Srbecky v Bess[2001] QDC 42

DISTRICT COURT OF QUEENSLAND

1. [1]
   One sometimes sees, in the title of proceedings in court, a party to the action identified as one or more names of individuals or companies, followed by the words “trading as” and then a business name. What is the effect of the addition of that expression? In my opinion, it is of no effect, except where it can produce the unfortunate result of leading someone into error as to the nature of the proceeding.

Proceeding in the Queensland Building Tribunal

2. [2]
   The applicant before me was the applicant before the Queensland Building Tribunal claiming damages from “Alan Bess T/A Ease-Al-Lee Projects”. The matter came on for hearing on 13 July 2000, when there was no appearance for the respondent; after considering the evidence the tribunal found there was a contract between the applicant and the respondent which was partly oral and partly in writing, and the respondent was liable for breach of the contractual term that the work be carried out in a workmanlike manner. The tribunal assessed damages in respect of the cost of rectification and the cost of demolition of existing works, and also upheld a claim for money paid for a consideration which had wholly failed, and ordered the respondent i.e. “Alan Bess T/A Ease-Al-Lee Projects”, to pay the applicant a total of $63,605.76 by a particular date. There was also an order for costs made by the tribunal, which was amended upon a reconsideration under s. 92 of the Queensland Building Services Authority Act 1991. 

3. [3]
   Section 91 of that Act provides that a determination made by the tribunal can be registered in the District Court by filing certain documents, which was done in this case, and on registration the determination has, for the purposes of enforcement, the same force and effect as if the determination had originally been given as a judgment in the District Court entered on the day of registration. The document which was actually filed on 18 August 2000 included a copy of the amended order dated 26 July 2000, ordering the respondent, identified in the same way as stated above, to pay the applicant $63,605.76 and costs of $14,701.

Proceeding in the District Court

4. [4]
   The applicant subsequently obtained an enforcement warrant for the seizure and sale of property under Chapter 19 of the Uniform Civil Procedure Rules. Such a warrant is the appropriate means for enforcing such a judgment, and can apply to real or personal property: r. 828. The respondent and Lee Bess are registered as proprietors of an estate in fee simple in a parcel of land and the applicant has registered a warrant against that land, but steps have not yet been taken to sell the respondent’s interest under the land. The warrant was registered on 6 September 2000 and, pursuant to s. 117 of the Land Title Act 1994, it affects registered lots only if it is executed within six months of its lodgment, or the extended time allowed by this court and notified to the registrar. On 28 February another judge extended the operation of the writ until 14 March, when the application came on before me. I reserved my decision, but extended the operation of the writ until 10 April 2001 to enable me to consider the matter.

Function of Supreme Court Act 1991 s. 89

5. [5]
   One of the orders sought by the applicant was that the judgment be enforced against the property of Lee Bess pursuant to s. 89(1)(d) of the Supreme Court Act 1991.  That section provides that “An order against partners suing or sued in the name of the partnership may be enforced against any one or more of the following - … (d) a person who the court has decided is a partner …”  This section is one of a number of provisions inserted into that Act by the Civil Justice Reform Act 1998, and applies to the District Court as well as the Supreme Court:  s. 71.  It reproduces a provision formerly found in O. 54 r. 10 of the Supreme Court Rules.  There is authority that under that provision a person would not be subject to execution unless there had been service upon that person, so as to give that person the opportunity to be heard: Whittan v. Hamilton Island Enterprises Pty Ltd [1992] 2 Qd.R. 331. In the present case Lee Bess was not made a respondent to the application.  For this reason alone such an order could not be made.

6. [6]
   There is, however, a more fundamental difficulty facing the applicant, and that is s. 89 applies only when an order has been obtained against, relevantly, partners sued in the name of the partnership. When the provision was contained in the then O. 54 r. 10 the way it fitted in with the general scheme of the rules dealing with actions by and against a firm and persons carrying on business in names other than their own, was more readily apparent than is the case now that the section has been placed in the Supreme Court Act, together with other sections dealing with enforcement.  Previously it was a part of the scheme under which action could be brought by and against partnerships in the name of the partnership (O. 54 r. 1) and actions could be brought against a person,  carrying on business in some name other than his or her own name, by that name: O. 54 r. 13. 

Suing Using a Business Name

7. [7]
   Prior to the introduction of rules of this nature, a partnership could not sue or be sued by the firm name, and the names of all partners had to be included, either as plaintiffs or defendants: Luka Brewery v. Grundmann [1985] 2 Qd.R. 204 at 206.  As was explained there, this was due to the fact that in English law the firm as such had no existence, not being a legal entity.  But there were obvious practical advantages in being able to sue all the partners simply by use of the firm name, arising from the difficulty which a plaintiff might sometimes have in identifying the partners who constitute the firm.

8. [8]
   One reason why this was important was because the liability of partners on contracts of a firm is joint rather than several: Partnership Act s. 12.  This meant that if only one or some of the partners were sued, at common law they could defend on the ground that it was necessary for all parties liable to be sued, a plea in abatement, and, although such a plea has now been abolished, the court still has a discretion to stay an action against one or some of the partners on the ground that their rights of contribution from the others will be prejudiced if the others are not made parties to the action:  Halsbury’s Law of Australia, vol. 9, para. 1080.  The reason for this is that at common law there could be only one judgment in respect of a joint liability, so that once there was judgment against one or some of a number of persons so liable, the liability of the others was discharged: Kendall v. Hamilton (1879) 4 App. Cas 504.  To some extent this has been modified by statute, and it is no longer the law in Queensland:  Property Law Act 1974 s. 54(1)(b).  Although the liability of partners remains joint because of s. 12, this paragraph abolishes the rule that judgment against one discharges the others, so long as the liability or cause of action arose after 1975. 

9. [9]
   Therefore, one of the advantages of suing partners in the firm name was that the judgment would necessarily bind all of the members of the firm who were jointly liable under s. 12 of the Partnership Act, and there was no risk of missing anyone.  But there were consequential difficulties with execution because it was necessary to identify those particular individuals (or companies) against whom the judgment could be executed.  That was the function of the former O. 54. r. 10, and the current s. 89, and, in the case of a judgment against a business name, s. 90. 

10. [10]
    Apart from actions against firms in business names, the rules also permitted an action be brought against a single person, carrying on a business under a different name, in that name: O. 54 r. 13, and see now Uniform Civil Procedure Rules r. 90. Again, this is a matter of convenience because there is a possibility that at the time the action is commenced the plaintiff will not know the name of the person carrying on the business by this name. Accordingly, when a particular individual is carrying on a business under a business name, that individual can be sued in the usual way under his own name, or he can be sued under the business name. It follows that if Alan Bess does trade as Ease-Al-Lee Projects, an action can be brought against “Alan Bess” because he is the relevant person, or an action can be brought against “Ease-Al-Lee Projects” under r. 90. One advantage in such circumstances of using the latter terminology is that it is effective as an action against whoever is carrying on business under that name.

11. [11]
    In the present case there is some evidence in the material before me that in fact Alan Bess and Lee Bess as partners carried on business under the name “Ease-Al-Lee Projects”, and Alan Bess has deposed to the partnership having been dissolved, which is an implied admission that there was one to dissolve. For this reason it was submitted on behalf of the applicant that the true situation here is that the proceedings in the Building Tribunal had been brought against the partnership, and that this was achieved by the use of the expression “trading as “Ease-Al-Lee Projects” added to the name “Alan Bess” as the name of the respondent.

Was This a Proceeding against the Partnership?

12. [12]
    There are, in my opinion, two reasons why that is not the case. The first is that, as was pointed out on behalf of the respondent, the Queensland Building Services Authority Act 1991 under which this proceeding was brought does not make provision for a proceeding to be brought against a partnership.  Section 95(1) provides that “The Tribunal may, on application by a party to a domestic building dispute, make such orders and directions as may be just to resolve a dispute and any other matters of issue between the parties”.  The term “domestic building dispute” is defined in s. 4 as “a claim or dispute arising between a consumer and a building contractor in relation to the performance of domestic building work or a contract for the performance of domestic building work …”.  The term “building contractor” is defined as “A person who carries on a business that consists of or includes carrying out building work, and includes a sub-contractor who carries out building work for a building contractor”.  Both the words “person” and “party” include individuals and companies – Acts Interpretation Act 1954 s.36 – but neither are defined to extend to a partnership, and as a partnership is not a legal entity, would not do so in the absence of some specific provision.  There is no specific provision of which I am aware in the 1991 Act, and therefore in my opinion it follows that that Act does recognise the partnership as such.  That does not mean that the partnerships could operate outside that Act;  it simply means that proceedings against a partnership under that Act are taken against the partners as individuals. 

Use of the Expression “Trading As”

13. [13]
    The second reason why the argument is wrong is that in my opinion when a proceeding is brought against “Alan Bess trading as Ease-Al-Lee Projects” it is a proceeding against “Alan Bess” as an individual rather than a proceeding against whoever happen to be the persons carrying on the business “Ease-Al-Lee Projects”. This is the result indicated by such authorities as exist in this area, as to the effect of an expression of this nature. In W. Hill & Son v. Tannerhill [1944] KB 472, Scott LJ said at p. 475 that, if an individual is sued, adding the words “trading as” followed by a business name is “mere useless and inappropriate surplusage”.  Then in J M Glassell & Co Ltd v. Fisk & Anor (1950, unreported, noted in 24 ALJ 524), Sholl J in the Supreme Court of Victoria criticised the identification of a party in a writ in the form “A & B (trading as Y & Co)” when A and B are being sued as a partnership in Victoria.  His Honour said that this was not suing a firm in the firm name but was a claim against A and B individually with a confusing and irrelevant addition. The correct designation of the defendant sued as a firm in that State was “Y & Co, a firm”.

14. [14]
    In Jessop v. Barker [1962] NSWR 1439, Nagle J said that the words “trading as Barker Bros and Milliner” in the writ could be considered as mere surplusage.  The various authorities are usefully collected in the notes to O. 48A r. 1 in Williams Practice of the Supreme Court of Victoria (1973, discontinued 1991) vol. 2, where the reference to a trading name is described as “a confusing and irrelevant addition”.  I respectfully agree.  There is no requirement under the new rules even for the addition of the expression “(a firm)”, since r. 83 simply permits proceedings to be started in the “partnership name” or brought against the partnership “in the partnership name”.  But if the situation is that A and B are in partnership under a name Y & Co, and a proceeding is brought against “A & B trading as Y and Co”, in my opinion it is not correct to say that the proceeding has been brought against the partners in the partnership name, and the true situation is that it is a proceeding against the partners as individuals (which is quite permissible and appropriate) with a confusing and irrelevant addition.

15. [15]
    In my opinion, therefore, the proceeding in the Queensland Building Tribunal was just against Alan Bess, and it follows that the determination of the Tribunal which has been registered in this court and is enforceable as a judgment of this court under s. 91(2) takes effect as a judgment just against Alan Bess. It is not a judgment against the partnership Ease-Al-Lee Projects, assuming that really is a partnership. It follows that it is inappropriate to grant any relief which is based on the assumption that it is a judgment against the partnership. It follows that s. 89 is not applicable because there is no order against the partners sued in the name of the partnership.

Other Relief Sought

16. [16]
    It also follows that it is not appropriate to order, pursuant to ss. 89, 90 and 91 of the Supreme Court Act 1991 that the judgment be enforced against the property of that partnership.  I have already indicated that s.89 is not applicable.  Section 90 applies when an order is made in the name or style under which one or more persons carry on a business, and for reasons I have given that is not the situation here.  Section 90 therefore does not apply.  It is therefore unnecessary for me to consider the circumstances under which it would be appropriate to make an order under s.90.  Section 91 applies when a proceeding is brought against a person in relation to a business carried on by the person under a name or style other than the person’s own name, and for reasons I have given, in my opinion that was not the case here, and so s. 91 also does not apply.  It follows that in my opinion the order sought in para. 3 of the application cannot be made. 

17. [17]
    Paragraph 4 seeks an order that Lee Bess’ interest in the partnership property and profits be charged with the judgment debt pursuant to s. 26(2) of the Partnership Act 1891.  This section is concerned to restrict execution in respect of a judgment against a partner against the partner’s interest in the partnership property, but permits this interest to be charged with the judgment debt and allows appropriate consequential orders to be made.  There is some authority that an order should not be made under this section in relation to a judgment against the partner not arising out of the operation of the partnership, unless the court is satisfied that the judgment creditor has exhausted all other means of satisfying the judgment:  Franklin v. Ruck (1899) 2 GLR 45.  This is because a business asset should be primarily available for business creditors, and private creditors should have resort first to private assets, but that would not be a difficulty in the present case because this was a business debt. 

18. [18]
    The difficulty however is that it is necessary for there to be a judgment against a particular partner before an order can be made charging that partner’s interest in the partnership property. The judgment here is a judgment against Alan Bess, but the applicant is not seeking an order charging the interest of Alan Bess in the partnership, but is seeking an order charging the interest of Lee Bess. Such an order cannot be made in the absence of any judgment in favour of the applicant against Lee Bess, and in my opinion there has been none. The application for this order was also based on the notion that the judgment was one against the partnership and therefore included Lee Bess, and in my opinion that is not the situation here.

Extension Of Enforcement Warrant

19. [19]
    That leaves the question of whether the enforcement warrant should be extended to enable the applicant to sell the respondent’s interest in the real property. The applicant was frank about the commercial disadvantages of seeking to enforce a judgment against one of two joint owners in property of this nature, because of the practical difficulties in selling the judgment debtor’s interest in the property, particularly in circumstances where it is a matrimonial home and the other joint owner is his wife, but that course is open to the enforcement creditor, and may well be the only form of execution which is of any practical value to her.

20. [20]
    It was submitted on behalf of the respondent that no extension should be granted because it was necessary for an applicant for an extension to show that there was some good reason for granting an extension, and the current material did not show any such good reason, nor did it show why the judgment creditor had been unable to effect any sale of the interest within the period allowed by the statute. Considerations of priorities between creditors might arise in such a situation, and it may be unfair to preserve a priority in favour of a dilatory creditor, but that particular consideration was not relied on and so far as I can see from the material before me does not arise in this case.

21. [21]
    This, however, is not a case where the delay is really unexplained; although there is no affidavit material which directly sets out why the enforcement creditor has not sought to sell the respondent’s interest in the property until now, it is obvious enough from the material before me that the practical reason for that omission is that the applicant was trying to find some way to make execution more effective by making it available against the property of Lee Bess as well as the property of Alan Bess. That in the circumstances is understandable, and indeed if Lee Bess really was a partner in the business, and therefore also liable as a partner on the contract of the business, she has been fortunate not to be found liable for what was, according to the reasons of the tribunal, some very defective work.

22. [22]
    In these circumstances I have some sympathy for the applicant, and consider that the applicant should have at least a further opportunity to decide whether it is appropriate to seek to enforce the judgment just against the interest of Alan Bess in the property and to take that course if thought fit. I note that there is no real prejudice alleged by the respondent arising out of the delay in enforcement. Accordingly, I will extend the period limited by the Land Title Act to 12 months after the lodgment of the enforcement warrant, that is to 6 September 2001.

23. [23]
    I order that the time limited by s.117 of the Land Title Act 1994 for executing and putting in force the enforcement warrant in favour of Lynette Srbecky registered on 6 September 2000 against the land described as Lot 525 on registered plan 176991 County of Stanley, Parish of Capalaba be extended to and including 6 September 2001. The application will be otherwise dismissed. The relief sought by the applicant in the application was largely inappropriate and the applicant has failed in what were from a practical point of view the important aspects of the application, and accordingly in my opinion costs follow the event.