Heartwood Nominees Pty Ltd & Ors v Oakleigh Acquisitions Pty Ltd (In Liq) & Ors [2004] WASC 284 (30 November 2004)

Last Updated: 21 January 2005

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA

IN CHAMBERS

CITATION : HEARTWOOD NOMINEES PTY LTD & ORS -v- OAKLEIGH ACQUISITIONS PTY LTD (IN LIQ) & ORS [2004] WASC 284

CORAM : ROBERTS-SMITH J

HEARD : 30 NOVEMBER 2004

DELIVERED : 30 NOVEMBER 2004

FILE NO/S : CIV 2779 of 2002

BETWEEN : HEARTWOOD NOMINEES PTY LTD (ACN 009 171 564)

First Plaintiff

WILLIAM JAMES GROVER

VALMA JEAN GROVER

Second Plaintiffs

BARWICK INVESTMENTS PTY LTD (ACN 008 972 192)

PAMELA MARGARET DOUGALL

JOY VICTORIA GIBSON As Executor of the Will of ALFRED ERNEST DUNKLEY (DEC)

NOEL JOHN GIBSON As Executor of the Will of ALFRED ERNEST DUNKLEY (DEC)

SHIRLEY MAY GARDINER

GROOVE HOLDINGS PTY LTD (ACN 009 274 328)

DOUGLAS JAMIESON

PAULA JAMIESON

ALBERT ERNEST LEE

JUNE ROSALIE LEE

IAN MAURICE SOUTAR

JOHN KIMBERLEY SPRAY

MARILYN JOY RINALDI

EDWARD WINDSOR THOMPSON

HAROLD BENTLEY VAWSER

Third Plaintiffs

AND

OAKLEIGH ACQUISITIONS PTY LTD (IN LIQ)

First Defendant

BRYAN JOHN REID

MONICA PAULINE REID

Second Defendants

Catchwords:
Practice and procedure - Chamber summons for correction of extracted order - Whether reflected intention of court - Jurisdiction to amend extracted order - Discretion - Turns on own facts

Legislation:
Nil

Result:
Application granted

Category: B

Representation:

Counsel:

First Plaintiff : Mr A J Aristei

Second Plaintiffs : Mr A J Aristei

Third Plaintiffs : Mr A J Aristei

First Defendant : Mr M J Hawkins

Second Defendants : Mr M J Hawkins

Solicitors:

First Plaintiff : B W Duckham & Co

Second Plaintiffs : B W Duckham & Co

Third Plaintiffs : B W Duckham & Co

First Defendant : Clark Whyte

Second Defendants : Clark Whyte

Case(s) referred to in judgment(s):

Biala Pty Ltd v Mallina Holdings Ltd (1989) 2 WAR 381

Heartwood Nominees Pty Ltd & Ors v Oakleigh Acquisitions Pty Ltd (In Liq) & Ors [2003] WASC 12

Monaco v Arnedo Pty Ltd (1994) 13 WAR 522

Mullins v Howell [1879] 11 Ch D 763

Case(s) also cited:

Deputy Commissioner of Taxation v Healy [2003] WASC 38; (2003) 52 ATR 330

Esther Investments Pty Ltd v Markalinga Pty Ltd (1992) 8 WAR 400

1 ROBERTS-SMITH J: On 3 January I gave my reasons for decision on a notice of motion for interlocutory injunction by the plaintiffs seeking interlocutory injunctions that the first and second defendants be restrained from settling or otherwise completing any tender for the sale of particular property until the actions in the endorsed writ of summons had been heard or until further order.

2 The position following the giving of those ex tempore reasons in Heartwood Nominees Pty Ltd & Ors v Oakleigh Acquisitions Pty Ltd (In Liq) & Ors [2003] WASC 12 was that following further submissions by counsel I required counsel to confer and bring in a minute of agreed orders or alternatively, in the absence of agreement, proposed orders for me to determine.

3 The situation, expressed for present purposes very briefly, was that I sought a minute encompassing an order as to costs made by me on that occasion together with a suitable order giving a direction to the liquidator to hold the proceeds of sale in a separate fund to be dispersed or paid out only in accordance with a subsequent direction of the court.

4 The application now before me by way of chamber summons is for an order that the extracted order be corrected. The chamber summons was filed on 5 October 2004. The extracted order relevantly stated at [4]:

"The first defendant place the proceeds of sale of the properties comprising certificate of title volume 1924 folio 622 and Crown Lease number 38/1960 in a separate fund pending determination of the third plaintiff's claim herein."

5 What is sought is the deletion of that paragraph and its substitution with the following:

"On discharge of registered mortgage G575752 the share or interest of Oakleigh Acquisitions Pty Ltd be held by Oakleigh Acquisitions Pty Ltd by its liquidator Mark Anthony Conlan on trust until further order in accordance with the orders of the Honourable Owen J made 16 August 2001 in Supreme Court action CIV 2076 of 1999."

6 The application is opposed and as I apprehend it, it is opposed by Mr Aristei for the third plaintiffs essentially on the basis that moneys have in fact been paid out of the fund by way of sale and related costs which his clients believe involve or include excessive and/or unreasonable amounts which they have not had an opportunity to challenge and which they seek to challenge.

7 It seems to me that implicit in that submission is a view that the position of the third plaintiffs could potentially be improved in terms of moneys available to them should they have an opportunity to challenge expenditure of the kind referred to so that the corpus of the fund is thereby increased, or at least not reduced.

8 Mr Hawkins in effect submits that is not and cannot be so because moneys sufficient to cover the whole of the principal together with interest claimed by Oakleigh have been retained in a separate fund placed on interest bearing deposit. He submits that the third plaintiffs could not under any circumstances be entitled to more than repayment of their principal plus interest and that is what is being retained in the separate fund at present. Any surplus moneys, should there be any, beyond the third plaintiffs' principal and interest would not be recoverable by them but would be available for distribution to other claimants who are not parties to these proceedings.

9 The question really is whether or not the order which was extracted reflects my intention or whether it does not do so and ought to be corrected.

10 I accept that I have an inherent jurisdiction to amend an order which turns out to be incorrect, relevantly here by the inadvertence of counsel or by the failure of counsel to confer or consult in the preparation of the draft minute.

11 I say that because without going into detail it seems clear that the solicitors for the parties failed to comply with my requirement to confer and consult as to a minute of draft orders, as a consequence of which an order was presented to me which had not been settled by agreement, but was, on my understanding that it had been, signed by me and subsequently extracted. I say no more about the circumstances in which the solicitors failed to comply with that requirement. I have indicated my views as to that in the course of submissions from counsel this morning. The result, however, as I have indicated, is that because of that failure to consult there is now a situation in which it is said the extracted order does not reflect my intention as at 3 January 2003.

12 The authorities which make it clear there is an inherent jurisdiction in the Court to amend an order in these circumstances include Monaco v Arnedo Pty Ltd (1994) 13 WAR 522 at 524 and Biala Pty Ltd v Mallina Holdings Ltd (1989) 2 WAR 381 at 390 and 398. I note that the Court's discretion in this regard is larger in relation to interlocutory orders than in relation to final judgments - Mullins v Howell [1879] 11 Ch D 763 at 766.

13 It is, of course, a discretion, and that will turn on all of the circumstances of the case, including whether or not there has been undue delay and the question of prejudice to either side.

14 The position, I think, can be summarised in this way. At the hearing before me in January 2003 there was no suggestion by counsel that there would be or was any concern about expenses that might be excessive and which might reduce the corpus of the fund. My intention as then expressed was that the third plaintiffs had a serious question to be tried in relation to their claim for a constructive trust in respect of the moneys secured by Oakleigh. My conclusion was that damages would be an appropriate remedy for them in that situation and their interests could be adequately and appropriately protected by approving the sale of the property or at least not injuncting against it, but with a direction that the proceeds of the sale be held in trust such that their claims to funds by way of constructive trust could be accommodated by applications or proceedings at the appropriate time. As I expressed it at [50] of the judgment:

"The conclusion to which I come therefore is that, subject to the making of an order by me that the proceeds of the sale be held in a separate fund to be distributed in accordance with the directions of this Court, damages would be an adequate remedy for the third plaintiffs. If they can then sustain an argument that their funds can be traced and they have an equitable right to the full return of their investment plus interest, such a distribution could be made. If not, then presumably they will fall to be dealt with in the same way as other investors."

15 It was consequent upon that conclusion and my dismissal of the application for the injunction that I made the remarks referred to previously as to the nature of the orders to be brought in.

16 I appreciate there has been a degree of delay here, but there has been fault on both sides and it does not seem to me that the delay should operate to preclude the correction of the order to reflect my intention at the time, which was that the moneys to which the third plaintiffs had any potential entitlement should be preserved in a separate fund in trust to be dealt with subsequently in accordance with the directions of the Court.

17 I express it that way because clearly it was only the funds to which the third plaintiffs would have any potential entitlement that should have been dealt with in that way. If that is not clear, as appears to be so from the wording of the order which was extracted, then I would be prepared to amend it to make it clear and if the parties or counsel are agreed that the proposed amendment would have that effect, then I would be prepared to order my previous order be amended in those terms, but I will hear counsel further specifically on the form of that amending order.