Milham v Stanford
[2001] FamCA 294
•18 May 2001
[2001] FamCA 294
FAMILY LAW ACT 1975
IN THE FULL COURT
OF THE FAMILY COURT OF AUSTRALIA Appeal No EA25 of 2000
AT SYDNEY File No PA4660 of 1998
BETWEEN:
MILHAM
Appellant Wife
- and -
STANFORD
Respondent and Cross-Appellant Husband
REASONS FOR JUDGMENT OF THE FULL COURT
CORAM: KAY, COLEMAN & PENNY JJ
DATE OF HEARING: 7 November 2000
DATE OF JUDGMENT: 18 May 2001
APPEARANCES: Mr Errington of Counsel, instructed by Baldock Stacy & Niven, Solicitors, 68 Summer Street, Orange, NSW 2800, appeared on behalf of the Appellant Wife
The Respondent Husband and Cross-Appellant Husband appeared in person
.
MILHAM v STANFORD
EA 25 of 2000
Coram: Kay, Coleman & Penny JJ
Date of Hearing: 7 November 2000
Date of Judgment: 18 May 2001
PROPERTY - "slip rule" application - Order 31 Rule 6 - inherent power of court to vary judgment - accidental omission of counsel - independent exercise of discretion by judge
On 5 November 1999, Purdy J made orders relating to residence and property. In relation to the issue of property, his Honour found that the liabilities of the parties exceeded their assets, and on this basis he refused to make orders as to the parties’ property pursuant to Section 79 of the Family Law Act.
His Honour did, however, make orders in relation to the sale of one property and the transfer of another to the wife. He also ordered:
18. That the Husband indemnify the Wife and the Wife be hereby indemnified by the Husband against any liabilities resulting from the past or future operations of the business ['F'].and of any other business operated by the Husband in conjunction with the said business.
Subsequent to the making of this order, a dispute arose between the parties as to which liabilities were covered by this indemnity.
On 25 February 2000, the husband filed a Form 8 application seeking that Order 18 be varied to exclude certain overdrafts and loans. On 8 March 2001 Purdy J handed down his decision in relation to the Form 8 application. His Honour held that he could equally well use the slip rule under Order 31 Rule 6 of the Family Law Rules or the inherent power to vary the order so as to make its meaning plain. His Honour acceded to the husband’s application to add words to Order 18 that would clearly exclude from indemnity several long-term debts.
There was a separate issue about chattels. The trial orders left the chattels where they lay. The husband asserted that an agreement had been reached between counsel to arrange a "pick-a-pile" distribution. Purdy J refused to allow the husband to re-open and to rely upon the agreement.
On appeal, the wife sought to set aside Order 3 of those orders, arguing that his Honour misapprehended the application of and extent of the “slip rule”. The wife argued that the amendments were more than an “accidental slip or omission” but instead reflected a substantial amendment of the orders that were inconsistent with his Honour’s orders of 5 November 1999. The husband cross-appealed in respect of he chattels and the lack of a costs order in his favour.
Held: in allowing the appeal and the cross appeal
(per Kay, Coleman and Penny JJ)
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 as a matter upon which a real difference might exist.
Order 18 stated that the husband indemnify the wife against any liabilities “resulting from the past or future operations of the business known as "F". The debt by the husband’s parents certainly related to the past operations of the business. However it was not clear whether any other debts apart from the creditors of the business came into this category. This was a matter where a real difference of opinion existed.
The trial Judge, by reviewing the evidence in relation to the liabilities and by seeking to re-interpret his findings, re-exercised his discretion in relation to who was liable for which debts, an issue which had already been decided in his judgment.
Therefore this was not a matter where his Honour could invoke either the slip rule or the inherent jurisdiction of the Court to correct his judgment. Any asserted error in this case was capable of rectification only by consent of the parties or by the appellate process.
It is clear from the authorities that an accidental slip or omission by counsel or a solicitor, or in fact a party, can be remedied pursuant to the slip rule. Having found that there was a firm agreement between counsel as to the chattels, and having stated that had he been told about it orders would have been made in terms of the agreement, his Honour ought to have ordered that furniture be distributed equally between the parties on a “pick a pile” basis.
There was no substance in the cross appeal as to costs.
APPEAL AND CROSS APPEAL ALLOWED
COSTS CERTIFICATE AWARDED
REPORTABLE
This is an appeal by the wife against orders made by Purdy J on 8 March 2000, whereby his Honour amended orders made by him on 5 November 1999, pursuant to the “slip rule”. The husband has filed a cross-appeal whereby he seeks to appeal against the orders made by Purdy J on the same day dismissing his application seeking the costs of the trial in relation to the issue of property and dismissing his application to give effect to an agreement he says was reached during the trial in relation to the distribution of furniture.
The parties married on 7 April 1988 and separated around Christmas 1997. There are three children of the marriage. Both parties brought applications in the Family Court at Parramatta seeking parenting and property orders. The trial took place in August and September 1999. At trial both parties sought orders that the children reside with them. The parties each sought orders in relation to property settlement. Judgment was handed down on 5 November 1999. On that day his Honour made orders that the children reside with the husband and made orders in relation to the sale and transfer of the parties’ properties and their liabilities. In relation to the issue of property, his Honour found that the liabilities of the parties exceeded the assets, and on this basis he refused to make orders as to the parties’ property pursuant to s 79 of the Family Law Act. He did, however, make orders in relation to the sale of one property and the transfer to the wife of another. He also made orders that the wife and the husband should indemnify each other in relation to certain debts. Order 18 made by his Honour on that day stated as follows:
“18.That the Husband indemnify the Wife and the Wife be hereby indemnified by the Husband against any liabilities resulting from the past or future operations of the business ['F'] and of any other business operated by the Husband in conjunction with the said business.”
Subsequent to the making of this order a dispute arose between the parties as to which liabilities were covered by this indemnity.
In relation to the issue of the matrimonial furniture, his Honour made the following order:
“19.That each party retain such items of matrimonial furniture, household goods, personal effects, motor vehicles and cash as may presently be in their respective possession or control.”
The husband believed the issue of distribution of furniture had been settled during the course of the proceedings as a result of negotiations between his solicitor and the wife’s solicitor. It was his view the issue of furniture had been settled by agreement on the basis of “pick a pile”.
On 25 February 2000 the husband filed a Form 8 application seeking the following orders:
“1.That the Respondent pay the Applicant’s costs associated with the property proceedings connected with these proceedings.
2.That order 19 be varied by deleting the word furniture ‘therefore’ .
3.That order 19 be varied by adding order 19(i) that the furniture of the parties be divided equally between them and failing agreement as to division be sold and the proceeds of sale be divided equally between them.
4.That order 18 be varied by including in the order after the word business the following:-
excluding (a) the Commonwealth Bank overdraft;
(b) second overdraft;
(c) loan by the Husband’s parents.”
On 8 March 2000 his Honour handed down his decision in relation to the husband’s Form 8 application and made the following orders:
“1.That the Husband’s application for costs set out in paragraph 1 filed 25 February 2000, be dismissed.
2.That the Husband’s application set out in paragraphs 2 and 3 of his Form 8 application filed 25 February 2000, be dismissed.
3.That pursuant to the slip rule Order 18 made 5 November 1999 and as engrossed, be varied by adding the following:
‘excluding –
(a) the Commonwealth Bank overdraft,
(b) the second overdraft,
(c) RAMS loan; and
(d) loan by the husband’s parents.'4.That the leave sought by the husband in paragraph 5 of his application filed 25 February 2000, be refused.”
The wife’s Notice of Appeal seeks to set aside order 3 of those orders. The husband’s Notice of Cross-Appeal seeks to set aside orders 1, 2 and 4 of 8 March 2000, and seeks the following orders:
“1.That the respondent pay the application costs associated with the property proceedings.
2. That order 19 be varied by date – furniture ‘therefore’
3.That the furniture of the parties be divided equally between them and failing agreement as to the division be sold and the proceeds be divided equally between them.”
Background
At trial the parties owned two properties, one which had been the former matrimonial home consisting of 25 acres upon which the parties ran a business known as "F". The other was a half interest in "the business premises". The wife’s brother owned the other half. The wife’s occupation was that of a psychologist and she worked part-time from those premises and rented them out to visiting psychologists and social workers.
In June 1999 after the parties separated the husband advised his taxation adviser to set up a trust known as the Stanford Family Trust. This trust would be the sole owner of the new company and perform some of the operations conducted by "F". The new company was to be Central West Flowers Pty Ltd. The trust deed, however, had not been signed by the husband.
At trial, and after considering the evidence in relation to valuations, his Honour determined that the parties’ liabilities exceeded their assets. The total value of the assets was $455,270. The liabilities were as follows:
Commonwealth Bank overdraft 62,000.00
Second overdraft 188,500.00
RAMS loan on "the business premises" 67,254.00
Loan by husband’s parents 70,000.00
"F" trade creditors 74,400.00
Husband’s City Bank and Mastercard debt 18,525.00
Debt to Financial Services 12,534.00
Visa Card liability, "the business premises" 5,136.00
Total $498,349.00
In his judgment at paragraphs 125 and 126 his Honour stated:
“125.Following this finding, it is clear there is a significant deficit involved in the total property in issue.
126.Accordingly, I do not intend to make orders under Section 79 as such.”
Although his Honour did not make an order under s 79, he ordered the sale of the former matrimonial home, but allowed the husband to bid at auction, and a transfer of the husband’s interest in the "the business premises" to the wife. In his judgment he stated as follows:
“128.At the hearing, it was agreed that ['the business premises'] would of necessity, be kept by Ms Milham and on that basis the husband, at the very heel of the hunt asked that I make some order for the disposition of the funds resulting from the sale of the former matrimonial home which would reflect the wife’s possession of ['the business premises']. It seems to me on the conclusion I have reached and on the basis of my decision not to make property orders as such, that I should not attempt to lay down what percentage of the funds resulting from the sale of the former matrimonial home and business premises shared should go to each party. Hence I will make an order that the husband assign to the wife his right, title and interest in ['the business premises'] and he will receive an indemnity in respect of outstanding loans on the property and the parties will divide 50-50 the proceeds, if any, resulting from the sale of the property on which the former matrimonial home lies. This 50-50 figure is designed to reflect the legal entitlement of the parties, not the respective contributions or Section 75(2) entitlements.”
His Honour went on to say at para 129:
“129.So far as all the debts are concerned, creditors will be left to exercise their legal rights against one or both parties as they may be advised.”
His Honour went on to make orders that the home property was to be sold by auction, and ordered the husband should sign all documents required to transfer his interest in "the business premises" to the wife. He then made the following orders in relation to the liabilities:
“17.That as and from the date of such transfers, the Wife indemnify the Husband and forever thereafter keep him indemnified in respect of –
(a)any moneys owing secured against the title of the property by mortgage to RAMS, and all rates, taxes and outgoings with respect to ['the business premises'].
(b)any loan accounts of the said business;
(c)all trade creditors of the said business;
(d)any liability of the husband arising out of his interest in the said business; and
(e)all payments and liabilities in respect of any moneys owing secured against the undertakings of the business known as ['the business premises'].
18.That the Husband indemnify the Wife and the Wife be hereby indemnified by the Husband against any liabilities resulting from the past or future operations of the business known as ['F'] and of any other business operated by the Husband in conjunction with the said business.
19.That each party retain such items of matrimonial furniture, household goods, personal effects, motor vehicles and cash as may presently be in their respective possession or control.
20.That liberty be granted to apply in relation to the implementation of the above orders.”
Wife’s appeal
The wife’s grounds of appeal are as follows:
“1.His Honour erred in applying the ‘slip rule’ to the amendment of Order 18 made on 5 November 1999 in that His Honour misapprehended the application of and the extent of the ‘slip rule’.
2.His Honour’s amendment to Order 18 made on 5 November 1999 pursuant to Order 3 of 8 March 2000 affected (sic) more than an 'accidental slip or omission’ but instead reflected a substantial amendment of the orders and was inconsistent with His Honour’s judgment of 5 November 1999.”
The husband’s Form 8 application seeking the exclusion of certain debts from the indemnity provided for in paragraph 18 of the judgment came about because the wife used the provisions of that paragraph to cross claim against the husband in relation to a claim by the husband’s parents for the debt they claim is owed to them by the husband and wife. It was the husband’s view that the indemnity provided by his Honour in paragraph 18 did not relate to any debts other than the trade creditors of "F".
In his Honour’s judgment of 5 November 1999 he made some findings as to the origin of the parties’ debts. In relation to the debt from the husband’s parents, which was originally $80,000, his Honour found that:
“104. At some point around the time of ['the business premises'] purchase, the parties borrowed from the husband’s parents the sum of $80,000 and the deed acknowledging the debt became Exhibit O in the proceedings. The funds provided working capital for ['F'] and it would seem also that whether the funds were used directly or not in the purchase of ['the business premises'], the latter purchase would have been impossible without that loan.
105. It is common ground that the debt currently stands at around $70,000 and relates solely to the parties’ business interests…”
There is no evidence as to the genesis of the Commonwealth Bank overdraft or the second overdraft. The RAMS loan related to the purchase of "the business premises". His Honour found at trial that "F" had trade creditors of $74,400. There was owing to Citibank $15,768 and to NAB Mastercard $2,757, however, there was no evidence as to the purpose for which these debts were raised. His Honour also found that there was a liability of $12,534 to Financial Services in relation to "the business premises", and a Visa Card liability which was secured over "the business premises".
In his judgment delivered on 8 March 2000 his Honour reviewed those portions of his judgment which dealt with the liabilities of the parties. He came to the conclusion that:
“25. I believe the paragraphs I have quoted above make it plain that my intention was that the husband’s indemnity to the wife only applied to the debts arising from the trading operations of the flower business whether they be ['F'] or 'Western Flowers Pty Limited'.
26. I believe that Order 18 in its terms is, in fact consistent with that intention. It seems to me that there is a very clear distinction made between paragraph 17 in which both long term and trading debts are referred to and Order 18 where the debts are described as ‘resulting from the past or future operations of the business’.
27. I feel, with all due respect, that Order 18 would probably be construed in that fashion if I refused to make any order under the slip rule and related provisions. However, the slip rule is provided for in Order 31 rule 6 and there seems little reason for me not to grant the husband’s relief he seeks…
28. As I say I have some doubt that the orders set out in that decree really do reflect any ‘accidental slip or omission’.
29. It seems clear however, that the Court has inherent power, apart from the slip rule to vary its own orders so as to make its meaning plain…"
His Honour concluded:
“32. …In the present case it seems to me I can equally well use the slip rule or the inherent power. Accordingly, it is my intention to accede to the husband’s application and add words to Order 18 which would clearly exclude from the indemnity various long term debts involved.”
Order 31 rule 6 sets out the circumstances where the formal record of a decree can be altered. Order 31 rule 6(3) and (4) are relevant to this application.
“6(3) Where it is claimed that the formal record of a decree contains an error, then, in a case of doubt or where it appears that the error arises from an accidental slip or omission, the Registrar or a party may, after giving reasonable notice to each other party to the proceedings in which the decree was made of the intention to do so refer it:
(a)to the court; or
(b)to the Magistrate or Registrar who made the decree.
6(4) Where a decree is referred under subrule (3), the court, Magistrate or Registrar to whom it is referred:
(a)may rectify the decree, without an appeal; and
(b)may make or give such consequential orders or directions as may be necessary to ensure that justice is done between the parties.”
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].”
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.”
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.”
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.”
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?”
Order 18 stated that the husband indemnify the wife against any liabilities “resulting from the past or future operations of the business known as ['F']". The debt by the husband’s parents on the evidence certainly related to the past operations of the business. It was not clear whether any other debts apart from the creditors of the business came into this category.
This is a matter where a real difference of opinion can and in fact does exist.
His Honour in reviewing the evidence in relation to the issue of the liabilities and in seeking to interpret his findings is, in our view, re-exercising his discretion in relation to who should be liable for which debts, an issue already decided in his judgment. As such, this is not a matter where his Honour can invoke either the slip rule or the inherent jurisdiction of the court to correct his judgment. Any asserted error in this case would appear to be capable of rectification only by consent of the parties, or by the appellate process.
Husband’s appeal
Furniture
The evidence before his Honour and which was accepted by him at the hearing of the husband’s Form 8 application was that of the husband’s solicitor, Donald John Graham. He swore an affidavit in which he stated an agreement was reached during the course of the trial in relation to the issue of the furniture of the parties. His Honour accepted the evidence of Mr Graham as to the agreement. His Honour commented in relation to that evidence:
“5. The husband’s solicitor, Donald John Graham has sworn an affidavit and paragraph 5 of his affidavit reads as follows:
(5)On Wednesday, 11 August 1999, I had a conversation outside the Court with Mrs Garvin relating to the furniture of the parties. I do not recollect all of the precise words used nor do I have a handwritten note of the conversation. My best recollection of the words used in the conversation are as follows:-
Graham:What are we going to do about the furniture?
Garvin:Pick a pile
Graham:OK I’ll get [H] to do a list and I’ll send it to you.
Garvin:OK.
There was further conversation about other aspects of the matter involving the children’s issues.
6. Mrs Garvin does not deny that the conversation occurred but says that she has no recollection of it.
7. Thus the first issue that arises is did that conversation take place?
8. I have no doubt that the conversation as set out by Mr Graham did take place. Both solicitors have been appearing before me for years on circuit and I accept completely their evidence on the matter.
9. It does not surprise me that Mrs Garvin cannot remember the conversation. The fact is, that as in most child/property proceedings, the parties and therefore their legal advisers were applying much more effort and enthusiasm to parenting issues than property issues. It is thus very likely that Mrs Garvin would have a clearer recollection of the conversation concerning the children which followed the conversation set out above.
10. The next issue that arises is did the conversation constitute a firm agreement? The answer to this is clearly that it did and at some point I should have been told about the agreement and would have incorporated it in my reasons for judgment and reflected it in the final orders. In the event, not knowing of the agreement, the only reference to furniture in the orders actually made and engrossed is as follows:-
19.That each party retain such items of matrimonial furniture, household goods, personal effects, motor vehicles and cash as may presently be in their respective possession or control.”
The further evidence of Mr Graham was that on 20 September 1999, 10 days after the completion of the trial but before the judgment was handed down, he forwarded to the wife’s solicitors a letter confirming the agreement and enclosing a list of furniture which made up the “pile”. On 5 October 1999 the wife’s solicitors wrote to the husband’s solicitors pointing out that there were items of furniture missing from the list which should have been included and asked the husband’s solicitors to provide them with an amended list which included all furniture and some antique doors.
On 9 November 1999 after the judgment was handed down, the husband’s solicitors wrote to the wife’s solicitors confirming that his Honour had not been aware of the agreement between the parties and again enclosed a list of furniture in the hope that the parties could reach agreement on the “pick a pile” arrangement. The husband’s solicitors then wrote a number of letters to the wife’s solicitors in an attempt to get some response in relation to their proposal that the “pick a pile” arrangement would be put into effect by the parties. On 8 December 1999, three days after the expiration of the appeal time limit, for the first time, the wife’s solicitors stated in correspondence that “our client holds the view that the chattels are subject to his Honour’s orders and she will abide by the orders”.
His Honour after a consideration of the evidence and after finding that he would have incorporated the agreement in his reasons for judgment had he known of it, considered whether he could make an alteration to the orders pursuant to the slip rule. In relation to that issue his Honour stated as follows:
“13. It seems to be well settled (Bailey v Bailey (1990) FLC 92-145) that the quote ‘accidental slip or omission’ referred to in subparagraph (3) above is the slip or omission of the Judge, Magistrate or Registrar who actually made the orders. It does not cover the situation here in which the omission was by the parties or their legal advisers. Thus it may be that other courses could be available to the husband to obtain relief but the relief is not in my view available under the slip rule and the husband’s application must fail.”
Accordingly, his Honour dismissed the husband’s application.
In Bailey v Bailey (supra) Mullane J considered an application to amend orders made by consent. In that matter at the time the parties entered into the consent orders it was anticipated that the wife would receive approximately $11,000 from the redemption of an investment account. The wife only received approximately $7,000 and therefore did not receive the amount pursuant to the judgment that the parties had anticipated. The wife sought an order that the husband pay her an extra $3,867 to make up for the funds she did not receive from the redemption of the investment account. She sought to bring this application pursuant to provisions of Order 31 rule 3, or pursuant to the inherent power the court has to amend orders under the slip rule. Mullane J did not make a finding in his judgment that the accidental slip or omission referred to in Order 31 rule 6(3) was to be a slip or omission of the Judge, Magistrate or Registrar who made the orders. He did not state that the provisions of Order 31 rule 6, or indeed the powers to make orders pursuant to the inherent jurisdiction of the court, did not cover a situation where the omission was made by the parties or their legal advisers. Mullane J did state as follows at 78,008 - 78,009:
“The exception to that general rule, known as the slip rule, does not, for example, provide power for the Court to later add to its orders a costs order, or an award of interest where such questions were not raised or considered at the hearing. (Brew v Whitlock (No. 3) (1968) V.R. 504, Lauer v. Briggs (No. 2) (1928) 28 S.R. (N.S.W.) 389, Tauro v. Tauro (1897) 14 W.N. (N.S.W.) 113, and Terry’s (A.E.) Motors Ltd. v. Rinder (No. 2) (1948) S.A.S.R. 303.)”
The High Court in L. Shaddock and Associates Pty Ltd and Another v The Council of the City of Parramatta 151 CLR. 590 dealt with an application where an appeal had been considered by the Court of Appeal and dismissed and a subsequent appeal to the High Court was allowed. Neither Notice of Appeal to the Court of Appeal Division nor the High Court sought an order for payment of interest if the appeal were to be upheld. By inadvertence of counsel the matter of interest was not alluded to in argument before the High Court, and it was not mentioned in the reasons for judgment subsequently published. The plaintiffs applied for an order under the slip rule of the High Court Rules seeking an order that the order of the High Court be amended to include an award of interest for the relevant period. The High Court decided that it had power under s 37 of the Judiciary Act to include as a component of the actual sum for which judgment is given an amount representing interest. The power would have been exercised in this case but for the counsel’s failure to avert to the matter in argument. Such an inadvertence fell within the slip rule and the High Court ordered that the order made should be amended to provide for interest. The High Court considered the decision of the Full Court of the Supreme Court of Victoria in Brew v Whitlock [No. 3] [1968] V.R. 504 (mentioned in the decision of Mullane J) and the decision of Whitlock v Brew (1968) 118 CLR 445 where the matter came before the High Court. The High Court confirmed the decision of the Full Court of the Supreme Court that the slip rule was not applicable in that matter because of the wording of s 78 of the Supreme Court Act. The High Court considered the approach of Taylor, Menzies and Owen JJ and different approach adopted by Kitto J and stated at 597:
“In that regard it is important to note that there was no evidence in Whitlock’s case, as there is in the present application, that the failure to apply for interest was the result of an accident or an inadvertence on the part of counsel (see [1968] V.R. at p. 506). On the other hand, if there be implicit in the judgment of Kitto J. the view that the slip rule should be given a narrower scope than that which we would give it, we consider that the subsequent decision in Tak Ming [1973] 1 W.L.R. 300; [1973] 1 All E.R. 569 affords strong support for the view we now take.”
The Court held that Order 29 rule 11 of the High Court Rules was in the traditional form of a slip rule. At 594 the Court stated:
“….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) [1942] 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. 640; Fritz v Hobson (1880) 14 Ch.D., at p. 560).”
In Shaddock’s case the High Court went on to observe that “an order under the slip rule is not available as a matter of course”. The Court stated at 597:
“The general principle in support of finality in litigation together with the fact that a party against whom a judgment in a money sum is entered is entitled to regard that judgment as finally determining the extent of his liability combine to stress the importance of prompt action under the slip rule. The seriousness of the delay in this case is, however, minimized by the fact that the applicants promptly made known to the Council their claim for interest and the delay in making the application to the Court is, to no small extent, explained by the content of the correspondence between the parties during the months prior to the filing of the application.”
In Tak Ming Co. Ltd. v Yee Sang Co. [1973] 1 All E.R. 569 the Privy Council allowed an application under the slip rule where there was an accidental omission by the Judge to order interest in his judgment and there was an accidental omission by counsel to ask for it. The Privy Council confirmed that in that decision at 575:
“…there is nevertheless a discretion in the court to refuse an order under the slip rule if something has intervened which will render it inexpedient or inequitable to do so.”
In Re Inchcape. Craigmyle v Inchcape [1942] 2 All E.R. 157 an application was made pursuant to the slip rule after an order was made in relation to an award of costs. The application sought the addition of certain costs that had not been sought at the hearing. The error did not result or arise from an omission in the order, but arose from an accidental omission of counsel to seek the particular costs. Morton J stated at 160:
“Thus I have had cited to me cases where the omission arose by a slip on the part of counsel, on the part of a solicitor and on the part of a party to an action. Having regard to those authorities, I am satisfied that I can make the order asked for under the provisions of R.S.C., Ord. 28 r. 11.”
In our view, his Honour was wrong in finding that the accidental slip or omission had to be of the Judge, Magistrate or Registrar. It is clear from the authorities that an accidental slip or omission by counsel or a solicitor, or in fact a party, can be remedied pursuant to the slip rule. His Honour found that the conversation between the solicitors constituted a firm agreement, and had he been told about it orders would have been made in terms of the agreement. His Honour made the orders in paragraph 19 because there was no other evidence before him in relation to division of the parties’ furniture. The husband’s appeal in relation to this issue should be allowed, and the furniture be distributed equally between the parties on a “pick a pile” basis.
Costs Order
Order 38 rule 30 sets out the time limits for an application for a costs order. This rule states as follows:
“An application for a costs order may be made:
(a) at any stage of proceedings; or
(b)within 28 days after the date on which the relevant decree in the proceedings was made; or
(c) within any further time allowed by the court.”
The relevant decree in these proceedings was handed down on 5 November 1999. The husband’s application for costs was made by way of his Form 8 application filed 25 February 2000. It is obvious that the application was made well outside the time limits provided by the Rules. In his application the husband did not seek an order that the time limit for the bringing of the application be extended, but rather that the wife pay his costs of the property proceedings. In support of the application the husband filed an affidavit annexing an Offer of Settlement made by himself on 24 March 1999, and an Offer of Settlement filed by the wife on 24 March 1999. Nowhere in that affidavit did he address the issue of the delay in making the application and no explanation was given for this delay.
The husband’s counsel at the hearing of his application referred only to the offers which had been made. No submissions were made in relation to the issue of extension of time or the delay in making the application.
In his reasons for decision delivered on 8 March 2000 his Honour stated as follows:
“36. It is common ground that the application for costs was not made until significantly after the 28 days provided by the rules for such an application.
37. It seems to me in the circumstances of this matter, justice is best done by dismissing the husband’s application for costs.”
Given that the husband’s application was not in proper form and there was no proper evidence put forward to justify making an order extending the time within which to allow the application to be made, we detect no error in the manner in which the learned trial Judge dealt with this issue. The husband’s cross-appeal in relation to the issue of costs should be dismissed.
Costs
The appellant has sought a certificate under the provisions of the Federal Proceedings (Costs) Act 1981 in the event that the appeal was allowed. The appeal has succeeded on a question of law. We think it appropriate that a certificate be granted. The respondent appeared in person at the appeal and did not appear to have incurred any costs which would have been covered by such a certificate.
Orders
That the appeal be allowed.
That Order 3 made by Justice Purdy on 8 March 2001 be set aside.
The husband’s cross-appeal be allowed in part.
That Order 2 made on 8 March 2001 be set aside.
That the orders made by Justice Purdy on 5 November 2000 be amended:
(a) by deleting from Order 19 the words “matrimonial furniture”;
(b) by substituting the following order:
“19A. That the furniture of the parties be divided between them equally in the manner agreed by their counsel on 11 August 1999."
That the husband’s cross-appeal otherwise be dismissed.
That the Court grants to the appellant wife a costs certificate pursuant to the provisions of s.9 of the Federal Proceedings (Costs) Act 1981 being a certificate that, in the opinion of the Court, it would be appropriate for the Attorney-General to authorise a payment under that Act to the appellant wife in respect of the costs incurred by the appellant/wife in relation to the appeal.
I certify that the 47 preceding
paragraphs
are a true copy of the reasons
for judgment delivered by this
Honourable Full Court.
Elizabeth Hore
Associate
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