PARTIES:	BETWEEN:

	DEE JAY ENGINEERING PTY LTD

	Appellant
	AND:

	MOLINE MANAGEMENT PTY LTD

Respondent

TITLE OF COURT:	In the Supreme Court of the Northern Territory of Australia 

JURISDICTION:	Supreme Court of the Northern Territory of Australia

FILE NO:	187 of 1994

DELIVERED:	2 August 1996

HEARING DATES:	11 July 1996

JUDGMENT OF:	MILDREN J

CATCHWORDS:

Appeal -	Appeal pursuant to r77.05 of the Supreme Court Rules from an order made by the Master - re-hearing de novo r77.05(7) - parties reliance on oral evidence and affidavits before the Master - no additional oral evidence and affidavits - acceptance of Master’s decision on credibility of a witness cross-examined.

		Leave to add two plaintiffs to proceedings pursuant to r9.06 of the Supreme Court Rules - whether or not addition of a new plaintiff into an existing action relates back to the date when that action first began - r36.01 of the Supreme Court Rules allows the Court at any stage to order that a document in a proceeding be amended - action based in contract not fatal to finding there was a mistake in name of party - mistake as to identity - substitution as opposed to addition of party.

Legislation

Supreme Court Rules
Interpretation Act

Cases

Southwell v Specialised Engineering Services Pty Ltd (1990) 70 NTR 6 approved
Uranerz (Aust) Pty Ltd v Hale (1980) 30 ALR 193 (High Court)
followed
Timor Transport Pty Ltd (in Liq) v Murlroam Pty Ltd (1992) 2 NTLR 102; (1992) 110 FLR 53 discussed
Cockerill and Ors v Westpac Banking Corporation (1991) 32 FCR 36  mentioned
Bridge Shipping Pty Ltd v Grand Shipping SA (1991) 173 CLR 231
discussed
Smart v Stuart (1992) 2 NTLR 43 mentioned
The “Al Tawwab” (1991) 1 Lloyd’s Rep. 201 mentioned
Smithkline Beecham (Aust) Pty Ltd v Minister for Family Services (1993) 45 FCR 587 mentioned
The “Winkfield” (1902), P.42 mentioned

LEGISLATION
Interpretation Act

Texts

Bowstead on Agency, 15th Ed, Article 79, p312; Article 105, pp431-2

REPRESENTATION:

Counsel:

	Appellant:	Mr J Reeves
	Respondent:	Mr A Wyvill

Solicitor:

	Appellant:	Ward Keller
	Respondent:	James Noonan

JUDGMENT CATEGORY:	CAT B
JUDGEMENT ID NUMBER:	MIL96016
NUMBER OF PAGES:	11

IN THE SUPREME COURT OF
THE NORTHERN TERRITORY
OF AUSTRALIA
AT DARWIN

No. 187 of 1994
(9417257)

	BETWEEN:

	DEE JAY ENGINEERING PTY LTD
	Appellant

	AND:

	MOLINE MANAGEMENT PTY LTD
Respondent

CORAM:  MILDREN J

	REASONS FOR DECISION

	(Delivered 2 August 1996)

This is an appeal pursuant to Rule 77.05(1) of the Supreme Court Rules from an order made by the Master whereby Zinnanda Pty Ltd (Zinnanda) and Arimco Mining Pty Ltd (Arimco) were added as plaintiffs to the proceeding, and the plaintiffs were given leave to file and serve an amended statement of claim.

Rule 77.05(7) provides that the appeal shall be by re-hearing de novo of the application to the Master, but each party may, subject to proper objections to admissibility:

(a)	rely on an affidavit used before the Master and on evidence given orally before him;

(b)	by special leave of the Judge, rely on an affidavit or oral evidence not used or given before the Master.

No additional affidavit evidence or oral evidence was sought to be led by the other party at the hearing of the appeal.

The material relied upon comprised the affidavits of Paul Gerard Maher sworn 24 October 1995 (except paragraphs 7 and 8), the affidavit of Paul Gerard Maher sworn 5 December 1995 (except paragraphs 2 and 3), the affidavit of Gregory Lindsay Howlett sworn 6 March 1996 and the affidavit of John Thomas Stewart sworn 3 December 1995.

In addition, the respondent relied upon the transcript of oral evidence given by Gregory Lindsay Howlett before the Master on 14 June 1996 as well as Master Coulehan’s reasons for decision delivered on 20 June 1996.

In Southwell v Specialised Engineering Services Pty Ltd (1990) 70 NTR 6, Kearney J held that an appeal from a decision of the Master is “a complete re-hearing:  the party who was the applicant before the master begins; the appeal is determined on the evidence placed before the judge and is unfettered by the master’s decision, though such weight may be given to his decision as appears proper” (at page 8).

To those observations, with which I agree, there is a necessary qualification to be added in this case.  The Master had the benefit of hearing from Mr Howlett in the witness box. Mr Howlett was cross-examined and it is plain that his credibility was in issue on a point vital to the outcome of the application.  It is plain from the reasons delivered by the Master that he accepted Mr Howlett’s evidence.  In those circumstances I am bound to approach this appeal in accordance with the principle that, generally speaking, I would not be justified in taking a different view of the credibility of Mr Howlett:  see Uranerz (Aust) Pty Ltd v Hale (1980) 30 ALR 193 (High Court).

The original writ was endorsed with a statement of claim claiming damages for breach of contract, and further and in the alternative, damages for negligence.  The claim in contract is set out in paragraphs 3-9 of the statement of claim.  The plaintiff (Moline Management Pty Ltd) alleges that the plaintiff entered into a contract with the defendant on 8 January 1992 whereby the defendant agreed to cut an access hole in one of the plaintiff’s sludge treatment tanks at the plaintiff’s mine for maintenance purposes and then to re-fit the section cut out.  Particulars of the contract are provided as being those set out in a certain purchase order.  The statement of claim then sets out certain of the terms and conditions of the contract, pleads breaches of the contract alleged to have been committed by the defendant as a result of which the tank ruptured and pleads consequential loss and damage to the plaintiff.  Further, and in the alternative, the plaintiff says the loss and damage it suffered was caused by the defendant’s negligence.  It is alleged that the rupture of the tank occurred on 13 January 1992.

The writ was issued on 31 August 1994 and a defence was filed on 8 November 1994.  The defendant admits carrying out works to the tank but denies that it was in breach of contract or that it was negligent.  It is also alleged that the plaintiff caused or contributed to its loss by its own negligence.

On 24 October 1995 the plaintiff sought leave to add Zinnanda and Arimco as plaintiffs and for leave to file and serve an amended statement of claim.  The summons stated that the application was made in pursuance of r.9.06.  That is the rule that permits the Court at any stage of a proceeding to order the addition, removal or substitution of a party.  Rule 9.11(3)(a) provides that when an order is made under r.9.06 adding or substituting a person as defendant, the proceeding against the new defendant commences on the amendment of the filed originating process in accordance with sub-rule (1) or (2).  The rule has nothing to say where an order is made adding or substituting a person as plaintiff.  In Timor Transport Pty Ltd (in Liq) v Murlroam Pty Ltd (1992) 2 NTLR 102; (1992) 110 FLR 53, Martin J (as he then was) observed that there is a divergence of authority as to whether or not the addition of a new plaintiff into an existing action relates back to the date when that action first began.  In Cockerill and Ors v Westpac Banking Corporation (1991) 32 FCR 36, Pincus J considered that since Ketteman v Hansel Properties Limited (1987) AC 189 decided that joinder of a defendant does not relate back to the date of the institution of the suit, the same rule would apply to joinder an additional plaintiff.  Be that as it may, the difficulty in adding Zinnanda and Arimco as additional plaintiffs to the suit is that any cause of action which either of those companies may have had against the appellant is statute barred.  In order to overcome this difficulty the respondent relied upon Rule 36.01(1) which permits the Court at any stage to order that a document in a proceeding be amended.  Sub-rule (4) provides that “a mistake in the name of a party may be corrected under sub-rule (1) whether or not the effect is to substitute another person as a party”.  Sub-rule (5) provides that where an order to correct a mistake in the name of a party has the effect of substituting another person as a party, the proceedings shall be taken to have commenced with respect to that person on the day the proceeding commenced.  Sub-rule (6) provides that the Court may, notwithstanding the expiration of a relevant limitation period after the day the proceeding was commenced, make an order under sub-rule (1) 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 claim or defence in a way that could not be fairly met by an adjournment, an award of costs or otherwise.

The respondent persuaded the Master that there had been a mistake in the name of a party in this case in that the respondent’s solicitor in fact intended to sue on the name of the owner of the tank but made a mistake in the name of the owner.  Accordingly, the Master granted leave to join Arimco and Zinnanda as plaintiffs, substituting them as owners of the tank but permitting the respondent to remain in the proceeding in its own right.

The evidence shows that Zinnanda and Arimco were involved in a joint venture to carry out the mining operations and that Moline was the manager of the joint venture.  Under the terms of the management agreement, all property belonging to the joint venture belonged to the joint venturers as tenants in common.  Moline had no interest whatsoever in that property (see clause 3.1(a)); but by clause 3.1(b) Moline was required to have and hold, subject to the terms of the joint venture agreement and the management agreement, exclusive possession, custody and control of the property of the joint venturers for the use and benefit of the joint venture parties.  Thus it would appear that the ownership in the tank belonged to Zinnanda and Arimco whilst Moline had possession of the tank as a bailee pursuant to the terms of the management agreement. As to the contract which Moline entered into with the defendant, it would appear also that Moline entered into that contract as agent for Arimco and Zinnanda (see clause 2.1 of the management agreement).

The tank was insured under an industrial special risks insurance policy.  The insured under the policy was Moline, as manager of the joint venture, Arimco and Zinnanda, “and other parties for their respective rights and interests”.  It appears that Moline made a claim under the policy for the loss occasioned by the rupture of the tank and that claim was met by the insurers.  Moline signed a discharge in which it declared and agreed that it was the owner of the property and that “no other person, firm, company, corporation or other body had any interest in it whatsoever”, although Moline’s letter enclosing the discharge form revealed that it was acting as manager on behalf of Arimco and Zinnanda and requested the funds to be remitted to Zinnanda’s holding company.

In September 1992 the insurers instructed its Sydney solicitors to advise on the likelihood of effecting a recovery from the defendant in these proceedings.  Advice was given to the insurers as a result of which a letter of demand was forwarded to the defendant.  Discussions then took place between the insurer’s solicitors and the defendant’s solicitors over a period of time.  In July 1994 the insurer’s solicitors were instructed to commence proceedings against the defendant.  Mr Howlett, who had carriage of the matter for the insurer’s solicitors, drafted a statement of claim and forwarded it to solicitors in Darwin.  Subject to a few minor amendments not presently relevant, the document so drafted became the statement of claim attached to the writ which the Darwin solicitors issued in Moline’s name.

It is clear that the insurers were purporting to exercise their rights of subrogation under the policy.

According to Mr Howlett, at all times up until March 1995 he believed that the tank was owned by Moline.  He gave evidence before the Master that when drafting the statement of claim he intended the proceedings to be brought in the name of the owner of the tank which he then believed was Moline.  He also said that he believed that the joint venture was effected through Moline in which the joint venturers held shares, and that Moline owned the assets of the joint venture.

Counsel for the appellant, Mr Reeves, submitted that there was no mistake in the name of a party in this case.  His submission was that the insurer’s solicitor always intended to sue on the contract entered into between Moline and Dee Jay Engineering.  He drew my attention to the statement of claim and submitted that it was not expressly said to be a claim by the owners of the tank.  Although the statement of claim refers to the “plaintiff’s sludge treatment tanks” and to “property owned by the plaintiff”, there was no specific pleading that Moline was the owner of the tank, and the pleading was consistent with Moline being a bailee.  There is no plea that Moline was a bailee or that it was an agent for an undisclosed principal.  As to the claim in negligence, it was submitted that it was not on its face a separate claim in negligence, but even if it could be so regarded, at its highest it was a secondary addendum to the primary claim which was in contract, the only parties to which were Moline and the defendant.  Further it was submitted that the insurer’s solicitor caused the proceedings to be issued in the name of the party paid out under the policy, and the party which executed the discharge form (Moline), that for relevant purposes the action was issued in the name of the insured under the policy exercising its subrogated rights (which were Moline’s rights), that the insurer could not issue proceedings in the name of anyone other than Moline in that event, and that there was therefore no mistake in the relevant sense.

There are several difficulties with the appellant’s argument. First, there is a finding of fact by the Master that Mr Howlett’s evidence should be accepted, that the predominant consideration in his mind was ownership, that his intention was to sue in the name of the owner of the goods and that he was mistaken as to the name of the owner.  Clearly that was a view of the evidence based on the credibility of Mr Howlett as a witness.  In those circumstances, I am not entitled to reverse that finding unless it is clearly demonstrated to have been wrong on grounds which do not depend merely on credibility.  For example, I might reach a different conclusion on the ground that the evidence which was accepted was inconsistent with established facts, or so improbable that no reasonable person could accept it, or the judgment of the Master disclosed that his conclusion was effected by some error of law or fact:  see Uranerz v Hale, supra, at 199.

The evidence of Mr Howlett was no doubt such as that it might well have been viewed with some suspicion, but it was certainly not inherently improbable, nor was it inconsistent with any facts which were indisputable or established by other evidence and nor has it been demonstrated that in accepting the evidence of Mr Howlett the Master fell into any error.  In these circumstances, I do not think that I am at liberty to arrive at a different conclusion from that of the Master.

As to the contention the statement of claim reveals that Mr Howlett must have intended to have sued in the name of Moline because the action was based in contract, that is not fatal to a finding that there was a mistake in the name of the party.  The true circumstances reveal that Moline was contracting only as an agent for Zinnanda and Arimco and that those companies were the true owners of the tank.  Whilst it may be that Moline could sue in its own right as agent for an undisclosed principal (if that is what it was) and could sue also in tort as a bailee, those circumstances do not preclude an action by the true owners either in contract or in tort:  see Bowstead on Agency, 15th Ed, Article 79, p312; Article 105, pp431-2; and see The “Winkfield” (1902) P.42.  Indeed, in the case of an undisclosed principal, the principal’s right is superior to that of the agent.  There is therefore nothing inherently improbable in a solicitor wishing to sue in the name of the owner.  Nor is it the case that the facts point only to the conclusion that the insurer’s solicitor wished to sue in the name of Moline as the insured under the policy.  The solicitor was aware that Zinnanda and Arimco were also insured under the policy and he believed, based on the discharge signed by Moline, that Moline was the only party with an interest in the property.  In fact, Moline’s claim, as disclosed by its letter to the insurer’s loss adjusters, was made as agent for Arimco and Zinnanda, but Mr Howlett was unaware of this letter.  This does not point to any improbability in the evidence of Mr Howlett of such a kind that the Master would have been acting unreasonably to have accepted his evidence.

In the light of the Master’s findings, Mr Wyvill for the respondent, submitted that there was a mistake in the name of a party within the meaning of rule 36.01, and in support of that argument he relied upon the judgment of McHugh J in Bridge Shipping Pty Ltd v Grand Shipping SA (1991) 173 CLR 231; Smart and Ors v Stuart (1992) 2 NTLR 43; The “Al Tawwab” (1991) 1 Lloyd’s Rep. 201, and Smithkline Beecham (Aust) Pty Ltd v Minister for Family Services and Anor (1993) 45 FCR 587. It is clear that if a solicitor for an insurer, intending to issue proceedings in the name of a person whom he identified by a particular description, was mistaken as to the name of the person who answered that description, that is a mistake in the name of a party.  Mr Reeves submitted in the circumstances of this case the correct legal conclusion was that the mistake was a mistake as to identity.  Mr Reeves submitted that even if Mr Howlett thought that Moline was the owner, he intended to sue in Moline’s name as it was the contracting party, and that this was a case of mistaken identity.  Reliance was placed on the observations of McHugh J in Bridge Shipping Pty Ltd v Grand Shipping SA, supra, at 262:

	“The statement of claim in the present case does not indicate that Bridge sued Grand because it believed that Grand was the carrier but was mistaken as to the name of the carrier.  To the contrary, the allegation in par. 3 that Grand was “the owner of the vessel” at all material times indicates that Bridge intended to sue Grand because it believed that Grand was the owner of the vessel.  The correctness of that conclusion is confirmed by the affidavit of Bridge’s solicitor who swore that he “was concerned to preserve Bridge Shipping’s rights against the owner of such vessel”.

	Bridge made no mistake as to the description of the party which it wished to sue.  It intended to sue the owner and did so.  Bridge’s mistake was not one of misnomer, clerical error or misdescription.  Nor was it one where, intending to sue a person whom one identified by a particular description, it was mistaken as to the name of the person who answered that description.”

An examination of that paragraph, it seems to me, does not support Mr Reeves’ contention.  The nature of the mistake made in the Bridge Shipping case was that Bridge’s solicitor thought that the owner of the ship was the carrier of the goods.  As McHugh J observed at pp261-2:

	“If Bridge had intended to sue the carrier and had mistakenly believed that the name of the carrier was Grand, it would follow that Bridge had made “a mistake in the name of a party”.”

However the proceedings in that case and the evidence showed that Bridge sued Grand because it believed that Grand was the owner of the vessel, not because it was mistaken as to the name of the carrier.  In the present case, the plaintiff’s solicitor sued in the name of Moline because he believed that Moline was the owner of the goods and he, according to the finding of the Master, intended to sue in the name of the owner.  In those circumstances it seems to me that there is a mistake in the name of a party within the meaning of the rule.

In this case, however, the plaintiff did not seek to substitute Arimco and Zinnanda for Moline, but to add Arimco and Zinnanda as co-plaintiffs.  Rule 36.01 deals with substitution but not with the addition of plaintiffs.  The question then is whether r.36.01 applies to this case.  Supposing that the true owner of the tank had been Moline, Arimco and Zinnanda whereas the plaintiff’s solicitor, intending to sue in the name of whoever the owner was, thought the owner was only Moline.  In such a case surely the mistake is a mistake in the name of a party.  There is no reason why the singular should not include the plural vide s.24 of the Interpretation Act.  In this case it would not be an abuse of language to say that Zinnanda and Arimco were being substituted for Moline as owners.  As McHugh J said in Bridge Shipping v Grand Shipping, supra, at 260-261:  “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”.

The circumstances here show that the insurer’s solicitor intended to sue in the name of the owners, Arimco and Zinnanda, and now wishes to keep Moline in the proceedings because it is nevertheless a proper party, in that if it is an agent acting for an undisclosed principal or a bailee, it may sue for the full amount of the loss, notwithstanding that it would receive the damages on behalf of Zinnanda and Arimco.  It would appear that Moline is remaining in the proceedings only ex abundanti cautela, so as to avoid any technical arguments about whether or not Moline was a bailee and whether or not Moline could recover more than nominal damages if it was not in fact an undisclosed principal, and to avoid any argument as to who was the true owners of the goods.

Whilst the rules of Court do distinguish between the addition of parties and the substitution of parties (see Order 9 and r.36.01(3)), the reality is that the application is to substitute Zinnanda and Arimco as the owners as plaintiffs but to keep Moline as a party in the action in its own right.  Whilst the rule may not be able to be used in all cases to add a party (a point I do not decide), I think nevertheless it is wide enough to cover the situation envisaged in this case.

There remains to be considered the provisions of r.36.01(6).  It was not suggested that the appellant, Arimco or Zinnanda would be prejudiced in any way, that could not be fairly met by an adjournment or an award of costs.

It was not suggested that the proposed amendments to the statement of claim should not be made if it were proper to permit Zinnanda and Arimco to be joined as plaintiffs.

As I have reached the same conclusion as the Master, the appeal is dismissed with costs.

__________________________