Re Hibbard; Ex parte Playroom Pty Ltd
[1988] FCA 689
•05 DECEMBER 1988
Re: NORMAN KINGSLEY HIBBARD
Ex parte: PLAYROOM PTY LTD
No. QLD P1606 of 1987
Bankruptcy - Practice
COURT
IN THE FEDERAL COURT OF AUSTRALIA
GENERAL DIVISION
BANKRUPTCY DISTRICT OF THE SOUTHERN DISTRICT OF THE STATE OF QUEENSLAND
Pincus J.(1)
CATCHWORDS
Bankruptcy - creditor's petition adjourned - adjournment date beyond 12 months from presentation - lapsed - whether slip rule gives power to correct mistake.
Practice - slip rule - by mistake, order not asked for - whether statute prevents correction of slip.
Bankruptcy Act, 1966 ss.52(4), 52(5).
HEARING
BRISBANE
#DATE 5:12:1988
Counsel for the petitioning creditor: Mr. D.R. Cooper
Solicitors for the petitioning creditor: Morris Fletcher & Cross
Counsel for the debtor: Mr M.M. Stewart
Solicitors for the debtor: Peter J. Davis &
Associates
ORDER
The petitioning creditor's application for correction of the order of 14 October 1988 by adding to it an order under s.52(5) be dismissed;
There be no order as to costs.
NOTE: Settlement and entry of orders is dealt with in Rule 124 of the Bankruptcy Rules.
JUDGE1
This bankruptcy petition was presented on 9 November 1987 and filed on 11 November 1987. On 14 October 1988 it was adjourned to 29 November 1988, beyond the period of twelve months mentioned in s.52(4) of the Bankruptcy Act 1966, which reads as follows:
"A creditor's petition lapses at the expiration of -
(a) subject to paragraph (b), the period of 12 months commencing on the date of presentation of the petition; or
(b) if the Court makes an order under sub-section
(5) in relation to the petition - the period fixed by the order,
unless, before the expiration of whichever of those periods is applicable, a sequestration order is made on the petition or the petition is dismissed or withdrawn."
Due to a mistake, when the petition was adjourned no order was made under sub-s.(5), which reads as follows:
"The Court may, at any time before the expiration of the period of 12 months commencing on the date of presentation of a creditor's petition, if it considers it just and equitable to do so, upon such terms and conditions as it thinks fit, order that the period at the expiration of which the petition will lapse be such period, being a period exceeding 12 months and not exceeding 24 months, commencing on the date of presentation of the petition as is specified in the order."
It will be noted that the Court's power to make an order under sub-s.(5) is expressed to be limited to the period before the expiration of the first twelve months from the date of presentation of the petition.
Counsel for the petitioning creditor has argued that the Court's failure to make an order under s.52(5) was a slip capable of being corrected under the inherent jurisdiction. None of the Bankruptcy Rules provides for correction of a slip, but the power to correct orders is inherent: L. Shaddock & Associates Proprietary Limited v. The Council of the City of Parramatta (1982) 151 CLR 590 at 594. There the High Court corrected a slip by adding an order for payment of interest.
The question whether the slip rule is able to be used in such a case as this was left open by the Full Court in Re Young; Ex parte Smith (1985) 59 ALR 385 at 391. In that case, it was decided that s.33(1)(c) gives no power to extend the duration of a petition after 12 months from its presentation. The Court dealt with Re Draper; Ex parte Brosalco Pty Ltd (1983) 48 ALR 656, in which it was held that such an order for extension could possibly be based on the slip rule.
It is unnecessary, for the purpose of deciding the question whether the "slip rule" can apply after the twelve months have expired, to set out the facts of this matter in detail. It should be mentioned, however, that in unusual circumstances, an application for an adjournment of the petition was made and granted at the instance of the debtor, neither the petitioning creditor's counsel nor the Court adverting to the fact that the adjournment would take the petition beyond the twelve month period mentioned in s.52(4). Counsel for the petitioning creditor has contended that the slip rule is available to remedy the position, although the order omitted by a slip - an order under s.52(5) - was not asked for.
Shaddock's case shows that that is not fatal. There, a suit in the Supreme Court of New South Wales was dismissed after trial, but damages were assessed, including interest to the date of assessment. There was an unsuccessful appeal to the Court of Appeal, but the plaintiff succeeded on further appeal to the High Court; that Court gave judgment for the sum fixed by the trial judge, with costs. No application was then made to the High Court for interest beyond the date of assessment of damages by the trial judge; the omission on the part of the appellants' counsel was held to be accidental.
It was argued that as the High Court's judgment had been perfected it was too late to amend it, but the Court held that the case fell within the slip rule. The order made was to the effect that there be included in the High Court's order, made some considerable time previously, provision for interest.
Shaddock's case is one where the slip was of the same basic kind as here - i.e. the error was not a misrecording of the Court's intention, but due to a failure on the part of counsel to ask for an order of an ancillary kind which the Court would plainly, if asked, have made. A Court has, in those circumstances, a discretion to alter its own order, even by addition of an order not originally asked for.
Such an order is exceptional in the sense that the slip rule is one of the exceptions to the principle that an order may not be changed except on appeal: Bailey v. Marinoff (1971) 125 CLR, 529 at 539. The difficulty in the way of the application of the slip rule here is that amendment of the order for adjournment by adding an order under s.52(5) would not be merely an infringement of the (general but not absolute) rule that the Court's orders, once perfected, are final. It would also be an infringement of the requirement in s.52(5) that any order extending the petition be made before the expiration of the period of twelve months commencing on the date of presentation of the petition. It does not appear to me that, on the proper construction of s.52(5), an order for extension may lawfully be made, after the twelve months' period has ended, predated so as to fall within the twelve months.
It should be added that some reliance was placed upon the decision of the Full Court in Streimer v. Tamas (1981) 37 ALR 211, and in particular the treatment of the slip rule in that case by Sheppard J. The result of Streimer v. Tamas is able to be explained and the case is able to be reconciled with Re Young (above) on the basis that the section in question in Streimer v. Tamas was held not to require that an order for extension of time be made before the expiration of the period fixed by the statute: see p 214.9. The wording of the section which I have to apply (s.52(5)) has some resemblance to that dealt with in Streimer v. Tamas (s.41(6A)), but its effect is significantly different for present purposes.
I therefore hold, in accordance with the submissions of counsel for the debtor, that the Court has no power to remedy the mistake which was made. In case the matter goes further, I should make it clear that the case is one in which it would be appropriate to exercise the power to correct the slip, if any such power existed. It appears to me unnecessary, however, to set out the rather unfortunate facts, disclosed by the evidence, which underlie the view just expressed.
The petitioning creditor's application for correction of the order of 14 October 1988 by adding to it an order under s.52(5) will be refused, but without costs.
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