Newscope Investments Pty Ltd v Manera
[2006] WASC 220
NEWSCOPE INVESTMENTS PTY LTD -v- MANERA & ORS [2006] WASC 220
| SUPREME COURT OF WESTERN AUSTRALIA | Citation No: | [2006] WASC 220 | |
| Case No: | CIV:1594/2006 | 13 SEPTEMBER 2006 | |
| Coram: | McKECHNIE J | 29/09/06 | |
| 12 | Judgment Part: | 1 of 1 | |
| Result: | Caveat extended | ||
| B | |||
| PDF Version |
| Parties: | NEWSCOPE INVESTMENTS PTY LTD (ACN 111 913 538) PETER ALBERT MANERA ADRIANA LAURA MANERA REGISTRAR OF TITLES |
Catchwords: | Contract Misdescription in name of company Whether no contract Whether caveatable interest |
Legislation: | Transfer of Land Act 1893 (WA) |
Case References: | Black v Smallwood (1966) 117 CLR 52 Custom Credit Corporation Ltd v Ravi Nominees Pty Ltd (1992) 8 WAR 42 F Goldsmith (Sicklesmere) Ltd v Baxter [1970] Ch 85 Ford v Young (1882) 3 ALT 85 Kingstream Steel Ltd v Stemcor UK Ltd [2001] WASCA 138 Mander Pty Ltd v Clements [2005] WASCA 67; (2005) 30 WAR 46 National Education Advancement Programs (NEAP) Pty Ltd v Ashton (1995) 14 ACLC 30 Porter v McDonald [1984] WAR 271 Burns v Bayliss [2006] WASC 102 Expectation Pty Ltd v Pinnacle VRB Ltd [2002] WASCA 160 Halse v Embling, unreported; FCt SCt of WA; Library No 970734; 22 December 1997 Luna Park (NSW) Ltd v Tramways Advertising Pty Ltd (1938) 61 CLR 286 Phillips Fox (a firm) v West gold Resources NL [2000] WASCA 85 Samampow v Mercator Property Consultants Pty Ltd [2005] WASCA 64 SDS Corp Ltd v Pasdonnay Pty Ltd [2004] WASC 26 |
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
- IN CHAMBERS
- Plaintiff
AND
PETER ALBERT MANERA
ADRIANA LAURA MANERA
First Defendants
REGISTRAR OF TITLES
Second Defendant
Catchwords:
Contract - Misdescription in name of company - Whether no contract - Whether caveatable interest
Legislation:
Transfer of Land Act 1893 (WA)
(Page 2)
Result:
Caveat extended
Category: B
Representation:
Counsel:
Plaintiff : Mr J C Hammond
First Defendants : Ms C H Thompson
Second Defendant : No appearance
Solicitors:
Plaintiff : Hammond Worthington
First Defendants : Martella & Co
Second Defendant : No appearance
Case(s) referred to in judgment(s):
Black v Smallwood (1966) 117 CLR 52
Custom Credit Corporation Ltd v Ravi Nominees Pty Ltd (1992) 8 WAR 42
F Goldsmith (Sicklesmere) Ltd v Baxter [1970] Ch 85
Ford v Young (1882) 3 ALT 85
Kingstream Steel Ltd v Stemcor UK Ltd [2001] WASCA 138
Mander Pty Ltd v Clements [2005] WASCA 67; (2005) 30 WAR 46
National Education Advancement Programs (NEAP) Pty Ltd v Ashton (1995) 14 ACLC 30
Porter v McDonald [1984] WAR 271
Case(s) also cited:
Burns v Bayliss [2006] WASC 102
Expectation Pty Ltd v Pinnacle VRB Ltd [2002] WASCA 160
Halse v Embling, unreported; FCt SCt of WA; Library No 970734; 22 December 1997
Luna Park (NSW) Ltd v Tramways Advertising Pty Ltd (1938) 61 CLR 286
(Page 3)
Phillips Fox (a firm) v West gold Resources NL [2000] WASCA 85
Samampow v Mercator Property Consultants Pty Ltd [2005] WASCA 64
SDS Corp Ltd v Pasdonnay Pty Ltd [2004] WASC 26
(Page 4)
1 McKECHNIE J: This is an application to extend a caveat under the Transfer of Land Act 1893 (WA) s 138C if I am satisfied that the caveator's claim has, or may have, substance.
2 The principles to be applied are not in issue between the parties and are of course set out in Custom Credit Corporation Ltd v Ravi Nominees Pty Ltd (1992) 8 WAR 42. Counsel for the plaintiff also drew my attention to Porter v McDonald [1984] WAR 271 per Rowland J at 276:
"A caveat will not be removed unless the claim to an estate or interest in the land appears to be without foundation. The courts will not, except in the most exceptional case, decide the matter on summons."
Statement of the issues
3 In a contract for the purchase of land the buyer is described as Newscore Investments Pty Ltd ("Newscore"). The plaintiff asserts that this was a misdescription and that the buyer is in fact Newscope Investments Pty Ltd (ACN 111 913 538) ("Newscope"). The first defendants, who are the vendors, assert that there is no contract because at the time there was no party able to contract as buyer. The issue for decision is whether the claim that Newscope is the actual purchaser has or may have substance and that a caveatable interest can therefore be supported.
Outline of facts
4 The first defendants raise as an issue whether parol evidence can be led in circumstances where there is a fully comprehensive written contract, relying on a passage in Ford v Young (1882) 3 ALT 85. It is sufficient to say that I consider there is a serious question to be tried that the plaintiff can lead parol evidence in these circumstances, and I will therefore approach this application by taking account of the evidence put by the plaintiff.
5 The evidence is chiefly contained in the affidavit of Peter John Peard sworn 8 June 2006 and the affidavit of Nicholas Neil Macleod sworn 8 June 2006. From these affidavits it appears Newscope was registered on 23 November 2004. Its registered office was "Rasmussen & Co Suite 2 398 Great Eastern Highway Ascot WA 6104" and its principal place of business was "Shop 69 Sorrento Quay Southside Drive Hillarys WA 6025".
(Page 5)
6 The two directors were listed as Philip John Fitzgerald and Peter John Peard. Mr Fitzgerald resigned as a director on 6 April 2006.
7 Mr Peard wanted to buy 170 Elliot Road, Wanneroo, and a further block of land at 176 Elliot Road, Wanneroo. He advised Mr Macleod, the sales representative employed by Peard Fitzgerald who was handling the matter, that a recently acquired company would be the purchaser.
8 Mr Macleod prepared contracts based on the REIWA Contract for Sale of Land. The full name and address of the buyer was entered in handwriting as follows:
"NEWSCORE INVESTMENTS PTY LTD
c/- RASMUSSEN & CO
398 GREAT EASTERN HIGHWAY ASCOT 6104
AND OR NOMINEE"
9 Mr Macleod does not know whether he misspelt the plaintiff's name on the contracts for sale or whether Mr Peard incorrectly instructed him as to the spelling of the name. Mr Peard has the same difficulty. At all events, Mr Peard deposed that he intended to execute the contracts on behalf of the plaintiff.
10 On the printed form, it is stated "Buyer [If a corporation, then the Buyer executes this Contract pursuant to its Constitution.]". There follows an indecipherable signature which is repeated on annexure A to the first contract and on annexures A and C to the second contract. Annexure D to the second contract is a draft deed said to be made by Newscore. That name is repeated in the execution clause.
11 Clause 3 of Annexure A of the contract is a clause for the benefit of the purchaser. On 21 February 2005, a letter was sent by Mr Peard to the vendors waiving the benefit of the clause. The letter is signed:
"Yours sincerely
Signed P Peard
Newscore Investments Pty Ltd"
12 On 18 April 2005, the first defendants' solicitors wrote to Peard & Associates Pty Ltd. The plaintiff's solicitors responded on 22 April 2005.
13 The letters encapsulate the positions of the two parties which remain unchanged.
(Page 6)
14 To protect its position, the plaintiff lodged a caveat claiming an interest in the land as follows:
"A Contract for Sale of Land dated 20 December 2004 made between the registered proprietor as seller and the caveator as buyer".
15 An issue arose in the course of argument as to whether the contract was executed on 20 December 2004 in view of Mr Peard's initials to a price alteration dated 22 December 2004. For present purposes, nothing turns on this. Certainly the documents were executed by the first defendants on 20 December 2004.
16 The caveat was supported by a statutory declaration which reads in part:
"1. I am a director of Newscope Investments Pty Ltd (ACN 111 913 538).
2. Newscope Investments Pty Ltd was registered on 23 November 2005 with its registered office care of Rasmussen & Co, 398 Great Eastern Highway, Ascot, Western Australia.
3. I arranged for the company to be registered with the express purpose of entering into contracts to buy Lot 1 on Diagram 22835 being the whole of the land in Certificate of Title Volume 1362 Folio 179 ('Lot 1') and Lot 2 on Diagram 22835 being the whole of the land in Certificate of Title Volume 1813 Folio 180.
…
8. When signing the Contract on behalf of Newscope Investments Pty Ltd I assumed the description of the buyer correctly referred to the company and did not check its spelling. At all material times I intended to sign the Contract on behalf of Newscope Investments Pty Ltd.
9. Newscope Investments Pty Ltd claims an interest in the subject land as purchaser by virtue of the Contract."
17 There is an obvious difficulty. Anyone reading the statutory declaration would doubt whether there was a caveatable interest in view of par 2. While counsel explained the date 23 November 2005 as an
(Page 7)
- obvious error (it should have read 23 November 2004), the Registrar of Titles reading the statutory declaration and making decisions about it would be entitled to reach the conclusion that Newscope was not incorporated until nearly a year after the contract was completed.
18 The casual manner in which Mr Peard has approached the purchase of this land has caused the difficulty for the plaintiff. The name of the purchaser was wrong. The documents were not properly executed. The waiver letter was wrong. Even the statutory declaration was wrong. A sentence containing the words "misfortune" and "author" would not be amiss.
19 However, the undoubted negligence of the plaintiff's agents does not affect whatever may be the contractual position – at least in these limited proceedings.
The legal principles
20 I am conscious that I am not resolving the action, merely considering whether the caveator's claim has, or may have, substance.
21 Nobody suggests that Newscore could enter into a contract. It does not exist and therefore could never be a party. The plaintiff, however, contends that the word "Newscore" is a misdescription. If the correct word "Newscope" is inserted in its place there is a valid contract.
22 In support of its position, the plaintiff relies particularly on Kingstream Steel Ltd v Stemcor UK Ltd [2001] WASCA 138 and Mander Pty Ltd v Clements [2005] WASCA 67; (2005) 30 WAR 46.
23 Before turning to each of those authorities, I will consider the decision of Stamp J in F Goldsmith (Sicklesmere) Ltd v Baxter [1970] Ch 85. This authority was referred to in both Kingstream and Mander. The facts are similar to a degree to the present case.
24 In the contract the seller was described as Goldsmith Coaches (Sicklesmere) Ltd. The vendor company was misdescribed in a contract for the sale of land. The vendor had been in business for many years. When the defendant's solicitors made a search to see if any charge was registered against the vendor they were unable to trace any company in that name. Eventually the defendant refused to complete the contract on the view that there was no vendor and therefore no contract. Stamp J held:
(Page 8)
- "… there must be two parties to a contract for the sale of land, a vendor and a purchaser, and if there was in truth no such person as is stated to be the vendor in the memorandum of April 9, 1968, the conclusion that there was no contract appears to me inescapable. In my judgment the question: contract or no contract? depends on the answer to the question whether, applying permitted principles of construction, the vendor named and described in the memorandum can be found to be identical to the plaintiff company."
25 Stamp J then analysed what he described as the persona ficta said to be the vendor which had four characteristics which he compared with the plaintiff concluding:
"Applying this process, if it be permissible, I conclude beyond peradventure that Goldsmith Coaches (Sicklesmere) Ltd. is no more nor less than an inaccurate description of the plaintiff company, F. Goldsmith (Sicklesmere) Ltd."
26 Importantly, at 92, he said:
"In the absence of authority constraining me to do so – and none has been cited – I would find it impossible to hold that a company incorporated under the Companies Acts has no identity but by reference to its correct name, or that, unless an agent acts on its behalf by that name, or a name so nearly resembling it that it is obviously an error for that name, he acts for nobody. A limited company has, in my judgment, characteristics other than its name by reference to which it can be identified: for example, a particular business, a particular place or places where it carries on business, particular shareholders and particular directors. If there are two limited companies having the same characteristics, then it is hardly to be supposed that each of them was incorporated on the same day, and owns the same property. Moreover, to accept the submission advanced on behalf of the defendant, would be to introduce a source of great confusion and uncertainty in respect of business transactions. Would it not follow that a memorandum signed by an auctioneer on behalf of the vendor or the owner would fail to bind the owner or vendor who was in fact a limited company?"
(Page 9)
27 Concluding at 93:
"I should perhaps add this: the name of the company on behalf of which Mr. Brewster signed the memorandum was a matter of indifference to the defendant, provided only that the vendor could be identified with certainty. There was in my judgment no lack of the necessary consensus. It does not lie in the defendant's mouth to say that he paid cash under a contract with a non-existent person."
28 In Kingstream Steel Ltd v Stemcor UK Ltd the Master had refused to order summary judgment in favour of the defendant. The defendant appealed and the appeal was dismissed.
29 Stemcor's claim arose out of three guarantees which were ancillary to a contract for the supply of steel. In two of the guarantees there were misdescriptions of the defendant's name. After referring to Black v Smallwood (1966) 117 CLR 52, the Court continued:
"[17] That case can be readily distinguished from the present where the respondent sought and obtained a guarantee from an existing company but that company was misdescribed in the guarantee. The company referred to in subcl 4 of the contract did exist. All that happened was that when the first guarantee came to be prepared the word 'Co.' was mistakenly inserted into its name and, when the second guarantee came to be prepared, the word 'Steel' was mistakenly omitted from its name. That was, in each case, simply a misnomer made in circumstances in which it must have been plain to all who were concerned with the document that it was the applicant which was the guarantor there referred to. Even if there had been any doubt at all about that fact then this must have been laid to rest by the fact that the applicant was identified by its address, fax number and telephone number. In those circumstances it seems to us plainly to be arguable that the Court is, as a matter of construction, at liberty to correct the misnomer. (See Whittam v W J Daniel & Co Ltd [1962] 1 QB 271 at 277; F Goldsmith (Sicklesmere) Ltd v Baxter [1970] Ch 85 and Nittan (UK) Ltd v Solent Steel Fabrication Ltd (1981) 1 Lloyd's Rep 633.)"
(Page 10)
30 There are factual differences between the present case and Kingstream. The parties in Kingstream were already in a contractual relationship of which the guarantees formed an incident. The Court concluded that it must have been plain to all who the real guarantor was.
31 Mander Pty Ltd v Clements was a case concerned with rectification. At [92] McLure J held:
"The appellants rely on Kingstream Steel Ltd v Stemcor UK Ltd [2001] WASCA 138 and F Goldsmith (Sicklesmere) Ltd v Baxter [1970] 1 Ch 85 as well as objective indicators in the clause itself in support of the rectification claim. Where there are obvious errors or ambiguities in the terms of a contract, a court will construe the document to conform with the objectively determined contractual intent without (formal) rectification of the contract. Courts can insert, delete, alter or interpret words in such a fashion as to make the document sensible as a matter of construction (see Fitzgerald v Masters (1956) 95 CLR 420; Watson v Phipps (1985) 60 ALJR 1). This principle applies where there is a misnomer or misdescription in the name of a contractual party, which is what occurred in Kingstream Steel and F Goldsmith. In both cases it was apparent from the terms of the contracts (and any admissible evidence of surrounding circumstances) that the person named in the contract was intended to correspond with the person claiming to be the party in question. This is not a case of misnomer or misdescription. To the contrary, the evidence in support of rectification establishes that the parties intended to name Mr Gibbs."
32 As mentioned earlier, the first defendants rely upon Ford v Young. An agent signed a written agreement stating that he was the agent for David Young, the vendor. In fact, Alexander Young was his principal. The Chief Justice held:
"Here there is no evidence that Alexander Young ever did business under the name David, or did anything to make people, suppose his name to be David."
- The conclusion was that no contract had been made.
(Page 11)
Application of legal principles to the facts
33 To the facts as advanced by Mr Peard and Mr Macleod contained in the documents to which they have referred I now add further facts. The first-named first defendant swore an affidavit on behalf of both the defendants. Mr Manera deposes that he became aware that there was no company called Newscore on 24 February 2005 when he attended his solicitor. It was not until after Mr Macleod had supplied an ACN number that Mr Manera became aware on about 5 April 2005 that Newscore was not a registered company but Newscope was.
34 Mr Manera concludes that at no time was it disclosed to he or his wife that Mr Peard, or any real estate agency associated with him, had an interest in the transaction.
35 The circumstances outlined by Mr Peard, together with the affidavit of Mr Manera, make it clear that so far as the vendors were concerned they had never heard of Newscope. At all times they thought they were dealing with Newscore. Unlike the position in F Goldsmith, there was nothing that they could do to check. Goldsmith was the vendor of the land. It had been in business for many years and answered characteristics identical to the persona ficta. In the present case there are no such characteristics. In November and December 2004, there were two directors of Newscope which itself had been in existence only days before the offer to purchase the land was made. The registered office of Newscope was at a service address and the principal place of business is also the principal place of business of a real estate agency. The contract did not even purport to be executed by a company. It was merely signed by Mr Peard as buyer.
36 The requirement for companies to display their ACN number is to provide a secure form of identity. It enables purchasers in the position of the defendants to conduct enquiries, if they wish, before entering into a contract. They may decide they do not wish to deal with a company associated with a particular director because he is, for example, a real estate agent. Having said that, there is no evidence that Mr Manera made such enquiries prior to entering into the contract. The enquiries were made subsequently by his solicitor. Nevertheless, the principle is clear and provides a significant purpose for the display of an ACN number. A business contract involving the company should have on it the ACN number: National Education Advancement Programs (NEAP) Pty Ltd v Ashton (1995) 14 ACLC 30: Corporation Act s 153.
(Page 12)
37 In the light of Mr Manera's evidence it cannot even be said that the identity of the purchaser was a matter of indifference: cf Stamp J in F Goldsmith (op cit). Indeed, the identity of a purchaser may be a matter of considerable importance to a vendor, of more importance perhaps than the converse. While it might be accepted, as I do provisionally accept parol evidence on the point, that there was an error or misdescription, that error or misdescription continued through to the notice of waiver in February. It was a misdescription capable of being known only to the buyer, not the vendors.
38 There is considerable merit in the first defendant's contention that no contract was formed. However, applying the authority of F Goldsmith, I am satisfied there is a serious question to be tried that the plaintiff is indeed the purchaser and that the misdescription of the plaintiff's name does not defeat the contract.
39 As a result I will make orders extending the caveat provided that the plaintiff takes swift action to determine whether it has an interest in the properties.
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