The authorities
116 A convenient starting point is the judgment of the High Court in L Shaddock & Associates Pty Ltd v Parramatta City Council [No 2] (1982) 151 CLR 590. In that case, the High Court held (at 595) that it was competent for that Court to make an order under the slip rule then prescribed in O 29 r 11 of the High Court Rules 1952 (Cth) to deal with the consequences of an omission by the appellant's counsel to seek an award of pre-judgment interest assessed as at the date of judgment on an appeal. The rule under consideration was in the same terms as that now expressed in r 16.05(2)(h) of the FCCA rules and r 39.05(h) of the FCA rules. By virtue of counsel's omission, the High Court had, at the time of judgment, made an award of damages in an amount notionally assessed by the trial judge, which included a component of interest calculated to the date of judgment in the trial court. The Court made an order under the slip rule to the effect that the order awarding damages made at the time of judgment on the appeal be amended to include an award of interest for the period between the date of judgment at trial and the date of judgment on the appeal. The High Court emphasised (at 596) that there was no statutory provision prescribing the time by which an application for an order allowing interest must be made, and so the circumstances were distinguishable from earlier cases in which relief under the slip rule had been refused in similar factual circumstances: see Brew v Whitlock (1968) 118 CLR 445 (Taylor, Menzies and Owen JJ at 463 - 464).
117 In Re Hibbard; Ex parte Playroom Pty Ltd [1988] FCA 689, as in the present case, the hearing of a creditor's petition was adjourned to a date falling outside the 12 month period prescribed in s 52(4) of the Bankruptcy Act. The petitioning creditor applied to have the adjournment order corrected so as to add to it an order extending the period under s 52(5). Pincus J referred to Shaddock. His Honour emphasised that the slip rule in question may be invoked in circumstances where the error or omission was not a mis-recording of the Court's own intention, but rather a failure on the part of counsel to ask for an ancillary order which the Court would plainly have made at the time, had it been asked to consider its necessity. His Honour nonetheless dismissed an application for a corrective order to be made in the exercise of the Court's implied jurisdiction to correct a slip or omission. Such an order would, his Honour said (at 4):
… be an infringement of the requirement in s 52(5) that any order extending the petition be made before the expiration of the period of twelve months commencing on the date of presentation of the petition. It does not appear to me that, on the proper construction of s 52(5), an order for extension may lawfully be made, after the twelve months' period has ended, predated so as to fall within the twelve months.
118 Einfeld J expressed a contrary view in Re Jago; Ex parte Paal Frame Pty Ltd [1989] FCA 52 and later in Re Van Coblyn; Ex parte Mercantile Credits Limited [1992] FCA 1018. In each case, his Honour made orders pursuant to the Court's implied power to correct an accidental slip or omission. As to whether the exercise of that power was inconsistent with s 52(5) of the Bankruptcy Act, Einfeld J said (at [15]):
… the slip rule does not need to be expressly permitted by legislative or regulatory enactment before it can be availed of. Indeed, it seems to have been designed to deal with situations where the legal framework does not deal at all or adequately with the correction of an accidental oversight or error by the Court in expressing or giving effect to its intention, or to what would have been its intention if the parties had not failed to seek an appropriate order or draw the Court's attention to factors which would influence the achievement of the obvious intention. If applicable statutory provisions or the common law otherwise dealt with this situation, there would be no need for the rule at all.
119 Einfeld J did not expressly approach the question by reference to whether the earlier judgment of Pincus J in Hibbard was plainly wrong, although it is implicit that his Honour determined as much: see Hicks v Minister for Immigration & Multicultural & Indigenous Affairs [2003] FCA 757 at [75] ⸺ [76]; Frugtniet v Australian Securities and Investments Commission [2017] FCAFC 162 at [93].
120 The question next arose in a bankruptcy context in Re Agushi; Ex parte Farrow Mortgage Services Pty Ltd (in liq) and another [1994] FCA 641; (1994) 126 ALR 704. Consistent with the reasoning of Pincus J in Hibbard, Heerey J held that the power to correct a slip or omission in an order could not prevail against the express provision of s 52(5) of the Bankruptcy Act. His Honour said (at 706):
I do not doubt that in the present case there was an honest and understandable inadvertence. If there were power to extend, I would not hesitate to exercise it. But it does seem to me that the Act specifically provides for petitions to be heard and determined within 12 months, and by s 52(5) expressly provides that extension can only be granted within that period.
121 The judgments in both Hibbard and Agushi were disapproved by the Full Court in Elyard (Lockhart J at 392 - 393, Lindgren J at 404, Black CJ agreeing at 387 - 388). The grounds of appeal in that case challenged the validity of an order made at first instance by Sheppard J pursuant to O 35 r 7(3) of the now superseded Federal Court Rules 1979 (Cth), equivalent in terms to what is now r 16.05(2)(h) of the FCCA rules and r 39.05(h) of the FCA rules. The order appealed against had the purported effect of correcting an earlier order so as to extend, with retrospective effect, the life of an application to wind up a company pursuant to s 459R of the Corporations Law as then in force. It provided:
(1) An application for a company to be wound up in insolvency is to be determined within 6 months after it is made.
(2) The Court may by order extend the period within which an application must be determined, but only if:
(a) the Court is satisfied that special circumstances justify the extension; and
(b) the order is made within that period as prescribed by subsection (1), or as last extended under this subsection, as the case requires.
(3) An application is, because of this subsection, dismissed if it is not determined as required by this section.
(4) An order under subsection (2) may be made subject to conditions.
122 On appeal, the company submitted that an order made pursuant to the relevant slip rule could not retrospectively overcome the express requirement of s 459(2) and the self-executing effect of s 459R(3). Rejecting the same arguments at first instance, Sheppard J said in DDB Needham Sydney Pty Ltd v Elyard Corporation Pty Ltd [1995] FCA 603; (1995) 131 ALR 213 (at ALR 223):
With respect to Pincus J [in Hibbard], I fail to see why the conclusion he has arrived at should follow. If the slip rule is capable of applying, as I think it is, and it has the retrospective effect which Pincus J appears to acknowledge and which the High Court in Shaddock decided it has, I do not see why there is any difficulty, in an appropriate case, in making an order which will overcome the slip. Otherwise, there is no purpose in the rule.
123 His Honour continued:
The fact that a statute such as s 52 of the Bankruptcy Act or s 359R of the [Corporations Law] has the effect which it does, does not touch the court's power to correct, in a proper case, its own order. That is part of its practice and procedure. Nothing in s 459R(3) suggests that the court was not to continue to be able to maintain a correct record of its proceedings. After all the error or omission which needs correction may be that of the court, not the party. What needs to be emphasised is that it is the position after the correction of the order has been made that must be looked at. Only then can one tell whether the particular provision has been complied with.
124 In separate judgments, Lockhart and Lindgren JJ applied the same reasoning. The argument advanced by the appellant company rested, Lockhart J said, on a "misconception of the nature and operation of the slip rule". His Honour held (at 391):
This is the case because the later order corrects the earlier order, and speaks from the date of the earlier order, which then operates with full force as corrected. Hence, the order made by the primary judge in this case, on 9 August 1995, corrected the order of the Registrar of 9 June 1995, which then operated with full force from 9 June 1995. The slip rule, with retrospective operation, corrected the earlier order … The essential purpose of the slip rule is to give effect to the intention which the court would have had, if it were not for the failure which led to the accidental slip or omission.
125 His Honour said that the operative orders in Hibbard and Agushi were not the later correcting orders, but the earlier orders as corrected, notwithstanding that the later orders were made outside the statutory time limit. As corrected, the earlier orders "spoke from dates within the time period" (at 393) and the requirement that the extending order be made before the lapse of the petition was thereby fulfilled.
126 After noting (at 402) that authorities decided in the bankruptcy jurisdiction of the Court did not "speak with one voice", Lindgren J held (at 404) that the approach taken in Hibbard and Agushi did not adequately recognise "the true nature of the slip rule or the effect of the orders which it permits". His Honour placed considerable emphasis on the terms of O 35 r 7(3) as then in force, which conferred a power to correct an order, as distinct from O 35 r 7(2) (which concerned a power, equivalent to that in issue in the present case, to vary or amend an order so as to reflect the intention of the Court). Lindgren J concluded (at 404 - 405):
What this analysis emphasises in the context of the facts of the present case is first, that there must have been an order made within the statutory period, and secondly, that an order under the slip rule in relation to such an order is appropriately seen not as varying it or setting it aside, but as merely correcting it by including an ancillary order which the Court and the parties intended to be included.
127 The correcting order in Elyard was made in factual circumstances similar to those arising in Hibbard and Agushi and, for that matter, in the present case: an order was made granting an adjournment of a hearing to a date beyond the statutorily prescribed period, the creditor in each case having omitted (by inadvertence) to apply for an order extending the period. It is apparent from the above passage that Lindgren J considered the slip rule in that case had been properly invoked to include an order which both the Court and the parties in fact intended, at the time of the earlier order, to be included. Lockhart J noted (at 391) that the slip rule extends to permit the correction of an order or decree where the omission results from the inadvertence of a party's legal representative, and thus extends to give effect to the intention that the Court would have formed, but for the failure that caused the accidental slip or omission. To the extent that there is a difference between the reasons for judgment of Lockhart J and Lindgren J as to the scope of the slip rule in question, it is not resolved by the judgment of Black CJ, his Honour agreeing with the reasons given by both Lockhart and Lindgren JJ.
128 Elyard was decided under the Corporations Law as then in force. Strictly speaking, the reasoning of the Court is obiter insofar as it concerns the proper construction of the provisions of the Bankruptcy Act and their interrelation with the so-called slip rule in any of its express or implied forms. The decision has nonetheless been followed by single judges of this Court and a subsequent Full Court in the exercise of its bankruptcy jurisdiction, albeit with some expression of disquiet: Re Howell; Ex parte Commissioner of Taxation (1996) 70 FCR 261 (Burchett J); Komesaroff v Law Institute of Victoria [1997] FCA 965 (Heerey J); Matthews v Collett [2000] FCA 224 (Spender J); Re Langridge; Ex parte Bennett, Carroll & Gibbons [1998] FCA 879 (Kiefel J). These cases do not involve any consideration of the proper construction of any equivalent to r 16.05(2)(e) of the FCCA rules.
129 In Amorin Constructions Pty Ltd v Kamtech Electrical Services Pty Ltd (2008) 73 NSWLR 627, Hammerschlag J of the Supreme Court of New South Wales declined to follow Elyard on the basis that it was plainly wrong. That case concerned the interrelation between s 459R of the Corporations Act 2001 (Cth) (equivalent to s 459R of the Corporations Law) and the slip rule in r 36.16 of the Uniform Civil Procedure Rules 2005 (NSW) (equivalent to what is now r 16.05(2)(h) of the FCCA rules). His Honour first acknowledged (at [54]) that the slip rule would operate to permit an order to be corrected or supplemented to reflect the actual outcome of the exercise by the Court of its discretion, but only where its orders do not accord with its actual actions or intentions. To that extent, his Honour held, s 459R of the Corporations Act did not exclude the operation of the rule.
130 His Honour continued (at [55] - [57]):
55 In Elyard Corporation (at 405), Lindgren J said: 'It is of the greatest importance to distinguish between the availability of the slip rule and the exercise of discretion whether to make any order or a particular order under it'.
56 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.
57 An outcome that permits the latter to occur under the guise of the slip rule would, in addition to the difficulties identified above, undermine the clear policy dictates of Pt 5.4 of the Corporations Act (Cth), which require winding up applications to be dealt with promptly. That policy has recently been reaffirmed by the High Court in Aussie Vic Plant Hire Pty Ltd v Esanda Finance Corporation Ltd (2008) 232 CLR 314 at 324 [17].
131 On the facts, Hammerschlag J held that neither the plaintiff creditor nor its advisers were conscious of the requirement for an extension of time under s 459(2) of the Corporations Act, and that the earlier presiding judge "clearly never had it in mind either" (at [8]). His Honour emphasised the importance of training focus on the precise words of the rule relied upon, rather than applying the terminology in the reasoning of prior case law (at [12]). The test was whether the mistake or omission was truly accidental within the meaning of the particular rule, such that if the question of extending the life of the winding up application had been drawn to the Court's attention, an order would "at once have been made": Hatton v Harris [1892] AC 547; Storey & Keers Pty Ltd v Johnstone (1987) 9 NSWLR 446 at 435 (McHugh JA).
132 The question next came before a Full Court of this Court in Griffiths v Boral Resources (Qld) Pty Ltd (2006) 154 FCR 554. In that case, a federal magistrate at first instance reserved judgment after the hearing of a creditor's petition, but did not deliver judgment until after the period fixed in accordance with s 52(4) of the Bankruptcy Act had expired. The Court (Spender ACJ, Dowsett and Collier JJ) said of the decision in Elyard (at [30]):
With all respect, we are a little uncomfortable with the view, inherent in Elyard, that the slip rule may be used to extend time notwithstanding the statutory requirement that such order be made within a period of time which has elapsed. However, Elyard concerns the practice of the Court and has now stood for over 10 years without legislative intervention. We are reluctant to reconsider it. Although it does not directly bind us in applying s 52 of the Bankruptcy Act, to take a different approach would cause substantial confusion in insolvency practice.
133 The Court in Griffiths is to be understood as applying the reasoning in Elyard in its application to orders made pursuant to s 52(5) of the Bankruptcy Act. The slip rule invoked in that case was expressed in the same terms as that invoked in Elyard. Consistent with what was said by Lindgren J in Elyard, the Full Court in Griffiths held (at [33]) that for the rule to be invoked in order to retrospectively effect an extension of time under s 52 of the Bankruptcy Act, then:
… there must be a judgment or order to be corrected, and it must have been made within the prescribed time. The power is to correct, not to vary or set aside. There is no general power to relieve from the consequences of [s 52(4)].
134 On the facts, however, no order had been made within the statutory time frame that was capable of correction within the meaning of what was then r O 35 r 7(3): the mere reservation of judgment by the magistrate did not constitute an "order" within the meaning of the rule.
135 In Flint, the Full Court held that the evidence was insufficient to support an inference of error or omission either on the part of the creditor's lawyer, or on the part of the magistrate at first instance. On the facts, it was unclear whether the magistrate would have exercised his discretion to extend the life of the creditor's petition had he been asked to do so within the statutory period. Accordingly, there was no "accidental slip or omission" so as to enliven the power in r 39.05(g) or r 39.05(h) of the FCA rules in any event. The Full Court concluded (at [43]):
The above reasons make it unnecessary to reconsider Elyard in the light of the doubts expressed in Griffiths and the criticism of Hammerschlag J in Amorin.
136 It is apparent from this passage that the Full Court in Flint accepted a submission advanced by the appellant in that case to the effect that the reasoning in Griffiths was obiter. I respectfully agree. In each case the rule was not enlivened on its terms, and so its interrelation with the bankruptcy regime did not fall to be decided.
137 Finally, in Ramsay Health Care Australia Pty Ltd v Compton (2016) 247 FCR 387 (Rares, Gleeson and Markovic JJ) a primary judge made an order within the period prescribed by s 52(4) of the Bankruptcy Act extending the life of a creditor's petition for an additional three months. The primary judge was held to have "intended" to make the order, albeit on the erroneous assumption that the Court retained the power to further extend the life of the period by a subsequent order. The Full Court held that the slip rule could not apply in the circumstances because the order was the product of an intentional decision (albeit based on error) and the order correctly reflected that intention. The slip rule under consideration in that case was expressed in the same terms as that considered in Elyard.