Caruso v Patchett and Insurance Australia Ltd

[2015] ACTMC 10

MAGISTRATES COURT OF THE AUSTRALIAN CAPITAL TERRITORY

Case Title:

Caruso v Patchett & Insurance Australia Ltd

Citation:

[2015] ACTMC 10

Hearing Date(s):

18 August 2015

DecisionDate:

8 September 2015

Before:

Magistrate Morrison

Decision:

See [45]

Category:

Interlocutory Application

Catchwords:

CIVIL LAW – appeal against decision of a Registrar refusing an application to amend statement of claim and entering summary judgment for the second defendant – error in statement of claim – principles applying to amendment after limitation period – whether mistake in the name or identity of a party – whether mistake genuine – whether mistake misleading or likely to cause reasonable doubt about identity  - whether leave appropriate - error attributable to solicitor and party personally blameless – appeal by way of rehearing – Registrar’s orders set aside - leave to amend granted and application for summary judgment dismissed.

Legislation Cited:

Court Procedures Rules 2006 (ACT) r 502-503; 6256

Cases Cited:

Alinta 2000 Ltd v Petkov [2012] WASCA 258

Al Tawwab [1991] 1 Lloyd’s Rep 201

Aon Risk Services Australia Ltd v Australian National University [2009] 239 CLR 175

Bridge Shipping Pty Ltd v Grand Shipping SA(1991) 173 CLR 231
Davies v Elsby Brothers Ltd [1961] 1 WLR 170
Mass (Australia) Pty Limited (CAN 108 657 012) v R & B Crane & Rigging Pty Ltd (CAN 101 925 482) [2008] ACTSC 23

Mitchell v Harris Engineering Co Ltd [1967] 2 QB 703

Parties:

Angela Caruso (plaintiff)
Scott Patchett (first defendant)
Insurance Australia Ltd (second defendant)

Representation:

Counsel
Mr R Crowe SC (plaintiff)
Mr P Woulfe (defendants)

Solicitors
Maliganis Edwards Johnson (plaintiff)

HWL Ebsworth (defendants)

File Numbers:

CS 651 of 2014

MAGISTRATE MORRISON:

1. The proceedings before me involve an appeal from a decision of the Registrar of this Court.

1. Appeals from decisions of the Registrar take place by way of rehearing – see rule 6256(4) of the Court Procedures Rules 2006 (ACT).

1. The broad background to the proceedings is that the plaintiff was injured in a motor vehicle accident on 12 October 2010. The plaintiff’s vehicle was stationary when struck from behind by another vehicle and pushed forward into a third vehicle.  She lodged a claim with the second defendant which was the insurer of both other vehicles. She commenced proceedings in this Court for damages for negligence on 3 June 2014. Her statement of claim names the driver of the vehicle in front of her as first defendant.  The plaintiff says the relevant limitation period runs from 6 May 2012 when the insurer made its last payment for treatment expenses for the plaintiff.  On 10 June 2015 the second defendant applied for summary judgment against the plaintiff. The plaintiff filed what was in effect a cross application for leave to amend her claim to name the correct defendant that being the driver of the vehicle which struck her from behind. Both applications were heard at the same time and on 25 June the Registrar delivered her decision.

1. The effect of the Registrar’s decision was to refuse the application by the plaintiff to amend its claim and to grant the second defendant’s application for summary judgment.

1. The facts on which the appeal is to be determined are not significantly in contest, although some parts of some affidavit material filed on behalf of the plaintiff was objected to and the deponent of one affidavit relied upon by the plaintiff – Mr Hassan Ehsan was cross examined briefly.

1. For the record I am satisfied as to the following:

   (a)The solicitor for the second defendant brought to the attention of Mr Ehsan (the solicitor for the plaintiff) by letter dated 29 August 2014 that the named defendant - Ms Browning - had said that she should not be a defendant and further that in his opinion “she is probably correct”.

   (b)Exchanges took place between Mr Ehsan and the solicitor for the second defendant in which Mr Eshan asked whether the second defendant would “agree to an order pursuant to section 502 of the Rules”.

   (c)The solicitor for the second defendant said that his client would not consent and would reserve its position pending receipt of an application from the plaintiff.

(d)Mr Ehsan says he held the view that an unopposed application to amend would be more cost effective. He says that one of the reasons that an application was not brought earlier was that he was waiting to hear whether or not the defendant would consent to an order being made. That evidence does not sit logically with his own acknowledgment that he had been told that the defendant would not say whether or not it consented before seeing an application.  Whatever may have been Mr Ehsan’s actual belief I am satisfied that what he had been told by the solicitor for the second defendant was as set out above at paragraph 6 (c). It follows that nothing said or done by the solicitor for the second defendant can be fairly regarded as having misled or confused Mr Ehsan in any relevant way.

(e)There is no suggestion that Mr Ehsan sought instructions from the plaintiff about any application to amend. I infer that any delay in bringing the application was not the result of any delay caused by the plaintiff herself in providing instructions to him or otherwise. 

1. There is no concession that the limitation period started to run from 6 May 2012 but nothing turns on that for present purposes. Even if it had done so the amendment application was brought after three years from that date. Rule 503 applies in those circumstances.

1. Rule 503 applies to an amendment correcting “a mistake in the name or identity of a party” and incorporates both mandatory pre-conditions – in accordance with 503(2)(b)(i) and 503(2)(b)(ii) as well as a discretionary consideration under 503(2)(a).

1. The second defendant resisted the plaintiff’s application on all bases – including that the mistake sought to be corrected was not one in the name or identity of a party. 

1. I can deal with the last point shortly. It is clear that the mistake made in the statement of claim in this case comes within the concept of a mistake made in the name or identity of a party.

1. The circumstances of the accident as accepted by the parties for the purposes of this application appear to be unremarkable. The plaintiff says that her stationary vehicle was struck from behind by another vehicle (a utility) and pushed into the vehicle in front (a Toyota sedan).

1. The defendant submits that there is no mistake capable of being corrected because it is clear that the claim identifies Ms Browning as the driver of the Toyota motor vehicle and that the plaintiff intended to sue the driver of the Toyota motor vehicle. 

1. I reject that submission. It is clear that both the vehicle and the driver described in the claim are wrongly identified but the combined effect of both mistakes is not that no mistake was made.

1. Paragraph 1(e) of the statement of claim sets out how the plaintiff alleges that the collision causing her injuries occurred in pleading that her stationary vehicle was struck from behind by another vehicle. The allegation as to how the collision occurred is accepted to be accurate. It is clear, and of course entirely logical, that the plaintiff intended that her allegations of wrongdoing were against the driver of the vehicle which had struck her from behind. The mistake in describing that vehicle, and the driver of it are clearly mistakes as to the name or identity of a party to the proceedings.

1. The mistake here is not of the type described in Bridge Shipping Pty Ltd v Grand Shipping SA[i] because both the object of the plaintiffs allegations of wrongdoing and their alleged role is clear from paragraph 1(e) of the statement of claim.

1. In arguing that the mistake was not one as to name or identity the defendant relied in part upon the test suggested by Devlin LJ in Davies v Elsby Brothers Ltd[ii] (“Davies”) which has been quoted with approval in this jurisdiction in Mass (Australia) Pty Limited (CAN 108 657 012) v R & B Crane & Rigging Pty Ltd (CAN 101 925 482). [iii] In Davies his Honour had this to say:

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 enquiries,” then it seems to me that one is getting beyond the realm of misnomer.

1. It is apparent from the use of the first person in both the question and the alternate responses posited that his Honour is referring to a reasonable person in the shoes of the correct defendant.  The second defendant’s submissions focussed on the admittedly enigmatic letter of 3 September 2014 from the plaintiff’s solicitor but that is not to the point.     

1. A reasonable person looking at the document as a whole would recognise that the core allegation of wrongdoing is set out in para 1(e) of the claim – that is that the plaintiff’s vehicle was struck from behind by the defendant’s vehicle.  In the circumstances Mr Patchett would be left in no doubt that it must mean him and that a mistake had been made about both his name and the description of his vehicle.   

1. I turn to the question at rule 503(2)(b)(i) – that the mistake must be genuine.

1. Having reached the conclusion that the mistake was one as to the name or identity of a party, it is a small step to conclude that it was genuine. The defendant argues the mistake arises because of shortcomings on the part of the plaintiff’s solicitors, and that, in the circumstances, it falls outside what is properly regarded as genuine for the purposes of the rule. 

1. That submission must be rejected. It flies in the face of authority dealing with rules which are relevantly identical in The ‘Sardinia Sulcis’ v The ‘Al Tawwab[iv]’ – a mistake by a relatively inexperienced solicitor about a company ceasing to exist upon merger with another company; and Mitchell v Harris Engineering Co Ltd[v] – a mistaken alteration to a writ by a clerk based on the results of an incorrect company search. 

1. The observations made by Master Harper in Mass (Australia) Ptd Ltd (ACN 108 657 012) v R & B Crane & Rigging Pty Ltd (ACN 101 925 482)[vi] at paragraph 31 need to be seen as wise counsel to litigation solicitors to reduce the risk of error and not as establishing some different legal principle.

1. Rule 503(2)(b)(ii) requires the Court to be satisfied that the mistake was not misleading or likely to cause any reasonable doubt about the identity of the person intended to be sued.

1. The defendant argues that this is not a case where it was obvious that the plaintiff always intended to sue Mr Pratchett – he being the driver of the vehicle which did collide with the plaintiff from behind. The defendant says the particularity with which the plaintiff describes the first defendant in her claim precludes such a conclusion.

1. The parties agreed that the test to be applied for the purposes of subsection (ii) was an objective one, but differed as to what was to be taken into account. On that point I accept the submission of Mr Crowe SC that the test to be applied is as set out by Buss JA in Alinta 2000 Ltd v Petkov[vii] at paragraph 38 – expressed by his honour in these terms:

.... the court is to determine whether it is satisfied that a reasonable person, upon reading the relevant document containing the mistake and with knowledge of the relevant legal and factual context, would not have been misled or had any reasonable doubt as to the identity of the person who the plaintiff intended to sue.

1. Indeed it is difficult to see how the test could be meaningfully applied if it were expressed otherwise.

1. The analysis therefore requires consideration of factors which include the contents of the accident report and the notice of claim, the fact that the insurer had accepted breach of duty of care and managed the claim and the fact that, at clause 1(e) of the statement of claim the plaintiff unsurprisingly alleged wrongdoing against the vehicle which had struck her stationary vehicle from behind.

1. In that context, I am satisfied that the mistake was not misleading or likely to cause any reasonable doubt as to the identity of the person intended to be sued.

1. That leads to consideration of the discretionary factor – that is whether in all the circumstances it is appropriate to grant the relief sought.

1. Mr Woulfe for the second defendant argues that a range of factors weigh against exercising the discretion in favour of the plaintiff.

1. In particular he points out that it was the second defendant which actually brought to the attention of Mr Ehsan the mistake about the identity of the named first defendant.  He goes on to point out that, even after having had attention directed to that mistake, no application to amend the claim was made before what the plaintiff asserts to have been the expiry of the limitation period – and indeed no application was made at all until the second defendant brought its application for summary judgment. 

1. Mr Woulfe referred in submissions to the decision of the High Court in Aon Risk Services Australia Ltd v Australian National University[viii] (“Aon”).

1. The principles established in Aon are very important although the decision must be viewed in the context of its own particular circumstances.  Those circumstances are neatly summarised in the judgment of French CJ at in these words:

..... an application which was made late in the day, was inadequately explained, necessitated the vacation or adjournment of the dates set down for trial, and raised new claims not previously agitated apparently because of a deliberate tactical decision not to do so.

1. Central to the deliberations in Aon was the effect to be given to Rule 21 of the Court Procedures Rules 2006 (ACT), and the stated objective to “facilitate the just resolution of the real issues in civil proceedings with minimum delay and expense”.[ix] Their Honours Gummow, Hayne, Crennan, Kiefal and Bell JJ made these observations about the rule:

What is a “just resolution” is to be understood in light of the purposes and objectives stated.  Speed and efficiency, in the sense of minimum delay and expense, are seen as essential to a just resolution of proceedings. This should not detract from a proper opportunity being given to the parties to plead their case, but it suggests that limits may be placed upon re-pleading, when delay and cost are taken into account.     

1. And later:

The objectives stated in rule 21 do not require that every application for amendment should be refused because it involves the waste of some costs and some degree of delay, as it inevitably will. Factors such as the nature and importance of the amendment to the party applying cannot be overlooked. Whilst r 21 assumes some ill-effects will flow from the fact of a delay that will not prevent the parties dealing with its particular effects in their case in more detail. It is the extent of the delay and the costs associated with it, together with the prejudice which might reasonably be assumed to follow and that which is shown, which are to be weighed against the grant of permission to a party to alter its case. Much may depend upon the point the litigation has reached relative to a trial when the application to amend is made”

1. As to factors of prejudice, delay and cost in the present case, there is no evidence of actual prejudice to the second defendant if the relief sought is granted to the plaintiff. The argument for presumed prejudice is not strong. It is correct that the insurer was entitled to have deleted provision for damages payable to the plaintiff as a contingent liability in its books, but that does not present as a matter of great significance in the present proceedings. The required notice of claim had been given and the insurer had for some time managed the claim, such that it is in possession of much background information.  I have concluded that the mistake was not misleading.  The insurer had admitted breach of duty. I infer that to have been in its capacity as insurer for what might be described as the correct defendant – that is Mr Patchett. It follows that the scope of any litigation was always going to be limited.  The proceedings are at an early stage.  The proposed amendment does not introduce any new claim or lengthen the time for hearing beyond what would have been anticipated had the correct defendant been named in the claim. 

1. Mr Woulfe presses on me in submissions the importance of an explanation to support an application. On that subject, their Honours had this to say [at paragraph 103]:

Generally speaking, where discretion is sought to be exercised in favour of one party, and to the disadvantage of another, an explanation will be called for. The importance attached by rule 21 to the factor of delay will require that, in most cases where it is present, a party should explain it. Not only will they need to show that their application is brought in good faith, but they will also need to bring the circumstances giving rise to the amendment to the court’s attention, so that they may be weighed against the effects of any delay and the objective of the Rules.

1. As to the explanation given in this case, as I understood the submissions, the second defendant accepted that, at least at the time of the hearing before me, it was apparent that the explanation for the plaintiffs delay lay squarely at the feet of her solicitors. 

1. The second defendant describes that explanation as “unsatisfactory”.

1. I do not read the views expressed in Aon as indicating a requirement that a satisfactory explanation (whatever that may mean) is a pre-condition to the exercise of the discretion.  Nor that an explanation admitting of some lack of diligence or other shortcoming on the part of the applicant is automatically a bar to relief.  

1. Rather the character of the explanation which is given is one of the factors to be considered in the weighing exercise described by their Honours at paragraph [103]. No doubt the lack of an explanation, if one was not provided, would also be a factor and one which may go to the question of whether the application is brought in good faith, but that is not the case here.

1. The character of the explanation in evidence for both the need for the amendment and the delay in seeking it does not reflect well on the solicitors for the plaintiff.  They are the plaintiff’s agents and their acts and omissions must be viewed in that light.

1. Nevertheless, as I have said, that explanation is but one of the factors to be taken into account.

1. The amendment sought is one of critical importance to the plaintiff’s case and there can be no resolution of the real issues in the proceedings without it.  The other factors to which I have referred weigh significantly in favour of the exercise of the discretion for the plaintiff’s benefit.  In all of the circumstances the character of the explanation is not such that it should prevent the discretion being exercised and the amendment sought should be allowed.

1. The formal orders of the court are that the appeal is allowed and orders made by the Registrar on 25 June 2015 are set aside to the following extent:

   (a)The defendant’s application for summary judgment is dismissed;

   (b)Leave is granted to the plaintiff to file the amended originating claim and statement of claim;

(c)I reserve the question of the costs of the appeal and of setting aside the Registrar’s orders as to costs on the basis that the parties have liberty to apply for an order on 7 days notice.

I certify that the preceding forty-five (45) paragraphs are a true copy of the Reasons for Decision of his Honour Magistrate P J Morrison.

Associate: Anna Carlander

Date: 8 September 2015

[i] (1991) 173 CLR 231.

[ii] [1961] 1 WLR 170.

[iii] [2008] ACTSC 23.

[iv] Al Tawwab [1991] 1 Lloyd’s Rep 201.

[v] [1967] 2 QB 703.

[vi] [2008] ACTSC 23.

[vii] [2012] WASCA 258.

[viii] [2009] 239 CLR 175.

[ix] Court Procedures Rules 2006 (ACT) r 21.