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Griffiths v Boral Resources (Qld) Pty Limited [2006] FCAFC 149 (20 October 2006)

Last Updated: 23 October 2006

FEDERAL COURT OF AUSTRALIA

Griffiths v Boral Resources (Qld) Pty Limited [2006] FCAFC 149

PRACTICE AND PROCEDURE – the slip rule – whether the slip rule authorizes the making of an order after the expiration of the statutory time limit for doing so – whether the power for doing so is restricted to a superior court of record

PRACTICE AND PROCEDURE – whether ‘reserving judgment’ is an order in itself – whether ‘reserving judgment’ is an order of adjournment

WORDS AND PHRASES – ‘judgment or order’, ‘adjourn’, ‘adjournment’

Bankruptcy Act 1966 (Cth) ss 43, 52(4), 52(5)
Federal Magistrates Act 1999 (Cth) ss 42, 43, 90
Corporations Act 2001 (Cth) s 459R
Federal Court of Australia Act 1976 (Cth) ss 4, 59(4)
Legislative Instruments Act 2003 (Cth) s 13
Judiciary Act 1903 (Cth)
Federal Proceedings (Costs) Act 1981 (Cth)

Federal Court Rules, O 1 r 4, O 19 r 7, O 30 r 3, O 35 r 7(3)
Federal Magistrates Court Rules 2001 rr 1.05, 16.05, 16.5, 16.07, 16.08

Supreme Court Act 1867 (Qld) ss 24, 30, 33

Elyard Corporation Pty Ltd v DDB Needham Sydney Pty Ltd (1991) 61 FCR 384 questioned
Gikas v Paparagiouto (1977) 2 NSWLR 945 cited
R v Essex Justices; ex parte Final [1963] 2 QB 816 cited
Bankstown Grammar School Ltd v Park [2000] FCA 1205 discussed
Re Howell; ex parte Deputy Commissioner of Taxation (1996) 70 FCR 261 considered
Komesaroff v Law Institute of Victoria (1997) FCA 965 considered
Re Langridge; ex parte Bennett Carroll and Gibbons (1998) FCA 879 considered
Matthews v Collett [2000] FCA 224 discussed
Re Young; ex parte Smith (1985) 5 FCR 204 cited
Ah Toy v Registrar of Companies (1985) 10 FCR 280 cited
Minister for Works (WA) v Civil and Civic Pty Ltd [1967] HCA 18; (1966-67) 116 CLR 273 considered
Driclad Pty Ltd v Commissioner of Taxation [1966] HCA 59; (1968) 121 CLR 45 discussed
Moller v Roy [1975] HCA 31; (1975) 132 CLR 622 discussed
Saffron v The Queen [1953] HCA 51; (1953) 88 CLR 523 considered
The President of India v The Moor Line Limited (No 2) [1958] HCA 25; (1955-1958) 99 CLR 212 cited
Westpac Banking Corporation v E & W Jury Pty Ltd (1998) 16 ACLC 540 discussed
Whitaker v Wisbey (1852) Cox’s CC 107 cited
Yapp v Williams (1901) WN 91 13 ALR 645 considered
In re Keystone Knitting Mills’ Trade Mark [1929] 1 Ch 92 cited
Thunderbird Products Corporation v Thunderbird Marine Products Pty Ltd [1974] HCA 51; (1974) 131 CLR 592 cited
R v McGregor (1977) 13 ALR 645 cited

E Campbell, ‘Revocation and Variation of Administrative Decisions’, (1996) 22(1) Mon LR 30
K Mason (now President of the News South Wales Court of Appeal), ‘The Inherent Jurisdiction of the Court’, (1983) 57 ALJ 449

Hale’s, The History of the Pleas of the Crown, vol II, E. Lynch, 1778
The Oxford History of the Laws of England, vol 6, Oxford University Press, 2003
Holdsworth’s, A History of English Law, vol 1, Sweet and Maxwell, 1982
The Supreme Court Practice 1987 (the White Book), vol 1, Sweet and Maxwell, 1987
Osborn’s Concise Law Dictionary, 10th ed, Sweet and Maxwell, 2005
Jowitt’s Dictionary of English Law, 2nd ed, Sweet and Maxwell, 1977
B A Garner, A Dictionary of Modern Legal Usage, 2nd ed, Oxford University Pres, 1995
Black’s Law Dictionary, 8th ed, West Publishing Company, 2004

DAVID JAMES GRIFFITHS v BORAL RESOURCES (QLD) PTY LIMITED

QUD 311 OF 2005

SPENDER ACJ, DOWSETT AND COLLIER JJ
20 OCTOBER 2006
BRISBANE

IN THE FEDERAL COURT OF AUSTRALIA
QUEENSLAND DISTRICT REGISTRY	QUD 311 OF 2005

ON APPEAL FROM THE FEDERAL MAGISTRATES COURT OF AUSTRALIA

BETWEEN:	DAVID JAMES GRIFFITHS Appellant
AND:	BORAL RESOURCES (QLD) PTY LIMITED Respondent

JUDGES:	SPENDER ACJ, DOWSETT AND COLLIER JJ
DATE OF ORDER:	20 OCTOBER 2006
WHERE MADE:	BRISBANE

THE COURT ORDERS THAT:

1. The appeal be allowed.

2. The orders made on 2 August 2005 be set aside.

3. The respondent pay the appellant’s costs of the appeal and of the proceedings below.

Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA
QUEENSLAND DISTRICT REGISTRY	QUD 311 OF 2005

ON APPEAL FROM THE FEDERAL MAGISTRATES COURT OF AUSTRALIA

BETWEEN:	DAVID JAMES GRIFFITHS Appellant
AND:	boral RESOURCES (QLD) PTY LIMITED Respondent

JUDGES:	SPENDER acj, DOWSETT AND COLLIER JJ
DATE:	20 OCTOBER 2006
PLACE:	BRISBANE

REASONS FOR JUDGMENT

THE COURT:

BACKGROUND

1 This case concerns the use of the so-called "slip rule" to authorize the making of an order after expiry of a statutory time limit for so doing.
2 Subsections 52(4) and (5) of the Bankruptcy Act 1966 (Cth) (the "Bankruptcy Act") provide as follows:

‘52(4) 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 subsection (5) in relation to the petition – the period fixed by that 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.

52(5) 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.’

3 On 11 September 2003 the respondent presented a petition against the appellant. On 11 November 2003 a federal magistrate heard the petition and reserved his decision. In some places in the record, it is erroneously suggested that the hearing occurred two days later, on 13 November 2003. On 15 March 2005 his Honour indicated that he was minded to make a sequestration order, subject to one matter. At [22]-[23] he observed:

‘22. An issue arises which was not the subject of submission. The Creditor’s Petition in this matter has expired - between the time I heard this matter in November 2003 and delivery of this Reasons. This was due to inadvertence by the Court - had I been aware (as perhaps I should have) that the Petition was to expire, then delivery of these Reasons would have been expedited.

23. In the circumstances, I am satisfied that the Court may have the power to extend the life of the Petition for the reasons given by Spender J in Matthews v Collett (2000) FCA 224 (see also Elyard Corporation Pty Ltd v DDB Needham Sydney Pty Ltd (1995) 133 ACR 206; Re Langridge; ex parte Bennett Carroll Gibbons (1998) FCA 879). Before pronouncing an order for sequestration, I propose to give the parties an opportunity to make submissions on this issue.’

4 On 19 April 2005, the magistrate heard further submissions and, on 2 August 2005, pronounced the following orders:

‘1. The order of 11 November 2003 reserving the decision to a date to be advised be varied by the addition of an order that the period at the expiration of which the petition will lapse be a period of twenty-four (24) months commencing on the date of presentation of the petition;

2. A sequestration order be made against the estate of David James Griffiths;

3. The applicant’s costs of and incidental to the petition (excluding the attendance in court for the hearing on 15 March 2005 and 19 April 2005 and the delivery of submissions in accordance with the order of 15 March 2005) and other reserved costs, if any, be taxed in accordance with the Federal Court Rules and paid from the estate of the respondent in accordance with the Bankruptcy Act 1966 (Cth).’

5 His Honour gave reasons for purporting to vary his "order" of 11 November 2003. At [1]-[3] he outlined the relevant facts as follows:

‘1. On 11 November 2003, I heard evidence in respect of the contested creditor’s petition. At the conclusion of the hearing, I adjourned the matter to a date to be fixed to consider my decision. This is the effect of "reserving judgment".

2. As identified in reasons published on 15 March 2005 (paragraphs 22 to 23), when preparing those reasons I became aware that the creditor’s petition had expired on 11 September 2004. I gave the parties an opportunity to make further submissions on whether I had the power under the "slip rule" to make an order remedying the position.

3. The petition lapsed on 11 September 2004 and it was not possible for me to exercise the power under s 52(5) of the Bankruptcy Act since, clearly under that provision, the power can only be exercised before the petition lapses.’

THE APPEAL

6 The appellant appeals from that decision on the grounds that:

• the petition lapsed on 11 September 2004 and could not thereafter be extended; and
• the magistrate had no power to extend the petition.

THE SLIP RULE

7 The federal magistrate, in making the order extending time, purported to act pursuant to O 35 r 7(3) of the Federal Court Rules (the "slip rule"). In order to understand the relevance of that rule it is necessary to consider the statutory provisions and rules regulating practice in the Federal Magistrates Court.
8 Section 43 of the Federal Magistrates Act 1999 (Cth) (the "FMA") provides relevantly as follows:

‘(1) The practice and procedure of the Federal Magistrates Court is to be in accordance with Rules of Court made under this Act. However, this subsection is subject to any provision made by or under this or any other Act with respect to practice and procedure.

(2) In so far as the provisions applicable in accordance with subsection (1) are insufficient:

(a) ...
(b) The Rules of Court made under the Federal Court of Australia Act 1976 apply, with necessary modifications, so far as they are capable of application and subject to any direction of the Federal Magistrates Court or a Federal Magistrate to the practice and procedure of the Federal Magistrates Court in relation to the jurisdiction of the Federal Magistrates Court under laws of the Commonwealth other than:

(i) the Family Court Act 1975; or
(ii) the Child Support (Assessment) Act 1989; or
(iii) the Child Support (Registration and Collection) Act 1988.

(3) In this section:
practice and procedure includes all matters in relation to which Rules of Court may be made under this Act.’

9 Division 8 of the FMA confers a broad power to make Rules of Court in connection with practice and procedure and matters incidental thereto. Rule 1.05 of the Federal Magistrates Court Rules 2001 (the "FM Rules") provides:

‘(1) It is intended that the practice and procedure of the Federal Magistrates Court be governed principally by these Rules.

(2) However, if in a particular case the Rules are insufficient or inappropriate, the Court may apply the Federal Court Rules or the Family Law Rules 2004 or the Family Law Rules 1984, in whole or in part and modified or dispensed with, as necessary.

(3) Without limiting subrule (2):

(a) ...
(b) the provisions of the Federal Court Rules set out in Part 2 of Schedule 3, apply with necessary changes, to general federal law proceedings.’

10 Proceedings in bankruptcy are general federal law proceedings. One of the provisions identified in Part 2 of Sch 3 is O 35 of the Federal Court Rules.
11 Rule 16.5 of the FM Rules provides:

‘(1) The Court may vary or set aside its judgment or order before it has been entered.

(2) The Court may vary or set aside its judgment or order after it has been entered if:

(a) the order is made in the absence of a party; or
(b) the order is obtained by fraud; or
(c) the order is interlocutory; or
(d) the order is an injunction or for the appointment of a receiver; or
(e) the order does not reflect the intention of the Court; or
(f) the party in whose favour the order is made consents.

(3) This rule does not affect the power of the Court to vary or terminate the operation of an order by a further order.’

12 Although it is not entirely clear, s 90 of the FMA and r 16.08 of the FM Rules seem to suggest that entry of an order involves the issue of an appropriate document evidencing it. Rule 16.07 provides that entry is only necessary in certain specified circumstances. No order made on 11 November was ever entered. If an order was made but not entered, there was power to vary it at any time pursuant to subr 16.05(1). The respondent did not seek to invoke that rule. It was apparently thought that r 16.05 was not a sufficient basis for extending time pursuant to s 52 of the Bankruptcy Act, at least at the time at which the need for such an order became apparent.
13 Order 35 r 7 of the Federal Court Rules provides:

‘(1) The Court may vary or set aside a judgment or order before it has been entered.

(2) The Court, where it is not exercising its appellate or related jurisdiction ... may if it thinks fit vary or set aside a judgment or order after the order has been entered where:

(a) the order has been made in the absence of a party, whether or not the absent party is in default of appearance or otherwise in default ...;
(b) the order was obtained by fraud;
(c) the order is interlocutory;
(d) the order is an injunction for the appointment of a receiver;
(e) the order does not reflect the intention of the parties; or
(f) the party in whose favour the order was made consent.

(3) A clerical mistake in a judgment or order, or an error arising in a judgment or order from an accidental slip or omission, may at any time be corrected by the Court.’

14 Order 35 r 7 reflects the inherent power of a superior court of record to correct an error in a decree or order. See Elyard Corporation Pty Ltd v DDB Needham Sydney Pty Ltd (1991) 61 FCR 384, per Lockhart J, at 389. The respondent submits that the power is not limited to superior courts of record, referring to the decision of Needham J in Gikas v Paparagiouto (1977) 2 NSWLR 945 at 951 C-D. However that decision and the authorities cited therein seem all to have concerned orders of superior courts. There is authority which suggests that inferior courts have no such power. See, for example, R v Essex Justices; ex parte Final [1963] 2 QB 816. However the question remains open. See Professor Enid Campbell’s article ‘Revocation and Variation of Administrative Decisions’ in 22 Monash University Law Review at pp 34-35. See also the article by K Mason (now President of the New South Wales Court of Appeal), ‘The Inherent Jurisdiction of the Court’ in 57 ALJ at pp 456-457.
15 If there is no such inherent power, there may be doubt as to whether, in the absence of express statutory authority, an inferior court may acquire it by making a rule of court to that effect. In the absence of inherent power, it would be necessary to consider whether s 43 of the FMA confers such a power upon the Federal Magistrates Court. That question may depend upon the meaning of the words ‘as far as they are capable of application’ in par 43(2)(b). Section 43 might be construed as conferring power to apply all of the Federal Court Rules or alternatively, as only conferring power to apply such rules as the Federal Magistrates Court would be, itself, empowered to make. Although the appellant challenged the power of the federal magistrate to invoke O 35 r 7, the argument was not developed in any detail. For reasons which follow it is not necessary that we consider that question. We assume for present purposes that the magistrate was entitled to invoke O 35 r 7.
16 The magistrate held that O 35 r 7(3) authorized him to make an order, nunc pro tunc, extending time pursuant to s 52 of the Bankruptcy Act. He referred to a number of cases, to which we will refer in due course, and concluded at [19]:

‘19. Although I acknowledge the delay in delivering judgment must necessarily fall at my feet, it must be conceded by the solicitors for the petitioning creditor that they were entitled to bring an application to extend at any time before the petition expired on 11 September 2004. They did not do so. I infer that as an oversight by them. Had I anticipated I would have taken so long to deliver the judgment (and after the date the petition was to lapse), then I would have brought that possible delay and the consequences to the attention of the parties on [11] November 2003. I did not do so.

20. The petitioning creditor could have then considered at that time making oral application to extend and it would have been very difficult for the debtor to have successfully opposed such relief at that time. In my view a combination of the omissions and accidental slips, both by the Court and the solicitors for the petitioning creditor are precisely what was alluded to by Spender J in Matthews v Collett.’

17 The decision of the Full Court in Elyard (supra), to which the magistrate referred, is the primary relevant authority for present purposes. The case concerned winding up proceedings on the ground of insolvency. Section 459R of the Corporations Act 2001 (Cth) (then the "Corporations Law") provides that such an application is to be determined within six months. The Court has power to extend time in special circumstances, provided that the extension is ordered within the specified period or any extension thereof. Subsection 459R(3) provides:

‘An application is, because of this subsection, dismissed if it is not determined as required by this section.’

18 In Elyard, the application was filed on 18 November 1994. On 21 April 1995 a new creditor was substituted for the original applicant. The proceedings were adjourned to 26 May 1995, the period for determination of the application being extended to that date pursuant to s 459R. On 26 May the matter was adjourned to 9 June 1995, with a further extension of the s 459R period. On 9 June 1995 another creditor was substituted as applicant. The proceedings were adjourned by consent to 16 June 1995, with consequential orders and directions, but no order for an extension of time was made. The solicitor for the new applicant had been instructed to apply for such an order and had prepared material, but the relevant paragraph was inadvertently omitted from the notice of motion.
19 Lockhart J considered that there was authority for the following propositions concerning the operation of O 35 r 7(3):

• that an order may be made nunc pro tunc after the expiry of the period specified in s 459R;
• that such an order may be made ‘where the proposed amendment is one upon which no real difference of opinion can exist. It does not apply where the amendment is a matter of controversy; nor does it extend to mistakes that are the consequence of a deliberate decision ...’;
• O 35 r 7(3) may be invoked irrespective of whether the order has been drawn up, passed and entered;
• the application of the slip rule is not confined to giving effect to the intention of the Judge at the time when the order was made or judgment given; it extends to the intention which the Court would have had, but for the failure that caused the accidental slip or omission; and
• the rule also permits the correction of an order or decree where the omission results from the inadvertence of a party’s legal representative.

20 In the same case, at 396, Lindgren J pointed out that since the order of 9 June was made by consent, it ‘necessarily contemplated that (the petition) for the winding up of Elyard would remain on foot and be capable of being determined after 9 June and at least down to 16 June. Likewise the Registrar, in making the orders. Otherwise, the consenting to and making of the orders were futile and nonsensical.’
21 At 404-405 his Honour observed:

‘The slip rule in O 35, r 7(3) should be read in the context of the preceding two subrules. Rule 7(1) gives the Court power to "vary or set aside a judgment or order before it has been entered". No limitations on or qualifications of this power are expressed. Rule 7(2) gives the Court power to vary or set aside a judgment or order even where it has been entered, but only in six situations specified in the subrule. The slip rule, r 7(3), applies whether a judgment or order has been entered or not. But as the scheme suggested by rules 7(1) and (2) might lead one to expect, the nature of the slip rule power, made available as it is in any case whatever where the judgment or order has been entered, is strictly confined. Unlike 7(1) and (2), rule 7(3) does not give a power to set aside or vary. It addresses only "clerical mistakes" in a judgment or order and "errors arising in a judgment or order from an accidental slip or omission". These are situations in which, when the mistake, slip or omission comes to light, one might expect the response "Of course, it must be attended to. It is obvious. It goes without saying" ....’

22 The federal magistrate also referred to the decision of Lindgren J in Bankstown Grammar School Ltd v Park [2000] FCA 1205. In that case a petition in bankruptcy was presented on 17 August 1999. On 10 May 2000 it was part-heard and adjourned to 10 August for submissions. Following submissions the decision was reserved. At that time, Lindgren J was aware that he would be in court on the following day, 11 August, and absent from Australia for the following week from Monday 14 August. He returned to Australia on Saturday 19 August and considered the matter on Sunday 20 August. He then realized that the petition had lapsed on 17 August. His Honour said at [3]:

‘If I had appreciated on 10 August that the petition was to lapse in only seven days’ time, I certainly would have made an order under s 52(5) of the Act extending the period of the currency of the petition. I have no doubt also that if counsel appearing on 10 August had appreciated the position, they would have drawn my attention to it and agreed that an order extending time should be made. Due to the inadvertence of all concerned the petition has lapsed ... .’

23 His Honour applied the slip rule, the parties agreeing that such course was appropriate in the circumstances.
24 We should refer to a number of other cases. In Re Howell; ex parte Deputy Commissioner of Taxation (1996) 70 FCR 261, a petition in bankruptcy was to expire on 3 November 1996. On 9 August 1996, it was adjourned, on the application of the debtor, from that date until 7 November 1996. Subsequently, the solicitor for the petitioning creditor stated, and the debtor did not dispute, that by an oversight, she had not made a request for an extension. The Court made an order extending time, invoking the slip rule.
25 In Komesaroff v Law Institute of Victoria (1997) FCA 965 a petition in bankruptcy was presented on 25 July 1996. It came on for hearing on 7 and 8 July 1997. The decision was reserved. Some mention was made of the fact that the petition would expire within a few weeks, but no application was made to extend the period. The Judge was unable to attend to the matter until 7 or 8 August, by which time the petition had lapsed. His Honour followed the decision in Elyard, adding to the order made on 8 July, an order for the extension of time.
26 In Re Langridge; ex parte Bennett Carroll and Gibbons (1998) FCA 879, Kiefel J considered a petition presented on 23 May 1997. On 5 February 1998 the hearing of the petition was adjourned until 9 April 1998. On that date it was further adjourned to 27 May 1998 and subsequently, to 3 June 1998. No order for an extension of time was made prior to the lapse of the petition on 23 May 1998. Her Honour, with some reservations as to its correctness, followed the decision in Elyard.
27 Finally, in Matthews v Collett [2000] FCA 224, Spender J considered a petition in bankruptcy presented on 21 December 1998. It was listed for hearing on 6 August 1999. After evidence was completed on that day, and in the course of addresses, counsel for the petitioning creditor sought to amend the petition. This was opposed by the solicitor for the respondent. His Honour directed that the respondent file further submissions within seven days, and that the petitioning creditor do so within seven days thereafter. The respondent’s submissions were received on 13 August 1999 and the petitioning creditor’s, on 20 August. On 21 December 1999, while the matter was awaiting determination, the petition lapsed. Thereafter, the petitioning creditor sought to mention the matter in order to seek an extension under s 52. After referring to Elyard and other authorities, his Honour concluded that there was power under O 35 r 7 ‘to make an order having the effect of retrospectively extending the life of a petition, notwithstanding its lapse.’ His Honour also concluded:

‘It seems to me that in this case the slip rule applies not only because of what the evidence suggests was a slip or omission on behalf of the solicitor for the petitioning creditor, but also because of the Court’s unintended error.

28 Spender J considered that the lapsing of the petition was ‘inadvertent, in that neither the petitioning creditor or his legal advisers, nor the Court, adverted to the lapsing on 21 December 1999. Had any attention been directed to that question there is no doubt that the issue which had been reserved for judgment would have been decided prior to the lapsing of the petition.’ However, in the event, it was not necessary to extend time because his Honour concluded that he would, in any event, have dismissed the petition on the merits. The nature of the evidence suggesting a slip is not disclosed in the reasons, nor does his Honour indicate the order which he would have amended pursuant to the slip rule in order to extend time.
29 The decision of the Full Court in Re Young; ex parte Smith (1985) 5 FCR 204 establishes that there can be no extension pursuant to s 52 of the Bankruptcy Act once the petition has lapsed. However the Court (of which Lockhart J was a member) considered that there was no question of applying the slip rule in that case (at p 209). In Elyard the Court addressed the slip rule, but in the context of winding up rather than bankruptcy. Although s 52 of the Bankruptcy Act serves substantially the same purpose as s 459R of the Corporations Act, there are potentially significant differences between the two sections.
30 With all respect, we are a little uncomfortable with the view, inherent in Elyard, that the slip rule may be used to extend time notwithstanding the statutory requirement that such order be made within a period of time which has elapsed. However Elyard concerns the practice of the Court and has now stood for over ten years without legislative intervention. We are reluctant to reconsider it. Although it does not directly bind us in applying s 52 of the Bankruptcy Act, to take a different approach would cause substantial confusion in insolvency practice.
31 We wish to stress, however, the importance of the policy, evidenced in both the Corporations Act and the Bankruptcy Act, that insolvency proceedings be speedily resolved, presumably for commercial reasons and for reasons of fairness. Courts exercising jurisdiction in insolvency must recognize this policy by giving priority to the hearing and determination of such matters. The parties and their legal advisers, particularly those advising petitioning creditors, must be aware of the potential problem. The decision in Elyard should not be taken as establishing an unlimited power to avoid this statutory policy.
32 Order 35 rule 7(3) may be invoked only if there is, in a judgment or order:

• a clerical mistake; or
• an error, arising from an accidental slip or omission.

33 In the latter case, the rule contemplates a causal connection between the slip or omission and the error. If the rule is to be invoked in order to effect an extension of time beyond the time permitted by s 52 of the Bankruptcy Act or s 459R of the Corporations Act, then there must be a judgment or order to be corrected, and it must have been made within the prescribed time. The power is to correct, not to vary or set aside. There is no general power to relieve from the consequences of either section.

A JUDGMENT OR ORDER

34 The expression ‘judgment or order’ in O 35 r 7.3 has the same meaning as that expression has in the Federal Court of Australia Act 1976 (Cth) (the "Federal Court Act"). See subs 59(4) of the Federal Court Act and s 13 of the Legislative Instruments Act 2003 (Cth). In s 4 of the Federal Court Act the term "judgment" is defined to mean ‘a judgment, decree or order, whether final or interlocutory, or a sentence ...’. It seems to have been generally accepted that those words should be given the same meaning as similar expressions in the Judiciary Act 1903 (Cth) (the "Judiciary Act") and in the Constitution. See Ah Toy v Registrar of Companies (1985) 10 FCR 280 at 285. The definition of "judgment" in s 4 suggests that there is no need, for present purposes, to distinguish between a judgment, a decree, an order or a sentence.
35 In Minister for Works (WA) v Civil and Civic Pty Ltd [1967] HCA 18; (1966-67) 116 CLR 273, Barwick J said at 277:

‘It is of the essence of a judgment within the meaning of the Constitution that it is binding upon parties and definitive of legal rights. It is not enough that the judge or court exercise a jurisdiction of the Supreme Court in a manner judicial in its substance. The judge or court must authorizedly give a binding judgment which determines or settles rights.’

36 In Driclad Pty Ltd v Commissioner of Taxation [1966] HCA 59; (1968) 121 CLR 45 at 64 Barwick CJ and Kitto J said:

‘The taxpayers lodged notices of appeal to the Full Court which were expressed as if the appeals were against the reasons of Taylor J relating to the "B" part of the fund rather than against the orders that he made. Needless to say, this was erroneous, because it is of the nature of appeals, as s 73 of the Constitution recognizes, that they lie only against "judgments decrees orders and sentences", not against reasons. The word "judgments" in this connection refers only to operative judicial acts, and is not used, as it often is in other contexts, as a convenient abbreviation for reasons for judgment.’

37 In Moller v Roy [1975] HCA 31; (1975) 132 CLR 622 at 639, Mason J said:

‘However, I see no alternative but to give the word "judgment" as it appears in s 46 its accepted legal meaning, that is, the formal order made by a court which disposes of, or deals with, the proceeding then before it ... .’

38 There may be a difference in emphasis between the view of Barwick CJ in Minister for Works (WA) and that of Mason J in Moller. Whereas Barwick CJ considered that a judgment must be binding upon the parties and definitive of legal rights, Mason J considered that it need only dispose of, or deal with, the proceeding before the court. However two other decisions offer support for the former view. The first is Saffron v The Queen [1953] HCA 51; (1953) 88 CLR 523 in which the Court (Dixon CJ, Kitto and Taylor JJ) considered whether an appeal lay to the High Court from a decision of a state Court of Criminal Appeal on a case stated after acquittal, where the outcome could not affect the result of the trial. At 527-8, Dixon CJ (Kitto and Taylor JJ concurring) said:

‘Our jurisdiction to entertain appeals is one conferred by s 73 of the Constitution, and it is a jurisdiction to hear and determine appeals from judgments, decrees, orders or sentences of a number of tribunals. When a court is authorized by legislation to give an advisory opinion, no matter what language is used, its opinion is not a judgment, decree, order or sentence from which an appeal lies. Various statutes have provided for raising questions by a case stated, in such a way as to make it difficult to know whether the result of the determination of the questions so raised is advisory or not. The present section raises that question in an unprecedented form. It is quite definite in providing that the determination of the Court of Criminal Appeal of the question reserved shall not in any way affect or invalidate any verdict or decision given at the trial. The acquittal must therefore remain undisturbed. It does, however, use the expression "reserve the question for decision", and it does use the expression "determine"; but it is apparent that these expressions cannot be directed to the determination of any rights or liabilities which are to be litigated or affected. The rights and liabilities involved in the charge have already been determined. The acquittal of the person has determined that he is not guilty, and that determination is to remain entirely unaffected.

I think that there can be no question that the decision of the Court of Criminal Appeal ... cannot affect the rights of the person who has been acquitted, or his liability. It can operate only as a judicial precedent, having at best the effect which in English jurisprudence is afforded to the decisions of a court as precedents. That is an entirely different thing from binding a right or creating a liability, or precluding a person who asserts a right or denies a liability.

I think the applicant in the present case is not affected in respect of his rights
or liabilities by the determination. At most he is, like any other of the Queen’s subjects, liable to have the decision cited against him as evidence of what is the state of the law. In those circumstances I am of opinion that the decision on the case stated ... is not appealable, and that special leave should be refused.’

39 The second decision is to similar effect. See The President of India v The Moor Line Limited (No 2) [1958] HCA 25; (1955-1958) 99 CLR 212 at 213-214. There may be no real difference between the views expressed by Barwick CJ and those of Mason J. The precise nature of a judgment or order was only marginally relevant to the decision in Moller. It is likely that much turned upon the meaning of the word "proceeding" as used by Mason J in the relevant passage.

WAS THERE AN ORDER?

40 It is not at all clear to us that the federal magistrate made any order on 11 November 2003. We have been provided with page 87 of the transcript. At the end of submissions, his Honour said: ‘Yes, yes. All right. I will reserve my decision.’ He then went on to discuss a matter of practice. Exchanges with counsel ensued. At the end of the transcript, and in bold letters, are the words ‘Matter adjourned at 5:40 pm indefinitely’. The transcript does not attribute these words to the magistrate. As far as we can see, he indicated only that he would reserve his decision. That he should have concluded proceedings in that way is no basis for criticism. Judicial officers frequently do so. However we are aware that some judicial officers, when reserving judgment, adopt the practice of adjourning the matter to a date to be fixed for judgment. The transcript does not suggest that the magistrate did so on this occasion. To us it seems more probable that the reference to adjournment was simply added by the court reporter. We note that the same legend appears on the transcript of argument in this appeal.
41 In his reasons, published on 2 August 2005, the magistrate said at [1]:

‘On 11 November 2003, I heard evidence in respect of a contested creditor’s petition. At the conclusion of the hearing, I adjourned the matter to a date to be fixed to consider my decision. This is the effect of "reserving judgment".’

42 At [18] he said:

‘At the conclusion of the hearing on 11 November 2003, I adjourned the matter to a date to be fixed for judgment to be delivered.’

43 Clearly, his Honour was referring to his earlier interpretation of the statement that he would reserve his decision. On their face, the words ‘I will reserve my decision’ indicate that the hearing is at an end and that judgment will be delivered at a later stage. They do not suggest an order of adjournment or any other order. The respondent, however, points to cases in which judges at first instance have treated reservation of judgment as being, itself, an order. In other cases, reservation has been treated as an order for adjournment. It seems that the point was not argued in any of those cases. Of more interest is the decision of Emmett J in Westpac Banking Corporation v E & W Jury Pty Ltd (1998) 16 ACLC 547. In that case a winding up petition was filed on 21 July 1997. Section 459R of the Corporations Law required that it be determined by 21 January 1998. It was not so determined. However, in December 1997, his Honour’s associate advised the applicant’s solicitor that the petition would be returnable on 6 February 1998. The applicant’s solicitor advised the respondent’s solicitor accordingly. On that date Emmett J gave leave to apply for an extension of time pursuant to s 459R. The applicant’s solicitor filed material which indicated that she had overlooked making such an application prior to the expiry of the relevant period. In his reasons for permitting an extension his Honour referred to various cases and, at 551, said:

‘There would, of course have been absolutely no utility at all for me, on 18 December 1997, to fix the proceedings for directions, if there was not to be an order under s 459R. Accordingly, I am satisfied that the circumstances which Lindgren J contemplated (in Elyard) would have been attracted subject only to what, as I have said, is really the only matter of opposition that was advanced on behalf of the respondents, namely, that there was in fact no order.

It is certainly correct that there was no formal notation of any direction given by me in December 1997 that the matter be listed for directions on 6 February 1998. However, the business of the Court can only be conducted in accordance with directions given by appropriate officers, be they officers in the Registry or a judge of the court. In so far as the matter was fixed for directions before me on 6 February 1998, there must have been an order made by me that that would happen. Fixing a matter for directions could only be done with the authority of an officer of the Court be it a judge or registrar. It may be that the circumstances of the case suggest that greater formality than sometimes exists is required in order to record what is being done by the Court in the administration of its business.

However, be that as it may, it appears to me that there can be no doubt that on 18 December 1997 there was a direction given by me listing the matter for directions on 16 February 1998, and that direction can properly be characterised as an order within the meaning of the slip rule. In my view, it goes without saying that I was not intending to waste my breath or waste the Court’s time in such a directions hearing. As I have said, had I been asked I would have made an order under s 459R(2). Similarly, if I had made such an order and then been asked to do the same thing on 6 February 1998, I would have said of course it is obvious that I intend that what I do on 12 February 1998 will have some utility. In the circumstance, I consider that I have power to make orders of the nature sought and I propose to do so.’

44 In this Court, O 30 r 3 confers upon the Registrar primary responsibility for fixing hearing dates and advising the parties of them. We are inclined to think that this indicates that the power is administrative rather than judicial. In those circumstances, we doubt whether such a decision and/or notification could be a judgment or order, given the meaning attributable to those words as used in s 4 of the Federal Court Act. We doubt whether the fact that a judge performs such functions would make any difference to their nature. They are administrative functions, at least if they are made out of court and in the absence of the parties. This highlights another difficulty with the approach taken by Emmett J. It suggests that an order, not being a consent order, may be made privately, that is not in open court, and in the absence of the parties. For completeness, we note that FM Rules 10.01(3)(r) and 10.03 authorize both ‘the Court’ and ‘a Registrar’ to fix hearing dates, suggesting that in the Federal Magistrates Court, too, such function is administrative.
45 The power exercised pursuant to O 35 r 7 depends upon there being an identifiable order. Much hangs upon the proper identification of that order. It must be identified before the Court can determine whether or not it contains an error. Until an error is identified, the Court cannot determine whether or not such error arose from an accidental slip or omission. To say that there ‘must have been an order’ or that an apparent statement of intention such as ‘I will reserve my decision’ amounts to an order may invite conversion of the power into a general power to vary all orders.

Reserving Decisions

46 In the present case, the respondent’s case is either that reservation of judgment necessarily implied an order of adjournment or that pronouncement of the intention to reserve judgment was, itself, an order. As we have observed, the words ‘I will reserve my decision’ do not, in lay (ie non-legal) usage, imply an order of adjournment. If they have that meaning in legal usage, it can only be because the expression has become a term of art or because, in the event of reservation, an adjournment order is, for some reason, necessary. Such necessity, we would think, could only arise if the absence of an order of adjournment would in some way compromise the future conduct of the matter.
47 We have looked for some elaboration of the meaning of the word "reserve" in this context. Current usage may date back to the English assizes when judges would reserve points for discussion with the other judges upon their return to Westminster. See The Oxford History of the Laws of England, vol 6, at 526-528 for a discussion of that practice. The expression "curia advisari vult" is also often used in this context. That expression is explained in Osborn’s Concise Law Dictionary (10th ed) at 127 as follows:

‘Curia advisari vult [The court wishes to be advised.] In law reports contracted to cav. It means that judgment was not delivered immediately, time being taken for consideration.’

48 Jowitt’s Dictionary of English Law (2nd ed) at 530 states that the expression ‘... when placed before the judgment in the report of a case, means that judgment was not delivered immediately. The judgment when delivered is then said to be a "considered or reserved judgment".’
49 In A Dictionary of Modern Legal Usage (2nd ed) by Bryan A Garner, at 240, a similar meaning is given. In Black’s Law Dictionary (8th ed) at 410, it is said that:

This phrase signalled a court’s decision to delay judgment pending further consideration. In England, the phrase is still used in all Court of Appeal decisions when the judgment is reserved; that is, not delivered after the hearing.’

50 None of this suggests that to reserve judgment constitutes an order of adjournment or has any other particular significance.

Adjournment

51 The words "adjourn" and "adjournment" are regularly used in two different contexts. Firstly, it is common to "adjourn" the court at the end of a day’s hearing. The court officer will frequently pronounce the adjournment, no doubt on behalf of the judge. Generally, such adjournment will be until the next sitting day. Secondly, we speak of "adjourning" the hearing of a particular matter, either indefinitely or to a fixed date. Where a judge disposes of many matters on one day, he or she may dispose of some or all of them by order of adjournment or some other order, and also adjourn the court at the end of the day. In that case the adjournment of the court will not affect the other orders made concerning particular matters. When the hearing of a matter extends past the end of one day, we apprehend that, at the end of the day, some judges adjourn the matter until the next sitting day whilst others adjourn the court. In either case the only apparent purpose of pronouncing adjournment is to indicate the time and place of any future hearing or sitting of the court.
52 In the days when parties and practitioners attended at sittings in the hope of being heard, but without the benefit of a fixed hearing date, pronouncement of the date at which the court would resume sitting indicated when they should return. The question of adjournment was, at one stage, important in the English system because of the large amount of work which was performed by judges pursuant to commissions. It seems to have been thought that if sittings held pursuant to commission were not adjourned from day to day, the commission would lapse. See Hale’s The History of the Pleas of the Crown, vol II at pp 24 and 297. Notionally, all business performed pursuant to a commission was treated as having been transacted on the first day. See The Oxford History of the Laws of England, vol 6 at p 260. See also Whitaker v Wisbey (1852) Cox’s CC 107. At least in Queensland, and probably other states, analogous, although not identical, systems were adopted. See, for example, the Supreme Court Act 1867 (Qld) at ss 24, 30 and 33. At 260-261 of The Oxford History vol 6, there is also discussion of the practice of adjourning the assize to another location. There is no reflection of any aspect of the commission system in the practice of this Court. As far as we can see the FM Rules are also free of any such reflection.
53 As to adjourning a matter (as opposed to the court), in Holdsworth’s A History of English Law, vol 1 at 282, there is mention of the practice of adjourning a matter heard at an assize to the royal court from which it had come. No doubt part-heard matters were also adjourned from day to day, with or without formal orders.
54 We are aware that at least until quite recently, practitioners were often concerned that a particular proceeding might lapse if not mentioned and disposed of in some way on the nominated hearing date. We have sought to identify any basis for such concern. In Yapp v William [1901] WN 91, it was said that:

‘Where counsel has been duly instructed to move on the motion day mentioned in the notice of motion, he is entitled on the motion day to save the motion by mentioning it to the Court at any time before the Court has risen for the day and notwithstanding the fact that the Court has finished the hearing of motions.’

55 Presumably, if the matter were mentioned, it would be either decided or adjourned. If not mentioned, the notice of motion would lapse. However the position seems to have been otherwise with summonses in pending causes. In The Supreme Court Practice 1987 (the White Book) at vol 1 par 21/1-6/8 it is said, concerning such summonses, that:

‘Where any of the parties do not attend upon the return of the summons care should be taken that the matter is adjourned from time to time to specified days and hours, until the proceeding is concluded; otherwise, if a break occurs, it will be necessary to serve the absent party again.’

56 This note suggests that at least where all parties attend, a summons will not lapse if not adjourned. It may be that there was a particular problem with motions. Order 5 r 1 of the English Rules (as they were in 1987), provided that proceedings in the High Court might be begun by writ, originating summons, originating motion or petition. The distinction between a "notice of motion" and a "motion" is important. A motion would be moved in court on the notified day. A notice of motion gave notice of the intention to do so. This may be contrasted with the rules concerning other initiating documents. Order 6 provided for the issue of writs originating actions. Originating summonses were regulated by O 7. Order 7 r 5 made it clear that proceedings were commenced by the issue of the originating summons. Order 9 r 2 contemplated commencement of proceedings by presentation of a petition. As to summonses in pending causes, O 32 r 1 provided for application by summons. With motions the matter was otherwise. Order 8 r 2 contemplated an application by motion but required that such motion generally not be made ‘without previous notice to the parties’. Rule 3 provided for notice of motion. Thus, at least in form, there was a significant difference between a notice of motion, which was not, itself, an application, and the other initiating documents which were applications. It would follow that if a motion was not moved on the nominated date, the notice would lapse. There would, in any event, be no extant proceedings.
57 In In re Keystone Knitting Mills’ Trade Mark [1929] 1 Ch 92, Clauson J proceeded upon the basis that filing of a notice of motion did not commence proceedings. In that case a notice of motion was served on 15 July 1927, but the motion was first before the court on 22 July 1928. Clauson J (at 99) treated the latter date as the date of commencement of proceedings. The Court of Appeal did not depart from that view. Notwithstanding the historical similarities between English and Australian practice and rules, Jacobs J held, in Thunderbird Products Corporation v Thunderbird Marine Products Pty Ltd [1974] HCA 51; (1974) 131 CLR 592 at 602-603, that the filing of a notice of motion under the High Court Rules commenced proceedings. It follows that in the event of non-appearance on the nominated date, the proceedings might be struck out, but they would not lapse.
58 In this Court O 19 r 7 clearly contemplates a motion surviving, notwithstanding its not having been adjourned on the appointed day for hearing. Order 32 deals with trials. The term "trial" is defined in O 1 r 4 to include ‘any hearing other than an interlocutory hearing’. Rules 2 and 3 deal with default of appearance by either party or both parties. Neither rule appears to contemplate that a matter will automatically lapse in the event that no order is made. It is possible that the practitioners’ concern to which we have referred arose from knowledge of the English view of motions. However the rules of this Court seem to reflect the view expressed by Jacobs J in Thunderbird Products.
59 The only initiating document under the FM Rules is an application. However s 43 of the Bankruptcy Act, itself, provides for the use of a petition. We find nothing in the FMA or the FM Rules which suggests that proceedings in that court will lapse if not dealt with by some form of order on an appointed hearing date. The existence of an administrative process for fixing hearing dates suggests otherwise. We also note that s 42 of FMA directs that the Federal Magistrates Court is to proceed without undue formality. Section 57 provides that proceedings are not generally to be invalidated by ‘a formal defect or irregularity’. It would be inconsistent with these statutory provisions to hold that a matter will lapse if a formal order is not made on an appointed hearing date.
60 Nothing in the Bankruptcy Act suggests that a petition needs to be adjourned from day to day in order to avoid its lapsing. Indeed, it might be thought that s 52 suggests to the contrary. Section 52(1) provides for the making of sequestration orders; s 52(2) provides for dismissal; and s 52(3) provides for stays. Section 52(4) provides that a petition will lapse upon expiry of the prescribed method. That express prescription would seem to exclude the possibility that a petition might lapse if, for some reason, it was not adjourned from a nominated date until another date of hearing within the prescribed period.
61 We do not consider that there is any particular purpose, other than to give notice of a future hearing date, for pronouncing an adjournment order at the end of a hearing in bankruptcy. Where the intention is to reserve the decision indefinitely, there is no such matter of which to give notice. It is no doubt desirable that at the end of any hearing, the status and future course of the matter be clearly identified. The practice of pronouncing an adjournment will, in many cases, be appropriate to achieve that outcome. However that does not lead us to conclude that reservation of judgment implies an order for adjournment. Such an implication is unnecessary. The status and future course of the matter are clear.
62 We do not mean to imply that an adjournment may never be the subject of an order. If an order for adjournment is pronounced, it may or may not satisfy the test to which we have referred. For example, where one party seeks an adjournment over opposition, the decision to adjourn or not to adjourn may be determinative of the parties’ respective rights to have the question determined judicially. In such a case, the decision to adjourn would be a judgment or order for all practical purposes. However that is hardly the effect of an indication by a judge that he or she is presently unable to give a judgment and will do so at a later time.
63 We conclude that there is no reason to treat reservation of judgment as implying an order for adjournment. Of course, reserving judgment will have the effect of adjourning the matter, but it does not follow that there is an order of adjournment.

Is reserving judgment an order?

64 Assuming that reservation does not imply an order of adjournment, there remains the question of whether it otherwise constitutes an order. We see no reason why such a statement of intention should be so construed, particularly given the authorities concerning the meaning of the term, to which authorities we have referred. This view is supported by the decision of Forster J in R v McGregor (1977) 13 ALR 645. In that case the respondent, McGregor, a stipendiary magistrate in the Northern Territory, had dismissed a complaint. The defendant asked for costs. The magistrate endorsed the file as follows:

‘Judgment delivered. Both counts dismissed. Ms Gray asks for costs of $2,025.’

65 There were then particulars of the claimed costs, followed by the words, ‘Reserved for consideration AGMCG (presumably the initials of the magistrate), 1.10.76.’
66 The Attorney General submitted that the magistrate had no power to reserve the question of costs and sought a writ of certiorari quashing such reservation. The relevant rules provided for a writ of certiorari to bring up a judgment or order. At 646 His Honour said:

‘The next point is whether or not, the application for costs having been made, "reserved for consideration" is a judgment or order and I must say that the words appear to me to be neither. As I said to counsel for the Attorney General it seems to me that he has struck too soon. Had he waited until the learned stipendiary magistrate made some order for costs he might then have sought an order nisi for a writ of certiorari to bring up the order for costs and quash it if such an order were, as is argued, beyond the power of the learned stipendiary magistrate to make. In this case all the learned stipendiary magistrate has done is say in effect: "I have been asked to make an order for costs but before making an order for some amount of costs, or refusing to make any order at all, I wish to take time to consider what I should do." It seems plain to me that he has neither made an order nor made no order and that there is nothing which a certiorari procedure can be used to have reviewed. Even assuming that the procedure was in order I think that the Attorney General’s application must fail because no judgment or order as to costs has yet been made.’

67 We agree. The respondent sought to distinguish the decision but advanced no cogent reason for so doing. We conclude that no order was made on 11 November 2003.

WAS THERE AN ERROR, SLIP OR OMISSION?

68 Even assuming that the magistrate made an order on that date, we consider that the conditions precedent to the invocation of the slip rule did not arise. The only possible "error" would be the omission from the "order" of an extension pursuant to s 52 of the Bankruptcy Act. In that case it would be necessary to identify the accidental slip or omission which caused the error. The primary responsibility for making an application for such order rested upon the present respondent. Whether there was a slip or omission is a question of fact. In some cases, such as in Elyard, there may be direct evidence of an intention to make a relevant application, steps taken to bring about that result and a failure to carry the intention into effect. In other cases it may be possible to infer that such a step should have been taken, and that the failure to do so can properly be seen as an accidental slip or omission. Where the petition is likely to expire very shortly after the hearing, and prior to the preparation of a reserved judgment, such an inference may be available.
69 In the present case, the petition was presented on 11 September 2003 and heard on 11 November 2003. At the time at which judgment was reserved, almost ten months remained until the expiry of the petition. In those circumstances, it cannot be inferred that the respondent ought to have applied for an extension of time, and that the failure to do so was an accidental slip or omission. There is also no reason to infer that the magistrate then expected that the judgment would be reserved for such a lengthy period of time. It cannot be said that he committed any accidental slip or omission. It is most unlikely that with ten months to run, anybody would have anticipated that judgment might not be given within the lifetime of the petition. Perhaps, at some time prior to 11 September 2004, somebody should have realized that an extension might be necessary. Failure to take a step at that stage may have been a slip or omission, but no "error" in the "order" arose from it.

CONTROVERSY

70 In any event, we doubt whether an order for extension of time, if sought at the hearing, would have been uncontroversial. We suspect that the appellant would have strenuously resisted the suggestion that the matter might remain unresolved for more than ten months.

DELAY

71 We do not make any criticism of the federal magistrate’s delay, although its length is far from acceptable in a case of this kind. It is well known that the federal magistrates in Brisbane are seriously overworked. We have no doubt that his Honour did the best that he could in the circumstances. It may be desirable that steps be taken in the Registry to ensure that this special problem with insolvency proceedings is not overlooked.

THE DISCRETION

72 Although the parties made submissions concerning the magistrate’s exercise of his discretion, it is not necessary that we address that question.

ORDERS

73 The appeal should be allowed. The orders below should be set aside. As the petition has lapsed, it is not necessary to make any order as to its disposition. The appellant should have the costs of the appeal and of the proceedings below. We will hear submissions as to whether there should be a certificate pursuant to the Federal Proceedings (Costs) Act 1981 (Cth).

I certify that the preceding seventy-three (73) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Acting Chief Justice Spender and Justices Dowsett and Collier.

Associate:

Dated: 20 October 2006

Counsel for the Appellant:	Mr A Duffy (Pro Bono) Ms A Wheatley (Pro Bono)

Counsel for the Respondent:	Mr P McQuade Mr S Cooper

Solicitor for the Respondent:	James Conomos Lawyers

Date of Hearing:	11 May 2006

Date of Judgment:	20 October 2006

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URL: http://www.austlii.edu.au/au/cases/cth/FCAFC/2006/149.html

1	This case concerns the use of the so-called "slip rule" to authorize the making of an order after expiry of a statutory time limit for so doing.
2	Subsections 52(4) and (5) of the Bankruptcy Act 1966 (Cth) (the "Bankruptcy Act") provide as follows:

7	The federal magistrate, in making the order extending time, purported to act pursuant to O 35 r 7(3) of the Federal Court Rules (the "slip rule"). In order to understand the relevance of that rule it is necessary to consider the statutory provisions and rules regulating practice in the Federal Magistrates Court.
8	Section 43 of the Federal Magistrates Act 1999 (Cth) (the "FMA") provides relevantly as follows:

10	Proceedings in bankruptcy are general federal law proceedings. One of the provisions identified in Part 2 of Sch 3 is O 35 of the Federal Court Rules.
11	Rule 16.5 of the FM Rules provides:

14	Order 35 r 7 reflects the inherent power of a superior court of record to correct an error in a decree or order. See Elyard Corporation Pty Ltd v DDB Needham Sydney Pty Ltd (1991) 61 FCR 384, per Lockhart J, at 389. The respondent submits that the power is not limited to superior courts of record, referring to the decision of Needham J in Gikas v Paparagiouto (1977) 2 NSWLR 945 at 951 C-D. However that decision and the authorities cited therein seem all to have concerned orders of superior courts. There is authority which suggests that inferior courts have no such power. See, for example, R v Essex Justices; ex parte Final [1963] 2 QB 816. However the question remains open. See Professor Enid Campbell’s article ‘Revocation and Variation of Administrative Decisions’ in 22 Monash University Law Review at pp 34-35. See also the article by K Mason (now President of the New South Wales Court of Appeal), ‘The Inherent Jurisdiction of the Court’ in 57 ALJ at pp 456-457.
15	If there is no such inherent power, there may be doubt as to whether, in the absence of express statutory authority, an inferior court may acquire it by making a rule of court to that effect. In the absence of inherent power, it would be necessary to consider whether s 43 of the FMA confers such a power upon the Federal Magistrates Court. That question may depend upon the meaning of the words ‘as far as they are capable of application’ in par 43(2)(b). Section 43 might be construed as conferring power to apply all of the Federal Court Rules or alternatively, as only conferring power to apply such rules as the Federal Magistrates Court would be, itself, empowered to make. Although the appellant challenged the power of the federal magistrate to invoke O 35 r 7, the argument was not developed in any detail. For reasons which follow it is not necessary that we consider that question. We assume for present purposes that the magistrate was entitled to invoke O 35 r 7.
16	The magistrate held that O 35 r 7(3) authorized him to make an order, nunc pro tunc, extending time pursuant to s 52 of the Bankruptcy Act. He referred to a number of cases, to which we will refer in due course, and concluded at [19]:

23	His Honour applied the slip rule, the parties agreeing that such course was appropriate in the circumstances.
24	We should refer to a number of other cases. In Re Howell; ex parte Deputy Commissioner of Taxation (1996) 70 FCR 261, a petition in bankruptcy was to expire on 3 November 1996. On 9 August 1996, it was adjourned, on the application of the debtor, from that date until 7 November 1996. Subsequently, the solicitor for the petitioning creditor stated, and the debtor did not dispute, that by an oversight, she had not made a request for an extension. The Court made an order extending time, invoking the slip rule.
25	In Komesaroff v Law Institute of Victoria (1997) FCA 965 a petition in bankruptcy was presented on 25 July 1996. It came on for hearing on 7 and 8 July 1997. The decision was reserved. Some mention was made of the fact that the petition would expire within a few weeks, but no application was made to extend the period. The Judge was unable to attend to the matter until 7 or 8 August, by which time the petition had lapsed. His Honour followed the decision in Elyard, adding to the order made on 8 July, an order for the extension of time.
26	In Re Langridge; ex parte Bennett Carroll and Gibbons (1998) FCA 879, Kiefel J considered a petition presented on 23 May 1997. On 5 February 1998 the hearing of the petition was adjourned until 9 April 1998. On that date it was further adjourned to 27 May 1998 and subsequently, to 3 June 1998. No order for an extension of time was made prior to the lapse of the petition on 23 May 1998. Her Honour, with some reservations as to its correctness, followed the decision in Elyard.
27	Finally, in Matthews v Collett [2000] FCA 224, Spender J considered a petition in bankruptcy presented on 21 December 1998. It was listed for hearing on 6 August 1999. After evidence was completed on that day, and in the course of addresses, counsel for the petitioning creditor sought to amend the petition. This was opposed by the solicitor for the respondent. His Honour directed that the respondent file further submissions within seven days, and that the petitioning creditor do so within seven days thereafter. The respondent’s submissions were received on 13 August 1999 and the petitioning creditor’s, on 20 August. On 21 December 1999, while the matter was awaiting determination, the petition lapsed. Thereafter, the petitioning creditor sought to mention the matter in order to seek an extension under s 52. After referring to Elyard and other authorities, his Honour concluded that there was power under O 35 r 7 ‘to make an order having the effect of retrospectively extending the life of a petition, notwithstanding its lapse.’ His Honour also concluded:

28	Spender J considered that the lapsing of the petition was ‘inadvertent, in that neither the petitioning creditor or his legal advisers, nor the Court, adverted to the lapsing on 21 December 1999. Had any attention been directed to that question there is no doubt that the issue which had been reserved for judgment would have been decided prior to the lapsing of the petition.’ However, in the event, it was not necessary to extend time because his Honour concluded that he would, in any event, have dismissed the petition on the merits. The nature of the evidence suggesting a slip is not disclosed in the reasons, nor does his Honour indicate the order which he would have amended pursuant to the slip rule in order to extend time.
29	The decision of the Full Court in Re Young; ex parte Smith (1985) 5 FCR 204 establishes that there can be no extension pursuant to s 52 of the Bankruptcy Act once the petition has lapsed. However the Court (of which Lockhart J was a member) considered that there was no question of applying the slip rule in that case (at p 209). In Elyard the Court addressed the slip rule, but in the context of winding up rather than bankruptcy. Although s 52 of the Bankruptcy Act serves substantially the same purpose as s 459R of the Corporations Act, there are potentially significant differences between the two sections.
30	With all respect, we are a little uncomfortable with the view, inherent in Elyard, that the slip rule may be used to extend time notwithstanding the statutory requirement that such order be made within a period of time which has elapsed. However Elyard concerns the practice of the Court and has now stood for over ten years without legislative intervention. We are reluctant to reconsider it. Although it does not directly bind us in applying s 52 of the Bankruptcy Act, to take a different approach would cause substantial confusion in insolvency practice.
31	We wish to stress, however, the importance of the policy, evidenced in both the Corporations Act and the Bankruptcy Act, that insolvency proceedings be speedily resolved, presumably for commercial reasons and for reasons of fairness. Courts exercising jurisdiction in insolvency must recognize this policy by giving priority to the hearing and determination of such matters. The parties and their legal advisers, particularly those advising petitioning creditors, must be aware of the potential problem. The decision in Elyard should not be taken as establishing an unlimited power to avoid this statutory policy.
32	Order 35 rule 7(3) may be invoked only if there is, in a judgment or order:

48	Jowitt’s Dictionary of English Law (2nd ed) at 530 states that the expression ‘... when placed before the judgment in the report of a case, means that judgment was not delivered immediately. The judgment when delivered is then said to be a "considered or reserved judgment".’
49	In A Dictionary of Modern Legal Usage (2nd ed) by Bryan A Garner, at 240, a similar meaning is given. In Black’s Law Dictionary (8th ed) at 410, it is said that:

51	The words "adjourn" and "adjournment" are regularly used in two different contexts. Firstly, it is common to "adjourn" the court at the end of a day’s hearing. The court officer will frequently pronounce the adjournment, no doubt on behalf of the judge. Generally, such adjournment will be until the next sitting day. Secondly, we speak of "adjourning" the hearing of a particular matter, either indefinitely or to a fixed date. Where a judge disposes of many matters on one day, he or she may dispose of some or all of them by order of adjournment or some other order, and also adjourn the court at the end of the day. In that case the adjournment of the court will not affect the other orders made concerning particular matters. When the hearing of a matter extends past the end of one day, we apprehend that, at the end of the day, some judges adjourn the matter until the next sitting day whilst others adjourn the court. In either case the only apparent purpose of pronouncing adjournment is to indicate the time and place of any future hearing or sitting of the court.
52	In the days when parties and practitioners attended at sittings in the hope of being heard, but without the benefit of a fixed hearing date, pronouncement of the date at which the court would resume sitting indicated when they should return. The question of adjournment was, at one stage, important in the English system because of the large amount of work which was performed by judges pursuant to commissions. It seems to have been thought that if sittings held pursuant to commission were not adjourned from day to day, the commission would lapse. See Hale’s The History of the Pleas of the Crown, vol II at pp 24 and 297. Notionally, all business performed pursuant to a commission was treated as having been transacted on the first day. See The Oxford History of the Laws of England, vol 6 at p 260. See also Whitaker v Wisbey (1852) Cox’s CC 107. At least in Queensland, and probably other states, analogous, although not identical, systems were adopted. See, for example, the Supreme Court Act 1867 (Qld) at ss 24, 30 and 33. At 260-261 of The Oxford History vol 6, there is also discussion of the practice of adjourning the assize to another location. There is no reflection of any aspect of the commission system in the practice of this Court. As far as we can see the FM Rules are also free of any such reflection.
53	As to adjourning a matter (as opposed to the court), in Holdsworth’s A History of English Law, vol 1 at 282, there is mention of the practice of adjourning a matter heard at an assize to the royal court from which it had come. No doubt part-heard matters were also adjourned from day to day, with or without formal orders.
54	We are aware that at least until quite recently, practitioners were often concerned that a particular proceeding might lapse if not mentioned and disposed of in some way on the nominated hearing date. We have sought to identify any basis for such concern. In Yapp v William [1901] WN 91, it was said that:

56	This note suggests that at least where all parties attend, a summons will not lapse if not adjourned. It may be that there was a particular problem with motions. Order 5 r 1 of the English Rules (as they were in 1987), provided that proceedings in the High Court might be begun by writ, originating summons, originating motion or petition. The distinction between a "notice of motion" and a "motion" is important. A motion would be moved in court on the notified day. A notice of motion gave notice of the intention to do so. This may be contrasted with the rules concerning other initiating documents. Order 6 provided for the issue of writs originating actions. Originating summonses were regulated by O 7. Order 7 r 5 made it clear that proceedings were commenced by the issue of the originating summons. Order 9 r 2 contemplated commencement of proceedings by presentation of a petition. As to summonses in pending causes, O 32 r 1 provided for application by summons. With motions the matter was otherwise. Order 8 r 2 contemplated an application by motion but required that such motion generally not be made ‘without previous notice to the parties’. Rule 3 provided for notice of motion. Thus, at least in form, there was a significant difference between a notice of motion, which was not, itself, an application, and the other initiating documents which were applications. It would follow that if a motion was not moved on the nominated date, the notice would lapse. There would, in any event, be no extant proceedings.
57	In In re Keystone Knitting Mills’ Trade Mark [1929] 1 Ch 92, Clauson J proceeded upon the basis that filing of a notice of motion did not commence proceedings. In that case a notice of motion was served on 15 July 1927, but the motion was first before the court on 22 July 1928. Clauson J (at 99) treated the latter date as the date of commencement of proceedings. The Court of Appeal did not depart from that view. Notwithstanding the historical similarities between English and Australian practice and rules, Jacobs J held, in Thunderbird Products Corporation v Thunderbird Marine Products Pty Ltd [1974] HCA 51; (1974) 131 CLR 592 at 602-603, that the filing of a notice of motion under the High Court Rules commenced proceedings. It follows that in the event of non-appearance on the nominated date, the proceedings might be struck out, but they would not lapse.
58	In this Court O 19 r 7 clearly contemplates a motion surviving, notwithstanding its not having been adjourned on the appointed day for hearing. Order 32 deals with trials. The term "trial" is defined in O 1 r 4 to include ‘any hearing other than an interlocutory hearing’. Rules 2 and 3 deal with default of appearance by either party or both parties. Neither rule appears to contemplate that a matter will automatically lapse in the event that no order is made. It is possible that the practitioners’ concern to which we have referred arose from knowledge of the English view of motions. However the rules of this Court seem to reflect the view expressed by Jacobs J in Thunderbird Products.
59	The only initiating document under the FM Rules is an application. However s 43 of the Bankruptcy Act, itself, provides for the use of a petition. We find nothing in the FMA or the FM Rules which suggests that proceedings in that court will lapse if not dealt with by some form of order on an appointed hearing date. The existence of an administrative process for fixing hearing dates suggests otherwise. We also note that s 42 of FMA directs that the Federal Magistrates Court is to proceed without undue formality. Section 57 provides that proceedings are not generally to be invalidated by ‘a formal defect or irregularity’. It would be inconsistent with these statutory provisions to hold that a matter will lapse if a formal order is not made on an appointed hearing date.
60	Nothing in the Bankruptcy Act suggests that a petition needs to be adjourned from day to day in order to avoid its lapsing. Indeed, it might be thought that s 52 suggests to the contrary. Section 52(1) provides for the making of sequestration orders; s 52(2) provides for dismissal; and s 52(3) provides for stays. Section 52(4) provides that a petition will lapse upon expiry of the prescribed method. That express prescription would seem to exclude the possibility that a petition might lapse if, for some reason, it was not adjourned from a nominated date until another date of hearing within the prescribed period.
61	We do not consider that there is any particular purpose, other than to give notice of a future hearing date, for pronouncing an adjournment order at the end of a hearing in bankruptcy. Where the intention is to reserve the decision indefinitely, there is no such matter of which to give notice. It is no doubt desirable that at the end of any hearing, the status and future course of the matter be clearly identified. The practice of pronouncing an adjournment will, in many cases, be appropriate to achieve that outcome. However that does not lead us to conclude that reservation of judgment implies an order for adjournment. Such an implication is unnecessary. The status and future course of the matter are clear.
62	We do not mean to imply that an adjournment may never be the subject of an order. If an order for adjournment is pronounced, it may or may not satisfy the test to which we have referred. For example, where one party seeks an adjournment over opposition, the decision to adjourn or not to adjourn may be determinative of the parties’ respective rights to have the question determined judicially. In such a case, the decision to adjourn would be a judgment or order for all practical purposes. However that is hardly the effect of an indication by a judge that he or she is presently unable to give a judgment and will do so at a later time.
63	We conclude that there is no reason to treat reservation of judgment as implying an order for adjournment. Of course, reserving judgment will have the effect of adjourning the matter, but it does not follow that there is an order of adjournment.

65	There were then particulars of the claimed costs, followed by the words, ‘Reserved for consideration AGMCG (presumably the initials of the magistrate), 1.10.76.’
66	The Attorney General submitted that the magistrate had no power to reserve the question of costs and sought a writ of certiorari quashing such reservation. The relevant rules provided for a writ of certiorari to bring up a judgment or order. At 646 His Honour said: