Court of Appeal Supreme Court New South Wales Medium Neutral Citation: Marlin Brands Australia Ltd v Brando Aus Holdco Pty Ltd [2022] NSWCA 59 Hearing dates: 11 February 2022 Decision date: 12 April 2022 Before: Meagher JA at [1]; Leeming JA at [2]; Brereton JA at [51]. Decision: Summons seeking leave to appeal dismissed, with costs. Catchwords: APPEAL – interlocutory decision – joinder of additional defendants back-dated to commencement of proceedings – challenge to decision to back-date joinder – consequent upon potential contractual limitation defence – where outcome of appeal would not prevent trial – variety of ways in which issue might not arise – absence of full argument on construction of defence and underlying power – where point available to be taken as of right after trial, if it were material to any judgment – leave refused Legislation Cited: Civil Procedure Act 2005 (NSW), ss 64, 65 Uniform Civil Procedure Rules 2005, r 6.24, 6.28, 51.14(1)(b) Cases Cited: Brando Aus Holdco Pty Ltd v Gary Shayne as Representative for the Persons Identified in Schedule 1 [2021] NSWSC 998 Bridge Shipping Pty Ltd v Grand Shipping SA (1991) 173 CLR 231; [1991] HCA 45 Brown v Jammal [1995] NSWCA 62 Captiv8 Pty Ltd v Bodger [2018] FCA 1801 Gerlach v Clifton Bricks Pty Ltd (2002) 209 CLR 478; [2002] HCA 22 Howard v National Bank of New Zealand Ltd (2002) 121 FCR 366; [2002] FCA 1257 Lloyd Steel Co (Aust) Pty Ltd v Jade Shipping SA (1985) 1 NSWLR 212 McInnes v Wingecarribee Shire Council (1987) 10 NSWLR 660 Michael Wilson & Partners Ltd v Nicholls (2011) 244 CLR 427; [2011] HCA 48 Minister for Immigration and Multicultural and Indigenous Affairs v Nystrom (2006) 228 CLR 566; [2006] HCA 50 Tomsimmat & Associates Pty Limited v G&R Investments Pty Ltd (1993) 25 IPR 545 Category: Principal judgment Parties: Marlin Brands Australia Ltd (Applicant) Brando Aus Holdco Pty Ltd (First Respondent) Gregory Norman Sean Kerr (Second Respondent) Bradley Peter Lancken (Third Respondent) Johannes Petrus Daffue (Handre Daffue) (Fourth Respondent) Representation: Counsel: D McLure SC, G O'Mahoney (Applicant) JAC Potts SC, BA Ng (First Respondent) Solicitors: Johnson Winter & Slattery (Applicant, Third to Fourth Respondents) Clayton Utz (First Respondent) Corrs Chambers Westgarth (Second Respondent) File Number(s): 2021/00256723 Publication restriction: Nil Decision under appeal Court or tribunal: Supreme Court of New South Wales Jurisdiction: Equity Division, Commercial List Citation: [2021] NSWSC 998 Date of Decision: 10 August 2021 Before: Rees J File Number(s): 2021/95750 [Note: The Uniform Civil Procedure Rules 2005 provide (Rule 36.11) that unless the Court otherwise orders, a judgment or order is taken to be entered when it is recorded in the Court's computerised court record system. Setting aside and variation of judgments or orders is dealt with by Rules 36.15, 36.16, 36.17 and 36.18. Parties should in particular note the time limit of fourteen days in Rule 36.16.] Judgment 1. MEAGHER JA: I agree with Leeming JA. 2. LEEMING JA: The applicant, Marlin Brands Australia Ltd (MBA), seeks leave to appeal from one aspect of an interlocutory decision joining it and another 70 companies and natural persons as defendants to proceedings pending in the Commercial List. No complaint is made as to the joinder per se. The point is much more narrow. MBA disputes the timing of its joinder. The order made joining it provided for the amendment "to have effect from the commencement of these proceedings". MBA does not dispute that, if there was power to do so, it was open to the primary judge to back-date the effect of the amendment from 10 August 2021 (when the order was made) to 7 April 2021 (when the proceedings were commenced). But MBA denies that there was power to back-date the order, in light of what it maintains to be a contractual provision giving it a limitation defence in answer to some of the causes of action prosecuted by the plaintiff. 3. An abbreviated summary of the background will suffice for present purposes. 4. By Share Sale Agreement dated 13 March 2019, the first respondent, Brando Aus Holdco Pty Ltd (Brando), acquired all of the shares in Marlin Management Services Ltd from 71 shareholders. The 71 shareholders are identified in Schedule 1 of the Share Sale Agreement and are defined as the "Sellers". Many are located outside Australia. The applicant MBA is, by far, the largest seller, having previously owned 88.4% of the issued shares. The consideration for the acquisition was some $200 million. 5. The Sellers gave various warranties and indemnities under the Share Sale Agreement. Brando alleges that those warranties were breached and that it is entitled to be indemnified for the loss it suffered. 6. The first defendant to the proceedings, Mr Gary Shayne, was not a Seller, but was appointed by the Share Sale Agreement as "Sellers' Representative". 7. The Share Sale Agreement also made provision for the limitation of liability. Clause 9.3 provided that no Seller had any liability in respect of a claim under the Share Sale Agreement unless a notice had been given to the Sellers' Representative setting out details of the claim no later than 24 months after (relevantly) completion. There is no dispute that that occurred within time. Further, cl 9.3 provided that a claim in respect of which notice had been given would survive until, relevantly: "the date that is 12 months after the date the Claim Notice is received unless the Buyer has issued or served legal proceedings against the Sellers in respect of the Claim." 1. Brando's Claim Notice was dated 9 April 2020, well within the 24 month period, and made plain that it claimed substantial loss ("of at least $91.6m to $135.5m") for which the Sellers were liable. The Claim Notice stated: "For the avoidance of doubt, the Buyer intends to pursue all available remedies under the Agreement, at general law and under legislation (including the Corporations Act and Australian Consumer Law) against the Sellers and directors and officers within the Group." 1. Over the ensuing 12 months there followed an exchange of correspondence between solicitors acting for Brando and solicitors who confirmed that they acted for MBA and Mr Shayne. 2. Brando commenced proceedings before the expiration of the 12 month period after the service of a Notice, but only just. Its Commercial List Summons and Commercial List Statement were filed on 7 April 2021. Those documents joined as the first defendant "Gary Shayne as representative of the persons identified in Schedule 1". Schedule 1 identified the 71 sellers by name. The second, third and fourth defendants were three men who were directors or officers of MBA. They seem to have played no part in the litigation to date and played no active role in this Court. 3. The Commercial List Summons sought by way of interlocutory relief: "1. An order pursuant to ss 56, 57, and 58 of the Civil Procedure Act 2005 (NSW) that Gary Shayne be appointed to represent the persons identified in Schedule 1 to this Commercial List Summons (Sellers). 2. An order that Gary Shayne give to each of the Sellers: a. notice in writing of this proceeding; b. a copy of this Commercial List Summons and the Commercial List Statement; c. a copy of any orders made by the Court. 3. An order granting leave to apply to any Seller who wishes to be separately joined as a party to the proceeding." 1. The final relief sought was "judgment for the plaintiff an amount to be determined [sic]", together with damages at common law and under statute, interest and costs. 2. The Share Sale Agreement dealt with the authority of the Sellers' Representative in cl 14.2. Clause 14.2(g) provided that the Sellers' Representative had no liability in respect of any obligations of a Seller under this document, other than if the Sellers' Representative were guilty of fraud, and cl 14.2(h) granted an indemnity by each Seller to the Sellers' Representative. Clause 14.2(e) provided that the Sellers authorised the Sellers' Representative to "give and receive notices and service of process" and added that "the giving of notice to or service of process on the Sellers' Representative will conclusively be deemed to be notice given to or service of process upon each Seller". Clause 14.2(e)(iv) provided that the Seller was provided with authority to "represent the Sellers with respect to any Claim". "Claim" was in turn defined as including any "proceeding". 3. Clause 20 of the Share Sale Agreement dealt with "Notices and service of process". Notice was defined to include "demand, certification, process or other communication". An address was given for delivery of Notices to the Sellers' Representative and cl 20.6 provided: "Any process or other document relating to litigation, administrative or arbitral proceedings in relation to this document may be served by any method contemplated by this clause 20 or in accordance with any applicable Law." 1. There is no dispute that the originating process was served upon the Sellers' Representative in accordance with the terms of the Share Sale Agreement within the time provided by cl 9.3. There is no dispute that had proceedings been commenced naming the Sellers as first to seventy-first defendants, with service being effected on the Sellers' Representative in accordance with cl 20, that would have been effective to commence proceedings against each of those individual sellers, for UCPR r 10.6 provides – reflecting what had been held at general law (see Howard v National Bank of New Zealand Ltd (2002) 121 FCR 366; [2002] FCA 1257 at [5]-[6]) – that personal service of originating process may be effected in accordance with an agreement binding the defendant. 2. However, it was common ground that Brando did not join the 71 Sellers as individual defendants. That is so notwithstanding that the Commercial List Statement is not entirely consistent in describing the parties joined as defendants, for it identifies the "Parties" as not only Brando, Mr Shayne and the second, third and fourth defendants, but also each of the Sellers identified in Schedule 1, saying that each was "represented in this proceeding by Mr Gary Shayne". Indeed, Schedule 1 commenced with the words "Parties for whom Gary Shayne has authority to act as the nominated Sellers Representative" before listing the 71 Sellers. But the proposition that the Sellers are parties is inconsistent with the enumeration of four defendants, and with the interlocutory relief envisaged in the document, and indeed actually sought by Brando. Instead, Brando chose to sue Mr Shayne alleging that it did so in his representative capacity on behalf of the Sellers, and sought immediately after commencing proceedings a representative order to confirm that. As mentioned during the hearing in this Court, the approach resembles that taken in a representative proceeding, where persons are bound albeit they are not individually joined as parties. 3. One final point needs to be noted about the allegations of breach of warranty and their relationship with the limitation provisions in the Share Sale Agreement. The Commercial List Statement alleged breaches of warranty by the Sellers, and went further to allege that, in each case, Brando's claim arose out of or was increased "as a result of fraud, wilful default or wilful concealment of the Sellers, their Representatives (other than any professional advisers) or Affiliates". Substantial particulars were given (by saying that I am not intending to express a view one way or the other as to their sufficiency) which on their face squarely engaged with the obligation to give full particulars of allegations of fraud. 4. Significantly for present purposes, cl 9.12 of the Share Sale Agreement qualified the time for making claims prescribed by cl 9.3. Clause 9.12(a) provided that none of the limitations in the clause applied to any Claim: "to the extent that it arises out of, or is increased as a result of any fraud, wilful default or wilful concealment by any Seller, or any of their Representatives (other than any professional advisers) or Affiliates." 1. Brando's claim was not merely for fraudulent breach of contract. It also made allegations of misleading and deceptive conduct contrary to the Corporations Act 2001 (Cth) and the ASIC Act 2001 (Cth). The applicants advanced, with appropriate tentativeness, the possibility that the time limitation in cl 9.3 might apply to the statutory claims. It is not necessary to express any concluded view on that proposition, but Mr McLure's rapid acceptance that it was not his best point was, in my view, appropriate. It is difficult to see how the parties' bargain can detract from an entitlement to sue for damages under federal statute within three years. 2. As contemplated in the Commercial List Summons, Brando filed a notice of motion at the commencement of proceedings seeking an order nunc pro tunc that Mr Shayne be appointed to represent the persons in Schedule 1, or alternatively "pursuant to ss 64 and 65 the [sic] Civil Procedure Act 2005 (NSW), or alternatively Uniform Civil Procedure Rules 2005 (NSW) r 6.24, grant leave to the plaintiff to amend the Summons filed on 7 April 2021 to join each of the Sellers as the fifth to seventy-fifth defendants". 3. The matter came before the primary judge on 16 June 2021, and no issue was taken with the large majority of her Honour's reasons in a substantial judgment delivered on 10 August 2021: Brando Aus Holdco Pty Ltd v Gary Shayne as Representative for the Persons Identified in Schedule 1 [2021] NSWSC 998. Her Honour declined to make a representative order, but acceded to the application to join each of the Sellers as a named individual defendant. Only the section of her Honour's judgment at [67]-[94] under the heading "Effective date of joinder" is the subject of the present application for leave to appeal. 4. There is no doubt that power to amend an originating process after the expiry of a limitation period, but with effect from the commencement of the proceedings, is conferred by s 65 of the Civil Procedure Act and in particular s 65(2)(b). I shall return below to whether s 65 is the sole source of power for back-dating such an amendment. Section 65 provides: 65 Amendment of originating process after expiry of limitation period (cf SCR Part 20, rule 4; DCR Part 17, rule 4) (1) This section applies to any proceedings commenced before the expiration of any relevant limitation period for the commencement of the proceedings. (2) At any time after the expiration of the relevant limitation period, the plaintiff in any such proceedings may, with the leave of the court under section 64 (1) (b), amend the originating process so as— (a) to enable the plaintiff to maintain the proceedings in a capacity in which he or she has, since the proceedings were commenced, become entitled to bring and maintain the proceedings, or (b) to correct a mistake in the name of a party to the proceedings, whether or not the effect of the amendment is to substitute a new party, being a mistake that, in the court's opinion, is neither misleading nor such as to cause reasonable doubt as to the identity of the person intended to be made a party, or (c) to add or substitute a new cause of action, together with a claim for relief on the new cause of action, being a new cause of action that, in the court's opinion, arises from the same (or substantially the same) facts as those giving rise to an existing cause of action and claim for relief set out in the originating process. (3) Unless the court otherwise orders, an amendment made under this section is taken to have had effect as from the date on which the proceedings were commenced. (4) This section does not limit the powers of the court under section 64. (5) This section has effect despite anything to the contrary in the Limitation Act 1969. (6) In this section, originating process, in relation to any proceedings, includes any pleading subsequently filed in the proceedings. 1. It has been held that the reference to a "relevant limitation period" in a similar provision in the rules contained in a schedule to the Supreme Court Act 1970 (NSW) included a limitation period which is contractual rather than statutory: Lloyd Steel Co (Aust) Pty Ltd v Jade Shipping SA (1985) 1 NSWLR 212 at 213-214, and argument has proceeded on the basis of the correctness of that construction. 2. The primary judge recorded that provisions of this nature were to be liberally construed, in accordance with McHugh J's statement in Bridge Shipping Pty Ltd v Grand Shipping SA (1991) 173 CLR 231 at 260-261; [1991] HCA 45 concerning a Victorian rule directed to the same end that: "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." 1. Her Honour identified that s 65(2)(b) had two components, namely the subjective component focusing on the nature of the mistake, and an objective component focusing on how the mistake would have been perceived by those familiar with the issues sought to be agitated. In the present case, attention was focussed upon the former, reflecting the fact that the Sellers were under no misapprehension as to Brando's intended claim against them, and indeed Her Honour observed at [87] that the defendants accepted that Brando intended to sue the Sellers. The only proposed ground of appeal is whether there was error in finding that Brando had made "a mistake in the name of a party to the proceedings" within the meaning of s 65(2)(b). Implicit in that formulation is the proposition that there was only power to back-date the joinder if s 65(2)(b) were satisfied. 2. Reflecting the voluminous authorities on which both sides relied, the primary judge dealt at some length with authorities bearing upon s 65(2)(b) and cognate provisions, in order to address MBA's submission that Brando's mistake was one to which s 65(2)(b) did not apply. MBA characterised the mistake as being in respect of Mr Shayne's authority to represent the Sellers in legal proceedings, as opposed to the name of a defendant. It had said that from the outset, in its Claims Notice, and the Commercial List Statement made a series of allegations against the Sellers, and none against the Sellers' Representative, Mr Shayne. 3. The dispositive portion of her Honours' reasons was at [90]-[91]: "The real issue is whether the mistake was of the kind which may be cured by section 65(2)(b) of the Civil Procedure Act, bearing in mind that the provision is a remedial rule to be given a beneficial interpretation. The mistake which may be gleaned from the Commercial List Summons and Commercial List Statement is that, by reason of Mr Shayne's appointment as the Sellers' Representative under the Share Sale Agreement and, in particular, clause 14.2(e)(iv), the appropriate procedure was to join Mr Shayne as first defendant and, as the Commercial List Statement explained: Consistently with his status under the Agreement as the representative of all Sellers, he is joined to these proceedings with the intent that Brando will immediately seek an order that he be appointed a representative defendant for all Sellers for the purpose of these proceedings. That is, the mistake was as to practice and procedure rather than any liability which Mr Shayne was thought to have for and on behalf of the Sellers. The pleadings did not suggest that the Sellers' Representative was himself liable or that Brando had legal rights against him. Brando's intention was to have the Court appoint Mr Shayne as a representative of the Sellers. Mr Shayne was thought to be a suitable person – presumably having regard to the legislation and case law including Burwood v Ralan – but he was not. The position is similar to McInnes v Wingecarribee: Brando had a mistaken belief as to the identity of the person against whom the action against the Sellers could be brought." 1. Having found that power existed to back-date the joinder of the Sellers, her Honour regarded this as a clear case for the exercise of the power. Her Honour stated at [93]: "Where Brando's claim was known to the Sellers' Representative by the Claims Notice within the times stipulated by the Share Sale Agreement; where the Sellers have since been notified of the Claim, so far as the Sellers' Representative has been able, by providing a copy of the Claims Notice; where the mistake was of a procedural nature and reasonably obvious; and where the mistake has been addressed soon after commencement of these proceedings, justice requires that the Sellers be joined from the date of commencement of these proceedings." 1. As noted above, no challenge was made to that assessment as to the appropriateness of the exercise of the power. In this Court, the contention was advanced that the power was unavailable. 2. Thus the narrow issue sought to be agitated in this Court by MBA may be stated simply: was there, in the circumstances which obtained on 10 August 2021, power to backdate the joinder of the 71 Sellers to the time the proceedings were commenced some four months earlier. 3. The applicant MBA was not party to the proceedings at first instance. No objection was made to its bringing an application for leave to appeal. Plainly, it was directly affected by the orders made by the primary judge. 4. Shortly after MBA's summons seeking leave was filed, the President directed pursuant to UCPR r 51.14(1)(b) that there be a concurrent hearing of the application for leave to appeal and the appeal itself, a course favoured by MBA but opposed by Brando. Nonetheless, both the oral and written submissions clearly distinguished the considerations telling in favour or against a grant of leave, and the merits of the appeal in the event there were a grant of leave. 5. MBA argued, and its arguments were not without force, that the order made went beyond the limits identified by the earlier authorities on s 65(2)(b) and its antecedents. That reflects the facts that the mistake related to the formulation of proceedings which were intended to be representative proceedings, and s 65(2)(b) is couched in terms of parties to ordinary civil litigation, and does not in terms speak to the position of persons who are bound by a judgment because a representative order has been made (or because the proceedings are brought under Part 10 of the Civil Procedure Act 2005 (NSW)). Further, "mistake" is a protean word, and the same mistake may commonly be characterised in a variety of ways. 6. Notwithstanding that the existence of the power to back-date the joinder is a pure question of law, I would nonetheless refuse leave. 7. First, as was at the forefront of Brando's submission opposing the grant of leave, nothing this Court will do will affect the fact that each of the 71 Sellers is a defendant to proceedings in the Commercial List. Nothing this Court will do will affect the need to plead to, and if disputed, adduce evidence and for the Court to resolve, the issues of breach of warranty. That is because even if the joinder of the Sellers should date from August 2021 rather than April 2021, Brando alleges fraud with the result that the contractual limitation period in cl 9.3 is inapplicable, and likewise the statutory claims will have to be pleaded to, and if disputed, be addressed by evidence and ultimately resolved by the Court. 8. It may be, as the Sellers have contended in their solicitors' correspondence to date, that they will wholly succeed in the litigation. If so, the issue of the timing of the joinder of the Sellers is wholly otiose. 9. It may also be that the Sellers are liable in one or more of the causes of action. If the plaintiffs' allegations of fraud or wilful concealment are made out, then, once again, nothing will turn upon the timing of the Sellers' joinder. 10. Secondly, let it be assumed that Brando fails in its case based on fraud but succeeds in its claim based on the contractual warranties. Even then it is far from clear that cl 9.3 will have any effect. The first issue will be whether that clause is effective to limit the contractual liability of the Sellers. That involves a threshold question whether what occurred on 7 April 2021 amounted to Brando issuing or serving "legal proceedings against the Sellers in respect of the Claim". Unquestionably legal proceedings in respect of the Claim were commenced within time. True it is that the Sellers were not joined as defendants until August. Nonetheless, all of them were named in the schedule to the Commercial List Statement and they were the subject of allegations of breach of contract and breach of statute, for which Brando had commenced proceedings. There could be no doubt upon receipt of the Commercial List Summons and Commercial List Statement that Brando was seeking to recover many millions of dollars of damages from the Sellers. It is at least reasonably arguable that the proceedings which were commenced answer the description of "proceedings against the Sellers in respect of the Claim" within the meaning of cl 9.3, based both on the ordinary meaning of the words and their purpose. 11. It is not necessary for the purposes of exercising the discretion to refuse leave to express any concluded view about the construction of cl 9.3, and indeed MBA signalled it might in due course seek to adduce evidence bearing upon its construction (a point to which I shall return). But if when the proper construction of cl 9.3 is determined it turns out that the commencement of proceedings individually naming and making allegations against the Sellers satisfies the clause, then it will follow that the issue sought to be raised on appeal will be utterly moot, and a waste of the parties' time and money. 12. Thirdly, refusing to grant leave on this interlocutory point at this stage in no way shuts out MBA from vindicating its contention that the primary judge erred in concluding there was power to backdate its joinder. To the contrary, this is a case where in the event that the litigation proceeds to trial and judgment in one of the permutations in which the timing of the joinder of the Sellers matters becomes significant, then the decision of the primary judge will be an interlocutory decision which will directly bear upon the ultimate outcome, and thus the Sellers will have an appeal as of right on that point: Gerlach v Clifton Bricks Pty Ltd (2002) 209 CLR 478; [2002] HCA 22 at [6]-[8]; Michael Wilson & Partners Ltd v Nicholls (2011) 244 CLR 427; [2011] HCA 48 at [78]. Brando properly acknowledged as much. It is overwhelmingly likely that if that eventuality materialises, there will be other grounds of appeal or cross appeal or notices of contention which the parties wish to agitate in this Court. 13. Against the foregoing, it may be thought that this Court having enjoyed full argument on the point (in a hearing which occupied some 3 hours and appears to have been considerably longer than that at first instance) the point should be resolved and, to that extent, the dispute between the parties narrowed. Not uncommonly there is force in considerations of that nature. However, there are two further matters which tell against taking that course. 14. The first concerns the position taken by MBA in relation to the construction of cl 9.3. MBA simultaneously advances two inconsistent propositions. On the one hand, MBA maintains that cl 9.3 is a limitation period which engages s 65(2)(b). This is necessary to its argument, for otherwise s 65 is not engaged at all. On the other hand, MBA insists that it is inappropriate to determine at this stage the proper construction of the clause, and reserves the right to adduce evidence which bears upon its construction. 15. Those propositions cannot be reconciled, once it is borne in mind that MBA contends that there is no power to back-date the joinder. A premise of MBA's submission is that cl 9.3 does in fact impose a limitation period which means that only if s 65(2)(b) is satisfied is there power to back-date the joinder. I do not consider that it is open to MBA on the one hand to deny power to back-date the joinder to outflank a limitation defence but on the other hand to resist a final determination of the construction of the limitation defence. The matters outlined above disclose that it is far from clear beyond argument that cl 9.3 applies. To be fair, it seems to have been common ground until the hearing in this Court that cl 9.3 was a "relevant limitation period", and thus there was no occasion for the inconsistent stance to have been exposed at an earlier stage. 16. The second is that although the parties provided helpful submissions on the authorities on the provision and its counterparts in other jurisdictions and in previous versions of the rules, the starting point is, as Mr Potts SC emphasised immediately after dealing with leave, the new statutory regime accompanying the enactment of the Civil Procedure Act, including, notably, ss 56-58. Those provisions are expressly picked up by s 64, and s 65(4), to which no attention seems to have been given prior to the hearing in this Court (notwithstanding that s 64 was identified in Brando's motion as a basis for a nunc pro tunc order), expressly provides that the powers conferred by s 64 are not limited by s 65. 17. Let it be assumed that MBA is correct and the unusual circumstances presented in this litigation do not fall within s 65(2)(b). That without more is insufficient to conclude that the Supreme Court lacked power to order that the Sellers' joinder had effect from 7 April 2021. The broad power in s 64 is expressly not limited by s 65. Section 64 provides as follows: 64 Amendment of documents generally (cf SCR Part 20, rules 1 and 4; DCR Part 17, rules 1 and 4) (1) At any stage of proceedings, the court may order— (a) that any document in the proceedings be amended, or (b) that leave be granted to a party to amend any document in the proceedings. (2) Subject to section 58, all necessary amendments are to be made for the purpose of determining the real questions raised by or otherwise depending on the proceedings, correcting any defect or error in the proceedings and avoiding multiplicity of proceedings. (3) An order under this section may be made even if the amendment would have the effect of adding or substituting a cause of action that has arisen after the commencement of the proceedings but, in that case, the date of commencement of the proceedings, in relation to that cause of action, is, subject to section 65, taken to be the date on which the amendment is made. (4) If there has been a mistake in the name of a party, this section applies to the person intended to be made a party as if he or she were a party. (5) This section does not apply to the amendment of a judgment, order or certificate. 1. It will be seen that s 64(2) confers a power, but in terms that all necessary amendments are to be made, thereby involving a measure of obligation. Further, that subsection is more broadly worded than s 65(2)(b). The question posed by s 64(2) is whether the purpose of an amendment is "correcting any defect or error in the proceedings and avoiding multiplicity of proceedings". It seems strongly arguable, to say the least, that there was a defect or error in the proceedings in the form commenced on 7 April 2021 answering the description in s 64(2). 2. Section 64(3) makes express provision where there is the addition or substitution of a new cause of action, and in that case explicit provision is made for the date on which the amendment is made. It will be seen that s 64(3) is not directed to parties, rather it is directed to causes of action. Mistakes in the name of the party are the subject of s 64(4), and that provision is unaccompanied by a provision stating what the date of the amendment is to be. 3. That is not an end to the matter. When this point was raised during the hearing, Mr McLure did not submit that a notice of contention was required (reflecting an acceptance that MBA if it were to succeed had to establish an absence of power). However, he did maintain that this was a case where s 64 would not be construed so as to avoid the specific constraints in s 65(2)(b). That is not without force. This Court has not heard full submissions on the point. The reference to "generally" in the heading to s 64 might be thought to support the construction. On the other hand, it is difficult to reconcile with s 65(4), and it would be necessary to conclude that there is a single power to grant an amendment, rather than two separate powers in ss 64 and 65: see Minister for Immigration and Multicultural and Indigenous Affairs v Nystrom (2006) 228 CLR 566; [2006] HCA 50 at [59]. Sections 64(3) and 65(3) each refer to orders made "under this section" suggesting that there are separate powers. 4. The matter may be tested this way. Here, the Buyer and the 71 Sellers have long been in dispute arising out of their Share Sale Agreement. It is perfectly plain that the Sellers understood after the serving of the Claims Notice that Brando intended to sue them personally. It is perfectly clear that after the service of the Commercial List Summons and Commercial List Statement, they knew that proceedings had been commenced in the Commercial List making allegations against them and seeking to hold them liable for loss caused to Brando. Not lightly would I conclude that there was no power, in a case where all considerations pointed to a nunc pro tunc order, to make one. 5. If I were of the view that this Court had heard full submissions on the unstated premises of MBA's application for leave, I would favour granting leave and resolving the point, even though it is quite likely that the point will never arise. However, because MBA is not shut out from raising the point in this Court when and if it turns out not to be entirely moot, because MBA resists a final determination of the construction of the limitation defence at this stage and because full submissions on the operation of s 64 have not been received, I propose that leave to appeal be refused. There is no reason for costs not to follow the event. 6. BRERETON JA: On 7 April 2021, the first respondent Brando Aus Holdco Pty Ltd ("Brando") commenced these proceedings, relevantly against, as first defendant, "Gary Shayne as representative of the persons identified in Schedule 1". Schedule 1 listed by name the 71 former shareholders ("the Sellers") in Marlin Management Services Limited ("MMS"), who by a share sale agreement made on 13 March 2019 ("the Agreement") had agreed to sell to Brando as purchaser all of the shares in MMS for $200 million. Brando's summons claimed damages on contractual and statutory causes of action, and for fraud, arising out of the Agreement. On 10 August 2021, Rees J in the Equity Division, Commercial List, made an order, expressly pursuant to s 65(2)(b) of the Civil Procedure Act 2005 (NSW) ("CPA") that each of the Sellers, including the applicant Marlin Brands Australia ("MBA"), be joined as defendants, such amendment to have effect from the commencement of the proceedings on 7 April 2021. [1] MBA seeks leave to appeal, but only from so much of the order as backdates the joinder to the date on which the proceedings were commenced. This matters because a contractual limitation period which potentially bars the contractual causes of action – but not the causes of action in fraud, and at least arguably not the statutory causes of action – expired on 9 April 2021 – two days after the summons was filed, but four months before the Sellers were joined. Background 1. A more extensive account of the background may be found in the judgment of Leeming JA, which I have had the benefit of reading in draft. The Agreement defined the "Sellers' Representative" as Gary Shayne. Mr Shayne was a director of MBA, which was by far the predominant Seller (holding some 88% of the shares in MMS), but he was not himself a Seller. The Agreement included a number of Sellers' warranties. [2] Clause 9 provided that no Seller had any liability in respect of any claim under the Agreement in respect of a breach of warranty unless Brando had given the Sellers' Representative a "Claim Notice" no later than 24 months after completion, in which event the claim survived until 12 months after the Claim Notice was received, unless Brando had by then issued or served legal proceedings against the Sellers in respect of the Claim. However, by Clause 9.12(a), that limitation does not apply to a claim to the extent that it arises out of or is increased as a result of any fraud, wilful default, or wilful concealment by any seller. 2. Clause 14.1 provided that an obligation or liability of the Sellers was imposed severally, and not jointly nor jointly and severally, on each of the Sellers, so that each Seller was liable only for its relevant proportion of any loss. Clause 14.2 described the authority of the Sellers' Representative in terms which made plain that the Agreement did not permit Brando to sue the Sellers' Representative instead of the Sellers (clause 14.2(g)); Brando does not now suggest otherwise. 3. The Agreement was completed on 18 April 2019. On 9 April 2020, Brando served a Claim Notice on Mr Shayne in his capacity as Sellers' Representative. On 7 April 2021, Brando commenced these proceedings. Prayer 1 of the summons sought, by way of interlocutory orders, that pursuant to CPA ss 56, 57 and 58, Mr Shayne be appointed to represent the Sellers (with liberty reserved to any Seller who wished to be separately joined as a party to apply). On 21 April 2021, Johnson Winter & Slattery, solicitors acting for Mr Shayne as Sellers' Representative, suggested to Brando's solicitors that that the proceedings were not properly constituted and appeared to be based on a misunderstanding of clause 9.3 and clause 14.2 of the Agreement: [3] "Your client appears to be incorrectly operating under the assumption that the authority of the sellers' representative extends to permitting the sellers' representative to be sued on behalf of all the sellers. The SSA, however, makes no such provision in terms". 1. In response, by motion filed on 12 May 2021, Brando sought that the representative orders be made, nunc pro tunc, and alternatively sought an order pursuant to CPA ss 64 and 65 and Uniform Civil Procedure Rules (NSW) 2005 ("UCPR"), r 6.24 that each of the Sellers be joined, with effect from the date on which the proceedings were commenced. In the judgment below, the primary judge held that a representative order was inappropriate, as there was no substantial common issue between the Sellers, and Mr Shayne was not himself a Seller and thus not a member of the proposed class. [4] That is no longer in issue. However, her Honour held that the joinder of Mr Shayne in place of the Sellers involved a mistake as to the identity of the person against whom the action could be brought, as a matter of practice and procedure, such that the Sellers were misdescribed by the imposition of Mr Shayne as their representative, and thus that the Sellers should be joined as defendants with effect from the commencement of the proceedings pursuant to CPA s 65(2)(b) and UCPR r 6.24(1). [5] Her Honour's relevant order was: [6] "(1) Pursuant to section 65(2)(b) of the Civil Procedure Act 2005 (NSW) and rule 6.24(1) of the Uniform Civil Procedure Rules 2005 (NSW), order that the 71 persons identified in Schedule 1 to the Commercial List Summons be joined to these proceedings as defendants, such amendment to have effect from the commencement of these proceedings." Mistake in name of a party? 1. That aspect of the decision turns on CPA s 65(2)(b), which was expressly invoked in her Honour's order. It provides as follows: 65 Amendment of originating process after expiry of limitation period (1) This section applies to any proceedings commenced before the expiration of any relevant limitation period for the commencement of the proceedings. (2) At any time after the expiration of the relevant limitation period, the plaintiff in any such proceedings may, with the leave of the court under section 64 (1) (b), amend the originating process so as— (a) to enable the plaintiff to maintain the proceedings in a capacity in which he or she has, since the proceedings were commenced, become entitled to bring and maintain the proceedings, or (b) to correct a mistake in the name of a party to the proceedings, whether or not the effect of the amendment is to substitute a new party, being a mistake that, in the court's opinion, is neither misleading nor such as to cause reasonable doubt as to the identity of the person intended to be made a party, or (c) to add or substitute a new cause of action, together with a claim for relief on the new cause of action, being a new cause of action that, in the court's opinion, arises from the same (or substantially the same) facts as those giving rise to an existing cause of action and claim for relief set out in the originating process. (3) Unless the court otherwise orders, an amendment made under this section is taken to have had effect as from the date on which the proceedings were commenced. (4) This section does not limit the powers of the court under section 64. (5) This section has effect despite anything to the contrary in the Limitation Act 1969. (6) In this section, originating process, in relation to any proceedings, includes any pleading subsequently filed in the proceedings." 1. The fundamental question in this case is whether the joinder of Mr Shayne in his purported representative capacity involved "a mistake in the name of a party to the proceedings" within s 65(2)(b). 2. Authoritative guidance on the meaning and scope of that phrase is to be found in the judgment of the High Court in Bridge Shipping Pty Limited v Grand Shipping SA, [7] in which McHugh J, with whom Brennan J and Deane J agreed, said, of the equivalent Victorian rule (emphasis added): [8] "The concluding words of sub-r (4) 'whether or not the effect is to substitute another person as a party' enable a plaintiff to substitute one person for another person as a party to the action. Those words also imply that the fact that the plaintiff intended to sue the person who was sued does not prevent the sub-rule applying provided that there was a mistake in the name of the person sued. Moreover, a plaintiff may make 'a mistake in the name of a party' not only because the plaintiff mistakenly believes that a certain person, whom the plaintiff can otherwise identify, bears a certain name but also because the plaintiff mistakenly believes that a person who answers a particular description bears a certain name. Thus, a plaintiff may make a mistake "in the name of a party" because, although intending to sue a particular person whom the plaintiff knows by sight, the plaintiff is mistaken as to that person's name. Equally, the plaintiff may make a mistake "in the name of a party" because, although intending to sue a person whom the plaintiff knows by a particular description, eg the driver of a certain car, the plaintiff is mistaken as to the name of the person who answers that description. In both cases, the plaintiff knows the person intended to be sued by reference to some property or properties which is or are peculiar to that person but is mistaken as to the name of that person. In the first case, the properties which identify the person are personal characteristics; in the second case, they are the properties which are of the essence of the description of that person. But for the purpose of sub-r (4) that distinction is irrelevant. In both cases, the plaintiff was mistaken only as to the name of the person intended to be sued. There is no warrant for treating sub-r (4) as dealing only with the case where the properties which identify the party are inherent properties. That is, there is no warrant for treating sub-r (4) as dealing only with the case where the plaintiff says: 'The person I wish to substitute as a party is that entity which I identified by certain inherent properties peculiar to it but whose name I mistakenly believed was X.' The sub-rule applies equally to the case where the plaintiff says: 'The person I wish to substitute as a party is that entity which I identified by reference to certain properties which are true of it and of no one else and whose name I mistakenly believed was X.' In both cases, a mistake in the name of the party has occurred and can be seen to have occurred only because the person sued does not have or is not identified by some property or properties which is or are peculiar to the person intended to be sued and to no one else. Rule 36.01(4) is a remedial rule and should be given a beneficial interpretation. 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. In my opinion, Evans v Charrington and Lloyd Steel were correctly decided. To give the rule the meaning for which Bridge contends does not mean that a person can sue any person and then at a later time substitute another person for the original defendant. The rule imposes three limitations on a person's right to amend. First, there must be a mistake. Secondly, the mistake must be 'in the name of a party'. Thirdly, the court may only make the order where it is satisfied that any other party to the proceeding would not by reason of the order be prejudiced in the conduct of his or her claim or defence in a way that could not be fairly met by an adjournment, an award of costs or otherwise: r 36.01(6)." 1. As McHugh J explained in the passage set out above, there will be such a mistake only if the plaintiff knows the person intended to be sued by reference to some property or properties peculiar to that person, but is mistaken as to the name of that person. 2. In principle, the question is whether a plaintiff who deliberately chooses to sue the true defendant's agent rather than the principal, believing that he or she is by that means effectively suing the principal, thereby makes a mistake in the name of the defendant. If the intention is to sue the person who is known to be the agent because he or she is the agent, then there is in my opinion no such mistake. 3. More specifically, here, the plaintiff joined Mr Shayne, whom it knew to be the Sellers' Representative, intending to join Mr Shayne and no-one else, with the intention of subsequently seeking a representative order so as to bind the Sellers. It was not mistaken in thinking that Mr Shayne as distinct from someone else was the Sellers' Representative. It was not mistaken in thinking that the Sellers' Representative had the name of Mr Shayne. It did not mistakenly think that Mr Shayne rather than some other person was a Seller who could be appointed a representative defendant. Rather, it was mistaken in thinking that by suing him, a representative order could be obtained so as to bind all the Sellers. Its mistake had nothing to do with the name or identity of the person intended to be sued, but rather was to do with the legal apparatus for binding the Sellers in the proceedings. The plaintiff was not mistaken only as to the name of the person intended to be sued. 4. The primary judge thought that the case was similar to McInnes v Wingecarribee Shire Council. [9] In that case, members of a local environmental society lodged objections to a proposed quarry development. Only persons who had lodged objections had standing to appeal to the Land and Environment Court. The secretary of the society lodged an appeal on behalf of the society, but when he became ill another member of the society, Mr McInnes, was substituted. However, it emerged that Mr McInnes had not lodged an objection. Time for lodging an appeal having since expired, leave was then sought to substitute Mr and Mrs Clark, who had lodged objections, as appellants, on the ground that a mistake had been made in the name of the appellant. Priestley JA, with whom Kirby P and Clarke JA agreed, concluded that there had been a mistake in the name of the appellant, as the intention was that the appellant be a member of the society who was eligible to appeal; Mr McInnes was (mistakenly) thought to be such a person. In Captiv8 Pty Ltd v Bodger, [10] Gleeson J characterised the mistake in McInnes as a mistaken belief as to the identity of the person having the relevant standing to bring the action. In my view, McInnes is a case within the second category described by McHugh J, involving a (mistaken) belief that Mr McInnes satisfied the description of a person who had been an objector (and thus had standing to appeal). 5. As Kirby P explained in Brown v Jammal: [11] "Characterising the mistake may lead the Court to a conclusion that the pleader's error concerns the legal effect of a rule of the common law or of statute by which one person rather than another is liable. If that is the conclusion of the Court the mistake is not in the 'name' of the party. True, an incorrect party will have been named. But the misnomer is not the character of the mistake. It is its result. In such a case, the court must dismiss the application. … Confusion as to who was, in law, the proper party is not a foundation for the application of the rule. That application is limited to the case where a mistake has occurred in the naming of the party. … Where such mistakes of law occur on the part of the legal advisers of a party, that party will normally not be without redress. …" 1. Her Honour characterised Brando's mistake as one which had the effect that the Sellers were misdescribed by the imposition of Mr Shayne as their representative. [12] However, there was no mistake as to whether Mr Shayne satisfied any description. Brando correctly understood that he was the Sellers' Representative. Brando correctly understood that he was not himself a Seller. Brando did not mistakenly think that it was joining the Sellers. Brando's mistake was its belief that it could bind the Sellers to the proceedings by suing him and obtaining a representative order. As in Jammal, the mistake is not in the 'name' of the party. 2. In Tomsimmat & Associates Pty Limited v G&R Investments Pty Ltd, [13] Bryson J after referring to McInnes and Bridge Shipping said: "The statements about the approach to interpretation and application of these rules in the judgments of Priestley JA and McHugh J show a strong general concurrence of idea. However neither there, nor in any illustrations in these judgments, nor anywhere else in case law have I observed any support for an idea that a decision or event should be classified as a mistake on the basis of a retrospective review of its wisdom; that is on some such basis as that, looking back from the present to the time when the decision was made, it can be seen that it would have been better to make a different decision. Although retrospective wisdom is sometimes spoken of in everyday speech as revealing a mistake, I do not think that that is a correct use of language, or a use applicable to the construction of these rules. Whether a decision or event is a mistake must in my opinion be judged according to the facts and circumstances which existed when it happened, and not according to the wisdom of hindsight." 1. In the present case, there was a deliberate selection of a particular course of action involving the joinder of a known person having a known capacity by his correct name, on the misconceived basis that liability could ultimately be visited on the Sellers in that way. Brando did not think that in joining Mr Shayne it was joining the Sellers. It knew exactly what it was doing, though it was mistaken as to the efficacy of that course of action. 2. For those reasons, in my opinion, s 65(2)(b) was not engaged. Her Honour erred in granting relief under that rule. Leave to appeal 1. Leave to appeal was opposed, essentially on the basis that the applicant would have an appeal as of right from a final judgment, in which any relevant interlocutory decision could be challenged, and that by that time it would be apparent whether the issue had any practical significance. It was submitted that resolving the issue now would have no practical impact on the conduct of the case, since even if the amendment were not retrospective, the case would still proceed against all the Sellers, because there were allegations of fraud, wilful default or wilful concealment, which were not caught by the contractual limitation, and statutory causes of action which were probably not caught by it, so that all the factual issues would still be agitated and all the parties would still be involved. 2. Those submissions are not without force. However, the issue has been fully argued in a concurrent hearing. The question is one of principle, concerning the proper interpretation and application of s 65(2)(b). Its timely resolution would clarify the viability of the contractual complaints. Such clarification might inform the course of the proceedings and the parties' assessments of their positions and risks. 3. In the course of argument in this Court, questions were raised as to whether some power other than s 65(2)(b) might be relied upon. Neither before her Honour nor in this Court was any alternative source of power invoked. It would be curious if, despite the specific provisions of CPA s 65, there was some residual discretion, such as under the general power of amendment in CPA s 64, to allow retrospective joinder after a limitation period has expired, untrammelled by the conditions contained in s 65 which was enacted to provide specifically for such cases. Moreover, where s 65 does not apply, UCPR r 6.28 expressly provides: 6.28 Date of commencement of proceedings in relation to parties joined If the court orders that a person be joined as a party, the date of commencement of the proceedings, in relation to that person, is taken to be the date on which the order is made or such later date as the court may specify in the order. 1. In circumstances where Brando has never sought to rely on an alternative basis, what seems to me the very remote possibility that there might be one is not a reason to decline leave. 2. It is preferrable where possible that cases should be conducted and determined on correct bases and assumptions. Leeming JA raises the possibility that even the contractual limitation might not be engaged. But if the retrospective joinder stands, that issue would not arise on the pleadings at the trial, and thus would not be determined. Nor would it be open at the trial for the applicants to agitate their admittedly tentative contention that the limitation also catches the statutory causes of action. Given the view I have reached as to the substantive question, it is preferable that those issues be open at trial, rather than being considered for the first time on an appeal if it were then held that the joinder was wrongly made retrospective. 3. As it seems to me, nothing is to be gained from deferring resolution of this question to an ultimate appeal from a final judgment, whereas something may well be gained from its resolution now - namely that the trial will proceed from this point on a correct basis as to the date of the joinder. Disposition 1. In my opinion, therefore, leave to appeal should be granted, the appeal allowed, order 1 made in the Equity Division on 10 August 2021 set aside, and in lieu thereof it should be ordered pursuant to UCPR r 6.24 that the sellers be joined as defendants, with the consequence that pursuant to UCPR r 6.28 the date of commencement of the proceedings in relation to them is taken to be 10 August 2021, when the order was made. The respondent should pay the applicant's costs in this Court. ********** Endnotes 1. Brando Aus Holdco Pty Ltd v Gary Shayne as representative of the persons identified in Schedule 1 [2021] NSWSC 998 ("Primary judgment") at [95]. 2. Schedule 3 of the Agreement. 3. Primary judgment at [42]. 4. Primary judgment at [66]. 5. Primary judgment at [91]-[92]. 6. Primary judgment at [95]. 7. (1991) 173 CLR 231 at 259-261. 8. Rules of the Supreme Court of Victoria, r 36.01(4). 9. (1987) 10 NSWLR 660 at 667 ("McInnes"). 10. [2018] FCA 1801 at [53]. 11. [1995] NSWCA 62 at 8 ("Jammal"). 12. Primary judgment at [92]. 13. (1993) 25 IPR 545 at 551. DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 12 April 2022