Aurora Australasia Pty Ltd v Hunt Prosperity Pty Ltd (No 2)

Case •

[2025] NSWCA 62

•

07 April 2025

No judgment structure available for this case.

Court of Appeal


Supreme Court


New South Wales

Medium Neutral Citation: Aurora Australasia Pty Ltd v Hunt Prosperity Pty Ltd (No 2) [2025] NSWCA 62
Hearing dates: On the papers
Date of orders: 7 April 2025
Decision date: 07 April 2025
Before: Ward P; Stern JA; Griffiths AJA
Decision:

1. Pursuant to rule 36.17 of the Uniform Civil Procedure Rules 2005 (NSW), order that Order (2) of the orders made in this Court on 20 February 2025 be varied so as to replace the word “declarations” with the word “declaration” and replace the number (1) with the number (2).

2.   Order the second and third respondents to pay the appellants’ costs of the notice of motion filed 24 March 2025

Catchwords:

JUDGMENTS AND ORDERS – amending, varying and setting aside – correction under slip rule – application to vary order made on 20 February 2025 – where respondents commenced new proceedings – where respondents sought a winding up order in relation to first appellant – where respondent alleged that the second appellant was not the beneficial owner of units recorded in relevant unit trust – whether court of appeal judgment set aside an unchallenged declaration regarding the second appellants’ beneficial ownership of units in relevant unit trust – whether orders should be corrected under r 36.17 of the Uniform Civil Procedure Rules 2005 (NSW)

Legislation Cited:

Uniform Civil Procedure Rules 2005 (NSW), r 36.17

r 36.17 of the UCPR

Cases Cited:

Aurora Australasia Pty Ltd v Hunt Prosperity Pty Ltd [2025] NSWCA 15

Aurora Australasia Pty Ltd v Hunt Prosperity Pty Ltd trading as trustee of the Aurora Australasia Investment Fund Unit Trust [2024] NSWSC 1054

Aurora Australasia Pty Ltd v Hunt Prosperity Pty Ltd trading as trustee of the Aurora Australasia Investment Fund Unit Trust (No 2) [2024] NSWSC 1210

Form-Quip Ltd v Trafalgar Properties Ltd (Supreme Court (NSW), Giles J, 19 July 1991, unrep)

Ivanhoe Gold Corporation Limited v Symonds (1906) 4 CLR 642; In re Swire; Mellor v Swire (1885) 30 Ch D 239

J Aron Corporation v Newmont Yandal Operations [2006] NSWSC 849

Mutual Shipping Corp of New York v Bayshore Shipping Co [1985] 1 All ER 520; [1985] 1 All ER 520; [1985] 1 Lloyd's Rep 189

Newmont Yandal Operations Pty Ltd v J. Aron Corporation and the Goldman Sachs Group Inc [2007] NSWCA 195; (2007) 70 NSWLR 411

Storey & Keers Pty Ltd & Anor v Johnstone (1987) 9 NSWLR 446

Category:Procedural rulings
Parties: Aurora Australasia Pty Ltd (First Appellant)
David James Driver (Second Appellant)
Hunt Prosperity Pty Ltd (First Respondent)
AMHP Pty Ltd (Second Respondent)
Adam Hartley (Third Respondent)
Representation:

Counsel:
MR Elliott SC (Appellants)
S Murray (First Respondent)
JM Ireland KC (Second and Third Respondents)

Solicitors:
McCabes (Appellants)
Gilbert + Tobin (First Respondent)
DC Balog & Associates Solicitors (Second and Third Respondents)
File Number(s): 2024/349259
Publication restriction: Nil
 Decision under appeal 
Court or tribunal:
Supreme Court of New South Wales
Jurisdiction:
Equity
Citation:

[2024] NSWSC 1054

Date of Decision:
23 August 2024
Before:
Rees J
File Number(s):
2023/459309

JUDGMENT

  1. THE COURT: On 20 February 2025, this Court handed down reasons (Aurora Australasia Pty Ltd v Hunt Prosperity Pty Ltd [2025] NSWCA 15) (the appeal judgment) for allowing an appeal from orders made by Rees J in an expedited matter involving a dispute in essence between two businessmen (the second appellant, Mr Driver, and the third respondent, Mr Hartley) (see Aurora Australasia Pty Ltd v Hunt Prosperity Pty Ltd trading as trustee of the Aurora Australasia Investment Fund Unit Trust [2024] NSWSC 1054 – the primary judgment; and Aurora Australasia Pty Ltd v Hunt Prosperity Pty Ltd trading as trustee of the Aurora Australasia Investment Fund Unit Trust (No 2) [2024] NSWSC 1210 – the costs judgment).

  2. Abbreviations used in the appeal judgment, with which familiarity is here assumed, are adopted in these reasons.

  3. The central question arising on the appeal (as noted at [3] of the appeal judgment) was whether the primary judge was correct in concluding that Mr Driver had granted an equitable charge in favour of the second and third respondents (the Hartley Parties) over his beneficial interest in the Units held in the name of Aurora Unit Trust. Clearly, that formulation of the issue for determination (consistent with ground 2 of the amended grounds of appeal) was predicated on Mr Driver holding the beneficial interest in those units. The primary judge, among other relief, had declared that Mr Driver was the beneficial owner of the Certificate 3 units (though that was not an issue for determination on the pleading at first instance). There was no challenge to her Honour’s finding to that effect in the proceedings before this Court.

  4. The orders made when allowing the appeal included:

(2)   Set aside the declarations and order in (1)-(3) at [155] of the primary judgment.

  1. An order was also made that the Trustee redeem the units in certificate 3 in the Aurora Australasia Fund Unit Trust and pay a specified sum ($1,696,472.17) in accordance with directions to be given to it by its director, Mr Driver.

  2. By notice of motion filed on 24 March 2025, invoking the power of the Court under r 36.17 of the Uniform Civil Procedure Rules 2005 (NSW) (UCPR), colloquially known as the “slip rule”, the appellants seek a variation of Order (2) made on 20 February 2025, so as to replace the number “(1)” in that order with the number “(2)” (those numbers corresponding to the orders referred to in [155] of the primary judgment). The second and third respondents, AMHP and Mr Hartley, oppose that relief. By consent, the motion is to be dealt with on the papers.

Background

  1. The background leading to the dispute that came before the primary judge, and the subject of the appeal, is set out in the primary judgment and appeal judgment, respectively, and will not here be repeated save as is necessary. However, it is relevant to note the following matters to which the appellants’ solicitor, Mr Lacey, has deposed in an affidavit sworn on 21 March 2025 in support of the relief sought on the notice of motion. That affidavit will be taken as read and the exhibit thereto marked as Ex A on the motion.

  2. Mr Lacey has deposed that, following delivery of the appeal judgment, and in accordance with order (3) made on 20 February 2025, a direction was given to the Trustee of the Aurora Australasia Unit Trust to pay the redemption sum in respect of the Units into the appellants’ solicitors’ trust account. The Trustee paid that sum not in accordance with the direction but, rather, into a bank account in the name of Aurora Australasia. Mr Lacey has deposed that the Trustee admitted that it had made a mistake and had intended to comply with the direction. Mr Driver then caused the money to be transferred into the appellants’ solicitors’ (McCabes) trust account.

  3. Mr Lacey has deposed that AMHP has now commenced a new proceeding against Aurora and Mr Driver, seeking an order winding up Aurora, and that AMHP has brought an interlocutory application for the appointment of a provisional liquidator. The appellants oppose those new claims.

  4. The relevance of the new proceeding is that AMHP there complains that the redemption proceeds have been dealt with in accordance with Mr Driver’s directions and asserts (contrary to the primary judge’s finding) that Mr Driver was not the beneficial owner of units recorded in certificate 3 of the Aurora Unit Trust.

  5. The appellants contend in the new proceeding that AMHP is bound by declaration (1) made in the primary judgment and its conduct of the appeal proceeding, in which it did not challenge (by cross-appeal or notice of contention) the finding that Mr Driver was the beneficial owner of the Units. Mr Lacey deposes that, in answer to that contention, AMHP has recently sought to rely on the terms of Order (2) made by this Court on 20 February 2025 (in particular the reference in that order to the “declarations and order in (1) to (3) of [155] of the primary judgment”). Order (1) made by the primary judge, as noted above, was the declaration as to Mr Driver’s beneficial ownership. AMHP apparently argues that this Court’s order thus operates to set aside the finding of the primary judge as to beneficial ownership.

  6. Hence the present application. The appellants submit that there is an error (which they postulate may be typographical) in the order here sought to be varied (Order (2)), which can be corrected by varying Order (2) to refer only to the declaration and order in paragraphs (2)-(3) of [155] of the primary judgment.

Submissions

  1. The appellants say that it was common ground between the parties during the conduct of the appeal as to Mr Driver’s beneficial interest in the units, noting that declaration (1) made by the primary judge was not challenged by any party. They refer to passages of the transcript of the hearing of the appeal on 17 December 2024 in support of the argument that this was common ground between the parties (see AT 10.8-19; AT 30.9-18), to which we refer below in the context of the respondent’s submissions.

  2. Further, the appellants rely on what was said at [5] of the appeal judgment, where Ward P summarised at the outset her conclusion as to the result of the appeal, namely that:

For the reasons that follow, the appeal should be allowed and both the declaration (at Order (2)) and order (at Order (3)) made by the primary judge as to the equitable charge over the Units should be set aside. …

  1. The appellants point out that there was no reference in that paragraph of the appeal judgment to the declaration made at [155](1) of the primary judgment. They also note that at [9] of the appeal judgment reference was made to the primary judge’s finding of beneficial ownership and to the appellants’ emphasis that there was no challenge to the finding as to that beneficial ownership.

  2. Significantly, the appellants point to the absence within the appeal judgment of any consideration or finding as to whether declaration (1) of the orders made by the primary judge should be set aside.

  3. As noted, the second and third respondents to the appeal (the respondents) oppose the orders sought.

  4. The respondents cavil with the suggestion that there is a typographical error in Order (2) of the orders made in this court on 20 February 2025, emphasising that Order (2) refers to “declarations” in the plural and “order” in the singular in (1)-(3) at [155] of the primary judgment; and that there were two declarations set out at [155](1) and (2) of the primary judgment followed by the “order” in [155](3). The respondents submit that the use of “declarations” in the plural was deliberate and meaningful by reference to [5] and [115] of the appeal judgment.

  5. As to [5], which refers to the setting aside of a single “declaration (at Order (2))”, the respondents emphasise the words that follow the reference to the declaration (and order) in that paragraph, namely “as to the equitable charge”. It is submitted that that paragraph was not speaking exhaustively as to the ultimate orders to be made on the appeal as a whole but, rather, this was a preview of the result of the appeal insofar as the relief granted by the appeal court would reverse the finding of the primary judge as to the existence of an equitable charge granted by Mr Driver personally in favour of Mr Hartley and the consequential injunctive relief granted by the primary judge restraining the trustee from paying out the redemption proceeds of the Units.

  6. Pausing here, clearly [5] of the appeal judgment was summarising the overall result of the appeal. However, that does not assist the respondents’ argument on the present application since it should be abundantly clear from the omission of any reference to the setting aside of the declaration made by the primary judge at [155](1) that what was not there contemplated was that the relief to be granted would have that effect. In other words, it was not necessary to set aside the declaration made at [155](1) of the primary judgment because the finding of beneficial ownership had not been put in issue on the appeal.

  7. The respondents emphasise that there was no pleading by the plaintiff at first instance (Aurora) that Mr Driver (who was not joined as a party to that statement of claim) held a “beneficial interest” in the proceeds of the Units; and that the respondents’ case (on their cross-claim) was that Aurora was not entitled to the redemption proceeds at all (because the asserted arrangement for the Trustee to pay Aurora a one third share of profitable FX trades which was said to ground the allocation to Aurora of Certificates Nos 3 and 4 was in fact illusory) – a case which they accept they lost at trial. The respondents note that this Court proceeded on the basis that there was no case litigated as to whether Mr Driver had personally charged some personal interest in the proceeds of the Units (referring to the findings at [77]; [81]-[83] as to the “pleading point” taken by the appellants on appeal).

  8. The respondents maintain that this Court did not endorse any suggestion that Mr Driver had a beneficial interest in the Units or the redemption proceeds (referring to what was said in the appeal judgment at [9], [20], [77] and [101]). They argue that it is consistent with that approach that (at [163(3)]) the order that was proposed (and which was ultimately made) was that the Trustee pay the redemption proceeds “in accordance with directions to be given to it by its director, Mr Driver” (i.e., directions given by Mr Driver not in his personal capacity but as the sole director of Aurora).

  9. Pausing again, the reason for the inclusion in Order (3) of reference to directions to be given to the Trustee by its director was that the units recorded in Certificate No 3 were held in the name of the Trustee. Objectively, this was not intended to suggest that the primary judge’s finding as to beneficial ownership of the units reposing in Mr Driver was being overturned by a side wind, in effect.

  10. Finally, the respondents say that the fact that they were not challenging the “beneficial ownership” of the Units is beside the point and leads nowhere. They cavil with the proposition that there was a concession or acceptance that the finding as to beneficial ownership was correct, noting that leading up to the passage cited by the appellants (AT 30.9-18), there was an exchange where the following was said:

That was obviously in the name of Aurora. It wasn’t in the name of Mr Driver personally. The judge found that between the parties, because they were fifty-fifty shareholders in Aurora, they could agree and informally did agree that this particular certificate would be attributed to Mr Driver, and another one almost the same but number 4 for the same number of units will be attributed to my client Mr Hartley.

There was an informal division between the shareholders of Aurora of those things. But that can only be effectively appointing Aurora as a trustee of that interest, respectively for Driver and for Hartley because nobody but Aurora can redeem it. It’s on the record. It’s like a share. It’s in the name of - so the proper analysis is that, in my respectful submission, whether it’s some sort of express trust or constructive trust doesn’t matter very much. Aurora holds - on the judge’s findings - this unit, as a trustee for Mr Driver. That’s the position. So what we’re talking about when talking about charging something, is him giving a charge over that, as his interest as a beneficiary of that narrow trust. That’s all he could charge because that’s all he’s got.” [Emphasis per respondents’ submissions].

  1. The respondents say that there was no “concession” in the above submission that Mr Driver had a beneficial interest in the Units, pointing out that such a “concession” would have been at odds with the essential and primary case of the Hartley Parties that Aurora itself held no interest in the Units and that the value of that unit certificate and of Certificate No 4 attributed to Mr Hartley should be returned to the capital of the trust fund.

  2. The respondents submit that the passage at AT 30 was nothing more than an explanation of the way the trial judge had viewed the matter and had reasoned in coming to her conclusion; a conclusion that was rejected by this Court. Hence, the respondents argue that the declaration made by the primary judge of the existence of a beneficial interest held by Mr Driver in the redemption proceeds of Certificate No 3 was rightly set aside by Order (2) of this Court.

Determination

  1. The principles applicable on an application under the “slip rule” are well known and were not in dispute here.

  2. In Newmont Yandal Operations Pty Ltd v J. Aron Corporation and the Goldman Sachs Group Inc [2007] NSWCA 195; (2007) 70 NSWLR 411 (Newmont Yandal), consideration was given to the interpretation and operation of the slip rule in r 36.17 of the UCPR and the scope of the court’s inherent jurisdiction. At first instance (J Aron Corporation v Newmont Yandal Operations [2006] NSWSC 849), White J (as his Honour then was) had found (at [58]; [74]; [116]) that the objective intention of the court (Austin J) had been not to create a res judicata estoppel and, having found the error as being that the orders as made permitted a reasonable argument that it did, held that the result could be corrected (i.e., the doubt removed). The slip rule was used in order to reflect the original intention. On appeal, White J’s application of the slip rule was upheld.

  3. Instructive in the present case is the distinction drawn by McHugh JA in Storey & Keers Pty Ltd & Anor v Johnstone (1987) 9 NSWLR 446 at 449 (Storey & Keers) as to the distinction between a mistake or error which is the result of an accidental slip or omission (capable of correction under the slip rule) and a mistake or error which is the product of a deliberate decision (which does not enliven the slip rule), the dividing line between which his Honour said had often been difficult to draw. In Mutual Shipping Corp of New York v Bayshore Shipping Co [1985] 1 All ER 520, at 530; [1985] 1 All ER 520; [1985] 1 Lloyd's Rep 189, Donaldson MR referred to the “distinction between having second thoughts or intentions and correcting an award of judgment to give true effect of first thoughts or intentions”.

  4. In Newmont Yandal, the Court of Appeal considered that the inherent jurisdiction of the Court permitted the correction of orders, the legal consequences of which were unforeseen or contrary to those that were intended, applying Ivanhoe Gold Corporation Limited v Symonds (1906) 4 CLR 642; In re Swire; Mellor v Swire (1885) 30 Ch D 239 (at [60]).

  5. In Storey & Keers (at 453), McHugh JA said that the rationale of the slip rule requires that an omission or mistake should not be treated as accidental if the proposed amendment requires the exercise of an independent discretion or as a matter upon which a real difference of opinion might exist. His Honour postulated the general test as being (and we here paraphrase) whether, had the matter had been drawn to the court’s attention at the time the order was made, it would immediately have been corrected. In Newmont Yandal, when considering whether there had been an error falling within the slip rule or capable of correction within the inherent jurisdiction of the court, the relevant intention was the objective intention of the decision-maker at the time the original orders were made (see Spigelman CJ at [26]). There was an acceptance that, had the position been put to Austin J at the time the initial order was made his Honour would “at once” have corrected the order (at [138]). Hence, the slip rule was applicable.

  6. While it is the objective intention of the decision-maker that is relevant (see Newmont Yandal at [91]; [95] per Spigelman CJ, with whom Santow JA and Handley AJA agreed), it is also accepted that some account may be taken of the ex post facto observations of the decision-maker (see Form-Quip Ltd v Trafalgar Properties Ltd (Supreme Court (NSW), Giles J, 19 July 1991, unrep)), Indeed, in Newmont Yandal, Spigelman CJ at [182] agreed with Handley AJA that the judge who made the orders in question is “overwhelmingly the preferable person to make the corrections” and the reasoning in that case indicates that intention can be tested by reference to how the particular decision-maker would have reacted had the alleged “slip” been drawn to his or her attention at the time.

  1. In the present case, there is in our minds no doubt that the reference to “declarations” (in the plural) in Order (2) of the orders made by this Court and the inclusion of reference to Order 1 set out at [155] of the primary judgment were slips. Had it been drawn to the Court’s attention at the time that the suggested operation of Order (2) would be to set aside the unchallenged finding that Mr Driver had beneficial ownership of the units in Certificate No 3, there would have been an immediate clarification that this was not the intention of the orders there being made.

  2. Of significance in this regard is the summary at the outset of the reasons in the appeal judgment (at [5]) of the relief that was proposed should be granted. This did not include the setting aside of the declaration as to Mr Driver’s beneficial ownership of the Units.

  3. Indeed, it would have been surprising had the reference to the declaration at [155](1) of the primary judge’s orders that found its way into Order (2) of this Court’s orders been intentional. This Court was well apprised of the fact that there was no challenge by any party to her Honour’s finding as to Mr Driver’s beneficial ownership of the relevant units. Nor was it the subject of substantive consideration in this Court. To have made an order setting aside an unchallenged declaration (without argument from the parties and without proper consideration) where it was not necessary for the purposes of the relief to be granted as a result of the determination of the appeal would have risked an accusation of denial of procedural fairness. Objectively, it is clear that such a result was not intended.

  4. Insofar as the respondents place emphasis on what they refer to as the “qualifying words” at [5] (and leaving aside the fact that one does not parse reasons in a judgment as if a statute), this does not assist them. Those words certainly focus on the subject matter of the declaration (at Order (2)) and order (at Order (3)) made by the primary judge as to the equitable charge over the Units which this Court considered should be set aside. However, nothing there suggests an intention to set aside the unchallenged declaration as to Mr Driver’s beneficial ownership of the said units.

  5. As indicated above, the fact that the order for the payment of the redemption proceeds at the direction of Mr Driver as the director of Aurora also does not assist the respondents in circumstances where the Units were recorded in the name of Aurora and it had issued the redemption request the subject of dispute.

  6. Thus, we have no doubt that there was a slip in the making of Order (2) by this Court. That slip is unfortunate (particularly since it seems to have provided an opportunistic argument in the fresh proceedings as to the beneficial ownership of the Units, contrary to the very finding made by the primary judge and not challenged on appeal) but readily capable of correction.

  7. The relief sought by the appellants should be granted.

Orders

  1. For the above reasons the following orders will now be made:

  1. Pursuant to rule 36.17 of the Uniform Civil Procedure Rules 2005 (NSW), order that Order (2) of the orders made in this Court on 20 February 2025 be varied so as to replace the word “declarations” with the word “declaration” and replace the number (1) with the number (2).

  2. Order the second and third respondents to pay the appellants’ costs of the notice of motion filed 24 March 2025.

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Decision last updated: 07 April 2025

Cases Citing This Decision

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