31 Here the irregularity was fundamental. The defendant had no reason to appear on the return of the originating process because of the agreement reached with the plaintiffs. Both rr 36.15(1) and 36.16(2)(b) are engaged. However, it is not the source of the power to set aside the order which is important, but the nature of the irregularity which gives rise to the power to have the order set aside.
32 I have no doubt in this case that the plaintiffs' solicitor and the plaintiffs' credit manager were both acting in good faith. However, it would be a breach of good faith if the plaintiffs sought to rely on the orders, as they recognise by bringing this application to set them aside.
33 The reason for the defendant's non-appearance on 17 March 2006 was the agreement which the defendant had reached with the plaintiffs. The orders were obtained in breach of that agreement. Had the defendant appeared, I infer that the originating process would have been dismissed. Certainly it should have been dismissed, as it would be an abuse of process to leave the originating process unresolved as a threat hanging over the defendant to compel its adherence to the compromise.
34 It does not appear that in any of the cases for the setting aside of a judgment under the Supreme Court Rules, or the Federal Court Rules, where the courts have required at least an arguable case of solvency, that there was a fundamental irregularity in the obtaining of the judgment.
35 If an order setting aside the orders of 17 March were refused in the interests of existing or potential creditors in the absence of evidence as to solvency, it could not be said that defendant was entitled as of right to have judgment set aside.
36 It is important to maintain the principle that judgments obtained through fundamental irregularity should be set aside ex debito justitiae, as this principle protects the integrity of the Court's processes.
37 I am of the view that the defendant is entitled as of right, and not merely as a matter of discretion, to have the judgment set aside and that, accordingly, such an order should be made on the plaintiff's application. I do not think that this conclusion is contrary to George Ward Steel Pty Limited v Kizkot Pty Limited, or Registrar of Aboriginal Corporations v Murnkurni Women's Aboriginal Corporation, or the observations of McDougall J in Labraga v Pomfret. In this case, unlike those cases, it is not necessary for the defendant to show an arguable defence.
38 If it be appropriate to consider also the interests of creditors generally, it is relevant that no creditor appeared on the return of the originating process on 17 March 2006. To set aside the orders then made and to dismiss the originating process would leave creditors in no different position from that in which they would have been this time last week, if the plaintiffs' lines of communications had not failed. I do not think that injustice will be done by putting the creditors in the same position as they would have been in on 17 March 2006 if orders had been made by consent for the dismissal of the originating process.
39 For these reasons, I order that the orders made on 17 March 2006 that the defendant be wound up under the Corporations Act, that Mr Worrell be appointed liquidator of the defendant, and that the defendant pay the plaintiff's costs, be set aside.
40 I order that the originating process be dismissed, with no order as to costs.