Quest Rose Hill Pty Limited v The Owners Corporation of Strata Plan 64025 and Anor

ex tempore Judgment 1On 13 December 2012 I gave judgment in this matter (Quest Rose Hill Pty Limited v The Owners Corporation of Strata Plan 64025 and Anor [2012] NSWSC 1548) and asked the parties to approach my Associate to make suitable arrangements to have the matter re-listed before me for the making of final orders in light of the terms of my judgment. 2Following judgment there were further hearings that included consideration of the form of final orders and costs. These relevantly included hearings on 8 March, 12, 18 and 24 April 2013. Final orders were made on 24 April 2013 in accordance with short minutes of order provided by email to my Associate. 3There are two aspects to the plaintiff's application. The plaintiff: (1)seeks a declaration as to the effect of paragraphs 1 and 2 of the final orders made on 24 April 2013, or, in the event that those orders have the effect contended for by the second defendant, the plaintiff applies under the Uniform Civil Procedure Rules 2005 (UCPR) r 36.17 for a variation of those orders; and (2)applies under UCPR 36.17 for a variation of the orders made on 24 April 2013 by the deletion of the words "by consent" in each of the two instances where they appear in the terms of the orders.

The first aspect of the plaintiff's application 4The orders made on 24 April 2013 relevantly provide: By consent and in accordance with the document Short Minutes of Order, which His [sic] honour has signed, sealed and placed with the papers, the following order [sic] are made: That By Consent:- 1. Subject to Order 2, declare that those of the lot owners represented by the Second Defendant who are parties to arbitration proceedings determined by an award made by Mr John McDermott as arbitrator bearing date 14 October 2008 are liable to refund to the Plaintiff the amount overpaid by it, as so determined, in and following March 2006 together with interest thereon under s.100(1) of the Civil Procedure Act 2005. 2. Order that the amount to be refunded to the Plaintiff pursuant to Order 1 above: (1) may be repaid by deduction from the annual rent hereafter payable by the Plaintiff, in accordance with paragraph 90D(i) of the said award; (2) shall be calculated so as to take into account the result of the rental determination the subject of order 3 below and also paragraphs 252 and/or 253 of the judgment of the Court delivered on 13 December 2012, such that any amount owing by a lot owner to the Plaintiff under Order 1 will be set off against any amount owing by the Plaintiff to such a lot owner by reason of such rental determination and also against any amount owing by the Plaintiff to such a lot owner referable to those paragraphs 252 and/or 253. 3. Order that each of the owners of lots in Strata Plan 64025 who are represented by the Second Defendant, do and cause to be done all things necessary to be done by such owner to grant to the Plaintiff a lease of that lot, for a term commencing on the date of registration of such lease and expiring on the tenth anniversary (in or about February 2016) of the day (in or about February 2006) on which the lease of that lot originally granted to Roseprop Pty Limited on or about 23 February 2001 expired ("the 2006 Expiry Date"), at a rent for the 12-month period expiring on the sixth anniversary of the 2006 Expiry Date ("the 2011/2012 period") as determined in accordance with clause 15.2.1(b) of the lease, and at a rent for each of the remaining four years of the term of such lease calculated pursuant to clause 15.2.2 of the lease. 5The plaintiff contends that there is ambiguity in the meaning of clause 2(2) of the orders, and therefore the court should make a declaration explaining the meaning of that clause. The second defendant contends, correctly in my view, that there is no ambiguity, and the order operates in accordance with its terms, as contended for by the second defendant. 6The plaintiff seeks in the alternative that I apply the slip rule to give effect to the manner in which the plaintiff says clause 2(2) should operate. 7The second defendant disputes this, and says that the plaintiff is simply seeking to re-agitate matters already raised and decided upon during the hearings subsequent to the handing down of the principal judgment on 13 December 2012. The first defendant has no interest in this present application, as the orders sought to be varied do not affect it. 8Rule 36.17 in the UCPR provides: 36.17 Correction of judgment or order ("slip rule") 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. 9It is clear, as the plaintiff contends, that the operation of the slip rule is not restricted to drafting or typographical errors, may apply where the orders made give rise to consequences contrary to those intended by the court. For example, in Newmont Yandal Operations Pty Ltd v The J Aron Corporation and the Goldman Sachs Group Inc (2007) 70 NSWLR 411, orders were varied to avoid an unintended estoppel in related proceedings (see paragraphs [114], [185] and [194]). 10However, there is a limitation on the scope of the rule which precludes its application to mistakes that are the consequence of a deliberate decision. In Expo Aluminium Pty Ltd v Pateman Pty Ltd (No 2) [1991] NSWCA 92, Meagher JA (with whom Kirby P and Samuels JA agreed) said: One thing is clear, and that is that the application does not involve the "slip rule". The "slip rule" governs inadvertent mistakes. The mistake suggested in the present case was, as the President pointed out in argument, the result of a deliberate decision. 11A criterion which has been applied since at least 1892 (Hatton v Harris [1892] AC 547 at 558 per Lord Herschell) to determine whether a proposed correction is justified, is the hypothetical enquiry as to whether the supposed error, if it had been drawn to the attention of the court or the parties at the relevant time, would have been corrected as a matter of course. 12In Storey & Keers Pty Ltd v Johnstone (1987) 9 NSWLR 446, McHugh JA referred to a number of authorities, including the High Court decision in L Shaddock & Associates Pty Ltd v Parramatta City Council [No 2] (1982) 151 CLR 590, and said (at 452-453): If the proposed variation of an order relates to a matter which was in issue in the proceedings or to something which was incidental to such a matter, the court, in my opinion has power to amend its order if the need for the variation is the result of an accidental omission or mistake ... No doubt in some cases there will be difficulty in determining whether or not the subject of the proposed variation relates to a matter which was in issue or whether it is to be regarded as a separate and distinct matter which was not in issue ... When that sort of problem arises, the level of classification of the matter in issue will usually prove decisive. The requirement that the proposed amendment must relate to a matter which was in issue in the proceedings or what was incidental thereto merely serves to emphasise that it is only omissions or mistakes that are accidental which can be rectified. It would be contrary to the rationale of the slip rule to allow judgments and orders to be amended to deal with matters which were not in issue in the proceedings ... The need to confine amendments to matters in issue or incidental thereto is necessitated by the fact that an amendment operates from the date of the original order no matter how long a period had elapsed since the original order was made. The rationale of the slip rule also requires that an omission or mistake should not be treated as accidental if the proposed amendment requires the exercise of an independent discretion or is a matter upon which a real difference of opinion might exist ... In general the test of whether a mistake or omission is accidental is that applied by Lord Herschell in Hatton v Harris [1892] AC 547 (at 558) if the matter had been drawn to the Court's attention would the correction at once have been made? [My emphasis] 13That passage was cited with approval by Spigelman CJ (with whom Santow JA and Handley AJA agreed) in Newmont Yandal Operations Pty Ltd v The J Aron Corporation and the Goldman Sachs Group Inc at [126]-[130]). 14In my view, the second defendant correctly contends that the issue now sought to be raised by the plaintiff was raised and either decided upon or agreed by the parties during various hearings after the main judgment was handed down. This is borne out by the transcript, relevant references to which have been identified by counsel for the second defendant (12 April at T2.31-3.10, T5.21-5.26, T19.12-19.30, T20.4-20.8, T22.8-22.16, T23.37-23.50; 18 April at T2.2-2.6, T5.31-6.15). The parties discussed in open court the terms of the proposed short minutes of order, sometimes for lengthy periods of time. The "cash flow" problem now complained of was expressly raised during those discussions, and counsel then acting for the plaintiff agreed to the short minutes of order in their current form. It cannot be said, in my view, that the consequences of the orders are unintended. 15The second defendant correctly notes that orders 1 and 2 do not involve any windfall to the landlords. It may be that no net payment will ultimately be due from the landlords to the plaintiff, and in that event, allowing the plaintiff to deduct "overpayments" in advance of rental determination would be to prejudice the landlords.