Newmont Yandal Operations Pty Ltd v The J Aron Corporation and The Goldman Sachs Group Inc - [2007] NSWCA 195

No judgment structure available for this case.

Reported Decision: 70 NSWLR 411

New South Wales

Court of Appeal

CITATION: Newmont Yandal Operations Pty Limited v The J. Aron Corporation & The Goldman Sachs Group, Inc & 3 Ors [2007] NSWCA 195

HEARING DATE(S): 10 May 2007

JUDGMENT DATE:
10 August 2007

JUDGMENT OF: Spigelman CJ at 1; Santow JA at 185; Handley AJA at 194

DECISION: 1 Leave to appeal granted; 2 Orders of White J varied by deleting the words “Declare that” in each of Order (1)(i) and (ii) and capitalising the next letter; 3 Appeal dismissed with costs.

CATCHWORDS: PROCEDURE – Judgements and orders – Amending, varying and setting aside – application to set aside order — where order had consequences in related proceedings — defence of res judicata or estoppel - PROCEDURE – Judgements and orders – Amending, varying and setting aside – inherent power to amend to give effect to intention of court – where an order has unintended consequences – relevant intention is objective intention of Court - PROCEDURE – Judgements and orders – Amending, varying and setting aside – Correction under slip rule - Uniform Civil Procedure Rules 2005 (NSW), r 36.17 – where order erroneously resolves an issue not adjudicated upon - PROCEDURE – Courts and judges generally – Judges – Disqualification for interest or bias – capacity of judge to hear application to amend order s/he has made - WORDS AND PHRASES - “dispose”, “error”, “correction”

LEGISLATION CITED: Civil Procedure Act 2005 (NSW), s56
Supreme Court Act 1970, s23
Uniform Civil Procedure Rules 2005 (NSW), r 36.16, 36.17
Federal Court Rules, Order 35 r 7

CASES CITED: Adam P. Brown Male Fashions Pty Ltd v Phillip Morris Inc (1981) 148 CLR 170
Ainsworth v Wilding [1896] 1 Ch 673
Bailey v Marinoff (1971) 125 CLR 529
Bass v Permanent Trustee Co Ltd (1999) 198 CLR 334
Batistos v Road and Traffic Authority (NSW) (2006) 226 CLR 256
Blacker v National Australia Bank Ltd [2000] FCA 1011
Brambles Constructions Pty Ltd (Third Party) [1969] 2 NSWLR 279
Brew v Whitlock (No 3) [1968] VLR 504
Ebner v Official Trustee in Bankruptcy (2000) 205 CLR 337
DJL v The Central Authority (2000) 201 CLR 226
D’Orta Ekenaike v Victoria Legal Aid (2005) 223 CLR 1
Dwyer v National Companies and Securities Commission (1988) 15 NSWLR 285
Elyard Corporation Pty Ltd v DDB Needham Sydney Pty Ltd (1995) 61 FCR 385
Gikas v Papanayiotou [1977] 2 NSWLR 944
Graham Barclay Oyster Pty Ltd v Ryan (2002) 211 CLR 540
Gould v Vaggelas (1984) 157 CLR 215
Hanave Pty Ltd v LFOT Pty Ltd (2004) 136 FCR 566
Hunter v Chief Constable of the West Midlands Police [1982] AC 529
In re Swire; Mellor v Swire (1885) 30 ChD 239
In Re the Will of F.B. Gilbert (dec) (1946) 46 SR (NSW) 318
Ivanhoe Gold Corporations Ltd v Symonds (1905) 8 WALR 103
Ivanhoe Gold Corporation Limited v Symonds (1906) 4 CLR 642
Jackson v Sterling Industries Ltd (1987) 162 CLR 612
Lawrie v Lees (1881) 7 App Cas 1
L Shaddock & Associates Pty Ltd v Parramatta City Council (No 2) (1982) 151 CLR 590
Logwon Pty Ltd v Warringah Shire Council (1993) 33 NSWLR 13
Milson v Carter [1893] AC 638
Paringa Mining & Exploration Co PLC v North Flinders Mines Ltd (1988) 165 CLR 452
Pittwater Council v Moore Development Group Pty Ltd [2004] NSWCA 278
Re Future Life Enterprises Pty Ltd (1994) 33 NSWLR 559
Re Hogarth’s Estate: Crisp v Hogarth [1962] 1 Tas R 17
Reid v Howard (1995) 184 CLR 1
Storey & Keers Pty Ltd v Johnstone (1987) 9 NSWLR 446
Symonds v Ivanhoe Gold Corporation Limited (1904) 7 WAR 69
Thynne v Thynne [1955] P 272
Tringalli v Stewardson Stubbs & Collet Pty Ltd (1966) 66 SR (NSW) 335
Walton v Gardiner (1993) 177 CLR 378
Western Australia v Ward (2002) 213 CLR 1

PARTIES: Newmont Yandal Operations Pty Limited (Claimant)
The J. Aron Corporation and The Goldman Sachs Group (First Opponent)
Mark Anthony Korda & Mark Francis Xavier Mentha (Second Opponent)
Clynton Court Pty Limited (Subject to a Deed of Company Arrangement) (Third Opponent)

FILE NUMBER(S): CA 40583/06

COUNSEL: P Wood, M Henry (Claimant)
B Walker SC, M Condon (First Opponent)
V Whittaker (Second and Third Opponent)

SOLICITORS: J Milner, Arnold Bloch Leibler (Claimant)
M Rickmans, Abbott Tout Lawyers (First Opponent)

LOWER COURT JURISDICTION: Supreme Court - Equity Division

LOWER COURT FILE NUMBER(S): 2407 of 2004

LOWER COURT JUDICIAL OFFICER: White J

LOWER COURT DATE OF DECISION: 24 August 2006

LOWER COURT MEDIUM NEUTRAL CITATION: [2006] NSWSC 849

- 59 -

CA 40583/06

SPIGELMAN CJ
SANTOW JA
HANDLEY AJA
Friday 10 August 2007

NEWMONT YANDAL OPERATIONS PTY LIMITED v THE J. ARON CORPORATION & THE GOLDMAN SACHS GROUP, INC & 3 ORS

The Claimant, Newmont Yandal Operations, and the First Opponent, Goldman Sachs, are in dispute about a debt arising from a master hedge agreement for the purchase and delivery of gold. Goldman Sachs terminated the agreement, asserting that Newmont thereby became liable to pay it approximately US$57 million. Newmont appointed voluntary administrators and at a meeting purportedly convened under the Corporations Act, the creditors determined that they would execute deeds of company arrangement under which Goldman Sachs would be entitled to approximately US$23 million of its debt.

Goldman Sachs commenced proceedings challenging the deeds of company arrangement (“the 2003 proceedings”). One of the grounds on which Goldman Sachs challenged the deeds was that the relevant resolution had not been effectively adopted. This was referred to as the “formal defect” issue. After Austin J refused an application to determine the formal defect issue as a separate question in the 2003 proceedings, Goldman Sachs commenced a second set of proceedings (“the 2004 proceedings”) as a special purpose vehicle for resolving the formal defect issue. Justice Austin determined the separate questions in the 2004 proceeding in favour of Newmont. His Honour made orders to give effect to his answers on 7 April 2005 and Judgment was entered for Newmont. An appeal by Goldman Sachs from that decision was dismissed on 15 March 2006.

Subsequently, Newmont filed an amended defence in the 2003 proceedings alleging that the orders made by Austin J in the 2004 proceedings gave rise to a res judicata or to estoppels which, in substance, determined the 2003 proceedings. In the course of other pre-trial proceedings before Austin J, his Honour made several comments to the effect that it had not been his intention that the order entered following the 2004 proceedings would have this effect on the 2003 proceedings. Goldman Sachs sought by a notice of motion to vary the orders, in the 2004 proceedings to remove any ambiguity regarding the res judicata and estoppel arguments raised in the amended defence. Newmont objected to Austin J hearing the application, and on 14 July 2006 his Honour excused himself from the hearing.

The matter was therefore determined by White J, who found that the Court had the power to vary Justice Austin’s orders under the slip rule found in r 36.17 of the Uniform Civil Procedure Rules (2005) or, alternately, in its inherent jurisdiction.

Newmont applied for leave to appeal from the decision of White J.

Held
Leave to appeal

Per Spigelman CJ, Santow JA and Handley AJA agreeing

In Re the Will of F.B. Gilbert (dec)

Relationship between the Supreme Court’s inherent jurisdiction and the slip rule

Per Spigelman CJ, Santow JA and Handley AJA agreeing

L Shaddock & Associates Pty Ltd v Parramatta City Council

(No 2)

Thynne v Thynne

2. The slip rule found in r 36.17 of the Uniform Civil Procedure Rules (2005) must be applied with reference to the words of the rule, rather than case law from the past or from other jurisdictions. Courts in New South Wales are now required to approach the task of interpreting the relevant words so as to give effect to the overriding purpose found in s56 of the Civil Procedure Act (2005). [24], [26], [27], [185], [194]

Unintended consequences

Per Spigelman CJ, Santow JA and Handley AJA agreeing

1. The Court’s inherent jurisdiction extends to the amendment of an order with unforeseen or unintended legal consequences. [58], [60], [185], [194]

Ivanhoe Gold Corporation Limited v Symonds

In re Swire; Mellor v Swire

Lawrie v Lees

Milson v Carter

Re Hogarth’s Estate: Crisp v Hogarth

Blacker v National Australia Bank Ltd

Bailey v Marinoff

Inherent jurisdiction

Per Spigelman CJ, Santow JA and Handley AJA agreeing

Ivanhoe Gold Corporation Limited v Symonds

In re Swire; Mellor v Swire

DJL v The Central Authority

Ainsworth v Wilding

Re Hogarth’s Estate: Crisp v Hogarth

Coppins v Helmers; Brambles Constructions Pty Ltd (Third Party)

Gikas v Papanayiotou

Logwon Pty Ltd v Warringah Shire Council

Re Future Life Enterprises Pty Ltd

Dwyer v National Companies and Securities Commission

Hunter v Chief Constable of the West Midlands Police

Walton v Gardiner

Batistos v Road and Traffic Authority (NSW)

D’Orta Ekenaike v Victoria Legal Aid

The intention of the Court

Per Spigelman CJ, Santow JA and Handley AJA agreeing

1. Justice Austin’s orders had consequences which his Honour had not intended, therefore the inherent jurisdiction is engaged to correct the order. [89], [185], [194]

2. The relevant intention is the objective intention of the Court, not the subjective intention of the judge. Expressions of subjective intention are no more than evidentiary. It was therefore open for White J to make his own finding of fact regarding the intention of the Court. [91], [95], [102], [185], [194]

Interpreting the slip rule

Per Spigelman CJ, Santow JA and Handley AJA agreeing

1. Rule 36.17 must extend to the correction of a mistake or error in an order which, or which arguably, resolves an issue that has intentionally not been adjudicated upon. That falls within the concept of an “error arising from an accidental slip or omission”. [114], [185], [194]

Brew v Whitlock (No 3)

Storey & Keers Pty Ltd v Johnstone

Elyard Corporation Pty Ltd v DDB Needham Sydney Pty Ltd

L Shaddock & Associates Pty Ltd v Parramatta City Council (No 2)

Gould v Vaggelas

Ivanhoe Gold Corporation Limited v Symonds

In re Swire; Mellor v Swire

DJL v The Central Authority

Applying the Slip Rule

Newmont contended that in order to apply the slip rule:

1. The error must be obvious.

2. The correction must be uncontroversial.

3. The correction must not be an evaluative or discretionary judgment.

4. The matter must not invoke a litigated issue.

5. The error in the orders of Austin J was obvious and would have been immediately varied if drawn to the attention of the Court. [138], [185], [194]

Elyard Corporation Pty Ltd v DDB Needham

7. The existence of a choice between alternative means of carrying the Court’s intention into effect does not involve an evaluative or discretionary judgment in the sense used in the authorities. [143], [185], [194]

Ivanhoe Gold Corporation Limited v Symonds

In re Swire; Mellor v Swire

Storey & Keers Pty Ltd v Johnstone

Was the error “accidental”?

Per Spigelman CJ, Santow JA and Handley AJA agreeing

1. The contention that there was no “accidental slip or omission” because of the actual conduct of Goldman Sachs’ legal representatives does not challenge the basis of Justice White’s judgement, which was concerned with the “error” of the Court that resulted in orders with consequences directly contrary to what the Court intended. [147], [185], [194]

Storey & Keers Pty Ltd v Johnstone

Was the conduct “deliberate”?

Per Spigelman CJ, Santow JA and Handley AJA agreeing

Elyard Corporation Pty Ltd v DDB Needham Sydney Pty Ltd

The exercise of discretion

Per Spigelman CJ, Santow JA and Handley AJA agreeing

Hanave Pty Ltd v LFOT Pty Ltd

Mellor v Swire

Justice Austin’s decision to disqualify himself

Per Handley AJA, Spigelman CJ agreeing; Santow JA contra

Per Santow JA

Ebner v Official Trustee in Bankruptcy

Res judicata or estoppel

Per Handley AJA, Spigelman CJ and Santow JA agreeing

Blair v Curran

Moss v Anglo-Egyptian Navigation Co.

Vitosh v Brisbane City Council

CA 40583/06

SPIGELMAN CJ
SANTOW JA
HANDLEY AJA

Friday 10 August 2007

NEWMONT YANDAL OPERATIONS PTY LIMITED v THE J. ARON CORPORATION & THE GOLDMAN SACHS GROUP, INC & 3 ORS

Judgment

1 SPIGELMAN CJ: In this judgment I will refer to the First Opponent as “Goldman Sachs”. The Second and Third Opponents submit to the orders of the Court save as to costs. I will refer to the Claimant as “Newmont”.

2 Newmont’s application for leave to appeal relates to a judgment of Justice White vacating orders made by Justice Austin in proceedings in which the Opponents were plaintiffs and Newmont was defendant. Goldman Sachs does not oppose leave to appeal being granted. The orders made by Austin J had been entered. White J exercised the inherent jurisdiction of the Court and, in the alternative, the slip rule now found in r 36.17 of the Uniform Civil Procedure Rules 2005 (NSW), to vary the orders.

3 Newmont asserts that the Court did not have jurisdiction on either basis. Alternatively, it contends that his Honour erred in the exercise of the discretion to act in the manner in which he did.

4 The Notice of Motion filed on behalf of Goldman Sachs sought alternative orders. The second order was in the form of the declarations answering the questions in the precise form eventually declared by Justice White. The alternative order sought an addendum to the order of dismissal of Austin J by adding the words:

“On condition that no party can rely upon issue estoppel and an Anshun estoppel, or by record or res judicata arising out of the order made and the judgment given except that the plaintiffs cannot assert in proceedings no. 4666 of 2003 or in any other proceedings that creditors did not vote in favour of a resolution on 29 August 2003 that each NYOL Group Company executed deed of company arrangement.”

5 By an application for leave to cross-appeal Goldman Sachs seeks an order substituting this alternative order for the order actually made by Justice White.

Background Facts

6 In his judgment (J Aron Corporation & 1 Or v Newmont Yandal Operations Pty Limited [2006] NSWSC 849), White J set out in detail the relevant facts at [5]-[56]. I proceed as if those paragraphs of the judgment were fully set out herein.

7 I will refer to the evidence and particular findings of fact made by his Honour where relevant to a particular contention advanced by the parties. I set out the critical steps in chronological order.

· 20 May 2003 – Goldman Sachs terminates a Master Hedge Agreement relating to gold with Newmont upon which, it asserts, Newmont became liable to pay approximately US$57 million.

· 29 August 2003 – at a meeting purportedly convened under s439A of the Corporations Act 2001 (Cth), the creditors of Newmont and of its subsidiaries resolve to execute deeds of company arrangement pursuant to which Goldman Sachs would become entitled to receive approximately US$23 million of their claim.

· 3 September 2003 – Goldman Sachs commences proceedings in the Supreme Court challenging the deeds of company arrangement on a number of different grounds (“the 2003 proceedings”). One of the grounds, referred to in the proceedings as the “formal defect”, challenges the deeds of company arrangement on the basis that the relevant resolution had not been effectively adopted.

· 12 March 2004 – Austin J refuses the application of Goldman Sachs for a separate determination of certain questions, including the formal defect issue.

· 14 April 2004 – Goldman Sachs commences proceedings in the Court (“the 2004 proceedings”) seeking a declaration of indebtedness in respect of the hedge transactions. For reasons explained more fully by White J, these proceedings were designed to permit resolution of the formal defect issue because it was expected that Newmont would plead the deeds by way of defence. The formal defect alleged with the deeds could then be separately determined.

· 22 June 2004 – Austin J publishes reasons for his decision on 12 March to reject Goldman Sachs’ application for the separate determination of the questions in the 2003 proceedings.

· 29 November 2004 – Austin J decides and publishes reasons for judgment upholding Goldman Sachs’ application for the separate determination of questions in the 2004 proceedings.

· 24 March 2005 – Austin J publishes reasons for judgment on the separate questions in the 2004 proceedings. His Honour answered the first of the eight questions in favour of Newmont and, accordingly, found that it was unnecessary to answer the other questions.

· 7 April 2005 – Austin J makes orders dismissing the amended cross-claim in the 2004 proceedings and entering judgment for Newmont.

· 15 March 2006 – this Court dismisses Goldman Sachs’ appeal from the judgment of Austin J on the separate questions in the 2004 proceedings.

· 4 May 2006 – the defendants in the 2003 proceedings, including Newmont, serve an amended defence in the 2003 proceedings alleging that the orders made by Austin J on 7 April 2005 gave rise to a res judicata and to estoppels which, in substance, determined the 2003 proceedings. The possibility of such an amended defence had first been raised on 8 November 2005.

8 These events, as fully set out by White J, make it apparent that the institution of the 2004 proceedings was directed to determining one of numerous issues that had arisen in the 2003 proceedings which, if decided in favour of Goldman Sachs, would avert the need for a full hearing of many, if not all, issues in dispute at a hearing which was likely to be lengthy and expensive. His Honour’s finding that that was the purpose of the 2004 proceedings was not challenged.

9 Justice Austin had determined, for reasons which are not in issue before this Court, that it was not appropriate, indeed not possible, to separate the particular questions in the 2003 proceedings. These became the separate questions which were considered in the 2004 proceedings and which led to the litigation now before the Court. On the findings of fact of Justice White in the present case, the purpose of the 2004 proceedings, understood to be so by all parties and by Justice Austin, was to create a mechanism by which the particular questions could be raised and answered.

Leave to Appeal

10 Justice Austin, after determining the separate questions in the 2004 proceedings could have moulded an order, like the orders made by Justice White, which would have prevented the impact which Newmont now seeks to allege is the effect that Austin J’s orders actually had. Accordingly, the focus of attention in the present proceedings is on the effect of the original orders which were taken out. The judgment was the subject of an appeal, during the course of which Goldman Sachs did not seek, by cross-appeal, to invoke the jurisdiction of this Court to remedy the possible effects of the orders.

11 All of the problems that have arisen, and which have led to significant further delay in the resolution of the 2003 proceedings, were inherent in the form of the 2004 proceedings. In the latter, Goldman Sachs claimed a debt in the amount of their full claim, expecting that Newmont would plead the deeds of company arrangement. The validity of the deeds would then be put in issue on a limited basis relating to the alleged formal defect in the voting process. In form, accordingly, the indebtedness of Newmont to Goldman Sachs was in issue on the pleadings. Whether or not there was some alternative mechanism for achieving the desirable object of averting a protracted and expensive trial on all issues in dispute need not now be considered.

12 Case management principles are appropriate even in a case of this magnitude. Although the parties may, in view of the amount in dispute, be prepared to incur substantial legal costs, there is a public dimension to the deployment of the scarce resources available to the courts. Civil dispute resolution by courts enjoys a significant level of subsidy from taxpayers. Justice Austin, correctly, was concerned to ensure that public resources were not expended unnecessarily.

13 In substance, albeit not in form, this is an application for leave to appeal from an exercise of discretion on a matter of practice and procedure. As Jordan CJ said in In Re the Will of F.B. Gilbert (dec) (1946) 46 SR (NSW) 318 at 323:

“The disposal of cases could be delayed interminably, and costs heaped up indefinitely, if a litigant with a long purse or a litigious disposition could, at will, in effect transfer exercises of discretion in interlocutory applications from a Judge in Chambers to a Court of Appeal.”

14 This passage has often been referred to with approval. (See Adam P. Brown Male Fashions Pty Ltd v Phillip Morris Inc (1981) 148 CLR 170 at 177; Paringa Mining & Exploration Co PLC v North Flinders Mines Ltd (1988) 165 CLR 452 at 457-458.)

15 As Mr B Walker SC, who appeared for Goldman Sachs, submitted, the order dismissing the 2004 proceedings was perfectly explicable, because those proceedings had fulfilled their intended purpose as a vehicle for determining the formal defect issue.

16 Nevertheless, the form of Austin J’s actual orders created substantive rights. For that reason, this Court should determine the issues that have been raised even though they arise, in substance, by reason only of case management. White J’s orders may affect substantive rights to a significant degree. Accordingly, leave to appeal should be granted.

The Appeal

17 As I have said, Justice White made orders on two alternative bases. First, in the inherent jurisdiction of the Court. Secondly, on the basis of the slip rule. Newmont challenges the applicability of each jurisdiction on a number of grounds, which it reduced to five propositions. Furthermore, Newmont contends that his Honour erred in the exercise of his discretion in each respect.

18 Of the five propositions argued in this Court by Newmont, four turn on the words of the slip rule. No authority was cited to the Court which indicates that the exercise of the inherent jurisdiction is confined by that terminology of the slip rule. There is no reason why the inherent jurisdiction of the Supreme Court should be so confined. The Rules of court do not constitute some type of a mini-code replacing the inherent jurisdiction. It may very well be that the Court’s inherent jurisdiction calls for a variation of orders in circumstances falling outside the slip rule.

19 It is often said that the slip rule “reflects” the inherent jurisdiction. (See e.g. L Shaddock & Associates Pty Ltd v Parramatta City Council (No 2) (1982) 151 CLR 590 at 594.) That does not, however, mean that the inherent jurisdiction can be expressed in the same terms as the rule. I will indicate below cases, including a recent joint judgment of the High Court, which use quite different terminology to the text of the slip rule when explaining the inherent jurisdiction.

20 As Morris LJ put it in Thynne v Thynne [1955] P 272 at 313:

It would, I think, be undesirable to limit the scope of these powers as a result of any words which describe them

Meier v Meier

21 I will discuss the authorities on the scope of the inherent jurisdiction below. Nothing in those authorities suggests that that jurisdiction is confined by words such as “accidental slip or omission”.

22 The slip rule is now found in r 36.17 of the Uniform Civil Procedure Rules 2005, which provides:

“36.17 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.”

23 This case is concerned with an “error”, not with a “clerical mistake”. There is a substantial body of case law about whether or not a particular “slip or omission” was “accidental”. There is a more limited body of case law on what constitutes an “error” and what is a permissible ‘correction’. It is, of course, important that the Court apply the actual formulation in the rule. Many of the cases, for example those which state that a “deliberate” decision is not within the rule, can be understood as a way of expressing the proposition that the act or omission there relied upon was not “accidental”.

24 It is now particularly important to focus attention on the precise words of the rule, rather than to apply the terminology in the reasoning of prior case law, because the position in New South Wales is different to what it has been in the past and to what the position is in other jurisdictions.

25 An “overriding purpose” was inserted in the Supreme Court Rules in 2000. It is now found in s56 of the Civil Procedure Act 2005 (NSW) which, relevantly, provides:

“56(1) The overriding purpose of this Act and of rules of court, in their application to civil proceedings, is to facilitate the just, quick and cheap resolution of the real issues in the proceedings.

(2) The court must seek to give effect to the overriding purpose when it exercises any power given to it by this Act or by rules of court and when it interprets any provision of this Act or of any such rule.”

26 Accordingly, this Court, unlike other courts which have the traditional form of slip rule, is required to approach the task of interpreting the relevant words, including “error”, “accidental slip or omission” and “correct”, in such a manner as to give effect to the overriding purpose. Such an interpretive requirement may lead to different results in New South Wales when compared with the past or with other jurisdictions.

27 Similarly, the Court must seek to give effect to the overriding purpose when exercising the discretion to correct an error or mistake in a judgment or order pursuant to r 36.17. In each respect this constitutes a substantive difference which requires the Court to treat prior case law and the case law from other jurisdictions with some care.

28 Accordingly, when considering the exercise by White J of the discretion under the slip rule, the obligation cast on his Honour by s56(2) is pertinent.

29 White J proceeded (it was not contended otherwise) on the basis that variation of an order of the Court after entry of judgment is an exceptional course. This Court should proceed on the same basis. It may be the case that contemporary concerns with the costs imposed on the community by the administration of justice should lead to a modification of the traditional approach, particularly where there is statutory provision like the overriding purpose which binds the Courts in this State. I do not, however, approach this appeal on such a basis.

Unintended Consequences

30 Newmont contends that, where a judgment is regularly entered dismissing proceedings, the Court has no power to set aside or recall that judgment “merely because the judgment had unforeseen or unintended consequences”. Newmont extended this contention to submit that there was no such power even if the result was actually contrary to an intended consequence, as White J found to be the case here.

31 In the authorities there are numerous references to the intention of a court. The reasoning of White J is, as I will show, consistent with those authorities. The terminology of “unintended or unforeseen consequences” is advanced for the first time in Newmont’s submissions in this case. Mr P Wood, who appeared for Newmont, submitted that his formulation was the correct one. He relied primarily on the decision in Bailey v Marinoff (1971) 125 CLR 529.

32 The first thing to note is that that case was concerned only with the inherent jurisdiction. There is no warrant, in that case or otherwise, to adopt the Newmont formulation as some sort of substitute for the express terminology of the slip rule. Nor, as I will show, does it qualify the appropriate formulation of the basis on which the inherent jurisdiction can be exercised.

33 In Bailey v Marinoff the Supreme Court of New South Wales had made a self-executing order to take effect upon a procedural failure. The order took effect in the manner which the Court had originally intended, but this Court sought, retrospectively, to deem the subsequent conduct to be sufficient compliance with the order. By majority the High Court rejected this step.

34 Barwick CJ said at 125 CLR 529 at 530:

“Once an order disposing of a proceeding has been perfected by being drawn up as the record of a court, that proceeding apart from any specific and relevant statutory provision is at an end in that court and is in its substance, in my opinion, beyond recall by that court. It would, in my opinion, not promote the due administration of the law or the promotion of justice for a court to have a power to reinstate a proceeding of which it has finally disposed.”

35 Furthermore, Menzies J said at 125 CLR 529 at 531-532:

“However wide the inherent jurisdiction of a court may be to vary orders which have been made, it cannot, in my opinion, extend the making of orders in litigation that has been brought regularly to an end … [His Honour referred to authorities] … As I read the judgments, however, there is a clear recognition that a court cannot, by a further order, get rid of the operative and substantive part of its judgment. Each case was decided on the footing that something less was being effected by the order made.”

36 The facts in Bailey v Marinoff were quite different from those in the present case. There were, in fact, no unintended or unforeseen consequences. Indeed, the actual consequences were precisely what the court intended to occur by the orders it had made. By reason of the events that transpired the court, in substance, formed the view that it would have been preferable if the order had not been made. Bailey v Marinoff is clearly distinguishable.

37 The Claimant relied on the generality of the reasoning, particularly in the judgment of Menzies J, to the effect that the court cannot, either in the exercise of its inherent jurisdiction or under the slip rule, “get rid of the operative and substantive part of its judgment”. It may be significant, in this respect, that Menzies J used the word “judgment”, rather than “order”. On the factual findings in this case, the “operative and substantive part” of the judgment – as distinct from the order – of Austin J was the determination of the formal defect issue. The judgment was not directed to a consideration of matters going to the existence of the debt. The orders of White J do not “get rid of” the judgment with respect to the formal defect issue.

38 Newmont submitted that there was no authority in which a duly entered order of the court had been varied because of legal consequences which were unforeseen or unintended, specifically consequences for other proceedings.

39 Mr Wood submitted that in all of the cases, whether based on the inherent jurisdiction or on the slip rule, the courts were concerned to perfect the intention of the court insofar as the orders determined the rights and liabilities in the proceedings before the court. This case, Mr Wood submitted, is not concerned with the rights and liabilities litigated in the 2004 proceedings, but with the rights and liabilities in the 2003 proceedings, which involved different issues.

40 This submission treats the two proceedings as quite distinct. This is not, in the circumstances of this case, an accurate characterisation. As White J found, a finding which Newmont does not contest, the 2004 proceedings were instituted for a purpose directly connected with the 2003 proceedings. This is an extremely unusual situation and it is not surprising that there is no authority directly on point. As a matter of form, the 2004 proceedings were an action for the debt. As a matter of substance, as the judge and all parties knew, the 2004 proceedings were instituted so that the formal defect issue could be separately determined.

41 In my opinion, contrary to Newmont’s submissions, Ivanhoe Gold Corporation Limited v Symonds (1906) 4 CLR 642 is a case in which the High Court approved variation of a final order by reason of the unintended legal consequences of that order. As in this case, an appeal from the first order had been dismissed. As Ivanhoe is perhaps the most closely analogous authority to the present case, I will set out the facts in some detail.

42 Ivanhoe involved statutory provisions dealing with the interconnection of a common law claim for damages and the workers compensation statutory regime. A worker who had initiated proceedings in negligence at common law was held, in a first trial, to have elected to receive compensation under the statutory regime. This was a complete defence to the proceedings in negligence. Accordingly, those proceedings were dismissed by order of the court. Judgment was entered in favour of the defendant. An appeal from that judgment and order was dismissed. (See Symonds v Ivanhoe Gold Corporation Limited (1904) 7 WAR 69; Ivanhoe Gold Corporations Ltd v Symonds (1905) 8 WALR 103.)

43 The West Australian workers compensation legislation there under consideration made express provision for a defendant employer to receive costs of any failed common law claim by way of deduction from the amount payable under the workers compensation regime. Section 9 of the Act then provided:

“9 If, within the time limited by section 11, an action is brought to recover compensation, independently of this Act, and it is determined in such action that the injuries is one for which the employer is not liable in such action, but that he would have been liable to pay compensation under this Act, the Court in which the action was tried shall assess such compensation, and shall deduct therefrom all the costs which have been caused by the plaintiff bringing the action instead of taking proceedings under this Act, and shall enter judgment accordingly.”

44 As in the present proceedings, no application was made invoking this particular provision, either in the original trial of the common law proceedings or, by cross-appeal, in the appeal from that judgment. Nevertheless, the defendant employer brought the matter back before the original trial judge, it appears by Notice of Motion, for an order under s9 of the Act. The trial judge proceeded to assess the compensation and deducted the defendant’s costs in accordance with s9. His Honour did so notwithstanding the earlier order dismissing the proceedings.

45 The Full Court of the Supreme Court of Western Australia held that an application under s9 had to be made in the course of the proceedings that had been dismissed and that, after dismissal, the trial judge had no power to proceed to assess compensation and deduct the costs. The first instance judgment in the second proceedings is not reported. However, it does not appear that the judge varied the order he had made in the first proceedings. He simply proceeded to exercise the statutory power.

46 The High Court, by majority, allowed the appeal. Griffiths CJ indicated that it was clear that neither the trial judge, nor the Full Court, in the first proceedings had applied their minds to the s9 question. If they had done so, his Honour held at 4 CLR 642 at 654, then the only recourse would have been by way of appeal. His Honour then referred to two cases in which final orders were amended after they had been passed and entered. In this context his Honour said, at 655:

“In my opinion, if, at the trial of an action in which two claims are joined, one only is tried, and without the fault of either party judgment is entered on the whole case, it can be amended both under this rule and under the inherent power of the Court.”

47 This, in my opinion, is an accurate description of what happened in the present case.

48 Griffith CJ went on to consider In re Swire; Mellor v Swire (1885) 30 ChD 239; Lawrie v Lees (1881) 7 App Cas 19 and Milson v Carter [1893] AC 638. His Honour concluded at 4 CLR 642 at 659:

“I am, therefore, of opinion that the Supreme Court had power to correct the original judgment as drawn up, and that McMillan J was therefore right in proceeding to assess the compensation.”

49 There is a suggestion here that McMillan J did, in the second proceedings, vary the original order but, as I have indicated above, that judgment is not available to the Court.

50 Barton J proceeded on the basis of a slightly different analysis. His Honour indicated at 4 CLR 642 at 662 that it was the order of the Full Court dismissing the appeal in the first proceedings that was “incorrect and defective”. However, that judgment was not the subject of any appeal to the High Court, only the second decision was.

51 His Honour concluded at 664-665:

“Technically there was one judgment; technically also – if we look at sec 9 – the time for entering final judgment is after the assessment of compensation and not before it. A hyper technical construction is likely to defeat the Act in every way, but as the Court has a statutory duty to assess compensation, I am of opinion that any order drawn up which, in form, would prevent the performance of that statutory duty must not be allowed to stand in the way of the doing of complete justice between the parties by a court of final resort.”

52 His Honour proceeded at 4 CLR 642 at 665 to say that, in the circumstances, he would treat the original order, even though entered, as being an interlocutory order. He also said, by reference to the same authorities upon which Griffiths CJ relied, that the Full Court “on the second appeal, ought itself to have corrected its order made on the first appeal”, and should have done so “notwithstanding the fact of its having been drawn up”. His Honour indicated that the authorities such as Mellor v Swire, Lawrie v Lees and Milson v Carter, authorised that course.

53 His Honour concluded at 665:

“It was, in my opinion, the duty of the Full Court, on appeal, to correct its own prior order if that course became necessary for the purpose of seeing that justice was done, instead of allowing the second appeal upon what seem to me the highly technical grounds on which it was allowed. It was open to them to choose between the allowance of that technicality and the making of a corrective order within an established jurisdiction.”

54 A similar duty could be said to fall upon this Court on this second appeal, but it is unnecessary to proceed on that basis.

55 Higgins J dissented and in doing so adopted an approach similar to that for which Newmont contends in these proceedings. His Honour referred at 4 CLR 642 at 669 to the inherent jurisdiction and also to the slip rule and found that neither applied to the case. His Honour said at 669-670:

“The learned judge deliberately came to the conclusion that there was an agreement between the parties which deprived the plaintiff of all rights of action for the injury; and I do not think this court, wide as are its powers, should take upon itself to say that there has been an error in the judgment arising from any accidental slip or omission. If there was an error, it was not accidental: it was the result of a deliberate finding; and the judge intended the judgment to be in the form in which it now stands. In one sense, it is true that all mistakes of a judge are ‘accidental’; but that is not the sense in which the word is used in this rule. If it were, no-one could feel any confidence of acting on the formal written judgment of the court. If the judge has made a mistake in his decision, the remedy is appeal; if no appeal be brought, or if the appeal be dismissed, the litigants are bound by the decision, even though wrong.”

56 His Honour referred to the various authorities and concluded at 671:

“I can find no instance … of any case which goes so far as to allow a final judgment duly passed and entered, or otherwise completed, to be corrected as posed by this motion. The judgment was given deliberately; the written judgment duly expressed what the Judge meant to pronounce; the new order proposed to be added does not deal with items of costs or the computation of interest, or matters purely incidental to and within the scope of the judgment … and McMillan J himself, even if he had been asked to alter his judgment on the ground of error, would have had, in my opinion, no jurisdiction to do so.”

57 It does not appear that, in Ivanhoe, either the court at first instance or the Full Court did in fact vary the order for entry of judgment in the first trial. The majority in the High Court concluded that either the judge at first instance or the Full Court could and should have done so. Therefore when, as appears to have been the case, the trial judge proceeded to determine a matter as if the earlier order had been varied in some unspecified way, his ultimate order in the second proceedings should stand.

58 The reasoning of the dissentient in the High Court in Ivanhoe would support the proposition for which Newmont now contends. However, the majority approved amendment of an order, that had been entered, by reason of an unforeseen and unintended legal consequence.

59 The only distinction between Ivanhoe and the present case is that the consequences in that case may not accurately be described as occurring “in other proceedings”, although there were separate causes of action. The second trial at first instance in Ivanhoe proceeded by way of Notice of Motion which, it appears, was heard in the original proceedings that had been dismissed. It does not appear to me that this is a material distinction for purposes of the reasoning of the majority in Ivanhoe. In any event, the close relationship between the 2004 proceedings and the 2003 proceedings in the present case is such that, as a matter of substance, they should not be regarded as separate for purposes of either the exercise of the inherent jurisdiction or the application of the slip rule.

60 The proposition that the inherent jurisdiction extends to correcting an order which has unintended consequences is reinforced by Mellor v Swire supra, relied on by the majority in Ivanhoe. In that case an officer of the court had caused an order to be drawn up and entered in a form which purported to cover disposition of certain assets that had not been the subject of the decision. The orders had been passed and entered.

61 As Cotton LJ indicated at 243, it could not be said that what had occurred was “a mere slip or verbal inaccuracy”, nevertheless his Honour went on to say:

“ … the court has jurisdiction over its own records, and if it finds that the order as passed and entered contained an adjudication upon that which the Court in fact has never adjudicated upon, then, in my opinion, it has jurisdiction, which it will in a proper case exercise, to correct its record, that it may be in accordance with the order really pronounced.”

62 Similarly, Lindley LJ said at 246:

“ … There is no … magic in passing and entering an order as to deprive the Court of jurisdiction to make its own records true, and if an order as passed and entered does not express the real order of the Court, it would, as it appears to me, be shocking to say that the party aggrieved cannot come here to have the record set right, but must go to the House of Lords by way of appeal … It appears to me, therefore, that if it is once made out that the order, whether passed and entered or not, does not express the order actually made, the Court has ample jurisdiction to set that right, whether it arises from a clerical slip or not.”

63 Similarly, Bowen LJ said at 247:

“ … every court has inherent power over its own records as long as those records are within its power, and that it can set right any mistake in them. It seems to me to be perfectly shocking if the Court could not rectify an error which is really the error of its own minister. An order, as it seems to me, even when passed and entered may be amended by the court so as to carry out the intention and express the meaning of the court at the time when the order was made, provided the amendment be made without injustice or on terms which preclude injustice.”

64 In the present case, the order was made by the judge in the terms which the judge intended to make and there was no error by a ministerial officer of the court. However, that distinction was not regarded as material in Ivanhoe where, similarly, the relevant step had been taken by a judge in a form which the judge intended to take. The three judgments, by three of the most distinguished English judges of that era, in Mellor v Swire were expressly relied upon and applied by the majority of the High Court in Ivanhoe and frequently been cited since.

65 Neither Ivanhoe nor Mellor v Swire was drawn to the attention of White J. His Honour referred to two first instance judgments in which orders of the court had been varied after entry by reason of consequences which were contrary to the intention of the Court. (Re Hogarth’s Estate: Crisp v Hogarth [1962] 1 Tas R 17 and Blacker v National Australia Bank Ltd [2000] FCA 1011.)

66 His Honour was correct to regard these two authorities as supporting the proposition which he adopted. Indeed in Blacker, the Federal Court made orders to ensure that its own orders would not impinge, by estoppel or res judicata, on other proceedings in another court. That decision is not distinguishable. Both Hogarth and Blacker are particular instances of the application of the principles discussed, most relevantly, in Ivanhoe and Mellor v Swire.

The Inherent Jurisdiction

67 It is well established that the inherent jurisdiction is not at large, but it is not capable of being confined to defined categories. (See Tringalli v Stewardson Stubbs & Collet Pty Ltd (1966) 66 SR (NSW) 335 at 344; Reid v Howard (1995) 184 CLR 1 at 16). It is also well established that the jurisdiction may be exercised after orders have been perfected.

68 The inherent jurisdiction is closely related to s23 of the Supreme Court Act 1970, which confers “all jurisdiction which may be necessary for the administration of justice in New South Wales”. (See Jackson v Sterling Industries Ltd (1987) 162 CLR 612 at 617-618.) Both sources of jurisdiction may be exercised when necessary for the administration of justice. (Reid v Howard at 17.)

69 As McLelland J said of the exercise of both the inherent power and s23 in Dwyer v National Companies and Securities Commission (1988) 15 NSWLR 285 at 287:

“Since it rests on necessity for the purpose of preventing injustice, the extent of the power is commensurate with the requirements of the necessity which calls it into existence.”

70 Where it is suggested, as it is in this case, that the effect sought to be given to an order of the court is directly contrary to the court’s intention, the test of necessity may extend to protecting the integrity of the administration of justice and/or to maintaining public confidence in the administration of justice.

71 In a frequently approved passage, Lord Diplock said in Hunter v Chief Constable of the West Midlands Police [1982] AC 529 at 536:

“My Lords, this is a case about abuse of the process of the High Court. It concerns the inherent power which any court of justice must possess to prevent misuse of its procedure in a way which, although not inconsistent with the literal application of its procedural rules, would nevertheless be manifestly unfair to a party to the litigation before it, or would otherwise bring the administration of justice into disrepute among right-thinking people.”

Walton v Gardiner

Batistos v Road and Traffic Authority (NSW)

D’Orta Ekenaike v Victoria Legal Aid

72 However, this case can be decided on a more narrow identification of the inherent jurisdiction.

73 The terminology of each of the judgments in Mellor v Swire supra, 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 the meaning of the court at the time when the order was made”. (Per Bowen LJ)

74 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. Newmont wishes to contend in the 2003 proceedings that, inter alia, the 2004 proceedings determined the existence of the Goldman Sachs’ debt. This is not a matter upon which there has ever been an adjudication.

75 The following observations of Griffith CJ in Ivanhoe 4 CLR 642 at 654 are, in my opinion, applicable:

Fictions of law have in this their done good work. But I am not disposed to invent a new one, and to hold that a Court is bound to pretend to believe that something happened in the course of proceedings before it, when it knows it did not happen. Is there, then, any authority to compel us to take this course, and to invent a fiction not for the purpose of doing but of denying justice?”

76 After consideration of authorities, including Mellor v Swire, his Honour answered his question in the negative. That is still, and should remain, the case.

77 In the joint judgment of the High Court in DJL v The Central Authority (2000) 201 CLR 226 at [34], Ivanhoe was referred to as authority for the following proposition:

or had intended to pronounce

78 The other authority cited for that proposition was Ainsworth v Wilding [1896] 1 Ch 673 at 678, where Romer J referred to Mellow v Swire as authority for the proposition that:

“ … even where a judgment has been duly passed and entered it might still be altered by the Court if the Court saw that it did not truly represent the decision which the Court had pronounced or intended to pronounce.”

79 This inherent jurisdiction has been expressly affirmed in DJL. 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. (See e.g. Hogarth’s Estate supra at 21.5 per Burbury CJ; Coppins v Helmers; Brambles Constructions Pty Ltd (Third Party) [1969] 2 NSWLR 279 at 281 per Herron CJ, Sugerman and Mason JJA; Gikas v Papanayiotou [1977] 2 NSWLR 944 at 953-984 per Needham J; Logwon Pty Ltd v Warringah Shire Council (1993) 33 NSWLR 13 at 28F-G per Sheller JA; Re Future Life Enterprises Pty Ltd (1994) 33 NSWLR 559 at 562-563 per McLelland CJ in Eq.)

80 The formulation approved recently in DJL, should be accepted as authoritative. That formulation, I note, is in quite different terms to the slip rule. There may be other aspects of the inherent jurisdiction which also overlap with the slip rule, but it is unnecessary to consider them.

81 For the reasons given by White J this formulation of the inherent jurisdiction is applicable to the present case. As his Honour said:

“[57] Once an order disposing of proceedings has been made and entered, the Court has no jurisdiction to re-open the proceedings to vary or set aside the order, except where the order does not correctly reflect the Court’s intention, but was made in error, or, where there is statutory authority to do so.”

82 As his Honour concluded:

there will be no occasion for raising res judicata or estoppel arguments except with respect to the matters directly involved in the answering of the question

J Aron Corporation v Newmont Yandal

Gikas v Papanayiotou

Re Future Life Enterprises Pty Ltd

Storey & Keers Pty Ltd v Johnstone

L Shaddock & Associates Pty Ltd v Parramatta City Council (No. 2)

Shaddock

Storey & Keers Pty Ltd v Johnstone

Bailey v Marinoff

L Shaddock & Associates Pty Ltd v Parramatta City Council

Storey & Keers Pty Ltd v Johnstone

83 In my opinion his Honour was correct to conclude that the circumstances of the present case were within the inherent jurisdiction of the Court to correct an order that did not represent the order the Court had intended to pronounce.

The Intention of the Court

84 With respect to both the inherent jurisdiction, and the element in the slip rule which empowers a court to “correct” an order, Newmont submits that the terms of any order made must accord with the intention of the judge who made the original order. Newmont does not contend that Austin J intended to make orders which had the consequences for which it wishes to contend in the 2003 proceedings. Nor does it advance any form of order which would avoid those consequences.

85 The focus of Newmont’s submissions in this regard is on the actual orders made by Justice White. His Honour made two declarations; first, to answer Question 1 “Yes” and, secondly, by reason of that answer, to answer Questions 2 to 8 as “do not arise”. The orders his Honour then made were that the Plaintiff’s Notice of Motion of 14 June 2006 was “otherwise dismissed” and that the proceedings were stayed until further order of the court.

86 Newmont contends that these orders failed to carry into effect the intention of Austin J in three respects. It contends that Austin J intended:

(i) That the 2004 proceedings would be disposed of;

(ii) That the disposal would give rise to a res judicata and/or estoppel (specifically with respect to the answers to the questions);

87 Mr Wood submitted that the orders made by White J do not dispose of the 2004 proceedings. Those proceedings have been reinstated and made the subject of an interlocutory stay. Nor, he submitted, do the orders give rise to any res judicata or to the estoppels intended with respect to the questions answered because the orders do not have such an effect on the 2003 proceedings. He also submits that the orders do not extend to matters directly involved in the answers to the questions.

88 Justice White correctly identified the intention of the Court on a number of occasions. It is sufficient to repeat one paragraph quoted at [34], where his Honour said:

“It is clear that Austin J did not contemplate that if the plaintiffs were unsuccessful, on the determination of the separate questions that would practically resolve the 2003 proceeding. It would only resolve, or go some way to resolving, the plaintiff’s claim that the administrations were invalid because of the formal defect.”

89 I have no doubt, indeed there was no submission to the contrary, that the orders made by Austin J had consequences which Austin J had not intended. This engages the inherent jurisdiction to correct an order, in accordance with authoritative restatement of the relevant jurisdiction in DJL.

90 I will indicate below why it is also an “error” within the slip rule. The only question then is what form should the order take.

91 Mr Wood submitted that there were three statements by Justice Austin about what he would have done if the matter had been brought to his attention. It was, in my opinion, open to White J not to act on any such statement. His Honour had to determine what was the objective intention of the Court at the time the original orders were made. In any event, properly understood, the statements do not mean what Newmont contended they mean.

92 The first statement by Justice Austin to which Mr Wood referred was made in a judgment of 29 November 2004, where his Honour set out the stage that both the 2003 and 2004 proceedings had reached and indicated that it was appropriate to deal with the separate questions in the 2004 proceedings. He made orders that that occur.

93 In the course of that judgment his Honour said:

“[53] It is not appropriate to make a final decision, at this stage, as to whether, if the plaintiffs fail in their Part 31 application, I should dismiss the 2004 proceeding or amalgamate with the 2003 proceeding. There may be something to be said for the view that the correct course will be simply to order that the two proceedings be heard together, with evidence in one being evidence in the other. This would preserve for the plaintiffs whatever advantage they may have, in terms, perhaps of the nature of final orders and questions of onus of proof, through commencing the 2004 proceedings. It is a course not opposed by the other parties. In the meantime, I shall list the two proceedings together for each directions hearing.”

94 Mr Wood submitted that the alternatives considered in this passage did not encompass the orders Justice White made. In my opinion, nothing concerning Austin J’s intention when he made the orders now in issue can be deduced from this passage. The passage begins with a statement that “It is not appropriate to make a final decision”. The tentative nature of his Honour’s consideration is made explicit by the introductory clause of the second sentence: “There may be something to be said for the view …”. This statement was made six months before the orders. Although he referred to it, Mr Wood did not place any significant weight on this statement. In my opinion, it is not an indication of any kind about his Honour’s intention at the time he made the original orders.

95 The next two statements were made by Austin J after the issue presently before the Court had arisen. As I have said, the relevant question is what the Court intended to do and/or what the Court would have done, if the issue had arisen at the time the orders were made. Anything a judge, even the same judge, says about what s/he would do to correct the original orders is no more than evidentiary and may not even be admissible over objection. Nevertheless, I proceed as if weight should be accorded to Austin J’s ex post facto observations.

96 The second statement of Austin J relied upon was made in a judgment of 7 December 2005, which his Honour delivered in the 2003 Proceedings where, although the issue was not before him, his Honour made the following observations:

“[22] My intention in making the orders that I made in the 2004 proceeding, consequent upon determination of the separate questions, was to leave for determination in the 2003 proceeding all of the issues that remained in the statement of claim in that proceedings as amended to that time (that is to say, excluding what has been called the formal defect argument). Though not articulated, my intention was that if the plaintiffs were able to establish any of the grounds for termination of the deeds, and were able to persuade the Court to exercise all appropriate discretions in favour of making orders to terminate the deeds, then it would be open to the plaintiffs to assert their claimed debt notwithstanding the entry of judgment in the 2004 proceeding.

Ritchie’s Uniform Civil Procedure

97 It was these observations that eventually led to the successful application for his Honour to recuse himself. Mr Wood relied on the indications his Honour gave as to the kind of order that he would have made and submitted that this was different to the order actually made by Justice White. He accepted that it is closer to Order 1 sought in the Goldman Sachs’ Notice of Motion, to which I have referred above, than it is to Order 2, which was the order ultimately made by Justice White.

98 Paragraph [22] of Austin J’s judgment of 7 December expresses in precise terms the intention which Justice White found to have been the intention of the Court. I note that in this paragraph Austin J refers to his intention in making the actual order he did make in the 2004 proceedings. Nevertheless, Newmont seeks to rely on par [23] as if it qualifies that intention. That is not a reasonable indeed, in my opinion, not an available, interpretation of Austin J’s statements in [23]. All that his Honour was doing – as the words “I have in mind that the variation would be along the lines …” make clear – was to raise for consideration by the parties the orders he may make by way of variation in order to carry into effect the intention expressed in [22].

99 In any event, par [23], unlike par [22], says nothing about the intention of the court at the time the original orders were made. His Honour was considering what orders he would then make by way of correction. The reliance sought to be placed on par [23] is, in my opinion, misconceived.

100 The third expression of intention was made by Justice Austin in a judgment of 18 July 2006, when he was dealing with the Newmont application that he disqualify himself from hearing the Notice of Motion of Goldman Sachs for variations of the orders, being the issue finally determined by Justice White. In the course of deciding to disqualify himself Austin J said:

Anshun

101 This is the passage primarily relied upon by Newmont. Mr Wood submitted that a number of elements of his Honour’s intention, as so expressed, are not fulfilled by the orders actually made by Justice White. First, his Honour intended there to be an actual disposal of the 2004 proceedings. That he submits is not carried into effect by any order of Justice White. Secondly, he submits that Austin J’s intention was that there would be a limited res judicata and estoppel, relating to matters directly involved in answering the question. He submits that there is no res judicata or estoppel created by the orders made by Justice White.

102 Paragraph [33] of Austin J’s reasons commences with his Honour’s reference to the course of the proceedings and his own earlier statement. What follows is a finding of fact by Justice Austin. Justice White also reviewed the same materials, set them out at length and made his own finding of fact about the intention of the Court. There is no reason why he should have adopted Austin J’s finding. The issue of intention was objective not subjective.

103 That is enough to dispose of this submission. However, in any event, Austin J’s statement did not constitute a finding of the character submitted.

104 The words used by Austin J were “the disposition of the 2004 proceedings”. Mr Wood’s submission replaced the word “disposition” with the word “disposal”, which derives from [58] of Justice White’s judgment. The word “dispose” conveys an element of some kind of finality in a legal sense, that is not necessarily implicit in the word “disposition”. In its context, his Honour refers to “the resolution of questions for separate determination” and to “the disposition of the 2004 proceedings” as being “consequential” upon that “resolution”. Nothing that his Honour said suggests that he intended that the disposition should follow immediately. Indeed, the precise effects which were clearly contrary to his Honour’s intention, arose by reason of an actual “disposal” of proceedings which, in form, sued for the debt. Austin J cannot be understood to have suggested that he wanted to “dispose” of the 2004 proceedings.

105 His Honour’s references to res judicata and estoppel of a limited kind were said to follow as a consequence “once … [the] step” of disposition “had been taken”. Again, there is nothing to suggest that that would follow immediately.

106 Mr Wood submitted that amongst the “matters directly involved in the answering of the question”, Austin J must have had in mind matters which were necessarily anterior and legally indispensable to the reasoning to that answer. He submitted that the validity of the appointment of the administrators must be of that character because, unless they were validly appointed, they could not have convened the meetings. This submission places a strained interpretation on his Honour’s use of the word “directly”. There is nothing to indicate that Justice Austin intended to give that word so expansive an operation. I can see no warrant for interpreting his Honour’s intention in that way and, on that basis, to conclude that what Justice White did was something other than a “correction” or that his Honour’s orders did not reflect the intention of the Court when the orders were made.

107 In my opinion, subject to one matter, the orders made by Justice White do ‘resolve’ the questions for separate determination and make provision for the consequential disposition of the 2004 proceedings, by means of express provision for “further order of the court”, whereupon a res judicata would arise. An estoppel would probably arise by reason of the answers to the questions before that, but that need not be determined.

108 The one matter about which I have some concern is the proposition advanced by Newmont that what White J has done, from the perspective of the 2003 proceedings, is to make an interlocutory declaration which is impermissible. (Relying particularly on Pittwater Council v Moore Development Group Pty Ltd [2004] NSWCA 278 at [5], [6] and [11]; and also Bass v Permanent Trustee Co Ltd (1999) 198 CLR 334 at [45]-[47]; Graham Barclay Oyster Pty Ltd v Ryan (2002) 211 CLR 540 at [128]; Western Australia v Ward (2002) 213 CLR 1 at 71-77 fn 142; Meagher Gummow & Lehane’s EquityDoctrines & Remedies 4th ed at [19-165].)

109 Interesting as these issues are, it is unnecessary to resolve them. The appeal can be allowed to the limited extent of removing the words “Declare that” in each of Order (i) and (ii) made by White J. The orders will then constitute an unadorned answer to the questions. For the reasons I have already given, this form of order accords with the intention of the Court at the time the original orders were made. Final disposal of the 2004 proceedings will, by reason of the stay, await the disposal of the 2003 proceedings. That is what was always intended.

110 For the above reasons, the appeal from the availability of inherent jurisdiction should be dismissed. I will deal below with the appeal from the exercise of the discretion. The next three sections are pertinent to the slip rule, being an alternative basis on which Justice White proceeded.

Interpreting the Slip Rule

111 Newmont relied on a number of cases, which interpreted the slip rule, for the following propositions:

1 The error must be recognisable at once, indeed so obvious it goes without saying;

2 The solution to the error must entail no controversy;

3 The solution must not be the subject of an evaluative or discretionary judgment;

112 I will refer to these as the first to fourth propositions. Each of the four propositions invokes the interpretation of the rule. As is often the case, it is necessary to be wary of attempts to treat the words of a judgment interpreting a statutory provision as if those were the words of the statute.

113 As I have indicated above, by force of s56(2) of the Act, this Court must bear in mind the overriding purpose when interpreting the rule. Even without this guidance, I would have come to the same conclusion. However, the express reference to s56(1) to “the real issues in the proceedings” puts the matter beyond doubt.

114 As a matter of interpretation, r 36.17 must extend to the correction of a mistake or error in an order which, or which arguably, resolves an issue that has intentionally not been adjudicated upon. Such a consequence, in my opinion, falls squarely within the concept of an “error arising from an accidental slip or omission”. In the present case, such matters as the existence of Goldman Sachs’ debt were not, in my opinion, the “real issue” in the 2004 proceedings. To hold otherwise would be to prefer form over substance, which the word “real” in s56(1) is designed to avoid.

115 I extend the scope of my reasons to an order which arguably resolves an issue upon which there has not been an adjudication. Of course, there has to be real risk. However, the person at risk is entitled to an order even when, as here, that person contends that the proposition on which the other party seeks to rely will ultimately fail. This was the position in Mellor v Swire at 245 per Cotton LJ.

116 By reason of the insertion of the overriding objective into the Civil Procedure Act 2005 words such as “error” and “correct” in the slip rule should not be given a narrow interpretation. In my opinion, 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 “correction”, particularly as understood in the light of the overriding purpose. The “real issues in the [2004] proceedings”, within the meaning of s56(1), did not extend in the direction for which, let alone as far as, Newmont seeks to contend in its new defence in the 2003 proceedings.

117 By reason of the significance of the overriding purpose with respect to the slip rule in this State, earlier authorities must be treated with caution.

118 The first case upon which Mr Wood relied was the judgment of the Full Court of the Supreme Court of Victoria in Brew v Whitlock (No 3) [1968] VLR 504. In that case counsel for the successful appellant had failed to request an award of interest. The Full Court entered judgment for the sum claimed. By Notice of Motion the appellant sought an amendment of the order that the Full Court had made. In its judgment rejecting the application the Court identified four component parts of the slip rule in the following way at 506:

“ … That rule requires … (1) a ‘slip or omission’; (2) that it be ‘accidental’; (3) that there be an ‘error’ in the judgment arising from the accidental slip or omission, and (4) that it be an error capable of being ‘corrected’ under the rule.”

119 The Court indicated that if there had been any “slip or omission”, it was made by counsel. Nevertheless, the Court set aside consideration of whether there was a “slip or omission” and, if so, whether it could be described as “accidental”. The Court rejected the application on the following basis at 506-507:

“There was no ‘error’ in the Full Court’s judgment. It had no application before it and it did not intend to deal with the matter at all. Moreover there was no error capable of being the subject of ‘correction’. 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 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.”

‘HIS HONOUR: Our main task this morning is in the 2004 matter, and that is to formally make orders with respect to the eight separate questions for determination and to deal with the question of costs in that matter. …

…

HIS HONOUR: Do you have any short minutes or anything else to help me?

GRAY (Counsel for the Plaintiffs): Your Honour will be astonished to know that the parties haven’t actually agreed on what should happen. In order to indicate where we see the position, can I give to your Honour a short chronology of what happened some year or 18 months ago in the 2003 proceedings. So far as the 2004 proceedings are concerned, we accept that the outcome should be judgment for the defendant, and the costs issue that your Honour mentioned I thought was to be dealt with on 26 April.

…

GRAY: Subject to, that we see no issue between the parties.

…

GRAY: Mr Bathurst suggests we deal with the 2004 proceedings first and, as I’ve said, from our perspective we …

HIS HONOUR: I will make some orders then. First of all, formally answering the questions for separate determination, my order is that my answers to the eight questions for separate determination are as follows:

(1) Yes;

(2) – (8) In view of my answer to question 1, these questions do not arise.

Secondly, I suppose the correct way to deal with the proceedings is to dismiss the amended cross-claim and enter judgment for the defendants in the proceedings.

BATHURST: If your Honour pleases.

HIS HONOUR: I will do that. In this 2004 proceeding the amended cross-claim is dismissed and judgment is entered for the defendant in the proceeding. …’

[39] There was then debate which extends to over fifteen pages of transcript as to what should happen with the 2003 proceedings. The defendant proposed that those proceedings remain dormant until the plaintiffs decided whether they wished to appeal from the determination of the separate questions. Austin J determined that directions should be made for the further conduct of the 2003 proceedings. It would appear from the following exchanges that all parties at that time contemplated that all of the issues in the 2003 proceedings would still have to be decided on their merits, although of course the ‘formal defect’ issue had been decided. It had been removed as an issue in the 2003 proceedings. There was the following exchange between his Honour and Mr Bathurst QC in relation to the evidence the plaintiffs had already filed in support of their challenges in the 2003 proceedings:

‘His Honour: … in other words, this has now become the usual kind of challenge to a deed case where there are arguments of improper purposes and oppression and all of that.

Bathurst: Yes. It may be, as I said, that’s all the plaintiff wants to put on it and that would seem surprising to us’.”

160 The last answer by senior counsel for Newmont is of some significance. He answered “Yes” to the proposition that the 2003 proceedings would proceed as a challenge to a deed case, involving improper purposes and oppression. This is inconsistent with any suggestion that the issue of debt or no debt had in some way been resolved or the other uses to which Newmont seeks to put the original orders.

161 It is of significance, as Mr Walker submitted, that nothing was said on this occasion with respect to the implications for the 2003 proceedings of the orders proposed to be made. The so-called ‘warnings’ upon which Newmont seek to rely as having put Goldman Sachs on notice were made much earlier, in the course of submissions about whether or not there ought to be a separation of the questions at all.

162 Justice White set out the relevant passage earlier in his judgment:

“[29] There was oral argument before Austin J on 22 October 2004. In the course of his submissions, Mr Bathurst QC, who appeared for the defendant, said:

‘ … If your Honour orders separate questions – I will come to why your Honour should not in a moment – they should be separate questions in each of the 2003 and 2004 proceedings because the issues are raised in each of the 2003 and 2004 proceedings.

That shows – again this is said irrespective of separate questions – the difficulty of these two cases in effect being run separately, whether on the legal issues postulated or on the discretionary issues, may ultimately come to be heard, if they are not heard – if the cases are not heard together or there is a danger of inconsistent verdicts – a difficulty if the 2004 proceedings for example are heard first, of what constituted a res in those proceedings so as to bind the parties in the 2003 proceedings and the difficulties in relation to Anshun on the basis that the whole of the case was not brought forward in the 2004 proceedings. Those very unsatisfactory consequences, in our submission, can be avoided if the two sets of proceedings are joined together. Once they are joined together consideration can then be given to the separate questions.

HIS HONOUR: Can I just think about one thing. Those submissions that you have just made are directed primarily, I think, to running the 2004 proceedings to final verdict before the hearing, the 2003 proceedings. I wonder to what extent you make the same submissions in the event that I make an order for determination of separate questions in only the 2004 proceedings?

BATHURST: If your Honour made an order for separate determination of questions in the 2004 proceedings it should be at the very least on the condition that the parties be bound by the answers to the questions in the 2003 proceedings. It can be overcome that way.

HIS HONOUR: What are the chances of getting that acknowledgement?

BATHURST: I would not see any difficulty of giving it for our part. We don’t want to cause any difficulties on this. If you have got two sets of proceedings with two sets of difficulties raised, one that has the acknowledgement you ordered the separate questions in both sets of proceedings, and order that they be heard together.’

running the 2004 proceedings to final verdict before the hearing [of] the 2003 proceedings

J Aron Corporation v Newmont Yandal

‘11 At the time, I understood Mr Bathurst QC to be proposing a condition that would prevent either party from later making an argument based on res judicata or Anshun or other estoppel, so as to treat the resolution of the questions for separate determination as having some greater significance than merely providing a separate answer to the formal defect issue.’

[31] The condition proposed by Mr Bathurst QC may not have been necessary, but was appropriate for more abundant caution to ensure that, in both proceedings, the plaintiffs and the defendant would be bound by the answers to the separate questions. His proposal in this respect immediately followed Austin J’s query whether the determination of separate questions in only the 2004 proceedings might not result in a final verdict being given in the 2004 proceedings before the hearing of the 2003 proceedings. Mr Bathurst QC did not suggest that wider estoppel issues would not arise if orders were made for the determination of separate questions in only the 2004 proceedings, particularly if their determination resulted in final judgment. He did later observe that:

‘The procedure that my learned friend wants really boils down to this: Let us have … a separate trial on power in 2004 then let us have a separate trial on discretion in 2004, and if I lose on those, then let me have a third go in 2003.’

163 Justice White dealt with this submission in the following passage of his judgment:

“[77] There are two answers to the defendant’s submission that the plaintiffs acted deliberately, or that they have not demonstrated that they acted inadvertently, in proposing the entry of judgment for the defendant.

[78] The first answer is that, whatever the subjective state of mind of the plaintiffs or their legal representatives, the judge making the order did so without adverting to the possible consequence that entry of judgment in favour of the defendant might enable it to raise arguments based on principles of res judicata or estoppel extending beyond the matters directly involved in answering the separate questions. The inherent jurisdiction, and the jurisdiction under the slip rule, is available to correct errors where the order does not reflect the intention of the judge making it. (This may include errors to reflect what the judge’s intention would have been had the particular matter been addressed when the original orders were made, but were not addressed because of an accidental slip or omission). Subject to the other matters which were argued, the jurisdiction arises once it is demonstrated that the orders made did not reflect Austin J’s intentions. It is a different question whether, as a matter of discretion, the jurisdiction should not be exercised if, when they proposed the order for entry of judgment for the defendant, the plaintiffs acted deliberately, in the sense that they gave consideration to the possibility of estoppel defences arising from the entry of judgment, but dismissed them. The jurisdiction arises from the fact the order does not reflect the intention of Austin J, who did not consider that question.

[79] The second answer to this submission is that, during the course of oral submissions, Mr Bathurst QC made it clear that the defendant did not suggest that counsel for the plaintiffs, when the latter suggested that judgment be entered for the defendant, had given consideration one way or the other as to what the effect of the judgment would be.”

164 In my opinion, Justice White’s reasons are compelling. There was no “deliberate” decision of a character which could render the conduct of Goldman Sachs or of Austin J in propounding or making the orders other than “accidental”.

165 Newmont’s submission that the evidence was inadequate to conclude that the conduct was “accidental” not “deliberate” should be rejected. Justice White did not need any of the Goldman Sachs’ legal representatives to say, in terms, that their conduct was a slip or omission. That really was quite obvious, not least because of the fact that the 2004 proceedings were instituted for the specific purpose of determining the formal defect issue. Mr Wood’s submission that the 2004 proceedings should be characterised primarily as an action for the debt should be rejected.

166 With respect to the characterisation of the conduct of Austin J this submission, also, is a variant of the “unintended or unforeseen” consequences submission, which I have rejected above. A judgment or order may be an “error” arising from an “accidental slip or omission” because of unintended or unforeseen consequences.

The Exercise of the Discretion

167 In the alternative, Newmont challenges the exercise by White J of the discretion to make an order, whether in the inherent jurisdiction or pursuant to the slip rule. There are significant restrictions on this Court interfering with such a decision. However, those restrictions are of little moment here. His Honour was plainly right.

168 His Honour set out the reasons why this jurisdiction should be exercised “sparingly”. He gave particular attention to the need for “finality of litigation”. That is a consideration entitled to considerable weight in the usual case. This, however, is not the usual case. The 2004 proceedings were a vehicle designed for a particular purpose, to decide a separate question which could not be decided separately in the 2003 proceedings. I have never encountered such proceedings before. In form, they were proceedings for a debt. In substance, they were a vehicle for determining the formal defect issue. The answers to the separate questions have the appropriate degree of finality under Justice White’s amended order.

169 In the present case White J noted that, although the orders he would make would mean that the 2004 proceedings had not been finally determined, no further litigation under the rubric of those proceedings was in fact “to be expected”. That is still the case. Whether an estoppel arises which could prevent the formal defect issue being re-agitated – as I believe it would – is not a matter of any practical significance and need not be decided. For purposes of the exercise of the discretions, White J proceeded on an appropriate basis.

170 His Honour said the following in the course of giving reasons for the exercise of his discretion:

“[116] Notwithstanding the discretionary reasons advanced for not making the order sought, and the need for caution in exercising the jurisdiction under the slip rule, I think the jurisdiction should be exercised in this case. Not to correct the order so as to give effect to Austin J’s intention would be to expose the plaintiffs to the risk that there would be no adjudication upon their substantive grounds for challenging the deeds of company arrangement. The amounts involved are very substantial. It was not only his Honour’s understanding, but also the plaintiffs’ intention, as made known to the defendant, that the 2004 proceedings were brought as a convenient vehicle for determining separate issues which could not be determined separately in the 2003 proceedings, and with the intention that if those questions were determined favourably to the defendant, the 2003 proceedings would proceed. That this was the limited purpose of the 2004 proceedings appears from the transcript of the directions hearing of 27 April 2004, referred to in para [14] above, and from subsequent exchanges referred to in paras [31] and [39] above. That was how his Honour viewed the matter.

[117] In those circumstances, it is fair and just that the plaintiffs not face the risk of being shut out, by the nature of the orders made consequentially upon the determination of the separate questions, from litigating in the 2003 proceedings whatever of the grounds are properly open to them having regard to their conduct of the 2004 proceedings and the answers to the separate questions.

[118] Carelessness of the plaintiffs’ legal representatives, whilst not to be encouraged, should not prevent the controversy from being determined in the way Austin J, who was case managing both proceedings, intended. The potential injustice to the plaintiffs if they are shut out from litigating such matters by the consequential order made on the answering of the separate questions outweighs the discretionary considerations advanced by the defendant.”

171 Newmont relied on the approach to the exercise of a discretion set out in the joint judgment of Wilcox and Allsop JJ in Hanave Pty Ltd v LFOT Pty Ltd [2004] FCAFC 180; 136 FCR 566. In that case the successful applicant had failed to make a claim for interest. The Full Court found that the first instance judge having determined that there had been an accident slip or omission had failed to consider whether the case was an appropriate one to exercise the discretion. In that context Wilcox and Allsop JJ said at pars [4]-[5]:

“[4] The nature and extent of the desired variation of the judgment, the delay in bringing the variation forward, the explanation going to the existence of the accidental slip or omission and for the delay are fundamental considerations. We prefer not to express a view on whether what occurred here, to the extent that the evidence discloses it, was an ‘accidental slip or omission’. Even assuming it to be such, it was born of an apparent ignorance of the basis for any claim for prejudgment interest for months after the case was over and the orders entered. Litigation is a costly and stressful undertaking. Whilst procedure should never be an end in itself, the necessity to follow and apply the rules of Court and the prevailing statutes dealing with the conduct of litigation promotes a degree of regularity and certainty necessary for the fair and predictable conduct of litigation. Once litigation is over people should generally consider themselves free from further agitation of an already quelled controversy. This is the policy of finality of litigation. Exceptions to the policy such as in O 35, r 7(3) are designed to permit justice and fairness in the particular case, in appropriate circumstances. Here, in our view, the circumstances of the delay, the ignorance of the persons involved and the absence of any real inadvertence (as opposed to ignorance) stretch significantly the notion of ‘accidental slip or omission’. Even assuming the facts reveal such (which we doubt, but do not decide), they point inexorably in our view to the inappropriateness of exercising the discretion to apply O 35, r 7(3).

[5] There was no real evidence of an accident, slip or omission. Mr Burke gave evidence that the first time he turned his mind to prejudgment interest ‘was when I wrote the letter in September 2000’. This was 10 months after the primary judge’s order that Hanave recover judgment against LFOT and Mr Tressider in the sum of $750,000 and that they have judgment for $375,000 against Mr Burke on the cross-claim; and seven months after the entry of the orders. It is an example as much of a lawyer not understanding, through his ignorance of basic procedure, what claims can be made on behalf of his client, as it is of an accidental slip or omission. To permit parties in such circumstances to disturb the finality of the record would be to undermine significantly and detrimentally the policy of finality of litigation. This is not a conclusion that we draw based on any pleaded or asserted personal stress of the cross-appellants, though if that were present it would be relevant. Rather, it would, in our view, undermine and erode the respect for finality of litigation to exercise the power in O 35, r 7(3) in the circumstances displayed here.”

172 Mr Wood placed particular reliance on the proposition in this judgment about the absence of any evidence on the part of legal practitioners if conduct of such practitioners is to be relied upon. I should note that it does not appear that the High Court decision in Ivanhoe was drawn to the Court’s attention in Hanave. There is no suggestion that any such evidence was adduced in that case.

173 Furthermore, White J expressly addressed the state of the evidence in the following way:

“[107] Were I of the view that, when the order was made on 7 April 2005, the plaintiffs' legal representatives had given consideration to the possible consequences for the 2003 proceedings of judgment being entered for the defendant in the 2004 proceedings, I would not exercise the discretion to set aside or vary the order, notwithstanding that its ramifications did not reflect the intentions of Austin J. The plaintiffs did not adduce evidence as to what consideration their legal representatives gave to that question prior to the hearing on 7 April 2005. However, I think it highly unlikely that if the matter had been considered, the plaintiffs' legal representatives would have proposed the order they did. I bear in mind that more than six months had passed since the hearing of 22 October 2004. Mr Bathurst QC accepted before me that the evidence did not permit him to suggest that the plaintiffs' counsel gave consideration, one way or the other, to what the effect of the judgment would be on the 2003 proceedings.

[108] However, it is still necessary to take into account that the plaintiffs and their legal representatives were on notice of the point, and that they failed to take any steps to address it, but rather themselves proposed the order for judgment in favour of the defendant.”

174 I can see no error in this analysis. There is nothing inconsistent with the reasoning in Hanave v LFOT.

175 Mr Wood further submitted that there was no proper basis for an inference of the character that Justice White drew at [118], that Goldman Sachs' lawyers had been “careless”. He relied on the statements made by the legal representatives of Goldman Sachs to the effect that the claims for estoppel and res judicata by Newmont were baseless and on the failure to approach the Court of Appeal at the time of the appeal with respect to the orders. Mr Wood submitted that Mr Bathurst’s concession did not fill an evidentiary gap on a point upon which Goldman Sachs bore the onus of proof.

176 I have already indicated at [165] above that the whole of the evidence, particularly the purpose of the 2004 proceedings, makes it plain that the conduct of Goldman Sachs’ representative was not deliberate. The same analysis applies to the issue of “carelessness”.

177 The reference to “carelessness” in [118] of the reasons of White J set out at [169] above, does not appear to be a matter to which his Honour gave significant weight in the exercise of the discretions. In any event, his Honour’s conclusion was correct. His Honour had earlier made a number of references to the degree of risk to which Goldman Sachs was exposed by reason of the structure and outcome of the 2004 proceedings. The confidence displayed by the legal representatives of Goldman Sachs, in the light of his Honour’s assessment of those risks, was evidence of, rather than inconsistent with, carelessness.

178 As I have already said, Justice White correctly concluded, indeed this was not challenged, that it was the intention of both Austin J and the parties, that the 2004 proceedings should be a vehicle to determine the formal defect issue. The risk that the orders actually made could go further than that was a proper basis for the exercise of the discretion under the slip rule. The same is true, perhaps even more clearly, with respect to the exercise of the discretion in the inherent jurisdiction. I note that the observations in Hanave v LFOT were not concerned with the inherent jurisdiction.

179 Cotton LJ’s conclusion in Mellor v Swire supra at 245 is applicable to the exercise of the discretion to make a correcting order under both the inherent jurisdiction and the slip rule:

“We ought not … to allow this record to stand in such a form as that it may be contended that it has decided questions which were never before us, and which we never meant to decide.” [at 245]

180 To permit Newmont to assert that the 2003 proceedings have been, in substance, determined, when important issues raised in those proceedings have never been the subject of consideration, in a manner contrary to the clear intention of the Court when determining the 2004 proceedings, would perpetrate a manifest injustice on Goldman Sachs. Justice White correctly exercised each jurisdiction.

Conclusion

181 Since writing the above I have read the judgments of Santow JA and Handley AJA in draft. I agree with Handley AJA.

182 Satellite litigation and delay should be avoided with respect to both the inherent jurisdiction and the slip rule. I agree with Handley AJA that the judge who made the orders is overwhelmingly the preferable person to make the corrections. That s/he may be influenced by, and even express, her or his subjective intention is not a ground for disqualification.

183 It is not necessary to deal with the cross-appeal.

184 The orders I propose are:

1 Leave to appeal granted.

2 Orders of White J varied by deleting the words “Declare that” in each of Order (1)(i) and (ii) and capitalising the next letter.

185 SANTOW JA: I agree with Spigelman CJ.

186 I also agree with the supplementary observations of Handley AJA, save as to one aspect concerning Austin J’s self-disqualification. I respectfully differ from the observation that Austin J should not have recused himself.

187 I consider that Austin J’s decision to recuse himself was properly reached. His Honour acknowledged in his disqualification judgment of 18 July 2006 [2006] NSWSC 720, that he had made various observations in course of preliminary argument. His Honour clearly took the view that a fair-minded lay observer might reasonably apprehend that he might not bring an impartial and unprejudiced mind to the exercise of his discretion (assuming he had such discretion, this being also in contest) to correct his orders so they accorded with his and the court’s intention. Essentially the ground for disqualification was prejudgment based on observations indicating a desire, even a strong desire, to correct his orders, before he had heard argument as to why he should not. I give just one example later.

188 The case put by Mr Bathurst QC for Newmont that Austin J disqualify himself was expressly not based on any reason in principle why Austin J should be disqualified from determining the capacity question. Nor as Mr Bathurst QC emphasised, was there any challenge to Austin J’s statement of what his actual or subjective intention was in making the original orders as regards the scope of any potential res judicata or issue estoppel.

189 The observations to which I refer are exemplified by that quoted from [25] of the disqualification judgment:

res judicata

190 These observations were said to indicate prejudgment on the issue of discretion, a proposition which, from a perception viewpoint only, Austin J acknowledged in recusing himself.

191 The principles for recusal were recently again stated by the High Court in Ebner v Official Trustee in Bankruptcy (2000) 205 CLR 337 at [19] and [20] quoted below, in the joint judgment of Gleeson CJ and McHugh, Gummow and Hayne JJ:

“[19] Judges have a duty to exercise their judicial functions when their jurisdiction is regularly invoked and they are assigned to cases in accordance with the practice which prevails in the court to which they belong. They do not select the cases they will hear, and they are not at liberty to decline to hear cases without good cause. Judges do not choose their cases; and litigants do not choose their judges. If one party to a case objects to a particular judge sitting, or continuing to sit, then that objection should not prevail unless it is based upon a substantial ground for contending that the judge is disqualified from hearing and deciding the case.

192 Had Austin J not made the observations earlier referred to, I would respectfully agree with what is said by Handley AJA about self-disqualification being wrong in a case such as this. But given such observations as Austin J did make, understandable as they were, I consider that, faced with a not insubstantial objection to hearing the matter on the basis of prejudgment, it was properly open to his Honour to take the course he did. However, I would categorise this case as near to the second category in Ebner at [20], where the matter was one of real doubt rather than being a clear-cut case of apprehended bias.

193 It may be said that whatever may have been the case before this appeal agitated the issue of the court’s power, including under the slip rule, to correct its completed orders to accord with the court’s true intention, the position should now be regarded as settled. Were a judge in the future to find that power put in contest in a case where the position was not otherwise unclear, I would not wish these remarks to suggest that prejudgment requiring disqualification would necessarily be evinced by similar such observations. Courts should not find themselves constrained, for fear of prejudgment, from affirming the obvious in argument nor at least provisionally indicating an intention in a procedural matter, merely because either is put in contest. The hypothetical fair-minded lay observer is more sophisticated than that.

194 HANDLEY AJA: In this matter I have had the benefit of reading the reasons for judgment of the Chief Justice in draft. I agree with his reasons and the orders he has proposed and do not wish to ad anything on the matters he has dealt with. I wish however to add some brief supplementary remarks.

195 The motion to rectify the orders of the Court initially came before Austin J who later disqualified himself. In my judgment his ability to bring an impartial and unbiased mind to the resolution of the questions raised by the notice of motion was not impaired by the fact that he had case managed and heard the 2004 proceedings. His view of the merits of the position of the Goldman Sachs parties on the procedural questions was based on his knowledge of the case and not on any impermissible pre-judgment.

196 Austin J was no more disqualified from dealing with the motion than he was from making final orders pursuant to his reasons for judgment. Under the slip rule, UCP 36.17 the Court is even entitled to correct its judgment of its own motion. He had a duty under s.56(2) of the Civil Procedure Act to facilitate the just, quick, and cheap resolution of the motion. He was uniquely qualified to hear and determine it and his self disqualification caused unnecessary delay, additional expense, and a duplication of judicial resources.

197 The other matter on which I would like to comment is the supposition that the order for the dismissal of the 2004 proceedings made on 7 April 2005 supported a plea of res judicata or Anshun estoppel which extended beyond the formal defect issue that Austin J had actually determined.

198 The Court which has to consider such questions must examine the reasons for judgment of the Court which made the decision relied on. This is particularly important where the earlier proceedings were dismissed. In such a case the res judicata estoppel is limited to the actual ground or grounds given by the Court in its reasons for making the order dismissing the proceedings. The dismissal will not create an estoppel on other grounds which could have, but did not, lead to that dismissal. It will be sufficient to refer to three cases to support this proposition. In Blair v Curran (1939) 62 CLR 464, 531 – 2 Dixon J said:

“A judicial determination directly involving an issue of fact or of law disposes once for all of the issue, so that it cannot afterwards be raised between the same parties or their privies. The estoppel covers only those matters which the prior judgment …” necessarily established as the legal foundation or justification of its conclusion … Where the conclusion is against the existence of a right or claim which in point of law depends upon a number of ingredients or ultimate facts the absence of any one of which would be enough to defeat the claim, the estoppel covers only the actual ground upon which the existence of the right was negatived.”

199 In Moss v Anglo-Egyptian Navigation Co. (1865) LR 1 Ch Ap 108, 114 – 6 Lord Cranworth LC said:

“Now there is no doubt that a question once adjudicated upon cannot be again brought in question except by … appeal to a higher Court … It would not have been sufficient … to plead the former suit and the decree of dismissal, it would have been necessary to couple with that an averment of facts sufficient to show that the question raised in the second suit had been adjudicated upon in the first … This is not … a technical rule at all, but it is one of substance, and unless it is strictly adhered to, Plaintiffs who have a clear title to relief on account of the breach of an agreement, may, by failing to prove a breach, lose all right to complain of future breaches … in pleading a former suit as a bar, it is not sufficient to show that the bill was dismissed, but you must plead, further, that which will show that the same matter in dispute in the subsequent suit was res judicata in the first.”

200 In Vitosh v Brisbane City Council (1955) 93 CLR 622 an owner of land affected by a resolution of the council establishing a residential district applied to it for an exemption to enable him to erect a building for the purpose of a prohibited trade. When this application was refused he brought proceedings for a writ of mandamus to compel the council to exercise its discretion under the resolution but failed. He then brought proceedings challenging the validity of the resolution but was met with a plea of res judicata based on the dismissal of his mandamus proceedings. The Court in its joint judgment said at 628 – 9:

“It is now said that the proceedings by prerogative writ of mandamus operate by way of issue estoppel to preclude the Plaintiff from succeeding in this action on the ground that the resolution was invalid. It was said that the issue of the validity of the resolution was decided against him. We think that this argument is misconceived. The Plaintiff’s application for a writ of mandamus assumed the validity of the resolution and upon that assumption the Plaintiff sought an order commanding the exercise of the council’s discretion under the resolution; but no issue arose as to the validity of the ordinance or of the resolution. The Plaintiff is not estopped by his having proceeded on the assumption that he was bound by the resolution under the ordinance.”

201 The 2004 proceedings alleged that the Plaintiffs were creditors with a claim greater than that permitted by the deed and that they had standing to challenge the deeds of company arrangement because of formal defects in the proceedings. The proceedings were conducted on that assumption but no issue arose relating to the standing of the Plaintiffs or their entitlements under the hedging contracts and Austin J did not decide any such question.

202 There was also no possible foundation for an Anshun estoppel. The other issues were already raised in the 2003 proceedings, and it would not have been reasonable for the Goldman Sachs parties to attempt to litigate them in the 2004 proceedings which were always intended to raise a discrete issue to be determined separately from the 2003 proceedings.

203 In my judgment, although the orders as entered should have been expressed differently, they did not create either res judicata estoppel relied on by the Appellant. The orders proposed by the Chief Justice should be made.

**********

Citations

Newmont Yandal Operations Pty Ltd v The J Aron Corporation and The Goldman Sachs Group Inc [2007] NSWCA 195

Most Recent Citation

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Statutory Material Cited

4

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

Adam P Brown Male Fashions Pty Ltd v Philip Morris Inc [1981] HCA 39

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CITATION:	Newmont Yandal Operations Pty Limited v The J. Aron Corporation & The Goldman Sachs Group, Inc & 3 Ors [2007] NSWCA 195
HEARING DATE(S):	10 May 2007
JUDGMENT DATE:	10 August 2007
JUDGMENT OF:	Spigelman CJ at 1; Santow JA at 185; Handley AJA at 194
DECISION:	1 Leave to appeal granted; 2 Orders of White J varied by deleting the words “Declare that” in each of Order (1)(i) and (ii) and capitalising the next letter; 3 Appeal dismissed with costs.
CATCHWORDS:	PROCEDURE – Judgements and orders – Amending, varying and setting aside – application to set aside order — where order had consequences in related proceedings — defence of res judicata or estoppel - PROCEDURE – Judgements and orders – Amending, varying and setting aside – inherent power to amend to give effect to intention of court – where an order has unintended consequences – relevant intention is objective intention of Court - PROCEDURE – Judgements and orders – Amending, varying and setting aside – Correction under slip rule - Uniform Civil Procedure Rules 2005 (NSW), r 36.17 – where order erroneously resolves an issue not adjudicated upon - PROCEDURE – Courts and judges generally – Judges – Disqualification for interest or bias – capacity of judge to hear application to amend order s/he has made - WORDS AND PHRASES - “dispose”, “error”, “correction”
LEGISLATION CITED:	Civil Procedure Act 2005 (NSW), s56 Supreme Court Act 1970, s23 Uniform Civil Procedure Rules 2005 (NSW), r 36.16, 36.17 Federal Court Rules, Order 35 r 7
CASES CITED:	Adam P. Brown Male Fashions Pty Ltd v Phillip Morris Inc (1981) 148 CLR 170 Ainsworth v Wilding [1896] 1 Ch 673 Bailey v Marinoff (1971) 125 CLR 529 Bass v Permanent Trustee Co Ltd (1999) 198 CLR 334 Batistos v Road and Traffic Authority (NSW) (2006) 226 CLR 256 Blacker v National Australia Bank Ltd [2000] FCA 1011 Brambles Constructions Pty Ltd (Third Party) [1969] 2 NSWLR 279 Brew v Whitlock (No 3) [1968] VLR 504 Ebner v Official Trustee in Bankruptcy (2000) 205 CLR 337 DJL v The Central Authority (2000) 201 CLR 226 D’Orta Ekenaike v Victoria Legal Aid (2005) 223 CLR 1 Dwyer v National Companies and Securities Commission (1988) 15 NSWLR 285 Elyard Corporation Pty Ltd v DDB Needham Sydney Pty Ltd (1995) 61 FCR 385 Gikas v Papanayiotou [1977] 2 NSWLR 944 Graham Barclay Oyster Pty Ltd v Ryan (2002) 211 CLR 540 Gould v Vaggelas (1984) 157 CLR 215 Hanave Pty Ltd v LFOT Pty Ltd (2004) 136 FCR 566 Hunter v Chief Constable of the West Midlands Police [1982] AC 529 In re Swire; Mellor v Swire (1885) 30 ChD 239 In Re the Will of F.B. Gilbert (dec) (1946) 46 SR (NSW) 318 Ivanhoe Gold Corporations Ltd v Symonds (1905) 8 WALR 103 Ivanhoe Gold Corporation Limited v Symonds (1906) 4 CLR 642 Jackson v Sterling Industries Ltd (1987) 162 CLR 612 Lawrie v Lees (1881) 7 App Cas 1 L Shaddock & Associates Pty Ltd v Parramatta City Council (No 2) (1982) 151 CLR 590 Logwon Pty Ltd v Warringah Shire Council (1993) 33 NSWLR 13 Milson v Carter [1893] AC 638 Paringa Mining & Exploration Co PLC v North Flinders Mines Ltd (1988) 165 CLR 452 Pittwater Council v Moore Development Group Pty Ltd [2004] NSWCA 278 Re Future Life Enterprises Pty Ltd (1994) 33 NSWLR 559 Re Hogarth’s Estate: Crisp v Hogarth [1962] 1 Tas R 17 Reid v Howard (1995) 184 CLR 1 Storey & Keers Pty Ltd v Johnstone (1987) 9 NSWLR 446 Symonds v Ivanhoe Gold Corporation Limited (1904) 7 WAR 69 Thynne v Thynne [1955] P 272 Tringalli v Stewardson Stubbs & Collet Pty Ltd (1966) 66 SR (NSW) 335 Walton v Gardiner (1993) 177 CLR 378 Western Australia v Ward (2002) 213 CLR 1
PARTIES:	Newmont Yandal Operations Pty Limited (Claimant) The J. Aron Corporation and The Goldman Sachs Group (First Opponent) Mark Anthony Korda & Mark Francis Xavier Mentha (Second Opponent) Clynton Court Pty Limited (Subject to a Deed of Company Arrangement) (Third Opponent)
FILE NUMBER(S):	CA 40583/06
COUNSEL:	P Wood, M Henry (Claimant) B Walker SC, M Condon (First Opponent) V Whittaker (Second and Third Opponent)
SOLICITORS:	J Milner, Arnold Bloch Leibler (Claimant) M Rickmans, Abbott Tout Lawyers (First Opponent)
LOWER COURT JURISDICTION:	Supreme Court - Equity Division
LOWER COURT FILE NUMBER(S):	2407 of 2004
LOWER COURT JUDICIAL OFFICER:	White J
LOWER COURT DATE OF DECISION:	24 August 2006
LOWER COURT MEDIUM NEUTRAL CITATION:	[2006] NSWSC 849