to the incoming respondent to establish at trial that the proceeding against it had started at the date of the amendment and not on a day related back to the first commencement of the proceeding. The defendant bore the onus of pleading and proving the limitation defence.
I am not here concerned with a matter in which a person may plead (or otherwise waive) a limitations of action “defence” where a proceeding against the person is started outside of a statutory limitation period.
As the authorities make clear, Art 35 of the Convention does not erect a bar to a remedy. Rather, the bringing of an action within a limitation period constitutes “a condition which is of the essence of the right to damages”: Agtrack at [51] (citing Australian Iron & Steel v Hoogland (1962) 108 CLR 471 at 488). It is not an issue properly left for trial. No party submitted it should be.
Dr Bhatia properly acknowledged that he could not succeed on the interlocutory application unless he first demonstrated that he had brought an action within the meaning of Art 35. It was only in that event that the power under r 8.21(1) could be exercised so as to correct any “defect” which was not fatal to the contention that the action had been brought.
Dr Bhatia’s acknowledgement appeared to be undermined by a degree of circularity in oral submissions. The circularity arises because Dr Bhatia sought to establish that he had in fact commenced an action against MAB because he had intended to sue the carrier but had mistaken the carrier’s identity in a way that justified an order permitting a back-dated amendment pursuant to r 8.21(1)(d) of the Rules.
In my view, Dr Bhatia’s resort to r 8.21(1)(d) for that purpose cannot be permitted. On the proper construction of Art 35, the right to damages against MAB was extinguished because an action was not in fact brought against MAB on or before 4 June 2018. Any procedural rule of the Court that may provide for the relation back of time (so as to deem a “proceeding” to have been started against a person on a date earlier than that on which the person first became a party) would impermissibly contradict the legal relationship (or extinguishment thereof) for which Art 35 provides. Any rule providing for a fictional relation back of that kind cannot properly be regarded as a procedural rule for the reckoning of actual time within the meaning of Art 35(2).
Accordingly, even assuming the power under r 8.21(1)(d) is enlivened on the facts, I would not, in my discretion, make the orders sought. Whilst it is true that the consequences of the passing of a limitation period are typically best left to trial and ought not be determined at the interlocutory stage, that principle cannot apply to a case where the passing of the limitation period has the effect of extinguishing the right upon which the applicant may otherwise have sued. If the amendment were allowed, the proceeding against MAB would start from the date that the amendment is made. To grant that relief would be futile because Dr Bhatia cannot succeed in a proceeding started against MAB at any time on or after 5 June 2018.
In conclusion I should note that the result I have reached on the interlocutory application is consistent with that reached in Hall v Heart of England Balloons Ltd v Anor [2010] Vol 1 Llloyd’s Rep 373. In that case, Worster J of the County Court of Birmingham refused an application of substantively the same kind as that brought in the present case in circumstances where the plaintiff had mistaken the identity of the carrier and so joined the wrong defendant. Worster J held that the plaintiff could not resort to a local procedural rule which conflicted with an express provision of the Convention. His Honour emphasised that the case of the plaintiff was one having “considerable general merit”. I join in that sentiment with respect to the submissions advanced on behalf of Dr Bhatia before me. I nonetheless consider that proper resolution of the interlocutory application must turn principally on the construction of the Convention and not on matters that may otherwise have informed the exercise of a discretion, on any power, conferred by the Rules, in Dr Bhatia’s favour.
The application for orders pursuant to r 8.21(1)(c) or (d) is refused.
I will hear the parties as to any consequential orders in the proceeding vis a vis Dr Bhatia and MAS.
I certify that the preceding sixty-five (65) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Charlesworth. Associate:
Dated: 2 October 2018
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