Marthas T Market v Reliance

• 7 - IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION CORPORATIONS LIST

2963/02 - MARTHAS T MARKET PTY LTD v RELIANCE FINANCIAL SERVICES PTY LTD JUDGMENT 1 By originating process filed on 31 May 2002, Marthas T Market Pty Ltd ("Marthas") sought an order under s.459G of the Corporations Act 2001 (Cth) setting aside a statutory demand served on it by Reliance Financial Services Pty Ltd ("Reliance") in respect of an alleged debt of $750,000. That application afterwards came before the court on several occasions. On 9 August 2002, it was stood over to 10 September 2002. When the matter was called on before Acting Master Berecry on 10 September 2002, there was an appearance for Reliance but no appearance for Marthas. The Acting Master ordered that the application be dismissed with costs. The solicitor for Marthas arrived at court after the order for dismissal had been made, but it is not clear that he then sought to make any application. 2 The next day, 11 September 2002, Marthas filed in the Registry a notice of motion under Part 40 rule 10 seeking an order setting aside the order made on 10 September 2002. Upon being filed, that notice of motion was assigned a return date of 23 September 2002. When the notice of motion came before Acting Master Berecry in the Corporations List on 23 September 2002, it was put to him that, as a result of the order for dismissal made on 10 September 2002 and the absence of any extending order under s.459F(2)(a)(i), the time for compliance with the statutory demand had expired, pursuant to s.459F(2)(a)(ii), seven days after dismissal of Marthas' s.459G application. The Acting Master directed that the notice of motion be listed before the Corporations List Judge and it came before me later on 23 September 2002. By consent, I made orders for the filing of written submissions. These were duly received. I heard supplementary oral submissions on 30 September 2002. 3 It appears to be common ground that the order made by the Acting Master on 10 September 2002 had the effect that the s.459G application was "finally determined or otherwise disposed of" as referred to in s.459F(2)(a)(ii). Explicit submissions to that effect were made by Mr Fury of counsel who appeared for Reliance, while the submissions made by Mr Johnson of counsel on behalf of Marthas seem to me clearly enough to accept that position by contending that the slip rule (part 20 rule 10 of the Supreme Court Rules) is the means by which the situation Marthas considers to be in need of rectification should be rectified. As the slip rule has what is effectively a form of retrospective operation (see Elyard Corporation Pty Ltd v DDB Needham Sydney Pty Ltd (1995) 61 FCR 385), I take reliance on it by Marthas to amount to recognition that retrospectivity of some kind is needed because, with the period fixed by s.459F(2)(a)(ii) having expired, it is no longer open to the court to make an extension order under s.459F(2)(a)(i). 4 The meaning of "finally determined or otherwise disposed of" in this particular statutory context and the non-availability of s.459F(2)(a)(i) once the period for compliance otherwise applicable has expired have been discussed in a number of cases. These have been recently reviewed in some detail by Hansen J in Burwood Retail Pty Ltd v Deputy Commissioner of Taxation [2002] VSC 349 (23 August 2002). Based on his Honour's analysis, the correct course in this case is to proceed on the basis which I understand the parties to have adopted, namely, that Marthas' position can be retrieved only by some retrospective action under the slip rule. That analysis does not seem to me to allow any scope for distinction between a case where a judge or master at first instance dismisses a s.459G application after a hearing on the merits and one where dismissal occurs when the applicant does not appear to prosecute the application 5 When one comes to consider ways in which part 20 rule 10 might be applied here, there is the immediate point that the only order the Acting Master made on 10 September 2002 was an order dismissing the s.459G application with costs and that the question of s.459F(2)(a)(i) extension was not even raised, let alone made the subject of any deliberation by the judicial officer. The fact that a matter is not raised is, of course, not fatal to the application of that aspect of the slip rule that pays attention to what might be termed the underlying and obvious purpose of the order actually made. If that order can only make sense if supplemented in a way that was not mentioned, the court will readily rectify it by adding the necessary supplement. An example of this may be found in the decision of Emmett J in Westpac Banking Corporation v E & W Jury Pty Ltd (1998) 16 ACLC 547. 6 In the present case, the order dismissing the s.459G application made perfect sense without any supplement by way of extension of the period for compliance with the statutory demand. Indeed, it would have been quite at odds with an order dismissing the application (and thereby putting an end to the attempt to have the statutory demand set aside) to contemplate giving the period for compliance some currency beyond that which the statute caused it to have in the ordinary course in consequence of the dismissal. 7 The nature of the slip rule and the cases with which it is, in general, intended to deal are discussed in the judgment of Einstein J in Currabubula Holdings Pty Ltd v State Bank of New South Wales [2000] NSWSC 232. Matters are conveniently summarised in the following passage in his Honour's judgment: "As the power to employ the slip rule is a jurisdiction granted to the Court to prevent injustice, the Court ought to be wary in the extreme of hampering itself by defining in an exhaustive way or laying down as a general proposition, the ambit of which situations will and will not be embraced by the rule. Subject to this caveat, the authorities appear to support the following statements of principle:

(1) The slip rule is a jurisdiction granted to the Court to prevent injustice caused to parties as a result of the actions of the Court : Elyard Corporation Pty Ltd v DDB Needham, Sydney Pty Ltd . Nevertheless, the competing interest in the finality of litigation dictates that the power be used sparingly: Gould v Vaggelas .

(2) The slip rule empowers the Court to correct mistakes in judgments and orders which stem from ambiguous language in the judgment or order (Ex parte Herman; In re Mathison) or which are a result of an inadvertent omission on the part of the Court or the parties in the litigation: Arnett v Holloway . It allows the Court to amend a judgment or order which failed to accord with the intention of the Court or to amend a judgment or order which failed to accord with the intention the Court would have had if the matter had been raised by the parties: L Shaddock & Associates Pty Ltd v The Council of the City of Parramatta .

(3) The slip rule cannot be employed to vary a decision which was itself ambiguous. The rule may be employed to better express an unambiguous decision where the expression of the decision (as opposed to the decision itself) was ambiguous: R v Cripps; Ex parte Muldoon, Axis Aviation Pty Ltd v Avtex Air Services Pty Ltd .

(4) The slip rule does not give the Court power to re-open or reconsider the correctness of an order made or to vary the order in the light of circumstances or matters which have arisen subsequent to the hearing by way of an afterthought as opposed to an inadvertent mistake in failing to raise the matter at the hearing: Brew v Whitlock, D'Angola v Rip Pioneer Gravel Co Pty Ltd .

(5) Matters particularly apt for correction under the slip rule include matters about which there can be no real disagreement or controversy; where an officious bystander would reply when asked if the amendment was appropriate: 'Of course.' It is not sufficient that the Court forms the view that had the matter been raised at the hearing, the Court would, on balance, have made the orders sought: Coppins v Helmers . The amendment cannot be one which would not be automatically made and cannot be one which requires the support of real argument in terms of the merits of competing submissions as to the order which ought to be made: Elyard Corporation v DDB Needham, Sydney .

(6) An amendment when made under the slip rule dates from the time of the original order and not from the time of the amendment: Elyard Corporation v DDB Needham, Sydney .

(7) The Court possess a discretion as to whether to employ the slip rule to correct an inadvertent mistake or omission. Relevant considerations are the fairness and the justice of the amendment and any delay of the party seeking the amendment: Gould v Vaggelas. " 8 In the present case, there is no basis on which it can be said that the orders as pronounced by the Acting Master on 10 September 2002 failed to give effect to his intention (item (2) in Einstein J's list). That decision was unambiguous and not in need of better expression (item (3)). There might be grounds on which it could be said that there was, in terms of item (4), "an inadvertent mistake in failing to raise the matter at the hearing" (in that the absence of Marthas' solicitor, being the cause of no submissions being made by Marthas, may have been inadvertent), although, on the whole, I do not think that this can be viewed as a case of inadvertence in the relevant sense: in the first place, in the events which actually happened (ie, in particular, Marthas' absence), there would not conceivably have been an extending order since the lawyer appearing for Reliance would not have sought it and there is no basis on which the court would have made it of its own motion; and, second, it is by no means clear that, had Marthas' solicitor been present, he would have sought an extending order since it is possible that the order dismissing the application would not have been made in that event. In terms of Einstein J's item (6), the order cannot, for this reason, be regarded as one that would automatically have been made. 9 Following dismissal of the s.459G application on 10 September 2002, Marthas had to make a decision as to what, if anything, it should do to attempt to retrieve the situation. The action it took was to file in the Registry a notice of motion under part 40 rule 10 which, in the ordinary course, was given a return date of 23 September 2002. Marthas did not take the course which would have been open to it (with time running against it under s.459G(2)(a)(ii)), of bringing an urgent application before the Duty Judge in the Equity Division seeking an extension under s.459G(2)(a)(i) to ensure that the time for compliance with the demand continued to run pending the determination of the notice of motion seeking to set aside the Acting Master's orders of 10 September 2002. A recent example of such an urgent application in the analogous case of extension under s.459R may be found in Expile Pty Ltd v Jabb's Excavations Pty Ltd [2002] NSWSC 851. Marthas made no such application. 10 In the circumstances as they exist, I can see no ground on which the slip rule in part 20 rule 10 can be applied so as to assist Marthas in its attempt to avoid retrospectively the conclusion that the time for complying with the statutory demand has expired. That being so, the well established rule emerging from the cases discussed by Hansen J in Burwood Retail (above) means that there is no longer any basis on which it is open to the court to extend time for compliance with the statutory demand. 11 Because the time for compliance has now expired, any setting aside of the order made on 10 September 2002 would be futile. The result must therefore be that Marthas' notice of motion filed on 11 September 2002 is dismissed with costs. 12 I note, in conclusion, the limited possibility that Marthas may still be able to obtain leave under s.495S(2) to argue the matters by reference to which it sought to set aside the statutory demand. **********

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