Moulieux Pty Limited v Girvan NSW Pty Limited (Receiver and Manager Appointed)

[1991] HCATrans 305

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry

Sydney No S126 of 1991

B e t w e e n -

MOULIEUX PTY LIMITED

Applicant

and

GIRVAN NSW PTY LIMITED

(Receiver and Manager

Appointed)

Respondent

Application for special leave

to appeal

MASON CJ TOOHEY J GAUDRON J

TRANSCRIPT OF PROCEEDINGS

AT PERTH ON THURSDAY, 24 OCTOBER 1991, AT 2.31 PM

Copyright in the High Court of Australia

Moulieux(2) 1 24/10/91

MR w.s. MARTIN:	If it please the Court, I appear on behalf of the applicant in this matter with my learned
friend, MR G.B. COLYER. (instructed by Carneys)
MR J.V. NICHOLAS:	May it please the Court, I appear on

behalf of the respondent.	(instructed by Colin
Biggers & Paisley).

MASON CJ:	Mr Martin?
MR MARTIN:	Your Honours, may I hand up an outline of our submissions?

MASON CJ: Yes.

MR MARTIN:  As Your Honours will be aware this is an

application for leave to appeal from a decision of

the New South Wales Court of Appeal refusing leave

to extend the time for an appeal from a decision of

Mr Justice Cole.

MASON CJ: Yes.

MR MARTIN:  As Your Honours will see, it is our submission

that the areas of law in which questions of

principle would arise if leave were granted are,

essentially, three, the first being the area which
we describe as the misnomer in mistaken identity
area; the second being the area relating to the

extent to which an appellate court should inquire

into the merits of an appeal on application for

extension; and the third being the extent to which

an appellate court should determine an application

before it on the basis of an issue which was not

anticipated or raised by either party.

If I might deal, firstly, with the area of

misnomer and mistaken identity. Your Honours, the

judgment of the two members of the court whose

decision prevailed in the Court of Appeal proceeded

on the basis that the respondent had always

intended to sue the party with whom it had

contracted but had misnamed that party on the

originating process. The alternative hypothesis,

what we would call the mistaken identity

hypothesis, which is that the respondent mistook
the identity of the party with whom it had
contracted and therefore sued the wrong party, is
not anywhere considered in the judgment of the

majority.

GAUDRON J: Are those two alternatives question of fact to

be decided by the trial judge?

MR MARTIN:  They would result in questions of fact to be

tried by the trial judge but, Your Honour, we are

Moulieux(2) 2 24/10/91

here seeking only the opportunity to run an appeal

on that issue before the New South Wales Court of

Appeal.

GAUDRON J: Yes.

MR MARTIN:  We would not be inviting this Court to determine

those questions of fact but merely to determine the

principle of law which governs - - -

GAUDRON J: But if they were conclusions to be made by

consideration of the various facts and the trial judge decided it was by reference to those facts

that it was a misnomer, what is there really for

you to appeal about?

MR MARTIN: Because, Your Honour, we would be saying both

here to the extent that it were necessary and in

the Court of Appeal, that both the trial judge and

the Court of Appeal proceeded upon a mistake, a

mistaken view of the law as to the distinction and,

in essence, what both Mr Justice Cole and the

majority of the Court of Appeal did was presume
that the test in Robertson, which was a misnomer

case, provided the answer to the distinction

between misnomer and mistaken identity.

GAUDRON J: Where does Mr Justice Cole make that mistake?

MR MARTIN:  Your Honour, initially, at page 2 of the appeal

book, and at page 18 on the motion to set aside his

earlier order.

GAUDRON J: Yes, where is it?

MR MARTIN:  At page 18 about line 20. He says:

All that had occurred was that the writ was issued against Company A by reference to a

prior name. There is no inhibition to

granting an amendment were "there has been a

mere misnomer and the amendment is not really

the substitution of one defendant for

another".

GAUDRON J: But he has stated the law correctly?

MR MARTIN:	He has, Your Honour, but - - -
GAUDRON J:	He has decided that it was a misnomer?
MR MARTIN:	But, Your Honour, on the basis of the starting

point that the party intended to be sued was the

party contracted with.

GAUDRON J: That is a question of fact, is it not?

Moulieux(2)	24/10/91
MR MARTIN:	Yes, it really amounts, in our submission, to

saying nothing more than the party intended to be

sued was always the correct defendant. So that if

one were looking at a tort case the party intended

to be sued was always the tortfeasor. In a

contract case the party intended to be sued was

always the correct defendant. Your Honour, our

proposition, in a nutshell, is if you start from

that presumption that the party intended to be sued

is always the correct party, then you will always

have a misnomer case.

GAUDRON J: But you start from that in a context in which

the defence accepts that it is correctly sued, the

defence of that defendant?

MR MARTIN:  The defendant that was sued accepted that it was

correctly sued -

GAUDRON J: It turned out that it was not?

MR MARTIN:  Yes.

GAUDRON J: That goes an awful long way to saying, "Well, it

is really a misnomer", and so much so that not even

the defendant raised any point about it.

MR MARTIN:  Except this, Your Honour, we are here on behalf of another party. We are here on behalf of a party

that was not originally sued and it is being said

that the conduct of - - -

GAUDRON J: That, too, makes an assumption, does it not?

That makes the assumption that it is not misnomer?

MR MARTIN:  We are in danger of ending up in circularity

here, Your Honour. If one starts with a
presumption that the right party intended to be

sued was always the right party then circularity is

inevitable, and that, in our respectful submission,

is where both Mr Justice Cole and the majority in
the Court of Appeal went wrong.	One should start

by testing the hypothesis - the alternative

hypothesis, namely, that the plaintiff made a

genuine mistake as to the identity of the party

which it proposed to sue, that being a mistake as

to the party with whom it had contracted.

Your Honours, that distinction, we say,

between misnomer and mistaken identity is critical.

It not having been specifically addressed by the majority is a fundamental difficulty with the

judgment which we would say necessitates review

but, Your Honours, the situation went further than
that because not only did Their Honours, the

majority, not advert to that distinction, but then

in purporting to apply the test in Robertson and

Moulieux(2) 4 24/10/91

which - I can say the relevant passage from

Robertson's case is set out in the judgment of the

President of the Court of Appeal, to be found at

pages 33 and 34, and all members of the court below

were of the view that it was a test appropriately

applied. It is, in fact, a test adopted by

Justice Walsh of this Court from the earlier

English decision of Lord Justice Devlin in Davies

v Elsby Bros.

MR TOOHEY:	Mr Martin, why is it in these misnomer cases appropriate to look at the state of mind of the
defendant?
MR MARTIN:	It would seem, Your Honour, that the authority

suggests that it is because the issue before the court is the avoidance of injustice. So that if the state of mind of the defendant of the person

served was that he knew that he was being served in

his capacity as some other party but that there had

been a misnomer, then there is no injustice.

MR TOOHEY:  That might be relevant to whether or not an

order would be made. In what respect is it

relevant to the primary question of whether there

has been a misnomer?

MR MARTIN:  We do not say it is, and we say that is the

first error made by both Mr Justice Cole and the

members of the Full Court, because they assumed

that that test distinguished between misnomer and

mistaken identity whereas we say the process is,

you first of all determine whether it is a misnomer

case or mistaken identity case. Having done that,

if you are satisfied it is a misnomer case you

apply the Robertson test; if it is a mistaken

identity case, then if Bridge is right in the Full

Court of Victoria there is no power.

MASON CJ:  I must say this strikes me as entirely

artificial, Mr Martin. When you look at this chart

on page 8, what is the explanation for all these

changes of name?

MR MARTIN: 

Your Honour, there are commercial explanations

for the changes in name of a differing nature over
those various periods.

MASON CJ: They must be productive of entire confusion, I

would have thought?

MR MARTIN:  Your Honour, in fact, part of the commercial

reason given by Mr Preston in his evidence was an

attempt to avoid confusion.

MASON CJ:  I cannot imagine any method more likely or more

calculated to cause confusion than this?

Moulieux(2)	24/10/91
MR MARTIN:	It certainly did carry that risk, Your Honour,

but if one realizes - -

MASON CJ: Carry that certainty, I would have thought.

MR MARTIN:  If one looks at the time, the chart as expressed

does certainly create that prima facie impression,

but if one analyses it on a date basis then one

finds that the two relevant tiers, if Your Honour

has page 8 before you, the two particularly

relevant tiers are the second tier which is the

time of contract, where in the left-hand column one

sees two companies, one company Preston Erection

Pty Ltd and in the right-hand Preston Erection

(Contractors) Pty Ltd. Now, we would say there is

nothing commercially unusually about that, it is

not uncommon for companies - - -

MASON CJ: What is unusual is to find two companies both

bearing the same name at different times?

MR MARTIN:  Yes, that is unusual, not unheard of, but not

unusual.

MASON CJ: It is certainly not a practice to be encouraged.

MR MARTIN: Certainly not, Your Honour, and we do not shirk

from whatever responsibilities flow from that but,

in essence, all we are here seeking to do is
exercise our ri~ht of appeal to have that argument

fully ventilated in an appellate court.

Now, Your Honours, the other relevant tier on

that chart is the fourth tier which is at the time

the summons was issued, where Your Honours will see

the two names were Preston Engineering Pty Ltd and

Western Suburbs Construction Co.

Your Honours, can I go back to the Robertson

test briefly and refer you to page 44 of the appeal

book where, having apparently determined by some

process not referred to in their judgments, the

majority referred to the test in Robertson at the

top of the page and then said:

This principle would clearly have been

applicable in the present case except that

Mr Preston ..... was himself so confused that he

could not tell whether the contracting party

had been sued in its correct name.

And it follows, the other limb of the Robertson

test being that he must have known they intended to

sue the right party but had got it wrong. It

follows that he could not have reached that stage

of mind either, and Their Honours went on to say:

Moulieux(2) 6 24/10/91

However if he had been fully aware of the facts his answer must have been "They have

sued my company which is the other party to

the contract but under a former name.".

so, what Their Honours have there done is assumed

that the objective recipient of the originating

process had perfect knowledge of all relevant

facts, and it is our respectful submission that if

one applies that to the starting assumption, and

that is that the plaintiff always intended to sue
the right party, you have a perfectly circular test

that will always result in the conclusion that the

person served must have known that they had sued

the wrong party;	intended to sue him but misnamed
him.

So, Your Honours, we say that that proposition

which, if unreviewed would stand as the law of New

South Wales, would effectively produce the result

that virtually every case of mistaken identity

would become a case of misnomer in which correction

could and should be made at almost any stage in the

process.

So, Your Honours, we say there are issues of

fundamental principle raised by the manner in which

the majority approached, firstly, the distinction

between misnomer and identity and, secondly, the
application of the relevant test and, in

particular, the assumption of perfect knowledge

which they appear to have made.

TOOHEY J:  The difficulty about applying that line of

argument in the present case is that the confusion
is of the making of the person effectively
controlling the relevant companies. In a number of

these misnomer cases you have two quite unrelated

bodies in the question of whether there has been a

misnomer arises, but this is a rather unusual case,

in a sense, that the defendant is really the author

of what happened, if by defendant you can embrace

the managing director of the company.

MR MARTIN:  Yes. Firstly, Your Honour, we would not accept

that generic description because we would say it

involves a lifting of the corporate veil, but the

second, and perhaps more basic point, is that had

we been given the opportunity to argue this matter

in the New South Wales Court of Appeal we would

have challenged that proposition that the mistake

was of our making, and can I just, briefly,

indicate to Your Honour why we would have done

that. If one goes back to the chart at page 8, we

would have wished to emphasize that the critical

time was the time of issue of the summons because

Moulieux(2) 7 24/10/91

that is when the misnomer arose, and at that time

one had the fourth tier.

The two companies were Preston Engineering Pty Ltd and Western Suburbs Construction Co Pty Ltd.	A
competent solicitor, conducting the search as
necessary to instruct counsel to draw originating

process, would have searched for a company which
bore the name of the contracting party at the date
the contract was entered into. Having obtained a
search of Western Suburbs Construction Co Ltd, that
is, the right-hand column company, had he taken the

trouble to look at the microfiche he would have

identified that that company did not bear the name

of the contracting company at the time the contract

was allegedly.entered into. Had he then conducted

further inquiries and searched the left-hand

column, the search would have revealed, had it been
done properly, the true identity of the party that

he should have sued. And, Your Honours, there is

evidence, and there was evidence before the court,

that the mistake was brought to the attention of

solicitors for the claimant - plaintiff before the

hearing before the referee.

So we would, with respect, challenge the proposition that all this is our doing. We

certainly do not deny that we may have made a

contribution to it but it is, with respect, again a

bit of a long bow to go from that to say, well,
because of that we should not get the opportunity

to ventilate these arguments in an appeal court.

GAUDRON J:  Is the argument you would wish to ventilate that

the trial judge could not have found it was a

misnomer case?

MR MARTIN:  Yes, Your Honour.

GAUDRON J: Could not?

MR MARTIN:  I do not know that we would go that far. We

would say that he never turned his mind to it

because he started with an erroneous assumption

which he considered as determinative of the issue,

that is, that the party intended to be sued was

always the contracting party and from that he appears to have concluded, and I will try and

identify that portion if I can, page 18 I think,

Your Honour.

GAUDRON J:  We really have to look at the first judgment, do

we not?

MR MARTIN: Yes, the first judgment.

GAUDRON J: And it is not so clear there, is it?

Moulieux(2)	24/10/91
MR MARTIN:	Your Honour, at line 20 on page 2:

It is clear that the plaintiff intended to sue

that company with which it contracted; it

contracted with the company now known as
Preston Engineering Pty Ltd.

And His Honour, with respect, seems to have jumped from that to the proposition that it must have been

a misnomer but without considering anywhere the

alternative hypothesis, and that is that it was

inadequate search work within the office of the

solicitors for the plaintiff.

Now, the only other point we would make,

Your Honours, is that at the time of service, again

on the fourth tier on page 8, the company I

represent had borne the name Preston Engineering

for more than 18 months. It was no reasent event.

Again, this line of discussion is not something

that we would necessarily seek to ventilate in this

Court, but it is simply something we wished to

ventilate in the Court of Appeal, and if leave were

granted and our appeal was successful, presumably,

it would be dealt with back in that court.

Your Honours, can I move now to the second

general limb of our submissions which concerns the
next area of law, and that is the extent to which

an appellate court, determining an application of this kind, ought to consider the merits. It will

have been clear, Your Honours, from the reading of

the judgment of the majority that it was,

essentially, their view as to the merits of the

matter that caused them to take the course that

they did. We say that in this case, this is

something of an unusual case because of the

presence of the five factors that we had set out at

page 4 of our submissions, and that is that all

members of the court accepted the extension sought

was not lengthy; that the delay was explicable and

justifiable; that at all times the respondent was

aware that the judgment was under challenge and,

Your Honours may have seen from the authorities in

the area that that is regarded as a central point,

that one of the consequences of allowing appeal

time to elapse is the other party thereupon acts

upon the assumption that his judgment is inviolate.

That is not a factor that is present in this case.

There was no prejudice to the respondent that

was incapable of remedy by the imposition of
appropriate terms and conditions and, indeed, the
whole problem arose because of a procedural
default, to use the words of Their Honours in the
majority, and that is that with the benefit of

hindsight, had an appeal been lodged as of right at

Moulieux(2) 24/10/91

the same time as the motion was brought before

His Honour Mr Justice Cole, then we would not be

here today and that was, essentially, the error.

Now, Your Honour, we say in that unusual case

the proper approach is to not regard the merits at
all because there is no need to inquire into the

merits, and can I hand up just very briefly bundles

of authorities. Four decisions of the English
Court of Appeal, referred to in our outline, and

one decision of Justice McHugh sitting alone in

this Court.

Your Honours, the first is Gatti

v Shoosmith. Can I take you immediately to the

last page of that report. This is a case where

Sir Wilfred Greene, then Master of the Rolls

delivered tne judgment, 920, again a case of

extension of time for appeal - a very short time,

His Lordship said, about line A on page 920:

We are not, I think, concerned here with any question at all as to the merits of this case

or the probability of success or otherwise.

And that was because of the circumstances which

gave rise to the application for extension. So we

say that there are plainly cases that it is not an

inviolate rule that merits must always be looked

at. To the same effect is the next decision in the bundle also of the Court of Appeal but more recent,

Palata v Burt & Sinfield, and can I refer you to

the very last page, 521. The paragraph sets out

the circumstances, again circumstances not

dissimilar to this case, of a technical nature

involving procedural default, no question of

prejudice, His Honour Lord Justice Ackner said:

There is no question of any prejudice arising

to the plaintiffs in the circumstances which I

have described -

this is between lines f and g -

and in that situation there was in my judgment

absolutely no need to go into the complex and

time consuming question whether or not there

was a good arguable case on the appeal.

A more recent authority - - -

MASON CJ: But once an intermediate appellate court does go

into it and comes to a conclusion, there cannot be

anything wrong in that if the conclusion can be

sustained?

Moulieux(2) 10 24/10/91

MR MARTIN:  That question of the exercise of discretion

wo.uld be right, Your Honour, but, with respect, we

say where they went wrong was by going into the

matter in a course of a short application for
extension of time, then deciding the matter on the

merits, leaving my client with a sense of grievance

that his appeal was not fully heard and determined,

and that all the arguments that could have and

would have been put had the appeal lain as of right

were not heard and properly ventilated. And that

was the approach that found favour, of course, with

His Honour the President.

GAUDRON J:  You do not make an application, though, on the

basis of a denial of natural justice, do you? But

that is not to say - - -

MR MARTIN: 

It comes not short of that, Your Honour, when we

come to the next point which is that, in large
measure, the decision was made against us on the
basis of an argument that arose arguendo, we had
not anticipated and was not raised at the suit of

our opponents, and which we did not have a real

opportunity to address.  Now, if one wants to call

that denial of natural justice or a lack of

procedural - - -

GAUDRON J: ,But you were under no mistake that the question

of the merits might be looked at and were looked

at, and you had every opportunity to put what you

wished to put about the merits of an appeal?

MR MARTIN:  No, we would not concede that, Your Honour. We

would have reasonably anticipated that, whether or

not we had an arguable case, whether or not our

case was so hopeless - if the line of authority to

which I have referred is wrong and the merits are

gone into, at best we would have, with respect,

approached the hurdle on the basis that we would
only lose on that ground if our case was beyond

hope and absolutely unarguable in the circumstances

of this case, and we did not and would not,

naturally, have approached an applicat~on for

extension of time, with respect, on the basis that there would be the equivalent of a full hearing of the appeal.

MASON CJ: But that is the risk you always run in presenting

an application for an extension of time. It may be

a case in which the court is going to take the view

that, on the merits, your case is unarguable.

MR MARTIN:  Our proposition in answer to that, Your Honour,

is twofold: firstly, in a case such as this where

there is no prejudice, that is not a question the
court ought to inquire into and, second, is that

the threshold for that determination ought to be

Moulieux(2) 11 24/10/91

very high. It ought to be only in the clearest and

most una~guable case and we.would respectfully say,

this was well short of that, particularly when one

has regard to the fact that we appear to have lost

on an issue, the estoppel issue, which was

not - - -

MASON CJ: That is your next point?

MR MARTIN:  It is our next point, Your. Honour, but it

merges, to some extent, into this whole notion of

whether we were given the opportunity of a fair

hearing on the application of extension of time.

J Your Honours, before I leave this point about

the extent to which the merits should be gone into, the two next decisions - more recent decisions - of the Court of Appeal earlier this year seem to

reflect something of a change in position. They do

not go so far as to say that it is axiomatic that

the merits must always be considered, but they do, at least, limit the more recent decision of Palata

to the particular circumstances where there was no

prejudice and the delay arose in unusual

circumstances.

Your Honours, there is another decision in the

bundle, the decision of Justice McHugh sitting

alone in this Court, Gallo v Dawson, where

His Honour said in an application for extension of

time in this Court, and at the second column

between lines F and G:

When the application is for an extension of

time in which to file an appeal, it is always

necessary to consider the prospects of the

applicant succeeding in the appeal.

That is in the left-hand column between lines F and

G on page 459. We would respectfully submit that

the absoluteness of that observation should be read

down to the context in which it was expressed,

namely, a case in which the delay was of some

16 months and a case in which the case was hopeless

on its face. We would say that is a case, clearly,

at one end of the spectrum. If one has go to to

the other end of the spectrum one can imagine, for

example, a case in which the solicitor's clerk

might be run over on the way to the court on the

last day of the appeal time and the appeal does not

get lodged until the following day. We would

respectfully ask, "Well, can it be the case that

there is an inviolable rule that in that

circumstance the appellant has to satisfy the

court - go through a mini-hearing to satisfy the court that it has an arguable case before it can

exercise its appeal as of right". And we would say

Moulieux(2) 12 24/10/91

there ought not to be any such inviolable rule, and
if there is not such an inviolable rule this is a

case in which there should have been no inquiry

into the merits. Alternatively - - -

GAUDRON J: That there should not have been?

MR MARTIN:	Yes, Your Honour.
GAUDRON J:	But surely it must be open to the court itself,

subject to your having a proper hearing, to

determine whether it is appropriate to go into the

merits in a particular case?

MR MARTIN:  Yes, Your Honour, but it should do so, with

respect, not as this court appears to have done on

the assumption that in every single case the merits

had to be gone into but with reference to the

authorities to which we have referred, namely, that

in a case where there is no prejudice and the delay
is of a technical nature, then there may be an

occasion for departing from the need to inquire

into the merits. That is the point we seek to

make, essentially, there.

We say that in relation to the merits,

although Their Honours in the majority expressed

the view that our case had no prospects of success,

which might be thought as a paraphrase for the

impression that our appeal was not possibly

. arguable, upon analysis, because of the nature of the arguments, there are cogent arguments and they

were really expressing nothing more than a view as

to the likely outcome of the appeal and were not,
with respect, properly addressing their mind to the

yardstick of whether there was no arguable case

which ought to be the yardstick, in our submission,

borne steadfastly in mind, especially where one is

dealing with the denial of an appeal which would

otherwise lain as of right.

Now, Your Honours, the third issue is the estoppal issue and can I hand up - Your Honours,

essentially the point here is that the estoppal issue arose from the bench during the course of

argument on the application for extension. It was

raised without notice - I have copies of the
transcript of the Court of Appeal and the relevant

portion is at pages 8 to 9, where it could be seen

that - - -

MASON CJ: There is nothing novel about a point being taken

by the court itself without notice to the parties?

MR MARTIN:	No, there is not, Your Honours, but we say that there is novelty in that point then, after the
short and quite peremptory way in which the matter

Moulieux(2) 13 24/10/91

was dealt with - can I refer Your Honours to

pages 8 and 9, commencing about half-way down

page 8 and you will see that senior counsel raised

an issue with respect to the estoppel argument, and then over the page at page 9 expressly protested at

the lateness in the day in which that argument was

being raised.

TOOHEY J: But the question of estoppel arose in the context

of an application for extension of time. It would

be one thing if the matter had been fully argued

for the court to arrive at a decision by reference

to some question which had not been adequately

ventilated, but the court was looking, essentially,

-at whether an ~xten~ion of time should be granted.

Is the court then precluded from saying, "Well, in

any event, this application, if we were to grant an

:...	extension of time, the appeal must fail because of the conduct of the parties, and, therefore, that is
a relevant consideration in deciding whether we
will grant an extension"?

MR MARTIN:  We say two things in relation to that,

Your Honour. That would be a proper course to

follow, firstly, if all the factual material were

properly before the court, that is to say, an

argument such as estoppel which raises questions of

fact had been ventilated before the judge at first

instance and considered by him and the parties

given opportunity to lead evidence in relation to

it. And the second condition we would impose,

Your Honour, with respect, is that the parties be

given adequate opportunity to consider that issue

and address argument upon it. So that if it is

pulled out of a hat, as it were, in the course of

an application for extension of time then, we would

respectfully say, that there ought to be an

adequate opportunity to consider the issue,

identify the facts that are relevant to it, make

the submission if it was to be made that there were

other facts that were not properly before the court

that ought to be before the court on that issue,

and then address the legal issues which arise from

it.

Now, we would respectfully say that, as

Your Honours can see from the way in which the

matter arose, that opportunity never really arose.

TOOHEY J: Except in this sense, I suppose, Mr Martin, that

in the ordinary circumstances estoppel could not

have operated against your client because the

conduct was by the person who had been sued, not by

your client, but the Court of Appeal was clearly

not only influenced but reached its view of

estoppel by reason of the fact that Mr Preston was

Moulieux(2) 14 24/10/91

the managing director of both companies and that

both companies had the same shareholders.

MR MARTIN:  Yes.

TOOHEY J: Therefore, in a sense, by reason of what had gone

before, he must have been fully aware of the sort
of question that could arise in the form of an

estoppel.

MR MARTIN:  But the problem, Your Honour, is that involved

jumping from his awareness to representation or

conduct on behalf of the client I now represent,

and the evidence only ever went so far as to

establish that he was confused about whether it was

the right party or not, and I remind Your Honours,
also, of the evidence that this confusion was
brought to the attention of the plaintiff and they

did nothing about it. So we would respectfully say

that there were other facts that ought to have been

got in; other issues that ought to have been

considered and properly addressed before this

aspect of the case could be used, as it was, to

deny us our appeal.

GAUDRON J: Although it is expressed in estoppel terms it

really does sound very much as though what is being

said is, "Well, look, here is this managing

director of both companies, both companies having
the same address, the same shareholders and having
the same names but at different times; the one, the

defendant, not raising any issue about it; the

managing director not thinking it necessary to be

anything other than confused; clearly this all

supports a misnomer rather than a mistake".

MR MARTIN:  Yes, Your Honour, that does seem to be the

approach the court below has taken, but we sought

to challenge that approach in the Court of

Appeal - - -

GAUDRON J: But does it not really indicate that at the end	of the day it is a question of fact and a
conclusion as to how you characterize it?

MR MARTIN: With respect, no, Your Honour, because there are

a number of questions of law involved along the

process. Firstly, the distinction between misnomer

and identity; secondly, the corporate veil;

thirdly, the extent to which the actions of a

director of one company, albeit that he happens to

be the director of another company - - -

GAUDRON J:	The managing director of both companies
MR MARTIN:	Managing director of both companies.

Moulieux(2) 15 24/10/91

GAUDRON J: Which had the same shareholders, same directors,

same address and same names, although at different

times?

MR MARTIN: .,But, Your Honour, there is a legal proposition

involved thQre that when he is taking a step in,

for example, providing instructions to his

solicitors as to the defence which is to be filed,

that he is acting on behalf of both companies,

whereas we would say the corporate veil requires it

to be held that he was, in essence, only acting on

behalf of the company that had been sued with the

~ consequence that no estoppel - - -

GAUDRON J:  No, it is a question of whether the knowledge he

receives, being knowledge that proceedings have

been brought, is compartmentalized and because it

comes to him or perhaps because he treats it in one

capacity rather than another, one is therefore to

erect a notion that nothing ever came to the

knowledge of anyone of what you say is a separate

company.

MR MARTIN:  No, we do not go quite as far as that,

Your Honour. We say there are two aspects to any

argument based on estoppel and that there is

knowledge and conduct and it may be a conduct by

omission, but it is the second question where it is

characterizing his conduct in effectively taking no

action on behalf of the first company as giving

rise to an estoppel binding on the second company.

GAUDRON J: But taking no action on behalf of the second

company to warn. I mean, estoppel can be

constituted by a failure to warn where caution

requires a warning?

MR MARTIN:  Your Honour, that would require a finding, then

in a circumstance where a company which may have no

assets is being sued to the knowledge of another

company which thinks it ought to be sued, that the

other company has a duty to warn the plaintiff.

GAUDRON J: Absolutely. But, I mean, why would it not? If

you put that submission it really is, "We are
playing legal games for our own advantage", that is

the end result of that submission.

MR MARTIN:  We would respectfully characterize it as

perceiving it from a view of director's

responsibilities to the company of which he was a

director and in whose defence he was acting. We

would say those principles of the laws evolved in

the area of corporate groups where a director has
to say, "Well, I must at any given time identify

the company on whose behalf I am acting and I owe

my duty to that company alone", cannot be

Moulieux(2) 16 24/10/91

abrogated, simply because one is looking at it from

a different direction.

TOOHEY J: But those arguments would have more relevance if

the appeal was being argued in substance, but this

was an application for extension of time. The

Court of Appeal was entitled to take a fairly broad view of the matters, including the conduct of

Mr Preston, and to decide in all the circumstances an extension of time was not warranted.

MR MARTIN: With respect, we would say no, Your Honour, that

these are issues which the Court of Appeal should

have properly reserved for the hearing of the

appeal - - -

TOOHEY J:  You mean they should have considered only the

circumstances which led to the appeal being out of

time?

MR MARTIN: 

And if those circumstances were in the ordinary

course, not in what we say is the extraordinary
course of this case where there was no prejudice,
no substantive default, if they were in the
ordinary course then go on to consider only whether
there was an arguable case rather than, as they
have done, not apparently pay regard to these
extraordinary circumstances, and then go directly
into the merits of the case and then deny us our
appeal on the basis of a perception of those
merits. And that is, essentially, the issue which

we would wish to run if leave were granted, namely,

the proper approach to be taken by a court of

appeal in that circumstance.

Your Honours, those are our submissions.

MASON CJ: Yes, thank you, Mr Martin, the Court will take a

short adjournment to consider the course it will

take in tnis matter.

AT 3.14 PM SHORT ADJOURNMENT

UPON RESUMING AT 3.20 PM:

MASON CJ:  The Court need not trouble you, Mr Nicholas.

In the view of the Court, in the particular

and unusual circumstances of this case, it was well

open to Mr Justice Cole to come to the conclusion

that this was a misnomer case and, equally, it was

Moulieux(2) 17 24/10/91

open to the Court of Appeal to have regard to the

merits of the case on the application for an

extension of time.

We do not reaci. the joint judgment of

Mr Justice Priestley and Mr Justice Handley, when

it deals with estoppel, as saying any more than
that the conduct of the parties, including that of

the two Preston companies and their managing

director, Mr Preston, reinforced the view that this

was truly a case of misnomer. In the result, the

application for special leave to appeal is refused.

You do not oppose an order for costs,

Mr Martin?

MR MARTIN:	No, Your Honour.
MASON CJ:	The application is refused with costs.

AT 3.21 PM THE MATTER WAS ADJOURNED SINE DIE

Moulieux(2) 18 24/10/91