OBRADOVIC v FAIR TRADING ADMINISTRATION CORPORATION SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL SHELLER and COLE JJA 16 December 1997 [1997] NSWCA 238 Sheller and Cole JA Motion On 15 November 1996 Todd Obradovic filed a notice of appeal from * a decision of Herron DCJ of 1 November 1996 setting aside a decision of the Registrar of the District Court of New South Wales to order a rehearing pursuant to s18 of the Arbitration (Civil Actions) Act 1983 (the Act), resulting in a judgment of the Court in the amount of $17,299.55, and * that part of a decision of Sidis DCJ of 5 June 1996 referring back to an arbitrator, Mr Barnes, the question of interest under an award made by Mr Barnes. On 13 March 1997 the respondent, Fair Trading Administration Corporation, then known as the Building Services Corporation (BSC), applied by notice of motion to have the appeal struck out as incompetent. Mr Obradovic sought leave to appeal, if the appeal was held to be incompetent. By a statement of claim issued on 25 July 1990 the BSC began proceedings against Mr Obradovic, a licensed builder, to recover $16,666 being the amount expended by the BSC in paying another builder to rectify building work carried out by Mr Obradovic for a named proprietor. In the claim interest, pursuant to s83A of the District Court Act 1993 was sought. A defence was filed on 26 March 1991 and the matter set down for hearing by arbitration on 31 August 1994. Mr Barnes heard the matter on 31 August 1994 and made an award on 16 December 1994. The arbitrator observed that on the case presented on the hearing, BSC's claim related solely to work required to rectify water penetration of a building erected by the plaintiff [sic the defendant]. The arbitrator said that it was established from the evidence that that part of the works which related to the rectification amounted to $9,067. The arbitrator added: "Although I appreciate that under the terms of the relevant Act the plaintiff was enticed to make a claim for works other than that referred to above having regard to the manner in which the case was presented I do not propose to allow any part of the plaintiff's claim beyond the sum of $9,067." His award was a verdict and judgment in favour of the plaintiff in that amount and that the defendant should pay the plaintiff's costs and disbursements properly payable in respect of the claim in that amount. We should have thought it plain enough from this award that no account was taken of the claim for interest. On 19 January 1994 Mr Obradovic applied for an order under s18 (2) of the Act for rehearing. So far as relevant, s18 provides: "(1) Except to the extent that this section and s17 otherwise provide, an award of an arbitrator made pursuant to this Act is final and conclusive and not liable to be called in question. 2 UNREPORTED JUDGMENTS (2) Except in the case of a referred action where the amount claimed, or the value of the property to which the action relates, does not exceed the amount prescribed for the purposes of this section, the court by which an action was referred to an arbitrator, or the registrar of that court, shall order a rehearing of the action if application for such an order is made by a person aggrieved by the award of the arbitrator and is so made before that award becomes enforceable as a judgment or order of the court. (3) Where an order is made under subs(2): (a) the award that gave rise to the order ceases to have effect; and (b) subject to subs(4), the action to which the order relates shall be heard and determined in the court as if it had never been referred to an arbitrator. (5) If, after an order is made under subs(2) with respect to an award: (a) the applicant for the order files a notice of discontinuance of the rehearing of the action; (c) in accordance with the rules, the court orders that the award be reinstated: (i) on being satisfied that the applicant does not intend to proceed with the rehearing; or (ii) for such other reason as to the court appears sufficient, the order under subs(2) ceases to have effect and the award shall be deemed to be a judgment or order of the court." S3(1) of the Act defines "referred action" relevantly as an action the subject of an unrevoked reference under s63A of the District Court Act 1973. S63A enables the District Court to refer actions for determination pursuant to the Act. The matter was listed for hearing before Sidis DCJ on 3 June 1996 and proceeded on 4 June. On that day, at the end of the hearing, Mr Obradovic's counsel, Mr Debuse, indicated his client's intention to file a notice of discontinuance of the rehearing pursuant to s18(5) of the Act. On the morning of 5 June 1996, Mr Debuse sought to file in Court the notice of discontinuance. Mr Thompson, who appeared for BSC, sought, before that was done to file a notice of motion seeking a number of orders, inter alia, leave to file and serve instanter a notice of rehearing. BSC also sought a determination of its entitlement to interest. The orders sought in BSC's notice of motion, so far as presently relevant, were: "1. Pursuant to s18 (2) of the Arbitration (Civil Actions) Act 1983 and DCR Pt3, r2 the plaintiff have leave to file in court and serve instanter a form of Application for Rehearing of Arbitrated Action in the form annexed hereto and marked 'A'. 2. The hearing of the appeal referred to in 1 (above) proceed before Her Honour forthwith. 5. The hearing of the appeal be restricted to the question of the plaintiff's claim for interest on the sum awarded by the arbitrator. 6. Pursuant to and at the rates prescribed pursuant to s83A of the District Court Act 1973, the defendant pay the plaintiff interest on the sum of $9,067.00 from 22 September 1989 to the date of judgment. \WFRRADOVIC v FAIR TRADING ADMINISTRATION CORPORATION (Sheller and Cole JAB [In the alternative] 8. The proceedings herein be remitted back to Mr Arbitrator J H Barnes for the purpose of his determining the question of the interest payable on the award made by him on 16 December 1994." On 5 June 1996 but before Sidis DCJ gave judgment or made orders on BSC's application, she noted that the defendant, Mr Obradovic, had filed a notice of discontinuance of his application for rehearing of the action. In her reasons for judgment Judge Sidis observed that the basis for BSC's application was its claim that the arbitrator had not dealt with the question of interest on the award made and that the discontinuance by Mr Obradovic of the proceedings had denied BSC the opportunity of putting to the Court argument in relation to its claim for interest. Her Honour observed that the award was entirely silent on the question of interest. She considered it appropriate for the matter to be raised with the arbitrator for clarification. Her Honour made the following orders: "1. That pursuant to s18 (2) of the Arbitration (Civil Actions) Act 1982 and District Court Rules Pt3 r2, the plaintiff have leave to file in court and serve instanter a form of application for rehearing of arbitrated action in the form annexed to the notice of motion and marked A. 2. That the determination be referred back to Mr Arbitrator Barnes for the purpose of clarification of the question of whether his award was inclusive or exclusive of interest, and if the award was exclusive of interest, whether he considers it appropriate to vary the award to provide for interest to be paid as claimed by the plaintiff." Her Honour then dealt with questions of costs. The second part of Mr Obradovic's appeal was against O2. On 4 July 1996 the matter came back before Arbitrator Barnes, who made a supplementary award on 10 July 1996. The arbitrator confirmed that he did not give consideration to the question of interest. He said he could see no basis on which BSC should be disentitled in respect of its claim for interest. He observed that a calculation of interest was prepared by counsel for BSC and that calculation was accepted by counsel for Mr Obradovic. He therefore amended his original award by adding thereto the following: "The plaintiff shall in addition to the sum of $9,067.00 being the damages awarded shall be entitled to interest in the sum of $8,232.55. [M]ly award therefore is that there should be a verdict and judgment for the Plaintiff in the sum of $17,299.55." On 6 September 1996 Mr Obradovic again applied for an order under s18(2) of the Act for rehearing of the action. A Registrar of the District Court fixed the matter for hearing on 12 November 1996. On 1 November 1996 Herron DCJ, on a motion by BSC, set aside the order for rehearing. The first part of Mr Obradovic's appeal was from this decision. S7 of the Act, so far as presently material, provides: "(1) The jurisdiction conferred on an arbitrator by this Act in relation to a referred action is part of the jurisdiction of the court by which the action was referred. (1A) Subject to this Act, but without limiting the specific powers and authorities of an arbitrator under this Act, an arbitrator has and may exercise, in relation to a referred action, all of the powers and authorities of the court by which the action was referred. 4 UNREPORTED JUDGMENTS (1C) The powers and authorities conferred on an arbitrator shall be exercised only: (a) for the purposes of determining the issues in dispute in a referred action and of making an award; and (b) for related purposes. (2) Subject to this Act, a tribunal other than the arbitrator to whom an action has been referred for determination pursuant to this Act has no jurisdiction in respect of any issue in dispute in the action while it is before the arbitrator. (3) In subs(2), 'tribunal* means any court, tribunal, board or other body, or any person, empowered by an Act or by agreement of parties to determine by litigation, arbitration, conciliation or otherwise any issue that is in dispute." Pt17 r10(1) of the District Court Rules as in force in July 1996 provided: "Where there is a clerical mistake, or an error arising from an accidental slip or omission, in a judgment or order, or in a certificate, the court, on the application of any party or without any such application, may, at any time, correct the mistake or error." In L Shaddock & Associates Pty Ltd v Parramatta City Council (No 2) (1983) 151 CLR 590 at 594-5, the High Court, speaking of O29 rll of the High Court Rules, which in all relevant respects was identical to Pt17 r10(1), the traditional form of a slip rule, said: "Tt reflects the inherent jurisdiction of the court 'at any time to correct an error in a decree or order arising from a slip or accidental omission' (see Milson v Carter [1893] AC 638 at 640). In terms, the rule provides, inter alia, that 'an error arising in a judgment or order from an accidental slip or omission, may at any time be corrected by the court or a justice on motion or summons'. This is so, regardless of whether the order has been drawn up, passed and entered (see Milson v Carter at 640; Fritz v Hobson [1880] 14 Ch D 542 at 560." We have no doubt whatever that by operation of s7 of the Act and Pt17 r10(1) of the District Court Rules the arbitrator, so long as the reference remained unrevoked, might, on the application of any party or without any such application, correct a clerical mistake, or an error arising from an accidental slip or omission in his award. As the High Court pointed out in Shaddock's: case at 595, it is competent or a court, pursuant to the slip rule, to amend the court's previous order to make provision for interest upon damages to which the applicant's have been held to be entitled, for the period between the date on which judgment was given and the date on which the orders were made in court. The interest sought and awarded by the arbitrator was not from the date of the award from 1 December 1989 which was some two months after BSC indemnified the proprietor in terms of the Building Services Act. Analogous appears to have been the claim for interest under the slip rule rejected in Whitlock v Brew (1968) 118 CLR 445, a case which the Court in Shaddock distinguished on the basis that at the relevant time the Victorian Supreme Court Act 1958 provided that an order allowing interest could only be made "at the hearing upon application". The original order without interest was seen to have properly reflected the court's intention so that the slip rule did not apply. In appropriate circumstances, but for the limitation imposed by the Victorian Act, interest from the date when the cause of action arose might have been awarded under the slip rule. In the present case the arbitrator confirmed that he did not give consideration to the question of interest which suggests that he overlooked it. Such an oversight seems to us to fall well within the now accepted expansive view of the slip rule \WFRRADOVIC v FAIR TRADING ADMINISTRATION CORPORATION (Sheller and Cole JAB discussed by McHugh JA, as his Honour then was, in Storey & Keers Pty Ltd v Johnstone (1987) 9 NSWLR 446 at 449-453. The result was that the arbitrator might correct the mistake by amending his award. The result was an amended award not a new award effective from the date it was originally made; compare Storey & Keers Pty Ltd v Johnstone at 454. This was so even though the document dated 10 July 1996 was headed "Supplementary Award". The BSC challenged the Registrar's order listing this for rehearing on Mr Obradovic's application. Herron DCJ took the view, we think correctly, that there was no new award and set aside the order for rehearing. We have no doubt that his Honour's judgment was interlocutory. The award as amended and dating from 16 December 1994 finally disposed of the rights of the parties. Subject to one matter to which we will return, pursuant to s18(1) of the Act the award was final and conclusive and not liable to be called in question. The effect of the notice of discontinuance of the rehearing under subs(5) was that the award was deemed to be a judgment or order of the Court. An order setting aside an attempt to invoke a further rehearing of the same award was, it seems to us, according to the rather ill defined dichotomy between final and interlocutory orders (as to which see Carr v Finance Corporation of Australia Ltd (No 1) (1981) 147 CLR 246) an interlocutory order against which an appeal lay to this Court only by leave: s127 of the District Court Act. However there is a further matter upon which Mr Obradovic relied. As we have said, the statutory effect of discontinuance before Judge Sidis was that the award was deemed to be a judgment or order of the court. By what power then could her Honour refer back the question of interest to the arbitrator? Her Honour did this by giving BSC leave to file in court and serve instanter a form of application for rehearing of arbitrated action and then referred back the determination to the arbitrator for the purpose of clarification of the question of whether his award was inclusive or exclusive of interest. If effective under subs(3) this meant that the award ceased to have effect. But this course of action was beyond power. Once Mr Obradovic filed a notice of discontinuance the award became a judgment or order of the court beyond the reach of any power to order a rehearing. This is made plain by subs(2) itself which provides that the application for an order for rehearing must be made "before that award becomes enforceable as a judgment or order of the court". Sidis DCJ, on 5 June 1996, some time before she gave judgment and made orders, inter alia, giving the plaintiff leave to file in Court and serve instanter a form of application for rehearing and referring the determination back to the arbitrator, noted that the defendant had filed a notice of discontinuance of his application for rehearing of the current action and proceeded to deal with Mr Thompson's notice of motion. But the fact that once that happened the court had no power to entertain an application for a rehearing and in the course of it refer the matter back to the arbitrator does not detract from the arbitrator's power under the slip rule at "any time" to correct a mistake. Accordingly it seems to us that it matters not how the application to apply the slip rule came back to the arbitrator. The arbitrator could have corrected the mistake without any application or on the application of either party however made. In short the fact that what Sidis DCJ did was beyond power in no way affects the amendment of the award. Mr Debuse conceded that the appeal against the decision of Sidis DCJ was an appeal against an interlocutory judgment or order. The right to appeal depended, according to this submission, upon the competence of the appeal against the decision of Herron DCJ. Since in our opinion Herron DCJ's orders were 6 UNREPORTED JUDGMENTS interlocutory the appeal against the decision of Sidis DCJ was, on any view, incompetent, the points raised have no merit and there is no ground for leave to appeal from her Honour's decision. In our opinion the appeal is incompetent and should be struck out. No ground at all has been shown why this Court should grant leave to appeal on grounds which have no merit. Obviously an order for interest should have been made and the amount fixed was agreed by counsel for Mr Obradovic. We propose the following orders: 1. Appeal is struck out; 2. Application for leave to appeal is refused; 3. Defendant is to pay the plaintiff's costs of both applications.