Royal Automobile Association of South Australia Inc v Brian Polomka Pty Ltd T/A Berry Gilbert and Polomka
[1993] SASC 3899
•16 April 1993
COURT IN THE SUPREME COURT OF SOUTH AUSTRALIA PERRY J
CWDS
Practice - Pleadings - Appeal by defendant against order of Master striking out defence - appearance by the defendant had been filed 7 years ago stating "Enter an appearance in this action for John William Connell trading as John Connell and Associates" - until 1991 the litigation was conducted on the basis asserted in the appearance, which was repeated in other pleadings and documents filed by Connell - in 1991 the defendant filed an amended defence asserting that Connell did not conduct the business under that name and held the name in trust for a limited company since wound up - defence struck out by a Master - further amended defence filed asserting that the liguidated company carried on business under the business name and John William Connell was a director and secretary of the company - order of the Master striking out the further amended defence upheld - held that the defendant could not be permitted to file a defence in terms inconsistent with the appearance, particularly where it had been acted upon by the plaintiff to his detriment over a number of years - further held that in any event, the purported registration of a business name other than in the name of the person or entity actually carrying on the business would be unlawful, having regard to the relevant provisions of the Business Names Act. Business Names Act (1963) 55 5 and 7. Coopers Brewery Ltd v Panfida Foods Ltd (1992) 26 NSWLR 738, considered.
HRNG ADELAIDE, 4 December 1992 #DATE 16:4:1993
Counsel for the appellant: Mr M Beamond
Solicitors for the appellant: Mellor Olsson
Counsel for the respondent: Mr A I Fairbank
Solicitors for the respondent: Ross and Mccarthy
ORDER
Appeal dismissed.
JUDGE1 PERRY J In this action, the plaintiff sues a number of defendants whom it alleges were guilty of negligence which resulted in a subsidence of soil which in turn damaged the foundations of a building constructed by the plaintiff between 1978 and 1979 at Ridleyton. 2. The writ was issued on 14 October 1983. The action has not yet come to trial. The pleadings and other pre-trial steps have followed a tortuous and convoluted path which does little credit to the advisers of any of the parties. 3. The present appeal is brought by the second-named defendant, John William Connell, against an order made on 21 October 1992 by a Master, pursuant to which he ordered, inter alia, that paragraph 3 of the appellant's defence (described as the "further amended defence") be struck out. This was the second time that the Master had struck out the same paragraph of the appellant's defence. He first made an order striking it out on 28 August 1992. When an amended defence was subsequently filed on 4 September, embodying the same paragraph expressed in somewhat different terms, the plaintiff again successfully sought an order striking it out. 4. On the occasion of each of the orders, the learned Master gave written reasons for his decision. In the reasons he sets out the relevant history of the matter, which I will repeat only to the extent necessary to render these reasons intelligible. 5. In the writ, the second-named defendant was "John Connell and Associates" and the third defendant was "John Connell Holdings Pty Ltd trading as John Connell and Associates". By an appearance dated 25 July 1984 (document no 2) Mouldens, who described themselves as solicitors for "John Connell and Associates" entered an appearance "for the abovenamed defendant John Connell and Associates of 168 Melbourne Street, North Adelaide in the State of South Australia". 6. Subsequently, on 4 December 1984 Mouldens applied on behalf of John Connell and Associates to file an amended appearance "in accordance with Order 48A Rule 5" of the Rules as they then stood (see affidavit, document 8). 7. Order 48A r 5 provided in part:
"(1) Where persons are sued as partners in the name of
their firm, they shall appear individually in their own
names: but all subsequent proceedings shall nonetheless
continue in the name of the firm.
(2) ........." 8. On 18 December 1984, an order was made by Master Lunn as he then was, in the following terms: "Leave to the defendants John Connell and Associates to file a fresh appearance complying with Order 48A Rule 5 in lieu of that filed on 25.7.84." 9. It is not clear what instructions led to the application to file a fresh appearance, as it is established by evidence to which I will refer, that Mr Connell was at the relevant time the sole proprietor of the business name "John Connell and Associates". Although the plaintiff may not have known that at the time when the action was brought against the business name only, it was, therefore, not a case where "persons are sued as partners in the name of their firm". Accordingly, one might question whether Order 48A 5 had any application at all. Be that as it may, having obtained the order to which I have referred, an amended appearance was filed on 13 May 1986. There is no explanation from the file as to why such an extraordinarily long delay occurred, although it is consistent with the inexplicably slow pace at which this litigation has been conducted. 10. The fresh appearance read: "ENTER AN APPEARANCE in this action for JOHN WILLIAM CONNELL trading as JOHN CONNELL and ASSOCIATES of 168 Melbourne Street North Adelaide in the State of South Australia." 11. The appearance itself is a somewhat confusing document as it is signed by a Mr Twydale on behalf of Mouldens as "solicitors for John Connell Holdings Pty Ltd trading as John Connell and Associates", which description is also used at the foot of the document and on the backsheet. In my opinion, despite that irregularity, Master Bowen-Pain in his reasons of 21 October 1992 is correct when he observed(5):
"Strictly speaking, the appearance filed on 13 May, 1986
did not acknowledge that Mouldens were the solicitors
for John William Connell. However, I think that it was
clearly intended that they were. It was certainly
accepted by the plaintiff's solicitors that Mouldens
would be solicitors for John William Connell and/or John
Connell and Associates." 12. On 20 October 1990 in the defence filed by Mouldens on behalf of the second defendant (document 22) appears the following (paragraph 3): "The second defendant admits that it carried on business in 1974 within the State of South Australia as a consulting engineer under the name John Connell and Associates." 13. When in July 1987 the plaintiff delivered a notice to the solicitors for the second-named defendant pursuant to Rule 36.03 requiring the delivery of a list "setting out the names and addresses of all persons "who were or are partners in the second-named defendant" between 1 January 1974 and the date of delivering of the list, Ross McCarthy and Nosworthy, who by then must have been acting for the second defendant, wrote a letter which in part read: "In response to your notice pursuant to Rule 36.03, we are instructed that between the 1st day of January, 1974 and 29th day of September 1976 (at which latter date the business ceased trading). The partner was John William Connell, 531 The Boulevard East Ivanhoe Victoria 3079." 14. A few days after that letter, Ross McCarthy and Nosworthy filed a notice of acting for the defendant John Connell and Associates, in lieu of Mouldens. Subsequently, on the application of the plaintiff, an order was made by a Master, which provided in part:
"2. That the plaintiff be at liberty to amend the
proceedings herein by altering the name of the defendant
John Connell and Associates to John William Connell and
to make all consequential amendments to the Statement of
Claim". 15. On the date that order was made, that is, 26 November 1987, the plaintiff discontinued the action against John Connell Holdings Pty Ltd trading as John Connell and Associates. The writ was amended to substitute the words "John William Connell" for references to "John Connell and Associates", and a similar amendment was made to the Statement of Claim, as to which the allegation in paragraph 3 became: "The second defendant John William Connell carried on business in 1974 within the said State as a consulting engineer under the name John Connell and Associates." 16. Other steps were taken in the action, including the filing of answers to interrogatories by John William Connell. As the Master points out, there is no suggestion in the answers to interrogatories that the second defendant was not properly identified with John Connell and Associates. A later version of the Statement of Claim filed on 1 November 1990 went one stage further, and simply pleaded (in paragraph 3) that the "second defendant John William Connell carried on business in 1974 within the said State as a consulting engineer". The previous reference to "John Connell and Associates" was deleted. 17. On 18 April 1991 the second-named defendant filed a further defence which read, as to paragraph 3, as follows:
"The second defendant denies each of the allegations contained in
paragraph 3 of the amended Statement of Claim as if the same were
set out herein and specifically traversed. The second defendant
says that Winara Pty Ltd carried on business in 1974 within the
State of South Australia as a consulting engineer under the
business name 'John Connell and Associates'. The second named
defendant further says that in 1974 he was a director and an
employee of Winara Pty Ltd and held the business name 'John
Connell and Associates' as trustee for Winara Pty Ltd." 18. The contents of that paragraph of the further defence convey an assertion made for the first time by the second defendant that he was not the proprietor of the business name "John Connell and Associates", and that he did not carry on business under that name. 19. On 20 January 1992 the plaintiff issued an application which, together with the consequences of it, are best described in the reasons of the Master(11):
"On 20th January, 1992, the plaintiff issued an application
seeking to strike out the defence of the second defendant, or,
alternatively, a more explicit defence in relation to the
allegation that the second defendant held the business name on
trust for Winara Pty Ltd. It was that matter which was argued
before me and in relation to which I delivered my reasons on 28th
August, 1992. I stated in those reasons: 'It seems to me, that
most of the pleading in paragraph 3 of the second defendant's
defence is irrelevant, in so far as it deals with the
proprietorship of the business name "John Connell and Associates".
I consider therefore, that paragraph 3 of the second defendant's
defence should be struck out, but that the second defendant should
have leave to plead to paragraph 3 of the amended statement of
claim as it now stands. I therefore order:-
1. Paragraph 3 of the second defendant's defence is struck out.
2. Leave to the second defendant to file a further amended
defence which properly pleads to paragraph 3 of the amended
statement of claim within 7 days.'
On 4th September, 1992, the second named defendant filed a further
amended defence, which reads inter alia:- 'The second named
defendant denies each of the allegations contained in paragraph 3
of the amended Statement of Claim as if the same were set out
herein and specifically traversed. The second named defendant
says that Winara carried on business in 1974 within the State of
South Australia as a consulting engineer under the business name
"John Connell and Associates". The second named defendant says
that in 1974 he was a director and employee of Winara Pty Ltd'." 20. At a hearing conducted on 17 September 1992, the plaintiff sought a further order striking out the second defendant's defence. While there was no written application, an application appears to have been made orally. The application was described by the Master as follows: "The plaintiff seeks to strike out the second-named defendant's defence on the basis that the amendment does not comply with my order of 28 August 1992, and further that the defendant now seeks to deny something which was previously admitted." 21. The learned Master went on to deal with the matter as follows:
"I propose to deal with this matter on the basis of the second
submission, because in reviewing the matter for the present
application, it seems to me that my examination of the background,
in my reasons of 28th August, was not in sufficient depth.
Although the current defence relates to the amended statement of
claim, filed on 1st November 1990, it must be considered in the
light of the previous pleadings and actions taken in respect
thereof. The plaintiff initially joined John Connell and
Associates as a defendant. As a result of procedural steps, in
accordance with the rules as they have been from time to time, the
plaintiff was told that John Connell and Associates was, at the
relevant time a business name owned and operated by John William
Connell. Mr Fairbank argued that that information was not
provided by John William Connell, or by solicitors instructed by
him. Mr Fairbank submitted that Mouldens were not instructed by
John William Connell, but by other interests. That may be so, but
the response to the Rule 36.03 notice was provided by the current
solicitors for the second defendant. Furthermore, Mr Fairbank,
himself, has perpetuated the understanding by his affidavit of 6th
June, 1989 to which I have referred. The answers to
interrogatories further perpetuate that understanding. In the
light of this material, the plaintiff is justified in pursuing
John William Connell. Connell cannot now change the assertions
which he has previously made. To do so would prejudice the
plaintiff's position. The second named defendant cannot now set
up the structure, which he purports to plead in the second and
third sentences of paragraph 3 of the further amended defence. I
therefore strike out paragraph 3 of the further amended defence.
I accordingly order:-
1. Paragraph 3 of the further amended defence is struck out.
2. The second defendant to pay the plaintiff's costs of the
application and order.
3. This matter is already fixed to return on the AFD on 20th
November, 1992 at 9.00 am." 22. It is against that order that the present appeal is brought. The first ground argued by Mr Fairbank, who appeared for the appellant, the second-named defendant, is that there was no proper application before the Master to strike out paragraph 3 of the defence. As I have said, there does not appear to be a written application, but clearly the Master entertained an oral application, as he was entitled to do, heard argument and then ruled on it. 23. The suggestion that there was no proper application before the Master must fail. 24. The next point argued by Mr Fairbank is that no appeal having been brought from the first order made by the Master on 28 August 1992, the matter was not able to be re-argued before the Master on 17 September. That point entirely overlooks the fact that the subject of the argument on 17 September was a different paragraph 3 of a different defence filed on a subsequent date. The plaintiff was entitled to argue that it should be struck out on similar grounds. 25. The next argument put by Mr Fairbank is best summarised by quoting ground 3 of the Notice of Appeal: "The learned Judge erred in the finding that the second-named defendant, John William Connell, '(sought) to deny something that was previously admitted' (by him) (page 12), whereas he should have found that the second named defendant had not sought to deny anything which had been previously admitted by him....." 26. That ground is then particularised over some two pages. It is unnecessary to set out the particulars in these reasons. It is sufficient to observe that, in my opinion, the ground is simply not made out, although I might perhaps reason towards the conclusion reached by the Master by a slightly different route. 27. In my opinion, although there may have been some confusion in the description of the solicitors for John William Connell, he is bound by the terms of the appearance filed on 13 May 1986, which specifically stated: "Enter an appearance in this action for John William Connell trading as John Connell and Associates ..." 28. That appearance has been on the file ever since and the litigation has been conducted on the basis of the assertion in that appearance. Although an appearance is not a pleading, the assertion contained in it must be given effect to. In particular, it is not open to John William Connell to file a defence which conflicts with the assertion in the appearance. A party cannot be allowed to blow hot and cold, particularly in circumstances when other parties have altered their position upon the basis of an assertion which finds expression in the appearance. 29. It is true that an appearance may be withdrawn with the leave of the Court, or the Court may, in the interests of justice, allow a party to withdraw an admission made formally for the purposes of the proceedings (see Coopers Brewery Ltd v Panfida Foods Ltd (1992) 26 NSWLR 738). But having regard to the history of these proceedings, and the long period of time over which the plaintiff was induced to believe and act to his detriment upon an admission that John William Connell traded as John Connell and Associates, to permit a withdrawal of the appearance (which in any event has not been sought) or to allow the second defendant to resile from the assertion contained in it, or to make an assertion which negatives or contradicts it, would be contrary to the interests of justice and could not possibly be entertained. 30. There is a further matter. Exhibit "B" to an affidavit of Edward Robert Harvey sworn on 21 January 1992 filed by the solicitors for the plaintiff, gives an account of a search conducted at the office of the Corporate Affairs Commission of the business name file for John Connell and Associates. The search established that John William Connell was the proprietor of the business name from its inception on 23 December 1958 until the business name ceased on 29 September 1976. The exhibit further confirms that Winara Pty Ltd was not incorporated in South Australia until December 1981, and that the company, after a change of name, was liquidated and became defunct in September 1984. 31. S.5 of the Business Names Act 1963 provides:
"(1) A person shall not either alone or together with other
persons carry on business in the State under a business name
unless -
(a) .....
(b) The business name is registered or deemed to be registered
under this Act in relation to that person and each other person if
any in association with whom that person is so carrying on
business...." 32. The fact that the business name must be registered by the person carrying on the business, which is clearly implicit in s.5(2), is reinforced by the terms of s.7(1) which provides that an application for the registration of a business name: "...shall be made by lodging with the Registrar a statement in the prescribed form which shall be signed by the person or persons carrying on or proposing to carry on business in the State under that name..." 33. The purpose and effect of the provisions of the Business Names Act to which I have referred is to ensure that members of the public transacting with a business carried on under a business name may ascertain by searching the name who it is who is carrying on the business, and with whom they are, therefore, contracting. It is contrary to the Business Names Act, and therefore illegal, for a person to register a business name when he is not carrying on the business, but in fact holds the name as trustee for another entity which is carrying on the business. 34. The appeal must be dismissed. It should be made clear to the second defendant that for the reasons which I have given he has put himself in the position where he is unable to file a defence which denies that he was carrying on business in this State at the relevant time in the name "John Connell and Associates", or conflicts with any such assertion by suggesting that the business was conducted in that name by another entity. 35. In dismissing the appeal, I would at the same time direct that the second defendant, if it is so advised, file a further amended defence complying with the conclusions which I have reached within five days of today. 36. It remains only to say that there is no reason apparent to me from the file why this action should not have been brought to trial some years ago. It should now be brought to trial without further delay. I will see to it that the case is given the earliest possible date before a Master for any further pre-trial procedures to be attended to, so that the matter can be entered for trial. 37. The respondent, that is, the second defendant, will pay to the plaintiff the costs of and incidental to the appeal in any event.
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