Davies v Stewart

The applicant's submissions 20 Mr Davies submitted that the Registrar failed to take into account that his claim was not limited to a claim under r 39.05(b), and wrongly applied Wu v Avin Operations Pty Ltd (No 2) [2006] FCA 792 at [24] without regard to Clone. 21 The relevant paragraph in Wu v Avin states (at [24]): Thirdly, although Mr Armitage sought also to rely on O 35 r 7(2)(b), he has not adduced sufficient evidence to make out a case that the order was obtained by fraud. Plainly, any allegation of fraud is extremely serious. Before an order can be set aside on the ground of fraud, there must be sufficient evidence of the facts that establish the alleged fraudulent conduct and the part played by the party having the benefit the order. The fraudulent conduct must be 'directly material' to the order and the evidence of the fraud must be evidence that was not available and could not have been discovered with reasonable and proper diligence before the order under challenge was made: see Monroe Schneider Associates (Inc) v No 1 Raberem Pty Ltd (No 2) (1992) 37 FCR 234 at 242. Mr Armitage's affidavit of 16 May 2006 did not satisfy these requirements. Accordingly, it is not open to him to rely on O 35 r 7(2)(b). 22 I agree that the Registrar has confined his reasons to consideration of r 39.05(b) and, by reference only to Wu v Avin, and based on the limited reasons given, has not properly taken into account either the fact that Mr Davies also brought his claim as a separate proceeding in equity or the relevance in that regard of the decision in Clone, as explained in Rawson Finances. 23 In my view the Registrar made an error of law in treating a diligence factor as a precondition - that is, that 'the evidence of the fraud must be evidence that was not available and could not have been discovered with reasonable and proper diligence before the order under challenge was made'. There might be occasions when a registrar has regard to this as one of a number of factors, so that one might say with confidence that their approach to this factor has not influenced an outcome that they would have come to in any event. There is also potential for diligence to remain relevant as a discretionary factor. But the difficulty in this case is that the appropriately short reasons reveal a cumulative approach - that is, that the Registrar proceeded on the basis that there was a mandatory diligence requirement that needed to be satisfied and revealed by the pleadings, in addition to other matters to which he referred. So, in considering for the purpose of r 2.26 whether the documents were an abuse of process or frivolous and vexatious, the Registrar expressly took the diligence factor into account as a necessary factor. Having regard to Clone, as explained in Rawson Finances, in my view this constitutes an error of law within the purview of s 5(1)(f) and it is not necessary to consider the other provisions of s 5(1) relied upon by Mr Davies further. 24 There may well be other bases upon which the filing of these documents might properly have been refused. But the appropriate course is that the Registrar's decision be set aside. 25 Mr Davies relevantly seeks a number of orders. The orders that the court might make on such an application are the subject of s 16 of the ADJR Act. Relevantly, s 16(1)(a) permits the Court to make an order setting aside the decision of the Registrar. Mr Davies also seeks an order reversing the Registrar's decision and directing that the documents be accepted for filing. It is not appropriate to make such an order: see SZVCP v Cho [2017] FCA 310; (2017) 250 FCR 225 at [46]; Reaper v Luxton [2017] FCA 949 at [37]; and Frigger v Trott [2021] FCA 18 at [42]. As explained in analogous circumstances in Frigger v Trott, the Court has determined that the decision will be set aside; it has not determined that the decision is incorrect, and has not decided that the documents should be accepted for filing. 26 As I have said, the order that is appropriate in this case is an order setting the Registrar's decision aside. As I discussed with Mr Davies during the hearing, if I decided to set aside the decision, it would then be for Mr Davies to lodge the documents again, if he wishes, and for a Registrar of this Court to consider afresh whether to accept them for filing. I certify that the preceding twenty-six (26) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Banks-Smith.