The ‘slip rule’

A court’s inherent (or accrued) jurisdiction includes a power to amend a clerical mistake in a judgment or order, or one arising from an accidental slip or omission.

The ‘slip rule’ under the Western Australian Supreme Court’s Rules of Court provides (together with its similarly-worded counterparts in each Australian court):

‘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 matter for correction must be ancillary to the substantive issues in the proceeding.

Some relevant considerations informing the court’s discretion under the slip rule are:

(i) its purpose is to avoid injustice to litigants. As such, courts should not be constrained by a restrictive approach to the rule’s interpretation;

(ii) an order under the slip rule is not available as a matter of course;

(iii) the power should be exercised sparingly to discourage carelessness by practitioners and not undermine finality in litigation;

(iv) the rule applies where there is no real dispute as to the matter to be corrected;

(v) undue or unexplained delay in bringing the application.

(An extensive and useful list of relevant considerations is set out in the case of Soil and Contracting Pty Ltd v Boban Pty Ltd [2014] WASC 402, at [15].)

The rule’s primary concern is with a sort of ‘rectification’ whereby ‘clerical mistakes’ made in recording a judgment can be corrected to reflect the judge’s decision and orders. There are older decisions referring to the slip rule giving effect to the court’s ‘true intention’.

The relevant ‘accidental slip or omission’ is interpreted broadly, and permits the court to pronounce upon matters that, through inadvertence, were not raised during the initial hearing. This secondary element of the rule is settled law (albeit less well-known) and enables a court to add to or amend its order so as to overcome inadvertence in the conduct of the proceeding, provided the matter for correction is uncontroversial. In other words, the ‘slip or omission’ can also be from a party in its conduct of the hearing. It operates outside of any notion of rectification per se – typically the proceeding will have been conducted by practitioners and judicial officers in ignorance of the party’s specific oversight. A recent decision of the Court of Appeal of the Supreme Court of Western Australia, illustrates such a scenario, and how the broad approach to the slip rule assisted a lender seeking to enforce its mortgage.

Commonwealth Bank of Australia v Kenney

The bank loaned money to Mr Kenney and his wife, secured by a mortgage over his property. The borrowers defaulted under the loan, then failed to meet demands and deliver vacant possession. The bank obtained summary judgment for possession of the property. The property secured by the mortgage was correctly described on the bank’s mortgage documentation. However the property was misdescribed on the bank’s notice to vacate, statement of claim and, eventually, the court’s order for possession in this way: ‘the land comprised in Lot 446 on Deposited Plan 202810 being the whole of the land comprised in Certificate of Title Volume 1586 Folio 648’. The property was misdescribed solely in that the lot number was 466, and not 446.

On 17 June 2016 the bank applied to the court to have its order for possession corrected under the ‘slip rule’ so as to reflect the correct lot number for the security property. Mr Kenney, who appears to have represented himself throughout this litigation, argued that the order was irregular and ought to be set aside. The primary judge made orders under the slip rule, which orders Mr Kenney then sought to appeal.

At first instance, Mr Kenney relied on the proposition (espoused in e.g. Elyard Corporation v DDB Needham Sydney [1995] FCA 943) that the slip rule does not apply to a mistake that is the consequence of a deliberate decision. Mr Kenney maintained that Counsel for the bank’s ‘deliberate decision’ consisted of reliance in court upon bank documentation (its notice to vacate and its statement of claim) which misdescribed the security property. Mr Kenney appears to have contrasted this consistent and ‘deliberate’ reliance with a mistake or slip.

The Court of Appeal upheld the lower court’s decision in respect of the application of the slip rule, eschewing this technical interpretation and finding in effect that there was no relevant ‘deliberate decision’ on the part of the bank’s legal advisors, noting that there was no suggestion that they were aware of the misdescription and stating it ‘was clearly a typographical or clerical error’.

Comment

Having regard to the five considerations enumerated in the introduction above, I make these observations: a court’s refusing to apply the slip rule in this case would in my respectful opinion have resulted in injustice to the bank. The security property was correctly described on the mortgage, which was before the court in the summary judgment application. Further, there was never an issue as to which property secured the mortgage, despite the misdescription appearing on the statement of claim. It is difficult to find injustice in a scenario involving this degree of acquiescence by the mortgagor. It appears that what brought the misdescription to Mr Kenney’s attention was the bank’s application under the slip rule.

Whilst lenders and practitioners can take some comfort that the Court of Appeal did not let an error which it viewed as a minor technicality prevent the bank from amending its order for possession, attention to detail on the documentation remains as fundamental as ever – whether or not the error in the notice to vacate could have created a substantial defence for Mr Kenney, the fact remains that an error in describing the security property on a notice sent pursuant to a mortgage can enable the mortgagor to argue that the lender has not complied with the procedures required by the mortgage. It is for this reason that defective notices are often withdrawn due to the increased litigation risk they pose, and substitute notices can be sent.