Cavanagh-Lang v O'Callaghan

CAVANAGH-LANG v O’CALLAGHAN & ORS
[2000] SASC 187

Full Court: Olsson, Wicks and Gray JJ

OLSSON J This is an appeal, by leave, against an order of a single judge of this Court, dismissing an appeal against an interlocutory order of a District Court Judge. That order purported to set aside a judgment for damages to be assessed, which was, on 5 October 1999, directed to be entered in a civil action in the District Court.
In those proceedings the respondents, who were licensed surveyors and development project managers, claimed $35,599.70, and interest accruing on that sum, in respect of work said to have been done in relation to a proposed real estate development project at Chandler’s Hill. By an amended statement of claim the respondents variously based their claim in breach of contract, quantum meruit, and unjust enrichment. At time of action brought, the appellant (“the first defendant”) was said to have been the registered owner of the land which was to be the subject of the proposed real estate development. The second defendant, at first instance, was the Administrator, with the Will annexed, of the estate of the then late husband of the first defendant.
As a matter of convenience I will, in my recital of the relevant history, refer to the respondents as “the plaintiffs”.
The two defendants in the original proceedings each filed separate defences. The first defendant, denied that she entered into any relevant contract or arrangement with the plaintiffs, or that she knowingly accepted the performance of work allegedly carried out by them. She asserted that no circumstances had arisen, whereby she was rendered liable for any of the moneys claimed by the plaintiffs. The defence filed by the second defendant, in effect, put the various assertions of the plaintiffs in issue. It denied the existence of any circumstances whereby that defendant was liable for the moneys claimed.
The proceedings were listed for trial before Lunn DCJ on 5 October 1999. Counsel appeared on behalf of the second defendant and intimated that the estate had no funds. He said that he was instructed to withdraw from the matter and consented to the entry of judgment against the second defendant for damages to be assessed.
Both of the other parties were separately represented by counsel on that occasion. Lunn DCJ pointed out to the parties that the immediate entry of such a judgment might lead to later technical difficulty, in that it could possibly preclude the plaintiffs from thereafter obtaining a judgment against the first defendant. Upon his so doing, counsel for the plaintiffs simply said:-
“Well, I wouldn't be suggesting in any (sic) that my friend' s concession on behalf of the second defendant of itself should bind the first defendant.”
Counsel for the first defendant remained mute at that stage.
It seems fair to say that, at the time, all counsel involved clearly did not appreciate the significance of the point referred to by the learned Judge.
The learned District Court judge thereupon pronounced an order that, by consent of the plaintiffs and the second defendant, judgment be entered for the plaintiffs against the second defendant for damages to be assessed.
Thereafter, counsel for the plaintiffs embarked upon the opening of the plaintiffs’ case. Almost at the outset, the learned judge raised the issue of whether or not counsel for the first defendant wished to raise, as a matter of law, a plea that the judgment pronounced against the second defendant constituted some form of bar to any claim against the first defendant. Counsel for the first defendant asked for time to consider his position, apparently on the footing that the plaintiffs’ opening should continue until the scheduled morning break during the trial. Even at that point, it was apparent that neither counsel then appearing fully appreciated the point being raised.
Counsel for the plaintiffs thereupon not only completed his opening, but also commenced to lead evidence in support of his clients' claim. In the course of the evidence of one of the plaintiffs, the learned trial judge intimated that he had just recollected that he was in the course of writing a judgment in another matter in which that party had been a witness, and as to which evidence he would be making findings. An issue as to apparent bias therefore potentially arose.
Following some exchanges between the learned trial judge and counsel, the former recused himself. He intimated that he had arranged for the matter to be relisted for immediate trial, ab initio, before Bright DCJ.
The proceedings were called on before Bright DCJ later the same day. Upon being informed of the course of events which had occurred earlier that morning, Bright DCJ asked whether judgment had been taken against the second defendant without prejudice to any entitlement which the plaintiffs might have against the first defendant. He was thereupon informed that counsel for the first defendant had, by then, foreshadowed that he would propose to seek leave to amend the defence to plead the judgment against the second defendant as a bar to any further claim against the first defendant. Counsel for the plaintiffs said:-
“... I have already indicated, and sought from Judge Lunn, an order setting aside judgment that was obtained by consent this morning, pursuant to the rules. Of course, Judge Lunn properly said he couldn't, or he shouldn't, consider that, in the absence of Mr Frost [counsel for the second defendant] ... His Honour took the view that that was a matter that ought properly to be determined by the judge who was going to hear the trial for the merits...”
After some further discussion with counsel, Bright DCJ adjourned the proceedings until the afternoon, upon the basis that counsel for the second defendant would be requested to re-attend.
When the matter resumed later the same afternoon, Mr Frost, of counsel for the second defendant, duly attended. The learned trial judge then said to him:-
“Mr Frost, thank you for coming back. I understand an application is to be made to set aside a judgment, entered by consent order default, against your client this morning. Do you wish to be heard in relation to that?”
Mr Frost responded:-
“No. I don't object to that application, but I don't have anything to put to you.”
Mr Frost was thereupon excused from further attendance.
Counsel for the first defendant then sought an adjournment to enable him, more adequately, to consider his position and to formulate proper submissions as to the legal position. Bright DCJ adjourned the matter to the following morning, counsel for the first defendant having indicated that he proposed to seek leave to amend the defence to plead that the judgment which had been pronounced operated as a bar to any further prosecution of the claim against his client, presumably by virtue of the doctrines of either merger or election.
At that stage, no steps had been taken to perfect the judgment pronounced, by sealing and entering it. Indeed, no such action was ever taken.
When the matter was called on for further hearing on 6 October 1999, counsel for the plaintiffs made application - as he put it - “to set aside the judgment”.
The relevant transcript suggests that he seems to have been somewhat ambivalent as to the basis upon which he sought to prosecute that application. He referred both to the provisions of SCR 3.04(f) and SCR 84.12. The former invests the Court with power to “correct, revoke or vary any order by a subsequent order”. The latter provides that “The Court may vary or set aside a judgment or order at any time if the justice of the case so requires”.
The debate which then ensued focused upon the extent to which the consent judgment which had been pronounced may, if it stood, have the effect of bringing proceedings to an end; and giving rise to a situation in which substantive rights vested by it in the second defendant could only be altered on the basis discussed in Commonwealth Bank of Australia v Forshaw (1990) 55 SASR 247 (“Forshaw”).
So far as I can determine, the various authorities which were referred to by counsel all arose from situations in which the relevant order or judgment had, in fact, been perfected.
Counsel for the second defendant argued that the effect of the judgment, as pronounced, was to merge all earlier causes of action arising out of what had been said to be joint obligations, or alternative obligations, into that judgment.
In the course of debate, Bright DCJ drew attention to the fact that the judgment had not been perfected. He put to counsel for the first defendant that a setting aside of the pronounced judgment would merely result in the situation that the second defendant would lose a technical advantage, of which her counsel had not even been aware at the time. He further stressed that counsel for the plaintiffs must be taken, also, to have been unaware of the doctrine or, otherwise, as the learned Judge put it, “he wouldn't have blundered into...” the situation in which he found himself. The learned judge went on to comment that there was no merit of any sort in the claim that the second defendant would suffer hardship if the action proceeded, as had been contended on the previous day.
The bland response of counsel for the second defendant was that, whilst he acknowledged that he had been as ignorant of the legal consequences of what had occurred, when it was first mooted by the trial judge, as had been counsel for the plaintiffs, nevertheless, “if the Court were able to re‑open judgments every time the parties made an error of law, no judgment would ever be closed”. On that basis he persisted in maintaining his position that the action of the second defendant had, unilaterally, conferred on the first defendant a substantive legal right by way of an absolute defence to the plaintiffs' claim.
Having heard counsel, Bright DCJ declined to permit the amendment to the defence, sought on behalf of the first defendant. He made an order, apparently pursuant to SCR 84.12, that “the consent interlocutory judgment for damages to be assessed against the Second Defendant be set aside”. Whilst the learned Judge primarily relied upon the rule referred to, he also intimated that, in the alternative, he invoked what he considered to be the inherent jurisdiction of the District Court, vested in it by reason of s 8 of the District Court Act 1991.
In reasons expressed by him, Bright DCJ said that the justice of the case required him to set the judgment aside,
“... having regard to the fortuitous way in which the first defendant came by her alleged defence to the absence of any detriment to her through reliance on it and to the fact that the plaintiffs' counsel took the judgment in ignorance of the consequences which may include depriving the plaintiff [sic] of any remedy of practical worth."

The first defendant appealed to a single judge of this Court against the orders made. That judge (Prior J) dismissed the appeal. He held that the orders sought to be impugned had, in the circumstances, properly been made in exercise of the power conferred by SCR 84.12. He also considered that, in any event, Bright DCJ also possessed the same inherent jurisdiction as a Judge of the Supreme Court to set aside a judgment which has not been sealed and entered.

In essence, the appellant seeks to reiterate before this court, the same contentions as those advanced in support of its appeal, as argued before Prior J.
It seems to me that, in addressing these contentions, one important point ought to be made at the outset. I consider that the primary focus adopted by the parties in the courts below has, to some extent, been misconceived.
An important, long established principle is that which is discussed by the Court of Appeal in the case of In re Harrison’s Share under a Settlement. Harrison v Harrison [1955] Ch 260 (“Harrison”). It was there confirmed that, in general, an order pronounced by a judge, whether in open court or in chambers, can always be withdrawn, altered or modified by him, either on his own initiative or on the application of a party, until such time as the order has been drawn up, passed and entered. The oral order is, meanwhile, provisionally effective, and can be treated as a subsisting order where the justice of the case requires it and the right of withdrawal would not thereby be prevented or prejudiced. Any rights flowing from the order are no less provisional that the order itself. The Court of Appeal went on to make the point that, when a judge has pronounced judgment, he retains control over the case until the order giving effect to his judgment is formally completed by being sealed and entered. Such a right of reconsideration and review, however, must be used in accordance with a proper exercise of judicial discretion and not capriciously. The Court went on to say that:-
“It is important to remember that in the ordinary way the recall of an unperfected order results in a rehearing at which all parties can present such further arguments as they may be advised having regard to the matter, whatever it may be, which is sought to cast doubt on the correctness of the order as orally pronounced”,

ie the situation is then dealt with afresh ab initio.

Such a situation is not, in my opinion, altered by the provisions of SCR 84.12, which confers quite separate powers. (See discussion in Carrol v Price [1960] VR 651.)
The principle to which I have referred in Harrison was adopted by the Full Court of this Court in Ljoljic v Sherlock (1989) 152 LSJS 484. Inter alia, the Full Court therein adverted to the dictum of Napier CJ in Driver v Driver (1950) SASR 8 at 10.
The learned Chief Justice there pointed out that pronouncing a judgment is not entering it. Something has to be done which will constitute the Court record, although the judgment - when it is passed and entered - will take effect as from the time when it is pronounced. Until the judgment is sealed and entered, it is inchoate and incomplete; and remains open to reconsideration and review. The matter is not, at that point, res judicata and the judgment has not yet passed from the control of the judge who pronounced it.
In Ljoljic v Sherlock (supra), it was further held that the power to recall an order before it is perfected is not absolutely restricted to the judge who pronounced it. This is, of course, particularly so where the doctrine of necessity arises - for example, where the commission of the Judge who pronounced it has expired or, as here, that Judge is disqualified from further dealing with the matter.
Both in the Court below and also on the hearing of the present appeal much debate took place as to the nature of any power to recall an unperfected judgment and entertain a reconsideration of the relevant matter. This gave rise to submissions as to whether s 8 of the District Court Act 1991 operated to vest in the District Court the same inherent jurisdiction as is possessed by this Court, and, alternatively, as to the nature and ambit of any implied or incidental powers which that statutory Court might otherwise possess. (As to the latter aspect see DJL v Central Authority (2000) 170 ALR 659, Parsons & Ors v Martin & Ors (1984) 5 FCR 235.)
There can be no doubt that s 8 of the District Court Act could scarcely be couched in wider terms. Subject only to certain limited and quite specific exceptions (not here relevant) it vests in the District Court -
“... the same civil jurisdiction (both at law and in equity) as the Supreme Court at first instance ... ”
Like the learned Judge now appealed from, I incline to the view that the effect of this provision (which is intended to constitute the District Court the primary trials Court in this State) is to confer upon that Court all of the jurisdictions and powers vested in the Supreme Court in its civil jurisdiction (including all relevant inherent powers), save for the aspects expressly excepted.
However, it is unnecessary, finally, to decide that question. It is plain, on the authorities, that the right of a Court to exercise the powers to reconsider and recall unperfected judgments is not the product of any inherent jurisdiction. It is a common law incident of the normal conduct of business, which is applicable to every court. It is so described by the High Court in Smith v New South Wales Bar Association (1992-1993) 176 CLR 256 at 265 (“Smith”) and rests on the notion that the Court is not functus officio as to the subject matter of any judgment in question until it is perfected. (See FAI General Insurance Co Ltd & Ors v Southern Cross Exploration NL & Ors (1987-88) 77 ALR 411 at 422.) As Brennan J (as he then was) commented in Permanent Trustee Co (Canberra) Ltd (Executor estate of Andrews) v Stocks & Holdings (Canberra) Pty Ltd (1977) 15 ALR 45 (“Permanent Trustee”):-
“Until the final judgment is entered, the court retains a power to reconsider the matter, but, when entered, the jurisdiction to reconsider is gone.”

It was for this reason that Sir George Jessel MR was heard to declaim that “A Judge can always reconsider his decision until the order has been drawn up” (In re St Nazaire Company (1879) 12 Ch D 88 at 91).

It is manifest from the decided cases to which I have referred that this concept is, indeed, applicable to all courts - it is, in fact, so expressed in the 1999 Cumulative Supplement (Part 2) to Halsbury’s Laws of England 4th Edn at para 555. I would reject the contention of counsel for the appellant that the power to recall an unperfected order is only possessed by a superior court. The case of The Texas Company (Australasia) Limited v The Federal Commissioner of Taxation (1940) 63 CLR 382 does not stand as authority for such a restrictive proposition, as contended for by him. Indeed, although it is cited with approval in the subsequent case of Smith, that case actually renders it clear (at p 265 of the report) that any court possesses the power in question. When the rationale for the power, as above discussed, is appreciated, it could scarcely be otherwise.
But a cursory perusal of the various authorities touching on the common law power to revisit unperfected judgments instantly reveals that the judicial discretion which may be exercised is extremely wide. The test to be applied is limited only by what appear to the Court to be the dictates of the justice of the case, in all of the circumstances - given that the Court will not lightly re-open its consideration of a matter. Proper justification for adopting this most unusual course must arise from the particular circumstances.
The published authorities indicate that the common law power to reconsider may properly be used to address errors on the part of counsel. In Ljoljic v Sherlock (No 2) (1990) 157 LSJS 463, the Full Court accepted a dictum of Lunn AJ which accepted these propositions:-

.it is not every error of fact or law which will lead to a reconsideration. The requirement of finality in litigation must be given due consideration;
.if the consequences of a possible error by counsel were catastrophic for his client, it may be that the interests of justice would dictate a reconsideration;
.there are various recognised categories of mistake where the court will normally relieve a party from the consequences of counsel’s error (as to which see, for example, the dicta in Re Barrell Enterprises & Ors [1972] 3 All ER 631). However, there is an overriding category of case in which it may properly be said that a failure to reconsider will, in the particular circumstances, work a manifest injustice on the party seeking the reconsideration.

So it was that, in Jingellic Minerals No Liability v Beach Petroleum No Liability (1990-1991) 55 SASR 424, Zelling AJ concluded that the interests of justice required him to reopen a matter where it appeared that counsel had misunderstood the importance of the defendant’s solvency whilst addressing argument to him and had believed that, as a matter of law, the question of solvency was not relevant at that stage. In the particular circumstances, which need not be rehearsed for present purposes, Zelling AJ was persuaded that the interests of justice demanded the recall of his unperfected order. He then entertained additional evidence and argument on the point in question.

I do not accept that the foregoing summation is contrary to what fell from the High Court in Autodesk Inc & Anor v Dyason & Ors (1992-1993) 176 CLR 300) as asserted by counsel for the appellant. In that case the members of the High Court, who were by no means unanimous as to the issues of policy involved, were simply focusing attention on the approach proper to be adopted to recalling orders made by that Court in its appellate jurisdiction. It is stating the obvious to say that the considerations applicable in that regard are quite different from those related to courts of first instance.
The essential concepts and principles arising in relation to an application to vary or set aside pursuant to SCR 84.12 are also markedly different from those to which I have been referring, as was illustrated by Brennan J in Permanent Trustee. The rationale for that difference was neatly summarised by Roxburgh J, in the course of his judgment in Harrison (at page 270) when he made the point that the power of reconsidering a matter simply depends upon the circumstance that the jurisdiction of the judge which has been invoked by parties to an action does not pass away from him until his order has been perfected. On the other hand, once it has been perfected, the jurisdiction of the Judge over the matter has come to an end. If the judgment is to be impugned some separate authority for varying or revoking it must be found.
I agree with the submission of Mr Besanko QC, of senior counsel for the respondents, that the provisions of SCR 84.12 are equally available to set aside a provisional, unperfected judgment, as well as one which has been perfected. It is expressed in the most general terms. (See discussion by Cox J in Forshaw at 256-257.)
In my view, a careful distinction must be drawn between those authorities which reflect the quite limited and restricted basis upon which a Court will exercise its inherent jurisdiction to set aside a perfected judgment, on the one hand, (as to which see the discussion by Lander J in Copping & Ors v ANZ McCaughan Ltd & Ors (1996-1997) 67 SASR 525 at 565 et seq and of Brennan J in Permanent Trustee at 48) and the principles which are applicable to an application founded on the express provisions of SCR 84.12 on the other. It cannot be stressed too strongly that, regardless of the principles applicable to resort to the inherent jurisdiction, SCR 84.12, which is of relatively recent origin, stipulates its own test. The sole touchstone for the exercise of the powers conferred by it is that they may be exercised “if the justice of the case so requires” (Hutchinson v Myer Stores Limited (1995-96) 184 LSJS 398 at 411, Berriman v Pipeline Engineering Pty Ltd (1988-90) 52 SASR 324 at 329 “Berriman” and Forshaw at 253).
As I pointed out in my judgment in Collins v State of South Australia & Ors (Olsson J, 20 November 1998, S6960, unreported), this rule must be read in conjunction with SCR 3.04. I there said:-
“It will, at once, be noted that the two rules are expressed in different terms. One fundamental difference is that, whereas SCR 84.12 confers power to actually set aside a judgment or order, the focus of SCR 3.04 is somewhat narrower. The latter is essentially pitched at correcting some manifest error, although it certainly does extend to the potential revocation of an order.
In Ballantyne & Sullivan v ETSA (1993) 173 LSJS 355 at 360 Perry J made the point that SCR 3.04(f) does not confer a jurisdiction which should be exercised simply by reviewing the merits of an order previously made. It is to be resorted to only where there has been some mistake or oversight, or when there has been a significant change of circumstances since the relevant order was made. He also stressed that it is not intended as an alternative procedure designed to circumvent normal appeal processes. Copping v ANZ McCaughan Ltd (1995 67 SASR 525 stands as authority for the proposition that SCR 84.12 can apply to a judgment regularly entered after trial in rare and exceptional cases.
In the course of his judgment in Mohtar v Mohtar & Seputis (1988) 146 LSJS 377 von Doussa J was disposed to consider the two rules as acting in concert with one another.
Having emphasised that an important distinction needed to be made between the existence of the powers conferred and the occasion for their proper exercise, he accepted that it was important that the court ought not to lose sight of the general rule that public interest requires that litigation ought not to proceed interminably.
Accepting that it was not practical to evolve specific, all embracing rules governing the proper application of the powers conferred, he concluded that some guiding principles were:-
(1).... the rules obviated the need to institute a fresh, separate action to set aside a judgment, where setting aside was justified in law;
(2)the fundamental question was what course was just in the particular circumstances, including (but not limited to) consideration of the existence of equitable or other fraud;
(3).... the factors of public interest, delay and rights of third parties were relevant for consideration;
(4)the rules are not intended to override contractual arrangements entered into by the parties.”
I see no reason to depart from what I there said. Each case must be considered upon its own merits, due consideration being given to the principle “interest reipublicae ut sit finis litium”.
In the course of his submissions, Mr Manetta, of counsel for the first defendant, bluntly asserted that it was beyond question, as a matter of principle, that, whereas a Court might be persuaded to grant relief where a mistake of fact was demonstrated, reliance could not be placed upon a mistake of law. Not only am I unable to discern any authority which unequivocally establishes such a proposition in relation to an application pursuant to SCR 84.12, but, also, such a purported principle would constitute an unwarranted fetter on the clear words of the rule itself. The test there postulated is not to be constricted by either self imposed fetters, or principles imported from the historically based, inherent jurisdiction of the Court. The concept of the justice of the case is protean. It demands a careful consideration of the individual circumstances in question and formulation of a judgment as to what is fair and reasonable, due regard been had to the practical need for finality of the litigation process.
In this regard, the type of reasoning expressed by Ormiston J in Macquarie Bank Ltd v Beaconsfield & Ors [1992] 2 VR 461, albeit in relation to issues of potential merger or election arising from the entry of a default judgment, is apposite to the present case. It is noteworthy that the learned Judge did not seek to draw any distinction between mistakes of law or of fact. He simply accepted the global concept enunciated by Wrottesley LJ in S. Kaprow & Co Ltd v MacLelland & Co Ltd [1948] 1 KB 618, to the effect that there is no authority for limiting the power of the court, in proper cases, in respect of a mistake in order to prevent a possible injustice. Indeed, Berriman was a classic example of a mistake of law.
In the course of his submissions Mr Manetta passionately sought to rely on what fell from the Divisional Court in Hammond v Schofield [1891] 1 QB 453 (“Hammond”) as being decisive of the issues in this case.
That case arose from a situation in which the plaintiff sued the defendant in debt on the assumption that the latter was the sole proprietor of the business which had incurred the debt. There being no defence to the claim, the defendant consented to judgment on a summons for final judgment. This was duly signed against him. A few weeks later the plaintiff, on hearing that, at the relevant time, the business which incurred the debt was in fact conducted by the defendant in partnership with one T, applied for an order setting aside the judgment, in order to join T as a defendant in the proceedings.
The Divisional Court rejected the application in somewhat summary terms. It pointed out that the defendant had plainly been liable to the plaintiff and the entry of judgment against him had, by virtue of the doctrine of merger, already operated to constitute a bar to any claim against T. Wills J, having pointed out that vested situation, said:-
“I cannot see upon what principle the consent of the plaintiff and defendant can be allowed to create a new right, or (which is the same thing), to resuscitate an extinguished right in favour of the plaintiff against a third person, or to create on the part of a third person a new liability. Courts exist, as it seems to me, not to take away people’s rights or increase their liabilities, but to enforce them, and I base my judgment upon this broad principle.”
It is by no means clear as to the jurisdictional basis on which the plaintiff made his application in Hammond. It may well have been an attempt to invoke the inherent jurisdiction of the Court. There is certainly no indication in the report that it was based on a rule expressed in a form akin to SCR 84.12. Further, the application was brought in relation to a perfected judgment which had given rise to the res judicata situation upon which the Divisional Court placed such store.
This, in factual terms, is a far cry from the present scenario, which focuses on an unperfected judgment. At best, any possible vesting of rights by way of merger, or otherwise, was no more than provisional. In its judgment in Petersen v Moloney & Anor (1950-51) 84 CLR 91 at 103-4, the High Court made the point that, even where a judgment has actually been entered, any merger arising from it will only stand whilst the judgment in question remains on record. There is no rule that prevents cessation or removal of the judgment, nor which prevents a party seeking such a removal, ie any merger defence which arose was not absolute and irretrievably vested. It is subject, so to speak, to defeasance, in the event that the judgment giving rise to it might be set aside for good reason.
Moreover, it is very much a moot question as to whether what fell from the Divisional Court in Hammond can be reconciled with the reasoning in the more recent “mistake” cases, even if it be accepted that the approach in that case was intended to erect a general principle. In any event, it is clear from the judgment of Cox J in Forshaw that an order properly made pursuant to SCR 84.12 may well affect and abrogate rights vested by an impugned order. That opinion is in accord with what fell from the High Court in Petersen v Moloney (supra).
Finally, as Mr Besanko QC observed, the judgment here in question was pronounced as an interlocutory judgment for damages to be assessed (Horwell v Jones 11 SASR 502. But cf Annan v Wayne (1988-89) 50 SASR 147). The published authorities seem to suggest that interlocutory judgments and orders will more readily be set aside than final judgments and orders - at least in the inherent jurisdiction. This is a reflection of the fundamental premise that the Courts will always retain control of their procedural processes to ensure that litigation is conducted in a fair, efficient and just manner. (See E I Du Pont de Nemours & Co v Commissioner of Patents & Ors (1988) 83 ALR 499.)
In my opinion the absolute stance propounded by Mr Manetta cannot be accepted.
Distilled to the essence, the situation in this case can be reduced to these propositions:-
Counsel for the plaintiffs took what was tantamount to a default interlocutory judgment against one of two defendants said to be liable to them - whether jointly or otherwise;
He did so not appreciating the legal effect of so doing and without any intention of making an election or bringing about a merger of all potential liability into the judgment pronounced;
On the contrary, he actively pursued the proceedings against the first defendant. He did so in circumstances in which counsel for that defendant, who also did not immediately appreciate the full possible legal consequences of what had occurred, concurred in the trial proceeding. Had counsel for the first defendant seriously thought, at the time, that a merger was being wrought, he would, immediately, have sought to amend the defence and contended that the action could not proceed further against his client. This did not happen.
As soon as a full realisation of the potential problem became apparent to counsel for the plaintiffs, he immediately made the application the subject of the present appeal. This was only a few hours after the pronouncement of the judgment. In the meantime the first defendant had, in no sense, acted to her detriment on the faith of the judgment in question.
It must, therefore, be said that, in adopting her present stance, the first defendant was simply seeking to take forensic advantage of a fortuitous event which had arisen by reason of an inadvertent mistake on the part of counsel for the plaintiffs - one which had operated, provisionally, to bring about a consequence which was both unintended and unappreciated by anyone concerned. It did not operate to vest in the first defendant an absolute and immutable right. The provisional right to which it gave rise was liable to automatic abatement with the recall of the relevant provisional order on which it was founded.
Bright DCJ and Prior J both took the view that the stance of the present appellant was, in the circumstances, unmeritorious; and that the justice of the case plainly demanded the making of the orders the subject of the appeal.
In the context of an SCR 84.12 application, I remain quite unconvinced that they were wrong in their ultimate conclusion. Had I been dealing with the matter at first instance I may well have preferred, as a matter of form, to respond to the situation which developed by exercise of the common law power of reconsidering the interlocutory judgment and recalling it. The circumstances were undoubtedly amenable to such an approach; and plainly attracted it as a matter of merit.
Be that as it may, I am driven to the conclusion that this appeal must be dismissed. The exercise of discretion by Bright DCJ and confirmed by Prior J has not been shown to have been wrong.
WICKS J I have read in draft the reasons published by Olsson J. I agree that the appeal should be dismissed for the reasons he gives.
GRAY J I agree.

[2000] SASC 187

30 June 2000