Buljabasic v AH Lam

The New South Wales Court of Appeal heard an appeal in *Buljabasic and Ors v AH Lam*. The dispute concerned the proper interpretation and application of a settlement agreement reached between the parties, which had been made an order of the court. The appellants, the Buljabasics, sought to set aside or vary the settlement order, alleging it was based on a fundamental mistake.

The primary legal issue before the Court of Appeal was whether the settlement agreement, and consequently the court order embodying it, could be set aside or varied on the grounds of a fundamental mistake, notwithstanding that it had been made an order of the court. This involved considering the principles governing the setting aside of consent orders and the circumstances in which a court retains inherent jurisdiction to correct errors.

The Court of Appeal affirmed that a consent order, once made, is generally binding and difficult to set aside. However, it acknowledged that a court retains an inherent jurisdiction to set aside or vary a consent order in exceptional circumstances, such as where the order was procured by fraud, or where there was a fundamental mistake going to the root of the agreement. The court found that the mistake alleged by the appellants, relating to the valuation of certain shares, did not amount to a fundamental mistake that would justify setting aside the consent order. The court distinguished between a mistake as to the underlying facts and a mistake as to the legal effect of the agreement, emphasizing that the latter, if it arises from a misinterpretation of the agreement itself, is generally not a ground for setting aside.

The appeal was dismissed.