Brandsma & Crockett Pty Ltd v Heindal Pty Ltd

[2002] WASCA 96

BRANDSMA & CROCKETT PTY LTD & ANOR -v- HEINDAL PTY LTD & ORS [2002] WASCA 96

Reported Decision:	(2002) 26 WAR 323
Jurisdiction:	SUPREME COURT OF WESTERN AUSTRALIA	Citation No:	[2002] WASCA 96
Court:	THE FULL COURT (WA)
Case No:	FUL:174/2001	Heard:	26 MARCH 2002
Coram:	MURRAY J McLURE J	Delivered:	24/04/02
No of pages:	20	Judgment Part:	1 of 1
Result:	Application for leave to appeal refused
Category:	A
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Parties:	BRANDSMA & CROCKETT PTY LTD (ACN 009 329 051) MGI BRANDSMA CROCKETT PTY LTD (ACN 008 903 240) HEINDAL PTY LTD (ACN 065 044 493) ALISTAIR RITCHIE LEANNE FLORENCE RITCHIE DENNIS DAVIS ROBYN LYNETTE CAMPBELL DAVIS
Catchwords:	Practice and procedure Parties Misdescription Mistaken identification Power to correct mistake in name of party Power remedial and to be interpreted expansively Relationship between this power and power to delete and add parties Relevance of potential defence of limitation of action
Legislation:	Rules of the Supreme Court 1965 (UK), O 20 r 5(3) Rules of the Supreme Court 1971 (WA), O 18 r 6, O 21 r 5(2) and (3) and O 63A Rules of the Supreme Court of Victoria, O 36 r 1
Case References:	Anthony Leslie John Woodings (as a receiver and manager of Elcos Australia Pty Ltd (in liq)) v Jay A Stevenson and Phillip G Jefferson (as liquidators of Elcos Australia Pty Ltd (in liq)) [2001] WASC 174 Beacon Funds Management Ltd v Kevan & Anor [2000] WASC 274 BHP Iron Ore Pty Ltd v Westraint Resources Pty Ltd [2002] WASCA 18 Bridge Shipping Pty Ltd v Grand Shipping SA (1991) 173 CLR 231 Davies v Elsby Brothers Ltd [1961] 1 WLR 170 Evans Construction Co Ltd v Charrington & Co Ltd [1983] QB 810 J Robertson & Co Ltd (in liq) v Ferguson Transformers Pty Ltd (1970) 44 ALJR 441 John Pfeiffer Pty Ltd v Rogerson (2000) 203 CLR 503 John Robertson & Co Ltd (in liq) v Ferguson Transformers Pty Ltd (1973) 129 CLR 65 Ketteman v Hansel Properties Ltd [1987] AC 189 Ketteman v Hansel Properties Ltd [1987] AC 189 Mitchell v Harris Engineering Co Ltd [1967] 2 QB 703 Morgan v Banning (1999) 20 WAR 474 Rainbow Spray Irrigation Pty Ltd v Hoette [1963] NSWR 1440 WA v Bond Corporation Holding Ltd (1991) 5 WAR 40 Weldon v Neal (1887) 19 QBD 394 Adams v Cape Industries plc [1990] Ch 433 Commonwealth v Verwayen (1990) 170 CLR 394 Craine v Colonial Mutual Fire Insurance Co Ltd (1920) 28 CLR 305 Decor Corporation Pty Ltd v Dart Industries Inc (1991) 33 FCR 397 Dickenson's Arcade Pty Ltd v Tasmania (1974) 130 CLR 177 Fancourt v Mercantile Credits Ltd (1983) 154 CLR 87 Gas Lighting Improvement Co Ltd v Inland Revenue Commissioners [1923] AC 723 Hobart Bridge Company Ltd v Federal Commissioner of Taxation (1951) 82 CLR 372 Kenny & Good Pty Ltd v MGICA (1992) Ltd (1999) 199 CLR 413 Liff v Peasley [1980] 1 WLR 781 Manfoud v Minister for Immigration, Local Government & Ethnic Affairs (1993) 33 ALD 609 Marks v GIO Australia Holdings Ltd (1998) 196 CLR 494 Metwally v University of Wollongong (No 2) (1985) 60 ALR 68 Michael v Nicholson, unreported; FCt SCt of WA; Library No 950660; 1 December 1995 Moscow Narodny Bank Ltd v Mosbert Finance (Aust) Pty Ltd [1976] WAR 109 Nguyen v Nguyen (1990) 169 CLR 245 Nykredit Mortgage Bank plc v Edward Erdman Group Ltd (No 2) [1997] 1 WLR 1627 Paltara Pty Ltd v Dempster (1991) 6 WAR 85 Pezzano & Anor v Westpac Banking Corporation & Ors [2002] WASC 31 Pioneer Concrete Services Ltd v Yelnah Pty Ltd (1986) 5 NSWLR 254 Re Calder; Ex parte Cable Sands (WA) Pty Ltd (1998) 20 WAR 343 Robowash Pty Ltd v Robowash Finance Pty Ltd [2000] WASC 409 Rodriguez v R J Parker [1967] 1 QB 116 Salomon v A Salomon & Co Limited [1897] AC 22 Sargent v A S L Developments Ltd (1974) 131 CLR 634 Silkline Investments Pty Ltd v Challenge Ltd, unreported; SCt of WA (M Sanderson); Library No 980610; 22 October 1998 The State of Western Australia & Anor v Rothmans of Pall Mall (Australia) Ltd [2001] WASC 25 Trustor AB v Smallbone (No 2) [2001] 1 WLR 1177 Twinsectra Ltd v Yardley & Ors [2002] UKHL 12 Walker v Wimborne (1976) 137 CLR 1 Waltons Stores (Interstate) Ltd v Maher (1988) 164 CLR 387 Water Board v Moustakas (1988) 180 CLR 491 Webster v Lampard (1993) 177 CLR 598 Western Australia v Bond Corporation Holdings Ltd (1991) 5 WAR 40 Whittam v W J Daniel & Company Ltd [1962] 1 QB 271 Wilson v Metaxas [1989] WAR 285 Wright & Anor v Wright & Anor [2002] WASC 30

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA TITLE OF COURT : THE FULL COURT (WA) CITATION : BRANDSMA & CROCKETT PTY LTD & ANOR -v- HEINDAL PTY LTD & ORS [2002] WASCA 96 CORAM : MURRAY J

McLURE J

HEARD : 26 MARCH 2002 DELIVERED : 24 APRIL 2002 FILE NO/S : FUL 174 of 2001 BETWEEN : BRANDSMA & CROCKETT PTY LTD (ACN 009 329 051)

First Applicant

MGI BRANDSMA CROCKETT PTY LTD (ACN 008 903 240)
Second Applicant

AND

HEINDAL PTY LTD (ACN 065 044 493)
First Respondent

ALISTAIR RITCHIE
Second Respondent

LEANNE FLORENCE RITCHIE
Third Respondent

DENNIS DAVIS
Fourth Respondent

ROBYN LYNETTE CAMPBELL DAVIS
Fifth Respondent

(Page 2)

Catchwords:

Practice and procedure - Parties - Misdescription - Mistaken identification - Power to correct mistake in name of party - Power remedial and to be interpreted expansively - Relationship between this power and power to delete and add parties - Relevance of potential defence of limitation of action

Legislation:

Rules of the Supreme Court 1965 (UK), O 20 r 5(3)

Rules of the Supreme Court 1971 (WA), O 18 r 6, O 21 r 5(2) and (3) and O 63A
Rules of the Supreme Court of Victoria, O 36 r 1

Result:

Application for leave to appeal refused

Category: A

(Page 3)

Representation:

Counsel:

First Applicant : Mr D H Solomon
Second Applicant : Mr D H Solomon
First Respondent : Ms F C E Davis
Second Respondent : Ms F C E Davis
Third Respondent : Ms F C E Davis
Fourth Respondent : Ms F C E Davis
Fifth Respondent : Ms F C E Davis

Solicitors:

First Applicant : Solomon Brothers
Second Applicant : Solomon Brothers
First Respondent : Phillips Fox
Second Respondent : Phillips Fox
Third Respondent : Phillips Fox
Fourth Respondent : Phillips Fox
Fifth Respondent : Phillips Fox

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

Anthony Leslie John Woodings (as a receiver and manager of Elcos Australia Pty Ltd (in liq)) v Jay A Stevenson and Phillip G Jefferson (as liquidators of Elcos Australia Pty Ltd (in liq)) [2001] WASC 174
Beacon Funds Management Ltd v Kevan & Anor [2000] WASC 274
BHP Iron Ore Pty Ltd v Westraint Resources Pty Ltd [2002] WASCA 18
Bridge Shipping Pty Ltd v Grand Shipping SA (1991) 173 CLR 231
Davies v Elsby Brothers Ltd [1961] 1 WLR 170
Evans Construction Co Ltd v Charrington & Co Ltd [1983] QB 810
J Robertson & Co Ltd (in liq) v Ferguson Transformers Pty Ltd (1970) 44 ALJR 441
John Pfeiffer Pty Ltd v Rogerson (2000) 203 CLR 503
John Robertson & Co Ltd (in liq) v Ferguson Transformers Pty Ltd (1973) 129 CLR 65
Ketteman v Hansel Properties Ltd [1987] AC 189
Mitchell v Harris Engineering Co Ltd [1967] 2 QB 703


(Page 4)

Morgan v Banning (1999) 20 WAR 474
Rainbow Spray Irrigation Pty Ltd v Hoette [1963] NSWR 1440
WA v Bond Corporation Holding Ltd (1991) 5 WAR 40
Weldon v Neal (1887) 19 QBD 394

Case(s) also cited:

Adams v Cape Industries plc [1990] Ch 433
Commonwealth v Verwayen (1990) 170 CLR 394
Craine v Colonial Mutual Fire Insurance Co Ltd (1920) 28 CLR 305
Decor Corporation Pty Ltd v Dart Industries Inc (1991) 33 FCR 397
Dickenson's Arcade Pty Ltd v Tasmania (1974) 130 CLR 177
Fancourt v Mercantile Credits Ltd (1983) 154 CLR 87
Gas Lighting Improvement Co Ltd v Inland Revenue Commissioners [1923] AC 723
Hobart Bridge Company Ltd v Federal Commissioner of Taxation (1951) 82 CLR 372
Kenny & Good Pty Ltd v MGICA (1992) Ltd (1999) 199 CLR 413
Liff v Peasley [1980] 1 WLR 781
Manfoud v Minister for Immigration, Local Government & Ethnic Affairs (1993) 33 ALD 609
Marks v GIO Australia Holdings Ltd (1998) 196 CLR 494
Metwally v University of Wollongong (No 2) (1985) 60 ALR 68
Michael v Nicholson, unreported; FCt SCt of WA; Library No 950660; 1 December 1995
Moscow Narodny Bank Ltd v Mosbert Finance (Aust) Pty Ltd [1976] WAR 109
Nguyen v Nguyen (1990) 169 CLR 245
Nykredit Mortgage Bank plc v Edward Erdman Group Ltd (No 2) [1997] 1 WLR 1627
Paltara Pty Ltd v Dempster (1991) 6 WAR 85
Pezzano & Anor v Westpac Banking Corporation & Ors [2002] WASC 31
Pioneer Concrete Services Ltd v Yelnah Pty Ltd (1986) 5 NSWLR 254
Re Calder; Ex parte Cable Sands (WA) Pty Ltd (1998) 20 WAR 343
Robowash Pty Ltd v Robowash Finance Pty Ltd [2000] WASC 409
Rodriguez v R J Parker [1967] 1 QB 116
Salomon v A Salomon & Co Limited [1897] AC 22
Sargent v A S L Developments Ltd (1974) 131 CLR 634
Silkline Investments Pty Ltd v Challenge Ltd, unreported; SCt of WA (M Sanderson); Library No 980610; 22 October 1998
The State of Western Australia & Anor v Rothmans of Pall Mall (Australia) Ltd [2001] WASC 25


(Page 5)

Trustor AB v Smallbone (No 2) [2001] 1 WLR 1177
Twinsectra Ltd v Yardley & Ors [2002] UKHL 12
Walker v Wimborne (1976) 137 CLR 1
Waltons Stores (Interstate) Ltd v Maher (1988) 164 CLR 387
Water Board v Moustakas (1988) 180 CLR 491
Webster v Lampard (1993) 177 CLR 598
Western Australia v Bond Corporation Holdings Ltd (1991) 5 WAR 40
Whittam v W J Daniel & Company Ltd [1962] 1 QB 271
Wilson v Metaxas [1989] WAR 285
Wright & Anor v Wright & Anor [2002] WASC 30

(Page 6)

1 MURRAY J: I have had the benefit of reading in draft the reasons for judgment to be delivered by McLure J. Her Honour's scholarship relieves me of the need to do more than refer shortly to the aspects of the matter which have persuaded me that leave to appeal should be refused in this case.

2 In the first place, I agree with her Honour that leave should be granted to amend par 11 of the motion for leave to appeal and the corresponding paragraph of the draft notice of appeal, to permit the applicants to seek in the alternative to the principal relief of dismissal of the respondents' application for leave to amend, relief in the form of a variation of the Master's order granting leave, to provide that the amendment should take effect only from the date the order was made, 9 November 2001. By that means it would be sought to preserve the capacity of the first applicant, the fifth defendant by counterclaim, to raise a limitation defence, the point being grounded on the proposition, which is clearly arguable, that having regard to the cause of action raised by the counterclaim, that cause of action accrued by 10 November 1994 when the business in question was acquired, giving rise to the complaint that the plaintiffs by counterclaim incurred substantial losses thereby and would not have entered into the transaction but for the advice negligently provided to them and but for the statements which allegedly constituted misleading and deceptive conduct in the provision of such advice.

3 In these reasons I will adopt the formula used by McLure J and refer to the first applicant as the service company and the second applicant as the practice company noting, as does her Honour, that both companies have the same registered office, principal place of business and directors, and that at all material times the service company did not trade in the way of provision of business or accounting services which was the function of the practice company, but was established solely to provide administrative services to the practice company.

4 I respectfully agree with McLure J as to the point principally at issue. To my mind also this is a clear case of misnomer falling within the Rules of the Supreme Court 1971 (WA), O 21 r 5(3).

5 Order 21 r 5(1) makes it clear that the rule operates subject to the provisions of O 18 r 6, which provides the procedural power to delete and add parties. Clearly the intention is that in a case where that is the proper characterisation of what is sought, that is the power which should be used, the deletion and joinder of a party taking effect from that date, thereby preserving any limitation defence. Generally under those circumstances

(Page 7)

the joinder would be refused as serving no useful purpose: Ketteman v Hansel Properties Ltd [1987] AC 189.

6 On the other hand, as O 21 r 5(2) makes clear, in my opinion, an amendment to a pleading allowed under that rule will relate back to the date of service of the original pleading; in this case the counterclaim. The Court is given the power to grant leave even under such circumstances "if it think it just to do so" but, as was held in Morgan v Banning (1999) 20 WAR 474, the rule cannot be applied so as to have the effect of overriding the substantive law provided by the Limitation Act 1935 (WA) or any other statutory provision in respect of the limitation of actions: see also John Pfeiffer Pty Ltd v Rogerson (2000) 203 CLR 503.

7 In my opinion, the rationale behind the capacity to allow O 21 r 5 the procedural effect upon the expiration of a limitation period to which r 5(2) refers is that identified by Dawson J in his judgment in Bridge Shipping Pty Ltd v Grand Shipping SA (1991) 173 CLR 231, a case concerned with the Rules of the Supreme Court of Victoria, r 36.01 which is in a different form to O 21 r 5 in that r 36.01(5) expressly provides:

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

8 As Dawson J observed at 238 – 239:

"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 person 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 such a case, the Court might well consider it to be just to allow the amendment to correct the name of a party under O 21 r 5(3) and, for similar reasons, the technical deletion of a party originally misnamed could not found an application for summary judgment such as was made by the service company in this case. That company, although a separate entity from the practice company, in a case of misnomer is to be regarded as never having been a party except in a technical or formal sense, the true party always being the practice company, albeit misnamed.

(Page 8)

9 As to whether this was a case properly characterised as misnomer rather than the substitution of a new party, reliance may be placed on the decision of the High Court in Bridge Shipping. The Court was unanimously of the view that on the facts of that case it was not a question of misnomer but a mistake in the party sued. All members of the Court accepted that it was proper to give the rule, the equivalent of our O 21 r 5, the widest appropriate construction.

10 Dawson J has been identified as giving the rule a rather narrower construction than other members of the Court. If his Honour did so, it is nonetheless instructive in this case to have regard to the view expressed by him at 245:

"It may sometimes be difficult to determine whether there is a mistake in name or a mistake in identity. When that is so and an amendment is sought under r. 36.01, the question can only be resolved by asking whether, in all the circumstances, it can reasonably be said that the party whose name is sought to be amended would remain the same in all but name or description if the amendment were allowed. If so, then there is a misnomer or misdescription and the rule applies notwithstanding that, as a matter of formality, the amendment results in the substitution of another entity. If not, and the effect of the amendment would be, not to correct the name of the party, but to alter the identity of the party, then that rule does not apply."

11 It is not clear to me that Toohey J was expressing a different point of view when, after reviewing the relevant authorities, his Honour concluded at 252:

"The application was not to correct a mistake in the name of a party by substituting another person as a party (r. 36.01(4)); it was an application to substitute a person who ought to have been joined as a third party in the first place: r 9.06(c)."

12 McHugh J, with whom Brennan and Deane JJ agreed, dealt most comprehensively with the proper interpretation of the relevant rule. After a thorough analysis of the decided cases, his Honour concluded at 260 – 261:

"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. It should be interpreted to cover not only cases of misnomer, clerical error

(Page 9)

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."

13 In my opinion, this was a case which, in terms of the judgment of Dawson J, was one where there was a misnomer or misdescription of the practice company which had tendered the advice to the plaintiffs by counterclaim in respect of which they sued. That misnomer or misdescription was expressed in the identification of the service company, but that was never the company which the respondents intended to sue. In no real sense was the application under O 21 r 5 directed to altering the identity of the party the respondents intended to sue and did in fact sue. In that regard the case is quite unlike Bridge Shipping. This was a case, as McHugh J put it, where the respondents intended to sue the practice company which they mistakenly identified by the description of the service company. In my respectful opinion, the Master's decision to allow the amendment was clearly right.

14 In my respectful opinion, a useful test in cases such as this is that provided by Donaldson LJ in Evans Construction Co Ltd v Charrington & Co Ltd [1983] QB 810 at 821 where his Lordship said that the question might be asked whether the defendant is sued in the mistaken belief that he is the party who was responsible for the matters complained of, or whether it was a person other than the named defendant who was intended to be sued and that person is mistakenly described or named as the defendant. Applying that test to this case, it is clear that this was a case of the latter sort and, in my opinion, the learned Master was not only not arguably wrong but was clearly correct. Applying the tests commonly accepted in such cases, I would therefore refuse leave to appeal against his decision to allow the amendment and, for the reasons I have given above, his decision to dismiss the first applicant's application for summary judgment: WA v Bond Corporation Holding Ltd (1991) 5 WAR 40, 54 - 7.

15 McLURE J: This is an application under O 63A of the Supreme Court Rules ("Rules") for leave to appeal and to appeal from orders made by Master Bredmeyer on 9 November 2001 granting leave to amend the name of the first applicant (the fifth defendant by counterclaim) and dismissing the first applicant's summary judgment application.

16 The application to amend was made and granted under O 21 r 5(3) of the Rules. This application concerns the scope of the power under that

(Page 10)

rule to amend the name of a party in circumstances when the relevant statutory limitation period has, or arguably has, expired at least in respect of some of the heads of damage the subject of the counterclaim.

17 In April 1997 the plaintiffs by counterclaim ("plaintiffs") commenced proceedings against a company called Brandsma and Crockett Pty Ltd ACN 009 329 051 as fifth defendant by counterclaim ("fifth defendant") alleging professional negligence and misleading and deceptive conduct in the provision of advice in relation to the purchase in November 1994 of a business known as "Metro Fruit & Vegies". In fact, the advice had been provided by a company carrying on an accounting business also called Brandsma & Crockett Pty Ltd but whose ACN number was at all material times 008 903 240 (the "Practice Company").

18 In January 1997 the Practice Company changed its name to MGI Brandsma & Crockett Pty Ltd. In February 1997, Brandsma & Crockett Services Pty Ltd ACN 009 329 051 ("the Service Company") changed its name to Brandsma & Crockett Pty Ltd. The Service Company and the Practice Company had the same registered office, principal place of business and directors. At all material times the Service Company provided administrative services to the Practice Company which in turn provided accounting and related advisory services to clients.

19 The Practice Company had provided accounting and advisory services to a number of the plaintiffs for some years until October 1996. Throughout that period, the Practice Company was named Brandsma & Crockett Pty Ltd. One of the plaintiffs, Mr Alistair Ritchie, swore an affidavit on behalf of all plaintiffs in support of the amendment application. His evidence was that around early April 1997 the plaintiffs instructed their solicitors, Phillips Fox, to file a counterclaim against, inter alia, "Brandsma & Crockett Pty Ltd". However, Mr Ritchie says elsewhere in his affidavit that:

"On or around 8 April 1997, Mr Davis and I, on behalf of the Plaintiffs by Counterclaim, instructed our solicitors to join the Practice Company to the action as a defendant by counterclaim."

20 A partner of Phillips Fox, Mr Dean Hely, who had no personal involvement in the matter at the relevant time, swore that from his perusal of the file, the solicitor at Phillips Fox who had the conduct of the matter, Mr Walton Smith, was instructed by the plaintiffs to join the Practice Company as a defendant by counterclaim. Mr Smith's evidence is that he was instructed by the plaintiffs to file a counterclaim against "Brandsma

(Page 11)

& Crockett Pty Ltd" and that he was not instructed and was not aware that the Practice Company had changed its name. Mr Smith caused a search of the company "Brandsma & Crockett Pty Ltd" on the ASIC register which was a search of the Service Company. Mr Smith thought it was a search of the Practice Company.

21 The plaintiffs did not know that the Practice Company had changed its name or that the Service Company had changed its name to "Brandsma & Crocket Pty Ltd". Indeed, there is no suggestion that any material time the plaintiffs were aware of the existence of the Service Company. The plaintiffs' intention and that of its solicitors was always to sue the Practice Company.

22 All parties to the action, including the Service Company conducted themselves as if the fifth defendant was actually the Practice Company. In particular, the statement of claim is clearly directed to the Practice Company and the fifth defendant made admissions in its defence and provided discovery and answers to interrogatories as if it were the Practice Company. The identity of the fifth defendant as the Service Company rather than the Practice Company went undetected by the fifth defendant and its solicitors and insurer. When its insurer went into liquidation in March 2001 the fifth defendant instructed new solicitors who discovered that the fifth defendant was the Service Company.

23 The applicants contend that the learned Master erred in granting the amendment under O 21 r 5(3) because it had the effect of substituting a new defendant. They say the application should have been made under O 18 r 6 of the Rules and been rejected on the ground that the claims were statute barred.

24 At the hearing the applicants sought leave to amend par 11 of the motion for leave to appeal to insert an alternative claim that the amendment take effect from 9 November 2001. The application was opposed by the respondents on the ground that it was not argued before the Master. That is because the decision on which the applicants rely in support (BHP Iron Ore Pty Ltd v Westraint Resources Pty Ltd [2002] WASCA 18) was handed down after the applications were argued below. However, the alternative relief is closely connected with the substantive issues at first instance and in this application and I would grant leave to amend.

(Page 12)

The Rule and Its History

25 Order 21 r 5 concerns the amendment of a writ or pleading with leave. It materially provides:

"5(1) Subject to –

(a) Order 18 Rules 6, 7 and 8;

(b) Order 20 Rule 19 paragraphs (2) to (5); and

(c) the following provisions of this Rule

the Court may at any stage of the proceedings allow the plaintiff to amend his writ, or any party to amend his pleading, on such terms as to costs or otherwise as may be just and in such manner (if any) as the court may direct.

(2) Where an application to the Court for leave to make the amendment mentioned in paragraph (3), … is made after any relevant period of limitation current at the date of issue of the writ has expired, the Court may nevertheless grant such leave in the circumstances mentioned in that paragraph if it thinks it just to do so.

(3) 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."

26 Order 18 r 6 gives the court the power to order that any person who has been improperly or unnecessarily made a party cease to be a party and order that any person who ought to have been joined as a party be added as a party. The joinder of a party under this order takes effect from the date of service of the originating process upon the newly added party: Morgan v Banning (1999) 20 WAR 474 at 481-482; Bridge Shipping Pty Ltd v Grand Shipping SA (1991) 173 CLR 231 at 236 per Dawson J; Anthony Leslie JohnWoodings (as a receiver and manager of Elcos Australia Pty Ltd (in liq)) v Jay A Stevenson and Phillip G Jefferson (as liquidators of Elcos Australia Pty Ltd (in liq)) [2001] WASC 174 at

(Page 13)

par 25; Ketteman v Hansel Properties Ltd [1987] AC 189 at 198, 201, 209, 210 and 213.

27 Order 21 r 5(3) is in the same terms as O 20 r 5(3) of the Rules of the Supreme Court 1965 (UK) ("the English Rule"). The English Rule was introduced to overcome the limitations caused by the decision in Davies v Elsby Brothers Ltd Ltd [1961] 1 WLR 170: Mitchell v Harris Engineering Co Ltd [1967] 2 QB 703 at 718.

28 The plaintiff in Davies had issued a writ against "Elsby Brothers – A Firm" for damages for negligence in respect of injuries sustained during the course of his employment. The plaintiff's injury, the date of which was not specified in the writ, occurred one year after the firm's business was taken over by a company, "Elsby Brothers Ltd". The Court of Appeal held that the plaintiff could not be permitted to amend if that would be to deprive the defendant of the benefit of a right to which he had become entitled under the statute of limitations and where the amendment involved the addition of the party and not the correction of a misnomer. Devlin LJ said (at p 176):

"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."

29 A submission that the English Rule was ultra vires was considered by the Court of Appeal in Mitchell v Harris Engineering Company Ltd (supra). The plaintiff commenced an action against "H E Co (Leeds) Ltd" for personal injuries sustained at work. The plaintiff was in fact employed by an associated company, "H E Co Ltd". The plaintiff was granted leave to amend under the English Rule. Lord Denning in the course of rejecting the ultra vires submission said that the statute of limitations was procedural in character (at p 718). However, Russell LJ did not rely upon the characterisation of statutes of limitation as procedural in character as the basis for his rejection of the ultra vires submission. He said (at p 720):

(Page 14)

"It is quite clear that a rule of court cannot in terms alter the period of time laid down by a statute within which an action must be brought. But it seems to me to be equally clear that the circumstances in which a litigant may amend his existing pleadings, for example, by addition or substitution of defendants, are essentially a matter of practice or procedure. Nor does it appear to me that the order made conflicts with the law contained in the Statute of Limitations, notwithstanding that if the amendment had been refused, there would have been a defence available … under the statute in a different action."

30 A majority of the Court of Appeal in Evans Construction Co Ltd v Charrington& Co Ltd [1983] QB 810 gave the English Rule a wide construction. In that case the lessor had assigned the reversion of a lease to an associated third party and the lessee applied for a new tenancy from the original lessor. The lessee intended to sue the original lessor because it did not know of the assignment of the reversion. The Court of Appeal, by majority, decided that the third party should be substituted for the original lessor. The Court held that there was a genuine mistake of a character to which the English Rule applied. Donaldson LJ said (at p 821):

"In applying O 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 on the light of the surrounding circumstances."

31 These comments must be seen in the context of the result in EvansConstruction.

32 In the absence of an express rule, the Court has inherent power to order an amendment to the name of a party where there had been a misnomer, misdescription or clerical error. This jurisdiction was exercised in two cases decided by Walsh J, the first in the Supreme Court of New South Wales in Rainbow Spray Irrigation Pty Ltd v Hoette [1963] NSWR 1440 and the second in the High Court in J Robertson & Co Ltd (in liq) v Ferguson Transformers Pty Ltd (1970) 44 ALJR 441.

(Page 15)

33 In Rainbow Spray the plaintiff was incorrectly named and an application to amend was made. The plaintiff commenced and conducted the proceedings as "Rainbow Spray Irrigation Pty Ltd" and applied to amend the name to read "Rainbow Spray Sales Pty Ltd". There were at the material times two companies in existence with those names. Walsh J concluded that he ought not regard it as a matter of substituting one plaintiff for another but rather a case of an error in naming the true plaintiff and that 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.

34 In J Robertson & Co Walsh J allowed an amendment to the name of a defendant by substituting "Philips Industries Pty Ltd" for "Philips Electrical Pty Ltd", holding that the original description of the defendant was a misnomer. The facts of that case are very similar to the present. The dealings which gave rise to the cause of action had been with Philips Electrical Industries Pty Ltd. After that time but before the commencement of proceedings that company purchased another company and Philips Electrical Industries Pty Ltd changed its name to Philips Industries Pty Ltd. The company which it had purchased changed its name to Philips 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 Philips Industries Pty Ltd. At the time of the application to amend the limitation period had expired.

35 Walsh J referred to the rule that a party ought not to be added by amendment where this would allow the defence of the statute of limitations to be defeated but said the rule does not stand in the way of an amendment in the description of a defendant where there has been a mere misnomer "and the amendment is not really the substitution of one defendant for another". He continued (at p 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 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,

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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."

36 The High Court in Bridge Shipping Pty Ltd v Grand Shipping SA (1991) 173 CLR 231 considered the Victorian rule relating to amendment of the name of a party. In that case goods had been damaged in transit by sea from Brazil to Melbourne. 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.

37 Order 36 r 1 of the Rules of the Supreme Court of Victoria provided that a mistake in the name of a party may be corrected by amendment whether or not the effect was to substitute another person as a party. Sub-rules 5 and 6 materially provided:

"(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 of 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 … 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."

38 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 intended to sue the owner of the vessel believing that its right of action lay against the owner.

39 However, the majority (Brennan, Deane, Toohey and McHugh JJ) rejected a submission that the court's power to correct a mistake in the name of a party was confined to cases of misnomer, misdescription,

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typographical or clerical error and the like but also covered cases where the plaintiff, intending to sue a person identified by a particular description, was mistaken as to the name of the person who answered that description. Dawson J construed the rule as having a narrower operation. He concluded that the rule did not give the court the power to order an amendment when the mistake was as to the identity of the person alleged to be liable and not in the name of the person sued. Dawson J (and the majority) referred with approval to Rainbow Spray, J Robertson & Co and Mitchell v Harris Engineering. However, he preferred the dissenting view in Evans Constructions.

40 McHugh J (with whom Brennan and Deane JJ agreed) surveyed the English and Australian authorities. He said that the view taken by some Australian State courts that the amendment rules in their various formulations only applied to misnomers and that Davies was still a relevant decision were wrongly decided and should be overruled. He concluded that Evans Construction was correctly decided. McHugh J said that the amendment rule was a remedial rule which should be given the widest interpretation which its language would permit.

41 In my view, the statement of principle by the majority in Bridge Shipping was intended to and does apply to O 21 r 5(3) of the Rules. McHugh J agreed in the result because he concluded on the evidence and by reference to the statement of claim that the defendant did not intend to sue the carrier but always intended to sue the owner.

42 The applicants rely on the decision of Master Sanderson in Beacon Funds Management Ltd v Kevan & Anor [2000] WASC 274 in support of their submissions. In that case the plaintiff sought to amend the name of the second defendant from "Countrywide Credit Ltd" to "Countrywide Home loans Ltd". The plaintiff and its solicitors intended to sue the mortgage manager engaged by the trustee of a trust. The mortgage manager was Countrywide Home Loans Ltd who carried on business under the business name "Countrywide Credit". The plaintiff instructed its solicitors that the mortgage manager was Countrywide Credit. The solicitor handling the matter instructed the firm's outside clerk to conduct searches of Countrywide Home Loans Ltd and Countrywide Credit. He was in fact supplied with a search of Countrywide Credit Ltd. When the writ was drafted it wrongly referred to the latter. The learned Master in that case appears to conclude that Bridge Shipping confined the power of amendment to situations of misnomer, misdescription and clerical error. However, that proposition was expressed rejected by the majority of the High Court, including Toohey J.

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43 On its proper construction, O 21 r 5(3) gives the court the power to order amendment where there has been a mistake in the name of a party. The curious phrase "notwithstanding that it is alleged that the effect of the amendment will be to substitute a new party" is to be understood in the context of, and to reflect the reasons of Walsh J in J Robertson & Co referred to earlier and those of Dawson J in Bridge Shipping (at p 238) where he refers to an amendment as not involving the substitution of a new party "except in a technical or formal sense". Whenever a former party and new party exist as separate legal entities there will always be at least a technical substitution. However the authorities clearly establish that that does not of itself prevent amendment under O 21 r 5(3).

44 The starting point in applying the law to the facts is to identify and characterise the mistake which the plaintiffs made. The applicants were keen to identify those respects in which the plaintiffs were not mistaken. They say that the evidence is that the plaintiffs instructed their solicitors to sue "Brandsma & Crockett Pty Ltd" which is what the solicitors did. The solicitors did an ASIC search of that company name and the name of the fifth defendant was correctly transcribed from that search. From this it is said there was no relevant mistake.

45 However a broader perspective is required. The evidence establishes that the plaintiffs and their solicitors always intended to take action against the Practice Company. They mistakenly believed that the name of the Practice Company was Brandsma & Crockett Pty Ltd. That mistake led to the mistaken belief that the Service Company was the Practice Company. At all material times from the commencement of the counterclaim, the Practice Company, its agents and insurer understood that it was the Practice Company who was the fifth named defendant.

46 In my view, it is correct to describe the mistakes as being of misnomer. They satisfy the tests applied in both Davies and J Robertson & Co. Even if not a misnomer then at the very least they are mistakes in the name of the company which satisfy all of the requirements of O 21 r 5(3) of the Rules.

47 The applicants' second and related submission is that it is necessary to read down the scope of O 21 r 5(3) of the Rules to avoid conflict with the statutory limitation periods applicable to the pleaded causes of action. As I understand the argument this is to be achieved in one of two ways. Firstly by rejecting the majority view in Bridge Shipping in light of the High Court's decision in John Pfeiffer Pty Ltd v Rogerson (2000) 203

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CLR 503. Secondly, by ordering that the amendment take effect from the date of the order granting leave to amend.

48 It was held by the whole court in John Pfeiffer Pty Ltd v Rogerson that, for the purposes of private international law, limitation provisions are not directed to governing or regulating the mode or conduct of court proceedings and are matters of substance rather than procedure. That is so, whether the limitation provision bars the remedy or extinguishes the right. As a consequence, matters of limitation in tort are governed by the lex loci delicti rather than the law of the forum. The High Court noted that some statutes of limitation had been held to be procedural on the basis that they barred the remedy not the right and referred to John Robertson & Co Ltd (in liq) v Ferguson Transformers Pty Ltd (1973) 129 CLR 65. That is the decision of the Full Court of the High Court on matters unrelated to the earlier decision of Walsh J granting leave to amend to change the name of the defendant.

49 I will assume for the purposes of argument that the limitation period has expired as at the date of the amendment in relation to at least part of the plaintiffs' claims. Indeed, applications to amend the name of a party are invariably made where the limitation period has expired after commencement of the action and before the amendment application. That was the position in Bridge Shipping. The time for commencing proceedings against the carrier had expired before the defendant became aware that the third party owner was not the carrier. It seems to me that all members of the High Court in Bridge Shipping, including Dawson J, accepted that such amendments relate back to the commencement of the action (as expressly stated in r 30.05) and are not inconsistent with the relevant limitation provisions. Dawson J in addressing the history of the equivalent of our O 18 r 6 and O 21 r 5(2) and (3) of the Rules said in Bridge Shipping (at p 238):

"What is important is the distinction between the correction of a misnomer or misdescription … (now reflected in r 36.01), 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 person as was misnamed or misdescribed. In such a case, at least as a matter of theory, no question of defeating a statute of limitation arises."

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50 Dawson J cited with approval Walsh J's statement in Rainbow Spray that the action is considered from the time of the writ onwards to have been an action by the correctly named party. He also noted (at p 240) that the rule in Weldon v Neal (1887) 19 QBD 394 was said to extend only to causes of action and not parties. It is also apparent from the reasons of Toohey and McHugh JJ that they construed the amendment rule having regard to the relevant limitation issues.

51 The applicants say that John Pfeiffer Pty Ltd v Rogerson undermines the correctness of the majority in Bridge Shipping. It is not apparent to me why the characterisation of limitation provisions as affecting substantive rights in any way undermines the basis of the majority decision in Bridge Shipping. In my opinion it does not. True it is that Lord Denning referred to the procedural character of limitation periods in rejecting an argument that the English Rule was ultra vires. However, Lord Russell in that case upheld the validity of the English Rule without reference to that matter. Further, the approach taken by Russell LJ is consistent with that taken by the Full Court in Morgan v Banning (1999) 20 WAR 474 at 476 and 483.

52 In summary, the authorities support the proposition that an amendment under O 21 r 5(3) operates from the commencement of the action or counterclaim rather than from the date of the amendment to the pleading or service of the amended pleading.

53 For these reasons I conclude that the learned Master was correct to allow the amendment and to dismiss the summary judgment application. I would therefore refuse leave to appeal against the decisions.