Binaco Textiles v Bobotin Kiribati Ltd [2017] KIHC 11; Civil Case 90 of 2013 (19 April 2017)

IN THE HIGH COURT OF KIRIBATI

CIVIL CASE NO. 90 OF 2013

[BINACO TEXTILES PLAINTIFF
[
BETWEEN [AND
[
[BOBOTIN KIRIBATI LIMITED DEFENDANT

Before: The Hon Chief Justice Sir John Muria

26 August 2016

Ms Kiata Kabure for Plaintiff
Ms Bitarana Yeeting for Defendant

JUDGMENT

Muria, CJ: By a writ dated 12 November 2013, the plaintiff, Binaco Textiles, claimed the sum of $71,241.31 against the defendant, Bobotin Kiribati Limited, “BKL” for goods sold and delivered to it. In addition, the plaintiff also claimed 1% interest per annum as agreed upon default of payment by the defendant on the outstanding amount. The plaintiff also claimed interest on the judgment and costs.

On 2 June 2014, Judgment in Default was entered against the defendant. There had been no payment made by the defendant after the default judgment was entered. On 27 May 2015, a Consent Order was made, in which the defendant was ordered to pay to the plaintiff the principal sum of $71,241.31 as stated in the default judgment of 2 June 2014, exclusive of interest and costs.

As required, in claim, against the State, a Certificate of the Order of payment was issued by the Court on 12 October 2015. As no payment was forthcoming from the defendant, the Court issued an order, upon application by the plaintiff, compelling the defendant to make payment as agreed, by 31 December 2015.

On 15 January 2016, the defendant paid the judgment sum of $71,241.31 in Australian Dollars, to the plaintiff, on the assumption that the currency in which the claim was brought was Australian Dollars. The plaintiff now claims that the currency of the transactions between the parties were in US Dollars, as shown by the Invoices and claims the difference between the judgment sum of $71,241.31 AUD and $71,241.31 USD.

Consequently, the plaintiff has applied to amend the default judgment so that the judgment sum is expressed in US dollar, and not in Australian dollars. The plaintiff relies on O.30, r. 11 of the High Court (Civil Procedure) Rules to seek correction of the default judgment.

Arguments

The plaintiff accepted that it had been paid the judgment sum of $71,241.31 in Australian Dollars. However, as the invoices were in USD, the plaintiff has now applied to amend the judgment so that the judgment sum of $71,241.31 should be expressed in US currency. Had that been done, the plaintiff would still have been entitled to the difference between AUD71,241.31 and USD71,241.31.

The plaintiff’s contention is that the omission of the USD currency in the writ and hence, in the judgment as well, was a clerical error, since the invoices for the transactions were all in USD. The plaintiff has now asked the Court to invoke its powers under O.30 rule 11 of the High Court (Civil Procedure) Rules.

The defendant, on the other hand, in opposing the application for amendment of the judgment, argued that pursuant to the Consent Order dated 27 May 2015, the defendant paid the judgment sum as ordered in the amount of $71,241.31 AUD which is the currency commonly used in Kiribati. The defendant, therefore, suggested that the plaintiff cannot now seek to alter the amount, through a change of the currency, in the default judgment.

It is also the argument for the defendant that the plaintiff never raised the issue of currency in the pleadings or in the default judgment. As such the transactions must be assumed to have been conducted in the currency normally used in Kiribati, namely, AUD.

Issues

There are two main issues for the Court to determine here. The first is whether the Court has power to amend or vary the default judgment issued on
2 June 2014. If the Court has power to do so, the second issue is whether the amount as stated in the default judgment should be amended or altered so that it is expressed in US currency, that is “US$71,241.31” instead of “$71,241.31” as appeared in the default judgment.

I feel that it is important that when determining the issues referred to, the Court should take into account the whole of the relevant circumstances of the case, justifying revisiting the judgment. Equally important, the court must consider other relevant factors justifying amending or correcting the judgment.

The Slip Rule
The Court’s power to revisit and correct a judgment or order can be found in Order 30 rule 11 of the High Court (Civil Procedure) Rules 1964. Rule 11 states:

“Clerical mistakes in judgments or orders, or errors arising therein from any accidental slip or omission, may at any time be corrected by the Court on motion or summons without an appeal”.

The rule, sometimes referred to as the slip rule, authorizes the Court to correct clerical mistakes or error arising from accidental slip in a judgment. The books are replete with case law authorities on the application of the slip rule to correct mistakes or errors in judgments.

The earlier cases commonly applied the slip rule principle to correct mathematical mistakes in calculation of a figure in the judgment or order, or wrong date in an order or miscalculations of interest in the judgment or order, and more particularly to matters that have been in issue and litigated. But the NSW Court of Appeal in Newmont Yandal Operations Pty Ltd –v- The J Aron Corporation & The Goldman Sachs Group, Inc. [2007] NSWCA 195; (2007) 70 NSWLR 411 has pointed out that the rule should not be given a narrow interpretation. Rather the rule should be given a wide interpretation, so that it extends to matters that have been overlooked or adding interest to judgments or extending to correction made to give effect to the intention of the judge who made the order. See
Re Walsh (1983) 83 ATC 4147; L. Shaddock and Associates Pty Ltd v Parramatta City Council (No.2) [1982] HCA 59; (1982) 151 CLR 590; Prestige Residential Marketing Pty Ltd v Depune Pty Ltd (No.2) [2008] NSWCA 341; and Ivanhoe Gold Corporation Limited v Symonds [1906] HCA 71; (1906) 4 CLR 642.

The Court in Newmont Yadal also held that “correction” under the slip rule principle must be given its natural meaning which extends to correction of mistakes in order to carry into effect the actual intention of the judge making the order. Thus, mistakes or omissions made in the order of the Court arising out of the conduct or inefficiency of a party’s lawyer are amenable to correction under the slip rule. See Storey & Keers Pty Ltd v Johnstone (1987) 9 NSWLR 446.

In the present case, it is accepted by the parties that the currency used in the transactions between the plaintiff and defendant was USD, as shown by the invoices. The total amount due under the invoices was $71,241.31 USD. However, the plaintiff’s lawyers failed to state in the Statement of Claim that the amount claimed was in USD, but simply claimed $71,241.31 as stated in the default judgment. To compound the problem in this case, the plaintiff’s lawyer failed to raise the issue of currency in Court or even at the time the consent order was made on 27 May 2015. Consequently, the defendant paid the amount $71,241.31 in Australian currency which is the currency used in Kiribati. Understandably, the defendant argued that any error in the order of the Court must fall on the shoulders of the plaintiff or its legal representative.

It is important, however, to bear in mind that apportionment of the blame for the failure or omission on the part of legal Counsel is not in point, in this case. The issue is whether the default judgment or the order of the Court can be catagorised as arising from accidental slip or omission. The failure of the lawyers may be part of the reasons for the catagorising the Court’s order as arising from accidental slip or omission. Equally, it can also be said that the default judgment and consent order can be catagorised as arising from accidental slip or omission on the part of the Court, even if the plaintiff’s lawyer adverted to the currency point in this case. See Newmont Yandal (above).

The default judgment and resultant consent order were regularly entered, but clearly there was something wrong about the judgment and the subsequent consent order. The amount $71,241.31 was not the same as $71,241.31 USD to which the plaintiff is entitled. I do not think that the Court intended its order to have such a result that is clearly prejudicial to the plaintiff.

In my judgment, the slip rule in O.30, r. 11 and authorities referred to above, support the conclusion that the Court is empowered under the slip rule to correct the error in the default judgment made on 2 June 2014. The error on the part of the Court arose from an accidental slip or omission resulting in an order which did not and could not truly reflect what the court intended.

In addition, under its inherent powers, the Court also possesses the power to revisit its order and to correct it, if the order was made without the benefit of considering a salient feature in the case, such as the proper currency for the award of damages. In my view it does not matter whether the failure to do so arose from an omission from the judge or the parties’ legal representatives.

Having found that the Court has the power to correct the error in the default judgment made on 2 June 2014 in this case, the next consideration is to determine whether the Court should exercise its discretion and amend the default judgment as requested. In this regard, factors bearing upon the Court’s discretion would include matters such as the error is clearly obvious, that is, based on the contract, the amount of loss to which the plaintiff is entitled is US Dollar 71,241.31 and not AUD 71,241.31. There is no dispute that the transactions as evidenced by the Invoices were in US Dollars; and the error in the default judgment if not corrected would result in prejudice to the plaintiff. See Newmont Yadal Operations Pty Ltd –v- The J Aron Corporation and The Goldman Sachs Group Inc. (above); Adams –v- Kennick Trading (International) Ltd (1986)
4 NSWLR 503; Goater –v- Commonwealth Bank of Australia [2014] NSWCA 382.

The case of Trawen –v- Itani [2011] PGSC 14 referred to by Ms Yeeting of Counsel for the defendant clearly supports the plaintiff’s application in this case. The glaring error in the default judgment was clear and manifest. The invoices were in US dollars to the amount of $71,241.31 and the judgment was simply $71,241.31 which the defendant took it to be in Australian dollars and paid in Australian dollars.

In my view, had the Court been alerted to the issue of the proper currency in this case, the Court would have two options, namely, to award damages in contract in the Australian currency used in Kiribati under the one currency policy stipulated in Re United Railways of Havana and Regla Warehouse Ltd;
Tomkison –v- First Pennsylvania Banking and Trust Co. (HL) [1961] AC 1007, [1960] 2 All ER 332 or to award the damages in contract in US dollars, the currency in which the loss was incurred by the plaintiff and arguably best reflect the loss sustained by the plaintiff as shown by the invoices. That would be the position taken in Miliangos –v- George Frank (Textiles) Ltd (HL) [1975] 1 WLR 758, [1976] AC 443, and see also One Steel Manufacturing Pty Ltd –v- Bluescope Steel (AIS) Pty Ltd [2013] NSWCA 27.

Having said all that, the present case is best resolved by the application of O.30 r.11 or the inherent powers of the Court. The Court therefore exercises its discretionary powers and orders that the default judgment entered on
2 June 2014 and Consent Order made on 27 May 2015 be amended by correcting the currency of the amount of damages awarded. That amount is now expressed as $71,241.31 USD instead of simply $71,241.31.

The parties are to resolve any balance due to the plaintiff (if any) based on the conversion rate obtained on 2 June 2014, the date of the default judgment.

ORDER: 1. The plaintiff’s application is granted;

2. Default judgment and the subsequent Consent Order are amended by correcting the currency of award of damages so that the amount $71,241.31 stated in the default judgment and in the subsequent Consent Order be corrected to read $71,241.31 USD or its equivalent in Australian dollars at the conversion rate on 2 June 2014;
   

3. No order on costs.

Dated the 19^th day of April 2017

SIR JOHN MURIA
Chief Justice