Procedure - Judgments and orders - Amending, varying and setting aside - Variation and setting aside of consent judgment - Upon grounds of duress - Fresh action required.

Permanent Trustee Co (Canberra) Ltd v Stocks & Holdings (Canberra) Pty Ltd (1976) 28 FLR 195; Spies v Commonwealth Bank of Australia (1991) 24 NSWLR 691, followed.

Judgment Number: [2000] TASSC 167

TASMANIAN OUTSTANDING PROPERTY INVESTMENTS PTY LTD

and PHILLIP JOHN GRIGGS v GREGORY IAN DICKENSON

1 This is an application by the second named plaintiff in this action to set aside a judgment entered on 11 November 1999 by consent of the parties. In his affidavit in support of what purports to be an interlocutory application in the action in which judgment has been entered, the second named plaintiff deposes that it was by reason of duress that he consented to the judgment by which the plaintiffs were ordered to pay $50,000 to the defendants on their counterclaim.

2 In Permanent Trustee Co (Canberra) Ltd v Stocks & Holdings (Canberra) Pty Ltd (1976) 28 FLR 195 at 198, Brennan J (as he then was) pointed out the general rule that a perfected judgment cannot be recalled or varied, for the public interest requires that the judgment, when it is entered, should conclude the litigation. He noted, however, three exceptions to this rule, the third being:

"... those which override the general rule in order to give relief where the judgment is obtained by fraud or by an agreement which is void or voidable."

In circumstances of fraud, however, he held that the fraud must be alleged in a fresh action brought to try the issue (citing Flower v Lloyd (1877) 6 Ch D 297, Jonesco v Beard [1930] AC 301) and at 199, said:

"Similarly, where the judgment is entered by consent, and a party alleges that the agreement pursuant to which the judgment was entered is void or voidable (Harvey v Phillips [1956] HCA 27; (1956) 95 CLR 235; Huddersfield Banking Co Ltd v Henry Lister & Sons Ltd [1895] 2 Ch D 273) the issue must ordinarily be litigated in a fresh action (Wilding v Sanderson [1897] 2 Ch 534, at p 549; Rayner v Rayner [1968] QWN 42)."

"A judgment or order made by consent operates as an agreement, and it follows that such an order may be set aside or varied in circumstances in which a contract may be discharged or rectified. In Harvey v Phillips (supra) at 243, 244, the following appears in the joint judgment of the High Court:-

'... in the case of a compromise ... a court does not appear to possess a discretion to rescind it or set it aside. The question whether the compromise is to be set aside depends upon the existence of a ground which would suffice to render a simple contract void or voidable or to entitle the party to equitable relief against it, grounds for example such as illegality, misrepresentation, non-disclosure of a material fact where disclosure is required, duress, mistake, undue influence, abuse of confidence or the like.'

But it is quite clear, at any rate as far as concerns a final order made by consent, that once it is drawn up and perfected, it cannot, in the absence of agreement between the parties, and subject to the slip rule, be set aside or varied by a proceeding in the action in which it was made, but only in a fresh action instituted for the purpose and relying upon one of the considerations mentioned in the passage which I have quoted: Ainsworth v Wilding [1896] 1 Ch 673, Kinch v Walcott [1929] AC 482 at pp 493, 494; in re Frackelton v McQueen & Others In re a Solicitor [1910] St R Qd 1 at 6 per Chubb J."

3 There is some authority for the proposition that a respondent to an application to set aside a judgment may waive the right to object to the proceedings being entertained by a motion or an application in the action in which judgment has been entered, eg, Ainsworth v Wilding (supra) at 679, but in Spies v Commonwealth Bank of Australia (1991) 24 NSWLR 691 where the basis for setting aside the judgment was alleged to be fraud, Handley JA, at 701, urged caution in departing from the established practice of determining such issues by way of a fresh action. Even in Ainsworth v Wilding (supra), Romer J, at 680, acknowledged the desirability of not dealing with them on motion "when, from the nature of the ground on which the application was based, conflicting evidence would have to be gone into or viva voce evidence and cross-examination would be essential". To this could be added the advantage of undertaking orderly discovery and interrogation in a separate action. However, in the circumstances of this case, the defendants, who are respondents to the application, are not prepared to waive their right to object.

4 The application is misconceived and must be dismissed. A separate action should be instituted to set aside the consent judgment on the ground of duress.