Australian Communications and Media Authority v Clarity1 Pty Ltd [2008] FCA 130 | Case summary

REASONS FOR JUDGMENT 1 By orders made on 27 October 2006 (Australian Communications and Media Authority v Clarity1 Pty Ltd (2005) 155 FCR 377), the Court ordered, amongst other things, that:

the first respondent, Clarity1, pay to the Commonwealth of Australia a pecuniary penalty pursuant to s 24(1) of the Spam Act 2003 (Cth) in the amount of $4.5 million; and
the second respondent, Mr Mansfield pay the Commonwealth of Australia a pecuniary penalty pursuant to s 24(1) of the Spam Act in the amount of $1 million. 2 The orders made by Nicholson J and referred to above did not stipulate a specific time within which either of those payments was to be made. Since the date of the orders, the parties have corresponded concerning payment but more than a year has passed and no payment has been made by either respondent. 3 Insofar as Clarity1 is concerned, an administrator was appointed on 23 June 2007 pursuant to s 436A of the Corporations Act 2001 (Cth). Following the appointment of the administrator, a meeting of creditors resolved on 20 July 2007 that it be wound up. The administrator was then appointed as liquidator for the purpose of s 446A(4) of the Corporations Act. By Sch G in a circular to creditors on 17 November 2006 from the administrator, liability to ACMA in respect of the pecuniary penalties was admitted. 4 While correspondence had been exchanged between ACMA and Mr Mansfield, that correspondence, at least from Mr Mansfield, tended to lapse by mid-2007 in consequence of which ACMA brought this motion to seek leave to amend the orders so as to enable it to execute the judgment. In the meantime, ACMA taxed its costs in respect of the action and on 20 September 2007 the Court issued a Certificate of Taxation allowing ACMA's bill of costs of $309,036. 5 ACMA's motion seeking a time limit by which payment of pecuniary penalties must be made was filed on 7 June 2007. The date of service, if it was served, is unclear. It sought orders that the pecuniary penalty imposed on each respondent by Nicholson J on 27 October 2006 be paid within 7 days from the date of the orders which were sought. It also sought costs of the motion. It has been pointed out by the Court in the course of exchanges during which Mr Mansfield has been present, that the effect of what ACMA seeks is to apply to amend his Honour's orders so as to impose a time limit for compliance with them. Unless there is, in effect at least, an amendment to impose a time limit, there can be no default. The parties have proceeded on that basis in the hearings that have been before me. In the course of those hearings, that has been the substantive issue even though the motion itself is not cast in terms of amendment. 6 I have allowed Mr Mansfield a little more latitude in respect of his three appearances before me in light of the fact that he is an unrepresented litigant but I am now satisfied that it has been clear to him that the essential debate has been whether or not there was a slip or omission by the Court in not imposing a time limit for the payment of the pecuniary penalties and if so whether this should, in effect, be rectified. 7 I am particularly mindful that at the last hearing on 15 February 2008, Mr Mansfield advanced the argument that Nicholson J deliberately did not provide for a time limit within which the substantial pecuniary penalties should be paid because his Honour was intending that the parties should have the opportunity to negotiate generally in relation to the issue. 8 On that occasion I informed the parties that I would adjourn the matter to consider that possibility and produce reasons after doing so. The parties acknowledged that costs would follow the event. 9 Having now examined the Court file and, in particular, examined his Honour's reasons giving rise to the orders of 27 October 2006, I can discern no intention on the part of his Honour that the omission of any time limit for payment was deliberate, so as to facilitate an opportunity for negotiation, or for any other reason. 10 In effect what ACMA seeks to do is to have the Court apply the slip rule in accordance with O 35 r 7(3) of the Federal Court Rules. The Court's power to correct errors in orders is expressly conferred by the Rules but, in any event, according to Lockhart J in Elyard Corporation Pty Ltd v DDB Needham Sydney Pty Ltd (1995) 61 FCR 385 exists pursuant to an inherent power of the Court to amend judgments which do not correctly state what was actually decided and intended. 11 In R v Cripps; Ex parte Muldoon [1984] QB 686 at 695 Donaldson MR said of the slip rule: It is surprisingly wide in its scope. Its primary purpose is akin to rectification, namely, to allow the court to amend a formal order which by accident or error does not reflect the actual decision of the judge. But it also authorises the court to make an order which it failed to make as a result of the accidental omission of counsel to ask for it. It even authorises the court to vary an order which accurately reflects the oral decision of the court, if it is clear that the court inadvertently failed to express the decision which it intended. It was also observed that the application to the court did not have to be made to the original judge who made the order. (That is presently relevant as Nicholson J has been retired for several months). 12 By application of this Rule, any omission or oversight made at the time of making the order which does not change the substantive character of the order can be rectified. The Rule exists to avoid doing injustice - Monaco v Arnedo Pty Ltd (1994) 13 WAR 522 at 524 per Malcolm CJ.

REASONS FOR JUDGMENT 1 By orders made on 27 October 2006 (Australian Communications and Media Authority v Clarity1 Pty Ltd (2005) 155 FCR 377), the Court ordered, amongst other things, that:

the first respondent, Clarity1, pay to the Commonwealth of Australia a pecuniary penalty pursuant to s 24(1) of the Spam Act 2003 (Cth) in the amount of $4.5 million; and
the second respondent, Mr Mansfield pay the Commonwealth of Australia a pecuniary penalty pursuant to s 24(1) of the Spam Act in the amount of $1 million. 2 The orders made by Nicholson J and referred to above did not stipulate a specific time within which either of those payments was to be made. Since the date of the orders, the parties have corresponded concerning payment but more than a year has passed and no payment has been made by either respondent. 3 Insofar as Clarity1 is concerned, an administrator was appointed on 23 June 2007 pursuant to s 436A of the Corporations Act 2001 (Cth). Following the appointment of the administrator, a meeting of creditors resolved on 20 July 2007 that it be wound up. The administrator was then appointed as liquidator for the purpose of s 446A(4) of the Corporations Act. By Sch G in a circular to creditors on 17 November 2006 from the administrator, liability to ACMA in respect of the pecuniary penalties was admitted. 4 While correspondence had been exchanged between ACMA and Mr Mansfield, that correspondence, at least from Mr Mansfield, tended to lapse by mid-2007 in consequence of which ACMA brought this motion to seek leave to amend the orders so as to enable it to execute the judgment. In the meantime, ACMA taxed its costs in respect of the action and on 20 September 2007 the Court issued a Certificate of Taxation allowing ACMA's bill of costs of $309,036. 5 ACMA's motion seeking a time limit by which payment of pecuniary penalties must be made was filed on 7 June 2007. The date of service, if it was served, is unclear. It sought orders that the pecuniary penalty imposed on each respondent by Nicholson J on 27 October 2006 be paid within 7 days from the date of the orders which were sought. It also sought costs of the motion. It has been pointed out by the Court in the course of exchanges during which Mr Mansfield has been present, that the effect of what ACMA seeks is to apply to amend his Honour's orders so as to impose a time limit for compliance with them. Unless there is, in effect at least, an amendment to impose a time limit, there can be no default. The parties have proceeded on that basis in the hearings that have been before me. In the course of those hearings, that has been the substantive issue even though the motion itself is not cast in terms of amendment. 6 I have allowed Mr Mansfield a little more latitude in respect of his three appearances before me in light of the fact that he is an unrepresented litigant but I am now satisfied that it has been clear to him that the essential debate has been whether or not there was a slip or omission by the Court in not imposing a time limit for the payment of the pecuniary penalties and if so whether this should, in effect, be rectified. 7 I am particularly mindful that at the last hearing on 15 February 2008, Mr Mansfield advanced the argument that Nicholson J deliberately did not provide for a time limit within which the substantial pecuniary penalties should be paid because his Honour was intending that the parties should have the opportunity to negotiate generally in relation to the issue. 8 On that occasion I informed the parties that I would adjourn the matter to consider that possibility and produce reasons after doing so. The parties acknowledged that costs would follow the event. 9 Having now examined the Court file and, in particular, examined his Honour's reasons giving rise to the orders of 27 October 2006, I can discern no intention on the part of his Honour that the omission of any time limit for payment was deliberate, so as to facilitate an opportunity for negotiation, or for any other reason. 10 In effect what ACMA seeks to do is to have the Court apply the slip rule in accordance with O 35 r 7(3) of the Federal Court Rules. The Court's power to correct errors in orders is expressly conferred by the Rules but, in any event, according to Lockhart J in Elyard Corporation Pty Ltd v DDB Needham Sydney Pty Ltd (1995) 61 FCR 385 exists pursuant to an inherent power of the Court to amend judgments which do not correctly state what was actually decided and intended. 11 In R v Cripps; Ex parte Muldoon [1984] QB 686 at 695 Donaldson MR said of the slip rule: It is surprisingly wide in its scope. Its primary purpose is akin to rectification, namely, to allow the court to amend a formal order which by accident or error does not reflect the actual decision of the judge. But it also authorises the court to make an order which it failed to make as a result of the accidental omission of counsel to ask for it. It even authorises the court to vary an order which accurately reflects the oral decision of the court, if it is clear that the court inadvertently failed to express the decision which it intended. It was also observed that the application to the court did not have to be made to the original judge who made the order. (That is presently relevant as Nicholson J has been retired for several months). 12 By application of this Rule, any omission or oversight made at the time of making the order which does not change the substantive character of the order can be rectified. The Rule exists to avoid doing injustice - Monaco v Arnedo Pty Ltd (1994) 13 WAR 522 at 524 per Malcolm CJ. 13 There can be little doubt, in my view, that if the omission of the time period had been brought to his Honour's attention at the time of making the orders, his Honour would have amended the orders to specify a time limit for compliance. 14 The slip rule should not apply where the amendment is a matter of controversy or where there may be difference of opinion as to whether the orders would have been amended had the need to do so been raised at the time. I do not consider those circumstances apply in the present case. Although Mr Mansfield has raised an argument that his Honour intended not to impose any time limit, I was taken to no evidence or basis for that submission nor could I discern any such intention whatsoever within his Honour's reasons or elsewhere on the Court file. That possibility, in my view, is so unlikely that the argument raised could not be said to have any substance at all. 15 The original orders were made over 15 months ago. The application of the slip rule has the effect of amending the original orders. The date inserted in this instance, however, would have to be some 16 months after the original orders. To insert such a period into the orders does not seem an appropriate course. I have no doubt his Honour expected that payment or some substantial contribution to payment should take place within a reasonable period. He would not have considered that no financial contribution at all within 15 months fell into that description. 16 Rather than actually amend the existing orders therefore, I will give effect to that principle by making orders of the style sought by ACMA. This course, as distinct from amending the original order commended itself to the Full Court in Construction, Forestry, Mining and Energy Union v BHP Steel (AIS) Pty Ltd [2003] FCAFC 62. The Court had given judgment on 21 February 2003. An order was made requiring the payment of a fine. On 28 March 2003, a letter was sent to the parties by the Court relevantly in the following terms: … Order 35 rule 5 of the Federal Court Rules requires that any such order specify the time within which the person liable to pay the fine is required to pay it. No such order was made by the Full Court. It has come to the attention of the Full Court that the fine remains unpaid. The Court has power under 0 35 r 7 (3) to correct an error arising from an accidental slip or omission. The Full Court proposes to order that the fine of … dollars be paid within 28 days from the date of that order. Any party opposing such an order being made should file and serve written submissions by … . … 17 There was no objection to the course proposed. The Court said at [3]: In our opinion, it is appropriate that an order be made which would put beyond doubt when the fine has to be paid. Indeed this reflects the apparent purpose of 0 35 r 5. Accordingly, we will make an order generally in the terms referred to in the last paragraph of the letter set out above. 18 I propose to allow 28 rather than 7 days from the date of service of this judgment and orders for compliance by Mr Mansfield with the order. As to Clarity1, I also will allow 28 days from service of this judgment and orders rather than 7 days and will do so subject to Clarity1 from whom I have not heard, having liberty to apply through its liquidator within 14 days of service of these orders should it choose to do so. 19 The liquidator has made no appearance in response to the motion filed by ACMA. There are no indications that either Clarity1 or the liquidator has been served with the motion. Nevertheless, given that the debt was admitted, it would seem unlikely that the liquidator wishes to be heard in relation to the orders sought. 20 Orders amended in this manner will be made. The costs of ACMA are to be paid by Mr Mansfield. I certify that the preceding twenty (20) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice McKerracher.

Australian Communications and Media Authority v Clarity1 Pty Ltd

At a glance

Court

Decision date

Before

Source

Judgment (11 paragraphs)

Parties

Legislation Cited (2)

Cases Cited (5)

Cited By (1)