New Guinea Company Ltd v Thomason [1975] PGLawRp 494; [1975] PNGLR 454 (23 December 1975)

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PRACTICE - Pleadings - Amendment - Statement of claim - Amendment at trial - Evidence closed - Discretion of Judge - Company plaintiff - No averment of incorporation - Leave to amend granted - Rules of Court O. XXXII, r. 2[dclxi]1.

The plaintiff company sued the defendant on a deed of guarantee; neither the specially endorsed writ by which the proceedings were commenced nor the statement of claim contained an averment that the plaintiff was duly incorporated and entitled to sue. At the conclusion of evidence and after submissions by the defendant, the plaintiff sought leave to amend the statement of claim to include such an averment.

N1>(1) Whether leave to amend should be granted or not is a matter of discretion for the Court.

N1>(2) Relevant matters for consideration in the exercise of this judicial discretion include:

N2>(a) whether the amendment ought to be made “for the purposes of determining the real question in controversy between the parties ... or of correcting any defect of error” (per Jenkins L.J in G. L. Baker Ltd. v. Medway Building Supplies Ltd., [1958] 1 W.L.R. 1216, at p. 1231);

N1>(3) The amendment sought being purely formal and for the purpose of correcting a procedural slip would cause no injustice to the defendant and leave to amend should be granted.

There is no requirement in Papua New Guinea that, when the plaintiff is an incorporated company that there must be an express statement endorsed on the writ or averred in the statement of claim that the company has been duly incorporated.

This was an action on a deed of guarantee commenced by specially endorsed writ. At the conclusion of the hearing of the case the plaintiff sought leave to amend its statement of claim by averring incorporation. The matter is reported on the ruling on this request only.

SALDANHA J: The plaintiffs who call themselves New Guinea Company Limited (hereinafter referred to as the plaintiff company) sued the defendant on a deed of guarantee. The plaintiff company had agreed to supply goods on credit to a members’ club known as the Pagini Club, and the defendant had guaranteed payment for the goods so supplied.

When the amount owing by the Pagini Club reached the sum of $1,586.63 and the account had not been settled for some five months the plaintiff company stopped giving the Club any further credit, and, upon the Club failing or refusing to pay the amount owing filed an action against the defendant on the guarantee.

Mr. Griffin, counsel for the defendant, in addressing me at the conclusion of the hearing of the case pointed out that there was no averment in the statement of claim nor proof at the trial that the plaintiff company was duly incorporated and entitled to sue. He contends that as an incorporated company is not a natural person but a legal entity created by statute there must be an averment in the statement of claim that it is duly incorporated and is entitled to sue. He relies upon the following three cases, namely, The Commercial Bank of Australia Ltd. v. Hatton [dclxii]², The Pacific Commercial Company v. Barnett and Anor. [dclxiii]³, and Moldex Ltd. v. Recon Pty. Ltd. [dclxiv]⁴. In each of these cases the plaintiff was an incorporated company. Each action was commenced by a specially endorsed writ, and, in each case, leave to sign final judgment was refused on the ground that the writ of summons did not contain an endorsement to the effect that the plaintiff company had been duly incorporated. These three cases, however, turned upon the particular requirements of the Rules of Court in Victoria, whereby, a specially endorsed writ must conform to a prescribed form, which, when the plaintiff is an incorporated company must contain the express statement that the company has been incorporated. The case before me was commenced by the filing of a specially endorsed writ. In our jurisdiction, however, although O. XCIV provides that the forms prescribed in a schedule must with suitable variations be used there is no form similar to that in Victoria which prescribes that on a specially endorsed writ where the plaintiff is an incorporated company the writ of summons must contain the express statement that the company has been incorporated, so that, these cases are not necessarily authorities for the proposition put forward by Mr. Griffin.

It is interesting to note, however, that in each of these cases, although the summons for final judgment was dismissed, leave to amend in one form or another was granted. Thus in The Commercial Bank of Australia Ltd. v. Hatton[dclxv]⁵ Hodges J made the following order:

“I shall dismiss the summons, without costs and without prejudice to its making a subsequent application for final judgment; the plaintiff to have leave to amend the endorsement on the writ.”

In The Pacific Commercial Company v. Barnett and Anor.[dclxvi]⁶ the following order was made:

“I dismiss the summons, with four guineas costs. Liberty to amend for purposes of the action; but not for purpose of a fresh application for final judgment ...”

“The proper course is to dismiss this summons as it is obvious that the plaintiff cannot obtain the relief it seeks. Speaking for myself, I think that this order should be accompanied by a further order giving the plaintiff leave to amend his writ and that I should dismiss the summons without prejudice to the issue of a fresh summons under O.XIV of the Rules of the Supreme Court 1938 within a limited time.”

Mr. Griffin also relies upon the following passage from Halsbury’s Laws of England, 3rd ed., Vol. 6 at p. 444 which sets out the English practice:

“A company registered under the Companies Act, 1948, or the Acts which it replaces, is a body corporate and can only sue or be sued in its corporate name.”

The English practice is also stated in The Supreme Court Practice, Vol. 2, 1973 ed., par. 2034 at p. 605 in similar terms as follows:

“Corporations incorporated by Charter, special Act of Parliament or registration, and companies incorporated by special Act or registered under the Companies Acts, must sue and be sued in their corporate title or registered name as the case may be.”

“A corporation and a limited company sue and are sued in their corporate name; they are legal persons.”

Neither in England nor in our jurisdiction, whether on a specially endorsed writ or a writ not so endorsed, does there appear to be a requirement when the plaintiff is an incorporated company that there must be an express statement endorsed on the writ or averred in the statement of claim that the company has been duly incorporated. Mr. Wood, however, seems to concede that without such a statement a writ is defective and asks for leave to amend the statement of claim by adding after the word plaintiff in the first paragraph the words:

“a company duly incorporated entitled to sue in and by its corporate name and style”.

“The Court or a Judge may, in any course or matter, at any stage of the proceedings, allow or direct either party to alter or amend the writ of summons, or any endorsement thereon, or any pleadings or other proceedings in such manner and on such terms as may be just.”

Order 20 r. 5 (1) of the Rules of the Supreme Court, Supreme Court Practice, Vol. 1, 1973 ed. sets out the English practice in the following terms:

“... the Court may at any stage of the proceedings allow the plaintiff to amend his writ, or any party to amend his pleading, on such terms as to costs or otherwise as may be just and in such manner (if any) as it may direct.”

The general principles governing the granting of leave to amend are well established as can be seen from the following authorities. In G. L. Baker Ltd. v. Medway Building Supplies Ltd.[dclxviii]⁸ at p. 1231 Jenkins L.J states that amendments ought to be made:

“for the purpose of determining the real question in controversy between the parties to any proceedings or of correcting any defect or error in any proceedings”.

“It is a well established principle that the object of the Court is to decide the rights of the parties, and not to punish them for mistakes they make in the conduct of their cases by deciding otherwise than in accordance with their rights . . I know of no kind of error or mistake which, if not fraudulent or intended to over-reach, the Court ought not to correct, if it can be done without injustice to the other party. Courts do not exist for the sake of discipline, but for the sake of deciding matters in controversy, and I do not regard such amendment as a matter of favour or grace ... It seems to me that as soon as it appears that the way in which a party has framed his case will not lead to a decision of the real matter in controversy, it is as much a matter of right on his part to have it corrected if it can be done without injustice, as anything else in the case is a matter of right.”

With these observations A. L. Smith L.J, expressed “emphatic agreement” in Shoe Machinery Co. v. Cultan [dclxx]¹⁰. In Tildesley v. Harper [dclxxi]¹¹, Bramwell L.J said:

“My practice has always been to give leave to amend unless I have been satisfied that the party applying was acting mala fide, or that, by his blunder he had done some injury to his opponent which could not be compensated for by costs or otherwise.”

And in Clarapede v. Commercial Union Association[dclxxii]¹² Brett M.R. said:

“However negligent or careless may have been the first omission, and however late the proposed amendment, the amendment should be allowed if it can be made without injustice to the other side. There is no injustice if the other side can be compensated by costs.”

The real matter in controversy between the parties is this: is the defendant liable on the guarantee, and if so, to what extent. It is clear from the authorities that for the purpose of deciding this issue it is only right and proper that I should allow the amendment which counsel for the plaintiff seeks.

Whether leave to amend should be granted or not is a matter of discretion for the Court. Like all judicial discretions it must be judicially exercised, and, for this purpose it is relevant to consider the conduct of the parties. Counsel for the plaintiff has confessed quite frankly that neither he nor the solicitors instructing him were aware of the defect until Mr. Griffin pointed it out. When exactly the other side became aware is not clear but there appears to be some force in Mr. Wood’s contention that Mr. Griffin waited in ambush until the last minute. Had the defect been pointed out earlier, as, in my opinion it ought to have been, it could have been amended in good time. The amendment sought is purely formal and is for the purpose of correcting a procedural slip. It will cause no injustice to the defendant.

[dclxi]O. XXXII, r. 2 of the Rules provides—

N1>“The Court or a Judge may, in any course or matter, at any stage of the proceedings, allow or direct either party to alter or amend the writ of summons, or any endorsement thereon, or any pleadings or other proceedings in such manner and on such terms as may be just.”

[dclxii](1895) 21 V.L.R. 489.

[dclxiii][1921] V.L.R. 196.

[dclxiv][1948] V.L.R. 59.

[dclxv](1895) 21 V.L.R. 489.

[dclxvi][1921] VicLawRp 18; [1921] V.L.R. 196.

[dclxvii][1948] V.L.R. 59.

[dclxviii][1958] 1 W.L.R. 1216.

[dclxix][1884] UKLawRpCh 91; (1884) 26 Ch.D. 700, at pp. 710-711.

[dclxx][1896] 1 Ch. 667.

[dclxxi] (1876) 10 Ch.D. 396, at p. 397.

[dclxxii] (1883) 32 W.R. 263.

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Papua New Guinea Law Reports

New Guinea Company Ltd v Thomason [1975] PGLawRp 494; [1975] PNGLR 454 (23 December 1975)

Papua New Guinea Law Reports - 1975