FEDERAL COURT OF AUSTRALIA Plaza Carpark Pty Ltd v Chor Shing Ma (No 2) [2010] FCA 1139 Citation: Plaza Carpark Pty Ltd v Chor Shing Ma (No 2) [2010] FCA 1139 Parties: PLAZA CARPARK PTY LTD (ACN 075 613 526), KAM TAI (AUST) PTY LTD AS TRUSTEE OF THE KAM TAI FAMILY TRUST NO 3, AUSTRALIA SUN WAH PTY LTD AS TRUSTEE OF THE MH YIP SETTLEMENT NO 2, AUSTRALIA SUN WAH PTY LTD AS TRUSTEE OF THE Y K NGAN SETTLEMENT NO 2, JU-JEN PTY LTD AS TRUSTEE OF THE FENG LIN CHENG FAMILY TRUST, BRIGHT (AUST) PTY LTD AS TRUSTEE OF THE SO PUI HIU TRUST NO 2, AUSTRALIA SUN WAH PTY LTD AS TRUSTEE OF THE WONG SUN WEN SETTLEMENT NO 3 and YUNG YUAN CO PTY LTD AS TRUSTEE OF THE HUANG FAMILY SETTLEMENT NO 2 v VICTOR CHOR SHING MA and SINO GLOBAL BUSINESS SERVICES PTY LTD (ACN 058 082 910) File number: SAD 38 of 2009 Judge: MANSFIELD J Catchwords: JUDGMENTS AND ORDERS – slip rule – scope of "accidental slip or omission" Legislation: Federal Court Rules O 35 r 7(3) Cases cited: Plaza Carpark Pty Ltd v Chor Shing Ma [2010] FCA 449 Elyard Corporation Pty Ltd v DDB Needham Sydney Pty Ltd (1995) 61 FCR 385 Date of judgment: 20 October 2010 Date of hearing: 20 October 2010 Place: Adelaide Division: GENERAL DIVISION Category: Catchwords Number of paragraphs: 16 Counsel for the Applicants: B Roberts Solicitor for the Applicants: Cowell Clarke Counsel for the Respondents: R Ross-Smith Solicitor for the Respondents: Fletcher Lawson IN THE FEDERAL COURT OF AUSTRALIA SOUTH AUSTRALIA DISTRICT REGISTRY GENERAL DIVISION SAD 38 of 2009 BETWEEN: PLAZA CARPARK PTY LTD (ACN 075 613 526) First Applicant KAM TAI (AUST) PTY LTD AS TRUSTEE OF THE KAM TAI FAMILY TRUST NO 3 Second Applicant AUSTRALIA SUN WAH PTY LTD AS TRUSTEE OF THE MH YIP SETTLEMENT NO 2 Third Applicant AUSTRALIA SUN WAH PTY LTD AS TRUSTEE OF THE Y K NGAN SETTLEMENT NO 2 Fourth Applicant JU-JEN PTY LTD AS TRUSTEE OF THE FENG LIN CHENG FAMILY TRUST Fifth Applicant BRIGHT (AUST) PTY LTD AS TRUSTEE OF THE SO PUI HIU TRUST NO 2 Sixth Applicant AUSTRALIA SUN WAH PTY LTD AS TRUSTEE OF THE WONG SUN WEN SETTLEMENT NO 3 Seventh Applicant YUNG YUAN CO PTY LTD AS TRUSTEE OF THE HUANG FAMILY SETTLEMENT NO 2 Eighth Applicant AND: VICTOR CHOR SHING MA First Respondent SINO GLOBAL BUSINESS SERVICES PTY LTD (ACN 058 082 910) Second Respondent JUDGE: MANSFIELD J DATE OF ORDER: 20 OCTOBER 2010 WHERE MADE: ADELAIDE THE COURT ORDERS THAT: 1. The application by the respondents pursuant to Order 35 rule 7(3) of the Federal Court Rules is refused. 2. The respondents pay to the applicants the costs of the application. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. The text of entered orders can be located using Federal Law Search on the Court's website. IN THE FEDERAL COURT OF AUSTRALIA SOUTH AUSTRALIA DISTRICT REGISTRY GENERAL DIVISION SAD 38 of 2009 BETWEEN: PLAZA CARPARK PTY LTD (ACN 075 613 526) First Applicant KAM TAI (AUST) PTY LTD AS TRUSTEE OF THE KAM TAI FAMILY TRUST NO 3 Second Applicant AUSTRALIA SUN WAH PTY LTD AS TRUSTEE OF THE MH YIP SETTLEMENT NO 2 Third Applicant AUSTRALIA SUN WAH PTY LTD AS TRUSTEE OF THE Y K NGAN SETTLEMENT NO 2 Fourth Applicant JU-JEN PTY LTD AS TRUSTEE OF THE FENG LIN CHENG FAMILY TRUST Fifth Applicant BRIGHT (AUST) PTY LTD AS TRUSTEE OF THE SO PUI HIU TRUST NO 2 Sixth Applicant AUSTRALIA SUN WAH PTY LTD AS TRUSTEE OF THE WONG SUN WEN SETTLEMENT NO 3 Seventh Applicant YUNG YUAN CO PTY LTD AS TRUSTEE OF THE HUANG FAMILY SETTLEMENT NO 2 Eighth Applicant AND: VICTOR CHOR SHING MA First Respondent SINO GLOBAL BUSINESS SERVICES PTY LTD (ACN 058 082 910) Second Respondent JUDGE: MANSFIELD J DATE: 20 OCTOBER 2010 PLACE: ADELAIDE REASONS FOR DECISION 1 The respondents have applied under O 35 r 7(3) of the Federal Court Rules to have the orders made in this matter on 1 June 2010 altered on the basis that they contain errors arising from an accidental slip or omission. The orders have been entered, but there is no dispute about the power of the Court to make such a correction, if it is appropriate. 2 The orders were made in two separate documents. They are attached to these reasons for decision. 3 I delivered judgment in this matter on 11 May 2010: Plaza Carpark Pty Ltd v Chor Shing Ma [2010] FCA 449. At that time, I directed the applicants, who had been successful in the proceeding, to prepare and submit within 14 days draft orders to give effect to the reasons for judgment in the expectation that the parties would be able to agree the terms of those orders. They were unable to do so, and the applicant's exercised the liberty to apply to make submissions on the appropriate orders. 4 The orders of 1 June 2010 were then duly made. At the time, orders 1-9 were not resisted by the respondents. Orders 10-12 were made to enable the respondents, as they had requested, to pursue an application to adduce further evidence on a particular issue. Orders 13-15 were made, but as is apparent were not to be sealed until 11 June 2010, to cover the eventuality that the foreshadowed application by the respondents for leave to re-open their case on that particular issue was not pursued. The application was not pursued and those orders were duly entered on 10 June 2010. The appeal from those orders is listed for hearing before the Full Court on 25 November 2010. 5 The present application, apart from a minor typographical error in para 3 of the orders to substitute "his" for "its" (an order which the applicants accept is appropriate) is to delete the words "and second respondents" and substitute the word "respondent" in orders 7 and 13 of the orders so made. The respondents contend that the liability of the second respondent under orders 7 and 13 reflects an accidental slip in those orders. 6 I note that, at present, there is no ground of appeal which challenges the correctness of orders 7 and 13, insofar as they prescribe joint liability of the first and second respondents. Counsel for the respondents indicated that it is proposed, at the hearing of the appeal, to seek leave to amend the grounds of appeal to include such a ground. I do not regard the fact that, at present, there is no ground of appeal raising the particular matter the subject of this application, in the circumstances, as a reason to decline it. 7 In Elyard Corporation Pty Ltd v DDB Needham Sydney Pty Ltd (1995) 61 FCR 385, the Full Court considered the scope of O 35 r 7(3). Lockhart J (with whom Black CJ agreed) said at 391: It is well settled that the application of the slip rule is not confined to giving effect to the intention of the judge at the time when the court's 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. The rule also extends to permit the correction of an order or decree where the omission results from the correction of an order or decree where the omission results from the inadvertence of a party's legal representative. (References omitted.) 8 That rule reflects what is commonly called the slip rule, which may be invoked whether or not the orders in question have been duly entered. It is to enable the correction of judgments which did not correctly state what was actually decided and intended. 9 In that case, Lindgren J at 404 suggested that the slip rule might be applied in respect of an accidental slip or omission, where one might expect the response when the slip or omission comes to light of it being acknowledged to be an obvious one. 10 The claim in this matter largely concerned the sum of $700,000 received by the first respondent in circumstances which it found to be inappropriate and applied by him firstly as to $350,000 to acquire units in the name of the second respondent in units in the Plaza Unit Trust, and as to the balance of $350,000 applied by him for personal purposes. It is the second-mentioned sum of $350,000 which is the subject of orders 7 and 13. 11 The second respondent's position in relation to the sum of $350,000 the subject of orders 7 and 13 is clearly different from its position in relation to the orders in respect of that sum applied to acquire units in the Plaza Unit Trust. In respect of that sum, the second respondent was the direct beneficiary of the improper receipt and application of those funds. 12 It was at all times the applicants' case that the second respondent should jointly be liable with the first respondent in respect of the misapplied sum of $350,000 dealt with in orders 7 and 13, based upon the relationship between the first and second respondents as discussed in [3], [7], [17], [24], [25], [29] and [31] of the reasons for decision, as well as [40] and [67]. That position was asserted in the application, and in the closing submissions on behalf of the applicants. The applicant's proposed orders, as presented on 1 June 2010, in particular order 7 as made, indicated its position clearly. That order was duly made without, at the time, opposition on behalf of the respondents. As noted, their concern was then confined to the order dealing with interest payable on that sum. 13 I have considered the reasons for judgment, and in particular [12], [19], [40], [52], [67] and [76] referred to by counsel for the respondents. 14 Some of those paragraphs refer to the relationship between the two respondents. In [12], there is a reference to the fact that neither paid for the units in the Plaza Unit Trust from its own resources. Some simply refer to the actual transactions which occurred. In [52] and [76] there is reference to the first respondent's liability for the use of the $350,000 in question, but in the context of him being the principal actor, it is not a finding that the second respondent is not accountable to the applicants in respect of it. There is elsewhere, including in [52] reference to the second respondent's position, as well as in those parts of the reasons for judgment referred to by the applicants. 15 Having regard to the applicant's claim as consistently expressed, and the reasons for judgment, addressing it, I do not consider that the terms of orders 7 and 13, insofar as they provide for the second respondent to be jointly liable with the first respondent, were made in circumstances in which it is appropriate to invoke Order 35 r 7(3) of the Federal Court Rules. In my view, the terms of those orders do not reflect an accidental slip or omission of the character to which that rule refers. There are a number of examples of the application of that rule, or its analogues, or under the implied powers of a court, so as to correct an order under the slip rule. I do not think they extend to circumstances where the order sought to be corrected was made on the basis of the case consistently presented by the successful party, and in respect of which findings as sought by the successful party have been made in the course of the reasons for judgment. 16 Accordingly, subject to correcting order 3 by substituting the word "his" for the word "its", I decline to make the order sought by the respondents. In those circumstances, the respondents should pay to the applicants their costs of the application dealt with by these reasons for decision. I certify that the preceding sixteen (16) numbered paragraphs are a true copy of the Reasons for Decision herein of the Honourable Justice Mansfield. Associate: Dated: 20 October 2010 IN THE FEDERAL COURT OF AUSTRALIA SOUTH AUSTRALIA DISTRICT REGISTRY GENERAL DIVISION No: SAD38/2009 PLAZA CARPARK PTY LTD ACN 075 613 526 First Applicant KAM TAI (AUST) PTY LTD AS TRUSTEE OF THE KAM TAI FAMILY TRUST NO 3 Second Applicant AUSTRALIA SUN WAH PTY LTD AS TRUSTEE OF THE MH YIP SETTLEMENT NO 2 Third Applicant AUSTRALIA SUN WAH PTY LTD AS TRUSTEE OF THE Y K NGAN SETTLEMENT NO 2 Fourth Applicant JU-JEN PTY LTD AS TRUSTEE OF THE FENG LIN CHENG FAMILY TRUST Fifth Applicant BRIGHT (AUST) PTY LTD AS TRUSTEE OF THE SO PUI HIU TRUST NO 2 Sixth Applicant AUSTRALIA SUN WAH PTY LTD AS TRUSTEE OF THE WONG SUN WEN SETTLEMENT NO 3 Seventh Applicant YUNG YUAN CO PTY LTD AS TRUSTEE OF THE HUANG FAMILY SETTLEMENT NO 2 Eighth Applicant VICTOR CHOR SHING MA First Respondent SINO GLOBAL BUSINESS SERVICES PTY LTD ACN 058 082 910 Second Respondent ORDER JUDGE: Mansfield J DATE OF ORDER: 1 June 2010 WHERE MADE: Adelaide THE COURT ORDERS THAT: 1. It is declared that the second respondent holds its interest in 502,000 units in the Plaza Car Park Unit Trust for: 1.1 the second applicant beneficially as to 62,750 units; 1.2 the third applicant beneficially as to 62,750 units; 1.3 the fourth applicant beneficially as to 62,750 units; 1.4 the fifth applicant beneficially as to 62,750 units; 1.5 the sixth applicant beneficially as to 62,750 units; 1.6 the seventh applicant beneficially as to 62,750 units; and 1.7 the eighth applicant beneficially as to 125,500 units. 2. The second respondent forthwith execute and deliver to the solicitors for the applicants' transfers of their interest in units in the Plaza Car Park Unit Trust in the form annexed to this order as follows: 2.1 to the second applicant in the amount of 62,750 units; 2.2 to the third applicant in the amount of 62,750 units; 2.3 to the fourth applicant in the amount of 62,750 units; 2.4 to the fifth applicant in the amount of 62,750 units; 2.5 to the sixth applicant in the amount of 62,750 units; 2.6 to the seventh applicant in the amount of 62,750 units; and 2.7 to the eighth applicant in the amount of 125,500 units. 3. The first respondent holds its interest in one share in Plaza Car Park Pty Ltd for: 3.1 Kam Chi Yan as to a one eighth interest; 3.2 Ip wai Ching as to a one eighth interest; 3.3 Chan Yat Choi as to a one eighth interest; 3.4 Feng Lin Cheng as to a one eighth interest; 3.5 Li Chun Yeung as to a one eighth interest; 3.6 Cheung Fuk Lam as to a one eighth interest; 3.7 Huang Yung as to a one eighth interest; 3.8 Huang Wu Man Chu as to a one eighth interest. 4. The first respondent forthwith execute and deliver to the solicitors for the applicants transfers of their interest in shares in Plaza Car Park Pty Ltd in the form annexed to this order as follows: 4.1 Kam Chi Yan in the amount of one eighth interest; 4.2 Ip Wai Ching in the amount of one eighth interest; 4.3 Chan Yat Choi in the amount of one eighth interest; 4.4 Feng Lin Cheung in the amount of one eighth interest; 4.5 Li Chun Yeung in the amount of a one eighth interest; 4.6 Cheung Fuk Lam in the amount of a one eighth interest; 4.7 Huang Yung in the amount of a one eighth interest; and 4.8 Huang Wu Man Chu in the amount of a one eighth interest. 5. If the respondents do not execute and deliver transfers as required by orders 2 and 4 within 7 days of the making of this order then: 5.1 the Registrar of the Court is hereby appointed to act on behalf of the respondents pursuant to Order 37 rule 3(1)(a); and 5.2 the Registrar of the Court is hereby directed to execute and deliver transfers as required by orders 2 and 4 on behalf of the respondents pursuant to Order 37 rule 3(1)(b). 6. The first respondent is released from any liability to pay Plaza Car Park Unit Trust the amount of $700,000 by way of repayment of the unsecured liability recorded in the balance sheet of the first applicant as trustee of the Plaza Car Park Unit Trust prepared as at 30 June 2007 and subsisting thereafter. 7. The first and second respondents pay the first applicant in its capacity as trustee of the Plaza Car Park Unit Trust equitable compensation in the sum of $350,000.00. 8. The cross claim is dismissed. 9. The respondents pay the applicants' costs of the proceedings and of the cross claim. 10. The respondents' foreshadowed application for leave to re-open their case, confined to the issue as to whether there is a difference between the interest rate payable by the respondents on the $350,000.00 applied to personal use and the rate which would have been payable on an unsecured borrowing of that amount, is to be filed and served by 8 June 2010. 11. The respondents' foreshadowed application be fixed for hearing on 11 June 2010 at 4.15pm. 12. Further consideration of the making of orders 13, 14, and 15 made on 1 June 2010 be deferred to 4.15pm on 11 June 2010. (Note: Further orders numbered 13, 14, 15 and 16 are in a separate order.) Date that entry is stamped: 9 June 2010. District Registrar IN THE FEDERAL COURT OF AUSTRALIA SOUTH AUSTRALIA DISTRICT REGISTRY GENERAL DIVISION No: (P)SAD38/2009 PLAZA CARPARK PTY LTD ACN 075 613 526 First Applicant KAM TAI (AUST) PTY LTD AS TRUSTEE OF THE KAM TAI FAMILY TRUST NO 3 Second Applicant AUSTRALIA SUN WAH PTY LTD AS TRUSTEE OF THE MH YIP SETTLEMENT NO 2 Third Applicant AUSTRALIA SUN WAH PTY LTD AS TRUSTEE OF THE Y K NGAN SETTLEMENT NO 2 Fourth Applicant JU-JEN PTY LTD AS TRUSTEE OF THE FENG LIN CHENG FAMILY TRUST Fifth Applicant BRIGHT (AUST) PTY LTD AS TRUSTEE OF THE SO PUI HIU TRUST NO 2 Sixth Applicant AUSTRALIA SUN WAH PTY LTD AS TRUSTEE OF THE WONG SUN WEN SETTLEMENT NO 3 Seventh Applicant YUNG YUAN CO PTY LTD AS TRUSTEE OF THE HUANG FAMILY SETTLEMENT NO 2 Eighth Applicant VICTOR CHOR SHING MA First Respondent SINO GLOBAL BUSINESS SERVICES PTY LTD ACN 058 082 910 Second Respondent ORDER JUDGE: Mansfield J DATE OF ORDER: 1 June 2010 WHERE MADE: Adelaide THE COURT ORDERS THAT: 13. The first and second respondents pay the first applicant in its capacity as trustee of the Plaza Car Park Unit Trust equitable compensation by way of interest on the sum of $350,000 payable by Order 7 made on June 1 2010 as follows: 13.1 interest thereon in respect of the period up to the date of this Order in the sum of $910,778.48; 13.2 interest thereon accruing at the rate of $323.84 per day from 2 June 2010 until all amounts payable pursuant to the Order 7 of the Orders made in this matter on 1 June 2010 are paid in full or 30 November 2010 (whichever is earlier); and 13.3 interest thereon accruing at the rate of $338.97 per day from 1 December 2010 until all amounts payable pursuant to Order 7 of the Orders made in this matter on 1 June 2010 are paid in full or 31 May 2011 (whichever is the earlier). 14. Upon payment in full of the amounts set out in Orders 13.1 to 13.3 of these Orders and Order 7 of the Orders made in this matter on 1 June 2010 the second to eighth applicants are to: 14.1 use their best endeavours to procure the unconditional release by the Commonwealth Bank of Australia (Bank) of all obligations of the first applicant subsisting pursuant to the guarantee entered into by the first respondent dated 28 October 1996 (Guarantee); and 14.2 pending the grant of the release described in order 14.1, indemnify the first applicant against any liability he may have to pay the Bank in response to any demand made by the Bank pursuant to the Guarantee. 15. These Orders not be sealed until 5pm on 11 June 2010 or such earlier date as ordered. 16. In the event that the respondents do not file by 8 June 2010 the foreshadowed application and supporting material detailed in Order 10 of the Orders made in this matter on 1 June 2010, these Orders be enlivened on 9 June 2010. Note: The orders 1 to 12 are in a separate order. Date that entry is stamped: 10 June 2010. District Registrar