Setting Aside Judgments and Orders

Dr Andrew Greinke 13 St James’ Hall Chambers

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The competing general principles involved in reopening, rehearing and setting aside judgments and orders are: 1.1 the private interest in achieving “perfect” justice as between the parties to the proceeding; the private and – more importantly – the public interest in the finality of litigation.

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It has recently also been recognised that the Civil Procedure Act 2005 (NSW) reinforces the latter consideration, and emphasises the affordable, efficient and timely disposal of matters before the courts as a relevant factor. 1 While the court has a general inherent power to control its own processes, including entry and setting aside of judgments, the following are typical examples of where the court will and will not intervene. This inherent power has also been supplemented and modified by express rules.

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Reopening
4. With leave of the court, a party may reopen its case at any stage of the trial including after the trial has concluded. Whether leave will be given typically turns on the extent of prejudice to the other parties, 2 and an explanation why the evidence was with reasonable diligence was not discovered earlier. 3 Other factors relevant to reopening evidence are: 5.1 5.2 5.3
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where a party believed a particular witness would be called who was not ultimately called at trial; 4 a defence is raised for the first time during addresses; 5 whether if credible the new evidence would affect the result. 6

MK & JA Roche Pty Ltd v Metro Edgley Pty Ltd [2006] NSWSC 810 at [94] per Einstein J. Smith v New South Wales Bar Association (No 2) (1992) 176 CLR 256. Re Australasian Meat Industry Employee’s Union (WA Branch); ex parte Ferguson (1986) 67 ALR 491. Baker v Furlong [1891] 2 Ch 172. Burns v Joseph [1969] Qd R 130. Baker v Palm Bay Island Resort Pty Ltd (No 1) [1970] QWN 25.

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1 where the authorities on which judgment was determined have been subsequently overruled. Morelle Ltd v Wakeling [1955] 2 QB 379. The lost opportunity must be through accident and without fault by that party. ie formally drawn up and sealed by the court. 10. 9 Other examples where further argument may be permitted are: 8.11. usually orally. or otherwise treated as having been entered with the practice of the court. Smith v New South Wales Bar Association (No 2) (1992) 176 CLR 256. 7 The courts take an even more stringent approach to an application to reopen a case so as to make further argument. 8. Harrison v Harrison [1955] Ch 260. an order takes effect as soon as it is pronounced.6.3 Entry of Orders 9. otherwise. An order or judgment of the court is taken to be “entered”: 14 10. Reopening will not be permitted merely to fortify the evidence by calling a witness that might have been made available for the trial. That is a jurisdiction “sparingly exercised” so as not to “subvert the finality of litigation”. 10 the court proceeded on a clearly mistaken view as to the state of the evidence. and when it is “entered”.4 UCPR. 12 7. Setting Aside Judgments and Orders 2 . as soon as a document embodying the order is signed and sealed by the registrar. 15 10. Wentworth v Woolahra Municipal Council (1982) 149 CLR 672. where it is recorded as entered in a computerised court record system.1 if ordered to be entered forthwith. or where the evidence is the result of a deliberate choice by Counsel. compare O 36 r 7 of Federal Court Rules. even though the filing date will be later. UCPR Rule 36.2 8. Unless varied by the rules of court. There are two stages to the making of the order. 8 One example where further argument would be permitted is where the court has reached a conclusion of fact or law that the unsuccessful party had no opportunity to argue. 8.2 7 8 9 10 11 12 13 14 Murray v Figge (1974) 4 ALR 612. the order is “pronounced” when it is given by the court. rather than inadvertence. 13 and the “date” of an order is the date on which it is pronounced. Orders as to costs take effect from the filing of the decision on costs assessment: Rule 36. 11 the court proceeded in ignorance of a statutory provision. Rule 36.4(2). Autodesk Inc v Dyason (No 2) (1993) 176 CLR 300 per Brennan J. O 35 r 3 Federal Court Rules.

The plaintiff might seek to amend a default judgment as a matter of the court’s general discretionary power to amend documents at any stage of the proceeding. Where regularly entered the court has an unfettered discretion to review all the circumstances of the case. Even the slightest failure to comply with the rules may render the judgment liable to be set aside. Costs are usually ordered against the plaintiff. as of right if it was irregularly entered.2 14.11. 19 The court will also take into account the reasons for 15. National Mutual Life Association of Australasia Pty Ltd v Oasis Developments Pty Ltd [1983] 2 Qd R 441. Usually the certificate of the associate or the judge’s signature or initials on short minutes handed up during the hearing.1 13. The process of entering or “taking out” orders is also known as “settlement” of orders. The order while defective is nonetheless operative and enforceable until such time as it is set aside: DCT v Abberwood Pty Ltd (1990) 19 NSWLR 530. 18 If found to be irregular the judgment must be set aside and the court will not inquire as to whether any reasonable defence can be shown. Once entered. The most cogent consideration is whether the defendant has an arguable defence on the merits. Fortunately modern registries tend to eliminate much of the bureaucracy inherited from 19th century chancery practice. The formal entry of an order is a significant event as the jurisdiction to reopen. otherwise as a matter of discretion of the court. 16. which then crosschecks the draft against the court file 16 before drawing up the final order and sealing it. where default judgment was entered for an incorrect sum. In assessing irregularity strict compliance with the rules is required. Typically the party seeking the formal order will lodge a draft of the formal order with the registry. for example. ___________________________ 15 16 17 18 19 Unfortunately this is a field where the (often arcane) internal practices of particular court registries can play a significant role. Default Judgments 13. 17 12. set aside or otherwise recall an order is broader before it is entered than after. Such an amendment could be sought. the interest in finality of litigation strongly militates against any review of a judgment otherwise than by way of appeal. University of Wollongong v Metwally (No 2) (1985) 60 ALR 68. This process used to involve making an “appointment” with the registry and attendances from the parties before a registrar. A default judgment may be set aside: 13. Setting Aside Judgments and Orders 3 . There was also a practice of using Counsel’s notes.

An affidavit sworn by a solicitor as to instructions provided by a client is not a sufficient affidavit as to merits.2 fraud.3 20 21 22 23 24 25 Evans v Bartlam [1937] AC 473. The court has wide powers to impose terms on any an order setting aside a default judgment. Yankee Doodles Pty Ltd v Blemvale Pty Ltd [1999] QSC 134. Guss v Magistrates Court of Victoria [1998] 2 VR 106. Such terms will be designed to protect the position of the non-defaulting party. 19. Hall v Nominal Defendant (1966) 117 CLR 423 at 440. There is authority for the view that since an application to set aside a default judgment is interlocutory. 20.1 22. any delay in applying to set the judgment aside. although such a course might only underscore the triable issues. 25 18. Setting Aside Judgments and Orders 4 . 24 new evidence has become available which was not available at the time of the first application. repeated applications can be made if initially unsuccessful. 21 While a draft defence should be annexed. and prejudice to the plaintiff. These can include payment in court or security for costs.default. 17. The court will typically order the defendant to pay the costs of the plaintiff of entering the judgment and the motion to set aside. Eddaglide Pty Ltd v Taubert [2000] NSWSC 1226. The defendant will be required to show an arguable defence brought in good faith. 22. 22 This runs contrary to the principle of finality of litigation. 20 This usually requires direct evidence by persons who themselves can swear to the facts giving rise to triable issues. On some applications the court may permit cross-examination on the affidavit as to merits. Christie v Baker [1998] 2 VR 582. 23 the first application was dismissed on a technicality. Hewitt v Mirror Newspapers Ltd (1977) 17 ACTR 1. 22. an affidavit made in general terms verifying a proposed pleading will not be a sufficient affidavit as to the merits. Meddings v Council of the City of Gold Coast [1988] 1 Qd R 528. The better view of the law is that a second application to set aside will be an abuse of process unless exceptional circumstances can be shown such as: 22. without a hearing of the issues on the merits. 21.

The principles here are generally the same as for reopening of a case as discussed above. The proper course where an application has been dismissed on its merits is to appeal that decision rather than bring another application.23.1 the judgment was made irregularly. 27 The power will not be exercised to enable some general reopening or review of the case. The courts have a discretion to set aside or vary a judgment before it has been entered. In NSW and also in the Federal Court. High Court). The real issue is when such a power is likely to be exercised. 28 The power is exercisable by the trial judge and may be exercised on the judge’s own initiative.3 26 27 28 29 30 Rule 36. issue overlooked by Counsel. Setting Aside Judgments and Orders 5 .15(1) UCPR. Before Judgment Entered 24. 26 Nonetheless the courts will be reluctant to exercise that power due to the interest in finality and the potential for reopening of the proceedings more broadly. “obtained by fraud”). authorities subsequently overruled (eg by House of Lords. 29 the parties consent. 26. 27. illegally or against good faith (in the Federal Court. O 35 r 7(2)(b). 30 the judgment was entered by default (above). material misapprehension of the facts. State Rail Authority v Codelfa Constructions Pty Ltd (1982) 150 CLR 29. Rule 36. 25. The superior courts have an inherent power to control their own process. whether interlocutory or final. ignorance of applicable legislation. Rule 36.2 27. Autodesk Inc v Dyason (No 2) (1993) 176 CLR 300.16(1) UCPR. which includes power to set aside or vary its own orders. O 35 r 7(1) Federal Court Rules. there are express powers to set aside a judgment or order even after it has been entered where: 27. After Judgment Entered 27.15(2) UCPR. O 35 r 7(2)(f). Examples of intervention by the courts are: ♦ ♦ ♦ ♦ ♦ ♦ ♦ mistake about the state of the evidence. appeal court’s misunderstanding of trial judge’s reasons. fresh evidence.

Rule 36.4 27. O 35 r 7(3). or absence of proper service. 31 32 33 34 35 36 37 38 39 Rule 36. the applicant should initiate fresh proceedings so that the allegations of fraud can be properly tried.5 the judgment was entered in the absence of a party. 29. While there remains an inherent power for a court to set aside a final judgment based on fresh evidence. Harrison v Schipp (2002) 54 NSWLR 612. including provision of full particulars of the fraudulent conduct. 33 the order was for an injunction or the appointment of a receiver (Federal Court only). this jurisdiction has in practice been subsumed within the appellate process. 32 the order was interlocutory. The applicant can show irregularity and illegality without alleging any misconduct. 30. Hoskins v Van Den-Braak (1998) 43 NSWLR 290.7 27.8 27.9 28. O 35 r 7(2)(a). Where the basis to set aside is fraud.16.27.(2)(c) UCPR. An example would be entering judgment for more than was found to be due by the court. 35 the “slip rule” applies. O 35 r 7(2)(d). O 35 r 7(2)(e). O 35 r 7(2)(c). 38 Another basis would be the entry of default judgment contrary to an agreement between the parties. 31 the judgment was entered in the absence of a party to be added as a defendant to a claim for possession of land (NSW only). 37 As all appellate courts have a statutory power to receive additional evidence. the proper course where the only basis for review is fresh evidence is by way of appeal.6 27.17 UCPR.16(2)(b) UCPR. and not by application to set the judgment aside. 34 the order does not properly reflect the intention of the court (Federal Court only). 36 27. McDonald v McDonald (1965) 113 CLR 529. 39 There is an unresolved question as to whether a judgment obtained by fraud is a nullity ab initio. Rule 36. Rule 36. Setting Aside Judgments and Orders 6 . or was in ignorance of payments made.16(3) UCPR.

staying proceedings or imposing an interlocutory injunction. however. 41 This ground applies not only in respect of ex parte applications. but the courts do limit the scope to which interlocutory issues can be re-agitated by the parties. Interlocutory Orders 36. The party bringing the application to set aside need not be the absent party . Nicholson v Nicholson [1974] 2 NSWLR 59. Such an approach does not offend the principle of finality of litigation as interlocutory orders do not create any res judicata or other estoppels. such as urgent injunctions. Orders made in the absence of a party are liable to be set aside as a breach of natural justice.31. 38.1 31. 35. the fraud was not in contest and was only discovered after judgment. 44 Where a matter of substance has been determined on the merits. 32. Where both parties consent orders may be set aside provided the court is satisfied that rights of third parties will not be affected. 40 41 42 43 44 Cameron v Cole (1944) 68 CLR 571. the court will require a reasonable explanation for the failure to appear and an evidentiary basis for reopening. To set aside on the grounds of fraud the applicant must show that: 31. 40 The power of the court is broad and extends to wholly discharging the first order and substituting a different order. Douglass v Gillman (1990) 19 NSWLR 570. The court may at any time revisit and vary or set aside its interlocutory orders. Setting Aside Judgments and Orders 7 . 34. as well as third parties likely to be adversely affected by the orders. Re Great Eastern Cleaning Services Pty Ltd [1978] 2 NSWLR 278. 43 33.2 the information would probably have affected the judgment. 42 The rule also applies to cross-claimants and cross-defendants. however. but even were a party fails to appear after being given proper notice of a hearing.the party who obtained the order can also apply under the rule. Hardie Rubber Co Pty Ltd v General Tire & Rubber Co (1973) 129 CLR 521. then the abuse of process principle applies. An applicant seeking to revisit a substantive 37. Procedural directions and orders may be revisited and varied at any time where necessary for the proper conduct of the proceeding. In the latter case. Examples are setting aside a default judgment. Wilkshire v Commonwealth (1976) 9 ALR 325.

It is within the power of the court to extend time for compliance with a self-executing order even if made by consent. 54 40. fraud. such as: 45 38. Adam P Brown Male Fashions Pty Ltd v Phillip Morris Inc (1981) 148 CLR 170. 43.interlocutory order will also need to show a ground for reopening the issue. fresh evidence not reasonably available at the first hearing. Setting Aside Judgments and Orders 8 . Chanel Ltd v FW Woolworth & Co Ltd [1981] 1 WLR 485. This is an incorrect view. There was a long line of cases following Whistler v Hancock (1878) 3 QBD 83. Ainsworth v Wilding [1896] 1 Ch 673. 47 breach of a condition of the order or a related order. 41. 45 46 47 48 49 50 51 52 53 54 Brimaud v Honeysett Instant Print Pty Ltd (1988) 217 ALR 44. There is a widely held view that consent orders cannot be revisited except by the agreement of the parties.1 38. 51 Similarly. 53 This is now seen as incorrect. self-executing orders may be revisited even where time limits have been breached. see Freeman v Rabinov [1981] VR 539. Baines v State Bank of New South Wales (1985) 2 NSWLR 729. Siebe Gorman & Co v Pneupac Ltd [1982] 1 All ER 377. 42.4 39. When an order is made “by consent” or an undertaking volunteered it may indicate a binding agreement between the parties. 50 Even if the court finds a binding agreement the ultimate question is what the interests of justice require. Alford v Ebbage [2003] 1 Qd R 343. Morgan v 45 Flers Avenue Pty Ltd (1987) 11 NSWLR 573.2 38. Torrac Nominees Pty Ltd Karabay [2007] NSWCA 96. Any interlocutory order may be set aside even if made by consent and formally entered. 48 This also applies to interlocutory undertakings formally made to the court. Mullins v Howell (1879) 11 Ch D 763. Chandless-Chandless v Nicholson [1942] 2 KB 321. 52 It was at one time believed that where a self-executing order dismissed a proceeding (for example for want of prosecution) this became a final order not capable of being set aside except by appeal. 49 or it may merely indicate that one of the parties took a position that it would not oppose the orders sought by the other. 46 a material change in circumstances. In this context the agreement of the parties is merely one factor – albeit an important one – to take into account. Purcell v FC Trigwell Ltd [1971] 1 QB 358.3 38.

O 35 r 7(3). or “until the hearing or earlier order”. That would be a question of reopening. correcting the grammar of the order . The slip rule does not permit supplementary orders on matters not considered or decided at the original hearing. Permanent Trustee Co (Canberra) Ltd v Stocks & Holdings (Canberra) Pty Ltd (1976) 15 ACTR 45. 59 49. The court has a power to vary an order even after it has been entered under the “slip rule”. 57 Examples of where the slip rule applies are: ♦ ♦ ♦ ♦ ♦ ♦ 48. 58 The slip rule acts retrospectively from the date of the original order. clarification of an order as to costs where ambiguously drafted. 47. 56 The rule can only apply where there can be no bona fide difference of opinion as between the parties. or inserting a date for compliance where accidentally omitted. Setting Aside Judgments and Orders 9 . correcting the calculation of interest. Hatton v Harris [1892] AC 5478. Brew v Whitlock (No 3) [1968] VR 504. 28 FLR 195. Arnett v Holloway [1960] VR 22. or including interest where omitted due to oversight of the judge or the parties. granting a certificate for Counsel. A widely used formula in determining whether the slip rule applies is whether. 55 The principal matter that needs to be shown is that the error arises from a “slip” or “accidental omission” rather than from a deliberate decision by the judge. correcting the names of the parties.44. The “slip rule” 45. if the error had been drawn to the attention of the court the error would have been corrected as a matter of course. so the court will not apply the slip rule where to do so would adversely affect third parties or would otherwise create difficulties. Where an order is made expressly “until further order”. even where by consent. D’Angola v Rio Pioneer Gravel Co Pty Ltd [1977] 2 NSWLR 227. correcting an incorrect date for compliance.17 UCPR.eg inserting a “not” where accidentally omitted. 55 56 57 58 59 Rule 36. 46. If the correction is controversial then the slip rule is inappropriate. such order is usually construed as contemplating that either party to seek to vary or set aside the order.

or where an important point of principle is involved. 60 61 San-Dee Pty Ltd v Farah Constructions Pty Ltd (No 3) [2006] NSWCA 329. removal of the need to demonstrate by evidence a change in circumstances or fresh evidence as the basis for revisiting the order (although these will be matters relevant to the court’s discretion). but will be limited to questions of practical implementation of the order. Costs may be imposed on a party if the party was responsible for the mistake or error. Liberty to Apply 51. A liberty to apply on a final order does not permit a reopening of the issue. by their very nature. whether interlocutory or final may be revisited on appeal. Setting Aside Judgments and Orders 10 .2 Appeal 55. The provision for liberty is particularly important when dealing with final orders. The issue is typically which path to take. and is to be implied where an order is expressly made “until further order”. child support). which (apart from the situations above) can only be set aside by appeal or the instigation of a fresh proceeding. A court may provide for “liberty to apply”. 54. Any order of a court. Chanel Ltd v FW Woolworth & Co Ltd [1981] 1 All ER 745. 53. 54.50. 60 A liberty is exercised by bringing a motion within the existing proceeding.1 regulation of the manner of the application (eg liberty to apply on notice of “24 hours” or even “one hour”). While preferable to apply to the same judge that made the original order. Liberty to apply is implied within interlocutory orders. While liberty to apply is technically unnecessary for interlocutory orders. the usefulness of making such a provision lies in: 54. 61 In some statutory jurisdictions (eg family law) parties may be permitted to make any application to vary or discharge a range of particular orders at any time (eg parenting orders. which contemplates that the parties may require the assistance of the court in implementation of the order. any judge has power to apply the slip rule. 52. As a general rule of thumb an appeal is more appropriate where the parties’ ultimate rights are at issue. There will be instances where both an appeal and an application to set aside are available.

65 This is because the order maybe reopened by the court in a technical sense. Similarly. and (in most jurisdictions) requiring leave to appeal from an interlocutory order. and not the nature of the application giving rise to the order. When in doubt the prudent course might be to bring an application to seek leave to appeal. compare s 254 Supreme Court Act 1995 (Qld). An order is a final order to the extent that the order finally disposes of the rights of the parties in relation to the principal proceeding. 63 The issue of whether an order is final or interlocutory can be a difficult one. ss24(1).1 60. Niemann v Electronic Industries Ltd [1978] VR 431. 60. finally determines the parties’ rights in a practical sense. an order refusing an application to dismiss a proceeding for want of prosecution is interlocutory. which may well be that the decision. 57. Setting Aside Judgments and Orders 11 .56. 62 Leave is also required to appeal an order entered by consent or as to costs only.2 a prima facie case for error in the original decision. 24(1A) and 25 Federal Court of Australia Act 1976 (Cth). s101(2)(c) Supreme Court Act 1970 (NSW). An order dismissing an application to set aside a default judgment is treated as interlocutory even though the effect is final. 66 62 63 64 65 66 s101(2)(e) Supreme Court Act 1970 (NSW). This is reflected in the rules. It turns on the nature of the order. 58. 64 Regard must be had to the legal rather than the practical effect of the order. which provide for varying or setting aside of interlocutory orders (above). as will orders dismissing a proceeding or entering judgment with damages to be assessed following determination of a preliminary question or case stated. while technically interlocutory. An applicant will need to show: 60. Wrongness of the decision is not sufficient to show injustice. to which no single formula has been successfully applied. Carr v Finance Corp of Australia Ltd (No 1) (1981) 147 CLR 246. An order for a permanent stay will be final. 59. and substantial injustice would be done if the decision were to stand. s253 Supreme Court Act 1995 (Qld). even though in a practical sense such an application may be doomed to failure. Hall v Nominal Defendant (1966) 117 CLR 423. 61. but an order dismissing the proceeding is final. Something further needs to be shown.

Dr Andrew Greinke Barrister agreinke@stjames.au 13th Floor St James' Hall 169 Phillip Street Sydney NSW 2000 DX 266 Sydney Clerk: Emma Cupitt Chambers Mobile Fax 02 9335 3091 04 0746 0076 02 9012 0065 Setting Aside Judgments and Orders 12 .net.

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