| JURISDICTION : DISTRICT COURT OF WESTERN AUSTRALIA LOCATION : PERTH CITATION : FOLVIG -v- NGARDA CIVIL & MINING PTY LTD [2011] WADC 227 CORAM : COMMISSIONER GETHING HEARD : 19 DECEMBER 2011 DELIVERED : 22 DECEMBER 2011 FILE NO/S : CIV 3424 of 2010 BETWEEN : DEBBIE ANN FOLVIG Plaintiff
AND
NGARDA CIVIL & MINING PTY LTD
First Defendant
ADITYA BIRLA MINERALS LIMITED
Second Defendant Catchwords: Practice and procedure - Substitution of a party Legislation: Rules of the Supreme Court 1971(WA), O 21 r 5(2), (3) Result: Appeal allowed
Leave to substitute granted
(Page 2)
Representation: Counsel:
Plaintiff : Mr G Stubbs
First Defendant : No appearance
Second Defendant : Mr M Herron
Solicitors:
Plaintiff : Shine Lawyers
First Defendant : Not applicable
Second Defendant : CCS Insurance Law
Case(s) referred to in judgment(s):
Aon Risk Services Australia Ltd v Australian National University [2009] HCA 27
Bridge Shipping Pty Ltd v Grand Shipping SA [1991] HCA 45; (1991) 173 CLR 231
Carter v O'Connell [2009] WASC 245
Clough v Frog (1974) 48 ALJR 481
Cropper v Smith (1884) 26 Ch D 700
Hazart Pty Ltd v Rademaker (1993) 11 WAR 26
Mitchell v Harris Engineering [1967] 2 QB 703
Queensland v J L Holdings Pty Ltd [1997] HCA 1; (1997) 189 CLR 146
(Page 3)
1 COMMISSIONER GETHING: By notice of appeal filed 12 October 2011, the plaintiff appeals against a decision of a Registrar made on 6 October 2011 refusing her application for leave to amend the writ and statement of claim in the action. The amendments sought are for present purposes contained in a Minute of Proposed Amended Statement of Claim dated 11 October 2011, annexed to the notice of appeal. The amendments seek to substitute the Birla Nifty Pty Ltd (Birla) as the second defendant in place of the current second defendant Aditya Birla Minerals Limited (Aditya).
2 The plaintiff's claim arises out of injuries she sustained in an accident on 5 December 2007 at the Nifty Birla Copper mine (project). At the relevant time, the plaintiff was the driver of a dump truck at the project. She was injured when the bucket from the loader which was loading the dump truck she was driving partially detached and fell on the dump truck. 3 In support of the initial application, the plaintiff filed an affidavit of Nicholas Jarrad Stevenson, a solicitor employed by the plaintiff's solicitors, sworn 22 August 2011. Mr Stevenson deposes that by letter dated 16 November 2009, the plaintiff's lawyers wrote to CCA Insurance Law and asked that firm to confirm that Aditya was the principal employer and manager of the Nifty mine site, that is, the project (Annexure NS-04). CCS Insurance Law had previously advised the plaintiff's lawyers that they had been instructed by 'the Aditya Birla Group's liability insurer Zurich Australian Insurance Limited' (see Annexure NS-03). By letter dated 4 February 2010, CCS Insurance Law advised the plaintiff's solicitors that: 4 Mr Stevenson deposes that the individual solicitors employed by the plaintiff's firm of solicitors who previously had the carriage of the plaintiff's action have left the firm. He now has the carriage of the action. Mr Stevenson then deposes that he reviewed the correspondence in the matter and the second defendant's defence, and then states: 'I am satisfied that the Second Defendant has been erroneously named and that the entity 'Birla Nifty Pty Ltd', should be substituted as the Second Defendant in this matter' (par 17). (Page 4)
Legal framework 5 Pursuant to District Court Rules 2005 (WA), r 5(6), the present appeal is 'by way of a new hearing of the matter that was before the registrar'. It is a complete review of the matter de novo: Hazart Pty Ltd v Rademaker (1993) 11 WAR 26, 28. 6 The power of the Court to amend the name of a party to an action to correct a mistake is contained in Rules of the Supreme Court 1971 (WA) O 21 r 5, which is in the following terms: 5. Amending writ or pleading with leave (1) Subject to — (a) Order 18 rules 6, 7 and 8; and (b) Order 20 rule 19(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 subrule (3), (4) or (5) 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 subrule if it thinks it just to do so. (3) An amendment to correct the name of a party may be allowed under subrule (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. 7 This nature of the discretion conferred by O 21 r 5 was considered by Le Miere J in Carter v O'Connell [2009] WASC 245. His Honour reviewed the decision of the High Court in Bridge Shipping Pty Ltd v Grand Shipping SA [1991] HCA 45; (1991) 173 CLR 231, and then summarised the nature of the discretion in O 21 r 5 in the following terms ([24] - [25]): (Page 5)
24 The power conferred by O 21 r 5 to correct the name of a party is remedial and should be given a beneficial interpretation. It extends to, but is not limited to, misnomers, clerical errors, misdescriptions and cases where the plaintiff intends to sue a defendant of a particular description but is mistaken as to the name of the person or entity who answers that description. … 25 Before the court will grant leave to the plaintiff to amend his writ to correct the name of the fourth defendant the court must be satisfied of three things. First, that the mistake sought to be corrected was a genuine mistake; second, that the mistake was not misleading or such as to cause any reasonable doubt as to the identity of the person intended to be sued; third, that it is just to make the amendment.
Analysis of the pleadings 8 The initial statement of claim filed 22 December 2010 named Aditya as the first defendant and Ngarda Civil & Mining Pty Ltd (Ngarda) as the second defendant. The plaintiff then pleaded that: (a) Aditya was the entity which undertook the project (par 4, 5); (b) the project was a mine within Mines Safety and Inspection Act 1994 (WA) (MSIA) s 4 (par 11); (c) Aditya was the principal employer as defined in MSIA s 4 for the project (par 12); (d) Ngarda was a contractor to Aditya (par 7); (e) Ngarda was the employer of the operator of the front end loader involved in the accident, one Gerald Taylor (par 9, 14); (f) Aditya had control over the project (par 13(a)); (g) Aditya in the course of mining operations engaged Ngarda to carry out works for it within MSIA s15A, thereby giving rise to a duty of care under MSIA s9 (par 13(g)); and (h) Ngarda and Aditya were occupiers of premises comprising the project, the front end loader and the dump truck for the purposes of the Occupiers Liability Act 1985 (WA) (OLA) (par 13(h), (i)). 9 There are references in the 22 December statement of claim to a third defendant, which appears to be a reference to Mr Taylor (eg par 13(k)). (Page 6)
10 The plaintiff then amended her statement of claim pursuant to O 21 r 3 by an amended statement of claim filed 20 January 2011. The amendment substituted the first defendant for the second defendant and the second defendant for the first defendant, with some consequential amendments. The references to the third defendant were removed. Notwithstanding the amendments, the following allegations were maintained: (a) Aditya was the entity which undertook the mine (project) (par 4, 5); (b) the project was a mine within MSIA s 4 (par 11); (c) Aditya was the principal employer as defined in MSIA s 4 for the project (par 12); (d) Ngarda was a contractor to Aditya (par 7); (e) Ngarda was the employer of Mr Taylor, the operator of the front end loader involved in the accident (par 9, 14); (f) Aditya had control over the project (par 13(a)); (g) Aditya in the course of mining operations engaged Ngarda to carry out works for it within MSIA s15A, thereby giving rise to a duty of care under MSIA s9 (par 13(g)); and (h) Ngarda and Aditya were occupiers of premises comprising the project, the front end loader and the dump truck for the purposes of the OLA (par 13(h), (i)). 11 In its defence filed 23 February 2011, Aditya: (a) denied that it undertook the project and said that the project was operated by Birla (par 2); (b) pleaded that Ngarda was a contractor to Birla, not Aditya (par 4); (c) denied that Aditya was the principal employee for the project and pleaded that Birla was the operator of the mine (par 8); (d) denied that Aditya had control over the project (par 9.5); (e) denied that Aditya in the course of mining operations engaged Ngarda to carry out works for it within MSIA s15A, thereby giving rise to a duty of care under MSIA s 9 (par 9.5); and (Page 7)
(f) denied that it was an occupier of premises comprising the project, the front end loader and the dump truck for the purposes of the OLA(par 9.5). 12 The effect of the amendments sought to be made in the 11 October 2011 Minute is to plead the allegations that: (a) Birla was the entity which undertook the mine (project) (par 4, 5); (b) the project was a mine within MSIA s 4 (par 11); (c) Birla was the principal employer as defined in MSIA s 4 for the project (par 12). (d) Ngarda was a contractor to Birla (par 7); (e) Ngarda was the employer of Mr Taylor, the operator of the front end loader involved in the accident (par 9, 14); (f) Birla had control over the project (par 13(a)); (g) Birla in the course of mining operations engaged Ngarda to carry out works for it within MSIA s15A, thereby giving rise to a duty of care under MSIA s9 (par 13(g)); and (h) Ngarda and Birla were occupiers of premises comprising the project, the front end loader and the dump truck for the purposes of the OLA (par 13(h), (i)). 13 It thus seems clear that the intention of the plaintiff was to sue the principal employer of the project for the purposes of the MSIA, the party who had control over the project, the party who contracted with Ngarda to perform the works out of which the accident arose and the occupier of the premises comprising the project, the front end loader and the dump truck for the purposes of the OLA (aside from, or in addition to Ngarda).
Plaintiff's submissions 14 The plaintiff submits that the present applications falls squarely within the discretion in O 21 r 5, as set out by Le Miere J in Carter. 15 I inquired of counsel whether the facts set out in Mr Stevenson's affidavit could accurately be characterised as an error by the solicitors employed by the plaintiff's firm of solicitors who had previously had responsibility for the conduct of the action. Counsel replied that the facts could be so characterised. (Page 8)
16 Counsel for the plaintiff submitted that the letter dated 16 November 2009 from the plaintiff's lawyers made it clear that the description of the party whom the plaintiff wished to sue was the 'principal employer' and 'manager' of the project. The fact that the plaintiff's solicitors knew that Birla was 'operator' of the project, meant that the case was more clearly one of error, and not one in which the identity of the correct defendant was ascertained by subsequent inquiry. 17 The plaintiff consequently submitted that: (a) from the correspondence attached to Mr Stevenson's affidavit, it is clear that Birla was the operator of the mine; (b) given the correspondence between the plaintiff's lawyers and the lawyers for Aditya and Birla's insurers, there could be no reasonable doubt as to what the plaintiff's claim was about and who it was directed to; (c) the mistake could not be misleading as it was lawyers for Aditya and Birla's insurers that advised that Birla was the operator or the mine; (d) Aditya and Birla's insurers have known about the claim for some time and were in a position to deal with it; and (e) the lawyers for Aditya and Birla's insurers knew from the outset who was the correct entity. 18 The plaintiff submitted that the case was similar to that which arose in Mitchell v Harris Engineering [1967] 2 QB 703. In that case, the intention was to commence an action against 'H E Co Ltd'. A junior clerk named the defendant 'H E Co (Leeds) Ltd'. Both companies had the same secretary and directors. The Court of Appeal allowed the amendment, holding that there had been a 'genuine mistake by the plaintiff's solicitors' which did not mislead the intended defendant (719, 721). Russell L J declined to narrowly construe the word 'mistake' to mean 'error without fault' (721).
Second defendant's submissions 19 At the outset of his submissions, counsel for the second defendant stated that he appeared for both Aditya and Birla, and that his submissions were focussed on Birla's objection to being joined as a party, Aditya having no objection to being removed as a party. (Page 9)
20 The second defendant submits that the evidence before the Court is simply not sufficient for the Court to conclude that the decision to sue Aditya was a 'genuine mistake' as opposed to a tactical decision. Counsel submitted that if the decision to sue Aditya was a mistake by the plaintiff's solicitors, then this should have been stated explicitly in the affidavit material before the court. There should also have been evidence that it was the plaintiff's intention to sue the operator of the project, or perhaps the principal employer of the project. 21 The second defendant further submits that it is not clear from the statement of claim, nor Mr Stevenson's affidavit, whether the intention of the plaintiff was to commence the proceedings against 'the proprietor, the lessee or the occupier' of the mine within the definition of a 'principal employer'. The definition of 'principal employer' in MSIA s 4, so far as is relevant, provides: principal employer — (a) in relation to a mine (other than a mine where only exploration operations are being carried out), means the employer who is the proprietor, lessee, or occupier of the mine and who has overall control and supervision of the mine, mining operations at the mine and the manager of the mine; … 22 The principal employer of a mine has a duty to 'take such measures as are practicable to ensure that the mine and the means of access to and egress from the mine are such that persons who are at the mine, or use the means of access to or egress from the mine, are not exposed to hazards': MSIA s13. 23 The second defendant's submissions are to the effect that given the definition of 'principal employer', even if Birla was the 'operator' of the mine, it would have been open to the plaintiff to have made a tactical decision to commence proceedings against Aditya as, say, the occupier of the project and the entity who had overall control and supervision of the mine. 24 The submissions continue that: (Page 10)
action against Aditya, evinces an intention not to commence proceedings against the 'operator' of the mine; (c) the fact that the plaintiff's solicitors were advised of the correct entity who was the operator of the mine meant that the plaintiff could not have been genuinely mistaken as to the correct identity of the operator of the mine; (d) no satisfactory explanation has been given as to why proceedings were commenced against Aditya; (e) the evidence does not establish that the plaintiff made a mistake as to the description of the party it intended to sue; and (f) if leave were granted, the effect would be to allow the plaintiff to sue Birla when the limitation period for that action had expired. 25 Counsel for the second defendant submitted that the present case was analogous to the decision in Bridge Shipping. In that case, goods were damaged in transit by sea from Brazil to Melbourne. The plaintiff was the owner of the goods. The defendant was the company that it had engaged to arrange the carriage. The defendant commenced third party proceedings against the registered owner of the vessel on which the goods were carried. In its defence, the registered owner pleaded that by a bareboat charter agreement, some 2 years prior to the carriage in question, the registered owner had chartered the vessel to another party, who had been the carrier of the goods. This defence was not delivered until after the limitation period for suing the actual carrier had expired. The defendant sought to substitute the actual carrier for the registered owner. The High Court declined to allow it to do so. 26 McHugh J, with whom Brennan and Dawson JJ agreed, concluded (262): Bridge made no mistake as to description of the party which it wished to sue. It intended to sue the owner and did so. Bridge's mistake was not one of misnomer, clerical error or misdescription. Nor was it one where, intending to sue a person whom it identified by a particular description, it was mistaken as to the name of the person who answered that description ... The mistake which Bridge made was that it believed that it had rights against the owner of the vessel. But that was not a mistake 'in the name of a party'. 27 Counsel submitted that this is exactly what occurred in the present case. The plaintiff knew that Birla was the operator of the project, yet (Page 11)
chose to sue Aditya. The mistake she made was to believe that she had rights against Aditya. 28 In relation to prejudice, the second defendant did not submit that Birla would be prejudiced by late notification of this claim. The submission as to prejudice was two fold. The first aspect was that Birla would be deprived of the ability to plead a limitation defence, which would now be open to it had the plaintiff been forced to add it as a new party. The second aspect was that the writ was no longer valid for service pursuant to RSC O 7 r 8.
Was there a genuine mistake? 29 The plaintiff's claim arises out of an injury she sustained at the project when the bucket from a loader driven by an employee of Ngarda partially detached and fell on to the dump truck she was driving. It seems clear that the intention of the plaintiff was to sue: (a) the principal employer of the project for the purposes of the MSIA; (b) the party who had control over the project; (c) the party who contracted with Ngarda to perform the works out of which the accident arose; and (d) the occupier of the premises comprising the project, the front end loader and the dump truck for the purposes of the OLA. 30 I accept the plaintiff's submission that the fact that her solicitors knew that Birla was the operator of the project supports the inference that there was a genuine mistake. It is not a case where a mistake arose out of subsequent inquiries resulting in the correct defendant only being identified after the limitation period had expired. 31 Although Mr Stevenson's affidavit is light on detail, he does depose that an error was made in naming Aditya as the defendant, and not Birla. From his affidavit, it is clear that the plaintiff's intention was to sue the principal employer at the project. This intention is confirmed in the statement of claim. The statement of claim also evinces an intention to sue: (a) the party who had control over the project; (Page 12)
32 This entity could compendiously be described as the 'operator' of the project. The operator was in fact Birla, not Aditya. 33 Given the claims made in the statement of claim, and the clear concession that Birla was the operator of the project, there is no obvious tactical reason to sue Aditya. The case is different from that in Bridge Shippingin this respect, as in Bridge Shipping the intention of the defendant was to sue the registered owner of the vessel, which it did, and against whom it ended up having no rights. The absence of any tactical reason to sue Aditya strengthens the inference that Aditya was sued by mistake. 34 I am satisfied that the plaintiff, though her solicitors, made a genuine mistake in naming Aditya as the defendant, and not Birla.
Was the mistake misleading or such as to cause any reasonable doubt as to the identity of the person intended to be sued? 35 The identity of the person intended to be sued was: (a) the principal employer of the project for the purposes of the MSIA; (b) the party who had control over the project; (c) the party who contracted with Ngarda to perform the works out of which the accident arose; and (d) the occupier of the premises comprising the project, the front end loader and the dump truck for the purposes of the OLA. 36 In general terms, Aditya concedes that the identity of the party in (c) is its wholly owned subsidiary Birla (par 4 defence). As I have just noted, the entity the plaintiff sought to sue could compendiously be described as the 'operator' of the project. The advice that Birla was the operator of the project came from CCS Insurance Law. CCS Insurance Law was retained by the 'Aditya Birla Group's liability insurer Zurich Australian Insurance Limited' (see exhibit NS 03 to Mr Stevenson's affidavit). It is Zurich that appears to have instructed CCS Insurance Law to inform the plaintiff that (Page 13)
Birla was the 'operator' of the project. In these circumstances, the mistake could not have been misleading to Aditya or Birla (nor their insurer), nor such as to cause reasonable doubt as to the identity of the person to be sued.
Is it just to make the amendment? 37 Birla is a wholly owned subsidiary of Aditya, with the same insurer. The fact that the mistake was as to which company in a group was the correct company to sue, is a factor tending to suggest it is just to make the amendment. 38 Birla was on notice of the claim by the plaintiff. Its solicitors identified it as the operator of the project prior to commencement. It cannot say it is taken by surprise by the amendment; it was inevitable that the mistake would be sought to be corrected at some point. This also tends to suggest that it is just to make the amendment. 39 Birla does not submit that it would be prejudiced by late notice of the plaintiff's claim. 40 The fact that Birla would be deprived of a limitation act defence is not determinative. RSC O 21 r 5(2) expressly contemplates the power being used where the limitation period has expired. The effect of the substitution of the second defendants is to place Birla in the same position it would have been in had no mistake been made. 41 The plaintiff would be prejudiced by a decision not to allow substitution. It is evident from the claims set out in the statement of claim that the plaintiff's prospects of success on liability at trial, and of getting a substantial settlement in lieu of trial, will be significantly undermined if she is not allowed to litigate against Birla. 42 It appears that the source of the error was the plaintiff's solicitors. In this regard, the comments of Bowen LJ in Cropper v Smith(1884) 26 Ch D 700, at 710 in the context of pleadings are apposite: Now, I think it is a well established principle that the object of Courts is to decide the rights of the parties, and not to punish them for mistakes they make in the conduct of their cases by deciding otherwise than in accordance with their rights. Speaking for myself, and in conformity with what I have heard laid down by the other division of the Court of Appeal and by myself as a member of it, I know of no kind of error or mistake which, if not fraudulent or intended to overreach, the Court ought not to correct, if it can be done without injustice to the other party. Courts do not exist for the sake of discipline, but for the sake of deciding matters in (Page 14)
controversy, and I do not regard such amendment as a matter of favour or of grace. 43 This passage was cited with approval in Queensland v J L Holdings Pty Ltd[1997] HCA 1; (1997) 189 CLR 146, 154 and Clough v Frog(1974) 48 ALJR 481, 482. The majority in Aon Risk Services Australia Ltd v Australian National University [2009] HCA 27, (2009) 239 CLR 175 referred to this passage from Cropper and observed that the passage is 'best understood by reference to the circumstances of that case, and the course of the litigation': [73] - [75].
Determination 44 For the reasons set out above, I am of the view that the present case is best characterised as a genuine mistake by the plaintiff's solicitors. I am of the view that it is just to allow the plaintiff to substitute the second defendant and for the action to be determined on its merits. The appeal should be allowed. 45 I will hear from counsel as to the order to be made, including costs. The orders should address the issue of the writ now being stale for service. The orders should also remove the action from the Inactive Cases List. My preliminary view on costs is that the plaintiff (or perhaps her solicitors) should pay Aditya's costs of the action to date to be taxed and paid within 21 days of taxation.
|