Harrison v Schipp - [2002] NSWCA 78

No judgment structure available for this case.

Reported Decision:
(2002) 54 NSWLR 612

New South Wales

Court of Appeal

CITATION: Harrison v Schipp [2002] NSWCA 78

FILE NUMBER(S): CA 40814/01; 40728/98; 40761/98

HEARING DATE(S): 12 March 2002, 15 May 2002

JUDGMENT DATE:
21 June 2002

PARTIES :

George Andrew Harrison
Emibarb Pty Limited
v
Delcie Joan Schipp & Ors

JUDGMENT OF: Handley JA at 1; Giles JA at 134; Ipp AJA at 204

LOWER COURT JURISDICTION : Reference under SCR Pt 12 r 2

LOWER COURT
FILE NUMBER(S) : EQ 6425/91

LOWER COURT
JUDICIAL OFFICER : Not Applicable

COUNSEL: S J Gageler SC/G Lucarelli (Plaintiffs)
M J Slattery QC/J M Hennessy/S Fendikian (Defendant)

SOLICITORS: Blake Dawson Waldron (Plaintiffs)
Dibbs Barker Gosling (Defendant)

CATCHWORDS: EQUITY - solicitors - business dealings with clients - EQUITY PROCEDURE - bill of review for fresh evidence - whether still available - EVIDENCE - requirements for fresh evidence - PROCEDURE - court has no power to reconsider perfected judgments - SOLICITORS - business dealings with clients

LEGISLATION CITED: Equity Act 1880 (NSW)
Equity Act 1901
Judicature Act 1873 (UK)
Supreme Court Act 1970

CASES CITED:
Ainsworth v Wilding [1896] 1 Ch 673, 676, 677
Arnold v National Westminster Bank plc [1991] 2 AC 93, 104
Akins v National Australia Bank (1994) 34 NSWLR 155, 160
Autodesk Inc v Dyason (No 2) (1993) 176 CLR 300, 310
Bailey v Marinoff (1971) 125 CLR 529, 530
Barbon v Searle (1686) 1 Vern 416
Barnsley v Powell (1748) 1 Ves Sen 119, 120, 284 [27 ER 930, 1034], 1034; Belt's Supp 74, 143; 28 ER 460, 482
Birne v Hartpole (1717) 5 Bro PC 197, 200 [2 ER 624, 626]
Boswell v Coaks (No 2) (1894) 6 R 167, 86 LT 365 n HL, 168 (366), 169-70 (366), 170 (366), 171 (367)
Braddock v Tillotson's Newspapers Ltd [1950] 1 KB 47 CA, 50
Brown v Higgs (1803) 8 Ves 561, 563, 566 [32 ER 473, 474, 475]
Builders Licensing Board v Sperway Constructions (Syd) Pty Ltd & Anor (1976) 135 CLR 616, 619, 620
Chamberlain v Deputy Commissioner of Taxation (1988) 164 CLR 502, 504-5
Charles Bright & Co Ltd v Sellar [1904] 1 KB 6, 11, 12-13
CDJ v VAJ (No 1) (1998) 197 CLR 172, 201-2
Coal and Allied Operations Pty Limited v Australian Industrial Relations Commission & Ors (2000) 203 CLR 194, 202, 203
Commonwealth Bank v Quade (1991) 178 CLR 134
Cotter v Barrymore (1733) 4 Bro P C 203
Council of the City of Greater Wollongong v Cowan (1955) 93 CLR 435
Davies and Cody v The King (1937) 57 CLR 170, 183
DJL v The Central Authority (2000) 201 CLR 226, 244, 245, 247
Doherty v Liverpool District Hospital (1991) 22 NSWLR 284
Eastman v The Queen (2000) 203 CLR 1, 11, 24-26, 33
Ex parte Currie; re Dempsey (1968) 70 SR 1
Ex parte James (1803) 8 Ves 337 [32 ER 385], 345 [388]
Falke v The Scottish Imperial Insurance Company (1887) 57 LT 39, 40
Flower v Lloyd (1877) 6 Ch D 297, 300, 302
Friesen v Braun [1926] 2 WWR 257
Gamser v The Nominal Defendant (1977) 136 CLR 145, 153, 154
Head v Godlee (1859) 1 Johns 536 [70 ER 534] (538-9, [535]) (578, [550])
Hip Foong Hong v H Neotia & Co [1918] AC 888, 894
Hosking v Terry (1862) 15 Moore PC 493, 504 [15 ER 581, 585]
Hungate v Gascoyne (1846) 2 Ph 25; 41 ER 850 (26; 851)
Huskisson RSL Sub-Branch Club Ltd v Sullivan (1990) 20 NSWLR 332
In re Barrell Enterprises [1973] 1 WLR 19, 24, 25-27
In re Harrison's Share Under a Settlement [1955] Ch 260, 276
In re Scott & Alvarez's Contract [1895] 1 Ch 596, 610, 623
In re Scott & Alvarez's Contract [1895] 2 Ch 603 CA
In re St Nazaire Co (1879) 12 Ch D 88, 91, 92, 93, 96-7, 98, 99-100, 100-101
In re Suffield and Watts Ex parte Brown (1888) 20 QBD 693, 696, 697, 698
Ivanhoe Gold Corporation Ltd v Symonds (1906) 4 CLR (Pt 1) 642, 670-1
Jonesco v Beard [1930] AC 298, 301-2
Jopp v Wood (1865) 2 De G J & S 323, 326, 329 [46 ER 400, 401, 402]
Law Society of New South Wales v Harvey [1976] 2 NSWLR 154, 171
Maybery v Brooking (1855) 7 De G M & G 673: 2 Jur.N.S.76
McCann v Parsons (1954) 93 CLR 418
McDonald v McDonald (1965) 113 CLR 529, 535, 542, 543, 544
McGowan v Middleton (1883) 11 QBD 464, 468
Mickelberg vThe Queen (1989) 167 CLR 259
Minister for Lands and Forests v McPherson (1990) 22 NSWLR 687
M'Laughlin v Little in (1845) Reserved and Equity Judgments 19, 21
Monroe Schneider Associates (Inc) v No 1 Raberem Pty Limited (No 2) (1992) 37 FCR 231, 234, 238-240
Moore v Moore (1755) 2 Ves Sen 596, 598 [28 ER 380, 382]
Nintendo Company Limited v Centronics Systems Pty Limited (1994) 181 CLR 134, 168
Norwich Pharmacal Co v Customs and Excise Commissioners [1974] AC 133
Oldham v Stonehouse (1838) 3 M & C 317
Orr v Holmes & Anor (1948) 76 CLR 632
O'Rourke v Hoeven (1974) 1 NSWLR 622, 626
Parker v McKenna (1874) LR 10 Ch App 96, 118, 124-5
Partridge v Usborne (1828) 5 Russ 195
Perry v Phelips (1810) 17 Ves Jun 173, 178 [34 ER 67, 69], 177-8; 68-9,
Preston Banking Company v William Allsup & Sons [1895] 1 Ch 141, 143, 144-5, 282, 283
Quilter v Mapleson (1882) 9 QBD 672, 676
Re May (1883) 25 Ch D 231, (1885) 28 Ch D 516 CA
Ronald v Harper (1913) VLR 311, 318
R v Flower (1966) 1 QB 147, 150-1, 183
R v Wallis (1949) 78 CLR 529, 550
Salt v Cooper (1880) 16 ChD 544
Smith v NSW Bar Association (No 2) (1992) 176 CLR 256, 265
Spies v Commonwealth Bank of Australia (1991) 24 NSWLR 691
Taylor v Lawrence [2002] 2 All ER 353 CA
The Queen v Gaudron (1978) 141 CLR 204
Thomas v Rawlings (No 3) (1864) 34 Beav 50, 53-4; 55 ER 551, 552
Thomson Australian Holdings Pty Limited v Trade Practices Commission (1981) 148 CLR 150, 161
Toubia v Schwenke [2002] 54 NSWLR 46
Tyrrell v Bank of London 10 HLC 26 [11 ER 934], 39-44 (939-941)
Victorian Stevedoring and General Contracting Company Pty Limited v Dignan (1931) 46 CLR 73, 108-9
Wentworth v Rogers (No 5) (1986) 6 NSWLR 534
Wentworth v Woollahra Municipal Council (No 2) (1982) 149 CLR 672
White v Ivory (1910) reprinted from The Times [1922] 1 WWR 1222
Willan v Willan (1810) 16 Ves 72 [ 33 ER 911]

DECISION: Proceedings dismissed with costs.; Direct that these orders be entered forthwith.

40814/01 (40728/98 ED 6425/91)

(40761/98 ED 6425/91)

HANDLEY JA
GILES JA
IPP AJA
21 June 2002

GEORGE HARRISON & ANOR v DELCIE JOAN SCHIPP & ORS

EQUITY – solicitors – business dealings with clients
EQUITY PROCEDURE – bill of review for fresh evidence – whether still available
EVIDENCE – requirements for fresh evidence
PROCEDURE – court has no power to reconsider perfected judgments
SOLICITORS – business dealings with clients

The plaintiffs, who were unsuccessful defendants in earlier proceedings heard by Einstein J, and were unsuccessful in an appeal from that decision to the Court of Appeal, commenced fresh proceedings in the Equity Division, after the earlier orders had been entered, seeking to have those orders set aside and to obtain a new trial of the original proceedings on the ground of the discovery of fresh evidence. They did not allege fraud. The new proceedings were referred to the Court of Appeal pursuant to SCR Pt 12 r 2 and the question to be decided was whether a Judge of the Equity Division had the power or jurisdiction to grant the relief sought. The plaintiffs claimed that the bill of review procedure of the Court of Chancery prior to the Judicature Act 1873, which enabled an enrolled decree of that Court to be reviewed on the ground of the discovery of fresh evidence, was still available in New South Wales. The jurisdiction was last invoked in New South Wales in Hosking v Terry (1862) 15 Moore PC 493 [15 ER 581].

HELD: Dismissing the proceedings, that the power or jurisdiction to commence fresh proceedings at first instance to review a judgment after it had been entered on the ground of the discovery of fresh evidence ceased to be available in New South Wales following the Equity Act 1880 and the Court had no power to grant the relief sought in these proceedings. In any event, the evidence relied on by the plaintiffs was not fresh.

CONSIDERED: The position in equity of solicitors who enter into business transactions with their clients and the Court’s jurisdiction or power to set aside perfected judgments on the ground of fraud.

ORDERS

(1) Proceedings dismissed with costs.

(2) Direct that these orders be entered forthwith.

40814/01 (40728/98 ED 6425/91)

(40761/98 ED 6425/91)

HANDLEY JA
GILES JA
IPP AJA
21 June 2002

GEORGE HARRISON & ANOR v DELCIE JOAN SCHIPP & ORS

Judgment

1 HANDLEY JA: On 23 August 2001 Mr Harrison and Emibarb Pty Limited commenced proceedings by statement of claim in the Equity Division (the new proceedings) which as amended claimed the following, amongst other relief:

“1. an order that orders numbers 1 and 7 made by Einstein J on 9 September 1998 in matter number 6425 of 1991 (at Red Appeal Book 2 468S-469F) be set aside.

2. an order that order No. 2 of the Court of Appeal made on 20 February 2001 in matters numbers 40728 of 1998 and 40761 of 1998 (at Red Book 80L-N) be set aside.

3. an order that order number 5 of the Court of Appeal made on 20 February 2001 in matters numbers 40728 of 1998 and 40761 of 1998 (at Red Book 80T-U) be set aside and in lieu thereof order that the cross-appellant pay the first and second cross-respondents’ costs of the cross-appeal.

4. an order that there be a new trial”.

2 The orders in the earlier proceedings (the orders) had been entered and the statement of claim does not allege that they were obtained by fraud. At first sight the new proceedings appear to be fundamentally misconceived. The orders having been entered, the general principle is that stated by Barwick CJ in Bailey v Marinoff (1971) 125 CLR 529, 530:

“Once an order disposing of a proceeding has been perfected by being drawn up as the record of the court, that proceeding apart from any specific and relevant statutory provision is at an end in that court and is in its substance, in my opinion, beyond recall by that court. It would, in my opinion, not promote the due administration of the law or the promotion of justice for a court to have a power to reinstate a proceeding of which it has finally disposed”.

3 This decision was followed in Gamser v The Nominal Defendant (1977) 136 CLR 145, where Aickin J said at 154:

Bailey v Marinoff

4 The position in Australia is governed by these decisions and cannot, in this Court, be affected by the decision of the Court of Appeal in Taylor v Lawrence [2002] 2 All ER 353 which has become available since the Court heard argument on the legal issues in this case.

5 The law of res judicata leads to the same conclusion. Mrs Schipp’s causes of action against the present plaintiffs have been litigated to a final judgment which has created one or more cause of action estoppels. These operate for and against the parties bound by the estoppel to preclude further litigation on that cause of action. The bar created by a cause of action estoppel is absolute. See Chamberlain v Deputy Commissioner of Taxation (1988) 164 CLR 502, 504-5; Arnold v National Westminster Bank plc [1991] 2 AC 93. In the latter case Lord Keith said at 104:

“In such a case the bar is absolute in relation to all points decided unless fraud or collusion is alleged, such as to justify setting aside the earlier judgment. The discovery of new factual matter which could not have been found out by reasonable diligence for use in the earlier proceedings does not, according to the law of England, permit the latter to be reopened”.

6 The plaintiffs have attempted to support the new proceedings as an action for review on the ground of fresh evidence based on the former procedure in the Court of Chancery by bill of review for new matter. Fresh evidence or new matter means evidence which could not have been discovered earlier by the exercise of due diligence, and which, if received, would probably lead to a different result.

7 On 4 October 2001 a Registrar of the Equity Division ordered that the new proceedings be removed into the Court of Appeal pursuant to SCR Pt 12 r 2 and stated the following as the question to be decided: “Whether a single Judge of the Equity Division has the power, or the jurisdiction, to grant the relief sought in the amended Statement of Claim?”

8 A bill of review, based on the discovery of new matter since the trial, was a remedy available in the Court of Chancery prior to the Judicature Act 1873, which enabled a decree that had been enrolled to be varied or reversed by the judge who pronounced it or his successor. The proceedings could only be brought with the leave of the Court. Where the decree had not been enrolled, relief could be obtained on the same grounds by a supplemental bill in the nature of a bill of review, filed with the leave of the Court. These remedies were available in the Supreme Court of this State at an early stage of its history, although the procedure appears to have been last invoked here in 1859 in proceedings which reached the Privy Council in 1862. See Hosking v Terry (1862) 15 Moore PC 493 [15 ER 581].

9 In England there has been no recorded case since the Judicature Act, with the exception of the decision of Kekewich J in In re Scott & Alvarez’s Contract [1895] 1 Ch 596, where an action for review on the ground of fresh evidence has succeeded, and that decision was reversed on other grounds. See In re Scott & Alvarez’s Contract [1895] 2 Ch 603 CA.

10 In 1973 the Court of Appeal held in In re Barrell Enterprises [1973] 1 WLR 19 that the jurisdiction previously exercised by the Court of Chancery on a bill of review had been vested by the Judicature Act in the Court of Appeal to the exclusion of the High Court. The Court, in a judgment delivered by Russell LJ, added at 27:

“Even if, technically, the High Court was at first clothed with this jurisdiction we are of opinion that this cause of action has long since lapsed because applications for rehearing on the ground of fresh evidence have for generations been made only to the Court of Appeal”.

11 I am not aware of any legal principle which could cause a superior Court of general jurisdiction to lose part of its jurisdiction or power by lapse through lack of use, but this difficulty does not affect the reasoning of the Court of Appeal on the effect of the Judicature Act.

12 The Federal Court considered whether this remedy continued to be available in Monroe Schneider Associates Inc v No. 1 Raberem Pty Limited (No 2) (1992) 37 FCR 234 at 238-40, but did not find it necessary to express a concluded view.

13 For a long time decisions of the Lord Chancellor could not be reviewed by any higher tribunal, but in the reign of Charles II jurisdiction to hear appeals from the Lord Chancellor was conferred on the House of Lords. See Charles Bright & Co Ltd v Sellar [1904] 1 KB 6, 11. However, there were other avenues for challenge available to aggrieved litigants which included a rehearing on the original materials on a petition filed before the decree was enrolled. See Daniell’s “The Practice of the High Court of Chancery” 5th Ed 1871 (Daniell), at 1340-1, 1342, 1344, 1345. Originally the rehearing took place before the Lord Chancellor or his successor (ibid 1339). When the original jurisdiction of the Court of Chancery became exercisable by the Master of the Rolls or one or more Vice-Chancellors, the rehearing could take place before the same judge or his successor or the Lord Chancellor, or later the Court of Appeal in Chancery (Daniell at 1339, 1342-3). The Master of the Rolls could not rehear a decree of the Lord Chancellor, or of a Vice-Chancellor, nor could a Vice-Chancellor rehear a decree of the Lord Chancellor, the Master of the Rolls or any other Vice-Chancellor (Daniell at 1343, 1346).

14 If the decree had been enrolled, limited relief was still available by a bill of review. Such a bill could be brought for error apparent, that is an error of law appearing in the decree itself, or for some new matter which had arisen since the decree, or, with the prior leave of the Court on discovery of new matter. On an application for leave the Court had to be satisfied that the matter newly discovered was relevant and material, such as might probably have occasioned a different determination, and that it was not discoverable by due diligence before the trial (Mitford “A Treatise on the Pleadings in Suits in the Court of Chancery” 5th Ed 1847 (Mitford) at 101-2, Daniell at 1422-3).

15 The Lord Chancellor exercised appellate jurisdiction in respect of the decrees and orders of the Master of the Rolls and the Vice-Chancellors, but later the Court of Appeal in Chancery was established with appellate jurisdiction co-ordinate with that of the Lord Chancellor. The appeal to the Lord Chancellor or the Court of Appeal was in reality a rehearing before the higher court (Daniell at 1343; and see also Brown v Higgs (1803) 8 Ves 561, at 563 in the argument of Mr Romilly, and at 566 per Lord Eldon LC, [32 ER 473, 474, 475]).

16 The scope of the jurisdiction to hear bills of review was not clear. Mitford at 105 and Daniell at 1424 stated that a bill of review for new matter had been permitted even after the decree of the Lord Chancellor had been affirmed by the House of Lords but the cases cited in both works, Barbon v Searle (1686) 1 Vern 416 and Willan v Willan (1810) 16 Ves 72 [33 ER 911] do not support this. However in Hosking v Terry (1862) 15 Moore PC 493 [15 ER 581], on an appeal from the Full Court of the Supreme Court of New South Wales, Lord Kingsdown said at 510-1 [587]:

“… the local Act … only means that an order shall be final and conclusive in the same sense as an order of the House of Lords affirming a decree in Chancery is in this country final and conclusive. Such an affirmance does not preclude a Bill of Review”.

The Full Court had allowed the respondent to challenge a decree that had been affirmed by the Privy Council, but this did not bar a bill of review based on the discovery of fresh evidence.

17 A supplemental bill, in the nature of a bill of review, based on the discovery of new matters since a decree of the Master of the Rolls, could be heard by the Lord Chancellor, together with a petition to rehear or appeal. See Moore vMoore (1755) 2 Ves Sen 596, 598 [28 ER 380, 382]; Perry v Phelips (1810) 17 Ves 173, 178 [ER 67, 69]; Jopp v Wood (1865) 2 De G J & S 323, 326, 329 [46 ER 400, 401, 402]. On the other hand in Head v Godlee (1859) 1 Johns 536 [70 ER 534], Page-Wood V-C dismissed on the merits a supplemental bill in the nature of a bill of review arising from a decree made by the Master of the Rolls in 1813 (at 538-9, [535]), but held that he had no jurisdiction to rehear that decree (at 578, [550]).

18 A litigant could impeach a decree obtained by fraud by an original bill in Chancery. This was not a bill of review and could be filed without leave. The fraud used was the principal point to be established (Mitford at 97, 112-3, Daniell at 1428-9). Where this was proved the Court would rescind the decree and restore the parties to their former situation whatever their rights might be (Birne v Hartpole (1717) 5 Brown PC 197, 200 [2 ER 624, 626]). In Barnsly v Powell (1748) 1 Ves Sen 119, 120 [27 ER 930], Lord Hardwicke LC said:

“There are several instances of relief, notwithstanding a former decree, if obtained by fraud and imposition, which infects judgments at law and decrees of all courts, and annuls the whole in the consideration of this Court”.

19 See now Hip Foong Hong v H Neotia & Co [1918] AC 888, 894; Jonesco v Beard [1930] AC 298, 301-2; McDonald v McDonald (1965) 113 CLR 529, 542; and Toubia v Schwenke [2002] 54 NSWLR 46.

20 The Judicature Act 1873 created the High Court of Justice and s 16 transferred to it the former jurisdiction of the High Court of Chancery. However s 18, which established the Court of Appeal, provided in sub s 1 that “all jurisdiction and power of the Lord Chancellor and of the Court of Appeal in Chancery, in the exercise of his and its appellate jurisdiction” was transferred to the Court of Appeal.

21 In Flower v Lloyd (1877) 6 Ch D 297 the plaintiff, who had lost in the Court of Appeal, applied by motion for that Court to rehear the appeal on the ground of fraud and for leave to adduce further evidence. The Court refused the motion on the ground that it sought an exercise of original jurisdiction which the Court did not possess, its only original jurisdiction being incidental to the exercise of its appellate jurisdiction. All members of the Court referred to the remedy by action to set aside or rescind a judgment for fraud, but Sir George Jessel MR also referred (300) to the old remedy by bill of review where matter was discovered which showed that the decree was wrong although there had been no fraud in obtaining it.

22 In In re St Nazaire Co (1879) 12 Ch D 88, following earlier proceedings and an unsuccessful appeal to the Court of Appeal, persons bound by the orders presented a petition to have the original orders of the High Court discharged or varied on the ground of further evidence. The relevant orders of Malins V-C had been entered. During argument Sir George Jessel MR said (91):

”.

23 Counsel argued that if the prayer for a rehearing were struck out, the High Court still had jurisdiction because the proceeding was analogous to a bill of review (92). The Master of the Rolls began his judgment by saying (93):

“The petition before us in this case may be roughly described as a petition of appeal from an order made by the Appeal Court”.

Judicature Act

24 He referred (97) to the old practice of the Court of Chancery under which the judges could rehear “not only their own decrees, but the decrees of their predecessors, that is, those whom they succeeded”. He said there was also an appeal from their decisions to the Lord Chancellor “but of course they could not alter his decisions” (98).

25 The Master of the Rolls then considered the nature of the right of rehearing and held that it was appellate jurisdiction, even though it was sometimes an appeal from a judge to himself, but more frequently an appeal from a judge to his successor (98). After referring to the relevant sections of the Judicature Act 1873, he continued (99-100):

“Now the jurisdiction and powers of the Lord Chancellor were undoubtedly included in the jurisdiction of the High Court of Chancery; and if the Court of Appeal is to have the appellate jurisdiction of the Lord Chancellor and the Court of Appeal in Chancery is it reasonable to suppose that part of the appellate jurisdiction vested in the High Court of Chancery … was transferred to the Judges of the High Court with the remarkable consequence I have already referred to? I am satisfied upon a fair reading of the Act … we ought to come to the conclusion that the Court below has no such jurisdiction … There is no appeal at all to the Judge of the Court of first instance against any decision, either of his predecessor or of the Appeal Court. In fact, the only surprising part of the matter is that anyone should have thought for a moment that a rehearing of this kind, involving a discharge, though not precisely in express terms, of an order of the Appeal Court, could be presented to a judge of the Court of first instance”.

26 Baggallay LJ agreed, and said that “the power of rehearing is vested in the Court of Appeal, and in that Court alone” (100-1). Thesiger LJ also agreed and said that: “Once the Common Law Division of the High Court of Justice has pronounced the decision … there is no power in that Division of the High Court to rehear or review that decision upon any suggestion that it has been misled, or that the parties have not brought all the evidence which ought to have been brought in order to enable the Court to arrive at a just conclusion”. He added that if that could not be done in the Common Law Division of the High Court it could not be done in the Chancery Division either (emphasis supplied).

27 In re St Nazaire Co established that the jurisdiction or power of the Court of Chancery to rehear or review its decrees after they were entered was appellate and had been transferred to the Court of Appeal. It also established that the High Court had no jurisdiction or power to rehear or review decisions of the Court of Appeal. This decision was approved in DJL v The Central Authority (2000) 201 CLR 226, at 244 where Gleeson CJ, Gaudron, McHugh, Gummow and Hayne JJ said:

In re St Nazaire Co.

Judicature Act 1873 (UK).

28 It is well established, as Sir George Jessel MR said in argument in In re St Nazaire Co, that a judge can always reconsider his decision until his order has been drawn up. The absence of any power in the High Court to rehear a matter after the order has been entered was affirmed in In re Suffield and Watts Ex parte Brown (1888) 20 QBD 693, 696. At 697, Fry LJ said:

In re St Nazaire Co

29 At 698, Lopes LJ said:

In re St Nazaire Co

30 In Preston Banking Company v William Allsup & Sons [1895] 1 Ch 141 at 143, Lord Halsbury said:

rehear

31 At 144, Lindley LJ said:

review

32 A L Smith LJ said, at 144-5:

rehear

In re Suffield and Watts

reviewing

33 The power of a Court to review its decision before its orders are entered was again considered in In re Harrison’s Share Under a Settlement [1955] Ch 260 where Jenkins LJ, delivering the judgment of the Court of Appeal, said at 276:

“We think that an order pronounced by the judge can always be withdrawn, or altered, or modified by him until it is drawn up, passed and entered. In the meantime it is provisionally effective”.

34 The Court referred with approval to In re St Nazaire Co, In re Suffield and Watts and Preston Banking Co v William Allsup & Sons (282), and said (283):

rehearing

35 All this is established law in Australia. In Smith v NSW Bar Association (1992) 176 CLR 256 at 265, Brennan, Dawson, Toohey and Gaudron JJ said:

review

DJL v The Central Authority

36 Thus the old power of rehearing in the Court of Chancery before the decree had been enrolled is still available to the Court that pronounced the orders.

37 The remedy in the Court of Chancery where new matter was discovered, but the decree had not been enrolled, was a supplemental bill in the nature of a bill of review coupled with a petition for rehearing on the original materials, so that the Court could make whatever decree was appropriate on the whole of the material. See Mitford at 108-112, Daniell at 1342, 1425. Proceedings on a bill of review for new matter, where the decree had been enrolled, also involved a rehearing of the whole of the material, because the original decree could be affirmed, reversed or altered (Mitford at 101-2, Daniell at 1422). However if the plaintiff established on an original bill that a decree had been obtained by fraud the Court did not rehear the case but simply set aside the decree.

38 The jurisdiction or power of the High Court to entertain an action for review based on the discovery of fresh evidence was assumed in Re May (1883) 25 Ch D 231, (1885) 28 Ch D 516 CA where leave to commence such an action was refused, but the question was not argued and In re St Nazaire Co was not cited.

39 In Falcke v The Scottish Imperial Insurance Co (1887) 57 LT 39 at 39-40, Kay J said that the old jurisdiction of the Court of Chancery to entertain a bill of review for new matter had not been affected by the Judicature Act, and the application had to be made to the High Court, although the decision sought to be challenged had been given by the Court of Appeal. The application failed on the merits. The views of Kay J on the question of jurisdiction were contrary to the decision in In re St Nazaire Co (para 27) that a judge of the High Court had no jurisdiction to rehear or review a decision of the Court of Appeal, and the practice of the Court of Chancery of conducting a full rehearing on a bill of review for new matter (par 37).

40 In Boswell v Coaks (No 2) (1894) 6 R 167, 86 LT 365 n HL, an action was brought in the High Court to set aside a judgment of the House of Lords on the ground that it had been obtained by the fraud of the defendant. The new action had been summarily dismissed by North J and the Court of Appeal. Lord Selborne, who delivered the principal speech in the House of Lords, referred to the earlier decision of the House and said at 168 (366):

“The judgment is binding: it is a final and conclusive protection against further litigation to the party in whose favour it is passed, unless some adequate ground can be shown in support of a proceeding to set it aside in due course of law. I am not at all prepared to say that such a proceeding would be impossible. There are two classes of cases, perhaps, which ought to be distinguished for this purpose. One is that … in which by the collusion of the parties the process of the courts has been abused … The present case falls within the second class – namely where it is not sought to treat as a nullity what has passed, but to undo it judicially upon judicial grounds treating it as in itself, and until judicially rescinded, valid and final”.

41 He continued at 169-70 (366):

“I will not lay stress upon its being a judgment of this House in the present case, because I think it right to assume that, if a judgment … of the High Court is in a proper way proved at the hearing of the cause to have been obtained by fraud, it is one which the Court can remedy … Upon that point … the Court ought to receive such evidence pro and con as is material to the question whether there has really been, since the former judgment, a new discovery of something material in this sense, that prima facie it would be a reason for setting the judgment aside if it were established by proof”.

42 He considered the material “that it is proposed to offer in evidence of fraud and misrepresentation” (170, 366). At 171 (367) he said that the fraudulent intent of the respondent was not enough, and that “it must appear to the Court that that which was abstracted was material”. He concluded that nothing material had been newly discovered by the plaintiff and the appeal was dismissed.

43 Lord Selborne referred at some length to the bill of review procedure. He said at 169 (366):

“The old practice of the Court of Chancery applicable to bills of review may not be, and I assume for the present purposes that it is not, now in use. A simpler and less formal and technical code of procedure generally has been adopted which does not expressly require a preliminary application to the Court when a proceeding in the nature of a bill of review to set aside a formal judgment otherwise final is taken. The same new code of procedure, while omitting to repeat the old rule of the Court requiring leave to be given for the commencement of such an action, contains this other power of an equally summary nature, that the defendant … can apply to the Court … to stay its further prosecution … I conceive that the principles applicable to an old bill of review ought to be kept in mind and ought to be applied in their full force, and even with greater freedom than before, when an application of this kind is made to stay the prosecution of an action to get rid of the former judgment”.

44 Fraud had been alleged, and the only grounds for setting aside a final judgment which Lord Selborne mentioned were collusion and fraud. He had also assumed that “the old practice … applicable to bills of review” was not in use. It seems that he only referred to the former practice as a useful analogy when considering the summary dismissal of an action to set aside a final judgment for fraud. Daniell at 1428 had stated unequivocally that the leave of the court was not required for the filing of a bill to impeach a decree for fraud, and I have difficulty in accepting that Lord Selborne could have been mistaken about this, or could have thought that a bill of review was the appropriate remedy in the Court of Chancery when a final judgment was to be impeached for fraud.

45 Since he assumed that bills of review were no longer in use, and mentioned only collusion and fraud as grounds for setting aside a final judgment, I do not read his speech as endorsing the discovery of fresh evidence without fraud as another ground for doing this.

46 In In re Scott & Alvarez’s Contract [1895] 1 Ch 596, the Court of Appeal held that the vendor had shown a good title in accordance with the contract. The purchaser then obtained further evidence, which showed that the vendor had no title at all, and refused to complete. The vendor sued for specific performance and the purchaser obtained leave from Kekewich J to counter-claim for review on the ground of fresh evidence (610). The trial came before the same Judge who held that the purchaser could only resist specific performance if the order of the Court of Appeal could be reviewed. He continued (623):

Falcke v Scottish Imperial Insurance Company

Boswell v Coaks

47 In re St Nazaire Co was not cited, and the question of the jurisdiction or power of the High Court to entertain the cross-claim was conceded. Kekewich J dismissed the vendor’s action for specific performance and declared that the order of the Court of Appeal was not binding on the purchaser (627). The vendor appealed but did not challenge the jurisdiction or power of the High Court to review the decision of the Court of Appeal. The decision of Kekewich J on the counter-claim was reversed without any comment from the Court on the question of jurisdiction, but it refused specific performance as a matter of discretion. In my opinion the judgment of Kekewich J on the counter-claim was contrary to In re St Nazaire Co and clearly wrong.

48 The bill of review procedure was again considered in Charles Bright & Co v Sellar [1904] 1 KB 6, where an action of review was brought for error of law apparent on the face of an order of the High Court. The trial Judge held that the action did not lie, and the plaintiff appealed. The order under challenge had not been enrolled (11) and Cozens-Hardy LJ, delivering the judgment of the Court, said that because of this the only remedy under the old procedure would have been a petition for rehearing. He continued:

Judicature Act

In re St Nazaire Co

.

49 However under the old procedure the case could have been reheard until the decree had been enrolled and this was still the position because this jurisdiction or power to review or rehear is not appellate. The jurisdiction or power only becomes appellate when the orders have been entered and can no longer be altered by the court which pronounced them. In In re St Nazaire Co the orders had been entered and the statement of Sir George Jessel MR, that the jurisdiction to rehear is appellate, referred to that situation.

50 It is evident that Cozens-Hardy LJ did not recognise the true effect of In re St Nazaire Co and he erred in concluding that the High Court could not review the order which had not been entered although this would be done by motion in the original proceedings.

51 Cozens-Hardy LJ continued at 12-13:

Birch v Birch

Boswell v Coaks

Falcke v Scottish Imperial Insurance Co

52 It is not easy to see why the procedure by bill of review based on the discovery of fresh evidence remained available in the High Court while the procedure by bill of review for error of law on the face of the order had been transferred to the Court of Appeal. There are also other difficulties. As has been seen (par 18), the old remedy when a decree had been obtained by fraud was not a bill of review, and (pars 43-4) Boswell v Coaks did not decide that the bill of review procedure based on the discovery of fresh evidence was still available in the High Court. In my judgment the dicta of Cozens-Hardy LJ about the jurisdiction or power of the High Court to entertain an action for review based on fresh evidence are wrong and I decline to follow them.

53 The existence of any jurisdiction or power in the High Court to entertain an action for review, on the ground of fresh evidence, to set aside a final judgment after it has been entered was repudiated by the Court of Appeal in In re Barrell Enterprises [1973] 1 WLR 19, 25-7, which until Taylor v Lawrence [2002] 2 All ER 353 CA had been treated as settling the question.

54 The article by D M Gordon QC “Fraud or New Evidence as grounds for actions to set aside Judgments” (1961) 77 LQR 358, 533 suggests that the bill of review procedure based on the discovery of fresh evidence survived the Judicature Act 1873 and still exists. However the author did not refer to In re St Nazaire Co (1879) 12 Ch D 88, and was mistaken in thinking that the bill of review procedure could be used to impeach a judgment for fraud.

55 The position in England does not determine the position in this State with its own history of the separate administration of law and equity until the Supreme Court Act 1970. The legislation in this State does not contain provisions which correspond to those in the Judicature Act 1873, which transferred the original jurisdiction of the Lord Chancellor to the High Court, and his appellate jurisdiction to the Court of Appeal.

56 The statute 4 Geo IV c 96 authorised the Crown by a Charter or Letters Patent under the Great Seal to establish the Supreme Court of New South Wales, and s 9 provided that the new Court should be a Court of Equity with the power and authority that the Lord Chancellor had within England for the due execution of such equitable jurisdiction. 9 Geo IV c 83 s 11 contained a similar provision which was made permanent by 4 and 5 Vic c 76 s 53.

57 The Court’s jurisdiction in equity was originally exercised by the Full Court, but Acts 4 Vic No. 22, 5 Vic No. 9 and 11 Vic No 22 provided that it was to be exercised by a Judge with an appeal to the Full Court. Act 16 Vic No 3 s 31 recognised the bill of review procedure by providing:

“All decrees and orders made under the provisions of this Act shall be subject to rehearing, appeal and review and may be discharged or varied in the same and like manner as decrees and orders of the said Court made in suits instituted by bill”.

58 The jurisdiction was confirmed by Hosking v Terry (1862) 15 Moore PC 493 [15 ER 581].

59 There was no relevant change until the Equity Act 1880 (44 Vic No. 18). Section 70, which provided that any person aggrieved by any decree or order of the Primary Judge in Equity might appeal to the Full Court within 14 days or within such further time as the Judge might allow, reproduced 4 Vic No. 22 s 21, but sections 71, 73 and 77 were new.

60 Section 71 provided that the appeal should be by way of rehearing, and s 73 provided that the Full Court could receive further evidence on the appeal, but only by special leave and on special grounds after a trial or hearing on the merits. Section 77 enabled the judge on his own motion or on the application of a party to direct a rehearing before the Full Court of any cause or matter “before him”, which I take to mean before his decree or order had been entered.

61 Thus the 1880 Act provided for an appeal to the Full Court as the only remedy for challenging the decisions of a judge exercising the equitable jurisdiction of the Court. Under the previous law an aggrieved litigant wishing to obtain the variation or reversal of a decree on the ground of the discovery of fresh evidence had to obtain the leave of a judge to file a bill (later a statement of claim) to review the decree. Leave to rely on fresh evidence could now be granted by the Full Court on the hearing of the appeal, and the rehearing which had previously taken place at first instance on a bill of review (para 37) was now to take place on appeal. The relevant provisions of the 1880 Act were re-enacted in the Equity Act 1901, and in the Supreme Court Act 1970.

62 These provisions were consistent with In re St Nazaire Co (1879) 12 Ch D 88, which decided that a rehearing and a review on a bill of review were exercises of appellate jurisdiction, and Flower v Lloyd (1877) 6 Ch D 297, which decided that the receipt of further evidence on appeal was incidental to the exercise of appellate jurisdiction.

63 Until 1880 an aggrieved litigant in New South Wales probably had 20 years within which to commence proceedings for review. (This had been the position in England prior to 1873. See Mitford at 105-6.) The decisions in Hosking v Terry, challenged in the review proceedings, culminated in that of the Privy Council on 28 July 1856. The application for leave to file the bill of review was lodged on 12 August 1859 (503 [584]).

64 The remedy of appeal provided by the 1880 Act and its successors thus subsumed the earlier procedures for an appeal or rehearing before the Full Court, or a review at first instance for fresh evidence or error apparent. The old procedures were not abolished in terms but the powers to rehear and receive fresh evidence for the purpose of a rehearing were conferred on the Full Court and then the Court of Appeal as part of their appellate jurisdiction and short time limits were imposed for the institution of an appeal with a power to extend the time. In In re St Nazaire Co (1879) 12 Ch D 88 the limited time for an appeal under the Judicature Act was held to be inconsistent with any power in the High Court to rehear or review its orders after they had been entered.

65 In R v Wallis (1949) 78 CLR 529, 550 Dixon J said:

expressum facit cessare tacitum

North Stafford Steel, Iron and Coal Co (Burslem) Ltd v Ward

Thomson Australian Holdings Pty Limited v Trade Practices Commission

66 The jurisdiction of a Court of Equity to entertain an action to set aside a judgment for fraud was not affected by the legislative changes here or in England because such proceedings are based on a cause of action under the general law. The discovery of fresh evidence confers no such cause of action, but before the Judicature Act was recognised by the Court of Chancery and the Superior Courts of Common Law as a ground for a rehearing or a new trial. It is still a ground for such relief in the Court of Appeal in England and here, but there is now no provision for that relief to be obtained in any other way once the orders of the Court have been entered. In my judgment therefore the trial Divisions of this Court do not have any power or jurisdiction to entertain an action to review a final judgment on the ground of the discovery of fresh evidence.

67 This conclusion requires the dismissal of these proceedings without more, but the plaintiffs may seek to take the matter to the High Court. It is therefore appropriate for this Court to make findings on the material said to constitute fresh evidence so that the High Court, if necessary, can deal with all issues.

68 It is not necessary to restate at length the history of the original proceedings and of the appeal to this Court. These matters are fully set out in the judgments of Einstein J (341 pages) delivered on 9 July 1998 and this Court (79 pages) delivered on 20 February 2001 [[2001] NSWCA 13]. Einstein J held that Mr Harrison, a solicitor, and his friend and business associate, Mr Don Cameron, an estate agent, and their companies, should pay equitable compensation for breaches of fiduciary duty, undue influence and unconscionable conduct in their dealings with Mrs Schipp. The proceedings arose out of a joint venture for the development of a property at Mary Street, Thirroul and a further joint venture for the development of a property at 55-57 Kembla Street, Wollongong. Einstein J held that Mrs Schipp was a person with a special weakness, readily apparent to Messrs Harrison and Cameron, which sprang from her quiet, reserved and timid character, from her lack of commercial experience and, as a divorced woman, from her lack of close family support (judgment 207-8). Mrs Schipp had been cross-examined for 9 days. The sale of the Mary Street property was completed on 6 December 1988. Mr Harrison and Mr Cameron were promoting a joint venture for the development of the Kembla Street property then owned by Emibarb Pty Limited, a company controlled by Mr Harrison. Mr Harrison was in financial difficulties arising from a multi-currency floating interest rate loan of $1.2 million which Emibarb obtained from the Commonwealth Bank in April 1985. The loan had to be rolled over every 6 months and the next rollover date was 31 January 1989 (judgment 54-5). On that date Emibarb had to pay the Bank the rollover costs which were approximately $175,000 (judgment 97). On 29 November 1988 Mr Harrison had been warned by the Bank that if Emibarb failed to meet its obligations on the rollover date the Bank would seriously consider appointing receivers and managers (judgment 96).

69 Discussions with a view to forming a joint venture for the purchase and development of the Kembla Street property began in December 1988 immediately after the settlement of the sale of the Mary Street property. Meetings, which included Mr Harrison, Mr Cameron and others, were said to have occurred on 8, 10, 20 and 28 December. The Judge found on the basis of Mrs Schipp’s evidence that she had not attended any of these meetings prior to 28 December. A number of witnesses, including Mr Harrison and Mr Cameron, had given evidence that Mrs Schipp had been present at these meetings, and that a Mr Murphy, an officer of AGC, had also attended the meeting on 8 December while Mrs Schipp was present.

70 According to the evidence of Mr Harrison, Mr Cameron and others, Mrs Schipp, having earned a quick profit from the sale of Mary Street, was an enthusiastic participant in these discussions. Mrs Schipp however gave evidence that she was becoming increasingly worried about the money due to her from the sale of Mary Street because she had not been repaid either her original investment, or her share of the profit, which Mr Harrison and Mr Cameron claimed (wrongly as has been held), had to be shared equally with them, and she had not received any form of accounting. When she was finally able to speak to Mr Harrison he told her that the money was safe on deposit with the Commonwealth Bank. On 18 December Mrs Schipp, who was then on holidays in Queensland, phoned Mr Baird, a solicitor in Wollongong who had acted for her on her divorce, and asked him to take steps to recover her money. On her return she conferred with him on 21 December, and on 22 December he wrote to the Commonwealth Bank “freezing” the account, and to Mr Cameron demanding an accounting on behalf of Mrs Schipp. On 23 December Mrs Schipp wrote a letter to Mr Baird detailing her concerns.

71 According to Mr Harrison and Mr Cameron, they spent some time together on 27 December preparing a full reply to Mr Baird’s letter. Mr Cameron claimed that he delivered this reply to Mr Baird’s office on 28 December by pushing it under the door at about 8.30 that morning. Mr Baird’s office had closed for the Christmas/New Year break, but according to Mr Cameron he had been told by Mr Baird over the telephone that he, Mr Baird, would be in his office on 28 December.

72 It was common ground that later that morning Mrs Schipp attended a meeting of the would be joint venturers. According to her, she was abused by Mr Cameron for her lack of trust in Mr Harrison and himself and in going behind their backs to consult Mr Baird. Einstein J described the occasion as the “roaring meeting”. The evidence of Mr Harrison and Mr Cameron painted a very different picture, but another witness, a Mr Zander, who became a member of the joint venture, partly corroborated Mrs Schipp’s evidence because he said that there was “a fair bit of tension” after she arrived and said that while Mr Harrison and Mr Cameron were talking to her he moved away and began reading a magazine (Court of Appeal judgment p 38). Mr Cameron claimed that he had given Mrs Schipp a copy of the letter delivered that morning to Mr Baird but Mrs Schipp denied this. The Judge accepted her evidence about this meeting.

73 Mr Baird said that he did not receive a copy of the letter of 28 December at that time and Mrs Schipp said that she first saw the letter in June 1989 when she was casually given a copy by Mr Cameron. Einstein J accepted Mr Baird’s evidence and found that the letter was not delivered on 28 December. There was material in the letter, on which Mr Harrison was cross-examined, which supported that finding.

74 The evidence which is relied on as “fresh evidence” is as follows:

(1) the evidence of Mr Comelli (affidavit of 21/8/01);

(2) the evidence of Mr Murphy (affidavit of 22/8/01);

75 Mr Slattery QC, counsel for Mrs Schipp, objected to this material on the ground that none of it was fresh evidence, but no other evidentiary objection was taken, and the deponents were not required for cross-examination.

76 Mr Comelli gave evidence of business dealings with Mrs Schipp and her then husband, Mr Harry Schipp, between 1971 and about 1983. These related to the sale in August 1973 of a milk bar/toy shop business owned by Mr and Mrs Schipp at 11 Bong Bong Road Dapto, the attempted sale in 1975 of their newsagency business in Dapto, the management of two residential rental properties in Dapto when Mr Comelli’s firm collected the rents on behalf of Mr and Mrs Schipp, and their block of shops in Kiama and block of flats in Dapto. From time to time in the late 1970’s he acted as the selling agent for tenants in the latter properties. He said that he generally saw Mr and Mrs Schipp together, that Mr Schipp did most of the talking, but was not as tough as Mrs Schipp. He concluded:

“Over the period of my business dealings with Mr and Mrs Schipp from about 1971 to 1983 I observed that Mrs Schipp was always well dressed and well groomed. She had a matter of fact style, she knew what she wanted and she could not be influenced or pushed around. She was not timid. She was street wise, a capable business women, a firm negotiator, a person who stood her ground, a person who paid attention to detail and who checked the accuracy of documents. I saw Mr and Mrs Schipp accumulate substantial wealth. From what I saw of their relationship Mrs Schipp was the driving force behind their financial success”.

77 Mr Schipp was for many years an alderman on the Wollongong Council and Mr Comelli said that Mr Schipp “built” the block of flats in Dapto in the late 1970s, meaning, I presume, that he was the developer.

78 Mr Comelli’s evidence needs to be weighed against the background of undisputed facts about Mr and Mrs Schipp. They had four children born in 1959, 1961, 1972 and 1973. Mrs Schipp had a nervous breakdown in 1968, but recovered and had further children. She and her husband separated in 1984 (judgment p 52) and were divorced a year later. Their property settlement was not finalised until 1987.

79 Mrs Schipp was extensively cross-examined at the trial about the property and business interests of her husband and herself during the period referred to by Mr Comelli. His affidavit does not refer to any property interests which were not known to the plaintiffs and their advisers during the trial.

80 Mr Comelli’s evidence relates to the conduct of Mrs Schipp while she was living with her husband. He had no business dealings with Mrs Schipp on her own, and in the dealings in which he was involved Mr and Mrs Schipp were in control as potential vendors under no compulsion to sell, or as landlords. All the dealings were at arm’s length.

81 After the period referred to by Mr Comelli, Mrs Schipp went through the trauma of separation, divorce, and contentious property settlement proceedings. When she was dealing with Mr Harrison and Mr Cameron she was on her own without effective family support. She was not dealing with them at arm’s length but as her advisers or fiduciaries. More importantly she was dealing with Mr Harrison, her solicitor, who was advising her in relation to transactions in which he and Mr Cameron were dealing with her to their own advantage, and on the findings to date, robbing her in the process.

82 This evidence does not satisfy the requirement for fresh evidence that it be “of such probative value and significance that, taken with the evidence already given at the trial, it would in all probability be decisive of the issues between the parties in a sense opposite to that of the verdict” (McDonald v McDonald (1965) 113 CLR 529, 532 per Barwick CJ).

83 The evidence related to an earlier period, to business transactions of a different kind, conducted in different circumstances. The earliest events occurred 30 years and the latest 18 years before Mr Comelli swore his affidavit. The evidence is peripheral to the events between 1987 and 1989 on which the case turned and taken at face value could not possibly be decisive on any critical issue. At best it may have provided slight support for some of the evidence given by Mr Harrison and others about Mrs Schipp’s business capacity. This evidence is not fresh and therefore must be rejected.

84 Mr Murphy was a witness for Mr Harrison at the trial. He swore his first affidavit on 11 February 1993 and gave a statement to Mr Harrison’s solicitors on 28 February 1993. He said in that affidavit that in December 1988 he was asked by Mr Cameron to meet the syndicate members in January 1989. He did not refer to a meeting on 8 December at Mr Cameron’s office at which he met the syndicate members including Mrs Schipp. He swore his second affidavit on 2 February 1996 and again made no reference to meeting Mrs Schipp in Mr Cameron’s office on 8 December 1988, although in the interval Mrs Schipp had sworn an affidavit in which she denied being present at such a meeting. He gave oral evidence at the trial and said that he had first met Mrs Schipp early in January 1989 (judgment p 105). The Judge accepted Mrs Schipp’s evidence that she had not been present at a meeting on 8 December supported as it then was by Mr Murphy’s evidence.

85 In his affidavit in the current proceedings, Mr Murphy said that when he swore his first affidavit and wrote out his handwritten statement it had not occurred to him to include details of a meeting on 8 December 1988 at which Mrs Schipp had been present. He was asked about that meeting prior to swearing his second affidavit, but had then forgotten about it. Although he had since reread his letter of 11 November 1994 to Mr Parasyn, the former solicitor for Mr Harrison in these proceedings, and then still the solicitor for Mr Cameron, he had no recollection of the meeting of 8 December 1988, although it was referred to in that letter.

86 Mr Harrison said in his affidavit sworn on 12 December 2001 (para 74), that he telephoned Mr Murphy in August 1994 after reading Mrs Schipp’s affidavit of 24 August 1994 in which she denied attending a meeting on 8 December 1988 with the syndicate members and Mr Murphy. Mr Harrison asked him if he recalled being at that meeting. Mr Murphy said he did not recall the meeting but asked Mr Harrison to send him Mrs Schipp’s affidavit and he would respond to it. Mr Harrison did this but heard nothing further from Mr Murphy.

87 After the Court of Appeal had given its judgment in the appeal, Mr Harrison discovered that Mr Murphy had written a letter to Mr Parasyn on 10 November 1994 in which he said that he had attended the meeting on 8 December 1988 and met Mrs Schipp.

88 When Mr Parasyn ceased to act for Mr Cameron in 1995, he gave Mr Cameron a box containing his files relating to the case. Mr Cameron stored this box under the house of his ex-wife in Figtree. Following a telephone conversation in August 2001, Mr Cameron and Mr Harrison obtained the box and when they inspected the files discovered Mr Murphy’s handwritten letter of 10 November 1994 to Mr Parasyn.

89 Mr Murphy’s statement in his affidavit in the present proceedings that he did not mention the meeting of 8 December in his first affidavit and statement is not persuasive in view of what he did say in that affidavit (Blue appeal book vol 5 p 832). It is also, to say the least, remarkable that by February 1996 Mr Murphy had forgotten not only the meeting of 8 December 1988 but his conversation with Mr Harrison in August 1994, his receipt and consideration of Mrs Schipp’s affidavit, and the letter he had written to Mr Parasyn only 15 months earlier.

90 The plaintiffs face a number of difficulties in having the evidence of Mr Murphy accepted as “fresh”. He was a witness at the trial where he gave evidence to the opposite effect. Further evidence from a witness called by the unsuccessful party at the trial, where corruption or duress implicating the successful party is not alleged, cannot ordinarily be fresh evidence, and we were not referred to any decision that it could be. Even in criminal cases where the rules as to fresh evidence are less restrictive, evidence by a witness on appeal that his evidence at the trial was perjured or mistaken is not in itself a ground for a new trial. See Davies and Cody v The King (1937) 57 CLR 170, 183 and R v Flower [1966] 1 QB 147, 150-1. In the former Latham CJ, Rich, Dixon, Evatt and McTiernan JJ said at 183:

“A declaration by a witness that he has committed perjury cannot possibly be accepted as a ground in itself for setting aside the result of a trial in which the witness has given evidence. If the contrary were held, the whole administration of both civil and criminal justice would be undermined”.

91 The same principle must apply where the witness claims that his evidence at the trial although honestly given was incorrect.

92 Where corruption or duress implicating the successful party can be proved, the case would be one of fraud where the strict requirements for the admission of fresh evidence do not apply. See Toubia v Schwenke (2002) 54 NSWLR 46.

93 However, the letter of 10 November 1994 would itself be admissible, and is in a different category but the plaintiffs still have to establish that the exercise of due diligence would not have led to its discovery before the trial.

94 Mr Harrison telephoned Mr Murphy in August 1994 and as requested sent him a copy of Mrs Schipp’s affidavit of 24 August. For some unexplained reason Mr Murphy wrote to Mr Parasyn without communicating directly with Mr Harrison. This called for some explanation because Mr Parasyn had ceased to act for Mr Harrison on 5 October 1993 (Dark Blue 2/104). However what is significant is that Mr Harrison did not follow up his phone call and letter with a further phone call or letter. Had he maintained contact with Mr Murphy, he would either have received the letter of 10 November 1994 or learned of its existence in time to use the information at the trial.

95 The failure of Mr Harrison to follow up his telephone conversation and letter to Mr Murphy involved a lack of due diligence on his part. Mr Murphy’s letter and his latest affidavit are not fresh evidence and must be rejected.

96 Assuming in the plaintiffs’ favour that Mr Murphy’s new evidence was fresh evidence and was accepted, and that the Court should therefore find that Mrs Schipp did attend the meeting of 8 December, what follows? Mrs Schipp’s presence or absence from this meeting was a peripheral issue at the trial. If Mr Murphy’s letter reflects the truth and Mrs Schipp was present, she may have honestly forgotten this fact, or she may have dishonestly denied it in an attempt to improve her case.

97 In the former situation the evidence would be relevant both to prove that she was present, and to show that, in this respect, her recollection was poor and her evidence unreliable. However evidence relevant only for the latter purposes lacks the decisive quality required if an otherwise unimpeachable judgment is to be set aside and a new trial ordered. See McDonald v McDonald above at 543 per Menzies J and Braddock vTillotson’s Newspapers Ltd [1950] 1 KB 47 CA, 50.

98 On the other hand if Mrs Schipp’s denial of being present at that meeting was perjured, that alone is not sufficient to obtain a new trial either. See McDonald v McDonald above at 544 per Windeyer J. It is still necessary to consider the significance of the evidence because from time to time a party with a good case is unable to resist the temptation to improve it.

99 Even if Mrs Schipp was present at the meeting on 8 December and appeared to be a willing participant in the discussions, this cannot displace the Judge’s findings as to the events later in December and January on which he based his conclusion that Mrs Schipp’s participation in the syndicate was procured by the exercise of undue influence, breaches of fiduciary duty and unconscionable conduct amounting to equitable fraud on the part of Mr Harrison and Mr Cameron.

100 These conclusions are solidly underpinned by undisputed evidence, or by findings which cannot be challenged and are not undermined by proof that she was present at the meeting on 8 December. She denied being present at a meeting on 10 December and Einstein J found that she had not been present. A finding that she was present at the meeting on 8 December may have led to a finding that she was also present at the next meeting. It was common ground that she was not present at a further meeting on 20 December, but that she was present at a meeting on 28 December. It was beyond dispute that she consulted Mr Baird on 18 and 21 December, that he wrote the two letters of 22 December, and that Mrs Schipp wrote to him on 23 December (par 70).

101 The Judge’s findings as to the “roaring meeting” on 28 December would not be affected, supported as they were by the independent evidence of Mr Zander (par 71). Indeed the behaviour of Mr Cameron and Mr Harrison at that meeting may be all the more explicable if Mrs Schipp had resiled from her earlier willingness to join the syndicate evidenced by her presence and conduct at the meetings of 8 and 10 December.

102 Mrs Schipp had not given evidence that her presence at the meetings on 8 and 10 December and her apparent willingness to join the syndicate at that stage were the result of any acts of equitable misconduct on the part of Mr Harrison and Mr Cameron, or that she had any relevant contact with them between the settlement of the Mary Street sale on 6 December and those meetings. She of course denied that she had been present at those meetings and the absence of any such evidence was consistent with that denial.

103 Her case was based on the failure of Mr Harrison and Mr Cameron to account to her after 6 December, and the events at and following the “roaring meeting” on 28 December. Accordingly a finding based on Mr Murphy’s new evidence and his letter of 10 November 1994 that Mrs Schipp did attend the meetings on 8 and 10 December and then appeared to be willing, or even eager, to join the syndicate could not, in my judgment, disturb the Judge’s findings as to the “roaring meeting” and the later events in January. The new evidence therefore lacks the necessary decisive quality, and on that ground also it must be rejected.

104 The other new evidence relied on includes the report of Dr Stephen Strach of 3 December 2001 (Blue 1/78 & foll). This dealt with four file notes of Mr Baird of 21 December 1988 (Blue 1/82-5). They were written on lined paper which may or may not have come from a single pad.

105 There were no extraneous impressions on the file notes at pp 83 and 85, but there were impressions on the file note at p 84 from the file note on p 82 indicating that the file note on p 82 was written, in part, while it was on top of the sheet of paper on which the file note on p 84 was written.

106 The file notes were in evidence at the trial but were not then controversial and they did not prove or tend to prove any fact which was then in dispute. A submission was made on behalf of the plaintiffs that the presence of some extraneous impressions on one file note, coupled with the absence of extraneous impressions on the others, constituted “irregularities” which made all the notes unreliable and that this was a reason for treating Mr Baird as an unreliable witness.

107 This was a desperate submission. We do not know how many note pads Mr Baird used during his conference with Mrs Schipp on 21 December or whether, as a matter of habit or otherwise, he removed the pages before he wrote on them but wrote on that at p 82 while it was loose immediately above that on p 84.

108 This evidence not only lacks the necessary decisive quality, it was barely if at all material. The report of Dr Strach should therefore be rejected.

109 The existence of Dr Strach’s report encouraged the legal advisers of the plaintiffs to revisit file notes of Mr Baird dated 27 and 31 May 1990 which were in evidence at the trial.

110 The file note of 27 May (Blue 5/698), which is not otherwise remarkable or of any materiality, contains an internal inconsistency because of the words “auction 4/7/91”. On this basis the submission has been made on behalf of the plaintiffs that the note was not written contemporaneously with its apparent date and was fabricated. However this internal inconsistency did not escape the notice of Mr Archer, counsel for Mr Harrison at the trial.

111 Mr Archer cross-examined Mr Baird on this note (Black 3/734-5) and put to him that the file note had been misdated and should have been dated 27 May 1991. Mr Baird eventually agreed. Counsel did not suggest to Mr Baird that the file note had been fabricated.

112 The other file note of Mr Baird, which is now relied on, is that dated 31 May 1990 (Blue 5/699-701). This purports to record a telephone conversation between Mr Baird and Mr Robert Burke, an accountant who acted for Mrs Schipp between January 1989 and June 1993, and also for Pyogrove Pty Ltd, the joint venture company which had purchased the Kembla Street property. The note contains the following:

“Auction last Sat – didn’t sell. Syndicate to buy her out – Don and George take ½ of her share – offered her $30,000.00 all guarantees released – she wants $100,000.00 and they said no!”

113 It was said that the statement that the property did not sell at auction last Saturday could only have referred to an unsuccessful auction which is known to have taken place on Saturday 26 May 1990. The only other unsuccessful auction was on Thursday 4 July 1991. The file note also refers to negotiations with Messrs Cameron and Harrison which, on the basis of other evidence in the present proceedings, were said to have occurred in 1991 and not 1990.

114 It was then said that Mr Baird obtained the information in this file note from a letter Mr Burke had written on 9 July 1991 to Mr Phillip Lewis, another solicitor, who was then acting for Mrs Schipp (Blue 1/54-5). It appears to have been sent by fax under cover of Mr Burke’s handwritten letter of the same date (1/53), but it has not been established that Mr Baird ever saw the letter sent to Mr Lewis. It was in evidence at the trial.

115 Mr Burke said in his affidavit in these proceedings that the negotiations referred to in this letter between Mrs Schipp on the one hand, and Messrs Harrison and Cameron on the other, took place in 1991 not 1990 as stated in the letter, and that the 1990 dates in the letter are incorrect.

116 The timing of these negotiations was well known to Mr Harrison and Mr Cameron because they were directly involved and their new evidence to this effect cannot be fresh. Indeed Mr Baird was cross-examined at the trial on the basis that his file note of 31 May 1990 was correctly dated (Black 5/735-6).

117 Mr Baird was also cross-examined to suggest that he had phoned Mr Bourke on 31 May 1990 at the request of Mrs Schipp (735) and that he saw her on 4 June 1990 in connection with matters referred to in his diary note of that date (5/729-31, 733-4, 735, 736-8). His affidavit in the original proceedings referred to a further telephone conversation with Mr Bourke on 7 June 1990 (738-9) and he was cross-examined about a telephone conversation with Mr Harrison on 8 June that year (739-40). This cross-examination suggests that negotiations did take place in May and June 1990 for Mrs Schipp to be bought out of the syndicate.

118 It is strange to say the least that Mr Bourke included so many incorrect references to 1990 in his letter to Mr Lewis of 7 July 1991 if the events referred to had occurred within the last month or two. He said in his affidavit in these proceedings (Blue 1/52) that he “prepared the letter by referring to documents in my file at that time and also from my recollection of events as it was at that time”.

119 Einstein J found that the evidence of Mr Bourke given at the trial was unreliable and should not be accepted (judgment pp 143, 151, 158). Prima facie therefore his new evidence lacks the quality of credibility which is an essential requirement of fresh evidence. However, assuming in favour of the plaintiffs that Mr Bourke’s new evidence is credible, and that the negotiations referred to took place in 1991 and not in 1990, the fact remains that he had sworn an affidavit in the trial and had been called as a witness. His new evidence is therefore not fresh, because it was capable of being discovered by the exercise of due diligence before the trial.

120 The new evidence lacks the necessary decisive quality. The true date of this file note of Mr Baird and its contents are not material facts and do not impact on material facts which were in dispute at the trial. Assuming in favour of Mr Harrison that Mr Baird did fabricate and back-date this diary note (it should be noted that the Court could not possibly make such a finding in the present proceedings because Mr Baird is neither a party nor a witness and has not had any opportunity to defend himself or explain the error in the date of the file note, if error there was), this would not directly affect any material finding made by Einstein J about the conduct of Mrs Schipp, Mr Harrison or Mr Cameron. Such a finding could materially affect Mr Baird’s credit, but Mr Baird’s evidence was only important in relation to the finding that he did not receive Mr Cameron’s letter of 28 December 1988 on that day.

121 New evidence which is only relevant to the credit of a witness, even an important witness, generally lacks the decisive quality required for fresh evidence. As Menzies J said in McDonald v McDonald (1965) 113 CLR 529, 543:

“It could only be in a rare case that a judgment would be set aside because of fresh evidence relating to a collateral matter merely affecting the credibility of a witness”.

Braddock v Tillotson’s Newspapers Ltd

122 This evidence cannot possibly be decisive because it might appear after a further investigation of the facts that the file note was correct. For example the negotiations in 1991 may have involved a re-run of negotiations in 1990. The resolution of that issue could raise further credibility questions as between Messrs Harrison, Cameron and Bourke on the one hand, and Mr Baird and Mrs Schipp on the other.

123 Accordingly, for all these reasons, the new evidence of Mr Bourke, Mr Harrison and Mr Cameron relating to the negotiations in 1991 is not fresh and must be rejected. None of the new evidence relied upon meets the exacting conditions required by law for the admission of fresh evidence.

124 SCR Pt 12 r 2(1) requires the whole proceedings to be removed to the Court of Appeal, and r 2(2)(b) enables this Court, in a proper case, to make orders finally disposing of the proceedings. In the light of my conclusions that this Court lacks the power to entertain these proceedings and that, in any event, the new evidence relied upon by the plaintiffs does not satisfy the stringent requirements for fresh evidence, orders should be made dismissing the proceedings with costs and directing that the orders be entered forthwith.

125 As a postscript, I will add this. By the second half of 1988 Mr Harrison was in serious financial difficulties. The loan of $1.2 million which his company Emibarb Pty Limited had obtained from the Commonwealth Bank secured by the Kembla Street property and his personal guarantee had become a major problem. The Kembla Street property was undeveloped and could neither be sold at an acceptable price, nor developed, because Emibarb Pty Limited and Mr Harrison were unable to borrow further funds for this purpose. The next rollover of the loan was due on 31 January 1989 and Mr Harrison had to find approximately $175,000 to secure a rollover. The Court may be permitted to know that interest rates at the time were very high and the bull property market was beginning to look fragile. If Mr Harrison failed to raise the necessary funds in time, the Bank was likely to enforce its securities, and he could be facing financial ruin.

247 When a judgment was sought to be impeached on the ground of fraud, the position was as described by James LJ in Flower v Lloyd (at 302):

“But that must be done by a proceeding putting in issue that fraud, and that fraud only. You cannot go to your adversary and say, ‘You obtained the judgment by fraud, and I will have a rehearing of the whole case’ until that fraud is established. The thing must be tried as a distinct and positive issue; ‘you’ the Defendants or ‘you’ the Plaintiff ‘obtained that judgment or decree in your favour by fraud; you bribed the witnesses, you bribed my solicitor, you bribed my counsel, you committed some fraud or other of that kind, and I ask to have the judgment set aside on the ground of fraud.’ That would be tried like anything else by evidence properly taken directed to that issue, and wholly free from and unembarrassed by any of the matters originally tried. That was the old course of the law, and there seems to be no reason why that should not be now followed; and if it is true that there was a fraud practised upon the Court, by which the Court was induced to make a wrong decree, the way to obtain relief will be to bring a fresh action to set aside the decree on the ground of fraud.”

248 The modern procedure is not dissimilar to that described by James LJ. As Taylor J pointed out in McDonald v McDonald (at 535), a judgment will be set aside on the ground of fraud only after an affirmative finding of the fraud alleged.

249 Thus, ordinarily, in proceedings pursuant to a bill to impeach a judgment on the ground of fraud, the fraud would be tried separately from the other issues in the case and the old and the new evidence would not be weighed together as in the procedure relating to a bill of review.

250 The differences were remarked upon by Gordon (op cit at 557) as follows:

“Where review is not based on fraud, but merely on discovery of new evidence, the course of the proceedings should seemingly be assimulated to that where perjury is set up. New evidence will be directed to the rightness of findings of fact; and so review based on it will have little affinity to review for extrinsic fraud”.

251 A further and important distinction lies in the nature of the remedies that follow from the two procedures.

252 As long ago as 1748 it was said by the Lord Chancellor, Lord Hardwicke, in Barnesly v Powell (1748) 1 Ves.Sen.120 that:

annuls

Richmond v Taylour

253 The idea of the court annulling the whole judgment was reiterated by the Earl of Selborne in Boswell v Coaks (No 2) 6 R 167, 86 LT 365, where he spoke of the action to impeach a judgment on the grounds of fraud as being an action, in effect, of judicial rescission.

254 In the case of a bill of review, the decree was not “annulled” in the same sense. In bill of review proceedings, where the new evidence was “directed to the rightness of findings of fact” and where both the old and the new evidence were weighed together, all or some of the issues canvassed at the trial would be re-opened and re-examined and findings would be made concerning them (cf Hungate v Gascoyne). The court might then reverse, alter or explain the decree: Daniell op cit at 1422.

255 In my opinion, the differences between the form and substance of the procedures for the impeachment of a judgment on the grounds of fraud and the Chancery bill of review procedure are such that no inference can be drawn from the court’s jurisdiction in regard to the former when determining the court’s jurisdiction in regard to the latter.

256 Finally, in this respect, due regard has to be given to the fact that fraud is one of the “pillars which support the entire structure of the equitable jurisdiction” (Meagher Gummow and Lehane, op cit at para 1207). It has always been recognised that “[e]quity has a broad jurisdiction to unravel fraud and set to right its consequences” (per the full Federal Court in Monroe Schneider Associates (Inc) v No 1 Raberem PtyLimited (1992) 37 FCR 234).

The jurisdiction to impeach judgments obtained by fraud is so deeply embedded in equity that very clear words would be required in any legislation before it would be construed as interfering in any way with the powers of a court of equity in this respect. On the other hand, the jurisdiction of a court of equity to review judgments on the ground of fresh evidence stands on a less entrenched footing, and the intention of parliament to transfer that jurisdiction to another court, or otherwise to remove it, would more readily be inferred.

The cases in England since the

Judicature Act

257 In Flower v Lloyd final judgment was pronounced against the plaintiff by the Court of Appeal dismissing his action with costs. The plaintiff then applied for leave for a rehearing of the appeal before the Court of Appeal on the ground of the subsequent discovery of new facts showing that the order of the Court of Appeal was obtained by a fraud practised on the Court below. Flower v Lloyd, therefore, was a case where the relief sought was based on an argument that the judgment was tainted by fraud.

Judicature Act

“There was another totally different class of cases where you discovered subsequent matter which showed that the decree was wrong, although there had been no fraud in obtaining it. That was called a supplemental bill in the nature of a bill of review, which brought the new matter forward, and again enabled the Court to do justice and get rid of the original decree”.

Jessel MR went on (at 300) to say, in effect, that there would be no difficulty in the plaintiff obtaining relief from the High Court in respect of the class in which this case fell. He said, however, that the Court of Appeal was “simply a Court of Appeal and nothing more;” hence, the plaintiff failed. Once the Court had determined an appeal it had no further jurisdiction.

258 Mr Gageler submitted that the remarks made by Jessel MR concerning the supplemental bill of review procedure supported the plaintiff in this case.

259 A supplemental bill in the nature of a bill of review was a bill used to introduce new matter discovered since the making of the decree but before the decree was signed and enrolled: Mitford op cit at 108. Such a supplemental bill differed from a bill of review: Mitford op cit at 97. The procedure akin to a supplemental bill in the nature of a bill of review remains part of our law today: Smith v New South Wales Bar Association[No 2] (1992) 176 CLR 256. It is different in nature to the bill of review procedure which concerned the reversal, alteration or explanation of an enrolled decree.

260 In my opinion, the fact that Jessel MR was of the view that the supplemental bill in the nature of a bill of review had not been displaced by the Judicature Act says nothing about the continuation of the bill of review procedure based on new evidence. I therefore do not agree with Mr Gageler’s submissions in this respect.

261 I turn now to In re St Nazaire Company. In this case Malins V-C ordered that the claim of liquidators of the European Bank be admitted against the St Nazaire Company. The company appealed from this order and its appeal was dismissed with costs. Thereafter, the St Nazaire Company filed a petition alleging that Malins V-C had been misled by the evidence before him and asking, in effect, for an order that it not be required to satisfy the claims of the Bank. Malins V-C ordered that the petition be allowed to proceed. The Bank appealed.

Jessel MR accepted (at 93) that, in essence, the petition was for rehearing and observed (at 96 to 97) with some impatience:

“[I]t is a petition presented to a judge of the High Court to rehear a decision of the Appeal Court … The mere statement of that would be sufficient to show that the judge below had no jurisdiction. It would be a wonderful result indeed if the Judicature Act empowered a judge of an inferior court to rehear a decision of the Appeal Court which perhaps had reversed his decision. Upon that theory, how long is the thing to go on? If the judge below has this power, he may exercise it by reversing the decision of the Appeal Court where the Appeal Court had reversed his decision.

Then it was said that under the old practice the Court of Chancery, that is, the judges of the Court of Chancery, the Lord Chancellor, the Master of the Rolls, and the Vice-Chancellor, could rehear not only their own decrees, but the decrees of their predecessors, that is, those whom they succeeded. No doubt it was so, but does that jurisdiction continue? If it does, the most extraordinary results will follow. The power to rehear was confined by General Orders. The time allowed had been 20 years but at last it came down to 5 years, and the power to appeal given by the new rules is only for 1 year; therefore if such a power were considered to remain vested in the Judges of the High Court it would follow that after the lapse of 1 year you could not appeal at all, but you might at any time within 5 years present your petition of rehearing to the Judge himself, and then, if he refused it on the ground that he thought he was right before, which would be the most probable result, you could then appeal to the Appeal Court, and thereby get 5 or 6 years for appealing instead of 1. That would be so remarkable a result that hardly anyone could believe that such was the true construction of the Act of Parliament or the rules.”

Jessel MR (at 99) said that he was satisfied upon a fair reading of the Judicature Act that the Court below had no jurisdiction.
Baggallay and Thesiger LLJ each agreed with Jessel MR and each gave additional reasons supporting the conclusion to which he had come.

262 Mr Gageler submitted that In re St Nazaire is not relevant to the present issue as it involved a procedure equivalent to a petition for a rehearing but not a bill of review. I agree that the case was concerned with such a procedure but that does not detract from the force of the remarks of Sir George Jessel and their application to bills of review.

263 The petition for rehearing In re St Nazaire was an essential preliminary step prior to the hearing of a procedure analogous to the pre-Judicature Act bill of review. The remarks of Jessel MR were directed as much to the final process as to the petition of rehearing. The “remarkable” result with which he was concerned was a decision that a bill of review type procedure could ensue (were the petition of rehearing to be successful). The extraordinary delays he described would be the inevitable consequence of recognising the continued existence of such a procedure. This underlies his acerbic comments.

264 In Salt v Cooper (1880) 16 ChD 544 Jessel MR again described the transfer of jurisdiction effected by the Judicature Act. He said (at 549):

[Judicature] Act

265 In Quilter v Mapleson (1882) 9 QBD 672 Jessel MR returned to the topic once more. He referred to the practice prior to the Judicature Act in the Court of Chancery in regard to “rehearings” and said (at 676):

“On an appeal strictly so called, such a judgment can only be given as ought to have been given at the original hearing; but on a rehearing such a judgment may be given as ought to be given if the case came at that time before the Court of first instance. This point often arose in the Court of Chancery where there was no strict appeal, but only a re-hearing before a superior Court. …. It was in my opinion intended [by the Rules of Court] to give appeals the character of rehearings, and to authorise the Court of Appeal to make such order as ought to be made according to the state of things at the time”.

266 In McGowan vMiddleton (1883) 11 QBD 464 Brett MR emphasised the importance of the creation of the Court of Appeal as a feature of the new comprehensive code created by the Judicature Act. He said (at 468) in this regard:

Judicature Acts

Judicature Act

267 A dissentient voice was heard in Falcke v The ScottishImperial Insurance Company (1887) 57 LT 39 where Kay J said (at 39 to 40):

Judicature Acts

In

re St Nazaire Company

Salt v Cooper

Quilter v Mapleson

McGowan v

Middleton

268 Inre Scott & Alvarez’s Contract [1895] 1 Ch 596 Kekewich J exercised the same jurisdiction as that exercised by Kay J in Falcke v Scottish Imperial Insurance Company but it appears (at 623) that counsel conceded that, having regard to Falcke, he “could not here argue to the contrary”. The matter proceeded to the Court of Appeal but the jurisdictional issue was not there touched upon.

269 In 1894 the House of Lords delivered their judgment in Boswell v Coaks (No 2). The appellant asserted that a judgment given by the House of Lords had been obtained by the fraud of the respondent. The Earl of Selborne made observations that arguably were suggestive of a view that in substance the old practice of a Court of Chancery applicable to the bills of review may have survived but in a simpler and less technical form. He said (at 366):

prima facie

270 In Ainsworth v Wilding (1896) 1 Ch 673 Romer J was concerned with the jurisdiction of the High Court to deal with a judgment that had been entered but which contained a mistake. He said (at 676 to 677):

Judicature Acts

Salt v Cooper

Quilter v Mapleson

McGowan v

Middleton

271 Charles Bright and Company Limited v Sellar concerned an action brought to review an order of the High Court on the ground of error in law apparent on the face of the order. The judge before whom the action was heard held that the action could not be maintained and the plaintiff appealed to the Court of Appeal. Cozens-Hardy LJ (who gave the judgment of the Court) pointed out (at 11-12) that, as the order absolute had not been enrolled:

Judicature Act

: In re St Nazaire Company

It seems to follow logically from what has been said that the High Court has now no jurisdiction to hear its own order on the ground of apparent error, by means of an independent action, and that the party complaining must come to the Court of Appeal”.

Cozens-Hardy LJ said further (at 12):

Birch v Birch

Boswell v Coaks (No 2)

Falcke v Scottish Imperial Insurance Company

272 The following comments may be made concerning the remarks of Cozens-Hardy LJ. Firstly, they were unnecessary for the decision and were obiter. Secondly, as I have pointed out, Boswell v Coaks (No 2) was itself a fraud case, the remarks of Lord Selborne in that case were themselves obiter and, in any event, because they were arguably confined to cases of fraud, they are of doubtful authority for the proposition that an action can be maintained to set aside an entered judgment on the ground of new matter not constituting fraud. Thirdly, Cozens-Hardy LJ erroneously treated a bill to impeach a judgment on the grounds of fraud as the equivalent of bill of review or a supplemental bill in the nature of a bill of review. Fourthly, the old jurisdiction to reverse or alter a decree by way of a supplemental bill in the nature of a bill of review was not available when the decree was enrolled; therefore, the earlier supplemental bill jurisdiction provides no support for the existence of a post Judicature Act jurisdiction to allow a “fresh action” to set aside an entered judgment on the ground of new evidence. Fifthly, Cozens-Hardy LJ appears to have approved Inre St Nazaire Company, but nevertheless postulated the continued existence of jurisdiction analogous to the bill of review procedure; the two, in my view, cannot stand together.

Charles Bright and Company Limited v Sellar

273 In re Barrell Enterprises Russell LJ said (at 25 to 26):

In re St Nazaire Company

Supreme Court of Judicature Act 1873

Flower v Lloyd, Falcke v Scottish Imperial Insurance Company, Boswell v Coaks, In re Scott and Alvarez’s Contract

Charles Bright and Company Limited v Sellar

Falke’s Case

In re St

Nazaire Company

Judicature Act

274 In re Barrell Enterprises has not been disturbed in England and remains the law in that country. Nothing said in Taylor v Lawrence detracts from the above quoted remarks of Russell LJ in that case. In Taylor v Lawrence the Court of Appeal was concerned only with whether it could reopen an appeal once its own judgment had been given and perfected. It did not deal with whether a single judge of the High Court had jurisdiction to entertain an action, based on fresh evidence, to set aside a judgment duly entered. The judgment of Lord Woolf CJ who gave the judgment of the Court, assumes that In re Barrell Enterprises remains the law in this respect.

The Australian cases

275 Hosking v Terry (1862) 15 Moore 493 at 504; 15 ER 581 at 585 appears to have been the last reported case in New South Wales where the bill of review procedure was recognised.

276 In Ivanhoe GoldCorporation Limited v Symonds (1906) 4 CLR 642 Higgins J (at 670) quoted with approval the remarks of Romer J in Ainsworth v Wilding (at 676 to 677) to the effect that the former power of the Court of Chancery to rehear cases after the decree had been entered had not survived the Judicature Acts.

277 In Ronald v Harper [1913] VLR 311 Cussen J, obiter, made remarks (at 318) indicative of a view that, “[u]nder the old practice” a judgment might be set aside, applying the same considerations “as formerly was the case on an application for leave to bring a bill of review”. This, for the plaintiff, is the high-water mark of post-Judicature Act Australian authority.

278 In Victorian Stevedoring and General Contracting Company Pty Limited v Dignan (1931) 46 CLR 73 Dixon J (at 108-109) referred to the creation of the Court of Appeal by the Judicature Act and said:

“When ‘the Courts which were manifold’ were united ‘in divers divisions of one,’ and the judgments of the one Court were made subject to the same review whether the obligations they enforced were legal or equitable, the jurisdiction and the power of the new Court of Appeal were conferred upon it in terms derived from Chancery. The provisions by which its functions were defined and described could scarcely be mistaken. The remedy they gave to the unsuccessful litigant was a rehearing of his cause of the kind illustrated by the cases since decided”.

279 As I have noted, in Gamser v The Nominal Defendant Aickin J (at 153 to 154) accepted that under the New South Wales Supreme Court Act this Court has powers to receive new evidence only during the currency of an appeal or, in respect of its inherent jurisdiction, when a judgment is sought to be impeached upon the ground of fraud.

280 In Monroe Schneider Associates (Inc) v No 1 Raberem PtyLimited the Full Court of the Federal Court (Spender, Gummow and Lee JJ) discussed (at 239-240) the equitable jurisdiction grounded on the Chancery bill of review procedure but left open the question whether the action to set aside a judgment on the ground of new matter continues to survive.

281 In DJL v The Central Authority (2000) 201 CLR 226 at 244 Gleeson CJ, Gaudron, McHugh, Gummow and Hayne JJ said (at 244):

In re St Nazaire Company

Judicature Act 1873 (UK)

While these remarks indicate that their Honours were in agreement with what Jessel MR had said in In re St Nazaire Company , they went on to observe (at 245) that it was “unsettled” whether the jurisdiction of Court of Chancery “might have been invoked to set aside judgments [of the superior courts of common law] by reason of the availability of ‘fresh evidence’” and stated that “[t]he equity jurisdiction remains in Australia, at least with respect to the impeachment of judgments for fraud” (my emphasis).

DJL v The Central Authority

282 The following points can be made about the Australian authorities on the issue raised by the plaintiff. Firstly, it is highly significant that the last reported case involving the bill of review procedure was Hosking v Terry, a case heard more than 140 years ago. This seems to be a very strong indication that the jurisdiction does not exist. Secondly, the remarks made by Dixon J in Victorian Stevedoring and General Contracting Company Pty Limited v Dignan were to the effect that the Courts established by the Judicature Act acquired all the jurisdiction previously exercised by the Court of Chancery (including the bill of review procedure). The same may be said of the remarks by Higgins J in Ivanhoe GoldCorporation Limited v Symonds, Aickin J in Gamser v The Nominal Defendant and Gleeson CJ, Gaudron, McHugh, Gummow and Hayne JJ in DJL v The Central Authority (2000) 201 CLR 226.

283 Generally, apart from the old case of Ronald v Harper, there is no comfort for the plaintiff from the Australian authorities. They generally reflect a view that, by the Judicature Act, the jurisdiction previously exercised by the High Court of Chancery and the Court of Appeal in Chancery was transferred to the High Court and Court of Appeal established by the Act.

Original and appellate jurisdiction

284 I turn to the proposition that the bill of review procedure involved the exercise of original jurisdiction and, as the jurisdiction given to the Court of Appeal by the Judicature Act was appellate only, the Court of Appeal did not acquire the bill of review jurisdiction (which continues to be vested in a single judge of the Supreme Court of New South Wales).

285 In Mickelberg v The Queen (1989) 167 CLR 259 Mason CJ (at 271) accepted that in allowing new evidence to be led on appeal, an appellate court would be exercising original jurisdiction. Toohey and Gaudron JJ (at 298) said:

“Proceedings before an appellate court involving a determination by reference to evidence called for the first time in that court are commonly referred to as appeals. However, the function which is then embarked upon is discernibly different from the ordinary appellate function of determining whether or not the court appealed from ought to have arrived at the decision in question. It involves the appellate court itself reaching a decision on material which is, to the extent of fresh evidence adduced, different from that considered by the lower court and, if that decision is different from the earlier decision, substituting that decision for the earlier decision. That function, involving the making of an independent and original decision, is properly to be characterised as the exercise of original jurisdiction”.

286 In CDJ v VAJ (1998) 197 CLR 172 McHugh, Gummow and Callinan JJ at 201 to 202 said:

“No doubt it is true that, because the appeal is by way of rehearing, the Full Court’s jurisdiction is neither purely appellate nor purely original”.

287 In Eastman v The Queen (2000) 203 CLR 1 Gleeson CJ said (at 11):

“Appeals are creatures of statute. It is not uncommon for intermediate appellate courts in Australia, including courts of Criminal Appeal, to have conferred upon them, by statute, power to receive an act upon evidence which was not before the court at first instance. When such a power is exercised, what is involved is an exercise of original rather than strictly appellate jurisdiction. The relevant statute ordinarily defines the conditions and limits of the exercise of the power”.

Quilter v Mapleson

Most appellate courts today are given a statutory power to receive further evidence on appeal. In some cases, if the appeal is by way of rehearing, it may be possible to infer an implied power to receive further evidence. When such a power is conferred, expressly or inferentially, the ‘appellate’ court decides the case on all the facts as it finds them to exist as at the date of hearing. But the court is not exercising appellate jurisdiction in its true sense”.

288 These authorities indicate that, when an appellate court allows new evidence to be led in the course of an appeal by way of rehearing, it is exercising original jurisdiction, or an amalgam of original or appellate jurisdiction, or a jurisdiction that is neither purely appellate nor purely original. Accordingly, the fact that the bill of review procedure may have involved the exercise of original jurisdiction did not preclude the transfer, by the relevant legislation, of that jurisdiction to an appellate court having jurisdiction to hear appeals by way of rehearing.

289 In any event, in DJL v Central Authority at 244 Gleeson CJ, Gaudron, McHugh, Gummow and Hayne JJ appear to have accepted (at 244) Jessel MR’s view Inre St Nazaire Company that a right of rehearing in the Court of Chancery involved the exercise of appellate rather than original jurisdiction.

290 In the circumstances, I do not accept Mr Gageler’s argument that the bill of review jurisdiction was original in nature and, therefore, it was not transferred by the relevant legislation to this Court.

The appellate jurisdiction to reverse a judgment on the ground of fresh evidence

291 Cases such as Orr v Holmes, McCann vParsons and McDonald v McDonald afford the plaintiff no support. They simply illustrate the principle that, prior to the entry of its own judgment, and as part of its ordinary powers, an intermediate appellate court has jurisdiction to make orders based on fresh evidence weighed against the evidence led at the trial. Such orders may involve reversing or altering orders made at first instance.

Conclusion

292 I do not accept the arguments made on behalf of the plaintiff.

293 The Judicature Act abolished the old bill of review procedure and replaced it with appeals to the Court of Appeal. The New South Wales successors to that legislation abolished the bill of review procedure and replaced it with appeals to the Full Court (to whose jurisdiction, this Court has succeeded).

294 The continued existence of an action before a single judge of the Supreme Court of New South Wales to set aside a duly entered judgment on the grounds of fraud lends no support to the argument that there is like jurisdiction to set aside an entered judgment on the grounds of fresh evidence not amounting to fraud.

295 Even if the bill of review jurisdiction was original in nature, that does not assist the plaintiff. In any event, there is persuasive (if not binding) authority that it was in part appellate.

296 None of the other matters argued assist the plaintiff.

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Citations

Harrison v Schipp [2002] NSWCA 78

Most Recent Citation

Euromark Limited v Smash Enterprises Pty Ltd (in liq) [No 2] [2024] VSCA 152

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Foundas v Arambatzis (No 5) [2022] NSWCA 113

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Statutory Material Cited

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Minister for Immigration and Multicultural Affairs v Bhardwaj [2002] HCA 11

Gamser v Nominal Defendant [1977] HCA 7

Cited Sections

CITATION:	Harrison v Schipp [2002] NSWCA 78
FILE NUMBER(S):	CA 40814/01; 40728/98; 40761/98
HEARING DATE(S):	12 March 2002, 15 May 2002
JUDGMENT DATE:	21 June 2002
PARTIES :	George Andrew Harrison Emibarb Pty Limited v Delcie Joan Schipp & Ors
JUDGMENT OF:	Handley JA at 1; Giles JA at 134; Ipp AJA at 204

LOWER COURT JURISDICTION :	Reference under SCR Pt 12 r 2
LOWER COURT FILE NUMBER(S) :	EQ 6425/91
LOWER COURT JUDICIAL OFFICER :	Not Applicable

COUNSEL:	S J Gageler SC/G Lucarelli (Plaintiffs) M J Slattery QC/J M Hennessy/S Fendikian (Defendant)
SOLICITORS:	Blake Dawson Waldron (Plaintiffs) Dibbs Barker Gosling (Defendant)
CATCHWORDS:	EQUITY - solicitors - business dealings with clients - EQUITY PROCEDURE - bill of review for fresh evidence - whether still available - EVIDENCE - requirements for fresh evidence - PROCEDURE - court has no power to reconsider perfected judgments - SOLICITORS - business dealings with clients
LEGISLATION CITED:	Equity Act 1880 (NSW) Equity Act 1901 Judicature Act 1873 (UK) Supreme Court Act 1970
CASES CITED:	Ainsworth v Wilding [1896] 1 Ch 673, 676, 677 Arnold v National Westminster Bank plc [1991] 2 AC 93, 104 Akins v National Australia Bank (1994) 34 NSWLR 155, 160 Autodesk Inc v Dyason (No 2) (1993) 176 CLR 300, 310 Bailey v Marinoff (1971) 125 CLR 529, 530 Barbon v Searle (1686) 1 Vern 416 Barnsley v Powell (1748) 1 Ves Sen 119, 120, 284 [27 ER 930, 1034], 1034; Belt's Supp 74, 143; 28 ER 460, 482 Birne v Hartpole (1717) 5 Bro PC 197, 200 [2 ER 624, 626] Boswell v Coaks (No 2) (1894) 6 R 167, 86 LT 365 n HL, 168 (366), 169-70 (366), 170 (366), 171 (367) Braddock v Tillotson's Newspapers Ltd [1950] 1 KB 47 CA, 50 Brown v Higgs (1803) 8 Ves 561, 563, 566 [32 ER 473, 474, 475] Builders Licensing Board v Sperway Constructions (Syd) Pty Ltd & Anor (1976) 135 CLR 616, 619, 620 Chamberlain v Deputy Commissioner of Taxation (1988) 164 CLR 502, 504-5 Charles Bright & Co Ltd v Sellar [1904] 1 KB 6, 11, 12-13 CDJ v VAJ (No 1) (1998) 197 CLR 172, 201-2 Coal and Allied Operations Pty Limited v Australian Industrial Relations Commission & Ors (2000) 203 CLR 194, 202, 203 Commonwealth Bank v Quade (1991) 178 CLR 134 Cotter v Barrymore (1733) 4 Bro P C 203 Council of the City of Greater Wollongong v Cowan (1955) 93 CLR 435 Davies and Cody v The King (1937) 57 CLR 170, 183 DJL v The Central Authority (2000) 201 CLR 226, 244, 245, 247 Doherty v Liverpool District Hospital (1991) 22 NSWLR 284 Eastman v The Queen (2000) 203 CLR 1, 11, 24-26, 33 Ex parte Currie; re Dempsey (1968) 70 SR 1 Ex parte James (1803) 8 Ves 337 [32 ER 385], 345 [388] Falke v The Scottish Imperial Insurance Company (1887) 57 LT 39, 40 Flower v Lloyd (1877) 6 Ch D 297, 300, 302 Friesen v Braun [1926] 2 WWR 257 Gamser v The Nominal Defendant (1977) 136 CLR 145, 153, 154 Head v Godlee (1859) 1 Johns 536 [70 ER 534] (538-9, [535]) (578, [550]) Hip Foong Hong v H Neotia & Co [1918] AC 888, 894 Hosking v Terry (1862) 15 Moore PC 493, 504 [15 ER 581, 585] Hungate v Gascoyne (1846) 2 Ph 25; 41 ER 850 (26; 851) Huskisson RSL Sub-Branch Club Ltd v Sullivan (1990) 20 NSWLR 332 In re Barrell Enterprises [1973] 1 WLR 19, 24, 25-27 In re Harrison's Share Under a Settlement [1955] Ch 260, 276 In re Scott & Alvarez's Contract [1895] 1 Ch 596, 610, 623 In re Scott & Alvarez's Contract [1895] 2 Ch 603 CA In re St Nazaire Co (1879) 12 Ch D 88, 91, 92, 93, 96-7, 98, 99-100, 100-101 In re Suffield and Watts Ex parte Brown (1888) 20 QBD 693, 696, 697, 698 Ivanhoe Gold Corporation Ltd v Symonds (1906) 4 CLR (Pt 1) 642, 670-1 Jonesco v Beard [1930] AC 298, 301-2 Jopp v Wood (1865) 2 De G J & S 323, 326, 329 [46 ER 400, 401, 402] Law Society of New South Wales v Harvey [1976] 2 NSWLR 154, 171 Maybery v Brooking (1855) 7 De G M & G 673: 2 Jur.N.S.76 McCann v Parsons (1954) 93 CLR 418 McDonald v McDonald (1965) 113 CLR 529, 535, 542, 543, 544 McGowan v Middleton (1883) 11 QBD 464, 468 Mickelberg vThe Queen (1989) 167 CLR 259 Minister for Lands and Forests v McPherson (1990) 22 NSWLR 687 M'Laughlin v Little in (1845) Reserved and Equity Judgments 19, 21 Monroe Schneider Associates (Inc) v No 1 Raberem Pty Limited (No 2) (1992) 37 FCR 231, 234, 238-240 Moore v Moore (1755) 2 Ves Sen 596, 598 [28 ER 380, 382] Nintendo Company Limited v Centronics Systems Pty Limited (1994) 181 CLR 134, 168 Norwich Pharmacal Co v Customs and Excise Commissioners [1974] AC 133 Oldham v Stonehouse (1838) 3 M & C 317 Orr v Holmes & Anor (1948) 76 CLR 632 O'Rourke v Hoeven (1974) 1 NSWLR 622, 626 Parker v McKenna (1874) LR 10 Ch App 96, 118, 124-5 Partridge v Usborne (1828) 5 Russ 195 Perry v Phelips (1810) 17 Ves Jun 173, 178 [34 ER 67, 69], 177-8; 68-9, Preston Banking Company v William Allsup & Sons [1895] 1 Ch 141, 143, 144-5, 282, 283 Quilter v Mapleson (1882) 9 QBD 672, 676 Re May (1883) 25 Ch D 231, (1885) 28 Ch D 516 CA Ronald v Harper (1913) VLR 311, 318 R v Flower (1966) 1 QB 147, 150-1, 183 R v Wallis (1949) 78 CLR 529, 550 Salt v Cooper (1880) 16 ChD 544 Smith v NSW Bar Association (No 2) (1992) 176 CLR 256, 265 Spies v Commonwealth Bank of Australia (1991) 24 NSWLR 691 Taylor v Lawrence [2002] 2 All ER 353 CA The Queen v Gaudron (1978) 141 CLR 204 Thomas v Rawlings (No 3) (1864) 34 Beav 50, 53-4; 55 ER 551, 552 Thomson Australian Holdings Pty Limited v Trade Practices Commission (1981) 148 CLR 150, 161 Toubia v Schwenke [2002] 54 NSWLR 46 Tyrrell v Bank of London 10 HLC 26 [11 ER 934], 39-44 (939-941) Victorian Stevedoring and General Contracting Company Pty Limited v Dignan (1931) 46 CLR 73, 108-9 Wentworth v Rogers (No 5) (1986) 6 NSWLR 534 Wentworth v Woollahra Municipal Council (No 2) (1982) 149 CLR 672 White v Ivory (1910) reprinted from The Times [1922] 1 WWR 1222 Willan v Willan (1810) 16 Ves 72 [ 33 ER 911]
DECISION:	Proceedings dismissed with costs.; Direct that these orders be entered forthwith.