Deputy Commissioner of Taxation v Healy

The case of Deputy Commissioner of Taxation for the Commonwealth of Australia v Healy involved a dispute over the interpretation and correction of a consent judgment entered in the Supreme Court of Western Australia. The plaintiff, the Deputy Commissioner of Taxation, sought to amend a consent judgment that had been entered in error, arguing that it did not accurately reflect the terms of the compromise agreement reached with the defendants. The defendants, who were directors of a company, had not opposed the application to amend the judgment, though they had changed legal representation and had appointed a controlling trustee under the Bankruptcy Act 1966.

The legal issues before the court included the scope of the slip rule under O 21 r 10 of the Rules of the Supreme Court 1971, which allows for the correction of clerical mistakes or errors in judgments. The court had to determine whether the error in the consent judgment was within the scope of the slip rule and whether it would be equitable to grant the plaintiff's application. The court also considered whether the defendants' bankruptcy proceedings under the Bankruptcy Act precluded the amendment of the judgment.

The court, in the person of Hasluck J, held that the slip rule was broad enough to encompass errors in consent judgments and that the error in this case was of a kind that would have been corrected if brought to the court's attention immediately. The court found that the amendment did not require the exercise of an independent discretion or involve a matter of real difference of opinion. The court declined to exercise its inherent jurisdiction to rectify the judgment to avoid injustice, as it was satisfied that the slip rule provided an appropriate avenue for relief. The court also noted that the defendants had not argued that their bankruptcy precluded the amendment of the judgment.

The court granted the plaintiff's application to set aside the consent judgment and substituted a new judgment that accurately reflected the terms of the compromise agreement. The court ordered the defendants to pay the plaintiff's costs of the application, including reserved costs. The court further indicated that it would hear from the plaintiff's counsel regarding any order for interest.