16 The "formal defect" issue, and the availability of statutory curial provisions, will inevitably arise in the present proceeding. The same issue is raised in paragraphs 83-86 of the statement of claim in the old proceeding. The defendant says that, subject to its filing an appropriate interlocutory process, the court should dismiss the new proceeding, because of this substantial overlap. Since, however, the constitution of the new proceeding gives the plaintiffs a chance of having their formal defect argument determined prior to the final hearing of the old proceeding, the bringing of the new proceeding is not necessarily repetitious or futile. "
18 At a directions hearing on 15 June 2004, counsel for the defendant said that the defendant would consent to the determination of the questions as to the alleged defect regarding voting, and the question of the Court's power to make orders under the Corporations Act, on the basis that discretionary questions be left for another day. Counsel for the defendant said that those questions could be dealt with separately, either in the 2003 proceedings, the 2004 proceedings, or as separate questions in the consolidated proceedings (if the 2003 and 2004 proceedings were consolidated). By this time, which was before pleadings had been filed, proposed questions for separate determination had been formulated.
19 In a judgment given on 22 June 2004, Austin J decided that an order for the separate determination of questions should not be made in the 2003 proceedings. His Honour noted that questions had been formulated which were designed to exclude the discretionary components of ss 445G, 447A and 1322, but also noted that in the 2003 proceedings, the other problems which had led to the refusal of the determination of the separate questions in those proceedings remained. His Honour also noted (J Aron Corporation v Newmont Yandal [2004] NSWSC 544 at [12]-[13]) that:
" 12 There is an important contrast with the 2003 proceeding, as to the outcome of separate determination of the questions. If the plaintiffs are able to show that their "formal defect" argument is correct, and that the court has no jurisdiction to intervene under the three curative provisions, they may well be entitled to judgment in the 2004 proceeding (depending on precisely what other questions are raised in the pleadings).
13 All things considered, my view is that there is probably a good case for making orders for the separate determination of questions, as drafted in the appendix, in the 2004 proceeding, whether or not other parties are joined (and therefore, whether or not the present defendant consents). But in my view it is premature to make that decision. I think it is necessary, first, for the precise issues in the 2004 proceeding to be defined by pleadings, and for any application that might be made for the joinder of parties to be heard and determined. "
20 Austin J adjourned the application so far as it related to the 2004 proceedings for further consideration once the pleadings had been closed. The separate questions all related to the "formal defect" issue and the question of whether the Court had jurisdiction under any of the provisions of the Corporations Act to cure the alleged defect.
21 In their statement of claim, the plaintiffs pleaded the entry into the master hedge agreement and its terms. They alleged the occurrence of an event of default, the designation of an early termination date and their calculation of the amount due. They claimed the same relief as in the summons. The defence admitted that the plaintiffs had terminated the agreement based on the occurrence of an event of default and had designated an early termination date. It did not admit the amount alleged to be due under the agreement. The defendant pleaded that the plaintiffs' debt was released and discharged by the deeds of company arrangement, and that in lieu of their debt, the plaintiffs became entitled to receive a distribution pursuant to those deeds.
22 On 31 August 2004, the plaintiffs filed a reply to the defence. The reply pleaded the "formal defect" issue. That is, the plaintiffs pleaded that the creditors of the defendant had resolved to execute the secondary deed of company arrangement. They pleaded that the secondary deed of company arrangement was conditional on execution of the other deeds of company arrangement, and required that resolutions be passed, in accordance with s 439C of the Corporations Act, of creditors of other companies in the group. The plaintiffs pleaded that the creditors of a number of the other group companies had failed to pass such resolutions. They pleaded that, as a result, conditions precedent to the secondary deed of company arrangement were not satisfied, and that that document never came into full force and effect, and was terminated in accordance with its own terms and by the operation of s 445C of the Corporations Act. They pleaded that by reason of these matters, the plaintiffs were not bound by any of the deeds of company arrangement and that their debt was not released, nor discharged.
23 The plaintiffs did not plead by way of reply, or by amendment to the statement of claim, the other grounds upon which they challenged the purported deeds of company arrangement in the 2003 proceedings.
24 The defendant and other companies in the Newmont group filed a cross-claim. They sought relief pursuant to ss 447A, 445G, or 1322 of the Corporations Act if it were found that the allegations in the reply were established. The defendant also filed a rejoinder to the reply asserting the due execution of the resolutions and of the deeds of company arrangement. The defendant also relied upon ss 444D, 445H, and 451C of the Corporations Act to assert the validity of the deeds of company arrangement.
25 In submissions filed on 8 October 2004 (that is, after the filing of pleadings), the plaintiffs submitted that the 2004 proceedings should be fixed for final hearing, or alternatively, that the questions formulated by the parties should be set down for separate determination. They submitted that the questions formulated by the parties did not in any way alter the precise issues defined by the pleadings in the 2004 proceedings. The plaintiffs noted that the statement of claim in the 2003 proceedings was being amended to remove the pleading of the "formal defect" issue in those proceedings. The plaintiffs submitted that because of this, there was no overlapping or similarity of evidence between the 2003 and 2004 proceedings, and hence, there should be no order for consolidation, or for the hearing of the two proceedings together.
26 It appears from the plaintiffs' submissions of 8 October 2004 that the plaintiffs did not contemplate that, if they failed on their claim in the 2004 proceedings, they might be shut out from continuing the 2003 proceedings.
27 The defendants submitted that the two proceedings should be tried at the same time. One of the grounds for this submission was that the prayers for relief in the 2004 proceedings concerned precisely the same subject matter as several of the prayers for relief in the 2003 proceedings, namely, the validity of the deeds of company arrangement and actions taken pursuant to those documents. The defendants also now opposed the determination of the separate questions in the 2004 proceedings.
28 In their submissions in reply, the plaintiffs submitted that if they succeeded on the separate questions or at a final hearing, it would bring finality to the 2004 proceedings and remove the need for continuation of the 2003 proceedings. They did not submit that the same consequence would follow if they failed on the separate questions or at a final hearing in the 2004 proceedings.
29 There was oral argument before Austin J on 22 October 2004. In the course of his submissions, Mr Bathurst QC, who appeared for the defendant, said:
" … If your Honour orders separate questions - I will come to why your Honour should not in a moment - they should be separate questions in each of the 2003 and 2004 proceedings because the issues are raised in each of the 2003 and 2004 proceedings.
That shows - again this is said irrespective of separate questions - the difficulty of these two cases in effect being run separately, whether on the legal issues postulated or on the discretionary issues, may ultimately come to be heard, if they are not heard - if the cases are not heard together or there is a danger of inconsistent verdicts - a difficulty if the 2004 proceedings for example are heard first, of what constituted a res in those proceedings so as to bind the parties in the 2003 proceedings and the difficulties in relation to Anshun on the basis that the whole of the case was not brought forward in the 2004 proceedings. Those very unsatisfactory consequences, in our submission, can be avoided if the two sets of proceedings are joined together. Once they are joined together consideration can then be given to the separate questions.
HIS HONOUR: Can I just think about one thing. Those submissions that you have just made are directed primarily, I think, to running the 2004 proceedings to final verdict before the hearing, the 2003 proceedings. I wonder to what extent you make the same submissions in the event that I make an order for determination of separate questions in only the 2004 proceedings?
BATHURST: If your Honour made an order for separate determination of questions in the 2004 proceedings it should be at the very least on the condition that the parties be bound by the answers to the questions in the 2003 proceedings. It can be overcome that way.
HIS HONOUR: What are the chances of getting that acknowledgement?
BATHURST: I would not see any difficulty of giving it for our part. We don't want to cause any difficulties on this. If you have got two sets of proceedings with two sets of difficulties raised, one that has the acknowledgement you ordered the separate questions in both sets of proceedings, and order that they be heard together. "
30 Mr Bathurst QC clearly identified the issue which has now arisen from the fact that the whole of the plaintiffs' case in the 2003 proceedings was not raised in the 2004 proceedings. Austin J queried whether those concerns would arise only from "running the 2004 proceedings to final verdict before the hearing [of] the 2003 proceedings." In his judgment of 18 July 2006 (J Aron Corporation v Newmont Yandal [2006] NSWSC 720), Austin J said (at [11]):
"11 At the time, I understood Mr Bathurst QC to be proposing a condition that would prevent either party from later making an argument based on res judicata or Anshun or other estoppel, so as to treat the resolution of the questions for separate determination as having some greater significance than merely providing a separate answer to the formal defect issue."
31 The condition proposed by Mr Bathurst QC may not have been necessary, but was appropriate for more abundant caution to ensure that, in both proceedings, the plaintiffs and the defendant would be bound by the answers to the separate questions. His proposal in this respect immediately followed Austin J's query whether the determination of separate questions in only the 2004 proceedings might not result in a final verdict being given in the 2004 proceedings before the hearing of the 2003 proceedings. Mr Bathurst QC did not suggest that wider estoppel issues would not arise if orders were made for the determination of separate questions in only the 2004 proceedings, particularly if their determination resulted in final judgment. He did later observe that:
" The procedure that my learned friend wants really boils down to this: Let us have … a separate trial on power in 2004 then let us have a separate trial on discretion in 2004, and if I lose on those, then let me have a third go in 2003 ."
32 I infer that the defendant understood that the plaintiffs did not intend that, if they lost the issues raised in the 2004 proceedings, they could be shut out from litigating the remaining issues in the 2003 proceedings. On the other hand, the possibility of wider estoppels being raised had been clearly flagged.
33 On 29 November 2004, Austin J made an order for the determination of separate questions in the 2004 proceedings (J Aron Corporation v Newmont Yandal [2004] NSWSC 1145). In the course of his reasons, his Honour said (at [42] and [45]):
" 42 If the plaintiffs succeed in the 2004 proceeding and in the cross-claim, they will be entitled to orders along the lines of the orders sought in the statement of claim, such as a declaration of indebtedness and an order that the amount owing be referred to a Master or referee for inquiry and report, unless some discretionary reasons are advanced for not making the orders. Orders of that kind would finally resolve the 2004 proceeding.
…
45 If the plaintiffs are unsuccessful on the separate determination of questions, the cloud of uncertainty that presently hangs over these administrations, because arguable claims have been made as to their invalidity, will not necessarily have been lifted, but at least some useful progress will have been made towards clarifying the position. Either the court will have decided that there is no defect warranting curative attention, or that there is a defect which is capable of being cured on discretionary grounds under one or more of the statutory provisions. It is desirable to make a determination that could lead to that outcome, sooner rather than later."
34 It is clear that Austin J did not contemplate that if the plaintiffs were unsuccessful on the determination of the separate questions, that would practically resolve the 2003 proceedings. It would only resolve, or go some way to resolving, the plaintiffs' claim that the administrations were invalid because of the alleged formal defect. His Honour also said (at [53]):
53 It is not appropriate to make a final decision, at this stage, as to whether, if the plaintiffs fail in their Part 31 application, I should dismiss the 2004 proceeding or amalgamate [it] with the 2003 proceeding. There may be something to be said to the view that the correct course will be simply to order that the two proceedings be heard together, with evidence in one being evidence in the other. This would preserve for the plaintiffs whatever advantage they may have, in terms, perhaps, of the nature of final orders and questions of onus of proof, through commencing the 2004 proceeding. It is a course not opposed by the other parties. In the meantime, I shall list the two proceedings together for each directions hearing.
35 Finally, Austin J said (at [55]):
"55 I intend to adopt the suggestion put forward by senior counsel for the defendant, that I should make the order on the condition that the parties to the 2003 proceeding acknowledge that they will be bound by the answers to the questions given in the 2004 proceeding. This may not be necessary, but seems to me an appropriate way of avoiding any uncertainty with respect to estoppel and res judicata."
36 In his judgment of 18 July 2006 (J Aron Corporation v Newmont Yandal [2006] NSWSC 720), Austin J said (at [15]):
"15 In making this order, my intention was to prevent any party from contending that any res judicata or estoppel would limit the contest in the 2003 proceeding of any of the issues other than the formal defect issue. I did not pay close attention to the drafting, which I borrowed from Mr Bathurst QC's submission, because I believed that all parties would attach to the words that I used the significance that I had understood Mr Bathurst to attribute to them. If I had detected any lack of consensus on this point, I would not have proceeded with the separate determination hearing until the question had been resolved so as to avoid any res judicata or estoppel issue remaining outstanding. "
37 On 14, 15 and 16 March 2005, Austin J heard the evidence and argument on the separate questions. The first question was whether the creditors of each of the Newmont Yandal group companies passed resolutions that each of them execute deeds of company arrangement. His Honour answered that question "Yes". It followed that the other questions did not require an answer as they were all predicated upon a negative answer to the first question. That is to say, the plaintiffs failed on whether there was a formal defect in the execution of the deeds of company arrangement. On 24 March 2005, his Honour published his reasons for judgment (J Aron Corporation v Newmont Yandal Operations Pty Ltd [2005] NSWSC 238). His Honour did not then make formal orders.
38 Following the delivery of Austin J's reasons, the matter came again before his Honour on 7 April 2005 for the purpose of his Honour making formal orders. The 2003 proceedings were also listed before his Honour at that time for directions. The transcript records the following:
" HIS HONOUR: Our main task this morning is in the 2004 matter, and that is to formally make orders with respect to the eight separate questions for determination and to deal with the question of costs in that matter. …
…
HIS HONOUR: Do you have any short minutes or anything else to help me?
GRAY (Counsel for the Plaintiffs) : Your Honour will be astonished to know that the parties haven't actually agreed on what should happen. In order to indicate where we see the position, can I give to your Honour a short chronology of what happened some year or 18 months ago in the 2003 proceedings. So far as the 2004 proceedings are concerned, we accept that the outcome should be judgment for the defendant, and the costs issue that your Honour mentioned I thought was to be dealt with on 26 April.
…
GRAY: Subject to, that we see no issue between the parties.
…
GRAY: Mr Bathurst suggests we deal with the 2004 proceedings first and, as I've said, from our perspective we …
HIS HONOUR: I will make some orders then. First of all, formally answering the questions for separate determination, my order is that my answers to the eight questions for separate determination are as follows:
(1) Yes;
(2) - (8) In view of my answer to question 1, these questions do not arise.
Secondly, I suppose the correct way to deal with the proceedings is to dismiss the amended cross-claim and enter judgment for the defendants in the proceedings.
BATHURST: If your Honour pleases.
HIS HONOUR: I will do that. In this 2004 proceeding the amended cross-claim is dismissed and judgment is entered for the defendant in the proceeding. … "
39 There was then debate which extends to over fifteen pages of transcript as to what should happen with the 2003 proceedings. The defendant proposed that those proceedings remain dormant until the plaintiffs decided whether they wished to appeal from the determination of the separate questions. Austin J determined that directions should be made for the further conduct of the 2003 proceedings. It would appear from the following exchanges that all parties at that time contemplated that all of the issues in the 2003 proceedings would still have to be decided on their merits, although of course the "formal defect" issue had been decided. It had been removed as an issue in the 2003 proceedings. There was the following exchange between his Honour and Mr Bathurst QC in relation to the evidence the plaintiffs had already filed in support of their challenges in the 2003 proceedings:
" His Honour: … in other words, this has now become the usual kind of challenge to a deed case where there are arguments of improper purposes and oppression and all of that.
Bathurst: Yes. It may be, as I said, that's all the plaintiff wants to put on it and that would seem surprising to us. "
40 On 8 April 2005, a minute of judgment was entered which reads:
" Judgment:
1. In this proceeding the amended cross-claim is dismissed and judgment is entered for the defendant as per order made on 7 April 2005 and entered on 8 April 2005. "
41 On 21 April 2005, the plaintiffs filed a notice of appeal. The plaintiffs appealed from the judgment of Austin J of 24 March 2005 and his Honour's orders of 7 April 2005.
42 On 10 May 2005, orders were made, inter alia, for the defendants in the 2003 proceedings to file amended defences by 27 June 2005. The first and fourth defendants in the 2003 proceedings did not file amended defences. (The fourth defendants in the 2003 proceedings are subsidiaries of NYOL). On 8 November 2005, the first and fourth defendants in the 2003 proceedings served a proposed amended defence in the 2003 proceedings. They pleaded that, by reason of the entry of judgment for the defendant in the 2004 proceedings (and the dismissal of the amended cross-claim in the 2004 proceedings), the plaintiffs in the 2003 proceedings were estopped from relying upon any acts or omissions of the defendants relating to the entry into administrations of the NYOL group companies, or the administrations of those companies, or the second meetings of creditors, or the entry into the deeds of company arrangement, or the performance of those deeds, because they were so relevant to the subject matter of the 2004 proceedings that it was unreasonable for the plaintiffs not to raise them in those proceedings. They also pleaded that the plaintiffs were estopped from claiming orders for the restoration of any assets to the companies which were transferred by them in implementation of the deeds of company arrangement, because those matters were so relevant to the subject matter of the 2004 proceedings it was unreasonable for the plaintiffs not to raise them in those proceedings. These defences therefore pleaded estoppels under the principles of Port of Melbourne Authority v Anshun Pty Ltd. The first and fourth defendants also pleaded that, by reason of the judgment being entered for the defendant in the 2004 proceedings, the question of whether NYOL owed a debt to the plaintiffs pursuant to the master hedge agreement was res judicata and the plaintiffs were precluded from contending otherwise. They also pleaded that there was an issue estoppel which precluded the plaintiffs from contending that the third defendants were not appointed as administrators of the companies.
43 The solicitor for the plaintiffs formed the view that these defences were purely opportunistic and not grounded in any reasonable view of the law and the facts.
44 On 11 November 2005, Palmer J dealt with an application for a stay of the 2003 proceedings, pending the outcome of the appeal. His Honour summarised the submissions made by the defendants as follows (J Aron Corp & Anor v Newmont Yandal Operations Pty Ltd & Ors [2005] NSWSC 1159 at [12]-[13]):
"12 The Defendants' submissions are essentially as follows. If the answer given by Austin J to question one of the separate questions is upheld in the Court of Appeal, the result will be that it will have been held that the resolutions referred to in that separate question were validly passed, the Deeds of Company Arrangement came into effect and the judgment consequentially entered for the Defendants in the 2004 Proceedings will stand. That the Defendants are not indebted to the Plaintiffs will be res judicata. Consequently there will be no point in agitating the questions which arise in the 2003 Proceedings, as those questions essentially concern whether or not the Deeds of Company Arrangement, having come into effect, should nevertheless be terminated or declared invalid for a number of different reasons. This is so, the Defendants say, because even if the Deeds are terminated, the judgment in the 2004 Proceedings in favour of the Defendants precludes the Plaintiffs from seeking to recover the alleged debt.
13 On the other hand, so the Defendants say, if the appeal is allowed and the first question identified by Austin J is answered in the negative, the result will be that the resolutions approving the Deeds of Company Arrangement will be held not to have been validly passed, there will be no valid Deeds of Company Arrangement in existence, and there will be no purpose in agitating the questions raised in the 2003 Proceedings as to whether those Deeds should be terminated. In other words, if the appeal is upheld, all of the questions as to termination of the Deed in the 2003 Proceedings will be otiose."
45 Palmer J ordered that the 2003 proceedings be stayed, pending the hearing and determination of the appeal in the 2004 proceedings. In the course of his reasons, his Honour said:
17 However, as matters presently appear, it is difficult to see how dismissal of the appeal in the 2004 Proceedings, leaving the judgment which has been entered in those Proceedings intact, could do other than, at the very least, remove a very large part of the issues falling for determination in the 2003 Proceedings, even if all of those issues are not finally disposed of or become unnecessary to resolve.
18 If the appeal is allowed on the ground that the Court of Appeal concludes that no valid resolutions for the execution of the Deeds were passed, it is difficult to see the further utility of many of the issues in the 2003 Proceedings."
46 On 25 November 2005, the plaintiffs filed an interlocutory process in the 2003 proceedings for an order that the first and fourth defendants comply with orders made on 29 July 2005 for the giving of discovery by the defendants. That application came before Austin J on 2 December 2005. During the course of argument, his Honour said:
" … it does strike me as a first impression, that things might have developed in a manner that I hadn't intended or expected they would in this respect: my understanding of the effect of the determination of the separate questions on 24 March and the consequent entry of judgment in the 2004 proceedings was to leave the 2003 proceedings standing, except in respect of the specific grounds of validity that have been alleged and dealt with in the separate questions, namely the procedural issues about the way in which the meetings were run.
In other words, it seemed to me what survived for determination was a substantial case as to whether the J Aron interests could establish any grounds for termination of the deed of company arrangement: the sort of grounds that are set out in the Act.
Now it seems to be argued on your side that the entry of judgment in the 2004 proceeding creates a res judicata that prevents those issues from being ventilated, or prevents them from being ventilated effectively, so that if the appeal against my judgment of 24 March 2005 fails, the argument seems to run, there's no utility in the 2003 proceeding.
That was certainly not my intention. If I've inadvertently, as it were, or without intending to do so, achieved that res judicata outcome by the entry of judgment in the 2004 proceeding, I would want to do whatever I could to put paid to that argument. "
47 Counsel for the defendants indicated that it was the defendants' position that if the appeal failed, the plaintiffs would be precluded from proceeding with a large part of the 2003 proceedings based on principles of res judicata, issue estoppel, or Anshun estoppel. Counsel said that there was no application before Austin J for him to rescind or vary the order of 7 April 2005. His Honour invited the plaintiffs to consider whether an application should be made to vacate the entry of judgment in the 2004 proceedings so as to preserve the parties' rights consequent upon the determination of the appeal. The plaintiffs' solicitor indicated that the plaintiffs intended to agitate the issue if the stay were lifted, and the defendants sought leave to file the proposed amended defence raising those issues. His Honour repeated that:
"What I flagged was whether it would be appropriate for the Court to vacate the entry of judgment so as to minimise or remove arguments which allege that the orders made have produced a result which it was certainly not my intention to produce."
48 In a judgment given on 7 December 2005, Austin J held that the effect of Palmer J's orders was to stay the operation of the earlier orders for the giving of discovery. After making consequential orders, his Honour added the following:
" 21. I touched on another matter that is troubling me on 2 December 2005, and I shall make some further remarks now. The matter that concerns me arises out of the ex tempore reasons for judgment given by Palmer J on 11 November - in particular, the argument put to Palmer J and reflected in paragraph 12 of his reasons for judgment. The defendants contended that if the appeal on my determination of the separate questions is unsuccessful, there will nevertheless be little or no utility left in the 2003 proceeding. They submitted that it is res judicata, by virtue of judgment having been entered for the defendants in the 2004 proceeding, that the defendants are not indebted to the plaintiffs in any event (that is to say, even if one or more of the grounds for terminating the deeds of company arrangement which remain extant in the 2003 proceeding are successfully pressed).
22. My intention in making the orders that I made in the 2004 proceeding, consequent upon determination of the separate questions, was to leave for determination in the 2003 proceeding all of the issues that remained in the statement of claim in that proceeding as amended to that time (that is to say, excluding what has been called the formal defect argument). Though not articulated, my intention was that if the plaintiffs were able to establish any of the grounds for termination of the deeds, and were able to persuade the Court to exercise all appropriate discretions in favour of making orders to terminate the deeds, then it would be open to the plaintiffs to assert their claimed debt notwithstanding the entry of judgment in the 2004 proceeding.
23. I understand that the orders that I made on 7 April 2005, giving judgment for the defendants, have been entered. The court has an inherent power to vary an order or judgment that does not reflect the true intent of the judicial officer concerned: see Ritchie's Uniform Civil Procedure at [36.17.15]. If that power is available in the present circumstances, I would be disposed to exercise it so as to vary the orders previously made in the 2004 proceeding. I have in mind that the variation would be along the lines of an additional provision stating that the orders, including the entry of judgment, were made without affecting or limiting the rights of the plaintiffs to pursue the relief currently sought in the 2003 proceeding and to assert, if they succeed in obtaining such relief, that they are creditors of one or more of the defendant entities.
24. There is no application before me for any such variation to be made, although the Court could proceed of its own motion. Whether the Court has jurisdiction to make such an order, and whether if it has it would be appropriate for the Court to do so, are matters which I think will involve some complexity. The Court ought not to act without giving the parties the opportunity to consider what I have said and make appropriate submissions. Given that the hearing of the appeal against my orders is pending and the problem could be addressed by the Court of Appeal, it seems to me that the Court should not, of its own motion, pursue the matter further for the time being. But I have recorded my views in case they have any relevance to the appeal and in case any application on this subject matter is in contemplation. These are difficult matters but in view of my firm understanding of the intention lying behind the orders I have made, I have thought it appropriate to take the unusual step of recording my views. "
49 The appeal was heard on 7 February 2006. No application was made to amend the grounds of appeal to seek any consequential order other than the entry of judgment for the defendant, if the answers to the separate questions were upheld. On 15 March 2006, the Court of Appeal dismissed the appeal.
50 The 2003 proceedings were again listed before Austin J on 13 April 2006. During the course of debate as to what direction should be made in the 2003 proceedings, counsel for the defendants submitted that:
"We see the prospects, when the pleadings are closed, that there will be raised a series of preclusions, or issue estoppels, and they will come in three ways. A short and less important way perhaps is res judicata. A second and more important way by issue estoppel, and the third one is by [ Anshun ] preclusion. If we are correct on one or more of those preclusionary doctrines then a very large proportion of the case will be shut out, and if a large proportion of the case is precluded then, as a matter of proper case management, the defendant should not be compelled to prepare, by way of discovery or by way of evidence, for a case that may not occur."
51 Austin J noted that no application had been made under the "slip rule", or any other rule, to vary the orders of 7 April 2005. Senior counsel for the plaintiffs submitted that orders should be made for pleadings, discovery and the filing of evidence. Senior counsel then appearing for the plaintiffs described the various defences of Anshun estoppel, res judicata and issue estoppel as laughable.
52 There was no resistance to the first and fourth defendants' amended defence being filed. They were ordered to file and serve any amended defences by 4 May 2006.
53 On 14 June 2006, the plaintiffs filed a notice of motion in the 2004 proceedings seeking the following orders:
" 1. The order made by Austin J dated 7 April 2005 and entered 8 April 2005 be varied to give effect to the intention of Austin J at the time when the Court's order was made by adding to paragraph 1 the words
'on condition that no party can rely upon issue estoppel, Anshun estoppel, estoppel by record or res judicata arising out of the order made and the judgment given, except that the Plaintiffs cannot assert in proceedings No. 4666 of 2003 or in any other proceedings that creditors did not vote in favour of a resolution on 29 August 2003 that each NYOL Group Company execute a deed of company arrangement.';
or
2. In the alternative to 1, the order made by Austin J 7 April 2005 and entered on 8 April 2005 be vacated and replaced with the following so as to give effect to the intention of Austin J at the time when the Court's order was made:
'1. The Court declares that the answer to question 1 as set out in Appendix A to the judgment of Austin J of 29 November 2004 in these proceedings, and replicated below is "yes":
"At the second meeting of creditors held on 29 August 2003 under s 439A of the Corporations Act, did the creditors of each of the following NYOL Group companies ('Companies') pass resolutions pursuant to s 439C that each of the Companies execute deeds of company arrangement'
Clynton Cout Pty Ltd ('Clynton')
Quotidian No 117 Pty Ltd
Australian Metals Corporations Pty Ltd
Great Central Holdings Pty Ltd
Great Central Investments Pty Ltd
Great Central Mines Pty Ltd
Matlock Castellano Pty Ltd
Matlock Mining Pty Ltd
Newmont Wiluna Metals Pty Ltd?"
2. The Court declares that by reason of its answer to Question 1, Questions 2 to 8 as set out in Appendix A to the judgment of Austin J of 29 November 2004 in these proceedings do not arise;
3. The Court orders that these proceedings be stayed until further order of the Court." "
54 The defendant objected to Austin J hearing the application. On 14 July 2006, his Honour decided that he should not do so (J Aron Corporation v Newmont Yandal [2006] NSWSC 720). In para [36] above, I referred to what Austin J said in para [15] of his reasons on 14 July 2006 as to his intention in making the orders of 3 December 2004 for the separate determination of questions. His Honour also said (at [33]):
33 It emerges from these materials that my intention, at the time of publication of my judgments of 29 November 2004 and 24 March 2005, and at the time that I made orders on 3 December 2004 and 7 April 2005, and subsequently, has been that the resolution of questions for separate determination, and consequently the disposition of the 2004 proceeding once that step had been taken, were to be on the basis that there would be no occasion for raising res judicata or estoppel arguments except with respect to the matters directly involved in the answering of the question. In raising a defence of res judicata, issue estoppel and Anshun estoppel on the ground that entry of judgment against the plaintiffs in a proceeding in which they asserted a claim to relief as creditors prevents them from pursuing the bulk of their claims to relief in the 2003 proceeding, the Newmont Companies are seeking to derive consequences from my orders that are contrary to my intention. … "
55 The evidence in support of the plaintiffs' application was an affidavit by the plaintiffs' solicitor, Mr Ryckmans. There was no evidence expressly dealing with the circumstances in which the plaintiffs' counsel came to propose, on 7 April 2005, that the appropriate order to be made consequential on the answering of the separate questions was that judgment be entered for the defendant. Mr Bathurst QC, who appeared with Mr Henry for the defendant, stated that because there was insufficient material to enable the defendant properly to do so, the defendant did not suggest that counsel for the plaintiffs, when he suggested judgment be entered for the defendant, gave any consideration, one way or the other, to what the effect of the judgment would be.
56 The view of the plaintiffs' solicitor from the time the proposed defences were raised on 8 November 2005 was that they were "opportunistic and not grounded in any reasonable view of the law and the facts". The plaintiffs' solicitor deposed that he considered it to be premature to file an application to vary the orders of 7 April 2005 until an amended defence alleging res judicata and estoppel was filed. He remained of the view that the defences did not have a reasonable basis and were "opportunistic". He also believed that the defendant would be dissuaded from raising the defences by Austin J's articulation of his understanding and intentions at the time the orders were made. He also believed that the defences would in any event be moot if the appeal from his Honour's orders succeeded.
Jurisdiction to Set Aside the Judgment and Orders of 7 April 2005
57 Once an order disposing of proceedings has been made and entered, the Court has no jurisdiction to re-open the proceedings to vary or set aside the order, except where the order does not correctly reflect the Court's intention, but was made in error, or, where there is statutory authority to do so. The statutory authority relied on by the plaintiffs is the "slip rule", now found in r 36.17 of the Uniform Civil Procedure Rules 2005 (NSW). The rule 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."
58 There is no doubt that if the entry of judgment for the defendant has the result for which the defendant contends, that that consequence was not anticipated or intended by the Court. It would be more than an unintended consequence. It is contrary to Austin J's intention that either party can contend that any res judicata or other estoppel, arising from the disposition of the 2004 proceedings, limits the issues to be contested in the 2003 proceedings, other than the "formal defect" issue. That is to say, his Honour intended that the 2004 proceedings would be disposed of on the basis that "there will be no occasion for raising res judicata or estoppel arguments except with respect to the matters directly involved in the answering of the question" (J Aron Corporation v Newmont Yandal [2006] NSWSC 720 at [15] and [33]).
59 The Court has an inherent jurisdiction to vary an order, even after it has been entered, if the order does not correctly express its intention (Gikas v Papanayiotou [1977] 2 NSWLR 944; Re Future Life Enterprises Pty Ltd (1994) 33 NSWLR 559 at 563; Storey & Keers Pty Ltd v Johnstone (1987) 9 NSWLR 446 at 449; L Shaddock & Associates Pty Ltd v Parramatta City Council (No. 2) (1983) 151 CLR 590 at 594). The slip rule in r 36.17, conferring power to correct a judgment or order if there is an error arising from an accidental slip or omission, or if there is a clerical mistake, reflects that inherent jurisdiction (Shaddock at 594; Storey & Keers Pty Ltd v Johnstone at 449).
60 Although the plaintiffs' written submissions seemed to suggest that the Court's inherent jurisdiction may not have survived the High Court's judgment in Bailey v Marinoff (1971) 125 CLR 529, that was not the position finally taken by either of the parties. Bailey v Marinoff was not concerned with an order which did not reflect the intention of the court when it was made, or involved any error (see especially per Menzies J at 531 and per Walsh J at 534).
61 The jurisdiction exists even where the Court has acted deliberately and without error in framing its order on the basis of the case presented to it, but there is an omission resulting from the inadvertence of a party's legal representative in not raising a point at the hearing (L Shaddock & Associates Pty Ltd v Parramatta City Council at 594-595; Storey & Keers Pty Ltd v Johnstone at 449). Examples of cases in which the jurisdiction has been exercised to rectify the consequences of mistakes of a party's barrister or solicitor include: ordering costs of a notice of motion adjourned to the hearing which counsel omitted to call to the judge's attention when he announced judgment (Fritz v Hobson (1879) 14 Ch D 542 at 561-562); the correction of a certificate of taxation where the solicitor omitted to include fees paid to a referee in his bill of costs (Chessum & Sons v Gordon [1901] 1 KB 694 at 698); the failure of counsel to apply for an order for costs incurred before the issue of a summons (In re Inchcape (Earl) [1942] Ch 394); the omission of counsel to ask for an order that interest be included in damages to be assessed (Tak Ming Co Ltd v Yee Sang Metal Suppliers Co [1973] 1 WLR 300 at 304); and the failure to include a claim for interest on damages from the date on which judgment was given in the Supreme Court and which would be payable if judgment for the defendant were overturned on appeal, coupled with the failure to mention the matter on the hearing of the appeal (L Shaddock & Associates Pty Ltd v Parramatta City Council (No. 2)). As Lockhart J said in Elyard Corporation Pty Ltd v DDB Needham Sydney Pty Ltd (1995) 61 FCR 385 at 391:
" It is well settled that the application of the slip rule is not confined to giving effect to the intention of the judge at the time when the Court's order was made, or judgment given. It extends to the intention which the Court would have had but for the failure that caused the accidental slip or omission: Symes v Commonwealth (1987) 89 FLR 356. The rule also extends to permit the correction of an order or decree where the omission results from the inadvertence of the parties' legal representative: Fritz v Hobson at 561-562; Chessum & Sons v Gordon [1901] 1 KB 694; Tak Ming Co Ltd at 304; Shaddock at 594-595 per Mason ACJ, Wilson and Deane JJ; and Gould v Vaggelas at 274-275 ".
62 Lockhart J's exposition of the scope of the slip rule was accepted by the Court of Appeal in Akron Securities Ltd v Iliffe & Ors (No 3) (26 September 1997, unreported; BC9704809 at 9). In Hanave Pty Ltd v LFOT Pty Ltd (2004) 136 FCR 566, the Full Court of the Federal Court held that an application under the slip rule should have been refused where a solicitor's failure to claim interest was due to ignorance rather than inadvertence (at 568 and 576).
Defendant's Submissions on Jurisdiction to Set Aside Order
63 The defendant submitted that the Court has no jurisdiction to set aside the order of 7 April 2005 on a number of grounds. First, it submitted that the slip rule is only available to correct ancillary or consequential matters (Coppins v Helmers; Brambles Constructions Pty Ltd (1969) 72 SR (NSW) 273 at 278). It submitted that entry of judgment for the defendant was not an ancillary or consequential matter.
64 Secondly, the defendant submitted that the plaintiffs made a deliberate decision to propose that judgment be entered for the defendant. It said there was no evidence of inadvertence on the part of the plaintiffs' legal representatives on 7 April 2005, and that the slip rule did not apply to the consequences of a deliberate decision.
65 Thirdly, the defendant relied upon the fact that the plaintiffs continue to deny that the entry of judgment has the preclusionary effect which the defendant alleges it has. The defendant submitted that the plaintiffs could not obtain relief under the slip rule where they did not acknowledge there was any error in the entry of judgment for the defendant. It was submitted that the slip rule requires demonstration of an error, not a possible error, in a judgment or order.
66 Fourthly, the defendant submitted that the Court has no power to recall or set aside a judgment which is regularly entered merely because the judgment has unintended or unforeseen consequences.
67 Fifthly, the defendant submitted that there is no jurisdiction to vary the order unless it is clear what is the precise variation which should be made to correct the error. It pointed to the fact that the plaintiffs claim alternative forms of relief in their notice of motion. This, it was said, demonstrates that it cannot be clear what precise variation is required to correct the error. The defendant also submitted that it is not clear that Austin J would have made either of the orders sought in the notice of motion had he been informed by the plaintiffs on 7 April 2005 that they sought those orders. It submitted that, on the pleadings in the 2004 proceedings, the entry of judgment for the defendant was the proper order to make to dispose of the proceedings. Accordingly, there was no error in the entry of judgment for the defendant to be corrected. If the order made is arguably correct, it could not be clear that any other order would have been made if sought on 7 April 2005.
68 Sixthly, the defendant submitted that the proposed variation to the order must relate to a matter which was in issue before Austin J, or was incidental to a matter in issue (Storey & Keers Pty Ltd v Johnstone at 453). The defendant submitted that there was no issue before Austin J as to the preclusionary effect on the 2003 proceedings of the orders to be made in the 2004 proceedings.
69 The defendant did not submit that the Court lacked jurisdiction to set aside the order of 7 April 2005 because the appeal from the making of that order was dismissed by the Court of Appeal. The dismissal of the appeal did not mean that the order of 7 April 2005 acquired a new status, as if it were an order of the Court of Appeal which could not be interfered with by a single judge. The order remains susceptible to correction in the Court's inherent jurisdiction or under the slip rule by a single judge. An example of orders of a single judge being corrected under the slip rule by another single judge, after those orders had been considered and varied on appeal, is to be found in Owston Nominees (No. 2) Pty Ltd v Branir Pty Ltd (2003) 129 FCR 558. The defendant did rely upon the conduct of the appeal in support of its contention that, in its discretion, the Court should not exercise jurisdiction to set aside the 7 April 2005 order, if that jurisdiction existed. However, it accepted that the dismissal of the appeal was not itself a jurisdictional bar to making the orders sought.
Whether Jurisdiction Confined to Ancillary or Consequential Orders
70 In Coppins v Helmers, the defendant had been found liable to the plaintiff in the sum of $60,000 plus costs at a separate hearing. In a third party action, the third party and the defendant were found equally liable and judgment was entered against the third party for $30,000. There was no order that the third party pay half the plaintiff's costs for which the defendant was liable. The question of apportioning liability for the plaintiff's costs was not raised before the trial judge. The trial judge gave no thought to it, but on the subsequent application said that had he considered the question, he would have awarded the defendant one half of the plaintiff's taxed costs of the action in addition to one half of the verdict. The Court of Appeal held that neither the Court's inherent jurisdiction, nor the slip rule, could be availed of to vary the order determining the substantial question in issue, as distinct from a merely ancillary or consequential matter. The Court said (at 278):
" … It is sufficient to say of all the instances in which a court has corrected an order by including in the original order a provision concerning a matter which was not dealt with at the hearing, that they are cases in which the correction has related, not to the substantial issue between the parties which has been resolved by the original order, but to an ancillary or consequential matter. The researches of counsel have not brought to light any judicial decision in which a court has exercised its power to correct an order, once completed, by varying its determination or on the substantial question in issue in a respect which through inadvertence was not dealt with at the original hearing. "