Bailey v Marinoff

Supreme Court of NSW|2019-06-14|Before: Rees J, Young J, Mr J, Davies J

Solicitors: Gardner Ekes Lawyers (Defendant) File Number(s): 2018/387725

Judgment

HER HONOUR: I heard these proceedings on 5 June 2019 and reserved judgment until 6 June 2019 when I made the following orders: 1. Order pursuant to section 459A of the Corporations Act 2001 (Cth) that GHS Safety Products Pty Ltd (ACN 112 732 073) be wound up in insolvency. 2. Order that Mr Peter Paul Krejci of BRI Ferrier (NSW) Pty Ltd, Level 30 Australia Square, 264 George Street, Sydney, NSW 2000, be appointed to act as the liquidator of GHS Safety Products Pty Ltd. 3. Defendant to pay the plaintiff's costs of these proceedings.
On 7 June 2019 the liquidator's office emailed the plaintiff barrister as follows: My colleagues have passed me a winding up order in respect of 'GHS Safety Products Pty Ltd ACN 112 623 073'. When they have obtained an ASIC extract for the company with that Australian Company Number, the company's name is given as 'GHS Safety Products Australia Pty Ltd'. There is no company in ASIC's register styled 'GHS Safety Products Pty Ltd'. I assume that a slip has occurred in entering the order. Are you able to liaise with the Registry about the issue of a fresh order? We are concerned that statutory creditors may query whether Mr Krejci has been appointed to the company about which we need to write to them.

Slip rule

Rule 36.17 of Uniform Civil Procedure Rules 2005 provides: If there is a clerical mistake, or an error arising from an accidental slip or omission, in a judgment or order, or in a certificate, the court, on the application of any party or of its own motion, may, at any time, correct the mistake or error. As the rule makes plain, it enables the court, of its own motion, to correct a mistake or error: Marlinspike Debt Acquisitions Pty Ltd v Undone Pty Ltd [2018] NSWSC 4 per Davies J at [29]. It is not confined to cases where the "mistake, error slip or omission" is that of the court but permits the correction of a clerical error in a judgment where this has arisen as a consequence of an accidental slip or omission by a party's legal advisors: Ritchie's Uniform Civil Procedure NSW (LexisNexis, looseleaf) at [36.17.5] and the numerous authorities there cited.
As Spigelman CJ (with whom Santow JA and Handley AJA agreed) explained in Newmont Yandal Operations Pty Ltd v J Aron Corporation and the Goldman Sachs Group Inc (2007) 70 NSWLR 411; [2007] NSWCA 195, when interpreting rule 36.17 the court must bear in mind the overriding purpose of section 56 of the Civil Procedure Act 2005 (NSW) and rules: to facilitate the just, quick and cheap resolution of the real issues in the proceedings. At [116]: By reason of the insertion of the overriding objective into the Civil Procedure Act, words such as 'error' and 'correct' in the slip rule should not be given a narrow interpretation. In my opinion, carrying into effect the actual intention of the judge making the order, and making sure that the order did not have a consequence which the judge clearly intended to avoid, falls within the natural and ordinary meaning of the word 'correction', particularly as understood in the light of the overriding purpose.
The criteria for determining whether a proposed correction is justified under the slip rule is often said to be the hypothetical inquiry as to whether the supposed error, if it had been drawn to the attention of the court or the parties at the relevant time, would have been corrected as a matter of course: Ritchie's at [36.17.5], citing Hatton v Harris [1892] AC 547 at 558.
The 'slip rule' in its common law form has been used to substitute the correct name of a party. In Pearlman (Veneers) SA Pty Ltd v Bartels [1954] All ER 659; [1954] 1 WLR 1457, the plaintiffs sued Bernhard Bartels in contract, and then sought to enforce the judgment in Germany. Mr Bartels contended that the judgment was unenforceable as his true name was Josef Bartels and he only used the name Bernhard Bartels when carrying on business, despite having defended the action under the latter name. The Court of Appeal held that the court below had jurisdiction to amend the title of the action where the substantive judgment was in no way altered. Per Denning LJ , with whom Hodson LJ agreed, at All ER 660; WLR at 1459: When the substantive judgment is not being altered, but only the title of the action, it is to my mind quite plain that this court has ample jurisdiction to correct any misnomer or misdescription at any time whether before or after judgment. Pearlman (Veneers) SA Pty Ltd v Bartels has been followed in Australia: Bailey v Marinoff (1971) 125 CLR 529 at 539-40; [1971] HCA 49 per Gibbs J; McGorm v Bennett (Unreported, Full Court of the Supreme Court of South Australia, 22 May 1981); Martino v Mostler (1988) 92 FLR 88 at 89 per Asche CJ of the Supreme Court of the Northern Territory; Sherpa v Anderson (Unreported, Supreme Court of New South Wales (Young J), 14 October 1993); Speedo Hodlings B.V. v Evans (No 2) [2011] FCA 1227.
The company submitted that a mistake in the name of a party is not amenable to correction under the slip rule, citing Bridge Shipping Pty Ltd v Grand Shipping SA (1991) 173 CLR 231; [1991] HCA 45. However, that case concerned the Victorian equivalent of section 64 of the Civil Procedure Act 2005 (NSW), which gives the Court power to grant leave to the parties to amend documents in a proceedings, including where there is a mistake in the name of a party, to ensure that the real issues in dispute are determined and to avoid multiplicity of proceedings. Section 64(5) provides: This section does not apply to the amendment of a judgment, order or certificate. Consequently, it is not necessary to consider Bridge Shipping Pty Ltd v Grand Shipping SA further, although I note it does not otherwise appear to support the company in the circumstances of this case in any event: per McHugh J at 261, with whom Brennan and Deane JJ agreed.

Application of slip rule

These proceedings were commenced by the barrister on 17 December 2018 against GHS Safety Products Pty Limited (ACN 112 732 073). The barrister filed an affidavit sworn on 17 December 2018 in which he deposed at paragraph 4: Annexed to this affidavit is a current and historical extract of the records maintained by the Australian Securities and Investments Commission with respect to the Defendant. It is annexed and marked JHP-2. Annexed was a current and historical company extract for GHS Safety Products Australia Pty Limited ACN 112 732 073. The registered office of the company was in Wetherill Park. It would appear, therefore, that the name of the defendant on the Originating Process was incorrect as the word "Australia" was omitted. The Australian Company Number was, however, in accordance with that in the company search. The address of the company was stated to be the registered office as it appeared in the company search.
This misdescription of the name of the company was thereafter repeated in the heading of each court document filed in the proceedings by either party. The identity of the defendant was, however, reasonably discernible from the affidavit in support of the Originating Process and its accompanying company search. Nor could there have been confusion on the subject as there is no company called GHS Safety Products Pty Limited.
Nor do I think there was any confusion on that score at the hearing. The company, in its written submissions, had contended that there was a lack of proper publication of the application to wind up the company. Debate ensued at the commencement of the hearing as to whether: 1. a notice published by the barrister in The Sydney Morning Herald, or 2. a Notification of Court Action relating to Winding-Up lodged by the barrister with the Australian Securities and Investments Commission on 12 February 2019, satisfied the requirements of the Corporations Act 2001 (Cth). Both the notice in The Sydney Morning Herald and the Notification of Court Action relating to Winding-Up lodged with ASIC were in respect of GHS Safety Products Australia Pty Limited.
At the hearing, the barrister tendered an updated company search for GHS Safety Products Australia Pty Limited ACN 112 732 073, to which no objection was taken The consent of liquidator signed by Peter Krejci on 6 February 2019 was given in respect of GHS Safety Products Australia Pty Limited. The barrister also tendered documents and relied on evidence to which the company objected, but not on the basis that it related to the wrong company. That evidence comprised: 1. an affidavit from Mr Rod, who deposed that he was familiar with GHS Safety Products Australia Pty Limited and annexed a Deed of Guarantee and Indemnity between 1 Loan Pty Limited and GHS Safety Products Australia Pty Limited dated 13 June 2017 and a PPSR registration search certificate in respect of GHS Safety Products Australia Pty Limited dated 4 June 2019; and 2. an email exchange between the barrister and George Dimitriou concerning the subject "GHS Safety Products Australia Pty Limited" which attached draft financial statements prepared by Wyse & Young International for GHS Safety Products Australia Pty Limited for the year ended 30 June 2016.
The company's evidence opposing the appointment of a liquidator comprised an affidavit of Paul Ekes and an accompanying lengthy exhibit including documents replete with references to GHS Safety Products Australia Pty Limited. 1. On 24 March 2017, an R&D Tax Incentive Application was lodged. It was this R&D claim that ultimately became the subject of the barrister's retainer. The application was lodged by GHS Safety Products Australia Pty Limited. 2. The position paper issued by the Australian Taxation Office (ATO), which prompted the retainer of the barrister, was issued in respect of GHS Safety Products Australia Pty Limited. 3. The barrister issued a costs agreement with "GHS Safety Products Australia Pty Limited and Bramco International Pty Limited", which was signed by Paul Ekes on 21 March 2018, albeit above a signature line below which was typed "GHS Safety Products Pty Limited". 4. On 31 August 2018, the company lodged an objection to amended tax assessment notice issued by the ATO. The objection was lodged for GHS Safety Products Australia Pty Limited. 5. On 19 January 2019, the barrister issued revised invoices at the request of the client, addressed to GHS Safety Products Australia Pty Limited. 6. On 28 February 2019, the barrister made submissions to the Costs Review Panel in respect of GHS Safety Products Australia Pty Limited. 7. On 12 March 2019, the company's solicitor sent submissions to the Costs Review Panel in respect of GHS Safety Products Australia Pty Limited. 8. On 13 March 2019, the barrister made further submissions to the Costs Review Panel in respect of GHS Safety Products Australia Pty Limited. 9. The exhibit to Mr Ekes' affidavit included bank statements for a Westpac bank account in the name of GHS Safety Products Australia Pty Limited.
At the hearing, the company also tendered the following documents: 1. screenshots from a Westpac bank account for an account in the name of GHS Safety Products Australia Pty Limited; 2. a printout from the ATO tax portal of GHS Safety Products Australia Pty Limited; and 3. an email from GDC Tax Pty Limited advising that it had no fees outstanding for GHS Safety Products Australia Pty Limited. Presumably, the company tendered these documents as the documents were perceived to be relevant to the application before the court, being whether to appoint a liquidator to the company, that is, to GHS Safety Products Australia Pty Limited.
I note that the same error was contained in the statutory demand and the costs assessment proceedings. The company has itself filed a Summons in the Common Law division of this Court seeking leave appeal against the Costs Review Panel in the name of GHS Safety Products Pty Ltd (although the coversheet issued by the court registry refers to GHS Safety Products Australia Pty Ltd. It would appear that the company has made the same error as the barrister when preparing court documents.
It would have been open to the company to seek to set aside the statutory demand under section 459J(1)(a) by reason of being incorrectly named in it if "because of a defect in the demand, substantial injustice will be caused unless the demand is set aside". Whether the company would have been able to establish substantial injustice is unknown but the company failed to make an application to set aside the demand within time in any event.
It seems to me, having reviewed the court file and the material considered at the hearing, that if the error in the name of the defendant had been drawn to the attention of the court or the parties at the hearing, it would have been corrected as a matter of course. It was a mistake or error fitting the description in rule 36.17. Having regard to the overriding purpose of the Civil Procedure Act 2005 (NSW) and the rules, as well as the Corporations Act regime under which I appointed Mr Krejci, it is appropriate to give effect to the actual intention of the Court to appoint a liquidator to GHS Safety Products Australia Pty Ltd rather than to a non-existent company to allow him properly to carry out the liquidation in a timely fashion for the benefit of the creditors of the company.

ORDERS

For these reasons, I make the following orders: 1. Pursuant to Rule 36.17 of Uniform Civil Procedure Rules 2005, correct the mistake or error in the orders made on 6 June 2019 as follows: 1. Order pursuant to section 459A of the Corporations Act 2001 (Cth) that GHS Safety Products Australia Pty Ltd (ACN 112 732 073) be wound up in insolvency. 2. Order that Mr Peter Paul Krejci of BRI Ferrier (NSW) Pty Ltd, Level 30 Australia Square, 264 George Street, Sydney, NSW 2000, be appointed to act as the liquidator of GHS Safety Products Australia Pty Ltd. 3. GHS Safety Products Australia Pty Ltd to pay the plaintiff's costs of these proceedings.

DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 14 June 2019

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