Cachia v Colaco

Land and Environment Court (NSW)|2003-07-01|Before: McClellan CJ, Cowdroy J, Clellan J

Introduction 1 HIS HONOUR: This is an application to set aside a judgment on the ground of fraud. The applicants Mr and Mrs Colaco, seek to set aside orders granted in favour of the respondent, Mr Cachia, in proceedings before Cowdroy J. 2 The parties to the dispute are neighbours. They live in Delmar Drive, Copacabana where Mr Cachia is the owner of the house at 154. Mr and Mrs Colaco are the owners of the house next door at 156 Delmar Drive. 3 Mr Cachia enjoys a right of way over the rear section of Mr and Mrs Colaco's property. Before Mr and Mrs Colaco purchased their home in July 1999 Mr Norman Fritter and his wife Anne owned the property which had previously been developed with a single storey brick and tile cottage. When the Fritters bought the property in March 1996, a retaining wall and fence at the rear of the property had been built pursuant to a development consent granted in 1994. The 1994 approval was given subject to a number of conditions which included the following: · "Wall height shall not exceed 1.8 metres above natural ground level. · No additional fence shall be provided above filled area unless maximum height does not exceed 1.8 metres above natural ground level. · Wall/fence shall not be constructed over right of carriage way." 4 The Fritters obtained a consent in 1996 for additions to the dwelling and then obtained permission in 1997 to construct a swimming pool and associated fencing. The 1997 approval contained conditions in relation to fencing including: · "boundary fence to comply with all requirements of AS 1926 - Fences and Gates for Private Swimming Pools." · "swimming pool being fenced in accordance with the Swimming Pool Act 1992 …". 5 The 1997 approval was issued in respect of plans which were prepared by a swimming pool construction company. These plans were not in evidence before Cowdroy J. The plans were included on a single sheet which included a site plan. The site plan identified the boundaries of the property, the house and the proposed swimming pool. On the boundary between the Fritter and Cachia properties the following specifications for fencing were noted: · "existing block wall to be raised to 1500 high and rendered"; · "top of structural coping to be 400 above existing brick wall, middle level"; and · "proposed 1200 high glass/aluminium child-proof fence on top of existing brick wall raised 400 mm". 6 The effect of the 1997 approval is made clear by these specifications. It was an approval to raise the existing wall by 400mm, bringing the wall to the same height as the structural coping around the proposed pool, and to construct a 1200mm high glass/aluminium fence on top of the raised brick wall. 7 Mr Cachia did not accept that this was the effect of the plan, insisting that, notwithstanding the 1997 approval, compliance with the conditions of the 1994 approval was still required so that the wall must be no higher than 1.8 metres above natural level. 8 Following the 1997 approval the Fritters constructed a wall on top of the existing wall. This was not done in accordance with the approved plan. Instead of using the materials specified (glass and aluminium), they constructed a continuous brick wall. The wall was also constructed to a height exceeding that specified. 9 Apparently significant walls were also constructed over the right of carriage-way contrary to both the 1994 and 1997 consent. Mr Cachia complained about all of this construction, both to the Council, and the Fritters. He also complained to the Estate Agent who sold the property on behalf of the Fritters. 10 After the boundary wall had been constructed, the Fritters applied to the council for a Building Certificate pursuant to s 149D of the Environmental Planning and Assessment Act 1979. They were told that a certificate would be issued only after the height of the wall had been reduced to comply with the 1997 approval and work had been carried out on the finish of the wall. Although the Fritters had built the boundary wall out of brick instead of the materials specified in the approval, the Council was satisfied that a brick wall was appropriate and only required demolition of the portion exceeding the height specified by the 1997 approval. By 11 December 1998, the remedial work had been completed to the satisfaction of the council and a certificate was issued which stated that the council would not require any further demolition or alteration of the wall. 11 Mr and Mrs Colaco purchased the property on 21 May 1999 in ignorance of the fact that the Fritters had not constructed the boundary wall in accordance with the approved plan. 12 After Mr and Mrs Colaco purchased the property, Mr Cachia wrote to them informing them of his complaints. Negotiations to resolve the problem failed and Mr Cachia commenced proceedings in this Court.

The proceedings before Cowdroy J 13 The original proceedings were heard by Cowdroy J. As I have indicated, one of the complaints was the fact that extensive brick walls had been built over the right of way. His Honour found that this construction was contrary to the relevant approval and on 17 May 2002 made orders. 14 In his reasons for judgment his Honour is concerned primarily to deal with the fact that construction had occurred on the right of way. With respect to the height of the boundary wall his Honour said only this: "The height of the brick wall between lots 455 and 456 varies between 2.76 metres and 1.86 metres being contrary to the height limit of 1.8 metres fixed by condition 3 of DA 75650/94." 15 His Honour makes no reference to the height of any wall permitted by the 1997 approval and how that approval may have been reflected in the s 149D certificate issued by the council. 16 Mr and Mrs Colaco were also not aware of the plan approved in 1997 until after the original proceedings. However, they allege that Mr Cachia was aware of the true effect of the 1997 approval and, in prosecuting the proceedings before Cowdroy J, failed to tell the court of the substance of the 1997 approval or the fact that the 1997 approval superseded the 1994 approval, knowingly allowing the court to determine the matter upon a false premise. They now apply for orders that the judgment of Cowdroy J be set aside, at least in so far as it requires demolition of the wall, because, in their submission, it was obtained by fraud.

Fresh proceedings 17 The applicants originally brought a notice of motion in the proceedings before Cowdroy J seeking to have the orders of 17 May 2002 set aside. The motion was said to be brought pursuant to Pt 15 r 9 of the Land and Environment Court Rules which provides: "The Court, may, on terms, set aside or vary an order in any of the following cases: … (c) if the order was obtained by fraud." 18 Mr Cachia submitted that the proceedings were not properly constituted and relied upon the common law principle that a perfected judgment cannot be revoked or recalled: Bailey v Marinoff (1971) 125 CLR 529; Gamser v Nominal Defendant (1977) 136 CLR 145 and Harrison v Schipp (2002) 54 NSWLR 612. This is clearly the position when the jurisdiction being exercised is that of a court of equity. The Land and Environment Court exercises jurisdiction pursuant to the Land and Environment Court Act 1979 and in accordance with the rules of the Court. 19 The rules of the Court do not specify the manner in which an application to set aside a judgment should be brought. However the Court of Appeal has held that jurisdiction to set aside a judgment for fraud should be invoked by a new action brought for that purpose and not by notice of motion in the original proceedings: Spies v Commonwealth Bank of Australia (1991) 24 NSWLR 691, (see also Jonesco v Beard [1930] AC 298, McDonald v McDonald (1965) 113 CLR 529). The point having been raised, the applicant moved to file a new application in fresh proceedings but in the same terms as the notice of motion originally filed. 20 Mr Cachia resisted the application on the basis that a large part of his submissions was directed against the relitigation of proceedings. However he could not identify how he would be prejudiced, other than for the fact that a potentially winning point would be taken away. Accordingly I allowed the applicants to file a new class 4 application instanter and reserved the costs of that motion.

Particulars of fraud 21 In Wentworth v Rogers (No 5) (1986) 6 NSWLR 534 at 538 Kirby P summarised the principles relevant to an action to set aside a judgment for fraud. The first principle is that: "As in all actions based on fraud, particulars of the fraud claimed must be exactly given and the allegations must be established by the strict proof which such a charge requires: Jonesco v Beard [1930] AC 298 at 301; McHarg v Woods Radio Pty Ltd (at 497)." 22 It is well established that particulars of fraud must be stated with specificity and clarity: see Spies v Commonwealth Bank and McHarg v Woods Radio [1948] VLR 496 where Herring CJ said that in an action to set aside a judgment on the ground of fraud, "the fraud complained of is put in issue and that fraud only." 23 In the present case the relevant section of the pleading is as follows: "12. The fact of the existence of BA's 75650/94 and 3540/97 was before the Court in the proceedings, but the substance of, including the plan attaching to, BA 3640/97 was not before the court. 13. The trial judge was not aware of the conflict between the BA 75650/94 and BA 3640/97 consents. 14. During the conduct of the proceedings the court was made aware of the existence of building approval number 3640/97 granted by Gosford City Council (BA 3640/97) but the court was not made aware of the substance and effect of that building approval. 15. The applicants did not discover or become aware of the matters recited in paragraphs 6, 7 & 8 until after judgment was delivered in the proceedings. 16. In the premises: a. the judgment as it stands will render an injustice. and, in that circumstance a. the applicants pray that the court exercise the court's inherent jurisdiction to ensure that its procedures do not effect an injustice by: i) revoking declaration 1 made 17 May 2002; ii) the making of an order to set aside the order 3 made 17 May 2002. 17. Further and in the alternative to the grounds for relief sought in para 16 above, the applicants: a. Repeat and rely on paragraphs 1 to 15 hereof. b. Say that in the premises the declaration 1 and order 3 made 17 May 2002 were obtained by fraud on the part of the respondent in the proceedings. Particulars of Fraud 1. The following facts were known to the respondent in the proceedings at all material times during the preparation for and hearing of the proceedings: A. that Gosford City Council: a) had granted building approval 3640/97 on 26 March 2997 for a swimming pool on lot 455 ("the Colaco property"); b) had informed the respondent by letter dated 20 May 1998 that the fence to be constructed on top of the existing retaining wall between the Colaco property and lot 456 ("the Cachia property") had been superseded by building application no. 3640/97; c) had informed the respondent by letter dated 11 December 1998 that remedial works carried out to the wall by the then owner of the Colaco property had been completed to council's satisfaction and that a building certificate under s 149D of the Environmental Planning and Assessment Act 1979 had been issued to the owner. B. that the NSW Ombudsman: a) had investigated a complaint against Gosford Council made by the respondent regarding, inter alia, the dividing wall and had declined to pursue that complaint. b) had conducted a review of that investigation and decision at the request of the respondent and had decided not to pursue the matter by way of formal investigation under the Ombudsman Act 1973. c) had notified the respondent in a letter dated 4 January 2000 that this decision had been taken because the Ombudsman agreed with the view of the Gosford Council that the addition to the dividing wall or fence effected under the later approval in 1997 had superseded or replaced the earlier approval in 1994. 2. The facts in A and B were withheld and not disclosed to the court by the respondent during the conduct of the proceedings. 3. Those facts and matters, if known to the court before it made its orders on 17 May 2002, would have affected those orders, in that the court would not have made declaration 1 and order 3. 18. The applicants did not discover or become aware of the matters recited in paragraphs 6, 7, 8 and set out in the Particulars of Fraud in paragraph 17 hereof until after judgment was delivered in the proceedings." 24 Mr Cachia requested further and better particulars from the applicants on 4 August 2003 but received no reply. He sent a second request for further and better particulars on 14 October 2003. In answer to the question "what specifically are the elements of the alleged fraud?", the applicants replied: "that you as applicant were aware of the matters set out in paragraph 1 of the particulars to paragraph 17 of the points of claim and knowing that these were relevant to the question upon which the adjudication of the Court was sought, deliberately withheld those matters from the court." 25 In answer to the question of how the letters in particulars 1A and 1B were relevant and had influenced the judgment of the court, the applicants replied that those letters "went directly to the question of whether the condition of BA 25650/94 on which the applicant relied was still effective." 26 In oral submissions, counsel for the applicants said that the act of fraud was that Mr Cachia failed to inform the court of the substance of the 1997 approval, knowing that it provided for a fence higher than that approved by the 1994 approval. 27 During the course of the proceedings it has become apparent that the essence of the applicant's complaint is in particular 1A(b). 28 With respect to the particulars of fraud Mr Cachia in his written submissions put the following: "As I understand it from the document, the allegation of fraud related to my correspondence with the council and with the ombudsman. I have prepared my case to answer that allegation. Please see my Points of Defence, my affidavit sworn on 31 August 2003 at pars 3, 5 to 9, my affidavit sworn on 14 October 2003 at par 3, and its annexures D, E, F these being my request for Further and Better Particulars filed on 04/08/03, my second request for Further and Better Particulars filed on 14/08/03, and the Reply to my second request for Further and Better Particulars, received by me on 25/08/03, and my submissions of applicant - hearing of 12/11/03. During the course of the instant hearings, counsel for the respondents', as nearly as I can remember, diverged the allegation of fraud to a different allegation, namely, that the building application of 1994 and 1997 were not tendered by me in the original proceedings. Not only was this diverged allegation not pleaded and not particularised and has therefore taken me by surprise, but is cheeky audacity is palpable: s The respondents owned the land the subject of the building applications and therefore knew or ought to have known more than I what the building applications were about. s If they did not possess copies of the said building applications, their witness and predecessor in title, Mr Fritter, certainly would have had them. s They could have obtained copies of them from the council since they owned the land the subject of the applications. s Moreover, the evidence is that Mr Kelso was on first name relations with the developer - Dear Norman, he addressed him - and wrote for him the affidavit of N Fritter sworn on 06/02/02 to which were annexed several documents including a building approval and its conditions, a second building approval and its conditions, and a building certificate. Why was the building application not included? The obvious inference is that it did not help their case. s Likewise, the affidavit of W Colaco sworn on 18/12/01 annexes title documents, several plans, letters, building certificate, but no building applications. s The respondents have still not tendered in evidence the said building applications. The clear inference is that they are irrelevant. s The respondents and their lawyers knew at all relevant times that a building approval proves the existence of a building application. s The building applications are mentioned in the transcript of the original proceedings, and the respondents (who were legally represented) did not produce them to the court. s How then could they satisfy the prerequisite requirements at law regarding their allegation of not being aware of the building applications? s In our adversarial system of litigation, they are not absolved from producing the evidence on which they rely. I, on my part, considered that the building applications were superfluous. A proposal to build does not found litigation no matter how outrageous. What was in issue was what was built." 29 Mr Cachia also drew my attention to Pt 15 r 13(1) of the Supreme Court Rules which provides: "Matters for specific pleading 13.(1) The plaintiff shall, in his statement of claim, plead specifically any matter which, if not pleaded specifically, may take the defendant by surprise." 30 Mr Cachia says that in preparing his defence he did not give any prominence to the plan because he did not understand it to be part of the allegation of fraud. 31 I do not accept that the applicants' case has changed as Mr Cachia alleges. Central to the allegations pleaded against him is that he allowed the court to be misled by withholding his knowledge of the effect of the 1997 approval communicated to him by correspondence from the Council. The response to Mr Cachia's second request for further and better particulars makes this plain. While the applicants did not specifically plead as an element of the alleged fraud that Mr Cachia had withheld the site plan or his knowledge thereof, the applicants had made clear that his knowledge of the effect of the 1997 approval was central to their case. 32 The purpose of particulars is to "control the generality of the pleadings and restrict the evidence to be led by the parties at the trial and give the other party such information as may enable him to know what case he will be met with at the trial and prevent surprise": Pilato v Metropolitan Water Sewerage and Drainage Board (1959) 76 WN (NSW) 364 per McClemens J. I am satisfied that Mr Cachia was aware of the case he had to meet.

Relevant documents 33 Mr Cachia's knowledge of the position in relation to the 1997 approval is reflected in various correspondence between himself, the council and the NSW Ombudsman. 34 Mr Cachia wrote to the Council on 18 March 1997 objecting to the 1997 proposal. His grounds for objection included the following: "1. The pool fences interfere with the view from my property… Council has already notified the (previous) owners that it would not allow the erection of fences above a certain height; such height to be measured from natural ground level. The proposed pool fences exceed such height and ought not to be allowed. 2. In the site plan, the cement block wall shown on the left is wholly my property and is wholly within the boundary of my property…" 35 The reference to the site plan indicates that Mr Cachia had seen that plan and the reference to the height of the proposed pool fence makes plain that he understood that the plan included a fence between his property and the applicants. 36 The building approval was granted on 26 March 1997. 37 Mr Cachia wrote to the Council on 8 April 1997 requesting a copy of the conditions of the 1997 approval. If there was a reply to this letter it is not in evidence. On 10 May 1997 he wrote to the Council again. His letter states: "Re: Building Application No. 3640/97 & Building Application No. 75650/94 I am the owner of property No. 154 Del Mar Drive, Copacabana. I refer to the Building Applications under reference and wish to advise you that the conditions of approval in each case have not been complied with. Specifically, a brick fence wall has now been erected on the boundary between properties Nos. 154 and 156 which, (a) exceed the height approved by Council under Building Applications Nos. 75650/94 & 3640/97, and (b) the material which was to be used under Building Application No. 3640/97, namely, Glass/Aluminium, has not been used." 38 The conditions of the 1997 approval themselves contain no reference to the use of glass or aluminium. This reference is found only in the accompanying plan. Mr Cachia had seen the plan, as he accepted in his evidence, and it is obvious that he had examined the part of it which provided for a fence. 39 Between May and November Mr Cachia wrote several more letters to the Council regarding this matter. His letter of 7 November 1997 states "the wall which they have erected along the boundary between the two properties exceeds the approved height and is not erected in accordance with the type of materials specified in their 2nd building application." 40 He continued his correspondence with the Council expressing demands for compliance with both the 1994 and 1997 building approvals. 41 Dissatisfied with the Council's response, on 23 January 1998 Mr Cachia wrote to the New South Wales Ombudsman complaining that the Council had failed to answer his letters and had "failed in its duty to enforce its conditions of approval". He wrote: "Breaches of the conditions of approval include: (a) the height of a fence wall on the boundary between the two properties is too high (b) a right-of carriageway at the rear of the property has been blocked (c) materials used are not the same as specified in the building application." 42 The Ombudsman's office replied on 13 February 1998, advising that the Council had made appropriate arrangements to look into his complaints and declining to take further action. 43 Mr Cachia continued to correspond with the Council. His letter of 19 February 1998 said "[w]ill you please note that the issues which I have raised relate also to Building Application No. 75650/94 and not to just Building Application No. 3640/97". 44 On 10 March 1998, Mr Goodworth of the Council wrote to Mr Cachia advising him that, following an inspection, "the owner has been instructed to reconstruct the fence so as to comply with Building Approval No 3640/97 and provide a satisfactory finish to the brickwork facing your property". 45 In reply to further correspondence from Mr Cachia, the Ombudsman wrote to Mr Cachia on 7 April 1998 expressing the view that a formal investigation of the complaint was not warranted and stating that: "your neighbour [Mr Fritter] … indicated he would reduce the height of the problem fence to accord with that in the original BA plans and make an application for a s.172 certificate for works which would probably also involve a variation to the fence materials proposed in the original BA." 46 On 12 April 1998 Mr Cachia wrote again to the Council, saying "[y]our letter [of 10 March 1998] refers only to Building Application No. 3640/97 whereas, with respect, Council's conditions of approval in Building Application No. 75650/94 should also be complied with." 47 On 13 April 1998 he wrote to the Ombudsman complaining that the rectification work required by the Council had not been completed in accordance with the 1994 approval. The Ombudsman replied on 28 April 1998 saying the Council had informed the Ombudsman's office that: "compliance in relation to [BA 75650/94] is effectively subsumed by the rectification required in relation to BA 3640/97. I can only say the Council has a legitimate discretion in relation to determining what it regards as reasonable compliance with its consents." 48 A letter from the Council to Mr Cachia of 20 May 1998 stated: "The fence will be reduced in height to accord to the approved plans from Council lodged under Building Application No 3640/97. … The previous Building Application (BA 75650/94), pertaining to the construction of brick retaining walls and brick fencing to the subject property was inspected for compliance by Council's officer. The brick retaining wall along your side common boundary has been constructed in accordance with the Building Approval. The fence to be constructed on top of this retaining wall has been superseded by the current Building Application (BA 3640/97)." 49 Mr Cachia continued to correspond with the Council regarding the completion of the remedial work. On 30 June 1998, the Council wrote to the Fritters advising that it would supply a building certificate subject to the certain remedial work including the following: "1. Reduce the height of the brick fence erected along the north-eastern boundary of the site to accord to the height approved by the Council under Building application No 3640/97 (relating to two portions of the stepped fencing)." 50 Mr Cachia subsequently wrote to Council several times complaining that the remedial work had not been carried out. On 11 December 1998 the Council issued a Building Certificate which indicated that the Council had had regard to both the 1994 and 1997 approvals in deciding to issue it. On the same day the Council wrote to Mr Cachia, stating: "the required remedial works carried out to the brick fence erected on the subject property, have now been completed to the satisfaction of Council and therefore the application for a Building Certificate under Section 149D of the amended Environmental Planning and Assessment Act 1979 has been issued to the owner of the subject premises." 51 Mr Cachia wrote back on 16 December 1998 stating that remedial work had not been carried out. The Council informed him by letter on 4 February 1999 that "an inspection of the subject brick boundary fence in early December 1998 revealed that the remedial works had in fact been carried out to the satisfaction of Council" and repeated this advice in letters dated 16 February 1999 and 12 July 1999. 52 Mr Cachia maintained in a letter of 16 July 1999 that "conditions of approval in Building Permit No. 75650/94 … have been breached and are still breached. And … conditions of approval in Building Application No. 3640/97 have been breached and are still breached." 53 Mr Cachia continued to write to the Ombudsman between May 1999 and August 1999. On 30 August 1999 the Ombudsman wrote to him saying: "Council considers the conditions of approval in BA 75650/94 were to a large extent overtaken by the conditions of approval in BA 3640/97. In other words, in 1997, Council has granted approval to building work that modified most of the work approved by Council in 1994. As such, Council says that it is no longer in a position to enforce those conditions of approval in the 1994 approval that have been overtaken by the 1997 approval. As I understand it, in the 1994 approval for a boundary wall, Council imposed conditions in relation to the height of a retaining wall and fence, the materials to be used and the location of the wall in relation to an existing right of way. I understand that the 1997 approval was for a swimming pool and related fencing. This approval, I note, contained conditions relating to boundary walls and fences. New boundary fencing and changes to existing boundary walls were approved. It would appear that the conditions of the 1994 approval that you call on Council to enforce are largely incompatible with the conditions of the 1997 approval. As such, it would appear that for Council to enforce the conditions of the 1994 approval, the applicant would be required to do work that was incompatible with work approved by the conditions of the 1997 approval. In these circumstances, I am unable to conclude that Council is acting unreasonable by failing to enforce the conditions of the 1994 approval." 54 Mr Cachia maintained in a letter of 9 October 1999 that: "Firstly, as I understand it, Mr Riordan says that Gosford Council's building approval no. BA 3640/97 negates the effect of the conditions of approval in BA 75650/94. This conclusion is erroneous. Not only are the conditions of approval in BA 3640/97 independent from those of the earlier building application, but there is in fact nothing at all in those conditions which leads to the conclusion reached by Mr Riordan. Indeed, BA 3640/97 was a standard swimming pool building application and the corresponding conditions of approval imposed were standard conditions as are required by swimming-pool construction legislation… [T]he requirements of the swimming pool legislation can still be met without in any way modifying or negating the conditions of approval in BA 75650/94." 55 The Ombudsman's office replied on 4 January 2000, stating that: "Mr Riordan made the point that the conditions of the earlier approval are largely incompatible with the conditions of the approval for the swimming pool and related fencing in 1997. I note that condition 3 of the 1994 approval, being 'no additional fence shall be provided above filled area unless maximum height does not exceed 1.8 metres above natural ground level', was associated with the building of the dwelling and that a swimming pool in the yard was not an issue at that time. You say that the later conditions of approval for the swimming pool were 'standard conditions' and that the requirements of the swimming pool legislation could be met without modifying or negating the original conditions. While that may be the case, in practical terms, the notion that conditions relating to an approval for a dwelling should be incumbent on a householder for all time cannot be justified. Councils are entitled to consider applications for additions, swimming pools and the like on the merits of the application." 56 Following the orders of Cowdroy J made on 17 May 2002, Mr and Mrs Colaco wrote to the Council requesting a modification of the condition of the 1994 approval which limited fencing to a height of 1.8 metres. The Council replied on 4 November 2002 that, in view of the Court's order of 17 May 2002, it was not in a position to consider this request. The Council enclosed a copy of the plan accompanying the 1997 approval and a copy of the letter from the Ombudsman to Mr Cachia dated 4 January 2000. Apparently this was the first time the applicants became aware of the detail of the approved boundary fence which was contained only in the plan. 57 By a further letter dated 4 December 2002, the Council advised Mr and Mrs Colaco that "as far as Council is concerned the wall does not comply with Condition No 3 of Building Approval No 75650/94 however a subsequent Building Approval No 3640/97 approved fencing on top of the existing wall."

The original proceedings 58 None of the correspondence set out above was before Cowdroy J in the original proceedings. Mr Cachia's points of claim made no reference to the 1997 approval and the only reference to it in the lengthy written submissions he handed to Cowdroy J is as follows: "...Council's building Certificate .. relates to the building of the Swimming Pool. (see p2 against "schedule". Building Applicant No 3640/97 is the application for the Swimming Pool as identified in annexure "C" in the Affidavit of N. E. Fritter). … Council decided the issue of the Certificate on; (1) Building Applications, and (2) Surveyor's Report … Thus Council has not had regard to the Conditions of Approval in the two buildings applications." 59 During the hearing, Mr Cachia directed Cowdroy J's attention to the 1998 Certificate which makes reference to the 1997 approval. Mr Cachia pointed out to his Honour: "[MR CACHIA]: Page 2 of the certificate and against schedule item 1 there's the building application numbers. Now the first number [BA 75650/94] is in fact the one we have been considering with the condition of council not to build on the right-of way. The second one [BA 3640/97] is in fact the - see application to building a swimming pool? HIS HONOUR: Yes. [MR CACHIA]: That number refers to that. There is more evidence to tie those numbers up. I don't know whether you want me to go to that evidence now or whether you want to hear me later. I shall certainly emphasise that later on. HIS HONOUR: In what way do you say they are tied up? [MR CACHIA]: Maybe this is an appropriate time your Honour to hand you a copy of my written submission. … HIS HONOUR: I understand that 3640 of 97 was for a swimming pool. Now how do you relate that to the earlier approval, 75650 of '94? I thought you said they were related. Did I misunderstand? [MR CACHIA]: Not quite your Honour. I was referring to [the building certificate]. HIS HONOUR: You've told me that - I've got [the building certificate], I thought you said that the two building applications were related. I thought you said that, I may have misunderstood you. [MR CACHIA]: You misunderstood me, yeah. What I - the point that I'm making, is that the building certificate has nothing to do with the building of the wall fence … what it has to do with is the building of the swimming pool. HIS HONOUR: Repeat that to me again once more. Would you just tell me what - I just don't understand something. I have in mind, I could be wrong but I thought you said that 75650 of '94 and 3640 of '97 were related in some way. [MR CACHIA]: They are not related. The application of '97 relates to the building certificate your Honour." 60 Later the following exchange took place: "HIS HONOUR: ... do you have copies of the plans do you for each time there was an application to build something on the adjoining block of land? [MR CACHIA]: I would have. HIS HONOUR: … Where are those plans? [MR CACHIA]: I might have them here because I have a file here but if we submit those building applications, the plans with the building applications, it would expand this case unnecessarily your Honour I would submit." 61 In the event the plan accompanying the 1997 approval was never placed before Cowdroy J. 62 In cross examination before Cowdroy J Mr Cachia gave the following evidence to the Court: "Q. The fencing, I suggest to you, that was built at about the same time as the pool was built pursuant to those conditions and not pursuant to the 1994 approval?

A. I disagree totally. Q. It's a matter for his Honour. Certainly, the swimming pool approval did require fencing to be carried out? A. In accordance with the swimming pool dividing fencing code. … Q. Just before I leave the fence, Mr Cachia, your complaint basically is that the whole of the fence as it now exists was built pursuant to the swimming pool approval? A. I disagree with that." 63 It is apparent from this exchange that the debate before Cowdroy J reflects a lack of understanding of the 1997 approval. It could have been cleared up by reference to the approved plans, but this was not done. 64 However, as it happened, Mr Fritter swore an affidavit on 6 February 2002, which had been prepared by the applicants' solicitors and was read before Cowdroy J. Mr Fritter's evidence made it clear that the fence was built following the grant of an approval by the council: "After I finished the renovations and additions to the house, my agent Premier Pools applied to the Council for approval for a pool and a fence around the property. Council granted this approval on 26 March 1997. This building approval was numbered 3640/97 and a copy of that approval is annexed and marked "C". I erected the fence on top of the existing foundations that I referred to in paragraphs 4 and 5 above and I also had a swimming pool placed in the rear yard of the property."

Mr Cachia's understanding 65 Mr Cachia gave evidence and made detailed written submissions in the present proceedings. He is a qualified and experienced engineer who claimed competence in reading plans. However, he gave confused evidence and said he could not interpret the plan which accompanied the 1997 approval. He suggested that he did not understand that the 1997 approval allowed a wall of a greater height than the 1994 approval. 66 The confusion in both Mr Cachia's evidence and his submissions leaves me unable to conclude that he understood that the 1997 approval permitted an extension of the height of the boundary wall beyond that approved in 1994. In reaching this conclusion I am conscious of the fact that Mr Cachia made representations to the council which are consistent with him having seen the plans, suggesting that he should have understood the consequences of the 1997 approval. He was also told of the position by the council in its letter of 20 May 1998 and the same information was given to him by the Ombudsman. 67 Mr Cachia's response when giving evidence and his submissions demonstrate a rigid attachment to the position that the 1994 approval controlled the height of any boundary fence. I am satisfied that his continuing belief that the 1994 approval is the controlling document is genuine, although wrong.

Equitable fraud 68 In Wentworth v Rogers (No 5) Kirby P said that proceedings to have a judgment set aside for fraud "are well-established in our law. They are independent of the appeal and equitable in origin and nature". The proceedings are founded upon proving "equitable fraud": see especially Ipp JA at paragraph 256 in Harrison. Accordingly, to succeed in an application to set aside a judgment it is not necessary to establish common law fraud which must involve dishonesty or moral ineptitude. It is sufficient that it would be unconscionable for the successful party to retain the benefit of the judgment. 69 The classic statement describing equitable fraud was made by Viscount Haldane LC in Nocton v Lord Ashburton [1914] AC 932 at 954 as follows: "…[W]hen fraud is referred to in the wider sense in which the books are full of the expression, used in Chancery in describing cases which were within its exclusive jurisdiction, it is a mistake to suppose that an actual intention to cheat must always be proved. A man may misconceive the extent of the obligation which a court of Equity imposes on him. His fault is that he has violated, however innocently because of his ignorance, an obligation which he must be taken by the Court to have known, and his conduct has in that sense always been called fraudulent, even in such a case as a technical fraud on a power. It was thus that the expression "constructive fraud" came into existence. The trustee who purchases the trust estate, the solicitor who makes a bargain with his client that cannot stand, have all for several centuries run the risk of the word fraudulent being applied to them. What it really means in this connection is, not moral fraud in the ordinary sense, but breach of the sort of obligation which is enforced by a court that from the beginning regarded itself as a court of conscience." 70 The applicants seek to establish fraud in the sense of improper reliance on legal rights. In Kettlewell v Watson (1882) 21 Ch D 685, Fry J said that, when providing relief against registered conveyances obtained through fraud: "The court will not allow a man to avail himself of a legal estate which he has recovered … when he, at the time he took the legal estate, … knew a fact which made it unconscionable for him to take the legal estate." 71 Mahoney JA adopted this statement in Logue v Shoalhaven Shire Council [1979] 1 NSWLR 537 where his Honour said: "Equitable fraud is not limited to conscious wrong-doing or over-reaching. In the final analysis, it depends upon whether what has happened, in the context in which it has happened, appears to the judicial conscience … as so unconscientious that it should not be allowed to stand."

Fresh material facts 72 To set aside a judgment for fraud it must be shown that there has been "a new discovery of something material, in the sense that fresh facts have been found which, by themselves or in combination with previously known facts, would provide a reason for setting aside the judgment" and "that the new facts are so evidenced and so material that it is reasonably probable that the action will succeed": per Kirby P in Wentworth v Rogers (No 5) at 538-9. 73 The applicants bear the burden of persuading me of the fact that the information as to the effect of the 1997 approval contained in the site plan and the letters from the council are facts which are both fresh and would provide a reason to set aside Cowdroy J's orders. 74 Neither the contents of the site plan nor the correspondence from the council were made known to his Honour, but the fact that the wall had been built after obtaining the 1997 approval was clear from Mr Fritter's evidence. It is not immediately apparent from Cowdroy J's reasons why this fact was not reflected in his Honour's decision. I can only assume that the evidence of Mr Fritter was not drawn to his attention. 75 Cowdroy J was also told that the council had issued a certificate pursuant to s 149D stating "that the council would not make orders under the EP&A Act or any other Act requiring any building erected on Lot 455 to be repaired, demolished, altered, added to or rebuilt." His Honour, in my opinion, rightly concluded that the certificate "does not prevent the applicant from instituting proceedings for the removal of obstructions to the right of way." However, its persuasive force is considerable especially if it is appreciated that the wall had been constructed after the necessary approval had been obtained. His Honour said nothing about the impact of the s 149D certificate on the claim for the demolition of part of the boundary wall but made a declaration that the wall exceeded the height limit imposed by the 1994 approval, ordering its partial demolition. 76 Although his Honour said nothing about the 1997 approval I am unable to find that knowledge of the plan accompanying that approval is a "fresh material fact". There was nothing before Cowdroy J to suggest that the wall had not been built in accordance with the 1997 approval. Knowledge of the detail in the plan would not have provided any additional facts to inform the inference which was clearly available that the wall had been built in accordance with the council's approval. 77 In these circumstances I cannot find that there has been a discovery of something material, in the relevant sense.

Is Mr Cachia responsible? 78 Before relief could be granted it would be necessary to be satisfied that Mr Cachia is responsible for any fraud which taints the judgment: Wentworth v Rogers (No 5) at 539. Mr Cachia says that at the time of the original proceedings he believed his correspondence with the Council and the Ombudsman to be irrelevant to the proceedings. That view must be correct, at least on the question of whether the wall was lawfully constructed. 79 But for the evidence of Mr Fritter, there may have been force in a submission by the applicant that Cowdroy J was not made aware of the legal foundation for the construction of the wall and this would have been revealed by the approved plan which Mr Cachia could have provided. However, the evidence of Mr Fritter makes further consideration of these matters unnecessary.

Reasonable diligence 80 Mr Cachia submits that the applicants were at all times aware of the 1997 approval and of the fact that he had corresponded with both the Council and the Ombudsman. He submits that they could have discovered the relevant information by the exercise of reasonable diligence. In this respect he relies on the principle stated by Lord Bridge in Owens Bank Ltd v Bracco [1992] 2 WLR 621 at 626-7, and followed by the Full Federal Court in Monroe Schneider Associates (Inc) v No 1 Raberem Pty Ltd (1992) 109 ALR 137 at 143: "… the common law rule [is] that the unsuccessful party who has been sued to judgment is not permitted to challenge that judgment on the ground that it was obtained by fraud unless he is able to prove that fraud by fresh evidence which was not available to him and could not have been discovered with reasonable diligence before the judgment was delivered…" 81 The New South Wales Court of Appeal in Toubia v Schwenke (2002) 54 NSWLR 46 has taken a different view. Handley JA, with whom Heydon JA and Hodgson JA agreed, said: "I would not follow the dicta in Owens Bank Ltd v Bracco, Owens Bank Ltd v Etoile Commerciale SA, and the Federal Court even if there was no High Court decision on the point because, with respect, the dicta are contrary to principle and earlier authority. The assumption is that the court and the losing party were successfully imposed on by the fraud of the successful party, but relief should nevertheless be denied and the judgment allowed to stand because the defrauded party was careless or lacked diligence in the preparation of his case. Such a result would be contrary to long established and fundamental principles. Contributory negligence is not a defence to an action for fraud whether the relief claims is recission or damages. As Brennan J said in Gould v Vaggelas (1985) CLR 215 at 252: 'A knave does not escape liability because he is dealing with a fool'." (p 54) 82 I am, of course, bound by the decision of the Court of Appeal. The fact that the solicitor who appeared for the applicant before Cowdroy J failed to seek out the approved plan or the correspondence, and he should at the least have sought the former, is irrelevant.

Inherent jurisdiction to set aside orders 83 In Logwon Pty Ltd v Warringah Shire Council (1993) 33 NSWLR 13 the Court of Appeal held that, being a superior court the Land and Environment Court had jurisdiction (either "implied" or "inherent") to discharge or revoke a consent order made by it but entered into by a party under a mistake. 84 Sheller JA cited Brennan J's decision in Permanent Trustee Co (Canberra) Ltd (As executor for Estate of Andrews) v Stocks and Holdings (Canberra) Pty Ltd [1976] 28 FLR 195 at 198 where, sitting as the Supreme Court of the Australian Capital Territory, his Honour identified three classes of exception to the general rule that a perfected judgment cannot be recalled or varied: "…those which are founded upon the inherent jurisdiction of the court to ensure that its procedures do not effect injustice; those which are authorised by statute; and those which override the general rule in order to give relief where the judgment is obtained by fraud or by agreement which is void or voidable." 85 In relation to the question of whether the court had the power to set aside consent orders entered into by mistake, Sheller JA said: "A superior court's inherent jurisdiction to uphold, protect and fulfil its functions by ensuring that justice is administered according to law and in an effective manner in my opinion enables it in the absence of a statutory limitation to discharge or revoke a consent order made by it giving effect to a compromise of proceedings before the court and entered into by a party under a mistake. I think this is sensible and consistent with the court's jurisdiction before judgment is filed or to correct slips or to right procedural unfairness where orders are made ex parte. If it is accepted that the Land and Environment Court has inherent jurisdiction in these circumstances, I see no reason in principle to deny it jurisdiction on an application on established grounds to set aside consent orders. Part 13, r 7 of the Land and Environment Court Rules 1980 … empowers the court to set aside or vary an order inter alia obtained by fraud but makes no mention of the more general jurisdiction referred to be Brennan J where the compromise is void or voidable for other reasons. I do not regard this rule as limiting the jurisdiction of the Land and Environment Court but rather as spelling out part of it." 86 Kirby P agreed with the decision of Sheller JA that the Court had the relevant power but differed as to the source of the power, perceiving "real difficulties in purportedly assigning to statutory courts inherent power" and preferring to identify the power as "implied" from the court's statute, or from its nature and purpose as a court. 87 The powers of the Land and Environment Court have been reconsidered following the decision in DJL v Central Authority (2000) 201 CLR 226 where the High Court held that the powers of the Family Court, as a statutory court, are conferred upon it expressly or by implication by its governing legislation and that, although a court of superior record, it has no inherent power to re-open final orders after they have been entered. Two decisions of this Court have held that the observations of the High Court in DJL apply equally to this Court, so that there is no inherent jurisdiction to set aside a perfected order: see Bignold J in Starray Pty Ltd v Sydney City Council (2001) 112 LGERA 438 and Talbot J in Wollong Pty Limited v Shoalhaven City Council (No 2) (2002) 122 LGERA 178. 88 Counsel for the applicants submitted that the decision in DJL regarding the absence of an inherent jurisdiction does not preclude the existence of an implied jurisdiction of the kind referred to by Kirby P in Logwon. 89 In my opinion it is unnecessary to resolve that submission. There is no basis in the present case for the exercise of any inherent or implied jurisdiction to set aside the orders of Cowdroy J which were perfected on 17 May 2002. The circumstances in which jurisdiction may be invoked to set aside perfected orders include those listed by Brennan J in Permanent Trustee Co as follows: "whether the entered judgment correctly expresses the court's decision ... or perhaps whether it requires amendment to keep its records in conformity with the real position … or whether the judgment proceeded from a hearing which was so irregular as to be treated as a nullity." 90 The issue in this case is not a matter of procedure but the very substance of his Honour's decision. Any injustice suffered by the applicants is not due to a difficulty in the application of this Court's procedures or as I have found, due to fraud. The only remedy for the applicants would be to appeal the decision of Cowdroy J, if an appeal is available. 91 Accordingly, I make the following orders: 1. Application dismissed. 2. The applicants are to pay the respondent's costs. **********

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CITATION : Cachia v Colaco [2003] NSWLEC 364 Saviour Laurence Cachia (Appl/Resp on motion) PARTIES : Wilfred Servelo Colaco (Resp/Appl on motion) Doris Bella Colaco (Resp/Appl on motion) FILE NUMBER(S) : 40134 of 2001 CORAM: McClellan CJ :- FRAUD Application to set aside judgment on grounds of fraud Original proceedings included dispute about height of wall Building approval operating in relation to specifications for height of wall contained in site plan Site plan not before court in original proceedings KEY ISSUES: Whether particulars of fraud sufficient Whether respondent appreciated effect of building approval Whether fresh material facts providing basis to set aside judgment Whether respondent responsible for any fraud Whether applicants' solicitors required to exercise reasonable diligence in discovering relevant evidence HELD: as there was no fresh material fact fraud was not proved Application dismissed LEGISLATION CITED: Environmental Planning & Assessment Act 1979 Land and Environment Court Act 1979 Bailey v Marinoff (1971) 125 CLR 529; DJL v Central Authority (2000) 201 CLR 226; Gamser v Nominal Defendant (1977) 136 CLR 145; Harrison v Schipp (2002) 54 NSWLR 612; Jonesco v Beard [1930] AC 298; Kettlewell v Watson (1882) 21 Ch D 685; Logue v Shoalhaven Shire Council [1979] 1 NSWLR 537; Logwon Pty Ltd v Warringah Shire Council (1993) 33 NSWLR 13 ; McDonald v McDonald (1965) 113 CLR 529; CASES CITED: McHarg v Woods Radio [1948] VLR 496; Monroe Schneider Associates (Inc) v No 1 Raberem Pty Ltd (1992) 109 ALR 137; Nocton v Lord Ashburton [1914] AC 932; Owens Bank Ltd v Bracco [1992] 2 WLR 621 ; Permanent Trustee Co (Canberra) Ltd (As executor for Estate of Andrews) v Stocks and Holdings (Canberra) Pty Ltd [1976] 28 FLR 195; Pilato v Metropolitan Water Sewerage and Drainage Board (1959) 76 WN (NSW) 364; Spies v Commonwealth Bank of Australia (1991) 24 NSWLR 691; Starray Pty Ltd v Sydney City Council (2001) 112 LGERA 438; Toubia v Schwenke (2002) 54 NSWLR 46; Wentworth v Rogers (No 5) (1986) 6 NSWLR 534 ; Wollong Pty Limited v Shoalhaven City Council (No 2) (2002) 122 LGERA 178. DATES OF HEARING: 12-13/11/03; 17/11/03 DATE OF JUDGMENT: 12/24/2003

(2001) 112 LGERA 438

(2002) 122 LGERA 178

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