DDB Needham Sydney Pty Ltd v Elyard Corporation Pty Ltd [1995] FCA 603

CATCHWORDS

CORPORATIONS - application to wind up company - application not determined within six months after making - one extension of time granted - need for application for further extension to be made within period of existing extension overlooked by party - whether the Court has power to extend period after expiry of extended period - whether slip rule applicable.

Corporations Law, ss.459G, 459P, 459R, 1322

Federal Court of Australia Rules, Order 35 rule 7, Order 71 rule 39A

DDB NEEDHAM SYDNEY PTY LTD v ELYARD CORPORATION PTY LIMITED

No. NG3602 of 1994

CORAM: SHEPPARD J

PLACE: SYDNEY

DATE: 20 JULY 1995

IN THE FEDERAL COURT OF AUSTRALIA)

)

NEW SOUTH WALES DISTRICT REGISTRY) No. NG3602 of 1994

)

GENERAL DIVISION )

BETWEEN: DDB NEEDHAM SYDNEY PTY LTD

Applicant

AND: ELYARD CORPORATION PTY LIMITED

Respondent

CORAM: SHEPPARD J

PLACE: SYDNEY

DATE: 20 JULY 1995

REASONS FOR JUDGMENT

HIS HONOUR: To be determined is a notice of motion taken out by DDB Needham Sydney Pty Ltd the now applicant in this matter. The notice of motion is dated 16 June 1995. It was filed in court on that day and made returnable instanter. The principal order sought in the notice of motion is that the time within which the principal application may be determined, which was extended on 26 May 1995 until 9 June 1995 under subsec. 459R(2) of the Corporations Law, be further extended from 9 June 1995 until 5 p.m. on the date orders are made at the final hearing of the matter.

The principal application is one in which the then applicant, Sega Ozisoft Pty Limited, claimed an order that the respondent to the application, Elyard Corporation Pty Limited ("Elyard"), be wound up. The application was filed on 18 November 1994 pursuant to s.459P of the Law. On 21 April 1995 Bowater Tutt Industries Pty Limited was substituted as the applicant. On 9 June 1995, the present applicant ("Needham") replaced Bowater Tutt as the applicant. The substitution was effected by an order made by the Registrar on 9 June 1995 with the consent of the parties. Paragraph 7 of the order provided that the proceedings were adjourned to 16 June 1995. The order of 9 June 1995 has not been entered. On 16 June 1995, when the matter came into the list, I directed the Registrar not to enter the order until further order of the Court. The reason for taking that course will emerge from what follows.

The question at issue concerns the proper construction, in the circumstances of the case, of s.459R of the Corporations Law. The section is in the following terms:

"459R(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."

With s.459R needs to be read rule 39A of Order 71 of this Court's rules. It is unnecessary to refer to the detail of the rule.

The difficulty which confronts Needham is that, although the period of six months provided for in subsec. 459R(1), which had expired on 18 May 1995, had been extended pursuant to subsec. 459R(2) up to and including 9 June 1995, no further extension of it was included in the orders made by the Registrar on 9 June. The circumstances which led to this occurring are dealt with in an affidavit sworn on 15 June 1995 by Ms E.M. Stuart who is a solicitor in the employ of the solicitors for Needham. Ms Stuart said that the sole purpose of an earlier affidavit sworn on 8 June 1995 was to support an application for an extension of time under subsec. 459R(2) of the Law. Annexed to the affidavit is a copy of an extract of a file note Ms Stuart made on 8 June 1995 upon receiving instructions from one of the partners of Needham's solicitors,
Mr Leopold, to prepare a notice of motion seeking an extension of time. The note says, "Prepare Notice of Motion and supporting affidavit for extension under S.459R. Prepare and put on amended winding up application. Get extension under 459R to evening 16 June".

Ms Stuart said that, when she prepared the notice of motion, she inadvertently omitted to include a paragraph which expressly covered an extension of time to the end of June 1995. This had been her intention. She said that she was informed by Mr Leopold and believed that he inadvertently signed the notice of motion notwithstanding the omission. Paragraph 5 of the affidavit contains an apology on behalf of Ms Stuart and Mr Leopold.

The affidavit sworn by Ms Stuart on 8 June referred to in her affidavit of 15 June did not expressly mention the obtaining of an extension of time. In that affidavit Ms Stuart did say, however, that, at the earliest, Needham would have been substituted as the applicant in the principal proceedings on 9 June. Ms Stuart said that she had been instructed that Needham would seek to have the application dealt with urgently. She said that before the hearing could take place "certain basic procedural steps must take place in accordance with the Rules." She said that that would require an adjournment of the application of up to a week in order to give Needham an opportunity to seek a final hearing from the
Court. It was in those circumstances that the matter was adjourned until 16 June when it came before me.

Ms Stuart was not cross-examined and there was no submission concerning the reliability of her evidence. I therefore accept it.

On 15 June 1995, Elyard's solicitors wrote to the solicitors for Needham. So far as it is material, their letter said:

"We wish to advise that at tomorrows directions hearing we are instructed to draw the Courts attention to s.459R of the Corporation Law. On our reading of this section, the application to wind up our client must now be dismissed. As a result of our reading of s.459R, and our advice to that effect to our client, we were instructed on the afternoon of 9 June 1995 to do no further work in this matter."

It was not suggested in argument that I should not accept the statements made in that paragraph of the letter at their face value.

In the submission of counsel for Elyard, the Court has no power now to extend the time pursuant to subsec. 459R(2). Two matters are relied upon. They are independent of each other so that the acceptance of either one will lead to the dismissal of Needham's application. The matters are:

(a) No extension of time can be granted now because subsec. 459R(2) requires any application for an extension to be made before the expiry of the period as earlier extended. In other words, the application not having been made on or before 9 June, no order can be made within the period prescribed by subsec. 459R(1) as extended under subsec. 459R(2); see para. (b) of subsec. 459R(2). Counsel relies upon the presence of the word "only" in the introductory part of the subsection.

(b) In any event the application to wind up Elyard has been dismissed by force of the statute. Subsec. 459R(3) provides that an application is, "because of this subsection", dismissed if it is not determined as required by the section.

Before coming to deal with the competing submissions of the parties, there is some further legislation to be referred to. Firstly, para. 1322(4)(d) of the Law provides, so far as material for present purposes, that, subject to the following provisions of the section, but without limiting the generality of any other provision of the Law, the Court may, on application by any interested person, make an order, either unconditionally or subject to such conditions as the Court imposes, extending the period for doing any act, matter or thing or instituting or taking any proceeding under the Law including an order extending the period "where the period concerned ended before the application for the order was made".

Then Order 35 rule 7(1) of the rules of this Court empowers the Court to vary an order before it has been entered. Paragraphs (c) and (e) of Rule 7(2) provide that the Court may, if it thinks fit, vary an order after the order has been entered where the order is interlocutory or where it does not reflect the intention of the Court. Rule 7(3) provides, inter alia, that an error arising in a judgment or order from an accidental slip or omission may at any time be corrected by the Court.

The evidence in the case establishes that there was no point in Needham obtaining the order made by the Registrar on 9 June 1995 if the consequence of its failure to obtain an extension of time, no application for such an extension having then been made, was the dismissal of its winding up application on 9 June 1995 by operation of law. The fact that no extension of time was obtained was due entirely to the oversight of Needham's solicitors as explained by Ms Stuart in her affidavit of 15 June. The letter written by Elyard's solicitors shows that they were well aware of the omission. The mistake made was thus not mutual; it was a mistake made unilaterally by Needham's solicitors whose acts and omissions bind it.

In these circumstances, it seems to follow that the notice of motion seeking an order for the extension which should have been sought no later than 9 June must fail unless Needham can rely on provisions of the slip rule provided for in Order 35 rule 7 of the Court's rules. On the present state of the authorities, the provisions of s.1322 of the Law will not help. The conflict of judicial opinion concerning the construction of s.459G of the Law, which provides for the setting aside of statutory demands, has, at least for the time being, been resolved especially for judges sitting at first instance, by the recent decision of the New South Wales Court of Appeal in Re J & E Holdings Pty Limited (15 June 1995, as yet unreported). There the Court decided to follow the same approach as was followed by the Appellate Division of the Supreme Court of Victoria in David Grant & Co Pty Limited v Westpac Banking Corporation (1995) 15 ACSR 771. The Court declined to follow the majority judgment of the Queensland Court of Appeal in Cavetina Pty Limited v Synthetic Dyeworks Industries Pty Limited (1994) 14 ACSR 274.

In the course of his reasons, Sheller JA, who wrote the judgment of the Court in J & E Holdings Pty Limited, referred to the decision of the High Court in Australian Securities Commission v Marlborough Goldmines Limited (1993) 177 CLR 485 where the High Court (at 492) stressed the importance of uniformity of decision in the interpretation of uniform national legislation. The Court said that uniformity was a sufficiently important consideration to require that an intermediate appellate court - and all the more so a single judge - not depart from an interpretation placed on such legislation by another Australian intermediate appellate court unless convinced that that interpretation was plainly wrong. Sheller JA said that he agreed with the interpretation placed upon s.459G by the Victorian Supreme Court in David Grant. He continued (at 15):

"This is the latest decision by an intermediate appellate court on the point. Their Honours carefully reviewed the arguments and concluded that the majority decision of the Queensland Court of Appeal was plainly wrong. Even if I retained some residual doubt about the Victorian Court's conclusion I think we should follow it. To do otherwise would seem to me to be giving but lip service to what the High Court has said. Certainty in the law, in my opinion, requires that only in an extreme case would an intermediate appellate court or a judge of first instance not follow the latest decision by an intermediate appellate court if, in that latest decision, the arguments have been fully reviewed and a conclusion reached that an earlier decision of another intermediate appellate court was plainly wrong."

In my respectful opinion, the question is a more open one than the Victorian decision suggests. The body of authority against that view is considerable. It consists not only of the decision of the Queensland Court of Appeal in Cavetina, but also of decisions of single judges particularly the decisions of McLelland CJ in Eq in Re Australnet Limited (1994) 15 ASCR 394 at 395-6 and Santow J in Sydar Pty Limited v K. Simmonds Finance Pty Ltd (1995) 16 ASCR 384. Sydar was referred to by Sheller JA in J & E Holdings Pty Limited (at 14). Sheller JA said that he disagreed with Santow J's conclusion "in substance because I believe it does not give appropriate weight, in the context of the legislation, to the use of the word 'only'."

The extent of the judicial disagreement which there is no doubt provides the reason for the grant of special leave to appeal to the High Court in the David Grant case. Once judgment is given by the High Court in that case, the position will have been clarified. In the meantime, decisions need to be made almost on a daily basis, not only by the courts, but also by the profession, on which line of authority is to be preferred. As Sheller JA has said, it is essential for there to be certainty. In my opinion that will only be obtained by following the decisions of the Victorian Supreme Court and the New South Wales Court of Appeal at least until the High Court gives its decision.

The present case concerns s.459R, not s.459G. But I am unable to detect any reason of policy or anything in the language of the two provisions which would suggest that s.459R should be given a different construction from s.459G. McLelland CJ in Eq referred to this matter in Australnet (see at 396), but I think the safer view is that the two provisions should be given a similar construction. Australnet was a case dealing with s.459R, not s.459G. In those circumstances I have reached the conclusion that the words of s.495R are such as to exclude the operation of s.1322 of the Law. In my
opinion, its provisions have no part to play in resolving the outcome of the notice of motion here to be dealt with.

The provisions of subsec. 459R(3) are effective themselves to operate to bring about the dismissal of an application for a company to be wound up which has not been determined within six months after it has been made or within any extension of that period that may have been granted under subsec. 459R(2). The effect of the subsection is explained in the judgment of Lindgren J in Western Suburbs Electrical Supplies Pty Limited v Russell Electrical Services Pty Limited (1994) 14 ACSR 337. There the applicant filed an application for the winding up of the respondent. A winding up order was made by the Registrar because there was no appearance for the respondent. This arose, apparently, because the proceedings did not appear in the published list of matters on the day of the hearing. The respondent filed a notice of motion in which it sought, and was granted (by Beazley J), an order setting aside the winding up order. When the parties returned to court, the applicant consented to an adjournment of the proceedings, overlooking the fact that the six month period provided for in s.459R of the Law for determination of the winding up application would have expired by that date.

The application was dismissed. Lindgren J held that the order setting aside the initial winding up order was interlocutory in that it did not purport finally to dispose of the application for winding up. Accordingly the Federal Court had power to set aside the interlocutory order under Order 35 rule 7(2)(c). However, as the interlocutory order was not set aside within the six month period referred to in s.459R, the winding up application was dismissed by operation of subsec. 459R(3). Because of the provisions of subsec. 459R(2)(b) the application could not be extended once the six month period had expired.

In the course of his judgment Lindgren J said (at 341-2):

"What I have just said highlights the question raised by the unusual circumstances of the case: Would an exercise of the discretionary power in favour of setting aside her Honour's order constitute a 'determination' of the application for winding up outside the 6 month period referred to in s.459R? If so, that section precludes the exercise of discretion in that manner.

The requirement of subs 459R(1) is that the status of the company ('ordered to be wound up' or 'application for winding up dismissed') be known finally by the end of the 6 month period. Section 459R is one of the provisions introduced into the Corporations Law as a result of the Australian Law Reform Commission's report on its General Insolvency Inquiry (ALRC 45) ('the Harmer report'). The explanatory memorandum which accompanied the bill which became the Corporate Law Reform Act 1992 (Act No. 210 of 1992) (which inserted the present Pt 5.4 (ss 459A-459T) in the Corporations Law) said this in relation to the then proposed s.459R:

An application for a company to be wound up in insolvency is to be determined within six months after it is made (proposed sub-section (1)). This is designed to ensure that decisions on a company's solvency are based on contemporaneous information. In relation to a statutory demand, for example, it would be inappropriate to order the winding up of a company on that basis on [sic: of] non-compliance with a statutory demand made years ago (para 712).

The period of 3 months referred to in subs 459C(2) and the period of 6 months referred to in subs 459R(1) represent the legislature's definition of 'contemporaneity' for this purpose. If I were to entertain the applicant's motion, final decision on the respondent's solvency would be made more than 6 months after the filing of the application on 16 September 1993.

As I said earlier, the intention of her Honour's orders made on 25 February 1994 was to restore the parties to the positions which they respectively occupied immediately preceding the making of the winding up order by the registrar on 11 February 1994. Her Honour's order achieved that result. Even though that order was interlocutory, and so was, generally speaking, susceptible to being set aside under subr 7(2) of O 35, it had not been set aside up to the time when the 6 month period expired. At that time, the application for winding up was still pending. It is precisely in such circumstances that subs 459R(3) reinforces the effect of subs 459R(1), by providing that the application for winding up is dismissed."

Section 459C referred to by his Honour is not relevant for present purposes. It is a provision dealing with the circumstances in which the Court is bound to "presume" that a company is insolvent.

Notwithstanding submissions to the contrary by counsel for Elyard, I do not think that the decision in the Western Suburbs Electrical case bears on the present problem except insofar as it serves to emphasise the effect which subsec 459R(3) will have in the event that the proceedings are not determined within the period, or the extended period, for which the section provides. In the Western Suburbs Electrical case, the orders had been entered. The order of 9 June made in this case has not been entered and will not be entered until the Court makes a further order. Furthermore, there was no reliance in the Western Suburbs Electrical case on the provisions of Order 35 rule 7 dealing with the slip rule. In any event, bearing in mind the circumstances of the Western Suburbs Electrical case, which, as his Honour said, were unusual, it does not seem to me that there would have been any different result in the matter if the orders had not been entered or if the slip rule had been relied upon.

The question I have to resolve is whether the provisions of the slip rule will assist Needham. Two questions are involved. The first is whether the slip rule applies; the second whether, if it does, the Court's discretion should be exercised in Needham's favour. What Needham needs is an order nunc pro tunc. In the submission of counsel for Elyard the Court has either no jurisdiction to make such an order, or, if it has, should not exercise its discretion to make it because it would not have any utility, the provisions of subsec. 459R(3) having operated to bring about the termination of the proceedings by operation of law.

In the written submissions prepared by the parties' legal representatives and lodged after the hearing concluded, there are numerous references to authorities. I have considered the references given me and some others. It is not material to refer to each one. I propose to refer to those which I think are of direct importance and relevance to the question to be decided.

It is clear that the slip rule will apply even though the slip or error which has been made is that of a party or his or her legal representative. The rule is available in cases of unilateral mistake and not only in cases of mutual mistake. The rule was the subject of consideration by the High Court in L. Shaddock & Associates Pty Limited v The Council of the City of Parramatta (1982) 151 CLR 590.

In that case the plaintiffs failed at first instance and on appeal to the New South Wales Court of Appeal. Lest his decision on liability should be reversed on appeal, the primary judge assessed the amount of damages to which the plaintiffs would have been entitled if they had obtained judgment. The amount awarded included an amount for interest calculated up to the date of the judgment at first instance. The High Court allowed the plaintiffs' appeal and ordered that judgment be given for the amount assessed by the primary judge. Neither the notice of appeal to the Court of Appeal nor that to the High Court sought an order for payment of interest, if the appeal were upheld, for the period from the date of the judgment at first instance to the date upon which judgment on appeal took effect. Through the inadvertence of counsel, the matter of interest was not mentioned in argument before the High Court or in its reasons for judgment.

It was held that the High Court had power under s.37 of the Judiciary Act 1903 to include as a component of the actual sum for which judgment was given an amount representing interest in respect of a period during which the party in whose favour judgment was given was or had been deprived of his entitlement which the Court's decision established. The Court held that the power would have been exercised in the case but for counsel's failure to advert to the matter in argument. Such inadvertence fell within the slip rule and the order made by the court would be amended to provide that the respondent should pay interest on the judgment during the relevant period. In the course of their reasons, the members of the Court (Mason ACJ, and Wilson and Deane JJ) said (at 594-5):

"Order 29 r.11 [Order 37 rule 7 of the Federal Court Rules is, so far as it is material, its counterpart] is in the traditional form of a slip rule. It reflects the inherent jurisdiction of a court 'at any time to correct an error in a decree or order arising from a slip or accidental omission' (see Milson v. Carter [1893] A.C. 638 at p. 640. In terms, the rule provides, inter alia, that 'an error arising in a judgment or order from an accidental slip or omission, may at any time be corrected by the Court or a Justice on motion or summons'. The rule extends to authorize an omission resulting from the inadvertence of a party's legal representative (see Fritz v. Hobson (1880) 14 Ch.D. 542, at pp. 561-562; Chessum & Sons v. Gordon [1901] 1 K.B. 694, at p. 698; In re Inchcape (Earl) [1842] Ch.394, at pp. 397-398; Coppins v. Helmers & Brambles Constructions Pty. Ltd [1969] 2 N.S.W.R. 279, at pp. 281-282; Tak Ming Co. Ltd v. Yee Sang Metal Supplies Co. [1973] 1 W.L.R. 300, at p. 304; [1973] 1 All E.R. 569, at p. 571. This is so, regardless of whether the order has been drawn up, passed and entered (see Milson v. Carter [1893] A.C. at p. 650; Fritz v. Hobson (1880) 14 Ch.D., at p. 560)."

At first sight the decision of the High Court may not be thought to cast much light on the present problem. In a sense it is but an ordinary application of a well-known rule, highly
authoritative though the decision be. But it would not appear to provide Needham with much assistance in surmounting the hurdle of subsec. 459R(3) of the Law. The statute considered by the High Court was s.37 of the Judiciary Act. It authorised the inclusion of interest in the judgment between the date of the primary judgment and the date of the successful appeal. Subsection 459R(2) authorised the grant in this case of an extension of time so long as the application for the extension was made within the currency of the original period of six months provided for in subsec. 459R(1) or any extension thereof granted pursuant to subsec. 459R(2). To that extent the provisions of s.459R of the Law and s.37 of the Judiciary Act may not involve very different considerations. But what is different is the overriding effect of subsec. 459R(3) which of itself brings about dismissal where the time provided for in the section has run. The question is whether the Court, by drawing on the slip rule, can overcome the problem which this subsection poses. It will only be able to do so if it can affect the order made on 9 June 1995 so as to include within it a provision that the time be extended, a provision which will have to be understood to speak from 9 June and not from the time any such correction to the order is made.

There is some discussion later in the judgment in Shaddock which, in my opinion, throws light on this question. For completeness, the Court mentioned an alternative basis
upon which the plaintiffs' submissions had been put. The Court said (at 597):

"...counsel for the applicants based the present application on the alternative ground that this Court should, pursuant to O.43, r.3, antedate its judgment on the appeal to the date on which Waddell J. delivered judgment in the Supreme Court. In view of our conclusion that an order to the above effect should be made under the slip rule, it is unnecessary that we deal with this alternative ground which, even if it would be effective to achieve the desired object, would plainly have formidable obstacles in its path (see Borthwick v. Elderslie Steamship Co. [No.2] [1905] 2 K.B. 516, at p. 519; Nitrate Producers Steamship Co. Ltd. v. Short Brothers Ltd. (1922) 127 L.T. 726)."

Brief reference needs to be made to these two authorities. Borthwick was a case where a plaintiff had failed at first instance. On appeal an order was made that judgment be entered in his favour for an amount of damages to be ascertained. The question was whether the plaintiff could recover interest for the period between the decision at first instance and the date of the judgment on appeal. It was held that the judgment of a court of appeal did not, as a matter of course, take effect from the date of the trial of the action so as to entitle the plaintiff to interest from that date upon the amount recovered. Usually it took effect only from the date at which it was given in the Court of Appeal unless an order were made that the judgment be antedated. The Court was unwilling to make such an order. In the course of his judgment Collins MR said (at 519-520):

"The judgment is not ipso facto antedated by reason that it is substituted for the judgment in the court below. The power to antedate ought, in my opinion, only to be used on good ground shewn, and when I examine the facts of this case I can find no such ground. There was no delay attributable to one of the parties, no contumacy or unreasonable acts of the defendants, who ought not to be treated as in default by reason of the postponement of the question of their liability, as if it arose from an act of theirs. I think, therefore, that no case has been shewn for antedating the judgment of this Court in order that the plaintiff may get interest for the time that elapsed between the trial and that judgment."

Romer LJ said (at 521-2):

"When a plaintiff has failed in the Court below so that his action has been dismissed, if he succeeds on appeal it cannot, I think, be properly said that the judgment of the Court of Appeal must be regarded for all purposes as if it had been the judgment given by the judge in the Court below. The judgment in favour of the plaintiff must be treated as of the date on which it was given in the Court of Appeal, subject to the right of that Court to antedate its judgment. That right should, in my opinion, be exercised with caution. In the present case the plaintiff failed at the trial; but this Court took the view that he was entitled to recover damages, the amount of which remained to be ascertained. The amount has since been ascertained, and must be treated as if it had been mentioned in the judgment of this Court; and the result is that the plaintiff has a judgment for an ascertained sum, dated on the day on which it was pronounced. It was certainly not antedated at the time it was given, and I do not see any sufficient ground for now antedating it."

I should pause here to note that the court in Borthwick was not dealing with a case under the slip rule. It was dealing with the date upon which the judgment of the Court of Appeal took effect. The High Court in referring to Borthwick was not dealing with the slip rule either. It was mentioning
an alternative basis upon which the plaintiffs before it had relied. It did not need to deal with that basis because it had decided that the plaintiff should succeed under the slip rule. By applying the slip rule, it achieved for the plaintiffs in that case what the Court of Appeal in Borthwick was unable to achieve for the plaintiff in the matter before it.

A similar result was reached by the House of Lords in the other case mentioned by the High Court in its judgment in Shaddock, the Nitrate Producers Steamship Company's case. I do not need to refer to the judgments in that case.

Since the decision in Shaddock, the decisions of the English Court of Appeal in Borthwick and the House of Lords in Nitrate Producers Steamship Company have been applied twice by the High Court. This was done firstly in Nicol v Allyacht Spars Proprietary Limited [No. 2] (1988) 165 CLR 306 (see particularly at 309-312) and then in Official Receiver in Bankruptcy v Schultz (1990) 96 ALR 327. Both these cases are authorities for the proposition that the order of an appellate court does not take effect earlier than the date on which it is made.

The decision of the English Court of Appeal in Borthwick was overruled by the House of Lords in Thomas v Bunn [1991] 1 AC 362. The point upon which the House of Lords differed from the Court of Appeal was a point of construction of s.17 of the Judgments Act 1838 (UK) which was considered by both courts. The overruling took place after the decisions of the High Court in the Allyacht and Schultz cases. For present purposes the correct view of the proper construction of s.17 of the Judgments Act is not of importance. The important point is that the judgment of a court of appeal usually speaks from the date of the judgment. It does not speak from the date of the judgment at first instance which it is overruling. That was the point made by the judges of the High Court who decided Shaddock's case in the passage earlier quoted. But they did not need to consider the alternative submission relied upon because they were able to overcome the problem by applying the slip rule. No problem connected with antedating orders or orders having a retrospective effect arose. All this was taken care of by the application of the slip rule.

The question which has to be determined in the present case is whether the slip rule can assist Needham here bearing in mind the effect which must be accorded subsec. 459R(3) of the Law. In my opinion Shaddock's case establishes that it can. It is true that the key to Shaddock's case lies in the construction of s.37 of the Judiciary Act considered by the High Court in the Shaddock case. The important point, however, is that, although the order of the High Court spoke from the date it was made, it was made in the terms in which it was because it corrected the slip or mistake made by counsel in not adverting to the question of interest between the date of the judgment at first instance and the date of the judgment of the High Court. The construction of s.37 of the Judiciary Act adopted by the High Court would not have availed the plaintiffs in Shaddock if it had not been for the High Court's application of the slip rule. It was the application of the rule which enabled the High Court to give the plaintiffs the remedy to which they would have been entitled if their counsel had asked for the relief in the course of the original argument. So here, the position needs to be looked at as it would have been if Needham's legal representative had done as had been intended and asked for an extension for the period provided for in subsec. 459R(1) of the Law. If that had been done, there can be no question but that the Court would have acceded to the application. It would have been pointless not to do so. If an order for an extension of time had not been made, the other orders being made by the Court, which were being made by consent, would have been of no utility.

In the written submissions of the parties, some further authorities were referred to. These were Streimer v Tamas (1981) 37 ALR 211, particularly in my own judgment at 216, Re Hibbard; ex parte Playroom Pt Ltd (Qld P1606 of 1987, unreported, 5 December 1988, Pincus J) and Re Agushi; ex parte Farrow Mortgage Services Pty Limited (1994) 126 ALR 704. There is an unevenness of approach between Pincus J and myself about questions such as that to be decided here. My judgment in Tamas was a dissenting one or, more correctly, I reached
the same conclusion as the majority (with whom I disagreed) but by a different route.

Hibbard was a case in which the question was whether a creditor's petition had lapsed after the expiration of the twelve month period provided for in subsec. 52(4) of the Bankruptcy Act 1966. Due to an oversight, no application had been made for an order extending the time within the original period of 12 months. In the course of his judgment, Pincus J said that an application for an adjournment of the petition had been made by the debtor and granted. Neither the petitioning creditor's counsel nor the Court adverted to the fact that the adjournment would take the petition beyond the 12 month period mentioned in subsec. 52(4). Counsel contended that the slip rule was available to remedy the position although the order omitted by the slip - an order under subsec. 52(5) - was not asked for. Pincus J continued (at 3-4):

"Shaddock's case shows that that is not fatal. There, a suit in the Supreme Court of New South Wales was dismissed after trial, but damages were assessed, including interest to the date of assessment. There was an unsuccessful appeal to the Court of Appeal, but the plaintiff succeeded on further appeal to the High Court; that Court gave judgment for the sum fixed by the trial judge, with costs. No application was then made to the High Court for interest beyond the date of assessment of damages by the trial judge; the omission on the part of the appellants' counsel was held to be accidental.

It was argued that as the High Court's judgment had been perfected it was too late to amend it, but the Court held that the case fell within the slip rule. The order made was to the effect that there be included in the High Court's order, made some considerable time previously, provision for interest.

Shaddock's case is one where the slip was of the same basic kind as here - i.e. the error was not a misrecording of the Court's intention, but due to a failure on the part of counsel to ask for an order of an ancillary kind which the Court would plainly, if asked, have made. A Court has, in those circumstances, a discretion to alter its own order, even by addition of an order not originally asked for.

Such an order is exceptional in the sense that the slip rule is one of the exceptions to the principle that an order may not be changed except on appeal: Bailey v. Marinoff (1971) 125 C.L.R., 529 at 539."

Pincus J said that the difficulty in the way of the application of the slip rule in the case he had to decide was that the amendment of the order for adjournment by adding an order under subsec. 52(5) would not be merely "an infringement of the (general but not absolute) rule that the Court's orders once perfected, are final. It would also be an infringement of the requirement in subsec. 52(5) that any order extending the petition be made before the expiration of the period of 12 months commencing on the date of presentation of the petition." Pincus J concluded (at 4) that, on the proper construction of subsec. 52(5), an order for extension may not lawfully be made after the 12 months period has ended, predated so as to fall within the twelve months. He then went on to refer (at 5) to Streimer v Tamas.

With respect to Pincus J, 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. The fact that a statute such as s.52 of the Bankruptcy Act or s.359R of the 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 subsec. 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.

Of course, the Court's power to correct errors is discretionary. There may be numerous circumstances which would militate against the exercise of the discretion in favour of applying the rule. One of those might be undue delay in bringing an application. Another might be prejudice suffered by creditors or others affected by a bankruptcy or a winding up. And there are the various considerations mentioned by Lindgren J in his judgment in the Western Suburbs Electrical case earlier quoted. Here there is no evidence of any prejudice to any one. The application has been made in a timely fashion. The only parties who appear to be affected are Needham and Elyard. Notwithstanding the contents of Elyard's solicitors' letter, which I have earlier set out, the solicitors must have known that it was on the cards that the Court itself would pick up the need to extend the time. If the Court had done so, it would not have been successful in any opposition it attempted to make to that order being made. There is no evidence from Elyard or its solicitors suggesting any prejudice other than that, once 9 June 1995 had passed, the solicitors were instructed to do no further work in the matter. In the present matter there is the added factor that the order has not been taken out. The wide words of Order 35 rule 7(1) apply. The Court's discretion to vary its own order is at large. In my view it ought to be exercised.

Tending to the same effect as the decision of Pincus J in Re Hibbard is the decision of Heerey J in Re Agushi. His Honour's judgment is not expressed as conclusively as that of Pincus J in Re Hibbard but it is to the same effect. To the extent that it suggests that the course contended for by Needham is not open, I would respectfully disagree with it. Again, however, I recognise that there may be matters going to the exercise of the Court's discretion in a given case which will militate against any application of the slip rule.

My conclusion is that the slip rule is available to correct the error which was made. There is no warrant for not exercising the Court's discretion in favour of correcting the
error. That is especially so in the light of the fact that the order of 9 June 1995 has not been entered.

I do not now propose to make orders. Rather I propose to give the parties and their legal representatives an opportunity of considering what I have said. When the matter is again in the list, the solicitors for Needham are to bring in short minutes of order to give effect to my decision. I shall deal also with the question of costs. Provisionally, I am of opinion that, the error being that of Needham, Elyard's costs should be paid by it but I will hear the parties on the question.

I certify that this and the twenty-six (26) preceding pages are a true copy of the reasons for judgment herein of the Honourable Justice Sheppard.

Associate

Dated

APPEARANCES

Solicitors for the Applicant: Allen Allen & Hemsley

Counsel for the Respondent: G. Moore

Solicitors for the Respondent: Mavrakis & Associates

Date of Hearing: 16 June 1995

Place of Hearing: Sydney

Date of Judgment: 20 July 1995

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