Woods v Woods

IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION

1973/97 GLENN WOODS & 1 OR v DESRE CLAIR WOODS & 2 ORS

1 In these embattled proceedings between mother on the one hand and son and daughter in law on the other, I have already delivered a number of judgments. One of them was delivered on 31 March 1999: Woods v Woods [1999] NSWSC 275 ("my judgment"). One of the matters dealt with in my judgment was a claim that the mother had lent the son $17,000 which had not been repaid. In [23] I said: " I find that the transaction took place substantially as she deposed. She has demanded the repayment of the money and is entitled to judgment in the sum of $17,000 together with interest on that sum under s94 of the Supreme Court Act 1970 from the date of demand until judgment. "

The judgment was given against the son only. Because of the nature of the other matters dealt with in my judgment final orders were not made immediately. However, in April 2000, on the mother's application, I formally gave judgment against the son for $26,662.21 "in respect of the claim referred to in [23]" of my judgment. At that time it was agreed that that was the appropriate sum to encompass the $17,000 together with interest as outlined in [23]. Mr Sanderson of counsel had only recently taken the brief for the son and the daughter in law, which had previously been held by Mr P P O'Loughlin of counsel. Mr Sanderson has subsequently made application on the son's behalf for the judgment entered to be corrected under the slip rule. He says that by reason of his inadvertence, owing to his unfamiliarity with the matter, he agreed to entry of judgment in the sum mentioned as including the appropriate amount of interest because he had not at that stage examined the evidence in the case to determine the date on which demand had been made and from which, therefore, interest ought run. He says that upon examination of the evidence it became apparent that interest had been calculated from a date earlier than the first demand and, as interest was to run only from demand, the "slip" in the judgment ought be corrected and the sum for which judgment was entered reduced accordingly. 2 The original claim for the $17,000 was contained in paragraphs 8, 9 and 10 of the cross claim. Those paragraphs simply allege that on 11 December 1992 the cross claimant lent the cross defendants $17,000 for one year and that the $17,000 had not been repaid. By prayers 3 and 4 the cross claimant sought an order for the payment of $17,000 and "interest". There was evidence at the trial that demand was made for the repayment of the $17,000 by letter on 23 December 1996. In essence the question as to the time from which interest should run was not the subject of submissions in the proceedings prior to the delivery of my judgment. I do not have transcript for the occasion on 26 April 2000 when I gave judgment for the $17,000. My notebook confirms that this was the first occasion on which Mr Sanderson appeared before me, Mr O'Loughlin having last appeared on 26 February 2000. However, I am clear that no submission was made to me concerning the calculation of interest nor, indeed, anything said on that day about the basis of calculation of interest. Mr Sanderson, as he concedes, clearly consented to entry of judgment in the form to which I have referred consequent upon [23] of my judgment. It was stated in submissions by Mr Sanderson on this application that the interest included in the order of 26 April 2000 was calculated from a date in 1994 which was selected by the mother's solicitor. This proposition is not contested on behalf of the mother. It is said by Mr Sanderson that the evidence showed that the first demand, being the letter dated 23 December 1996 referred to above, demanded payment within seven days, so that the date from which interest should have been calculated in accordance with [23] of my judgment was 30 December 1996. It is asked that the judgment be adjusted by a reduction of the sum so as to include only interest calculated from that date. 3 It is the law (commonly known as "the slip rule") that, even where a judgment has been entered, the Court may correct the judgment if it contains an error caused by mistake or inadvertence. The rule is now embodied in the Supreme Court Rules 1970 Part 20 r 10 as follows: "(1) Where there is a clerical mistake, or an error arising from an accidental slip or omission, in a minute of 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."

The errors which may be corrected are errors caused by mistake or inadvertence, not only on the part of the Court itself but also on the part of legal representatives: see L Shaddock & Associates Pty Ltd v Parramatta City Council (No 2) (1982) 151 CLR 590 at 594 - 595. Whether or not the error should be corrected is within the discretion of the Court: ibid at 597. Mr Sanderson has informed the Court that the error was caused by his inadvertence and has explained the circumstances in which that arose. I accept his explanation. It would found exercise of the discretion to correct the error. 4 Mr Radojev, of counsel for the mother, resists the correction of the order under the slip rule. He concedes that he made no submission to me either at the end of the trial or when seeking the entry of judgment for the $17,000 debt in relation to the time at which the debt was repayable and from which interest ought run. He says that this was by inadvertence and that he ought have submitted that interest should have run from the time payment of $17,000 was made by the mother in December 1992, or at the latest from the date in 1994 when the son in a written note acknowledged the debt. He says, furthermore, that I seem to have assumed that the loan was a loan which was not repayable without demand. He says that if the loan was for a term, the term was a year, which had expired; or alternatively, there was no term at all. There is no evidence that the loan was at any time stipulated to be repayable on demand; even if there were, those words would not of themselves be sufficient to preclude recovery of the loan without a demand; there must be words which make it clear that a demand is a precondition to repayment. The law in this regard was stated as follows by Fullagar J Ogilvie v Adams [1981] VR 1041 at 1043 - 1044, where his Honour said: "The common law has always regarded the fact of indebtedness as a continuing detention by the debtor of the creditor's money, and this whether the creditor brought an action of debt or an action in indebitatis assumpsit. Therefore if A lends money to B, then instantly B is detaining A's money. In order to prevent a cause of action for recovery arising in A instantaneously on paying the money, the parties must expressly contract out of that situation by words clearly inconsistent with that situation. The courts have long since settled it that a mere statement or agreement that the money is repayable on demand (or request or at call) is not sufficient to contract out of that situation where all else that is known of the terms of the contract is that A has paid money to B by way of loan. The lender's cause of action still arises instanter on the receipt of the money by the borrower so that the lender's cause of action becomes statute barred at the expiry of six years after the receipt of the money. See, for example, the early cases of Capp v Lancaster (1597) Cro Eliz 548; 78 ER 794; Ashenden v Clapham (1673) 1 Freeman 114; 89 ER 84; Norton v Ellam (1837) 2 M & W 461; 150 ER 839; Jackson v Ogg (1859) Johnson's Reports 397; 70 ER 476 and the recent case of Commercial Union Assurance Co Ltd v Revell [1969] NZLR 106. See also the unanimous dictum of the Full High Court in Young v Queensland Trustees Ltd (1956) 99 CLR 560 at p 566; [1956] ALR 939 at p 942 per Dixon CJ and McTiernan and Taylor JJ: 'A loan of money payable on request creates an immediate debt.'" 5 Mr Radojev submits that, because of his slip and because I made a slip in specifying that the interest should run from the time of the demand, if any correction should be made to the amount of the interest, it should be a correction increasing the amount to cover the period back to December 1992. Alternatively, the date in 1994 from which interest was in fact calculated corresponds with the first defendant's acknowledgment in writing that he had received the moneys as a loan from his mother and this is the appropriate time for interest to run from. In any event, there should be no correction to reduce the amount of interest paid as claimed on behalf of the first defendant. 6 Acceding to Mr Radojev's submission may result in correcting a slip not only on his part, but on the part of the Court. The law in this regard was discussed by Cohen J in Mailman v Challenge Bank Limited SCNSW 16 April 1992 unreported. There his Honour pointed out, by reference to authorities such as Hall v Harris (1900) 25 VLR 455; Mutual Shipping Corporation v Bayshore Shipping Co Ltd [1985] 1 WLR 625; and Yore Contractors Pty Ltd v Holcon Pty Ltd SCNSW 17 July 1989 unreported, that the principle is that, where the error is the error of the Judge, the question is whether he made a mistake by misapprehending a situation or misunderstanding a position or whether in the course of his consideration of the matter he deliberately made a decision of fact or of law which he now recognises to be erroneous. The distinction was formulated as follows by Sir John Donaldson MR in the Mutual Shipping case (a case concerning an arbitration) supra at 633: "It is the distinction between having second thoughts or intentions and correcting an award or judgment to give true effect to first thoughts or intentions, which creates the problem. Neither an arbitrator nor a judge, can make any claim to infallibility. If he assesses the evidence wrongly or misconstrues or misappreciates the law, the resulting award or judgment will be erroneous, but it cannot be corrected either under section 17 of the Act of 1950 or under RSC, Ord 20, r 11. It cannot normally even be corrected under section 22 of the Act of 1950. The remedy is to appeal, if a right of appeal exists. The skilled arbitrator or judge may be tempted to describe this as an accidental slip, but this is a natural form of self-exculpation. It is not an accidental slip. It is an intended decision which the arbitrator or judge later accepts as having been erroneous."

In the latter case the correction may only be made by on appeal. In the former case, the correction may be made under the slip rule, as in the case of slips by Court staff or legal representatives. It probably appears from the foregoing (see [2], [4] above), and I should state at once, that the mistake I made in specifying the time of demand as the time from which interest was to run in [23] of my judgment was a mistake of the former type. Neither the question of the time at which the debt was payable nor the time from which it was appropriate that interest should run was debated before me and I gave no consideration to the relevant matters, including the question of whether or not a demand was necessary to render the debt repayable. It may be that I included reference in what I said to the time of demand by unthinking adversion to the fact that evidence of a demand had been given, which would not have been necessary to complete the cause of action in the circumstances (although no doubt it did have other purposes in these proceedings because it was tendered as evidence that at least as of 1996 the mother was contending that the payment was made by her to the son by way of loan and not by way of gift). I certainly did not turn my mind to the question of whether or not demand was necessary to complete the cause of action. In my view the error that I made was of the inadvertent variety rather than an error in the principle of law to be applied. If it were otherwise appropriate, this would justify the correction of the slip by changing the amount of interest to cover the period from an earlier date than the 1994 date from which it was in fact calculated. 7 In my view, bearing in mind all the considerations arising in this somewhat complex situation, the fashion in which I ought exercise my discretion is by refusing the application made by Mr Sanderson and also refusing the application made by Mr Radojev to alter the amount of interest by providing for calculation from an earlier time. It was by an inadvertent slip by Mr Sanderson that it was not argued that interest should not run till 30 December 1996. But the true situation is that the loan was repayable by the date in 1994 from which interest has been calculated and that date also has significance as the date on which the son acknowledged in writing that the moneys had been received by him by way of loan. Either the money had been repayable by the son from the time of its payment by the mother in December 1992, or it became so about a year later. But as I say, in any event, it was certainly repayable by 1994. The reference to a demand that was embodied in [23] of my judgment found its way into that paragraph by way of inadvertence rather than by way of error in decision concerning a legal principle. But it was the mother's solicitor who selected the commencing date for the calculation embodied in the judgment and that selection should not now be departed from. 8 In these circumstances it is my view that no alteration ought be made to the judgment and that it should stand as it was given on 26 April 2000 and entered on 27 April 2000. In view of the fact that there was some contribution on the part of both parties (as well as the Court) to the situation that has arisen, in my view there should be no order as to the costs of the applications relating to the correction of the judgment.

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