Hodgson v Amcor (No. 8)
[2012] VSC 162
•27 APRIL 2012
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
COMMON LAW DIVISION
No. 9420 of 2004
| JAMES GEORGE HODGSON | Plaintiff |
| v | |
| AMCOR LIMITED (ACN 000 017 372) | Defendant |
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JUDGE: | VICKERY J | |
WHERE HELD: | MELBOURNE | |
DATE OF HEARING: | 16 APRIL 2012 | |
DATE OF JUDGMENT: | 27 APRIL 2012 | |
CASE MAY BE CITED AS: | HODGSON v AMCOR (No. 8) | |
MEDIUM NEUTRAL CITATION: | [2012] VSC 162 | |
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Judgment – Application of ‘Slip Rule’ – r 36.07 Supreme Court (General Civil Procedure) Rules2005 – Application to reasons for judgment and orders by way of judgment – Inherent jurisdiction of the Supreme Court to apply ‘slip rule’ – Content and application of slip rule both under inherent jurisdiction and r 36.07 - Application of ss 7 and 8 Civil Procedure Act 2010 to the inherent jurisdiction of the Court under the ‘slip rule’ - Lollis v Loulatzis and Anor [2008] VSC 231 (Kaye J) distinguished and not followed - Newmont Yandal Operations Pty Ltd v J Aron Corp (NSWCA) (2007) 70 NSWLR 411 followed – Judgments and orders to be interpreted in the context of the prevailing law.
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff (9420 of 2004) | Mr C Gunst QC with Mr P Booth of counsel | A.J. Macken & Co |
| For the Defendant (9420 of 2004) | Mr J D Elliott SC with Ms SB McNicol of counsel | Corrs Chambers Westgarth |
HIS HONOUR:
Introduction
In the proceeding before the Court James George Hodgson v Amcor Limited and Amcor Limited & Others (Supreme Court Proceeding No. 9420 of 2004) (the “Hodgson Proceeding”) I pronounced judgment and delivered reasons for the decision on 20 March 2012 (the “Reasons for Judgment”). The judgment was authenticated by an order made 27 March 2012 (the “Judgment”).
In the Hodgson Proceeding, Mr James Hodgson (“Hodgson”) as the Plaintiff claims amounts due to him under his contract of employment with the Defendant Amcor (“Amcor”) consequent on the termination of his employment with that company which I have found to have occurred on 1 October 2004. Hodgson, at the time of his departure from Amcor, occupied a senior position as Group General Manager of Amcor’s corrugating division known as Amcor Fibre Packaging Australia (“Corrugating/AFPA”). Amcor defended Hodgson's claims, by challenging the quantum of the sum due to him, and on the basis that he is disentitled to the amounts he claims by reason of serious misconduct, as alleged in Amcor’s counterclaim.
The trial of the quantum of Hodgson’s claim in the Hodgson Proceeding was conducted in an earlier and separate trial (the “Quantum Trial”). The balance of the issues, including Amcor’s counterclaim, were heard in the principal trial which was conducted concurrently with another proceeding, the Barnes Proceeding. The Reasons for Judgment delivered 20 March 2012 included reasons for decision in relation to both parts of the Hodgson Proceeding.
The Judgment was in the following terms:
1. Judgment for the Plaintiff in the sum of $917,695.
2.The Defendant is ordered to pay interest on the Judgment sum at the rate fixed from time to time under s 2 of the Penalty Interest Rates Act 1983 from 1 October 2004.
By a summons issued 12 April 2012 the Defendant and Counterclaimant in the Hodgson Proceeding (“Amcor”) sought the following substantive relief:
1.That the Court correct errors in the judgment in the proceeding dated 20 March 2012 (Judgment) by:
(a)inserting the words “(less applicable tax)” after the figure “$917,695” appearing at the end of paragraph 541; and
(b)inserting the words “(less applicable tax)” after the words “under his Employment Contract” appearing in the first sentence in paragraph 545.
(c)inserting the words “on the sum of $917,695 (less applicable tax the Defendant would have been required to withhold as at 1 October 2004 and remit to the Australian Taxation Office (ATO))”.
2.That the Court correct errors in the General Form of Judgment in the dated 27 March 2012 (Orders) by:
(a)inserting the words “(less applicable tax the Defendant would have been required to withhold as at 1 October 2004 and remit to the ATO)” after the figure “$917,695” appearing at the end of order 1; and
(b)inserting the words “(less applicable tax)” after the words “Judgment sum” appearing in order 2.
3.Subject to further order of the Court, orders 1 and 2 or the Orders be stayed until:
(a)the determination and final ruling on the Defendant’s application to correct errors in the Orders; and
(b) in the event the Defendant’s application is not granted, the hearing and determination of any appeal that may be made by any party from the judgment of the Honourable Justice Vickery of 20 March 2012.
The three principal questions arising in the application are: first, whether the judgment sum of $917,695 (the “Judgment Sum”) awarded to Hodgson, both as reflected in the Reasons for Judgment delivered 20 March 2012 and the Judgment authenticated on 27 March 2012 in Order 1 should have included a reference to “less applicable tax”, or whether in any event this is implied into both by operation of law or as a matter of construction; second, whether the amount of interest awarded to Hodgson, as reflected in the Reasons for Judgement and the Judgment in Order 2 should be calculated on the total judgment sum of $917,695 or whether it should be calculated on the Judgment Sum less applicable tax; and third, whether in any event, it was open to the Court to consider the question of interest at all because, as Amcor claimed, it was not heard on the issue and wishes to be heard.
The ‘Slip Rule’
The ‘slip rule’ in Victoria provided for the Supreme Court is found in r 36.07 Supreme Court (General Civil Procedure) Rules 2005 (the “Rules”). It is in the following form:
36.07 Amendment of judgment or order
The Court may at any time correct a clerical mistake in a judgment or order or an error arising in a judgment or order from any accidental slip or omission.
As observed by Gibbs J in Bailey v Marinoff[1] supported by the authorities there cited, as a general rule, it is well settled that once a judgment or an order of a court has been authenticated, that is, perfected by being drawn up as the record of the court in a form which correctly expresses the intention with which it was made, the court has no jurisdiction to review, vary or set it aside.
[1] (1971) 125 CLR 529 at 539; See too: Williams, Civil Procedure in Victoria, Vol 1 (2000) (up-dated edition as at 24 April 2012) at page 4167 Note 36.07.0
The general rule was stated by Brennan J sitting as a Judge of the Supreme Court of the Australian Capital Territory in Permanent Trustee Co (Canberra) Ltd v Stocks & Holdings (Canberra) Pty Ltd[2] in the following terms:
The general rule is that a perfected judgment cannot be recalled or varied, for the public interest requires that the judgment when it is entered should conclude the litigation: interest reipublicae ut sit finis litium. Until the final judgment is entered, the court retains a power to reconsider the matter, but, when entered, the jurisdiction to reconsider is gone: Re St Nazaire (1879) 12 Ch D 88; Re Suffield and Watts (1888) 20 QBD 693; Texas Co (Australasia) Ltd v Federal Commissioner of Taxation[1940] HCA 9; (1940) 63 CLR 382 at 457; Preston Banking Co v William Allsup & Sons [1895] 1 Ch 141 at 144.
[2] 28 FLR 195 at 198
The general rule rests on the principle that it is desirable that there be an end to litigation and on the view that it would be mischievous if there were jurisdiction to rehear a matter decided after a full hearing: Bailey v Marinoff.[3] These may be described as the “finality of litigation” factors.
[3]Supra.
However, it is not an inflexible rule, and there are a number of exceptions to it in addition to those which may be expressed in regulatory provisions which provide a slip rule for a particular court: Bailey v Marinoff.[4] These exceptions arise from the inherent jurisdiction of a superior court, such as the present Court, to vary a judgment or order so as to carry out what it is intended to do or to restate language which calls for clarification.[5] Gibbs J stated the applicable principle in Bailey v Marinoff in the following terms:[6]
… the rule implies, the court has the power to vary an order so as to carry out its own meaning or to make plain language which is doubtful, and that power does not depend on rules of court, but is inherent in the court ... Further it has been held that a court may amend a part of a judgment or an order which is ‘not the operative and substantial part’ ... Similarly the rule that a court may review an order made ex parte has been said to be ‘a rule of natural justice’ ... or ‘an elementary rule of justice’ ... and this can only mean that the power is traceable to the inherent jurisdiction. Moreover, it has been held that in certain cases circumstances occurring since the judgment may warrant the making of a supplemental order ... and this seems to be another example of the inherent power.
[Citations omitted]
[4]Ibid.
[5]Ibid, Bailey v Marinoff per Gibbs J at 539.
[6]Ibid at 539-540.
In Permanent Trustee Co. (Canberra) Ltd v Stocks & Holdings (Canberra) Pty Ltd[7] Brennan J noted that there may be exceptions to the general rule, namely,
… those which are founded upon the inherent jurisdiction of the court to ensure that its procedures do not effect injustice; those which are authorized by statute and those which override the general rule in order to give relief where the judgment is obtained by fraud or by an agreement which is void or voidable.[8]
[7]Ibid.
[8] Cited with approval by the Court of Appeal (Vic) in McVey v St Vincent’s Hospital (Melbourne) Ltd[2005] VSCA 233 per Eames JA at [40]
His Honour proceeded in Permanent Trustee:[9]
When the inherent jurisdiction of the court is invoked, the court will inquire whether the entered judgment correctly expresses the court’s decision or perhaps whether it requires amendment to keep its records in conformity with the real position or whether the judgment proceeded from a hearing which was so irregular as to be treated as a nullity. The jurisdiction may be invoked by application in the proceedings in which judgment was entered.
[References to cited cases and footnotes omitted]
[9]Supra
Further, the existence of a power for a judge to vacate or set aside all or part of his or her order in the appropriate case, even when that order has been authenticated, is well established. In In Re Bruce the Full Court of this Court stated that they were of opinion that:
... the Court of Insolvency, like every other court, or judge of a court, has power to set aside an order made by it or by him upon being satisfied either that the order has been made improvidently, or that facts have been withheld from him which should have been disclosed to him, but which were not disclosed either through negligence or some other cause. Every court and every judge has, we think, power to do that, and to set aside any act of their or his own shown to have been done under circumstances which operated to deprive his mind of the power of exercising a fair judgment at the time.
As noted by Habersberger J in Tapoohi v Shiff & Company (a Firm):[10]
This passage was cited with approval by Batt and Buchanan JJA in Kabat Investments Pty Ltd v Compleat Imports Pty Ltd, in the context of their Honours assuming without deciding that "there is a power to vacate orders even when perfected". Other authorities cited by Batt and Buchanan JJA [in Kabat] were Autodesk Inc v Dyason [No. 2] and University of Wollongong v Metwally [No. 2].
[Footnotes omitted]
[10] [2005] VSC 178 at [21]
I was referred to the learned decision of Kaye J in Lollis v Loulatzis and Anor[11]. There his Honour, carefully analysed the decisions of Bailey v Marinoff; Gamser v The Nominal Defendant;[12] Autodesk Inc & Anor v Dyason & Ors;[13] Wentworth v Woollahra Municipal Council;[14] State Rail Authority of New South Wales v Codelfa Construction Pty Ltd;[15] Kabat Investments Pty Ltd & Anor v Compleat Imports Pty Ltd & Anor;[16] Re Bruce;[17] and that of Tapoohi v Shiff & Company (a Firm). Having done so, his Honour concluded that in his view, the case law does not support the proposition that this Court possesses an inherent jurisdiction to vacate or set aside all or any part of its order when the order has been authenticated, save in exceptional circumstances such as those referred to by Gibbs J in Bailey v Marinoff.
[11] [2008] VSC 231
[12] (1977) 136 CLR 145
[13](1993) 176 CLR 300.
[14](1982) 149 CLR 672.
[15](1982) 150 CLR 28.
[16] [2002] VSCA 134.
[17](1886) 12 VLR 696 at 709.
However, a more liberal approach was adopted in New South Wales in the decision of the Court of Appeal in Newmont Yandal Operations Pty Ltd v J Aron Corp,[18] decided the year before Lollis vLoulatzis. The Court of Appeal in Newmont, where the leading judgment was that of Spigelman CJ, confirmed that although the applicable slip rule may reflect the Court’s inherent jurisdiction to vary, modify or extend its own orders, the exercise of such jurisdiction should not be confined to the terminology of that rule, saying that:
There is no reason why the inherent jurisdiction of the Supreme Court should be so confined [by the statutory slip rule]. The Rules of Court do not constitute some type of a mini-code replacing inherent jurisdiction. It may well be that the Court’s inherent jurisdiction calls for a variation of orders in circumstances falling outside the slip rule.[19]
[18](2007) 70 NSWLR 411.
[19]Supra, [18].
In Newmont, it was also confirmed that it was well established that the inherent jurisdiction of the Court may be exercised “after orders had been perfected”.[20]
[20]Ibid, [67].
As to the breadth of the inherent jurisdiction, the Court of Appeal observed in Newmont that, although it was “not at large”, it was not capable of being confined to defined categories”.[21] Nevertheless, in considering the facts of the case before it, the Court of Appeal was in a position to make the following observations as to the circumstances in which the jurisdiction should be invoked in relation to the facts before it:[22]
[21]Ibid, [67].
[22]Ibid, [73]-[74], [79].
The terminology of each of the judgments in Re Swire; Mellor v Swire, invoking the inherent jurisdiction of the court, is wide enough to cover the present situation. To adopt the terminology in the respective judgments of their Lordships, the order entered in the 2004 proceedings by Austin J:
·“contain[s] an adjudication upon that which the court has never adjudicated upon”. (Per Cotton LJ)
·“has not expressed the real order of the court”. (Per Lindley LJ)
·“may be amended by the court so as to carry out the intention and express meaning of the court at the time when the order was made”. (Per Bowen LJ)
In my opinion, if the Court were powerless, as Newmont contends, to grant a remedy in the circumstances of this case it would constitute a perversion of the administration of justice and a clear denial of natural justice to Goldman Sachs.
…
Accordingly, the Supreme Court has jurisdiction to correct a duly entered judgment where the orders do not truly represent what the Court had intended to pronounce. This principle has been applied on numerous occasions.
The question as to whether the law with respect to the revisitation of an earlier final order is as liberal as is stated in New South Wales in the Court of Appeal decision of Newmont was referred to but not decided by Cavanough J in DPP v Johnstone (No 2).[23]
[23][2010] VSC 615 at [24]–[25].
However, I prefer the approach adopted by the Court of Appeal in Newmont to that reflected in Lollis v Loulatzis, where Newmont was not, it seems, referred to by counsel and for that reason, not considered by the Court.
Further, the approach on Newmont is consistent with the principles of case management now entrenched in the Civil Procedure Act 2010 which came into operation in Victoria on I January 2011 (the “CP Act”). The introduction of this legislation serves to distinguish the present circumstances from that which prevailed at the time Lollis vLoulatzis was decided. In particular, the following provisions are relevant:
7. Overarching purpose
(1)The overarching purpose of this Act and the rules of court in relation to civil proceedings is to facilitate the just, efficient, timely and cost-effective resolution of the real issues in dispute.
8. Court to give effect to overarching purpose
(1)A court must seek to give effect to the overarching purpose in the exercise of any of its powers, or in the interpretation of those powers, whether those powers-
(a)in the case of the Supreme Court, are part of the Court's inherent jurisdiction, implied jurisdiction or statutory jurisdiction; or
(b)in the case of a court other than the Supreme Court are part of the court's implied jurisdiction or statutory jurisdiction; or
(c)arise from or are derived from the common law or any procedural rules or practices of the court.
…
Thus the Court is obliged by statute to give effect to the “overarching purpose” defined by s 7(1) of the CP Act, including that of seeking to facilitate the just, efficient, timely and cost-effective resolution of the real issues in dispute. Further, as required by s 8(1) of the CP Act, the Court is to apply this principle, inter alia, in exercising its powers or in interpretation of those powers, including those conferred upon it pursuant to its inherent jurisdiction or statutory jurisdiction.
As to alterations to reasons for judgment, reference is made to the observations of Chernov JA in Fletcher Construction v Lines, Macfarlane and Marshall[24] where his Honour said:
It seems, however, that ordinarily, even after judgment has been entered, it is permissible to change the given reasons provided that in substance they do not become different reasons as a result of the changes and provided the alterations are made within a period that is not unduly long in all the circumstances. Thus, it is clear enough, for example, that a judge can alter the transcript of the reasons at any time to remove an error brought about by an administrative act which related to the compiling of the reasons - Nakhla; Bromley. In Bar-Mordecai v Rotman it was held that ex tempore reasons can be altered by a judge provided the substance of them is not changed, nor are the orders which they sustain. There is no reason in principle why a like position should not apply to written judgments that have been published. It is common practice for judges to make changes not only to reasons that have been given ex tempore, but also to written reasons and in the latter case to make changes to them between the time they are published and when they become the subject of an authorised report. For example, in Duke of Buccleuch v Inland Revenue Commissioners Lord Reid and Lord Guest did not question the correctness of the action of Sankey J in deleting in the version that was later published in the Law Reports a paragraph of his reasons in Ellesmere (Earl of) v Inland Revenue Commissioners, which had been published in the Law Times. In fact, Lord Reid considered that Sankey J was wise to have deleted that paragraph, given that his Honour must have had a reservation about its correctness.
[Footnotes deleted]
[24](2001) 4 VR 28 at 48.
Accordingly, in my opinion the inherent jurisdiction of the Court may and ought to be invoked to amend reasons for a judgment, an order in the nature of a judgment and other orders, when they contain or result from an adjudication upon that which the court has never in truth adjudicated upon or when they do not express the intention and express the meaning of the court at the time when they were made. Such an amendment may be made at any time:
(a)whenever it is in the interests of justice to do so after applying the overarching purpose prescribed by s 7 of the Civil Procedure Act2010 in accordance with s 8 of the Act in order to avoid unnecessary delay and expense involved in an appeal to the Court of Appeal and burdening that Court with unnecessary appeals relating to matters which should be dealt with at first instance; and
(b)after taking into account and duly balancing the “finality of litigation” factors such as the desirability of there being an end to litigation and the need to avoid the mischief of an application made under the guise of the slip rule which in fact amounts to an application to rehear a matter decided after a full hearing.
Particularly in the latter case, an applicant found to have transgressed the boundary may well be visited with an appropriate order as to costs, including a special costs order.
As to the statutory or rule based source of jurisdiction, the capacity for a court to invoke such power varies between jurisdictions, depending upon the applicable statute, regulation or court rule.
This brings into focus the terms of r 36.07 of the Rules in Victoria. In considering the construction of the rule, again I will approach it in a manner which is consistent with the provisions of the CP Act to which I have referred. This also happens to coincide with the approach of the Court of Appeal in Newmont where a slip rule drafted in very similar terms was considered.
The slip rule as it was at the time of the decision in Newmont was provided for in r 36.17 of the Uniform Civil Procedure Rules (NSW). It was in the following terms:
36.17 Correction of judgment or order (‘slip rule’)
If there is a clerical mistake, or an error arising from an accidental slip or omission, in 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 present case is concerned with an “error”, not with a “clerical mistake”.
Following Newmont, I will apply the following principles to the construction of r 36.07 of the Victorian Rules:
(a)A court’s order which has consequences which were not intended by the judge making that order, as objectively determined, can constitute an “error” within the meaning of the slip rule;
(b)Carrying into effect the actual intention of the judge making the order, and making sure that the order did not have a consequence which the judge clearly intended to avoid, falls within the natural and ordinary meaning of the word “correct” in the slip rule, particularly as understood in the light of the overriding purpose of the rules of court as set out in s 7 of the Victorian CP Act, and such rule will apply to correct an order which extends too far by resolving matters that were not in issue;
(c)Where a court’s order arises from an accidental slip or omission, it matters not that such characterisation may be explained by either inadvertence or inefficiency on the part of the legal representatives.
Whether Obligation to Withhold Tax Implied into the Reasons and Orders
The Taxation Administration Act 1953 (Commonwealth) provides that an “entity” as defined by the Act must withhold certain amounts from any of the designated payments it makes to an individual. Included in the designated payments are payment of a superannuation lump sum (s 12-85(a)); a payment that is an employment termination payment or would be one except that it is received more than 12 months after termination of employment (s 12-85(b)); an unused annual leave payment (s 12-90(a)); or an unused long service leave payment, to the extent that the payment is included in the individual’s assessable income (s 12-85(b)).
The Taxation Administration Act was not referred to the Court prior to the present application.
It was put on behalf of Hodgson that it was likely that the Australian Taxation Office (“ATO”) would accept that the payment to Hodgson in lieu of notice and any interest accrued thereon would be regarded as a “transitional termination payment” within the meaning of s 82.10 of the Income Tax (Transitional Provisions) Act1997. I accept that this is a special type of termination payment which confer a right of election on the part of the payee/employee to rollover some or all of the transitional termination payment to a complying superannuation fund, resulting in no withholding tax obligation arising for the payer/employer to the extent of the sum subject to the payee/employee’s election. I also accept that in certain cases, transitional termination payments may be taxed at a concessional rate, at least for part of the payment in question. However, it remains uncertain as to which part or parts of the Judgment Sum may be subject to being assessed by the ATO as transitional termination payments and whether, indeed, it may access the entire Judgment Sum on a global basis. No election has yet been made by Hodgson because he has not yet received a “pre-payment statement” under s 82-10E of the Income Tax (Transitional Provisions) Act1997.
However, the evidence and submissions made upon it on these matters highlight the present state of uncertainty as to the existence of any obligation Amcor may have assumed in relation to withholding monies from the Judgment Sum and the amount it may be required to withhold, if any.
Some or a number of the provisions of the Commonwealth taxation law may apply to the whole or part of the Judgment Sum awarded in favour of Hodgson, requiring Amcor to withhold sums of money from what it is otherwise obliged to pay Hodgson. The precise sum which Amcor is required to withhold pursuant to the statute, if any, is not a matter which is presently before this Court. No assessment has yet been issued by the ATO in respect of the matter, and no final determination as to the obligation of Amcor, if any, to withhold any sum from the Judgment Sum has yet been made.
Nevertheless, it is beyond argument that if there is such an obligation assumed by Amcor under the taxation legislation to withhold payment of the whole or any part of the Judgment Sum, both the Reasons for Judgment and the Judgment have to be read as being subject to such obligation.
In the exercise of the Court’s duty to deliver reasons for its judgment and pronounce a judgment in the nature of orders upon those reasons, any such reasons delivered and orders made upon them, must be interpreted in a manner which is consistent with the applicable law as far as it is possible to do so. Such reasons and orders will ordinarily be interpreted so as not to authorise or require the doing of an act that is prohibited by law: Bennett v Higgins.[25]
[25][2005] WASC 197; 194 FLR 406 at 415 per Wheeler, Pullin and Le Miere JJ.
Applying this principle the Reasons for Judgment and the Judgment should be interpreted as operating against the background of the law which pertains. The Reasons for Judgment and the Judgment remain subject to compliance with the applicable Commonwealth taxation law and require no amendment to achieve this.
The interests of justice do not call for any amendment to the Reasons for Judgment or the Judgment and there has been no error within the meaning of r 36.07 which has arisen in relation to any taxation obligation or liability. For these reasons it is unnecessary for the slip rule to be applied, either pursuant to the inherent jurisdiction of the Court or the Rules.
For these reasons, I will make an order dismissing Amcor’s summons dated 12 April 2012 insofar as it seeks amendments to the Reasons for Judgment and the Judgment in relation to payment of the applicable tax, namely through paragraphs 1 and 2 thereof.
Whether Amcor Deprived of a Hearing on the Question of Interest
By order dated 21 March 2011 and authenticated 25 March 2011 (“the 21 March Order”) the Court made an order pursuant to r 47.04 of the Rules that certain questions which were stated therein be determined in a separate trial relating to Hodgson’s claim for termination payments following the termination of his employment with Amcor. This trial was called in the order the “Hodgson Quantum Trial”.
The 21 March Order included an order 9 which materially read as follows:
9.… issues raised in the Defence and Counterclaim in the Hodgson Proceeding and the entitlement (if any), of Mr Hodgson to an order for payment of any sum found due to him pursuant to the Hodgson Quantum Trial, together with any interest, be heard and determined at the same time as the Barnes Proceeding (Joint Trial).
[Underlined for emphasis]
By this order, it was directed that the issue of any entitlement to interest was to be dealt with in the Joint Trial.
In his opening submissions in the Quantum Trial, counsel for Hodgson, submitted in writing, inter alia, in relation to the sums claimed consequent on the termination of his employment with Amcor:
These calculations exclude interest, which is to be determined in the joint trial commencing on 16 May 2011. The plaintiff is entitled to interest under the Penalty Interest Rates Act 1983 from 1 October 2004.
In oral submissions in the Joint Trial senior counsel for Hodgson said during oral submissions that “we’ve already made a claim for statutory interest and we addressed your Honour on the quantum trial months ago”.
The question of interest was dealt with in the Reasons for Judgment in paragraphs 542 to 546 in the following terms:
542In addition to the above, Hodgson claims an entitlement to be paid interest under the Penalty Interest Rates Act 1983 from 1 October 2004.
543The general position at common law, special damages within the rule in Hungerfords v Walker aside, in the absence of any agreement or statutory provision for the payment of interest, is that a court has no power to award interest as compensation for late payment of a debt or damages.
544Section 58 of the Supreme Court Act 1986 however permits, indeed requires, the Court to allow interest when debts or sums certain are recovered, unless good cause is shown to the contrary. The section relevantly provides:
Interest to be allowed when debts or sums certain recovered
(1)If in a proceeding a debt or sum certain is recovered, the Court must on application, unless good cause is shown to the contrary, allow interest to the creditor on the debt or sum at a rate not exceeding the rate for the time being fixed under section 2 of the Penalty Interest Rates Act 1983 or, in respect of any bill of exchange or promissory note, at 2% per annum more than that rate from the time when the debt or sum was payable (if payable by virtue of some written instrument and at a date or time certain) or, if payable otherwise, then from the time when demand of payment was made.
…
(3)A debt or sum payable or a date or time is to be taken to be certain if it has become certain.
545The sums to which Hodgson is entitled, for which he has not been paid, are debts due to him under his Employment Contract. They will have become certain by the judgment which is to be given on these reasons.
546Hodgson is entitled to be paid interest at the rate fixed from time to time under s 2 of the Penalty Interest Rates Act 1983 from 1 October 2004.
It was this reasoning which founded Order 2 of the Judgment which provided:
2.The Defendant is ordered to pay interest on the Judgment sum at the rate fixed from time to time under s 2 of the Penalty Interest Rates Act 1983 from 1 October 2004.
However, in purporting to address the matter of interest in its Reasons for Judgment the Court operated under the following misapprehensions:
(a)that it properly had before it the question of interest and that the submissions of the Plaintiff, cursory as they were on the question, was all that he wished to say on the issue; and
(b)that the Defendant had elected not to make any submissions to the Court on the issue.
It has now been revealed that the Defendant did not make any submissions to the Court on the question of interest, not because it had elected not to do so, but because it did not apprehend that the Plaintiff had made any such submissions, and that it was in a position to deal with the matter following the handing down of the Reasons for Judgment of the Court, when it could have done so in accordance with usual practice, along with submissions as to costs and other such ancillary matters.
The Defendant wishes to put on argument on the matter of interest which may run on Hodgson’s Judgment Sum. In particular it indicated that it wished to advance argument that there was “good cause” which could be shown to the contrary pursuant to s 58 Supreme Court Act1986 as to why interest should not be paid to Hodgson. This was put on the basis that the adverse findings made against Hodgson as to his conduct in the course of his employment with Amcor would justify such a course.
I accept Amcor’s position. In spite of the terms of order 9 of the 21 March Order which contemplated that the question of interest would be dealt with at trial, it is understandable, given the cursory reference to the question of interest made by senior counsel for Hodgson in the course of oral submission, which was not accompanied by any developed argument, that Amcor was placed under a misapprehension as to whether the question of interest was before the Court for determination.
In my opinion, in the events that have happened, paragraphs 542 to 546 of the Reasons for Judgment contain determinations upon that which the Court never properly adjudicated upon. This occurred simply because the Defendant was not heard on the matter, and this in turn arose through the Court falling into error that Amcor had elected not to be heard on the point, when this in fact was not the case.
In these circumstances, similar to the finding made in the Newmont case, in my opinion it would constitute a perversion of the administration of justice and a clear denial of natural justice to Amcor to deny it the hearing which it has properly called for.
Further, taking into account the overarching purpose prescribed by s 7 of the Civil Procedure Act2010, as the Court is required to administer that section pursuant to s 8 of the Act, in order to avoid unnecessary delay and expense involved in an appeal to the Court of Appeal and burdening that Court with unnecessary appeals relating to matters which should be dealt with at first instance, and after taking into account and duly balancing the “finality of litigation” factors to which I have earlier referred, it is appropriate in this case to make the orders which follow.
Although orders in these terms were not specifically sought by Amcor in its summons dated 12 April 2012, given the nature of the errors revealed, and the argument advanced to the Court in respect of it, it is appropriate to found the orders I am about to make on paragraph 4 of the summons which seeks “such further or other orders as the Court deems fit”.
It follows that, in the application of the inherent jurisdiction of the Court, applying the principles which I have earlier alluded to, I should make the following orders:
1. Paragraphs 542 to 546 of the Reasons for Judgment are set aside.
2. Order 2 of the Judgment is set aside.
3.The question of interest which may be awarded to the Plaintiff on his Judgment Sum be referred to a hearing on a date to be determined.
In the course of argument on this application a question arose as to what sum the calculation of interest is to be undertaken, given the potential for the Judgment Sum to be the subject of a statutory obligation on the part of Amcor to withhold some or all of the amount awarded to Hodgson. In other words, is the calculation of interest to be undertaken on the whole Judgment Sum or on that sum, net of any amount which Amcor may be obliged to withhold under the taxation laws. The decision of Einstein J in Whitlam v Insurance Australia Group Ltd was referred to.[26]
[26][2005] NSWSC 200
However, determination of this question is best left to the further hearing of the question of interest which I have directed.
Other Corrections of the Reasons
The Reasons for Judgment extend to 404 pages and contain 1795 paragraphs.
Very soon after the handing down of the Reasons for Judgment on 20 March 2012 it came to the attention of the Court that there were some errors in the text of the reasons which called for amendment dealing with Hodgson’s position within Amcor.
In this regard, I refer to paragraphs 1321 and 1327 of the Reasons for Judgment.
I will hear the parties Hodgson and Amcor on the question as to whether the text in paragraph 1321:
1321 Hodgson reported to Messrs Brown and Sutton.
should be formally amended by order to:
1321 Hodgson reported to Messrs Brown and later to Sutton.
I will also hear the parties Hodgson and Amcor on the question as to whether the text in paragraph 1327:
1327Hodgson was part of the highest level of Senior Management within Amcor. He took part in decisions that affected the business of Amcor at a high level. He reported directly to the board and was capable of dealing directly with board members.
should be formally amended by order to:
1327Hodgson was part of the highest level of Senior Management within Amcor. He took part in decisions that affected the business of Amcor at a high level. Although he did not report directly to the board, he was capable of dealing directly with board members.
in order to be consistent with the findings earlier made as to Hodgson’s position within the structure of Amcor as reflected in paragraph 1321, and earlier in paragraphs 77 and 38.
Some attention will also need to be given to paragraph 74 of the Reasons for Judgment where “Brown” is referred to twice. Where “Brown” appears second in the paragraph it should read “Jones”. I will also hear the parties Hodgson and Amcor on this matter as the affected parties.
Finally, paragraphs 1439, 1444 and 1447 of the Reasons for Judgment on their face call for amendment in respect of the word “shuts” where it appears in each case and the substitution of the word “shut”. This is such an obvious change to correct a clear grammatical error that I do not need to call the affected parties Holihan and Barnes to attend to be heard on the matter, and I will make the appropriate order pursuant to r 36.07 in their absence.
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