Re Amazon Pest Control Pty Ltd (No 2)

[2016] NSWSC 1590

Supreme Court

New South Wales

Medium Neutral Citation:	Re Amazon Pest Control Pty Ltd (No 2) [2016] NSWSC 1590
Hearing dates:	In chambers on the papers
Date of orders:	10 November 2016
Decision date:	10 November 2016
Jurisdiction:	Equity
Before:	Young AJ
Decision:	Amend order 1(a) to $1,069,125.73, order 1(b) to $488,916.48 and the last line of order 2 to “The final judgment sum is thus $1,558,042.21”.
Catchwords:	PRACTICE & PROCEDURE – slip rule – application to reduce judgment sum because of mistake in calculation – defendant became bankrupt after judgment pronounced – whether jurisdiction to make the amendment BANKRUPTCY – application to reduce judgment amount under slip rule – order made before bankruptcy – application under slip rule after bankruptcy – whether prohibited fresh step in proceeding – Bankruptcy Act 1966 (Cth) s 58(3)
Legislation Cited:	Bankruptcy Act 1966 (Cth)
Cases Cited:	ANZ Banking Group v Computer Plus [1992] 1 VR 607 Australian Broadcasting Commission v Industrial Court (SA) (1985) 159 CLR 536; [1985] HCA 71 Deighton v Cockle [1912] 1 KB 206 Doran v Isaacs (1912) 12 SR (NSW) 699
Category:	Consequential orders (other than Costs)
Parties:	2015/87126 Plaintiff: Edward Ted Lakis Defendant 1: Michael Victor Lardis Defendant 2: PestHelp Holdings Pty Ltd   2015/89913 Plaintiff: Michael Victor Lardis Defendant: Edward Ted Lakis
Representation:	Websters (for ET Lakis) David Leamey Solicitor & Barrister (for MV Lardis and PestHelp Holdings Pty Ltd)
File Number(s):	2015/87126; 2015/89913

Judgment

1. I heard these proceedings in March this year and gave the principal judgment on 12 May. I gave additional reasons when I made formal orders on 1 September 2016. Following delivery of those reasons on 1 September, it would seem that a formal order was taken out which is attached as an appendix to these further reasons.

2. Three problems have now surfaced, namely:

1. can I now under the slip rule amend the amount of the judgment by reducing the amount of $1,090,076.24 referred to in order 1(a)?

2. is the order in the appendix irregular or invalid?

3. should I deal with this matter ex parte?

3. I will deal with all three points together.

4. A problem arises because the solicitors for Mr Lakis, who seek the variation of the order, have informed the Court that their understanding is that Mr Lardis became a bankrupt on 8 September 2016.

5. Section 58(3) of the Bankruptcy Act 1966 (Cth) says:

“Except as provided by this Act, after a debtor has become a bankrupt, it is not competent for a creditor:

…

(b) except with the leave of the Court … to commence any legal proceeding in respect of a provable debt or take any fresh step in such a proceeding.”

Is then an amendment of the judgment under the slip rule after it has been entered a fresh step which cannot be taken without leave of a federal court?

6. I have found no authority directly on the point. However, there are three cases dealing with fresh steps in proceedings decided outside the area of bankruptcy, though both are referred to in the principal bankruptcy practice. These are Deighton v Cockle [1912] 1KB 206 and ANZ Banking Group v Computer Plus [1992] 1 VR 607.

7. There is no doubt that signing judgment is a fresh step: see Doran v Isaacs (1912) 12 SR (NSW) 699. However, the cases show that the significant date is the date on which the order for judgment is made and a judgment that is entered pursuant to an order that has already been made is not a fresh step: see Deighton’s case at 209 referred to by Wilson J in Australian Broadcasting Commission v Industrial Court (SA) (1985) 159 CLR 536 at 539. In the instant case, the order authorising judgment was made on 1 September and the bankruptcy did not occur until 8 September. There was accordingly no bar to signing judgment.

8. However, was the document in the appendix to these reasons a proper signing of judgment?

9. The document should never have been entered as a formal judgment. It is just a copy of the short minutes that were handed up as adjusted after argument. Formal judgments must tell the parties and the world what it is that the Court has entered. There is no problem with orders 1(a) and (2) as entered or with orders 5, 10 and 11. However, it is not good practice to record in a formal judgment that interest on the damages is a sum to be calculated. The judgment should contain the actual figure. Putting aside bankruptcy in the normal course of events if the sum is not paid then the Sheriff has to execute and obtain no more than the amount of the judgment and interest. The Sheriff must know the sum and not just be told that interest is to be calculated.

10. It is also bad practice to say that no order is to be made in respect of numbers 4, 6, 7, 8 and 9. No-one would know what that meant and, indeed, it has no significance. If it is required to put in a formal judgment that a judge has considered a matter but declined to make any order, then that should be expressly stated.

11. Accordingly, it seems to me that the appendix should never have been filed. However, that does not mean that it is necessarily invalid. The legislation makes a clear distinction between something which is irregular and something which is invalid and, in my view, the judgment in appendix 1 is merely irregular.

12. This being so, and there is a formal judgment on the Court record, is an order under the slip rule reducing the amount of the judgment a fresh step?

13. There is some authority for the proposition that fresh step means any step which advances the proceeding towards judgment and Deighton’s case and the ANZ Banking case support that proposition. However, to my mind there may be situations where taking a step in the proceedings after judgment has been entered could be a fresh step. I thought it might be prudent to ask the solicitors for Mr Lakis to give me some assistance on this matter. However, I declined to do that because it seemed to me that the costs in these proceedings were already very high. The chances of there being a recovery did not appear, on the surface, to be that great and I did not wish further expensive research to be done at the client’s expense. It seems to me that the maxim “the greater includes the less” should come into play. On 1 September I authorised judgment for a larger sum than is now sought and I think modifying the judgment to reduce the sum is not taking a fresh step in the proceeding and, accordingly, is not barred by the Bankruptcy Act.

14. Accordingly, I amend pursuant to the slip rule, the judgment so that order 1(a) in the appendix should be $1,069,125.73 and in 1(b) the figure should be $488,916.48 and that the last line of order 2 should read “The final judgment sum is thus $1,558,042.21”.

15. I should note that there was liberty to apply with respect to interest calculations.

16. It is not known whether Mr Lardis still retains solicitors or what interest he has now that he has become bankrupt. However, as this order has been made ex parte under the rules of court, he or his trustee would have liberty to apply to set aside this further order. As the judgment sum is now less, I doubt whether it would be commercially prudent to take this step but it is available if the appropriate people want to do it.

APPENDIX

17. Orders of 1 September 2016:

1. Order that Michael Victor Lardis, the First Defendant in proceedings No. 2015/87126 (“the Lakis proceedings”) and the Plaintiff in proceedings No. 2015/89913 (“the Lardis proceedings”) pay Amazon Pest Control Pty Ltd (In Liquidation) CAN 092 833 531 (“the Company”)

(a) The sum of $1,090,076.24.

(b) Interest on the damages – a sum to be calculated.

2. Note that the sum in order 1(a) is made up as follows:

(a) $861,076.55 (on account of cash);

(b) $72,569 (on account of Company cheques);

(c) $26,150 (on account of personal ATM withdrawals);

(d) $68,757 (on account of Company credit card);

(e) $11,418.62 (on account of Company debit card);

(f) $15,251 (on account of Company EFTPOS card) and

(g) $13,633 (on account of cash withdrawals from company credit card, ATM, debit card and EFTPOS).

The final judgement sum is (a) plus (b) above.

3. The amount in order 1(b) is to be calculated in accordance with the provisions of s 100 of the Civil Procedure Act 2005 up to 1 September 2016 for each of the items referred to in 2 above.

4. No order.

5. Edward Ted Lakis pay the Company $30,000.

6. No order.

7. No order.

8. No order.

9. No order.

10. Liberty to restore on 3 days’ notice if the interest calculations in 3 are not agreed.

11. I stay the orders until Tuesday 13 September 2016 so that the parties may apply to the Court of Appeal on Monday 12 September for a further stay.

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Decision last updated: 23 April 2018