Reported Decision : 54 ACSR 760 New South Wales Supreme Court CITATION : A & M Short Pty Ltd v Prestige Residential Marketing Pty Ltd [2005] NSWSC 872 HEARING DATE(S) : 15/08/05 JUDGMENT DATE : 31 August 2005 Equity Division JURISDICTION : Corporations List JUDGMENT OF : Young CJ in Eq DECISION : Grant order for leave to amend application to set aside statutory demand. CATCHWORDS : PROCEDURE [101]- Misnomer- Leave to amend application to set aside statutory demand- ACN and name of plaintiff non-existent- Amendment may be made where identity of party was known and was always intended to be a party- Where party substituted to correct misnomer he or she is taken to be party from commencement of proceedings notwithstanding the expiry of any limitation period. STATUTES [31]- Statutory interpretation- Section missing "as"- Section lacks meaning without addition of word- Whether permissible to assume mistake and read in "as" or must section be strictly construed- Where intention abundantly clear mistake can be rectified to give meaning- Construction of Civil Procedure Act 2005, s 64(4). Civil Procedure Act 2005, ss 60, 64(4), 65(2)(b) Corporations Act 2001 (Cth), s 459G LEGISLATION CITED : Suitors Fund Act 1951 Supreme Court Rules 1970, Pt 20 r 1(3) (repealed) Allen Properties (Qld) Pty Ltd v Encino Holding Pty Ltd (1985) 10 ACLR 104 Beardmore Motors Ltd v Birch Bros (Properties) Ltd [1959] Ch 298 Brandsma & Crockett Pty Ltd v Heindal Pty Ltd (2002) 26 WAR 323 Bridge Shipping Pty Ltd v Grand Shipping SA (1991) 173 CLR 231 Brown v DML Resources Pty Ltd (No 3) (2001) 188 ALR 469 Clay v Oxford (1866) LR 2 Ex 54 David Grant & Co Pty Ltd v Westpac Banking Corporation (1995) 184 CLR 265 Envy Trading v State of Queensland [1998] 1 Qd R 413 Evans Constructions Co Ltd v Charrington & Co Ltd [1983] QB 810 CASES CITED : Ex parte Ashby; Re Carless (1971) 2 Petty Sessions Review 969 Fitzgerald v Masters (1956) 95 CLR 420 J Robertson & Co Ltd v Ferguson Transformers Pty Ltd (1970) 44 ALJR 441 Kingston v Keprose Pty Ltd (1987) 11 NSWLR 404 Lindner v Wright (1976) 14 ALR 105 Lloyd Steel Co (Aust) Pty Ltd v Jade Shipping SA (1985) 1 NSWLR 212 Rainbow Spray Irrigation Pty Ltd v Hoette [1963] NSWR 1440 Richards v McBride (1881) 8 QBD 119 RKO Pictures Inc v Channon Screen Entertainment Ltd [1990] BCLC 364 A & M Short Pty Limited (P) PARTIES : Prestige Residential Marketing Pty Limited t/as Richardson & Wrench Commercial Sutherland Shire (D) FILE NUMBER(S) : SC 3912/05 N Francey (P) COUNSEL : J T Johnson (D) Elliot Tuthill (P) SOLICITORS : Macedone Christie Willis (D) LOWER COURT JURISDICTION : IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION CORPORATIONS LIST YOUNG CJ in EQ Wednesday 31 August 2005 3912/05 – A & M SHORT PTY LTD v PRESTIGE RESIDENTIAL MARKETING PTY LTD JUDGMENT 1 HIS HONOUR: On 17 June 2005, the defendant made a statutory demand against A & M Short Investments Pty Limited (ACN 075 258 258) for $19,000 allegedly owed for estate agent's commission. On 11 July 2005, a Mr Jordan, solicitor, filed in this Court an application to set aside the statutory demand on the last day for making such an application. The plaintiff was shown as A & M Short Pty Limited (ACN 732 172 251). 2 The evidence shows that there is no such company as A & M Short Pty Limited, nor has there been at any material time, nor is there a company with ACN 732 172 251. 3 The affidavit supporting the application was by one Andrew Short who swore that he was a director of A & M Short Pty Limited, alleging that the amount, the subject of the statutory demand, was disputed and was subject to unfinished court proceedings in the Sutherland Local Court. 4 In due course the plaintiff's solicitor realised that the correct plaintiff was A & M Short Investments Pty Limited and has moved to amend the application so that that company, ACN 075 258 258, is the plaintiff. The application to amend has been resisted by the defendant. The application came before me on 15 August last, Mr N Francey appearing for the plaintiff and Mr J T Johnson appearing for the defendant. 5 Mr Francey moved under s 64 of the Civil Procedure Act 2005. That section provides for amendments, and in particular, sub-section (4) reads: "If there has been a mistake in the name of a party, this section applies to the person intended to be made a party if he or she were a party." 6 The current application is supported by an affidavit of Mr Jordan who says that he was alerted by the defendant's solicitors to their allegation that the current proceedings disclosed a non-existent plaintiff. He then says: "As a result of this discussion, I realised the existence of a typographical error in which the plaintiff had been incorrectly named on the Application … ." 7 It seems to me that four matters arise for my consideration, and I will deal with these in turn. The matters are: (1) What is the meaning of s 64(4) of the Civil Procedure Act 2005? (2) Is this a case of substitution of a plaintiff or of curing a misnomer? (3) What is the effect of s 459G(2) of the Corporations Act ? and (4) Should the current application be granted? 8 (1) I have already set out the text of the relevant sub-section. The heading to s 64 is "Amendment of Documents Generally (cf SCR Part 20, rules 1 and 4) ….". 9 Part 20 rule 1(3) of the former Supreme Court Rules said: "Where there has been a mistake in the name of a party, sub rule (1) applies to the person intended to be made a party as if he were a party." It can be seen that the drafter of the section has for some reason, known only to him or herself, changed the "where" to "if", removed the presumption that "he" refers to the other genders by substituting "he or she" and has omitted the word "as". 10 The substitution of "if" for "where" appears merely cosmetic. The "he or she" raises problems as to whether the legislature intended to deny corporations' rights under the section. However, (a) s 8(a) and (d) of the Interpretation Act 1987 are probably sufficient to avoid this conclusion being drawn in the present case; (b) the defendant has not argued the point; and (c) there is probably a modern legal maxim that equity presumes a drafter of legislation to be politically correct, so I will just pass over it. 11 The omission of "as", however, is significant. Indeed the sub-section is almost made unintelligible without it. Am I to assume a mistake and read in the word "as" or is that beyond my mandate? 12 Older cases would clearly say it is beyond my mandate and I must never accept that Parliament could have omitted a word by mistake. In Richards v McBride (1881) 8 QBD 119 at 122, Grove J said of a case where a statute had used "the day next appointed" and counsel argued that that meant "the next day appointed": "No one in construing a statute or any other literary production could put such a construction on the words unless by supposing they were a mistake. But we cannot assume a mistake in an Act of Parliament. If we did so, we should render many acts uncertain, by putting different constructions on them according to our individual conjectures. The draftsman of this Act may have made a mistake. If so, the remedy is for the legislature to amend it." 13 In more modern cases courts have taken a more practical approach. A good example is Lindner v Wright (1976) 14 ALR 105. Muirhead J at 110-111 acknowledged that he had no power to fill gaps disclosed in the legislation and acknowledged what Grove J had said in Richards' case but he continued: "It seems to me that I am faced not with a gap to be filled, but with a clear mistake and I consider when intention is so clear that to correct that mistake and to give force to the sub-section involves not 'legislation' but interpretation." 14 In other words, his Honour applied the same rule that this Court applies to documents. That is, if when looking at the text one can see that there has been a mistake in transcription and what its meaning obviously is one merely construes the document and does not rectify it; see eg Fitzgerald v Masters (1956) 95 CLR 420. 15 Lindner's case was followed in Queensland by the Court of Appeal in Envy Trading v State of Queensland [1998] 1 Qd R 413. 16 In Kingston v Keprose Pty Ltd (1987) 11 NSWLR 404 at 422-3, McHugh JA thoroughly reviewed the law and made it clear that the above approach was a fit and proper one. 17 In my view the present sub-section only operates sensibly if one reads it as including the word "as" and I so construe it. 18 (2) There have been a large number of cases decided in the last 200 years as to whether a mistake in the name of a party is a mere misnomer or whether it involves the substitution of a new party. 19 Probably as good a place as any to commence is the decision of the Court of Exchequer in Clay v Oxford (1866) LR 2 Ex 54. In that case the action was commenced in the name of John Clay as plaintiff. In fact he had died before the writ was issued. The application to substitute the name of his executors was refused on the basis that there never was a plaintiff so that substituting the executors was adding a new plaintiff. 20 I will not mention every relevant case but will touch on the more significant ones. In Rainbow Spray Irrigation Pty Ltd v Hoette [1963] NSWR 1440 the plaintiff commenced an action in the name of "Rainbow Spray Irrigation Pty Limited": later it wished to change the name of the plaintiff to "Rainbow Spray Sales Pty Limited". Walsh J said that, in the circumstances, this was not a case where Rainbow Spray Irrigation Pty Limited advisedly but mistakenly considered it had a claim against the defendant, rather it was one of misnaming the company which at all times sought to enforce the right. It was thus not a case of substituting a party but correcting a misnomer. 21 The next case to which I should refer is Beardmore Motors Ltd v Birch Bros (Properties) Ltd [1959] Ch 298. This was a case where it was alleged that the defendant rather than the plaintiff was misnamed but it is a significant case because the relevant statute provided a time limit for bringing the relevant application. The tenants (plaintiffs) leased the property from Birch Bros Ltd, but during the lease the reversion was assigned to Birch Bros (Properties) Ltd. The latter company gave the tenants a notice of termination of the lease and it was then incumbent on the tenants to serve a counter notice and commence proceedings within a certain time. They did so but the respondents named were Birch Bros Ltd. After the time expired they sought to correct the mistake. However, C E Harman J held that the mistake was more than a mere misnomer and that accordingly as the time had expired no order for amendment should be made. He held a mere misnomer could always be amended. 22 In J Robertson & Co Ltd v Ferguson Transformers Pty Ltd (1970) 44 ALJR 441, a writ was issued out of the original jurisdiction of the High Court against Philips Electrical Industries Pty Ltd. A company which did have that name was now called Philips Electrical Pty Ltd. However, there had been changes of names of various companies in the Philips Group some changing their names to former names of other companies in the group. It was argued that the Statute of Limitations having run out, there could be no amendment, but Walsh J held on the facts that this was a case of mere misnomer. 23 The corresponding English provision at all relevant times was that "An amendment to correct the name of a party may be allowed … 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 person intending to sue or, as case may be, intended to be sued." 24 In Evans Constructions Co Ltd v Charrington & Co Ltd [1983] QB 810, C Ltd, as agent for B Ltd, gave a notice terminating E Ltd's tenancy. E Ltd's solicitor, within the permitted two months time limit, filed an application erroneously naming C Ltd as the landlord. Later, leave was sought to join B Ltd. The English Court of Appeal, Waller LJ dissenting, held that this was a genuine mistake in naming the landlord. Waller LJ held that there was a mistake as to identity which could not be cured under that rule. 25 The point was raised next before Clarke J in Lloyd Steel Co (Aust) Pty Ltd v Jade Shipping SA (1985) 1 NSWLR 212. The plaintiff sought an order substituting New Far East Shipping SA in place of Jade Shipping SA. The solicitor for the plaintiff gave evidence that the named first defendants were the relevant carriers and sued. Later, after the expiry of a time bar, he found that those defendants had actually chartered the relevant vessel to the proposed new defendant. The English rule which I have already cited and which found its way into Part 20 rule 4(3) of the old Supreme Court Rules is now to be found in s 65(2)(b) of the Civil Procedure Act 2005. Clarke J held, following the Evans Constructions case that as the plaintiff had always intended to sue the carrier and merely had mistakenly named the carrier, he could make the order for the new party. 26 In RKO Pictures Inc v Cannon Screen Entertainment Ltd [1990] BCLC 364, an American corporation wanted to sue an English company. The English solicitors issuing the writ either misunderstood their instructions or were given inadequate instructions and issued it in the name of RKO Pictures Inc, a company that had merged with another company many years before. The proper plaintiff was the result of the merger, Entertainment Acquisition Co Inc. It sought to substitute this company. Schiemann J in the English Queen's Bench Division held that under the rules of the Supreme Court and under the Court's inherent jurisdiction it was proper to substitute the merged company in place of the non-existent company. His Lordship referred to Clay v Oxford. 27 The definitive Australian case is Bridge Shipping Pty Ltd v Grand Shipping SA (1991) 173 CLR 231. Philip Morris Ltd engaged Bridge Shipping Pty Ltd to carry tobacco from Brazil to Melbourne. The goods arrived damaged. Philip Morris sued Bridge and Bridge issued a cross claim against Grand Shipping SA, which its search showed was the registered owner of the vessel. However, Grand Shipping SA had chartered the vessel to Rainbow Lines SA which had thus been the carrier of the goods. The limitation period had expired at the time when Bridge applied to substitute Rainbow Lines as a party for Grand Shipping. All levels of court refused the application. The reason for this was that there was no mistake in the name of the party because Bridge had always intended to sue the owner of the vessel. However, the five Judges discussed the ambit of rules allowing substitution of parties and held that they covered not only cases of misnomer, clerical error and misdescription but also where the plaintiff, intending to sue a person identified by a particular description, was mistaken as to the name of the person who answered that description. 28 That case has been applied on many occasions since including by the Full Court of the Supreme Court of Western Australia in Brandsma & Crockett Pty Ltd v Heindal Pty Ltd (2002) 26 WAR 323. That was a case where the court held that the defendant was always intended to be X so that naming another company in the group with a similar name to X was a misnomer. There should be a substitution and furthermore where a person is added by an amendment to correct the name, he or she is to be regarded as always having been a party from the commencement of the proceedings, albeit misnamed. However, as Murray J pointed out at p 326, a court rule cannot have the effect of operating contrary to the provisions of a statute. 29 I need only refer to two other decisions. In Ex parte Ashby; Re Carless (1971) 2 Petty Sessions Review 969, the NSW Court of Appeal granted a mandamus against a magistrate who had dismissed an information against "The Egg and I (Farm) Pty Ltd" on the basis that there was no company of that name and the information did not refer to "Egg & I (Farm) Pty Ltd". The Court of Appeal held that it was just a case of misnomer. Moffitt JA, however, said: "One could hardly conceive that in this century in the law, much less in this decade, there should parade as a judicial proceeding the charade that has led to the present application. … Nobody for a moment could have any doubt that the summons referred to and only referred to the respondent, except perhaps some lawyer of a century or more ago in a layman's tale seeking to ridicule lawyers for their petty-fogging technicalities." The respondent was denied a certificate under the Suitors Fund Act 1951 . 30 I applied that case in the company sphere in Allen Properties (Qld) Pty Ltd v Encino Holding Pty Ltd (1985) 10 ACLR 104, where I treated a statutory demand addressed to Encino Holdings Pty Ltd as sufficient to refer to the defendant Encino Holding Pty Ltd. 31 I should note that I am not suggesting that any lawyer involved in the current case is a petty-fogging parity of a Dickensian lawyer. However, the flavour of the cases to which I have referred show that amendments because of misnomers are relatively freely allowed. 32 Mr Johnson says that in the instant case there was obviously a non-existent plaintiff because not only is the plaintiff misnamed, but also there is a wrong ACN number. This cannot be gainsaid. However, it must also be said that the application is one to set aside a statutory demand which is addressed to A & M Short Investments Pty Ltd and an application by any other company would just be a nonsense. Although as Mr Johnson truly points out there is a paucity of evidence as to how the mistake came about, or indeed whether the drafter always intended to sue in the name of A & M Short Investments Pty Ltd, the point is fairly obvious, as is the point that can be made on the other side that there is none, nor could there ever be any, evidence of confusion. 33 Accordingly, unless there is some problem with s 459G of the Corporations Act the order should be made. 34 (3) Section 459G(2) provides that an application by a company for an order setting aside a statutory demand may only be made within 21 days after the demand is so served. The High Court has ruled that "may only" means there is no capacity to extend any time: David Grant & Co Pty Ltd v Westpac Banking Corporation (1995) 184 CLR 265. 35 If the Court allows the current application, will this run foul of the section? In my view, the answer is "No". Where there has been a misnomer the action is treated as if it originally named the substituted person and there is a mere correction of a bad typographical error; see Bridge Shipping at 238-9 per Dawson J and Brown v DML Resources Pty Ltd (No 3) (2001) 188 ALR 469 at 488 and following. 36 (4) As a result, the order should be made for leave to amend the application accordingly and the amended application may be listed in the next Associate Justice's call-over for hearing. 37 As to the costs of this application, the plaintiff has sought an indulgence. The defendant has resisted it, but resisted it far too strongly. The defendant is entitled to its costs of investigating the matter and taking advice. I order that the plaintiff pay 20% of the defendant's costs. 38 I take into account in making that order the fact that there is apparently somewhere between $19,000 and $44,000 in real dispute between the parties. My assessment is that the defendant perceived the mistake, and indeed pointed it out to the plaintiff, yet resisted the application to the full and s 60 of the Civil Procedure Act requires the Court to deal with costs in such a way that it is proportionate to the importance and complexity of the subject matter in dispute. ******************** 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.