Kevin Lucas & KDL Building Pty Limited v Robert Montgomery and Anor

Kevin Lucas & KDL Building Pty Limited v Robert Montgomery and Anor - [2008] NSWDC 207 - NSWDC 2008 case summary — Zoe

[20]

Similarly, his Honour observed a court must seek to give effect to that overriding purpose when exercising the discretion to correct an error or mistake in a judgment pursuant to r 36.17. His Honour said at [114] that, as a matter of interpretation, r 36.17 " must extend to the correction of a mistake or error in an order which, arguably, resolves an issue that has intentionally not been adjudicated. Such a consequence, in my opinion, falls squarely within the concept of an ' error arising from an accidental slip or omission' ". In the following paragraph his Honour extended "the scope of my reasons to an order which arguably resolves an issue upon which there has not been an adjudication. Of course, there has to be a real risk." Once again referring to s 56 of the Civil Procedure Act , his Honour observed that words such as " error " and " correct " should not be given a narrow interpretation. His Honour then expressed the opinion that " 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. " 14. As to an error or omission which may be attributable to an oversight on the part of a legal practitioner his Honour set out passages from the judgment of White J from which the appeal was brought in Newmont Yandal Operations and said at [153]: "I agree with the reasons of White J in this regard. I would add that the issue is whether the Court's order can be characterised as arising from an accidental slip or omission. Advertence or inefficiency on the part of legal representatives may explain why the court's order can be so characterised." 15. Finally the Chief Justice again set out a passage from the judgment of White J and observed that the reasons contained in that passage were compelling. The relevant passage for my purposes is contained in [163] of the Court of Appeal's judgment (the Chief Justice's observation being contained in the following paragraph). White J said: "The inherent jurisdiction, and the jurisdiction under the slip rule, is available to correct errors where the order does nor reflect the intention of the judge making it. (This may include errors to reflect what the judge's intention would have been had the particular matter been addressed when the original orders were made, but were not addressed because of an accidental slip or omission). Subject to the other matters which were argued, the jurisdiction arises once it is demonstrated that the orders made did not reflect Austin J's intentions." Similarly to the application before me to correct orders made by Phegan DCJ, the application before White J was to correct orders made by Austin J.

[26]

Returning to Mr Bland's third argument based upon Amorin 's case , he argued that Phegan DCJ gave consideration to the form of the orders and amended them accordingly. Mr Bland argues further that this court ought not to amend orders to suit the parties and added that the issue had already been determined and adjudicated upon by Phegan DCJ. Part of his argument was that the order now sought, or the correction now sought by the owners, had it been sought before Phegan DCJ, would have required the exercise of an independent discretion requiring judicial determination. Even if the outcome was obvious, once a judicial discretion was required to be exercised I ought not to rely upon r 36.17 to correct the orders made by the first judge. 22. In response to Mr Bland's argument Mr Neal argues that there was indeed a discretion which the primary judge would have exercised in Amorin's case and which therefore made it inappropriate for Hammerschlag J to make orders under r 36. 17, or indeed in that case the inherent jurisdiction of the Supreme Court. That was a case where proceedings for winding up a corporation had been commenced. A statutory provision required such proceedings to be determined within six months after they are commenced. The same statutory provision made allowance for the court to extend the period, but only if the court is satisfied that special circumstances justify the extension. What had happened in that case was that the hearing of the application had been listed before Hammerschlag J after the expiry of six months from their commencement. Confronted with the statutory time limit the applicants in that case made an application to amend the orders made by the judge who had listed the case for hearing by including an additional order extending the time. As Hammerschlag J said: "The central issue is whether r 36.17 is available to the plaintiff to bring about the result that there will be an extension of the date for the determination of its winding up application." His Honour then made observations about the statutory provision concerning the time limit including that a court may only extend the period if it is satisfied that special circumstances justify it. His Honour also observed that if the application is not determined then the winding up application is dismissed. As his Honour observed, the provision of special circumstances before the making of an extension order "undoubtedly involves the exercise by the court of an independent discretion" . As Hammerschlag J observed, even though the primary judge, or first judge, would have intended to exercise the discretion had it been drawn to his attention "a finding that he would have had that intention does not permit the court now to exercise a special discretion his Honour did not and which his Honour was not called upon to exercise" . Hammerschlag J further observed, at [56], as follows: "It seems to me that it is equally important to distinguish between the exercise of a discretion to correct an error so as to reflect the intention of the court - or the intention that the court would have had but for the failure that caused the accidental slip or omission - on the one hand, with the exercise by the court of an initial special statutory discretion which the earlier court omitted to exercise. on the other." 23. Mr Neal points out that this case does not involve the exercise of any such discretion. He points to [84] in the judgment of Phegan DCJ in which his Honour reasons that the contract in this case was validly terminated by the defendants and the "damages which flow from KDL's breach are recoverable in the cost claim from KDL, as builder, and Mr Lucas, as guarantor." From that passage, Mr Neal argues, clearly separate liabilities arise in KDL Building Pty Limited and Mr Lucas. Accordingly, he says separate judgments ought to have been given.

[28]

The findings I make on this application are as follows. The issue of whether the judgments against KDL Building Pty Limited and Kevin Lucas ought to have been joint or several was never raised before Phegan DCJ. There was therefore no adjudication upon that issue. In my opinion Phegan DCJ's intention would have been, had his attention been drawn to the potential impact of Neate 's case , to make separate orders against each of the judgment debtor so that there was no prospect of his Honour's judgment against Mr Lucas being frustrated by an argument to the effect of the one raised in Neate 's case . That issue was not addressed, as I said, before his Honour. Therefore, to adapt the words of White J quoted by the Chief Justice in Newmont Yandal Operations case , I have jurisdiction, in my opinion, under r 36.17 to correct the error in this case because it did not reflect the intention of Phegan DCJ, this including what Phegan DCJ's intention would have been, had the particular matter been addressed when his Honour was considering the orders. The fact that they were not addressed, arguably because of an oversight by the legal representatives, does not preclude me, in my opinion, from exercising the power conferred by the rule. As the Chief Justice said at [153] of Newmont Yandal Operations , "inadvertence or inefficiency on the part of legal representatives may explain why the court's order can be so characterised." I hasten to add that I do not intend by these remarks to criticise in any way the owners' legal representatives. Clearly they were diligent when it came to the consideration of bankruptcy proceedings against Mr Lucas and their researches turned up the case which could have been a potential problem in those proceedings and they are seeking to avert that potential problem by bringing this application in a timely manner. I cannot see that the determination whether to give a joint judgment against both judgment debtors or separate judgments against each judgment debtor would involve any discretion on the part of Phegan DCJ.

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