Petkov v Alinta 2000 Limited - [2012] WADC 40

JURISDICTION : DISTRICT COURT OF WESTERN AUSTRALIA
IN CHAMBERS

LOCATION: PERTH

CITATION: PETKOV -v- ALINTA 2000 LIMITED [2012] WADC 40

CORAM: KEEN DCJ

HEARD: 27 JANUARY 2012

DELIVERED : 22 MARCH 2012

FILE NO/S: CIV 864 of 2007

BETWEEN: PETER PETKOV
First plaintiff
LEITA-MAE PETKOV
Second plaintiff
AND
ALINTA 2000 LIMITED
Defendant

Catchwords:

Procedure - Order 21 r 5 Rules of the Supreme Court 1971 - Leave to amend the writ and statement of claim to substitute a new party - Whether mistake was misleading or such as to cause reasonable doubt as to the identity of the party intended to be sued

Legislation:

Nil

Result:

Application granted

Representation:

Counsel:

First plaintiff                :     Mr G T Stubbs
Second plaintiff            :     Mr G T Stubbs
Defendant:     Mr G R Hancy

Solicitors:

First plaintiff                :     Dwyer Durack
Second plaintiff            :     Dwyer Durack
Defendant:     DLA Piper Australia

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

Bridge Shipping Pty Ltd v Grand Shipping SA (1991) 173 CLR 231
Carter v Connell [2009] WASC 245
Evans Constructions Co Ltd v Charrington & Co Ltd [1983] QB 810

KEEN DCJ: The plaintiffs' action is one for damages for both physical injuries and damage to property arising out of a gas explosion at the property of the first named plaintiff at 15B Hillview Road, Mount Lawley on 16 July 2001.

Background

According to the statement of claim, on 16 July 2001 the second plaintiff detected a strong smell of gas in the front yard of the property. She telephoned the gas authority (to use a neutral term) to advise of the smell. Further telephone calls were made to the gas authority during the course of the afternoon and evening.
At about 8.00 pm on that day gas leaked into the property and an explosion occurred due to operation of an electrical switch or equipment.
As a result it is said that both the plaintiffs suffered injuries, economic loss and loss and damage to the property.

The proceedings

On 4 June 2007 the plaintiffs issued a writ against Alinta 2000 Limited claiming damages arising out of the incident.
By a summons filed 13 July 2011 the plaintiffs sought leave to amend the name of the defendant.
The proposed amended statement of claim and writ now seeks to name Alinta Sales Pty Ltd (Alinta Sales) as the defendant.

The gas authority

On 1 January 2000 Alinta Gas Ltd (ACN 087 857 001) was registered.
This company changed its name to Alinta Ltd on 4 May 2002.
On 25 October 2006 it further changed its name to become Alinta 2000 Limited. On 22 September 2008 its name was once again changed to become Westnet Infrastructure Group Limited.
During the course of its evolution as noted above, the gas authority was a public company limited by shares, at times listed and at other times unlisted. Throughout this evolution, despite the changes of name, the company remained the same company with its same identifying ACN.
On 27 January 2000 Alinta Gas Networks Pty Ltd (ACN 089 531 975) (Alinta Networks) was incorporated. On the same day Alinta Sales Pty Ltd (ACN 089 531 984) was also incorporated.
Both Alinta Networks and Alinta Sales are wholly‑owned subsidiaries of Alinta Gas Ltd as it has evolved.
Under the Gas Corporation (Business Disposal) Act1999 (Gas Corporation Act) Alinta 2000 was divested of its distribution, sales, business assets and liabilities in favour of Alinta Sales and Alinta Networks. The Act provided for an approved form of consumer contract with customers.

The defendant

From the above chronology it can readily be seen that at the date of the incident, that is 16 July 2001, the present defendant, Alinta 2000 Limited was not the entity that was involved in the distribution, sale and maintenance of the gas supply to the property and the plaintiffs were not customers of that entity. Those entities were in fact Alinta Sales and Alinta Networks. The transfer of the assets and liabilities to those two corporate entities took place with effect from 1 July 2000 by reason of the Gas Corporation Act. So much appears to be common ground.

Post‑incident events

By its defence dated 30 July 2010 the defendant set out the evolution of the gas authority as noted above and also the transfers to Alinta Networks and Alinta Sales.
It denied that the plaintiffs were a customer of the defendant. It is further denied that there was any agreement between the plaintiffs and the defendant and the existence of a duty of care.
In the defence the defendant admits that on 16 July 2001 Alinta Networks or its contractor or a person under its instruction or control was contacted by a member of the Petkov family. It admits the reporting of the smell of gas in the vicinity of the premises and that Alinta Networks or its contractor or a person under the instruction or control of Alinta Networks informed a representative of the family that a Priority 5 Status with a 48‑hour response time had been allocated to the complaint.
The defence also admits that subsequently on that day Alinta Networks or its contractor or a person under the instruction or control of Alinta Networks was again contacted by a member of the family and that at about 8.00 pm a member of the family reported smelling gas within the dwelling situated at the premises and that the family was informed that a person would attend the premises within an hour.
By letter dated 26 June 2009 solicitors for the gas authority brought all these historical matters relating to the names of the companies and the transfer of assets and liabilities to the attention of the plaintiffs' then solicitor. In that letter the defendant's solicitors pointed out that the plaintiffs appeared to have sued the wrong entity. They notified the plaintiffs' solicitor that any application for leave to amend the writ would be opposed.
Prior to that position being reached, between 21 June 2007 and 26 June 2009, there was correspondence between the two firms of solicitors. The defendant's solicitors invited an informal without prejudice conference to discuss the matter and sought in the meantime an extension of time within which to file a defence. It appears from correspondence that there were telephone conversations agreeing to an informal conference and the deferral of a defence. The plaintiffs' solicitors were obtaining further medical reports and by 29 June 2007 the defendant's solicitors were agreeable to postponing the proposed informal conference pending further medical evidence and other documentation relating to the plaintiffs' losses. On 16 August 2007 the defendant's solicitors wrote again to the plaintiffs' solicitors asking when they anticipated being in a position to provide further documentation in relation to the loss and injury. A similar letter was sent on 19 November 2007. On 11 March 2008 and 23 June 2008 the defendant's solicitors wrote to the plaintiffs' solicitors again confirming that the defendant need not file a defence until after the contemplated informal conference.
On 4 May 2011 the plaintiffs instructed their current solicitors to act on their behalf in place of their previous solicitor.

The legal framework

It is common ground that the Limitation Act1935 applies to the cause of action in the plaintiffs' writ. That cause of action arose on 16 July 2001. The limitation period ran until 15 July 2007 for the commencement of an action for damages founded on breach of contract or tort (s 38(1) Limitation Act1935). Accordingly, the writ having been issued on 4 May 2007 was within time against the current defendant but would be out of time as against the proposed defendant, Alinta Sales.
The plaintiffs seek to rely on O 21 r 5 Rules of the Supreme Court1971 which relevantly provides:
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.
(4)…
(5)An amendment may be allowed under subrule (2) notwithstanding that the effect of the amendment will be to add or substitute a new cause of action if the new cause of action arises out of the same facts or substantially the same facts as a cause of action in respect of which relief has already been claimed in the action by the party applying for leave to make the amendment.
As Le Miere J noted in Carter v Connell [2009] WASC 245 [19]:
Order 21 r 5(1) of the Rules of the Supreme Court 1971 (WA) provides that, subject to certain other rules, the court 'may at any stage of the proceedings allow the plaintiff to amend his writ'. Rule 5(2) provides that where an application for leave to make the amendment mentioned in [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 if it thinks it just to do so.
Le Miere J at [25] went on to note that before the court will grant leave to the plaintiff to correct the name of the defendant the court had to 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.

Plaintiffs' submissions

The plaintiffs' case is that by reason of the Gas Corporation Act customers of the gas authority were moved to the new entity Alinta Sales. At the date of the events the subject of the proceedings, Alinta 2000 was not the owner, operator, controller or manager of the items which caused the accident nor was it a party to a contract with either plaintiff. Accordingly, the plaintiffs were not customers of Alinta 2000 at the material time and there was no contract into which to imply duty of care terms on which the action partly relies.
The plaintiffs rely upon the approved form of contract for the supply of gas by Alinta Sales under the Gas Corporation Act. It is said that that contract points to a responsibility on the part of Alinta Sales for the meter.
The plaintiffs rely upon O 21 r 5(3). There is no issue between the parties that the mistake sought to be corrected was other than a genuine mistake. That is put by the plaintiffs as a mistake in relation to the naming of the entity which was involved in providing the services at the property.
The real issue in this case is whether or not the mistake was misleading or such as to cause any reasonable doubt as to the identity of the party intended to be sued.
The plaintiffs argue that it has been clear from the outset and from the correspondence between the parties who that party is and that party is Alinta Sales. It is said that it is clear that the issue was about the explosion from the gas meter at the premises.
It is further argued that it would be just to grant leave under O 21 otherwise the plaintiffs' cause of action will be lost by reason of the provisions of the Limitation Act.
In the context of giving a descriptor of the entity to be sued, in oral argument, the plaintiffs argued that it is the entity that supplies the gas and who is contractually responsible for the meter.

Defendant's submissions

Counsel for the defendant identified the key issue as whether or not the mistake was not misleading or such as to cause any reasonable doubt as to the identity of the party intended to be sued. The court must be satisfied on both bases; in other words, the disjunctive 'or' becomes conjunctive.
The defence position is that if one analyses the writ and statement of claim for the features of the entity said to be responsible there is no clear descriptor that identifies that entity as Alinta Sales. Such an analysis demonstrates that there was an apprehension that there was a company, an entity, that had complete responsibility for everything. However, in 2000, the functions were split as indicated earlier.
Counsel argued that that shows that there never was an entity at the time when the writ was issued of the kind contemplated in the writ and statement of claim. It is said that this is not the kind of mistake contemplated by the rules were a person meant to sue company 'X' because that company satisfied the particular description of all the features that have been identified.
It is said that the plaintiffs sought to pursue the operator of the infrastructure not the party with whom one or other of the plaintiffs had a contract. The intention was to sue an entity that the plaintiffs believed had the responsibility for everything but no such entity existed.
Further, on the issue of reasonable doubt it is said that the entity that the plaintiffs were contemplating was partly a seller and partly an operator, in other words a combination of the two. It is argued that it is not possible therefore for there to be simply a change of name because the one defendant became two (although the plaintiffs are now limiting that to one, Alinta Sales) and therefore there must be some reasonable doubt as to who the plaintiffs did intend to sue.
The defence also relies upon the allegations in the statement of claim which it is said provide a clue to who was intended to be sued. There is a reference to the business of selling and supplying gas and installing and maintaining gas connections to customers. There is a further reference to the first plaintiff being a customer. There is a reference to the defendant having a faults and emergency line which was contacted. Further, there is a reference in the pleadings to the defendant's gas main line and copper riser connecting to the meter box. It is said in respect of the entity with the emergency line and that equipment that that would not appear to be Alinta Sales.
The defence also argues that the approved form of contract does not necessarily fix Alinta Sales with the responsibility for the meter. The defence points to provisions in the contract which demonstrate that the distribution network is owned and operated by Alinta Networks, a separate company.
It is argued that the standard terms and conditions are in respect of the sale of gas at the supply address through a network. The sales are by Alinta Sales and the network is operated by Alinta Networks. The contract merely provides for Alinta Sales to be responsible for selling the gas not the network. The plaintiffs' case is a complaint about the operator of the network not the seller of the gas.

Findings

In Carter, Le Miere J canvassed the history and scope of O 21 r 5. He referred to Bridge Shipping Pty Ltdv Grand Shipping SA (1991) 173 CLR 231. In that case McHugh J traced the history of similar rules and in particular O 25 r 5 of the English Supreme Court Rules which appears to be identical to our O 21 r 5. His Honour went on to consider Evans Constructions Co Ltd v Charrington & Co Ltd [1983] QB 810 in which the plaintiff had made an error in respect of the name of his landlord and sought to correct that error. Donaldson LJ accepted that it was the intention of the solicitor for Evans to sue the relevant landlord. His Lordship found that to be a genuine mistake of character within the rule. He said:
In applying Ord 20, r 5(3) it is, in my judgement, important to bear in mind that there is a real distinction between suing A in the mistaken belief that A is the party who is responsible for the matters complained of and seeking to sue B, but mistakenly describing on naming him as A, and thereby ending up suing A instead of B. The rule is designed to correct the latter and not the former category of mistake. Which category is involved in any particular case depends upon the intentions of the person making the mistake and they have to be determined on the evidence in the light of all the surrounding circumstances.
In the same case, Waller LJ said:
In the present case there was no mistake as to the name. Mr Greenwood, Evans' solicitor, in his affidavit frankly stated he thought Charrington's was the landlord. The mistake here was not a mistake as to name; it was a mistake as to identity.
In dealing with the corresponding rule in Victoria, McHugh J was of the opinion that Evans was correctly decided. He noted that the rule is a remedial rule and should be given a beneficial interpretation. He went on to say:
It is proper to give it the widest interpretation which its language will permit. It should be interpreted to cover not only cases of misnomer, clerical error and misdescription but also cases where the plaintiff, intending to sue a person he or she identifies by a particular description, was mistaken as to the name of the person who answers that description.
As I have noted, in this case, there is no dispute that the mistake as to the name of the correct party was genuine. The real issue is whether that genuine mistake was not misleading or such as to cause any reasonable doubt as to the identity of the party intended to be sued.
In the indorsement of claim on the writ the plaintiffs attribute the loss and damage sustained to the gas meter connected to their home leaking gas as a result of which an explosion occurred. It is alleged that that occurred due to negligence and/or breach of contract and/or breach of statutory duty. The statement of claim identified and described the then defendant as 'carries on the business of selling and supplying gas and installing and maintaining gas connections to its customers …'. The statement of claim goes on to allege that the first plaintiff was a customer of the defendant for the provision of gas supply which was connected through a gas meter at the property.
Paragraph 5 of the statement of claim sets up an alleged express or implied contract between the first plaintiff and defendant and/or that the defendant owed the plaintiffs a duty of care. That involved the installation of safe plant and equipment for the provision of gas supply to the property and to keep it maintained it at all times; to implement and enforce a system to respond promptly and effectively to emergency calls for gas leaks; and to provide safety information to the plaintiff to prevent injury and damage in the event of a gas leak at the property.
The pleading then goes on to describe the reports and complaints made in relation to the gas leak. Reference is made to telephoning the defendant's faults and emergency line.
It can therefore be seen from that analysis of the writ and statement of claim that the plaintiffs' claim focused on the gas meter and was directed to an entity which provided gas through the meter in the course of the business of selling and supplying gas and installing and maintaining gas connections.
That is the description of the entity that the plaintiffs have identified. As was noted by counsel in argument, it is the entity that supplies the gas and that entity is also responsible for the meter. In other words, as originally framed, the action was aimed at an entity which had a dual function.
The plaintiffs rely upon the approved contract under the Gas Corporation Act to demonstrate that Alinta Sales also fits that descriptor, that is to say has that dual function of selling and supplying gas and having responsibility for the equipment.

The approved contract relevantly provides:
11.Networks equipment and your equipment
Everything before (upstream of) the point where gas leaves the meter is network equipment. We will inspect and look after network equipment.
Everything after (downstream of) the point where gas leaves the meter is your equipment. You must inspect and look after your equipment. You must keep your equipment in good working order and condition. You must not let any other than a certified gas installer work on your equipment.
The words shown in italics are defined in cl 31 and relevantly include:
'meter' means the equipment we have installed (or will install) at the supply address to measure the volume of gas you use (in the contract, the word 'meter' includes the short lengths of gas pipe which protrude from the meter);
'network equipment' means the meter and any pipes, pressure regulators or other equipment used to transport, measure or control gas for delivery to you, before (upstream of) the point where gas leaves the meter;
'we' and 'us' means Alinta Gas Sales Pty Ltd CAN 089 531 984 … and includes our employees, subcontractors, agents and successes in title.
In answer to the defendant's argument that the contract merely provides for Alinta Sales to be responsible for selling the gas not for the network, it is relevant to look at other clauses in the contract.
Clause 2 of the contract provides for Alinta Sales to sell gas to the customer which may be limited by the size of the meter. It provides that Alinta Sales can arrange for a larger meter to be installed.
The contract provided, at cl 3.5, for Alinta Sales to carry out meter testing. Clause 4 provides for the eventuality of the meter inaccurately measuring the volume of gas used and for Alinta Sales to change the meter. In the event of the meter being inaccurate Alinta Sales may replace the meter or repair it.
Clause 7 of the contract makes provision for circumstances where a customer does not pay his or her bill when Alinta Sales may turn off the gas supply. At cl 18, in answer to a question 'who turns off your gas', it is provided that Alinta Sales does not operate the gas distribution network. It is owned and operated by Alinta Networks, a separate company. It is further provided that where the clause speaks of us turning off the gas it will often be the operator of the gas distribution network that will do so. Clause 29 provides that Alinta Sales does not operate the gas distribution network which is owned and operated by Alinta Networks. The clause goes on to provide:
Where the contract speaks of us doing something (such as turning off your gas supply, or having access to the supply address, or inspecting, looking after or reading the meter), it will often be the operator of the gas distribution network that does so.
When that happens, it is because we have asked (or allowed) the operator of the gas distribution network to do so in our place.
We will try to make sure that our contract with the operator of the gas distribution network obliges the operator to do any things that these terms and conditions oblige us to do, but which in fact can only be done by the operator. (For example we promise in these terms and conditions that if we have turned off your gas due to work on the network, we will turn your gas on as soon as possible, but in fact this depends on how quickly the operator completes the work).
Provision is made for events beyond the control of Alinta Sales. Clause 16 is in terms:
Because we don't operate the gas distribution network (clause 29 explains this further), one of the things which can happen beyond our control is that the operator of that network doesn't transport gas. We will use our contract with that operator to try to make sure that this does not happen
Reverting to cl 18, provision is made for planned maintenance. It is provided:
We can turn off your gas when it is necessary for work on the gas distribution network.
Finally, cl 19 provides for the removal or disconnection of the meter:
Whenever we turn off your gas, we can remove the meter or physically disconnect the meter. We can remove or physically disconnect the meter at the same time that we turn off your gas, or at a later time.
It can readily be seen from the provisions of the contract that whilst the contract (cl 1) is a contract for Alinta Sales to sell to the customer gas at the supply address, it also makes provision for the manner of supply and for the recording of the volume of supply and ancillary requirements relating to the gas supply network. The meter is an integral part of that. It is the means by which Alinta Sales can record the volume of gas used by the customer and to restrict the supply of gas for non‑payment. The meter being an integral part of the supply service, the contract provides for Alinta Sales to test, repair or replace the meter. Provision is also made for inspection and to 'look after' network equipment.
In order for Alinta Sales to operate within that framework, relative to the meter, it reserves unto itself those rights. However the contract is at pains to point out that the gas distribution network is owned and operated by Alinta Networks. By definition network equipment includes the meter.
It seems self‑evident that in order to fulfil its contract of supply Alinta Sales must have a functional point of delivery and recording of the volume of gas passing to a property. That is the meter. It is also self‑evident that in order to fulfil its contract of supply Alinta Sales must ensure that that equipment is properly maintained. That is evidenced by the provisions for meter testing in cl 4. If the meter is found to be accurate than the customer must pay the cost of having the meter tested. Conversely, if the meter is found to be inaccurate, then no such fee is payable and Alinta Sales then has the option to repair or replace the meter. It would have to do one or other of those things in order to fulfil its contract of supply.
On that basis, I am of the view, that Alinta Sales does retain a responsibility for the proper working order of the meter notwithstanding the division of the assets of Alinta 2000 pursuant to the provisions of the Gas Corporation Act. In my view it matters not that Alinta Networks, or indeed any other person, whether under the terms of the contract or otherwise, may also carry out inspections, maintenance or indeed reading of the meter as part of the network equipment.
Further, in written submissions the defendant asserts that the plaintiffs in their statement of claim assert ownership of the equipment to the defendant. That is not the case. Whilst a reference is made in the statement of claim to 'the defendant's gas main line and copper riser connecting to the meter box', that is not a positive assertion of ownership. It can be seen as a general way of describing the equipment through which the supply of gas is made by the defendant. Accordingly, in my view, even though that equipment might now belong to Alinta Networks, and formerly to Alinta 2000, that does not weaken the plaintiffs' case.
The descriptor given to the defendant in the writ and statement of claim was in respect of an entity that carried on the business of selling and supplying gas and installing and maintaining gas connections to customers. That is done through the medium of a gas meter. I am satisfied on an analysis of the contract that Alinta Sales fits the descriptor of all the features that have been identified save for the installation of the gas connection and meter. There is no evidence before me as to the responsibilities of this aspect and it is reasonable to infer that it is something that would have been done by or been the responsibility of Alinta Networks.
Without going into detail of the correspondence that passed between the plaintiffs' solicitors and the defendant's solicitors, it seems to me that there was no misunderstanding about the nature of the plaintiffs' claim and description of the entity that would be liable. Alinta 2000 was informed of the nature of the claim, the date of the explosion and the names of the potential plaintiffs at the latest two weeks after the incident. It was able to make certain admissions in the defence as to the cause of the explosion and as to the phone contact between the plaintiffs and the operator responding to the emergency calls. There is no basis upon which to suggest that the defendant in this case was confused or misled by the error in the name.
The mistake in this matter was one that falls within the description given by Donaldson LJ as one which the rule was designed to correct. One can readily infer that the plaintiffs sued Alinta 2000 in the mistaken belief that, at the time, it was the entity responsible for both the supply of gas and maintaining that supply to the house.
It seems to me that the mistake was a genuine mistake made by the plaintiffs as to the name in which proceedings were to be commenced and was not misleading or such as to cause any reasonable doubt as to the identity of the party intended to be sued. The devolution of gas supply through the corporate structures that have been put in place was well known to the defendant and it was also well aware of the circumstances which gave rise to the claim. In my view no reasonable person in the position of Alinta Sales would have been in any doubt that the plaintiffs' intention was to sue the entity that supplied the gas and had a responsibility for the meter through which and by which it was supplied.
On that analysis the defendant's argument that the one defendant, Alinta 2000, became two entities but that the plaintiffs are now only suing one, Alinta Sales, falls away.
Further, in my opinion, the fact that the plaintiffs may have contacted the defaults and emergency line which may have been operated by Alinta Networks does not weaken the position. It does not assist to identify the descriptor of the entity to be sued. The entity to be sued is that which supplies the gas and the means by which it is supplied. It is not affected by there being another entity which may receive complaints about faults in order to carry out repairs even though under the contract Alinta Sales reserved unto itself the right to carry out repairs.
The final issue that needs to be determined before the amendment is allowed is whether or not it is just to allow the amendment. This was not in issue. It is common ground that if the amendment is refused the plaintiffs will be deprived of their action against the supplier of the gas. There does not appear to be any relevant prejudice to the proposed defendant.

Conclusion

In the circumstances the plaintiffs should have leave to amend the writ by correcting the name of the defendant to read Alinta Sales Pty Ltd (ACN 089 531 984).
I will hear the parties as to the form of order to be made, ancillary orders and costs.