Cuthbert and Cuthbert (No 2)

[2015] FamCA 763

FAMILY COURT OF AUSTRALIA

CUTHBERT & CUTHBERT (NO 2) [2015] FamCA 763

FAMILY LAW – ORDERS – SLIP RULE APPLICATION – Where wife seeks amendment to final orders as to property pursuant to the Slip Rule – Where consideration as to general principles – Where amendment sought by the wife fell into the category of accidental error in part – Where orders amended in part as sought.

Family Law Rules 2004 (Cth) r 17.02

Milham and Stanford [2001] FamCA 294
TWN & PAQ [2005] FamCA 677

APPLICANT: Ms Cuthbert

RESPONDENT: Mr Cuthbert

FILE NUMBER: NCC 3270 of 2009

DATE DELIVERED: 16 September 2015

PLACE DELIVERED: Parramatta

PLACE HEARD: Parramatta

JUDGMENT OF: Foster J

HEARING DATE: 14 September 2015

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr Tockar

SOLICITOR FOR THE APPLICANT: Moylan Family Lawyers

SOLICITOR FOR THE RESPONDENT: Jodhi Coady Lawyer

Orders

1. In relation to the orders made on 12 June 2015, pursuant to Rule 17.02 of the Family Law Rules 2004:

   (a)       The sum of $159,470 provided for in Order 1 be deleted wherever appearing and sum of $356,423 be substituted.

   (b)       The words “and the balance then remaining to the husband” be deleted from Order 1(a) and be substituted with the words “with any balance then remaining to the wife to be paid by the husband within 14 days thereafter”.

   (c)       The words “Pay to the husband $125,530” and “and upon such payment” in Order 1(b) be deleted.

   (d)       The words “and the husband shall pay to the wife the further sum of $71,423 within 14 days of such delivery up to the wife of the boat” be inserted as the end of Order 1(b).

IT IS NOTED that publication of this judgment by this Court under the pseudonym Cuthbert & Cuthbert (No 2) has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).

FAMILY COURT OF AUSTRALIA AT PARRAMATTA

FILE NUMBER: NCC 3270 of 2009

Ms Cuthbert

Applicant

And

Mr Cuthbert

Respondent

REASONS FOR JUDGMENT

1. The application for determination is a “slip rule” application by the wife arising out of final orders as to property between the parties made on 12 June 2015 and reasons for judgment delivered that day. The application is opposed by the husband.

2. Also before the Court was an application for costs filed by the husband in relation to the primary proceedings. Having regard to the Appeal and Cross Appeal pending in relation to the final orders, it is appropriate that the costs application be stood over until determination of the appeals.

3. The relevant order the subject of the slip rule application provides:

   That within two months from the date of these orders the husband pay to the wife $159,470 and in default of such payment and within three months from the date of these orders the wife shall at her election and by giving to the husband notice in writing including SMS or email of her election to either:

   a)Be appointed trustee for sale of the G boat and do all things necessary to effect a sale of the boat for the best price reasonably obtainable and for this purpose the  husband shall deliver up the said boat, together with all accessories, equipment, fixtures and fittings on the said boat as at the date of these orders to the wife or her nominee at such place and at such time as is nominated by the wife in writing including SMS or email to the husband and provided further that the boat shall be delivered up to the wife in good order and condition, fair wear and tear excepted, and the husband shall reimburse the wife from the cost of all or any repairs, maintenance, detailing, survey or shipwrights costs incurred by her in relation to the boat provided that such expenses are recommended by a qualified marine surveyor as reasonably necessary to effect a sale at the best price reasonably obtainable and shall be at liberty to reimburse herself the cost of same from the husband’s portion of the proceeds of sale and on sale the proceeds of sale shall be disbursed as to $159,470 plus interest accrued to the wife, any reimbursement to wife as provided for and the balance then remaining to the husband; or

   b)Pay to the husband $125,530 within a further one month of her election in writing to do so and upon such payment the husband shall deliver up the said boat, together with all accessories, equipment, fixtures and fittings on the said boat as at the date of these orders to the wife or her nominee at such place and at such time as is nominated by the wife in writing including SMS or email to the husband and provided further that the boat shall be delivered up to the wife in good order and condition, fair wear and tear excepted.

4. Relevantly Rule 17.02 of the Family Law Rules 2004 provides:

   Errors in orders

   (1)  If a party claims that there is an error in an order issued by the court, the party must give written notice of the error to the Registry Manager and all parties.

   (2)  A Registrar may rectify an error that appears obvious on reading the order.

   Example: A kind of amendment that a Registrar may make under subrule (2) is the correction of a typographical error.

   (3)  If the Registrar:

   (a)  is in doubt about whether there is an error in an order; or

   (b)  believes that an error in an order has, or may have, arisen from an accidental slip or omission;

   the Registrar may take action under subrule (4).

   (4)  If subrule (1) or (3) applies, the party or Registrar may, after giving reasonable notice to each party, refer the order to the judicial officer who made it.

   Note: If the judicial officer who made the order is unavailable, it may be referred to another judicial officer (see rule 1.13).

   (5) A judicial officer may, after giving each party a reasonable opportunity to be heard, rectify a suspected error referred to the judicial officer.

   Note: An amendment of an order may be made under this rule only if it is an error obvious when reading the order. Any other amendment must be remedied by appeal or consent.

5. In Milham and Stanford [2001] FamCA 294 (18 May 2001) (and see also TWN & PAQ [2005] FamCA 677) the Full Court of the Family Court reviewed the well settled law at [23] and following:

   23. Kirby J in the High Court decision of DJL v Central Authority 170 ALR 659 at 685 considered this part of the Family Court Rules. He stated:

   [93] Some accidental slips or omissions are capable of correction at common law. [Ainsworth v Wilding [1896] 1 Ch 673 at 677 per Romer J; R v Cripps; Ex parte Muldoon [1984] QB 686 at 695] This facility is now commonly replaced by provisions in rules of court. In the Family Court of Australia, that is where the ‘slip rule’ may be found. [Family Law Rules O 31, r 6] Ordinarily, it is limited to correction of the formal record for accidental mistakes or omissions of no substantive significance. Similarly, when it can be shown that a court order does not correctly reflect the court’s decisions as contained in its reasons, rectification of the order is viewed as nothing more than a mechanical task. [Rajunder Narain Rae v Bijai Govind Sing (1839) II Moo Ind App 181 at 216, 222-3; 18 ER 269 at 282, 285 per Lord Brougham; Ainsworth v Wilding [1896] 1 Ch 673 at 677; Thynne v Thynne [1955] P 272 at 313] Thus where a party has been wrongly named or misdescribed [Thynne v Thynne [1955] P 272 at 314] or is shown to have died or to be non-existent [MacCarthy v Agard [1933] 2 KB 417 at 427] corrections may be made. Where, without alteration, it is possible to repair an oversight and prevent injustice by making a supplementary order, the existence of a previously perfected order will be no barrier. [Preston Banking Co v William Allsup & Sons [1895] 1 Ch 141 at 144; Bailey v Marinoff (1971) 125 CLR 529 at 540].

   24. Lockhart J of the Full Court of the Federal Court in Elyard Corporation Pty Ltd v DDB Needham Sydney Pty Ltd 133 ALR 206 considered the circumstances in which the slip rule would operate. He stated as follows at 209-10:

   Traditionally, a court's power to correct errors in orders arising from accidental slips or omissions is conferred by an express rule of court (eg O 35 r 7 of the Federal Court Rules); but it exists whether provision is made by express rule or not.
   The slip rule is a qualification of the rule that a court may not vary a duly passed and entered order which brings a proceeding to an end because it is obviously desirable that the litigation should be brought to an end. The rule is very wide in its scope; but is not available as a matter of course: Shaddock at CLR 597.
   Courts have an inherent or implied jurisdiction to amend judgments which do not correctly state what was actually decided and intended. Indeed, after a decree or order has been passed and entered a court will not, unless by consent, permit it to be altered without a rehearing, except in cases of mistakes or errors arising from accidental slips or omissions.”

   25. His Honour went on to say at 210- 211:

   “The slip rule applies where the proposed amendment is one upon which no real difference of opinion can exist. It does not apply where the amendment is a matter of controversy; nor does it extend to mistakes that are the consequence of a deliberate decision: see Arnett v Holloway [1960] VR 22; Re Army and Navy Hotel (1886) 31 Ch D 644; and Ivanhoe Gold Corp Limited v Symonds (1906) 4 CLR 642.
   The slip rule may be invoked irrespective of whether the order has been drawn up, passed and entered: Milson v Carter [1893] AC 638 at 640; Fritz v Hobson (1880) 14 Ch D 542 at 560; Shaddock per Mason ACJ, Wilson and Deane JJ at CLR 594-5; Gould v Vaggelas (1985) 157 CLR 215; 62 ALR 527 and Tak Ming Co Ltd v Yee Sang Metal Supplies Co [1973] 1 WLR 300.
   It is well settled that the application of the slip rule is not confined to giving effect to the intention of the judge at the time when the court's order was made, or judgment given. It extends to the intention which the Court would have had, but for the failure that caused the accidental slip or omission: Symes v Commonwealth of Australia (1987) 89 FLR 356. The rule also extends to permit the correction of an order or decree where the omission results from the inadvertence of a party's legal representative: Fritz v Hobson (1880) 14 ChD 542 at 561-2; Chessum and Sons v Gordon [1901] 1 QB 694; Tak Ming Co Limited at 304; Shaddock per Mason ACJ, Wilson and Deane JJ at CLR 594-5; and Gould v Vaggelas at CLR 274-5.
   The circumstances in which the slip rule has been applied are numerous and varied. Examples of the application of the rule include amendments, to allow a proper order for costs (Armitage v Parsons [1908] 2 KB 410); to increase the amount of an award of damages (Storey and Keers Pty Limited v Johnstone (1987) 9 NSWLR 446); to permit a proper calculation of interest (Ninnis v Miller [1905] VLR 669); to permit a claim for interest to be added to the amount of the judgment (Shaddock); to order repayment of moneys previously paid by the defendant where the subsequent appeal was upheld (Commonwealth v McCormack (1984) 155 CLR 273; 55 ALR 185); to alter a wrong date or figure in the orders, where the parties and the court both used the same wrong date or figure, but the correct figure had been available at the relevant time (Re J W Challand Pty Limited (1945) 62 WN (NSW) 166); and, to limit the time of an injunction's application (Shipwright v Clements (1890) WN 134). See also the Supreme Court Practice 1995 (UK) (the White Book) pp. 385-6, Notes 20/11/3 and 20/11/6.”

   26. It must also be borne in mind that for the purposes of the operation of the slip rule, 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 might exist. (Russell v Russell (1999) FLC 92-877; 25 Fam LR 629). As the Full Court of the Supreme Court of Victoria said in Brew v Whitlock (No. 3) [1968] V.R. 504 at 506:

   “In our view it is necessary that it should appear not only that the judgment was wrong, but also what could and should be done to it to make it right; not only what was omitted, but also what would need to be put in. It is impossible, in our view, to apply the rule to a case where, on the application to correct the judgment, it is necessary to exercise an independent discretion, not only as to whether interest should have been awarded but also as to the rate at which it should run and as to the time from which it should run.”

   27. This principle was more recently affirmed by McHugh JA in Storey & Keers Pty Ltd v Johnstone (1987) 9 NSWLR 446 at 453 where he stated:

   “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: cf Brew v Whitlock(No. 3) (at 506). In general the test of whether a mistake or omission is accidental is that applied by Lord Herschell in Hatton v Harris (at 558) if the matter had been drawn to the court’s attention would the correction at once have been made?”

6. The slip rule application by the wife relates to the treatment of shareholders loans in two companies in effect operated by the husband.

   a)As to the joint shareholders loan of $174,347 owing by the husband and wife to B Pty Ltd: the loan account was found to be a debt of the husband only to the company (Reasons for Judgment at [139(d)]). This debt was included in the valuation of the company by the Single Expert and thus its existence had no effect on the value of the overall pool. As the loan was in both names the husband was required to indemnify the wife from any liability in regard thereto (Reasons for Judgment at [139(h)(i)]). The wife thus contends the debt should be removed from the overall asset pool for determination. If so it is arguable that so should the loan as an asset of the Company be removed. That was clearly not the Court’s intention on any reading of the Reasons for Judgment. This aspect of the application is rejected.

   b)As to the husband’s shareholders loan of $342,527 owing to B Pty Ltd: The loan account was a debt owing by the husband to the company. The loan accounts of the husband in B Pty Ltd were adjusted by reason of the Single Expert’s report in that the husband was ultimately owed $219,403 by the company. This was the figure accepted and adopted at trial on an updated reconciliation of the husband’s loan account in the company (Reasons for Judgment at [139(h)(ii)]). It is clear that the inclusion of the sum of $342,527 as a debt owed by the husband to the company was an inadvertent error and that debt should be excluded from the balance sheet for adjustment. 

7. As a consequence the total pool for adjustment at [148] should be adjusted to $2,938,339 ($2,595,812 + $342,527).

8. The wife’s entitlement at 57.5 per cent of the pool is thus $1,689,544. Thus the husband is required to pay to the wife an additional $196,953.

9. The adjustive payment provided for in the Order set out above should be increased to $356,423.

10. It is thus necessary to adjust the mathematical calculations in relation to the default provisions in Orders 1(a) and (b) accordingly. Order 1(a) should provide for any shortfall on sale to be paid by the husband. Order 1(b) should provide for a balance to be paid by the husband by reason of the boat having an agreed value of $285,000 thus leaving a balance payable.

11. Orders amended under the slip rule to give effect to same and to give effect to necessary consequential orders will be made.

I certify that the preceding eleven (11) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Foster delivered on 16 September 2015.

Associate: 

Date:  16 September 2015