Gleeson v Marshall Diel & Myers Ltd and Others
| Jurisdiction | Bermuda |
| Judgment Date | 14 January 2015 |
| Neutral Citation | [2015] SC Bda 3 Civ |
| Date | 14 January 2015 |
| Docket Number | Civil Jurisdiction 2013 No 133 |
| Court | Supreme Court (Bermuda) |
[2015] Bda LR 7
In The Supreme Court of Bermuda
Civil Jurisdiction 2013 No 133
Mr T Frith for the Plaintiff
Mr N Hargun for the Defendants
The following cases were referred to in the judgment:
The ‘Sardinia Sulcis’UNK [1991] 1 Lloyd's Rep 201
International Bulk Shipping and Services Ltd v Minerals and Trading Corp of IndiaUNK [1996] 2 Lloyd's Rep 474
Adelson v Associated NewspapersUNK [2007] EWCA Civ 701
Evans Construction Co Ltd v Charrington & Co LtdELR [1983] QB 810
Coultard v Disco Mix Club LtdUNK [1999] 2 All ER 457
Paragon Finance PLC v Thakerar & CoUNK [1999] 1 All ER 400
Gwembe Valley Development Co Ltd v KoshyUNK [2003] EWCA Civ 1048
Leal v Dunlop Bio-Processes International LtdUNK [1984] 2 All ER 207
Amerada Hess v Rome [2000] TLR 185 (15 March 2000)
The ‘Goldean Mariner’UNK [1990] 2 Lloyd's Rep 215
In re Regent United Service StoresELR (1878) 8 ChD 75
Re Bezier Acquisitions [2011] EWHC 3299
R v SonejiUNK [2005] UKHL 49
Application for leave to amend Writ and Statements of Claim — Substitution of names of parties — Mistake as to identity — Limitation of actions — Irregularity of service
RULING of Kawaley CJ
1. On April 25, 2013, the Plaintiff issued a Generally Indorsed Writ of Summons against the first two Defendants (D1 and D2) seeking various heads of relief. The claims advanced were based upon the professional dealings of ‘Marshall Diel and Myers’ and D2 with the Plaintiff in 2007 in connection with the purchase of a certain property (‘the Property’). On April 8, 2014 the 3rd Defendant (D3) was added by way of amendment and a Statement of Claim was filed in which detailed allegations were made against, inter alia, ‘the First Defendant(“MDM”)’.
2. After entering an appearance on April 28, 2014 on behalf of D1 and D2, the following day the Defendants' attorneys issued a Summons seeking to set aside service on D3 pursuant to Order 12 rule 8. By Summons dated June 4, 2014, D1 applied to strike-out the claim against it ‘on the grounds that it is frivolous, vexatious or an abuse of process’. By Summons dated June 18, 2014, the Plaintiff applied for leave to amend the Writ and Statement of Claim ‘to amend the names of the First and Third Defendants’ to:
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i. ‘Marshall Diel & Myers (a firm)’; and
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ii. ‘BCB Paragon Trust Limited’.
3. These three Summonses were heard together. They raised two key broad issues:
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i. whether the failure to issue proceedings against the firm which was involved in the Property transaction to which the action related, as opposed to D1 (the limited company which was formed by some if not all of the firm's partners after the impugned transaction) either:
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(a) a claim against the wrong party, which could not be cured by way of amendment after the expiry of the limitation period, or
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(b) a simple error of nomenclature which could be cured by amendment at any time;
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ii. whether service on D3 was so defective as to be liable to be set aside or was substantially effective and therefore valid.
4. This application is supported by the May 23, 2014 Georgia Marshall Affidavit which deposes that D1 was incorporated on December 18, 2009 and authorised to commence legal practice from January 13, 2012. Prior to this, a firm Marshall Diel & Myers carried on a legal practice and corresponded with the Plaintiff's former attorneys about the Property and the present dispute in September 2008. D1 did not exist in 2007 and could not have committed the acts complained of, it is asserted. None of this is disputed.
5. The Plaintiff's case, as set out in the Affidavit of Timothy Frith is that:
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i. Georgia Marshall's affidavit makes it clear that D2 at all material times carried out the legal work complained of on behalf of the firm, which was the intended defendant;
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ii. in naming D1 as First Defendant, ‘we have made a minor mistake as to the nomenclature’ of the Defendant;
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iii. D1 has not been misled in any way as its principals are well aware of what entity carried on the legal work in question and there was only one law firm practising under the name ‘Marshall Diel & Myers' at the material time.
6. In the 2nd Georgia Marshall Affidavit filed in reply, it is deposed that not all of the partners of the former firm are shareholders of the company and not all of the present corporate shareholders are former partners. Permitting the amendment would have the result of adding new parties to the action after the expiration of the limitation period. The deponent also points out that the Plaintiff's own attorneys formerly practised as a firm and then through a company incorporated after the 2009 changes to the Bermuda Bar Act. As a matter of law the Plaintiff must be deemed to have known that D1 could not have been the legal entity involved in 2007 before lawyers were permitted to incorporate by amendments to the Bermuda Bar Act 1974 passed in 2009. The Plaintiff's counsel did not attempt to refute these additional assertions.
7. The governing legal principles are found in paragraph (3) of Order 20 rule 5:
‘ (3) An amendment to correct the name of a party may be allowed under paragraph (2) notwithstanding that it is alleged that the effect of the amendment will be to substitute a new party if the Court is satisfied that the mistake sought to be corrected was a genuine mistake and was not misleading or such as to cause any reasonable doubt as to the identity of the person intending to sue or, as the case may be, intended to be sued.’
8. Mr Hargun submitted that a qualifying ‘genuine mistake’ had to be limited to the name of the party as opposed to their identity: The ‘Sardinia Sulcis’UNK[1991] 1 Lloyd's Rep 201; International Bulk Shipping and Services Ltd v Minerals and Trading Corporation of IndiaUNK[1996] 2 Lloyd's Rep 474. In this case the mistake was misleading because it was unclear whether the initial case was based on a case of successor liability; in addition, a conspiracy claim had been pleaded against D1 which could only validly be asserted against a body corporate. It was unjust for the partners of a firm which no longer existed, who had adjusted their rights without reference to the present claim, to be joined to an action issued at the end of the limitation period and served a year later in circumstances where the delay was unexplained.
9. Mr Frith responded that the mistake was clearly merely one of nomenclature where the defendant was correctly identified but called by an incorrect name: Adelson v Associated NewspapersUNK[2007] EWCA Civ 701; [2007] 4 All ER 330; and Evans Construction Company Limited v Charrington & Co LimitedELR[1983] QB 810. These authorities clearly supported the application to correct the corporate name of D3, if the application to set aside service failed.
10. In the latter case the English Court of Appeal analysed the cases on the English equivalent of our Order 20 rule 5(3) and applied the same principles to the more widely drafted CPR 19.5(3)(a). Lord Phillips CJ summarised the case law where leave to amend was granted as follows:
‘57. Almost all the cases involve circumstances in which (i) there was a connection between the party whose name was used in the claim form and the party intending to sue, or intended to be sued and (ii) where the party intended to be sued, or his agent, was aware of the proceedings and of the mistake so that no injustice was caused by the amendment. In SmithKline, however, Keene LJ accepted that the Sardinia Sulcis test could be satisfied where the correct defendant was unaware of the claim until the limitation period had expired. We agree with Keene LJ's comment that, in such a case, the Court will be likely to exercise its discretion against giving permission to make the amendment.’
11. There is also an additional requirement that a post-limitation period amendment would be just, which Mr Hargun correctly submitted arose under the following provisions of Order 20 rule 5:
‘ (2) Where an application to the Court for leave to make the amendment mentioned in paragraph (3), (4) or (5) is made after any relevant period of limitation current at the date of issue of the writ has expired, the Court may nevertheless grant such leave in the circumstances mentioned in that paragraph if it thinks it just to do so.’
12. I am bound to accept Mr Frith's evidence that his intention was to sue the law entity which acted for the Plaintiff in relation to the 2007 transaction and that a genuine mistake was made as to the legal status and name of that entity. The mistake does not clearly qualify for potential relief under Order 20 rule 5 (3) because not knowing if a body corporate which did not exist in 2007 or a partnership which did was involved in a transaction raises issues of identity and nomenclature. As a result, accepting the Plaintiff's submission...
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