Supreme Court of the ACT|2015-05-27|Before: Refshauge J

Commonwealth of Australia v Davis Samuel Pty Limited and Ors (No 9) [2015] ACTSC 127 (27 May 2015)

SUPREME COURT OF THE AUSTRALIAN CAPITAL TERRITORY

Orders D.3, D.4, K.3 and K.5 of the Orders made on 21 November 2014 be amended under the slip rule by:

1.1 At D.3(i) deleting "$1,204,917.27" and inserting instead "$1,058,421.44".

1.2 At D.3(ii) deleting"$292,991.67" and inserting instead "$146,495.84"

1.3.1 "$821,765.49" and inserting instead "$675,269.66", and

1.3.2 "$292,991.67" and inserting instead "$146,495.84", and

1.3.3 after "proportion" inserting the words "until payment in full of the balance of the charged money with interest", and

1.4 At K.3(i) deleting "$475,474.30" and inserting instead "$360,911.14".

1.5 At K.3(ii) deleting "$229,126.33" and inserting instead "$114,563.17".

1.6.1 "$475,474.30" and inserting instead "$255,811.13", and

1.6.2 "$229,126.33" and inserting instead "$114,563.17", and

1.6.3 after "proportion" inserting the words "until payment in full of the balance of the charged money with interest", and

PRACTICE AND PROCEDURE - Accidental slip or omission -Mathematical error - Amendment to orders - Decision under appeal - Amendment does not affect grounds of appeal - Amendment does not cause prejudice

Court Procedures Rules 2006 (ACT), rr 1613(2)(d), 6906

Brew v Whitlock (No 3) [1968] VicRp 63; [1968] VR 504

Burrell v The Queen [2008] HCA 34; (2008) 238 CLR 218

Commonwealth v Davis Samuel Pty Ltd (No 7) [2013] ACTSC 146; (2013) 35 ACSR 258

Commonwealth v Davis Samuel Pty Ltd (No 8) [2014] ACTSC 312

D'Orta-Ekaraika v Victoria Legal Aid [2005] HCA 12; (2005) 223 CLR 1

Gikas v Papanayiotou [1977] 2 NSWLR 944

Gould v Vaggelas (1985) 157 CLR 215)

Hatton v Harris [1892] AC 547

Hazeldell Ltd v Commonwealth [1924] HCA 36; (1924) 34 CLR 442

In re Suffield and Watts; Ex parte Brown (1888) 20 QBD 693

In re Swine; Mellor v Swine (1885) 30 Ch D 239

L Shaddock & Associates Pty Ltd v Council of the City of Parramatta (No 2) [1982] HCA 59; (1982) 151 CLR 590

McLeary v Swift [2013] NSWSC 1674

Moore v Buchanan [1967] 3 All ER 273

Mutual Shipping Corp of New York v Bayshore Shipping Co of Monrovia [1985] 1 All ER 520

Qiao v Jacon Industries Pty Ltd [2003] NSWCA 125

R v Calvert [2010] ACTSC 80

R v Cripps; Ex parte Muldoon [1984] 1 QB 686

Sands & McDougall Wholesale Pty Ltd (In liq) v Commissioner of Taxation (No 2) [1999] VSCA 36; [1999] 2 VR 114

Stewart v Rhodes [1900] 1 Ch 386

Storey & Keers Pty Ltd v Johnstone (1987) 9 NSWLR 446

The Napier Star [1933] P 136

Valleyfield Pty Ltd v Primac Ltd [2002] QSC 134

von Reisner v Chepurin [2013] NSWSC 874

Wickey v The Queen (No 2) [2012] ACTCA 51; (2012) 269 FLR 289

Kamanga Holdings Pty Limited ACN 003 316 292 (Tenth Defendant)

Pellon Pty Limited ACN 082 375 951 (Eleventh Defendant)

Amative Pty Limited ACN 082 375 924 (Thirteenth Defendant)

Bisoya Pty Limited ACN 003 016 242 (Fifteenth Defendant)

Winton Oil NL ACN 001 863 878 (Sixteenth Defendant)

Quancorp Pty Limited ACN 002 755 133 (Seventeenth Defendant)

Allan Paul Endresz as representative of the members of 'Border Basketball Association Inc' an unincorporated association (Eighteenth Defendant)

Tresmonay Pty Limited ACN 073 120 635 (Twenty-first Defendant)

ACT Organics Pty Ltd ACN 008 628 662 (Twenty-second Defendant)

Graham McCann Pty Limited ACN 008 653 969 (Twenty-third Defendant)

TNG Limited ACN 008 817 023 (Twenty-seventh Defendant)

Snedden Hall & Gallop as agents for Jackson McDonald (Twenty-seventh Defendant)

1. In this long-running matter, I delivered what was to be final judgment and made final orders on 21 November 2014.

2. Because of the complex nature of the proceedings and of the orders to be made, I handed to the parties draft orders when I delivered judgment in the morning and adjourned to the afternoon so that the parties would have an opportunity to ensure that the proposed orders were in accordance with the reasons I have delivered.

3. While that time was obviously useful as a number of amendments were suggested and made to the draft orders, I do note that my reasons and the attached schedules took up 122 pages so there was a lot of material to consider.

4. All the active parties who are defendants (see the definition of 'active party' in the Dictionary to the Court Procedures Rules 2006 (ACT)) have now appealed against my orders. I shall refer to them hereunder simply as the active defendants. The appeal of the active defendants has not yet been heard.

5. The orders I made have now been perfected, having been sealed by the court and issued. The plaintiff, the Commonwealth of Australia, has now applied for amendments to the orders I made. Ordinarily a perfected order can only be corrected on appeal and the trial court is regarded as functus officio. See Burrell v The Queen [2008] HCA 34; (2008) 238 CLR 218 at 224; Harrison v Schipp [2002] NSWCA 78; (2002) 54 NSWLR 612 at 630.

6. The Commonwealth submits that I have made some mathematical errors in the calculations I did to give effect to my findings in the reasons set out in Commonwealth v Davis Samuel Pty Ltd (No 8) [2014] ACTSC 312, so that some of the amounts specified in the orders I made are wrong. Application is made to correct the errors under r 6906 of the Court Procedures Rules. It may be that, alternatively, they could be corrected under r 1613(2)(d).

7. The former provision, r 6906, is commonly known as "the slip rule": see, for example, Moore v Buchanan [1967] 3 All ER 273 at 276. This is a power that common law courts have always possessed: In re Swine; Mellor v Swine (1885) 30 Ch D 239 at 247. More recently, it has been given statutory force in the rules of court. Both provisions, however, are a source of power for a court to amend an order, even if perfected, but only in the limited circumstances set out in the respective provisions.

8. Some of the active defendants have consented to the Commonwealth's application, some have not.

9. It seems to me that, if the Commonwealth can make out its case for amendment, then the opposition of other parties, even those affected, is not of itself a bar to me making the amendments.

10. In Mutual Shipping Corp of New York v Bayshore Shipping Co of Monrovia [1985] 1 All ER 520, the UK Court of Appeal remitted an arbitrators award back to the arbitrator for correction of what was an error of the arbitrator, which the arbitrator acknowledged, even though the party who received the benefit of the error vigorously opposed that result. See also L Shaddock & Associates Pty Ltd v Parramatta City Council [1982] HCA 59; (1983) 151 CLR 590.

11. Of course, the opposition of parties may result in the application for amendment being dismissed if that opposition satisfies the court that there is some reason for that result. For example, if those active defendants or third parties may have relied, to their detriment, on the orders as made, there may be injustice. This may require the application for amendment to be refused. See, for example, Gikas v Papanayiotou [1977] 2 NSWLR 944 at 954.

12. Similarly, the active defendants may show that the error was not an error at all or not the kind of error that can be corrected in this way.

13. In this case, not all the defendants, much less all the active defendants, were represented at the hearing of the Commonwealth's application.

14. Mr Allan Endresz appeared for himself. As I had earlier allowed (though this changed from time to time), he sought to represent his parents, Dawn May Endresz and Mr Jozsef Endresz. I permitted again the earlier representation he had been allowed. See Commonwealth v Davis Samuel Pty Ltd (No 7) [2013] ACTSC 146; (2013) 35 ACSR 258 at 275; [116]. He opposed the Commonwealth's application. He had also earlier represented his wife, Joy Beverly Endresz. He did not seek to represent her expressly but did not suggest that this meant that the application could not be heard. Mrs Joy Endresz had been advised by the Commonwealth about the application but had not directly responded. Mr Allan Endresz had, however, responded "on behalf of all the remaining defendants in Matter No 75 of 1999" that the orders sought by the Commonwealth were opposed. I am satisfied that Mrs Joy Endresz knew of the application and any submissions she may have made were made by Mr Allan Endresz.

15. Mr Peter Cain appeared for himself and also for Davis Samuel Pty Ltd, CTC Resources NL, Winton Oil NL and Tresmonay Pty Ltd. He had earlier appeared for Bisoya Pty Ltd also but I was told in the hearing that the company had been put into liquidation by a court, which would stay the proceedings against it by virtue of s 471B of the Corporations Act 2001 (Cth) and I had no application for leave to proceed, though I understood that the winding up was subject to an appeal. Mr Cain did not tell me that he, or the parties he represented, opposed the application. He made no submissions to me opposing the application.

16. Mr William Forge appeared for himself. He did not oppose the application.

17. The liquidator of Quancorp Pty Ltd (in liquidation) wrote to the Commonwealth's solicitor a letter which was tendered and in which he advised that he was not in a position to consider the proposed amendments because, he informed me:

• As Official Liquidator, I have played no active role in the proceedings.

• As Quancorp is without assets and the Liquidator is unfunded I have not been in a position to retain counsel or seek legal advice.

• In terms of Section 545 of the Corporations Act 2001 the Liquidator is not obliged to take any action in these circumstances.

18. TNG Ltd did not appear by counsel, but its solicitor signed the draft consent order proposed by the Commonwealth which I can reasonably take to indicate its attitude to the application.

19. For reasons that will appear obvious below, this represents all (indeed, more) of the active defendants whose interests were directly affected by the proposed amendments.

20. An overview of these proceedings is set out in Commonwealth v Davis Samuel Pty Ltd (No 7) at 265-6; [1]-[9].

21. Briefly, I found that an amount of $6 million (called the April funds) was improperly, and in breach of fiduciary duties, paid from Commonwealth funds to CTC Resources NL and dissipated in various ways, including into assets to which I held the Commonwealth and, to a lesser extent, TNG Ltd could trace these funds and which were impressed with a constructive trust in favour of the Commonwealth and to an extent of TNG Ltd for the sum thereby paid away.

22. The relevant assets were certain real estate properties, one being a residential property known as "Haven Hill", located on the Riverina Highway at Splitters Creek, Albury, New South Wales (Haven Hill) and the other being a residential property known as 21 Pine Avenue, Elwood, Victoria (Pine Avenue). They are described in more detail in Commonwealth v Davis Samuel Pty Ltd (No 8) at [40] and [43] respectively. Mr Allan Endresz and Mrs Joy Endresz were the registered proprietors of Haven Hill; Quancorp Pty Ltd (in liquidation) was the registered proprietor of Pine Avenue but under a trust of which Mr Cain was a beneficiary.

23. There were two methods by which the April funds were converted into these assets relevant to this application. The first was through payment by two companies to which CTC Resources NL had made payments of the April funds it had received and which companies made payments to persons who applied them to the assets by effecting improvements on them.

24. The second method was similar but somewhat more complicated. Some of the active defendants purchased shares in a company known as Kanowna Lights NL using April funds. Those shares were then sold to TNG Ltd. That sale also breached fiduciary duties owed to TNG Ltd.

25. The funds received from the sale of those shares were then, in part, paid to persons who applied them to these assets, either by repaying loans that had been used to purchase the assets or by effecting improvements on them.

26. The significant and relevant difference between the two methods was that the liability to repay the funds traced into these assets under the first method was only owed to the Commonwealth, for whose benefit I imposed a constructive trust over the assets to the extent of the funds traceable into these assets, whereas the liability to repay the funds under the second method was owed to both the Commonwealth and TNG Ltd, to be paid in equal shares to them and for whose benefit I also imposed a constructive trust in favour of the two equally over the assets of the funds traceable into these assets.

27. I then had to consider the priorities as between the Commonwealth and TNG Ltd in respect of the various amounts paid under the two methods because TNG Ltd was only entitled to funds that were traceable through the application of the proceeds of the sale to it of the shares in Kanowna Lights NL, which sale took place on 23 October 1998.

28. TNG Ltd's involvement, however, only came after 26 October 1998. All the payments made by the first method were made on or before that date.

29. Thus, there was a period, represented by amounts of principal and interest, where the Commonwealth alone was entitled to the funds traceable into the assets and there were subsequent periods when the Commonwealth and TNG Ltd were equally entitled to the funds traceable into the assets. For the earlier period, the Commonwealth's interest took priority over the interests recognised for the latter period.

30. I held, however, that the interest accrued on that part of the April funds traceable into the assets prior to 26 October 1998 should be dealt with in two ways: for the interest accrued prior to 26 October 1998 and that part of the April funds traceable into the assets before 26 October 1998, the Commonwealth should have priority; for the interest on that part of the April funds traceable into the assets before 26 October 1998 but which interest accrued after 26 October 1998, the Commonwealth and TNG Ltd should share equal priority together with the further part of the April funds traceable into the assets after 26 October 1998 and interest accrued on that further part of the funds.

31. This is explained in Commonwealth v Davis Samuel Pty Ltd (No 8) at [290]-[302].

32. When translating that reasoning into the actual amounts to be included in the orders, however, I made mathematical errors.

34. The amount of April funds traceable into this asset prior to 26 October 1998, together with accrued interest to the date of judgment, was $911,925.60. The Commonwealth was entitled to the whole of this sum. The amount of the April funds which came from the sale of shares in Kanowna Lights NL, with interest, was $292,991.67. The Commonwealth and TNG Ltd were entitled in equal shares to this sum.

35. When translating that into totals for the relevant orders, I calculated the Commonwealth's entitlement at $1,204,917.27 (being $911,925.60 + $292,991.67) and TNG Ltd's entitlement as $292,991.67.

36. This, of course, meant that the post-26 October 1998 sum had been added twice instead of attributing half each (namely $146,495.84) to the Commonwealth and to TNG Ltd, whose entitlements should have been: Commonwealth - $1,058,421.44 (being $911,925.60 + $146,495.84); TNG Ltd - $146,495.84.

37. So far as priorities were concerned, the part of the April funds traceable into the assets prior to 26 October 1998, together with interest accrued up to that date, was $383,151.78. This was the sum for which the Commonwealth had priority.

38. Of the total amount due to the Commonwealth, $1,058,421.44 then, the balance, namely $675,209.66 was equally shared with amount due to TNG Ltd, $146,495.84.

39. I had in the orders, however, carried through the earlier error, specifying the Commonwealth's balance as $821,765.49 (namely $1,204,917.27 less $383,151.78) and that of TNG Ltd as $292,991.67, instead of the correct figures referred to in the preceding paragraph.

40. This resulted in a calculation of the respective percentages of the entitlements of the Commonwealth and TNG Ltd as 74% and 26% respectively, instead of 82.17% and 17.83% respectively.

41. A similar error was made with respect to the relative entitlements of the Commonwealth and TNG Ltd in the Pine Avenue asset.

42. In that case, the total amount of the April funds traceable into this asset prior to 26 October 1998, with interest accrued to the date of judgment, was $246,347.97. The amount of the April funds which came from the sale of the shares in Kanowna Lights NL, with interest, was $229,126.33.

43. I translated the total entitlement of the Commonwealth to be $475,474.30 (being $246,347.97 + $229,126.33) and TNG Ltd's entitlement as $229,126.33.

44. Again the amount from the sale of shares in Kanowna Lights NL should have been attributed to each of the Commonwealth and TNG Ltd as to one half, so that the total entitlement of the Commonwealth was $360,911.14 (being $246,347.97 + $114,563.17 - that latter amount being one-half of $229,126.33) and of TNG Ltd being $114,563.17.

45. Again, that translated into errors in the orders determining the priority between the Commonwealth and TNG Ltd. The April funds traceable into the asset, together with accrued interest up to 26 October 1998, was $105,100.01, for which sum the Commonwealth had priority. The balance, then, was $255,811.13 (being $360,911.14 less $105,100.01) for which the Commonwealth shared priority with TNG Ltd, not the sum of $475,474.30 which appeared in the order. TNG Ltd had an entitlement to share with the Commonwealth the sum of $114,563.17, not the sum of $229,126.33 which appeared in the order.

46. The relative percentage entitlements, which were then calculated between the Commonwealth and TNG Ltd as 67% and 33% respectively, should have been 69.07% and 30.93% respectively.

47. None of the parties disputed that, applying the reasoning to which I have referred above (at [30]), the errors that I have set out were errors in the orders which did not reflect accurately the intention I had clearly expressed in my reasons.

48. These were the errors that the Commonwealth sought to have rectified by amendment of the orders made on 21 November 2014.

49. It is convenient to deal with the submissions made by Mr Allan Endresz by setting out his argument and my findings.

1. The proposed amendments were not amenable to the slip rule

50. Mr Endresz relied on two decisions as the basis for his submissions that the errors that he accepted had been made were not amenable to correction under the slip rule. These were Valleyfield Pty Ltd v Primac Ltd [2002] QSC 134 and Qiao v Jacon Industries Pty Ltd [2003] NSWCA 125.

51. In Valleyfield Pty Ltd v Primac Ltd, the plaintiff applied to have altered the interest component in a judgment pronounced in its favour. The interest rate allowed by the trial judge on all heads of the damages awarded to the plaintiff was 5%. In its counsel's submissions, however, the plaintiff made a claim for 10% interest on certain heads of damages and 5% on the balance.

52. It was said in the amendment application that the reference to 5% was an error by counsel and that this error should have been apparent to the court. While the court accepted that an error amenable to correction under the slip rule is not limited to errors made by the court and can include errors made by counsel (a position clearly so in the light of decisions such as L Shaddock & Associates Pty Ltd v Council of the City of Parramatta (No 2) and Gould v Vaggelas (1985) 157 CLR 215), the court held that this did not justify intervention in this case.

53. The court held that the decision of the court in awarding the interest it did, at the rate it did, was exercising a discretion and that there was nothing to suggest that what the court did was other than make a decision on the material before it. As the court said, the slip rule cannot be applied where what is involved is the exercise of an independent discretion which has to be re-exercised and referred to Brew v Whitlock (No 3) [1968] VicRp 63; [1968] VR 504 and Re Russell [1999] FamCA 1875; (1999) 25 Fam LR 629.

54. The court further pointed out that the applicant had to show an error the correction of which would be such that no real difference of opinion could exist. The court referred to the decision of Brooking JA in Sands & McDougall Wholesale Pty Ltd (In liq) v Commissioner of Taxation (No 2) [1999] VSCA 36; [1999] 2 VR 114 at 119 where his Honour referred to the well-known test articulated by Lord Herschell in Hatton v Harris [1892] AC 547 at 558 that the Court would not doubt that the "correction would at once have been made if the matter had been drawn to the attention of the judge who made the [order]".

55. In Sands & McDougall Wholesale Pty Ltd (in liq) v Commissioner of Taxation (No 2) the question was whether a costs order should have been made on a solicitor-client basis because the plaintiffs had made an offer to compromise the proceedings before the hearing and which was rejected. In the proceedings, the plaintiffs recovered more than was offered in the compromise. When the defendant was ordered to pay costs, the plaintiffs did not seek an order that the costs be paid on a solicitor-client basis. The Court of Appeal held that the order for costs could not be amended to provide for solicitor client costs because the court found (at 121):

the impossibility of saying, with the necessary degree of conviction, that an award of solicitor client costs would have been made had the matter been drawn to the attention of the Court of Appeal ... It may well be that the court would have done so, but I do not think that it can be said that there is no real difference of opinion, no controversy about whether that was the appropriate order to make ... it is probable that the Court of Appeal would have awarded solicitor client costs below had the matter been debated at the right time, but ... I am not prepared to say that the matter is beyond argument.

56. The present case is quite different. The mathematics simply do not correctly represent the findings I made and it is not a matter of discretion to increase, as I did when making the orders, the amount payable to the Commonwealth and TNG Ltd beyond what represented the actual findings. Once the explanation is given, as it is above (at [34]-[46]), it is obvious what error has been made and I have no doubt that the correction would have been made without argument, difference of opinion or controversy, had it been drawn to my attention at the time. Indeed, all parties agreed there was an error and Mr Endresz did not argue to the contrary.

57. The decision in Valleyfield Pty Ltd v Primac Ltd is distinguishable and does not support the proposition of Mr Endresz that, in the present case, the identified errors are not amenable to correction under the slip rule.

58. In the second decision, Qiao v Jacon Industries Pty Ltd, the trial judge had to consider damages for an injured worker. He was required to assess damages for non-economic loss under a statutory formula that, inter alia, required him to determine "a proportion according to the severity of the non-economic loss of the maximum amount which could be awarded". No damages for economic loss were payable unless the injuries were not less than 25% of the maximum amount or the compensation was not less than $48,000. The trial judge assessed the plaintiff's injuries at 22% of the most extreme case "which on the table" was, he found, $32,500. Thus, no damages were awarded for economic loss.

59. The trial judge, it appeared had calculated 22% as the level he assessed the case as a proportion of the most extreme case, instead of the degree of permanent impairment. His Honour had then made reference to "the table" but it was not clear which one. There was one table, quite irrelevant to the purposes required for the decision to be made by his Honour, and the court held that (at [15]):

[t]he conclusion that the judge referred to the [wrong] table is all but irresistible, and it should be said that in the appeal, counsel for the defendants properly did not resist it.

60. Counsel submitted that the decision should be referred to the trial judge under the slip rule for correction of the mistake. The court did not agree, finding that the error was not "an accidental slip or omission". The court then said (at [21]):

While of course no judge would deliberately engage in erroneous reasoning, that is not what the slip rule addresses. By whatever his process of reasoning, the judge arrived at the percentage of 22 percent of a most extreme case, and I do not think that it would be a proper exercise of the slip rule for the matter to go back to the judge for him to say that he really meant a different figure and explain how he arrived at it, or to confirm that he meant that figure and explain where his reasons presently do not the reference to the table. The submission of counsel for the defendants really amounted to the matter being returned to the trial judge for him to have a second go at arriving at the percentage of a most extreme case and giving reasons, and that is not what the slip rule deals with.

61. Again, the present case is quite different. The reasoning behind my findings is not the issue. While that will, no doubt, be challenged on appeal, that is not what the present application addresses. It is the translation mathematically from the findings (including the amounts of principle and interest) into the final result, a purely arithmetical exercise. What is being sought is a correction of the arithmetic and not for me "to have a second go" at arriving at any findings but rather to give effect to the relevant findings.

62. Thus, the decision in Qiao v Jacon Industries Pty Ltd is distinguishable and does not support the proposition of Mr Endresz that the present case is not amenable to correction under the slip rule.

63. It has long been held that a mathematical error, where the reasoning is clear and not intended to be altered by the amendment, may be amended under the slip rule. In Storey & Keers Pty Ltd v Johnstone (1987) 9 NSWLR 446, the trial judge made a finding that the plaintiff was entitled to loss of wages from 14 January 1984 to 1 October 1985. In calculating the damages, he allowed for 38 weeks instead of the actual 90 weeks that this period represented. The trial judge corrected the error and increased the damages accordingly. The Court of Appeal held that the trial judge had rightly applied the slip rule to increase the damages to represent the actual 90 weeks that his finding actually covered.

64. In R v Calvert [2010] ACTSC 80, I applied the slip rule where I had imposed a period of imprisonment of 15 months, but with the first 6 months to be served by periodic detention. As required by s 11 of the Crimes (Sentencing) Act 2005 (ACT), I specified the period during which the sentence of imprisonment was to be served, incorrectly, as 30 July 2010 to 29 March 2011 instead of 29 January 2011. I had no difficulty in correcting that mathematical error under the slip rule. See, to the same effect, Wickey v The Queen (No 2) [2012] ACTCA 51; (2012) 269 FLR 289.

65. I am satisfied that the slip rule applies to the errors identified by the Commonwealth and which it seeks that I correct.

66. In any event, even were, contrary to my finding, the slip rule to be unavailable to rectify the manifest error in translating my reasons into the orders, it seems to me that r 1613 of the Court Procedures Rules would provide ample authority for making the corrections as it is perfectly plain that the orders do not reflect the clear intention of the court as is apparent from the reasons for judgment.

67. I would, however, have to consider whether action under r 1613 would be an abuse of process for reasons set out below (at [79]). I do not have to do so in the circumstances.

68. As I have noted above (at [4]), the active defendants appealed to the Court of Appeal, on 23 October 2014, from the judgment entered on 21 November 2014. That appeal has not yet been heard.

69. Mr Endresz submitted that the pending of the appeal meant that this application should not proceed.

70. There seemed to be two aspects to the ground: he submitted that I had no jurisdiction to make the orders once the proceedings were subject to appeal and he also submitted that he and those of the active defendants that he represented would be prejudiced by any amendment made under the slip rule.

71. As to the first issue, Mr Endresz submitted that no authority cited had shown that the slip rule could be applied where the judgment sought to be amended was under appeal.

72. That, of course, does not show that I am unable to proceed as the Commonwealth seeks; it may only show that the circumstances have not previously arisen or that they have not been dealt with in any published decisions.

73. I have to look at the circumstances and the statutory power in order to test the submission.

74. I accept that, unless there is statutory or inherent power for me to amend the orders I made, I am functus officio. This arises, not by virtue of the oral pronouncement of judgment (for an oral judgment may be reconsidered: In re Suffield and Watts; Ex parte Brown (1888) 20 QBD 693 at 697), nor by the commencement of an appeal, but by the perfecting of the judgment: R v Cripps; Ex parte Muldoon [1984] 1 QB 686 at 695. In this case, the judgment has been perfected by being settled, signed and sealed by the Registrar. The law, however, recognises "a few, narrowly defined, circumstances" (D'Orta-Ekaraika v Victoria Legal Aid [2005] HCA 12; (2005) 223 CLR 1 at 17) where that does not apply and one is the exception given by the slip rule.

75. The rule is now, as noted above (at [7]), set out in the Court Procedures Rules and there is nothing in the rules to confine the court to its operation only where no appeal has been commenced.

76. Indeed, there are good policy reasons not to do so. The resources of the courts are stretched; indeed, the pressure of business on this court which caused the regrettable delay in delivering judgment in this matter on 21 November 2014 shows how stretched the resources are. To use those resources in the hearing of an appeal, involving three judges and complex and comprehensive preparation, when an obvious amendment can be made by the trial judge who, often, if not always, is in the best position to decide that the amendment accords with the reasoning and findings made and is a correction which "if the matter had been drawn to the court's attention would ... at once have been made" (Storey & Keers Pty Ltd v Johnstone at 453) is to waste scarce resources for no benefit.

77. In any event, contrary to the submissions of Mr Endresz, it is clear that the slip rule has been utilised by courts notwithstanding that the subject decision is under appeal. In McLeary v Swift [2013] NSWSC 1674, Windeyer AJ considered an application to amend the orders he had made even though the judgment was the subject of an appeal and cross-appeal. His Honour dismissed the application, but not because his Honour was precluded from doing so because there was an appeal. At [19], his Honour pointed out that there was no mistake amenable under the slip rule because "right or wrong, the judgment says what it was intended to say".

78. Mr Endresz submitted that his Honour did not advert to whether it was permissible to exercise jurisdiction under the slip rule where an appeal was pending. It is correct that his Honour did not do so in so many words but there are two points worth noting. A judge is always sensitive to the question of jurisdiction, for this is fundamental to the task upon which a judge will embark. Indeed, as Isaacs ACJ said in Hazeldell Ltd v Commonwealth [1924] HCA 36; (1924) 34 CLR 442 at 466, "the very first duty of any Court, in approaching a cause before it, is to consider its jurisdiction".

79. Secondly, it is clear that his Honour was aware of the issue, for his Honour was also asked to proceed under r 36.16 of the Uniform Civil Procedure Rules 2005 (NSW) (which has some similarity to r 1613 of the Court Procedures Rules). His Honour held at [17] that to do so may constitute an abuse of process because there was a cross-appeal on the very question sought to be remedied by the proposed amendment. His Honour was, therefore, acutely conscious of this issue and did not consider that it prevented consideration of the slip rule application.

80. In any event, in von Reisner v Chepurin [2013] NSWSC 874, Slattery J considered an application to vary, under the slip rule, a judgment of Harrison AsJ which had been appealed to the Court of Appeal. His Honour made it clear at [4] that he could have referred the matter back to Harrison AsJ but that it was more efficient to deal with it under the slip rule then and there, which his Honour did. Although his Honour ultimately dismissed the application, it was not for want of jurisdiction but because the errors claimed were not ones that were amenable to correction under the slip rule.

81. See also E v E [1903] P 88 at 91, where the court, constituted by the trial judge, amended the judgment at first instance even though there was a pending appeal and in the face of an express submission that:

... the respondent is appealing against [the settled and passed order] as drawn up. If there was even any ground for alteration, it is now much too late.

82. Even though the court did not mention the slip rule, it was made clear in The Napier Star [1933] P 136 at 142, that this is the power there exercised (though called the "slip order" as the power was then known, as explained in Hatton v Harris at 563).

83. Mr Endresz still persisted that there was no authority that expressly stated that despite an appeal from a decision the slip rule is available to amend that decision. I can oblige.

84. Following a careful consideration of the terms of r 6906 of the Court Procedures Rules, from authority and from a consideration of matters of policy and efficiency, it is clear to me, and I find, that a court may amend an order or judgment under the slip rule notwithstanding that the decision which it is sought to amend is the subject of an appeal. Such amendment, must, of course, be amenable to the application of the slip rule and is subject to the usual discretionary considerations. This may, in appropriate cases, mean that the application will be refused as an abuse of process.

85. The second aspect was that Mr Endresz submitted that the amendment sought would prejudice him and the other defendants who have appealed the decision. He was unable to particularise how this would be so.

86. The only ground of appeal to which he directed my attention was that which challenged my decision as follows:

86. The judge erred in failing to properly calculate interest.

87. This does not apply as the proposed amendments do not affect the calculation of interest but rather the apportionment of the interest (and principal) so calculated as between the Commonwealth and TNG Ltd.

88. I also note that, despite his extensive involvement in litigation, including acting in person and being granted leave to appear for other parties in many cases, Mr Endresz is still an unrepresented litigant and I must afford him the appropriate assistance that is due to a person in that position, as I have described in Maher v Carpenter (2012) 7 ACTLR 216 at 224; [41].

89. Accordingly, I have read through the 88 grounds of appeal. The only grounds that could conceivably be relevant are the following:

The final orders made on 21 November 2014 and each of them are wrong and not supported by the evidence or the law as to damages.

Each of the amounts referred to in paragraph 2 is excessive.

90. Paragraph 2, referred to in ground 8, sets out, in summary form, the orders I made on 21 November 2014 and includes the orders to which this application of the Commonwealth relates.

91. The proposed amendment will not prevent the appellants in the appeal from arguing either of these grounds, though the absence of the error which this application is designed to rectify will mean that the small and uncontroversial (the Commonwealth acknowledging by this application) errors will not need to be argued or proved.

92. Mr Endresz submitted that this will deprive him of the argument that the whole judgment is undermined and its reliability irrevocably damaged by virtue of these errors. That only has to be articulated to show how unpersuasive it is as a basis for declining to make the orders sought by the Commonwealth. In any event, the orders I will make will be on the record as will my express acknowledgement that I made the mathematical errors claimed and as carefully explained. That admission to making the errors can be used by Mr Endresz for such purposes on the appeal as he sees fit.

93. There is no substance in the claim by Mr Endresz that the appellants will be so prejudiced by the making of the amendments sought by the Commonwealth.

94. In Gikas v Papanayiotou at 954, Needham J pointed out that a court would be unlikely to exercise its discretion to amend an order "if the right of third parties have intervened, or if to amend the decree would work injustice".

95. See also L Shaddock & Associates Pty Ltd v Parramatta City Council (No 2) at 597; Stewart v Rhodes [1900] 1 Ch 386 at 395; Buchan v Buchan [1895] VicLawRp 83; (1895) 21 VLR 391 at 395; Hatton v Harris at 560.

96. Mr Endresz submitted that his parents would be prejudiced by the making of the amendments sought. It was an ingenious submission and one that it is unlikely that a legal practitioner would have been permitted to make, as it was directly contrary to the interests of Mr Endresz, who was making the submission, though on behalf of the persons he also represented.

97. Mr Endresz pointed out that the effect of the orders in their present form was that both the Haven Hill and Pine Avenue properties were charged with a sum greater than that to which the Commonwealth and TNG Ltd were actually entitled to recover from the assets. Thus, if the properties were sold and the proceeds distributed in accordance with the orders as they currently stand, the proceeds then payable from those proceeds to the Commonwealth and TNG Ltd would reduce the indebtedness of his father and mother, Mr Jozsef Endresz and Mrs Dawn Endresz, to the Commonwealth and to TNG Ltd.

98. At this stage, this is, as Mr J Hogan-Doran, counsel for the Commonwealth, pointed out, entirely theoretical for the properties have not been sold and it is not at all clear that they would, if sold, realise even the amounts for which the Commonwealth and TNG Ltd are beneficiaries under the relevant constructive trust.

99. Further, Mr Endresz did not point to any act taken or change of position effected by either of his parents in reliance on the situation where their indebtedness to the Commonwealth or to TNG Ltd or both would be reduced because of a greater recovery by them from realisation of these properties. Indeed, depending on how the judgment debt is recovered, the properties may never be sold.

100. It would be inequitable for the indebtedness of Mr Jozsef Endresz and Mrs Dawn Endresz to be reduced by an amount which was not properly payable to the Commonwealth or to TNG Ltd by Mr Endresz and Mrs Joy Endresz from the Haven Hill property or by Quancorp or Mr Cain from the Pine Avenue property.

101. A fortiori, it would be equitable to make the amendments to ensure that the proper results so far as the distribution of proceeds from the realisation of the properties are achieved.

102. This submission does not raise a discretionary reason why the amendments should not be made.

103. In my view, the Commonwealth has made out a case for making the proposed amendments to the orders I made on 21 November 2014 and no basis has been made out by Mr Endresz to justify me declining to make the amendments sought. Neither Mr Cain nor Mr Forge have suggested any reason why the amendments should not be made.

104. Accordingly, I will make the amendments as sought by the Commonwealth.

105. The Commonwealth did, before I actually made the orders, have the chance to comment on them and to propose amendments necessary to ensure there were no errors in them.

106. I did not give the parties a long time to do so and the material needed to be considered was extensive.

107. It is to the Commonwealth's credit (though it was, of course, only acting as a Model Litigant) that it raised these errors, even though the unamended orders were more to its benefit.

108. In all these circumstances, I consider that there should be no order as to costs.

109. This is a case where a suitors fund or a scheme such as embodied in the Federal Proceedings (Costs) Act 1981 (Cth) is highly desirable and should be available in the Territory so that parties who have expended costs though a court error can be compensated if appropriate, though given that the active defendants were, for the most part, not represented by a lawyer, there may have been little by way of recoverable costs.

110. I shall make orders to give effect to these reasons.

I certify that the preceding one hundred and ten [110] numbered paragraphs are a true copy of the Reasons for Judgment of his Honour Justice Refshauge

(Sentencing) Act 2005

Proceedings (Costs) Act 1981

Civil Procedure Rules 2005

Procedures Rules 2006

(Sentencing) Act 2005

Proceedings (Costs) Act 1981

Civil Procedure Rules 2005

Procedures Rules 2006

(1999) 25 Fam LR 629

Commonwealth of Australia v Davis Samuel Pty Limited and Ors

At a glance

Court

Decision date

Before

Catchwords

Source

Catchwords

Judgment (183 paragraphs)

Commonwealth of Australia v Davis Samuel Pty Limited and Ors (No 9) [2015] ACTSC 127 (27 May 2015)

Parties

Legislation Cited (8)

Cases Cited (11)