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[2003] NSWSC 651
procedural. The defendants were ordered to file points of claim setting out the material facts supporting their application by 28 July 2003. The plaintiff was ordered to file and serve a defence by 4 August...
The Court did not decide whether the settlement should ultimately be set aside. It decided that, because the consent orders had not yet been formally entered, it could consider the defendants’ challenge within the existing case. The defendants had to set out the facts behind their allegations in points of claim, and the plaintiff was given time to respond. The allegations about illness, capacity and legal advice remained untested.
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2,141 words · generated 29/09/2026
Perpetual Trustees Victoria Limited had obtained consent orders for possession of a property at Baulkham Hills against Richard Kingsley Sheehan and Maureen Patricia Sheehan. Simpson J made the orders by consent and granted leave for a writ of possession to issue forthwith ([1]). The signed terms of settlement were dated 11 June 2003. Although the Court had made the orders, they had not been formally entered ([2]).
No linked legislation citations have been extracted yet.
The defendants filed a notice of motion on 7 July 2003 seeking to set aside the orders and settlement. They also sought ancillary relief, including reinstatement of the claim and defences, delay of a trial to allow for surgical procedures for the first defendant, and the joining of a cross-claim by the second defendant ([3]). The judgment does not determine those ancillary matters on their merits.
The first defendant’s evidence was that he was a disability pensioner, wheelchair bound and seriously unwell, with pain and other conditions treated using morphine and other medication. He said that, when signing the settlement, he was operating “as if in a fog” and was not fully informed or acting rationally ([5]). He also said that he believed he might have signed anything if told it was necessary to complete the matter ([6]). Shaw J expressly noted that this evidence was untested at the time.
The second defendant’s position was described more briefly: she was said to have been unrepresented and therefore without legal advice ([7]). The Court’s task was not to decide whether these allegations were true. It was to decide how the challenge could proceed and what procedural steps were needed. Shaw J ordered the defendants to particularise their case, directed the plaintiff to respond, and set the matter for further directions ([18]).
There is a date variation within the judgment: paragraph 2 says the signed terms were dated 11 June 2003, while paragraph 18 describes the judgment of Simpson J as being on 10 June 2003. The text does not explain that difference.
The key procedural fact was that the consent orders had not been formally entered. Shaw J relied on the principle quoted from Smith v New South Wales Bar Association: a court may review, correct or alter its judgment until the order is perfected ([10]). The Court also relied on Part 40 rule 9(1) of the Supreme Court Rules 1970, which provides that the Court may set aside or vary a judgment if a notice of motion is filed before entry ([12]).
That power was discretionary, not automatic. Shaw J noted the public interest in the finality of litigation, and the judgment’s discussion of Smith indicated that, where reasons had been given, there needed to be some matter calling for review. In this case there were no reasons because the orders had been made by consent ([13]). The decision therefore recognised a power to reconsider the unentered orders, but did not decide whether the defendants’ evidence would ultimately justify setting them aside.
The plaintiff relied on Spies v Commonwealth Bank of Australia, arguing that the motion should not be heard and that the defendants should instead bring separate substantive proceedings ([14]). Shaw J identified two distinctions. First, the judgment in Spies had already been formally entered, so Part 40 rule 9 did not apply there. Second, Spies concerned a challenge based on fraud. The Court described the rule in that case as requiring a new action to set aside an entered consent order for fraud, with facts showing reasonable prospects of success to be alleged ([14]).
The present allegations were different. Shaw J characterised them as claims based on ill health, incapacity or lack of appropriate legal advice, rather than fraud ([15]). On that basis, he considered Spies distinguishable and saw no procedural injustice in hearing the motion in the original proceedings.
That did not mean the allegations had been accepted. The plaintiff was entitled to know the precise grounds and to answer them through evidence and submissions ([16]). Points of claim and a defence were therefore ordered. The result balanced the defendants’ opportunity to pursue the challenge against the plaintiff’s procedural right to understand and respond to it.
The judgment did not purport to establish a new general rule about all consent orders. It applied the existing procedural power in Part 40 rule 9(1) to an order that had been made but not entered. It also relied on the proposition from Smith that a court can review, correct or alter its judgment before the order is perfected ([10]–[12]). These propositions framed the Court’s authority to consider the defendants’ motion.
The judgment contrasted that position with Spies. As Shaw J described it, Spies dealt with an entered consent order challenged on the ground of fraud. In that setting, the challenge had to be brought by a new action, not by a notice of motion in the original proceedings ([14]). Shaw J did not reject that approach. He confined it to a materially different procedural situation and distinguished it because the present orders were unentered and the asserted grounds were not fraud ([14]–[15]).
The decision’s practical effect was therefore procedural and case-specific. The defendants were allowed to particularise the grounds in the existing proceedings. The Court did not determine the validity of the settlement, decide the defendants’ capacity, or rule on the ultimate effect of the second defendant’s lack of legal advice.
The judgment also records that the plaintiff accepted that a statutory reference in paragraph 4 of the consent orders was erroneous, and said it should refer to section 95 rather than section 94 of the Supreme Court Act 1970. The plaintiff acknowledged that this could be amended under the slip rule ([4]). That point did not form the basis of Shaw J’s decision on the motion.
No later state of the law can be established from the judgment text supplied. It contains no discussion of subsequent decisions applying, limiting or reconsidering this judgment. Any account of later treatment would need sources beyond this judgment, which are not available here.
At [10], the judgment quotes Smith: “a court may review, correct, or alter its judgment at any time until its order has been perfected.” In plain English, the Court treated the stage before formal entry as significant. The fact that the orders had been made did not, by itself, prevent the Court from considering whether they should be changed.
At [12], Shaw J set out Part 40 rule 9(1): the Court may set aside or vary a judgment if a notice of motion is filed before entry. In this case, the rule was the direct procedural basis for hearing the defendants’ request. The judgment does not suggest that filing such a motion automatically results in the judgment being set aside.
At [13], Shaw J emphasised the discretionary nature of the power and the public interest in finality. In plain terms, a court’s ability to revisit an unentered order still has to be exercised carefully. Finality matters, even where the Court has power to reconsider its order.
At [14], the judgment explains why the plaintiff’s reliance on Spies did not determine the procedure here. Spies involved an entered order and an allegation of fraud. The current case involved unentered orders and different asserted grounds. The distinction was about the procedural setting and nature of the challenge, not a finding that the defendants’ allegations were true.
At [15], Shaw J described the defendants’ grounds as “ill health, incapacity or lack of appropriate legal advice”. This passage identifies the character of the case as the Court understood it at that stage. It should not be read as a finding that incapacity existed or that the settlement was invalid.
At [16]–[18], the Court moved from the legal power to the next procedural step. The grounds had to be particularised, and the plaintiff had to have an opportunity to answer them. The points of claim and defence orders implemented that requirement. The motion’s costs were reserved, rather than decided at that hearing.
The judgment is most directly relevant to a procedural situation involving a consent judgment or order that has been made but not yet formally entered, where a party files a motion to set it aside before entry. The Court’s reliance on Part 40 rule 9(1) depended on that timing ([10]–[12]). A matter involving an entered judgment may raise a different procedural question, as Shaw J’s distinction from Spies illustrates ([14]).
The judgment also addresses a challenge based on alleged ill health, incapacity or lack of appropriate legal advice, rather than fraud ([15]). It indicates that, in the circumstances before it, those grounds could be advanced by motion in the original proceedings. It does not establish that every challenge framed in those terms must be dealt with that way. The decision turned on the facts as characterised in the judgment, including the unentered status of the orders.
A further trigger is the need to convert broadly stated allegations into defined factual issues. The defendants’ affidavits raised serious matters, but the Court required them to set out the material facts in points of claim so the plaintiff could answer them ([5]–[7], [16]–[18]). The case therefore has practical relevance where the court can hear a challenge but the opponent needs particulars to understand and respond to it.
The judgment does not determine what evidence would be sufficient to establish incapacity, how a court should assess particular medication or medical conditions, or what legal consequences follow from a party being unrepresented. Those matters were not decided. The Court’s role at this stage was procedural, and the first defendant’s evidence was expressly untested ([5]).
The judgment supplied here does not cite any later decisions, and it cannot establish how subsequent courts have treated Perpetual Trustees Victoria Limited v Sheehan. The only authorities Shaw J discussed were Smith v New South Wales Bar Association and Spies v Commonwealth Bank of Australia. Smith was cited for the ability to review, correct or alter a judgment before perfection ([10]); Spies was distinguished because it involved an entered order and a fraud-based challenge ([14]).
Accordingly, it would not be grounded in this source to say that later courts have followed, applied, limited or overruled Sheehan. The judgment’s own reasoning provides a narrow account of its procedural basis, but any claim about its later precedential history requires later judgments or other legal sources not included in the material provided.
For research purposes, a later court’s treatment would need to be checked against the precise proposition for which Sheehan is cited. That proposition may concern the use of a pre-entry motion under the rule, or the distinction drawn from a fraud-based challenge to an entered consent order. This judgment itself establishes only what Shaw J decided in the 2003 proceedings. It does not establish how those propositions were subsequently understood.
The central unresolved question in the proceedings was whether the defendants could establish factual grounds sufficient to set aside the consent orders. Shaw J did not decide that issue. The first defendant’s account of his pain, medication and impaired state was untested ([5]–[6]), and the Court required the defendants to provide particulars before the plaintiff responded ([16]–[18]).
The judgment also leaves open what evidence would be relevant to any eventual assessment of the first defendant’s capacity when the settlement was signed. It records allegations about serious illness and medication, but does not set out medical evidence or make findings about the effect of either on his understanding or decision-making. Similarly, it gives only a short description of the second defendant’s position as unrepresented and without legal advice ([7]); it does not explain the circumstances of the settlement negotiations or make findings about the significance of that fact.
The procedural distinction from Spies also has limits in the source. Shaw J distinguished that case because the orders here were unentered and the asserted grounds were not fraud ([14]–[15]). The judgment does not address a mixed case involving both fraud and non-fraud allegations, or a case where the status of entry is disputed. Nor does it elaborate on how the discretion under Part 40 rule 9(1) should be exercised in other factual settings beyond noting the importance of finality ([13]).
Finally, the disposition was a timetable, not a final ruling on the motion. The reserved costs and the listing for further directions confirm that the proceedings were continuing ([18]). The judgment does not record what happened after those directions or whether the consent orders were ultimately set aside.
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CITATION : Perpetual Trustees Victoria Limited v Richard Kingsley Sheehan and Anor [2003] NSWSC 651 HEARING DATE(S) : 07/07/03; 10/07/03; 11/07/03 JUDGMENT DATE : 23 July 2003
JUDGMENT OF : Shaw J DECISION : (1) Defendants to file points of claim on or by 28 July 2003; (2) Plaintiff to file and serve a defence to that claim on or by 4 August 2003; (3) The matter to be put into the call up list before the list judge on 8 August 2003; (4) Costs of the proceedings on the motion should be reserved.
CATCHWORDS : Practice and Procedure - application to set aside consent orders - judgment not entered - fraud - capacity - whether should be by way of separate proceedings - LEGISLATION CITED : Supreme Court Rules 1970 Part 40 r 9(1) CASES CITED : Smith v New South Wales Bar Association (1992) 176 CLR 256; Spies v Commonwealth Bank of Australia (1991) 24 NSWLR 691; Perpetual Trustees Victoria Ltd - Plaintiff PARTIES : Richard Kingsley Sheehan - First defendant Maureen Patricia Sheehan - Second defendant FILE NUMBER(S) : SC 13593/01 P Dowdy - Plaintiff COUNSEL : In Person - First defendant M Duncan - amicus curiae SOLICITORS : Heidtman & Co - Plaintiff In Person - Defendants
IN THE SUPREME COURT OF NEW SOUTH WALES COMMON LAW DIVISION
13593 of 2001 Perpetual Trustees Victoria Limited (Plaintiff)
JUDGMENT 1 Shaw J: In this matter, by consent, judgment was issued by Simpson J for the plaintiff against the first and second defendants for the possession of property at Baulkham Hills in New South Wales. Leave was issued to grant a writ of possession forthwith. 2 The agreed terms of settlement, incorporating the orders, were signed personally by the first and second defendants and also by the solicitor for the plaintiff. They were dated 11 June 2003. The Court made the orders, but they have not been formally entered. 3 The application before the Court, by way of notice of motion filed on 7 July 2003 by the defendants, seeks to set aside those orders and the terms of settlement. Certain ancillary orders are also sought including the reinstatement of the claim of the plaintiff and the defences, the delay of a trial for a period to allow for surgical procedures to be undertaken in relation to the first defendant, the joining of a cross claim by the second defendant and other matters that do not need to be set out in this judgment. 4 The plaintiff has undertaken, as I understand it, not to proceed to enter judgment until proceedings concerned with the setting aside of the orders and settlement have been finally disposed of in this Court. Counsel for the plaintiff has pointed out: (a) It is a matter for the defendants as to whether they proceed with the sale of the residence by auction on or before 31 July 2003 as was contemplated by the terms of settlement. However, the plaintiff reserved its rights as to the consequences of non compliance with the orders; (b) It is accepted that par [4] of the orders is erroneous in that a reference to s 94 of the Supreme Court Act 1970 should be to s 95 of that Act and that this should be amended pursuant to the slip rule; (c) It is also acknowledged that any surplus arising out of the sale of the property would accrue to the defendants as the registered proprietors though this is not expressly set out in the terms of settlement. 5 The grounds upon which the judgment is impeached are, broadly, discernable from the affidavits filed by the defendants. It is said by the first defendant that he was a the material times a disability pensioner and wheelchair bound with serious ill health that requires a substantial intake of morphine and other drugs to deal with muscle cramps. The affidavit also deposes to other serious medical conditions involving pain, inability to sleep, headaches and cramps. Accordingly, it is said that at the time of the signed settlement the first defendant was operating 'as if in a fog'. It is alleged that there was enormous pain and in entering the settlement he was not fully informed of the arrangement nor acting rationally, particularly in the light of the high level of medication he was taking. 6 He says, and at the present time this evidence is untested, that he believes that: at the time I could have been presented with anything and provided I was told it was necessary to complete the matter I would have signed it. 7 In relation to the second defendant, Mrs Sheehan, it is said that she was unrepresented and therefore lacked legal advice. Broadly, these are the grounds upon which it is said that the judgment should be set aside. 8 Mr Duncan, of counsel, appeared as amicus curiae to put matters to the Court on behalf of the second defendant and the Court has been assisted by his submissions. The agreement between the parties was said to be faulty on a number of bases, both technical and in substance. 9 Mr Duncan accepted that the notice of motion as currently framed was misconceived but put submissions to the effect that the proceedings should not be dismissed altogether, especially in light of the fact that it was conceded by the plaintiff that fresh proceedings could be commenced. This seems to be practical and in accordance with the efficient disposition of matters in this Court. 10 It is clear and common ground that the orders made by Simpson J have not been entered, and as was said by the High Court in Smith v New South Wales Bar Association (1992) 176 CLR 256 at 265: It has long been the common law that a court may review, correct, or alter its judgment at any time until its order has been perfected. 11 The High Court also made reference to the Rules of this Court. 12 There is undoubted power in this Court to set aside the judgment and orders which have not been entered. Part 40 r 9(1) of the Supreme Court Rules 1970 provides that: The Court may set aside or vary a judgment where notice of motion for the setting aside or variation is filed before entry of the judgment. 13 The High Court indicated that this power was discretionary and was to be exercised having regard to the public interest in the finality of litigation. The judgment continues to the effect that if reasons for judgment have been given, the power is only to be exercised where there is some matter calling for review. In the present case, there are no reasons, because the matter was dealt with by consent. 14 However, in reliance on the authority of Spies v Commonwealth Bank of Australia (1991) 24 NSWLR 691, the plaintiff submits that the setting aside of the judgment, although within the power of the Court, should not be entertained on this notice of motion, but rather the notice of motion should be dismissed with the defendants being granted leave to file further substantive proceedings. In my view there are two significant points of distinction between Spies and the present case. First, Spies was a case which occurred after judgment had been formally entered and so Pt 40 r 9 of the Rules was inapplicable. Secondly, the ratio of Spies was essentially concerned with an allegation of fraud. That was the basis upon which the judgment in that case was sought to be set aside. It was held that jurisdiction to set aside a consent order obtained by fraud should be invoked by a new action brought for that purpose and not by notice of motion in the original proceedings. It was also held that where an action is brought to set aside a consent order on the ground of fraud that the plaintiff was required to allege facts which established that he has reasonable prospects of success. 15 In the present case, as I perceive it, the serious allegation of fraud is not alleged. Rather, as I have indicated, it is a question of ill health, incapacity or lack of appropriate legal advice that are asserted as grounds which would justify the setting aside of the judgment of Simpson J. Hence, I think that Spies is distinguishable, and that no procedural injustice would be incurred by this Court hearing and determining the notice of motion in the original proceedings. 16 However, the plaintiff rightly asserts that the grounds upon which the judgment is impeached should be particularised and they should have the opportunity to deal with those grounds by way of evidence and submission. 17 The only submission the defendants made with respect to proposed orders handed up by the plaintiff (as its alternative submission) was in relation to a date for further directions. In all of the circumstances I think that the defendants are adequately protected and that the date suggested is appropriate in order to give the plaintiff sufficient time to consider and prepare any answer it needs to make to the specific grounds and reasons (or material facts) upon which the application to set aside the judgment is made. 18 Accordingly, I think the alternative approach of the plaintiff is appropriate in the circumstances and the Court orders: 1) The defendant should file points of claim on or by 28 July 2003 setting forth the material facts upon which they ground their application to set aside the judgment of Simpson J on 10 June 2003; 2) The plaintiff should file and serve a defence to the points of claim on or before 4 August 2003; 3) The matter should be stood over for further directions before the list judge on the next call up list of 8 august 2003; 4) Costs of the proceedings on the notice of motion should be reserved.
Last Modified: 08/12/2003 DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.
Perpetual Trustees Victoria Limited
Richard Kingsley Sheehan and Anor
(1992) 176 CLR 256
(1991) 24 NSWLR 691
The defendants were ordered to file points of claim setting out the material facts supporting their application by 28 July 2003. The plaintiff was ordered to file and serve a defence by 4 August 2003. The matter was stood over for further directions before the list judge on 8 August 2003, and the costs of the notice of motion were reserved ([18]).