Dr Andrew Greinke
13 St James’ Hall Chambers
2. 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
3. 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.
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
1 MK & JA Roche Pty Ltd v Metro Edgley Pty Ltd [2006] NSWSC 810 at [94] per Einstein J.
2 Smith v New South Wales Bar Association (No 2) (1992) 176 CLR 256.
3 Re Australasian Meat Industry Employee’s Union (WA Branch); ex parte Ferguson (1986) 67 ALR 491.
4 Baker v Furlong [1891] 2 Ch 172.
5 Burns v Joseph [1969] Qd R 130.
6 Baker v Palm Bay Island Resort Pty Ltd (No 1) [1970] QWN 25.
1
6. Reopening will not be permitted merely to fortify the evidence by
calling a witness that might have been made available for the trial, or
where the evidence is the result of a deliberate choice by Counsel,
rather than inadvertence. 7
Entry of Orders
9. There are two stages to the making of the order, the order is
“pronounced” when it is given by the court, usually orally, and when it
is “entered”, ie formally drawn up and sealed by the court. Unless
varied by the rules of court, an order takes effect as soon as it is
pronounced, 13 and the “date” of an order is the date on which it is
pronounced, even though the filing date will be later.
Default Judgments
13. A default judgment may be set aside:
15. 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. Such an amendment could be sought, for example,
where default judgment was entered for an incorrect sum.
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15 Unfortunately this is a field where the (often arcane) internal practices of particular court registries can
play a significant role.
16 Usually the certificate of the associate or the judge’s signature or initials on short minutes handed up
during the hearing. There was also a practice of using Counsel’s notes.
17 University of Wollongong v Metwally (No 2) (1985) 60 ALR 68.
18 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.
19 National Mutual Life Association of Australasia Pty Ltd v Oasis Developments Pty Ltd [1983] 2 Qd R 441.
20. The court has wide powers to impose terms on any an order setting
aside a default judgment. Such terms will be designed to protect the
position of the non-defaulting party. These can include payment in
court or security for costs. The court will typically order the defendant
to pay the costs of the plaintiff of entering the judgment and the motion
to set aside.
21. There is authority for the view that since an application to set aside a
default judgment is interlocutory, repeated applications can be made if
initially unsuccessful. 22 This runs contrary to the principle of finality of
litigation.
22. 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:
22.1 fraud; 23
22.3 new evidence has become available which was not available at
the time of the first application. 25
25. The courts have a discretion to set aside or vary a judgment before it
has been entered. 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. 27 The power will not be
exercised to enable some general reopening or review of the case. 28
The power is exercisable by the trial judge and may be exercised on
the judge’s own initiative.
26. The principles here are generally the same as for reopening of a case
as discussed above. Examples of intervention by the courts are:
♦ mistake about the state of the evidence;
♦ fresh evidence;
28. While there remains an inherent power for a court to set aside a final
judgment based on fresh evidence, this jurisdiction has in practice
been subsumed within the appellate process. 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, and not by application to set the judgment aside.
29. The applicant can show irregularity and illegality without alleging
any misconduct. An example would be entering judgment for more
than was found to be due by the court, or was in ignorance of
payments made, or absence of proper service. 38 Another basis would
be the entry of default judgment contrary to an agreement between the
parties.
30. Where the basis to set aside is fraud, the applicant should initiate
fresh proceedings so that the allegations of fraud can be properly tried,
including provision of full particulars of the fraudulent conduct. 39 There
is an unresolved question as to whether a judgment obtained by fraud
is a nullity ab initio.
31.2 the fraud was not in contest and was only discovered after
judgment.
32. Where both parties consent orders may be set aside provided the
court is satisfied that rights of third parties will not be affected.
33. Orders made in the absence of a party are liable to be set aside as a
breach of natural justice. 40 The power of the court is broad and
extends to wholly discharging the first order and substituting a different
order. 41
34. This ground applies not only in respect of ex parte applications, such
as urgent injunctions, but even were a party fails to appear after being
given proper notice of a hearing. In the latter case, however, the court
will require a reasonable explanation for the failure to appear and an
evidentiary basis for reopening.
35. The party bringing the application to set aside need not be the absent
party - the party who obtained the order can also apply under the
rule. 42 The rule also applies to cross-claimants and cross-defendants,
as well as third parties likely to be adversely affected by the orders. 43
Interlocutory Orders
36. The court may at any time revisit and vary or set aside its interlocutory
orders. Such an approach does not offend the principle of finality of
litigation as interlocutory orders do not create any res judicata or other
estoppels, but the courts do limit the scope to which interlocutory
issues can be re-agitated by the parties.
37. Procedural directions and orders may be revisited and varied at any
time where necessary for the proper conduct of the proceeding. 44
40 Cameron v Cole (1944) 68 CLR 571, Re Great Eastern Cleaning Services Pty Ltd [1978] 2 NSWLR 278.
41 Douglass v Gillman (1990) 19 NSWLR 570.
42 Nicholson v Nicholson [1974] 2 NSWLR 59.
43 Hardie Rubber Co Pty Ltd v General Tire & Rubber Co (1973) 129 CLR 521.
44 Wilkshire v Commonwealth (1976) 9 ALR 325.
38.1 fraud;
39. There is a widely held view that consent orders cannot be revisited
except by the agreement of the parties. This is an incorrect view. 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.
41. Even if the court finds a binding agreement the ultimate question is
what the interests of justice require. In this context the agreement of
the parties is merely one factor – albeit an important one – to take into
account. 51
45 Brimaud v Honeysett Instant Print Pty Ltd (1988) 217 ALR 44.
46 Chanel Ltd v FW Woolworth & Co Ltd [1981] 1 WLR 485.
47 Adam P Brown Male Fashions Pty Ltd v Phillip Morris Inc (1981) 148 CLR 170.
48 Mullins v Howell (1879) 11 Ch D 763; Ainsworth v Wilding [1896] 1 Ch 673.
49 Chandless-Chandless v Nicholson [1942] 2 KB 321.
50 Siebe Gorman & Co v Pneupac Ltd [1982] 1 All ER 377.
51 Alford v Ebbage [2003] 1 Qd R 343; Morgan v 45 Flers Avenue Pty Ltd (1987) 11 NSWLR 573; Purcell v
FC Trigwell Ltd [1971] 1 QB 358.
52 Baines v State Bank of New South Wales (1985) 2 NSWLR 729.
53 There was a long line of cases following Whistler v Hancock (1878) 3 QBD 83, see Freeman v Rabinov
[1981] VR 539.
54 Torrac Nominees Pty Ltd Karabay [2007] NSWCA 96.
46. A widely used formula in determining whether the slip rule applies is
whether, if the error had been drawn to the attention of the court the
error would have been corrected as a matter of course. 56 The rule can
only apply where there can be no bona fide difference of opinion as
between the parties. If the correction is controversial then the slip rule
is inappropriate. 57
48. The slip rule does not permit supplementary orders on matters not
considered or decided at the original hearing. That would be a
question of reopening. 58
49. The slip rule acts retrospectively from the date of the original order, so
the court will not apply the slip rule where to do so would adversely
affect third parties or would otherwise create difficulties. 59
Liberty to Apply
51. A court may provide for “liberty to apply”, which contemplates that the
parties may require the assistance of the court in implementation of
the order. The provision for liberty is particularly important when
dealing with final orders, which (apart from the situations above) can
only be set aside by appeal or the instigation of a fresh proceeding.
52. A liberty to apply on a final order does not permit a reopening of the
issue, but will be limited to questions of practical implementation of the
order. 60 A liberty is exercised by bringing a motion within the existing
proceeding.
Appeal
55. Any order of a court, whether interlocutory or final may be revisited on
appeal. The issue is typically which path to take. There will be
instances where both an appeal and an application to set aside are
available. As a general rule of thumb an appeal is more appropriate
where the parties’ ultimate rights are at issue, or where an important
point of principle is involved.
60 San-Dee Pty Ltd v Farah Constructions Pty Ltd (No 3) [2006] NSWCA 329.
61 Chanel Ltd v FW Woolworth & Co Ltd [1981] 1 All ER 745.
58. Regard must be had to the legal rather than the practical effect of the
order. An order dismissing an application to set aside a default
judgment is treated as interlocutory even though the effect is final. 65
This is because the order maybe reopened by the court in a technical
sense, even though in a practical sense such an application may be
doomed to failure. Similarly, an order refusing an application to
dismiss a proceeding for want of prosecution is interlocutory, but an
order dismissing the proceeding is final.
59. An order for a permanent stay will be final, as will orders dismissing a
proceeding or entering judgment with damages to be assessed
following determination of a preliminary question or case stated.
60.1 a prima facie case for error in the original decision; and
62 s101(2)(e) Supreme Court Act 1970 (NSW); ss24(1), 24(1A) and 25 Federal Court of Australia Act 1976
(Cth); compare s 254 Supreme Court Act 1995 (Qld).
63 s101(2)(c) Supreme Court Act 1970 (NSW); s253 Supreme Court Act 1995 (Qld).
64 Carr v Finance Corp of Australia Ltd (No 1) (1981) 147 CLR 246.
65 Hall v Nominal Defendant (1966) 117 CLR 423.
66 Niemann v Electronic Industries Ltd [1978] VR 431.