Swain v Balanced Securities Limited
[2014] NSWSC 1550
•04 November 2014
Supreme Court
New South Wales
Case Title: Swain v Balanced Securities Limited Medium Neutral Citation: [2014] NSWSC 1550 Hearing Date(s): 4 November 2014 Decision Date: 04 November 2014 Jurisdiction: Equity Division Before: Rein J Decision: Summons dismissed.
Catchwords: EQUITY - Application to set aside consent orders - Application under 'the slip rule' 36.17 of the Uniform Civil Procedure Rules 2005 - Application under the inherent jurisdiction of the Court - Where there is no ambiguity in the consent orders - Where there is no clerical mistake, error arising from an accidental slip or omission identified - Rule 36.17 not applicable in the circumstances - Where there is no conduct to invalidate the plaintiff's agreement to the consent orders Legislation Cited: Uniform Civil Procedure Rules 2005 Cases Cited: 168 Wharf St v Amstar [2005] QCA 44
Commissioner of Taxes v British Australian Wool Realisation Association Ltd [1932] VLR 109
Commonwealth v McCormack (1984) 155 CLR 277
Deputy Commission of Taxation v Healy (2003) 52 ATR 330
Gould v Vaggelas (1995) 157 CLR 215
Harvey v Phillips (1956) 95 CLR 235
L Shaddock & Associates Pty Limited v Parramatta City Council (No 2) (1982) 151 CLR 590
Newmont Yandal Operations Pty Limited v J Aron Corporation and Goldman Sachs Group (2007) 70 NSWLR 411
R v Cripps; Ex parte Muldoon [1984] 1 QB 686
Stowe v Stowe (Supreme Court of Western Australia, Full Court, 15 September 1995 and 16 October 1995)Category: Principal judgment Parties: Peter Rolf Swain (Plaintiff)
Balanced Securities Limited (Defendant)Representation - Counsel: Counsel:
M Auld (Plaintiff)
M Gilbert (Defendant)- Solicitors: Solicitors:
Delaney Lawyers (Plaintiff)
Thomson Geer (Defendant)File Number(s): 2014/193493
EX TEMPORE JUDGMENT
On 10 October 2011, I made orders in proceedings 2011/217401 Balanced Securities Limited v Warren Perry Anderson & Ors, which I shall refer to as "the Balanced Securities proceedings", as follows:
THE COURT ORDERS THAT:
Orders 1-4 be made by consent between the plaintiff and third defendant.
1. Judgment for the plaintiff against the third defendant for possession of the land contained in Certificate of Title Folio Identifier 1/570484 and known as 1145 Mulgoa Road, Mulgoa, New South Wales (the 1145 Mulgoa Road Property).
2. Leave be granted to the plaintiff for a writ of possession to issue forthwith in respect of the 1145 Mulgoa Road Property.
3. The third defendant pay the plaintiff's costs of these proceedings.
4. The Commercial List Cross-Summons filed by the first cross-claimant against the first cross-defendant be dismissed.THE COURT ALSO ORDERS THAT:
5. Mark Conlan as trustee of the estate of Warren Perry Anderson (a bankrupt) be removed as a party to this proceeding.
6. George Lopez and Evan Verge as trustees of the estate of Warren Perry Anderson (a bankrupt) be added as the fourth defendant to this proceeding, in substitution for Mark Conlan.
7. Judgment for the plaintiff against the first defendant, the second defendant and the fourth defendant for possession of the land contained in Certificates of Title Folio Identifiers 64/247308, 6/173159, 4/260373, 1/549247, 10/615085, 3/260373, 2/260373, 12/610186, 1/260373, 11/615085, 2/541825, 31/237163, 100/717549, 2/211795 and 1/570484 and known as "Fernhill", Mulgoa Road, Mulgoa, New South Wales (collectively, the Fernhill Property).
8. Leave be granted to the plaintiff for a writ of possession to issue forthwith in respect of the Fernhill Property.
9. The second defendant pay the plaintiff's costs of these proceedings.THE COURT DIRECTS THAT:
10. The listing of this proceeding on 2 December 2011 for directions be vacated.
(emphasis added).In an ex tempore judgment delivered on 10 October 2011 I noted that the third defendant, Mr Peter Rolf Swain ("Mr Swain") was represented by Mr R M O'Brien (of counsel but incorrectly described as a solicitor) and had consented to all of the orders sought by the plaintiff in its notice of motion and the summons insofar as they concerned Mr Swain. Mr Swain was at the time living in one of the properties which made up 1145 Mulgoa Road, known as "Fernhill".
Following the entry of judgment Balanced Securities had a bill of costs assessed. Mr Swain contended before the costs assessor that the costs for which he was liable only related to "the costs arising from the plaintiff's action against me in the initial proceedings" and that he should not be jointly and severally liable with Mr Anderson (who, even at 10 October 2011, had been declared bankrupt) for the balance of the costs. The costs assessor did not accept that construction of the orders and the costs payable by Mr Swain were assessed at $184,726.10 (see CB p 115) and judgment was entered on 12 November 2013 in that amount. No challenge to the assessment was ever made by Mr Swain after the assessor had made his determination.
Mr Swain was also a cross-claimant in the Balanced Securities proceedings seeking declarations in relation to his title as a lessee but also, mirroring his defence, that, inter alia, the Balanced Securities mortgage did not extend to Fernhill and was null and void.
Prior to the assessment Balanced Securities' solicitors had written to Mr Swain's solicitors encouraging the making of a proposal in relation to costs without the need for an assessment (see letter of 31 May 2012, CB p 153). Mr Swain's solicitor's response suggested that they had a view as to how the order operated which would mean that the costs payable by Mr Swain would be minimal. Balanced Securities' solicitors then wrote (see letter of 7 September 2012, at CB pages 159-160) making very clear Balanced Securities' position that Mr Swain was liable jointly and severally with the other defendants. No action was taken by Mr Swain at that time to seek to amend the orders and Balanced Securities proceeded with the costs assessment as it was required to do in the absence of agreement on costs. Mr Auld was unable to point to any evidence explaining the delay in bringing the present application. Mr Gilbert draws attention to the fact that Mr Swain is now facing bankruptcy on the petition of Balanced Securities and posits that as the explanation for the present application.
Mr Swain by his Summons now seeks the following orders:
(1)An order that order 3 of the judgment/order made on 10 October 2011 in proceedings number 2011/217401 be set aside.
(2)An order that the third defendant in proceedings number 2011/217401 pays the costs of the first defendant in proceedings number 2011/217401 insofar as those costs relate to matters determined by orders 1 to 4 only.
(3)The first defendant, in these proceedings, pay the plaintiff's costs, in these proceedings.
The plaintiff relies on:
(a)Part 36, rule 36.17 of the Uniform Civil Procedure Rules 2005 ("UCPR"); and
(b)The inherent jurisdiction of the Court.
Part 36 rule 36.17 says as follows:
36.17 Correction of judgment or order ("slip rule")
If there is a clerical mistake, or an error arising from an accidental slip or omission, in a judgment or order, or in a certificate, the court, on the application of any party or of its own motion, may, at any time, correct the mistake or error.I have received written submissions from Mr Auld of counsel who appears for Mr Swain and from Mr Gilbert of counsel who appears for Balanced Securities, and I heard further oral submissions today.
Mr Auld contends that:
(a)The orders provide a demarcation between orders which resolve the dispute between Balanced Securities and Mr Swain, orders 1 to 4 on the one hand, and order 5 to 9, which concern orders between Balanced Securities and other defendants.
(b)That because of the demarcation "these proceedings" must mean the proceedings relating to disputes between Balanced Securities and Mr Swain arising from Mr Swain's amended commercial list response and his cross-claim in the case, and those proceedings relating to the dispute between Balanced Securities and the other defendants.
(c)That there is an ambiguity in the order for costs against Mr Swain.
Mr Auld submits that support for the construction for which Mr Swain contends can be found in the pleadings, the judgment and the background to the dispute.
Part of this argument centres on the fact that Mr Swain resided in an allotment of 2 hectares pursuant to an agreement between himself and Mr Anderson whereas the total area of the property at Fernhill was 700 hectares. Mr Swain, it is said, claimed an equitable interest in the Mulgoa Road property arising from that agreement and because of improvements made to that property but did not claim to have an interest in any other part of the property and was not a party to the $31 million facility provided by Balanced Securities to Mr Anderson or the corporations he controlled.
Mr Auld makes reference to Mr Swain's affidavit, para 31, in which Mr Swain says he thought that he was liable to pay the plaintiff's costs "only as related to orders 1 to 4" (see CB p 5).
Mr Auld has made reference to a number of cases dealing with the Court's power to amend orders pursuant to the slip rule and inherent jurisdiction - particularly Newmont Yandal Operations Pty Limited v J Aron Corporation and Goldman Sachs Group (2007) 70 NSWLR 411 ("Newmont").
Mr Auld put forward the following propositions:
(1)A superior court can interpret an earlier decision by declaration "where a dispute arises relating to whether subsequent conduct is or is not within the orders contemplated".
(2)The Court has inherent jurisdiction to amend orders including on terms to avoid injustice.
(3)The Court has inherent jurisdiction to amend orders including costs order "for inadvertence of counsel": see the case of Stowe v Stowe (Supreme Court of Western Australia, Full Court, 15 September 1995 and 16 October 1995).
(4)The Court has power pursuant to the slip rule to amend orders for inadvertence of counsel: L Shaddock & Associates Pty Limited v Parramatta City Council (No 2) (1982) 151 CLR 590; Gould v Vaggelas (1995) 157 CLR 215 (from 271) and Commonwealth v McCormack (1984) 155 CLR 277 are cited in support.
(5)The Court has power to amend ambiguous orders: R v Cripps; Ex parte Muldoon [1984] 1 QB 686; Commissioner of Taxes v British Australian Wool Realisation Association Ltd [1932] VLR 109; Deputy Commission of Taxation v Healy (2003) 52 ATR 330; and 168 Wharf St v Amstar [2005] QCA 44.
Accepting all of the above propositions, as Mr Gilbert did, there are a number of matters which in my view compel rejection of the contentions advanced on behalf of Mr Swain:
(1)I do not accept that there is any ambiguity in the order.
(2)I accept that orders 1-4 are orders as between Balanced Securities and Mr Swain and orders 5-9 are orders between Balanced Securities and the other defendants but it was appropriate (particularly since one of the parties was consenting and the others did not appear) to have different orders for each set of defendants and both sets of orders provide for the defendants in each set to pay the costs of the proceedings without limitation. I am unable to accept the construction advanced on behalf of Mr Swain, which is entirely inconsistent with the words used.
(3)No clerical mistake, error arising from an accidental slip or omission has been identified and rule 36.17 therefore has no application.
(4)Mr Swain was at the hearing on 10 October 2011 represented by counsel (Mr O'Brien).
(5)The orders that were made were made by consent.
(6)The circumstances in which orders can be set aside are quite limited as Newmont acknowledged (see [29]). There is no evidence from Mr O'Brien that he meant to agree to some different orders. Indeed there is no evidence that Mr Swain informed Mr O'Brien of his understanding or instructed him to agree to orders that limited his liability for costs. Further, I should add that although there may be cases in which evidence from counsel in support of exercise of the inherent jurisdiction as to counsels' belief as to the effect of the orders made, may not be required see Newmont at [133] (where it was clear that the order made had an unintended legal consequence in respect of the other proceedings on foot), I do not think that this is such a case, since the order in question was absolutely clear in effect and could not reasonably have been viewed by counsel as having any different effect.
(7)There is nothing to suggest that there was any conduct by those representing Balanced Securities or any reason to invalidate the agreement of Mr Swain to the order: see Harvey v Phillips (1956) 95 CLR 235 at pp 243-244 on the circumstances in which consent orders can be set aside. Unilateral mistake by Mr Swain as to the meaning of the orders is not such a basis.
(8)The relevant order for costs made against Mr Swain was that sought by the plaintiff and set out in its notice of motion of 19 September 2011 and in submissions provided by counsel for the plaintiff: see CB pp 131-144, particularly para 54 of those submissions. The order for costs made reflected what Balanced Securities was seeking.
(9)Mr Swain had not only asserted that his agreement with Mr Anderson gave him an equitable interest which was entitled to priority over Balanced Securities' interest but also asserted that as a matter of construction of Balanced Securities' mortgage over all of the land it did not secure the loans between Balanced Securities and Owston Nominees No 2 Pty Ltd ("Owston") and that it was null and void. He therefore was by his defence and cross claim challenging Balanced Securities' entire claim as a means of resisting the specific claim against him, thereby exposing him to the very order for costs which was sought by Balanced Securities and made.
It follows from what I have said that even accepting (as I do) that the Court does have an inherent jurisdiction to correct an order made by consent, and even accepting that it is appropriate to exercise such jurisdiction when it is invoked after 3 years (which in the circumstances of this case I do not), I am not persuaded that there is any proper basis for the jurisdiction to be exercised here.
Conclusion
It follows, in my view, that Mr Swain's summons should be dismissed and that he should pay Balanced Securities' costs in defending the summons.
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