Independent Commission Against Corruption v Kinghorn

[2015] NSWCA 342

Court of Appeal

Supreme Court

New South Wales

• Amendment notes

Medium Neutral Citation:	Independent Commission Against Corruption v Kinghorn [2015] NSWCA 342
Hearing dates:	28 October 2015
Date of orders:	28 October 2015
Decision date:	06 November 2015
Before:	Bathurst CJ; Basten JA; Meagher JA
Decision:	Notice of motion filed by the applicant on 7 May 2015 dismissed with costs.
Catchwords:	PROCEDURE – application to set aside consent orders – orders entered but to be treated as not entered – no mistake or misapprehension in agreeing to orders – retrospective change in law revived availability of appeal – change of law in prospect when orders agreed to – agreement unqualified – no challenge to agreement – reliance on possible anomalies – reliance on interest in resolving dispute as to operation of statute – Uniform Civil Procedure Rules, r 36.16
Legislation Cited:	Civil Procedure Act 2005 (NSW), s 56 Corporations Act 2001 (Cth), s 184 Independent Commission Against Corruption Act 1988 (NSW), s 8; Sch 4, Pt 13, cl 34 Independent Commission Against Corruption Amendment (Validation) Act 2015 (NSW), s 2 Supreme Court Rules 1970, Pt 2, r 3 Uniform Civil Procedure Rules 2005 (NSW), rr 36.11, 36.15, 36.16; Pt 36, Div 2, Div 4
Cases Cited:	Autodesk Inc v Dyason [No 2] (1993) 176 CLR 300 AVS Australian Venue Security Services Pty Ltd v Criminale [2006] NSWCA 368 Bailey v Marinoff (1971) 125 CLR 529 Chandless-Chandless v Nicholson [1942] 2 KB 321 Cliffs Robe River Iron Associates v Dravo Pty Ltd [1988] WAR 322 De L v Director-General, New south Wales Department of Community Services [No 2] (1997) 190 CLR 207 Deputy Commission of Taxation v Meredith (No 2) (2008) 75 NSWLR 462; [2008] NSWCA 133 Duncan v Independent Commission Against Corruption [2015] HCA 32; 89 ALJR 835 FAI General Insurance Co Ltd v Southern Cross Exploration NL (1988) 165 CLR 268 Harvey v Phillips (1956) 95 CLR 235 Independent Commission Against Corruption v Cunneen [2015] HCA 14; 89 ALJR 475 In Re Harrison’s Share Under A Settlement; Harrison v Harrison [1955] 1 Ch 260 Kentwell v The Queen [2014] 252 CLR 601; [2014] HCA 37 Morgan v 45 Flers Avenue Pty Ltd (1987) 11 NSWLR 573 Muldrock v The Queen (2011) 244 CLR 120; [2011] HCA 39 Piening v Wanless (1968) 117 CLR 498 Reg v Unger [1977] 2 NSWLR 990 Romeo v Papilia [2012] NSWCA 221 Siebe Gorman & Co Ltd v Pneupac Ltd [1982] 1 WLR 185 Southern Cross Exploration NL v Fire & All Risks Insurance Co Ltd (1986) 7 NSWLR 319 Victorian Stevedoring and General Contracting Co Pty Ltd v Dignan (1931) 46 CLR 73 Vital Finance Corporation Pty Ltd v Taylor (1996) 40 NSWLR 25
Texts Cited:	J Tarrant, “Consent Orders Based on Binding Contracts” (2011) 28 JCL 237   J Tarrant, Amending Final Judgments and Orders (Federation Press, 2010)
Category:	Principal judgment
Parties:	Independent Commission Against Corruption (Applicant) John Alan Kinghorn (Respondent)
Representation:	Counsel: Mr G M Watson SC/Mr P D Herzfeld (Applicant) Mr A C Archibald QC/Mr D F C Thomas (Respondent)     Solicitors: Crown Solicitor’s Office (Applicant) King & Wood Mallesons (Respondent)
File Number(s):	2014/247532
Decision under review	Court or tribunal: Supreme Court Jurisdiction: Common Law – Administrative Law Citation: Duncan v Independent Commission Against Corruption [2014] NSWSC 1018 Date of Decision: 29 July 2014 Before: McDougall J File Number(s): 2013/249678, 2013/325031, 2013/326066, 2014/13155

Judgment

1. THE COURT: The applicant, John Alan Kinghorn, was the subject of adverse findings contained in a report of the Independent Commission Against Corruption (“the Commission”). He, together with Travers William Duncan and other plaintiffs, sought judicial review of the corrupt conduct findings in relation to them. On 29 July 2014, McDougall J declared that the finding that Mr Kinghorn had engaged in corrupt conduct was not made according to law and was a nullity. [1] Mr Duncan and others failed to have similar findings relating to each of them set aside: they have appealed to this Court. Relevantly for present purposes, the Commission appealed to this Court from the finding favourable to Mr Kinghorn.

   1. Duncan v Independent Commission Against Corruption [2014] NSWSC 1018.

2. On 15 April 2015 the High Court delivered judgment in Independent Commission Against Corruption v Cunneen. [2] The effect of the judgment was to curtail the functions of the Commission, to the extent that those functions depended upon s 8(2) of the Independent Commission Against Corruption Act 1988 (NSW) (“the ICAC Act”). The effect of that ruling was, the Commission accepted, to invalidate findings made against the individual plaintiffs in the judicial review proceedings heard by McDougall J.

   2. [2015] HCA 14; 89 ALJR 475.

3. On 23 April 2015 the Commission indicated in writing that it would consent to orders dismissing its summons seeking leave to appeal in the Kinghorn matter. On 1 May 2015 the Court made orders, by consent, dismissing the Commission’s summons seeking leave to appeal and ordering that the Commission pay Mr Kinghorn’s costs of the proceedings.

4. On 6 May 2015 the Independent Commission Against Corruption Amendment (Validation) Act 2015 (NSW) (“the Validation Act”) was passed by the Legislature, assented to and commenced. [3] The effect of the Validation Act, shortly stated, was to expand the functions of the Commission by including within the scope of corrupt conduct in s 8(2) conduct which could adversely affect the efficacy (but not necessarily the probity) of the exercise of official functions. [4] The amendment was to operate retrospectively, with the consequence that the legal basis upon which the Commission had conceded that its appeal with respect to Mr Kinghorn must be dismissed was no longer the law.

   3. Validation Act, s 2.

   4. ICAC Act, Sch 4, Pt 13, cl 34(1).

5. On 7 May 2015 the Commission filed a notice of motion seeking to set aside the orders entered on 1 May 2015, pursuant to the Uniform Civil Procedure Rules 2005 (NSW) (“UCPR”), r 36.16. The effect of such an order would be to re-enliven the summons seeking leave to appeal against the judgment of McDougall J in respect of Mr Kinghorn.

6. On 14 May 2015, before that motion was heard, Mr Duncan and others sought to amend their grounds of appeal in this Court to raise a further ground challenging the validity of the Validation Act. They also filed a motion seeking to have the new ground removed to the High Court. On 25 May 2015 Gageler J ordered the removal of that matter to the High Court, the challenge being dismissed on 9 September 2015. [5]

   5. Duncan v Independent Commission Against Corruption [2015] HCA 32; 89 ALJR 835.

7. That issue having been disposed of, the Commission’s motion of 7 May 2015 was set down for hearing on 28 October 2015. At the conclusion of the hearing, the Court dismissed the motion with costs, but reserved its reasons. What follows are the reasons for that order.

Power to reopen consent orders

8. Although the specific power relied upon by the applicant was that found in r 36.16(3A), the exercise of the discretionary power conferred by the rule was said to be subject to principles of restraint expressed in cases dealing with other rules, or the inherent powers of the Court, but not the specific power identified in r 36.16(3A). Accordingly, it is desirable to identify the context within which the rule appears.

9. The entry of judgments and orders is dealt with in r 36.11, which appears in Div 2 of Pt 36.

36.11   Entry of judgments and orders

(1)   Any judgment or order of the court is to be entered.

(2)   Unless the court orders otherwise, a judgment or order is taken to be entered when it is recorded in the court’s computerised court record system.

(2A)   If the court directs that a judgment or order be entered forthwith, the judgment or order is taken to be entered:

(a)   when a document embodying the judgment or order is signed and sealed by a registrar, or

(b)   when the judgment or order is recorded as referred to in subrule (2) ….

10. In the present case, the consent orders were entered on the Supreme Court’s computerised court record system, JusticeLink. The record described the orders as having been “made or given” on 1 May 2015 and entered on the same day.

11. Powers to set aside and vary judgments and orders are to be found in Pt 36, Div 4. These include the following:

36.15   General power to set aside judgment or order

(1)   A judgment or order of the court in any proceedings may, on sufficient cause being shown, be set aside by order of the court if the judgment was given or entered, or the order was made, irregularly, illegally or against good faith.

(2)   A judgment or order of the court in any proceedings may be set aside by order of the court if the parties to the proceedings consent.

36.16   Further power to set aside or vary judgment or order

(1)   The court may set aside or vary a judgment or order if notice of motion for the setting aside or variation is filed before entry of the judgment or order.

(2)   The court may set aside or vary a judgment or order after it has been entered if:

(a)   it is a default judgment (other than a default judgment given in open court), or

(b)   it has been given or made in the absence of a party, whether or not the absent party had notice of the relevant hearing or of the application for the judgment or order, …

(3)   In addition to its powers under subrules (1) and (2), the court may set aside or vary any judgment or order except so far as it:

(a)   determines any claim for relief, or determines any question (whether of fact or law or both) arising on any claim for relief, or

(b)   dismisses proceedings, or dismisses proceedings so far as concerns the whole or any part of any claim for relief.

(3A)   If notice of motion for the setting aside or variation of a judgment or order is filed within 14 days after the judgment or order is entered, the court may determine the matter, and (if appropriate) set aside or vary the judgment or order under subrule (1), as if the judgment or order had not been entered.

(3B)   Within 14 days after a judgment or order is entered, the court may of its own motion set aside or vary the judgment or order as if the judgment or order had not been entered.

(3C)   Despite rule 1.12, the court may not extend the time limited by subrule (3A) or (3B).

(4)   Nothing in this rule affects any other power of the court to set aside or vary a judgment or order.

12. The significance of r 36.16(3A) was noted by this Court in Deputy Commissioner of Taxation v Meredith (No 2). [6] The adoption of an administrative procedure whereby orders were entered automatically and virtually instantaneously by the court, without any input from the parties, required the inclusion of a rule giving the parties an opportunity to object to the orders in circumstances where, according to general law principles, entry would have placed the orders beyond recall by the court. [7] In effect, sub‑r (3A) delays the operation of the entry of orders for a period of 14 days. The absence of power to extend that period was no doubt based on the assumption that the parties would have notice of the making of the orders by the delivery of judgment in open court. Where the order is given or made in the absence of a party, the court has an unconfined power to set aside or vary the order after it has been entered, pursuant to r 36.16(2).

    6. (2008) 75 NSWLR 462; [2008] NSWCA 133.

    7. See, eg, Bailey v Marinoff (1971) 125 CLR 529 at 530 (Barwick CJ).

13. Whether the consent orders were “made or given” in the absence of a party, and whether r 36.16(2)(b) applied to the consent orders was not raised in the present case. Sub-rule (2) is not subject to a temporal limitation, but that liberty was not relevant in this case, the notice of motion seeking to set aside the consent orders having been filed within 14 days of the orders being entered. There is no need to consider the process by which the consent orders were “made or given”.

14. It was common ground that the effect of sub-r (3A) was to bring the Commission within the operation of sub-r (1). There is no doubt that the Court has express power to set aside unentered orders; the question is whether it should do so in the circumstances of the case. Accordingly, it was necessary to consider how the Court should approach an application to set aside or vary a judgment or order where relief is sought before entry of the judgment or order.

Discretionary considerations – general principles

15. The range of circumstances in which orders may be set aside or varied is broad: the statements of principle, sometimes expressed at a high level of generality, should not be incautiously applied in other circumstances without due regard to the context. So much is clear from the analysis of rules which preceded the UCPR in AVS Australian Venue Security Services Pty Ltd v Criminale. [8]

    8. [2006] NSWCA 368.

16. The point may be illustrated by reference to a significant authority relied upon by the Commission, namely Autodesk Inc v Dyason[No 2]. [9] The motion to reopen related to an appeal heard by the High Court itself. The applicant, which was the unsuccessful party in the appeal, contended that it had not been heard on an issue which was material to the outcome, as revealed by the principal judgment, a failure which was not due to any fault on its part. Judgment had not been entered. All members of the Court accepted that it had jurisdiction to recall its own judgment prior to entry if the unsuccessful party had not been given, through no fault of its own, an opportunity to be heard. However, the Commission sought to rely upon passages in the judgments of Mason CJ and Gaudron J, which did not then enjoy the support of all members of the Court.

    9. (1993) 176 CLR 300.

17. It is sufficient for present purposes to note the approval given in De L v Director-General, New South Wales Department of Community Services [No 2] [10] in the following terms: [11]

“The power of this Court to reopen its judgments or orders is not in doubt. The Court may do so if it is convinced that, in its earlier consideration of the point, it has proceeded ‘on a misapprehension as to the facts or the law’, [12] where ‘there is some matter calling for review’[13] or where ‘the interests of justice so require’. [14] It has been said repeatedly that a heavy burden is cast upon the applicant for reopening to show that such an exceptional course is required ‘without fault on his part’,[15] ie without the attribution of neglect or default to the party seeking reopening. [16] By such expressions of the power to reopen final orders, courts seek to recognise competing objectives of the law. On the one hand, there is the principle of finality of litigation which reinforces the respect that should be shown to orders, final on their face, addressed to the world at large and upon which conduct may be ordered reliant upon their binding authority. On the other hand, courts recognise that accidents and oversights can sometimes occur which, unrepaired, will occasion an injustice. In the case of a final court of appeal, such as this Court, that injustice may be irremediable, unless the Court itself, acting promptly, is persuaded to reopen its orders so as to afford relief in the exceptional circumstances of the case. [17] ”

10. (1997) 190 CLR 207.

11.    De L at 215 (Toohey, Gaudron, McHugh, Gummow and Kirby JJ).

12.    Autodesk Inc at 302 (Mason CJ).

13. Smith v NSW Bar Association (1992) 176 CLR 256 at 265.

14.    Autodesk Inc at 322 (Gaudron J).

15. Wentworth v Woollahra Municipal Council (1982) 149 CLR 672 at 684.

16.    Autodesk Inc at 303 (Mason CJ).

17.    Autodesk Inc at 302.

18. It may readily be apparent that different principles may operate where (a) the court invited to reopen its orders is not a final court of appeal,[18] (b) the orders have not been pronounced in open court and (c) the orders have not been made following a full hearing.

    18. AVS at [59].

19. Bearing those principles in mind, not as some implied limitation on the scope of the discretionary power given to the court to manage its own business, but as an identification of the conflicting factors which may need to be taken into account in exercise of the discretionary power, it is convenient to refer to cases where it has been sought by one party to reopen a judgment to which consent had been given, without a hearing on the issues in dispute.

20. The Commission drew the Court’s attention to the judgment of the English Court of Appeal in In Re Harrison’s Share Under A Settlement; Harrison v Harrison. [19] The case involved an application to a judge in chambers to approve on behalf of infants and unborn and unascertained persons, three schemes affecting certain family trusts. The primary judge made orders approving the schemes some eight days before the House of Lords handed down a decision making it clear that the judge had no jurisdiction to make the orders. The primary judge (Roxburgh J) then entertained argument as to whether he should vary the orders, which had not been entered; concluding that he had power to do so, he withdrew his approvals and dismissed the applications. The Court of Appeal upheld that course, concluding: [20]

“When a judge has pronounced judgment he retains control over the case until the order giving effect to his judgment is formally completed. This control must be used in accordance with his discretion exercised judicially and not capriciously. The judge in these two cases exercised his discretion judicially in recalling his original orders, and there is in our opinion no ground for disturbing the orders finally made.”

19. [1955] 1 Ch 260 at 275 (Jenkins and Hodson LJJ and Vasey J, delivered by Jenkins LJ).

20.    Harrison’s Share at 283-284.

21. At the time Harrison’s Share was argued, as the Court of Appeal itself noted, [21] the declaratory theory of judicial exposition of the law operated:

“As to the argument to the effect that the orders orally pronounced by the judge were proper orders at the time of their pronouncement and should therefore be allowed to stand, this seems to us to be based on the erroneous supposition that [the decision of the House of Lords] altered the law, whereas in truth that decision merely declared the law as it always was, and showed it to have been theretofore misapprehended in the courts below.”

21.    Harrison’s Share at 283.

22. Although that understanding of the “declaratory” effect of an appellate judgment is no longer accepted, the Commission submitted that the analogy was apt because the present case involved a statute retrospectively varying the law so that it was now to be treated as if it had always been thus. In this sense, the Commission submitted, the case was closely analogous to Harrison’s Share.

Application of principles

23. There were a number of features of the present application which were of particular significance, namely:

(i)   unless the appeal is heard, there will (or could) be anomalous results;

(ii)   it was based on a “change of law”;

(iii)   the orders were entered pursuant to an agreement;

(iv)   the appeal was disposed of without a hearing, and

(v)   although technically (that is for particular legal purposes) an interlocutory order, the dismissal of the appeal finally determined the proceeding.

These factors will all be addressed; however, as will appear, (i) is in effect subsumed within (because it follows from) (ii), and (iv) and (v) may be considered together and last.

(a)   anomalous results

24. The Commission accepted that Mr Kinghorn’s position was different from that of the other persons the subject of adverse findings by the Commission. The basis of his involvement in corrupt conduct depended upon his essentially passive role in failing to disclose information about the Obeid family involvement in the Mt Penny mining tenement, with the intention of deceiving public officials or public authorities. That finding depended upon such non-disclosure constituting an offence under s 184(1) of the Corporations Act 2001 (Cth), involving conduct of a director or other officer of a corporation which is reckless or intentionally dishonest, and failing to exercise the powers and discharge the duties of a director in good faith and for a proper purpose. The Commission made adverse findings based on this provision against all the plaintiffs in the judicial review proceedings. However, the findings of corrupt conduct against the other plaintiffs were also founded on contraventions of other statutory provisions.

24. McDougall J adopted a construction of s 184(1) which removed that provision as a basis for a finding of corrupt conduct. The Commission sought to challenge the finding of McDougall J with respect to s 184(1) by way of notices of contention in relation to Mr Duncan and others, but as the central ground of its proposed appeal with respect to Mr Kinghorn. Accordingly, if the appeals by Duncan and others were to succeed in part or in whole on the basis of the Commission’s contention, the setting aside of the finding against Mr Kinghorn could appear anomalous. Alternatively, if the findings of the Commission against Mr Duncan and others were to be upheld on the basis accepted by McDougall J, the construction of s 184(1) would not be addressed.

25. Neither of these concerns demonstrates a substantial difficulty deriving from the public interest in the proper administration of justice, for a number of reasons. (The latter matter will be addressed below.) So far as the former eventuality is concerned, differential results will frequently occur due to the exigencies of the litigious process. Thus, in Harrison’s Share, the Court of Appeal disposed of an argument against recalling the particular orders which had been made (but not entered) before the House of Lords' decision, when similar orders could not be made thereafter, in the following terms: [22]

“As to the argument based on inequality in the treatment of litigants, the question for this Court is whether Roxburgh J was justified in recalling the two orders with which we are concerned, and not whether some other judge ought to have recalled other similar orders. Inequality is, moreover, inevitable in all cases falling within a given field of law where the House of Lords arrives at a decision to the effect that the law in that field is not as hitherto understood. Cases determined before the House of Lords’ decision go one way, and cases determined after it go the other, whether the date of determination is taken as being the date when the order is orally pronounced or the date when the order is perfected. Whichever date is taken, the result must necessarily depend on circumstances purely accidental, whether they relate to the state of the lists or the state of business in the scrivenry department, or the length of time for which the House of Lords find it necessary to reserve their decision.”

22.    Harrison’s Share at 281.

27. That is not to say that equality is not a value to be pursued, but only that its pursuit may depend upon the nature of the case and the circumstances. Disparate treatment is a common consequence of a change in the law. However, such cases do not all engage similar principles, as will be noted below.

(b)   change of law

28. In a civil case involving proof of negligence, Piening v Wanless,[23] Barwick CJ dealt with an appeal from an application for a retrial in circumstances where there had been a change in the law resulting from a judgment of the High Court. This Court had granted a retrial. On further appeal, Barwick CJ stated: [24]

“Of course, a litigant faced with a decision of a court which is not a final court of appeal which lies across the path he wants to follow, must make up his mind whether he desires to accept the burden and possible expense of challenging that decision. He may lack the courage or the means to do so, or both, or he may see advantage in accepting the current view. But the remedy for the erroneous decision is by way of such a challenge and not, as the majority of the Supreme Court seems to have thought, in the prolongation of litigation by affording a litigant a second opportunity after the error has been put right in other proceedings by other litigants.”

23. (1968) 117 CLR 498.

24.    Piening at 506.

29. A similar problem arises in the criminal law. It was addressed by the High Court in Victorian Stevedoring and General Contracting Co Pty Ltd v Dignan [25] with respect to prosecution under a regulation which was later disallowed. The approach, based on merger of the liability in the conviction, was followed by the Court of Criminal Appeal in Reg v Unger [26] in relation to an invalid regulation. In Unger, Street CJ noted: [27]

“There is no difference in principle between a subsequent judicial decision which has the effect of exposing a prior misconception in relation to a principle of law which was wrongly regarded as well founded at the time of the trial, and a subsequent judicial decision exposing the invalidity of regulations that were wrongly treated as valid at the time of the trial. The trial having been concluded and the time for appeal having gone by, the general principle is that the matter is regarded as at an end.”

25. (1931) 46 CLR 73 at 106 (Dixon J).

26. [1977] 2 NSWLR 990.

27.    Unger at 995C-D.

30. A different approach has been adopted with respect to sentencing. Following the judgment of the High Court in Muldrock v The Queen [28] there was a spate of applications for leave to appeal out of time by offenders who claimed to have been sentenced on the basis of an approach shown in Muldrock to be erroneous. In considering “change of law” cases, the High Court held in Kentwell v The Queen,[29] with respect to sentences which were still being served, that the Court of Criminal Appeal had wrongly approached the matter on the basis that “the appellant had failed to demonstrate that substantial injustice was occasioned by the sentence”, the appellant being “entitled to be sentenced according to law.”[30]

    28. (2011) 244 CLR 120; [2011] HCA 39.

    29. (2014) 252 CLR 601; [2014] HCA 37

    30. Kentwell at [44].

(c)   conclusions – alleged anomalies

31. Thus, the extent to which consistency is to be pursued in the administration of justice varies according to the circumstances of the particular case. With respect to the first aspect of the alleged anomalies, the best that can be said is that the Commission has some interest in having an appellate court resolve the proper construction of s 184(1) of the Corporations Act, which may, but also may not, be determined in the appeals of Duncan and others. However, the Commission is a statutory authority which cannot be said to suffer prejudice as a result of any uncertainty as to the proper construction of that provision. Significantly, it is not a regulatory authority with responsibility for the operation of the Corporations Act.

32. True it is that the Commission has very important functions with respect to the identification of corrupt conduct in New South Wales. However, its agreement to discontinue its appeal with respect to Mr Kinghorn demonstrated, no doubt properly, that there were other interests at stake which constrained the single-minded pursuit of a particular individual. The potential anomaly which it seeks to identify if not allowed to revive its appeal, is readily explained: Mr Kinghorn and the other plaintiffs in the judicial review proceedings will, as a result of the exigencies of the litigation, have been judged by reference to different laws.

33. So far as the second aspect of the Commission’s argument is concerned, its limited interest in the proper construction of s 184(1) of the Corporations Act has already been noted. Indeed, it remains at least a possibility that the proper construction of the provision will be addressed in the other matters. Further, this aspect of the case cannot be viewed in isolation: the Commission’s desire to resolve such legal uncertainty must be weighed against the undoubted prejudice to Mr Kinghorn in being again put to the expense, stress and disruption of a lengthy appeal. These factors will be addressed below: it is sufficient at this point to say that the argument for intervention based on potentially anomalous results of the extant appeals is unpersuasive.

34. Subject to what follows, there were good grounds to reject the application on the Commission’s primary case.

(d)   orders entered pursuant to an agreement

35. The focus of the Commission’s submissions in support of its motion was on the change in the law and the potential resultant anomalies discussed above. However, in an important sense the application required consideration of the underlying fact that the orders were based on an agreement between the parties to dispose of the appeal on a final basis. There was no suggestion that that agreement was revocable, yet the circumstances in which a court should reopen final orders based on a contract are at least limited.

36. As the Commission squarely acknowledged, there was no suggestion that it was acting under any mistake or misapprehension at the time that it consented to the orders. As stated in its letter to the respondent’s solicitors on 23 April 2015, its position was “based on the law as it currently stands”.

37. However, it would be inapt to adopt the language applied to a court judgment following a hearing (that is, whether the court has proceeded according to some misapprehension of the facts or the relevant law) and apply that language to the party who has reached an agreement with another party. Of course, a common mistake (and in some circumstances a unilateral mistake) may provide grounds to set aside an agreement; nothing of that kind was relied on here. Yet, if the agreement stands, there is, arguably, no basis to reopen the orders. In substance, what the Commission sought to do was to obtain the Court’s approval for it to abandon its agreement with the respondent. That agreement, it should be noted, was in unequivocal terms, was not contingent upon there being no retrospective change to the law, and did not seek to reserve to the Commission the right to reinstate its appeal in the event that the legal justification for its agreement was removed by amending legislation. Further, the Commission did not seek to rely upon any established basis for challenging the legal effect of its agreement, such as the lack of authority of its agents to enter into the agreement. [31] Nor was the agreement itself subject to any vitiating statute. [32]

    31. Cf Romeo v Papalia [2012] NSWCA 221.

    32. Cf Vital Finance Corporation Pty Ltd v Taylor (1996) 40 NSWLR 25.

38. There may be a question in some circumstances as to whether orders (especially interlocutory orders) did result from a binding agreement between the parties. [33] However, where it is clear that a contract has been entered into to compromise an action, it will bind the parties. [34]

    33. See Chandless-Chandless v Nicholson [1942] 2 KB 321 at 324 (Lord Greene MR); Siebe Gorman & Co Ltd v Pneupac Ltd [1982] 1 WLR 185 at 189-190 (Lord Denning MR), applied in Cliffs Robe River Iron Associates v Dravo Pty Ltd [1988] WAR 322 (Wallace, Smith and Kennedy JJ).

    34. Harvey v Phillips (1956) 95 CLR 235.

39. The extensive case law in relation to these issues has been discussed by Professor Tarrant in an article published in 2011. [35] Of the many cases discussed in the article, only one of present significance was referred to by the Commission, namely Morgan v 45 Flers Avenue Pty Ltd. [36] The question in that case was whether, pursuant to a specific rule in the Supreme Court Rules permitting the court to extend any time fixed by the rules or by any judgment or order,[37] the Court was able to vary the time for compliance with a self-executing order, which had been entered, and which resulted in the dismissal of the proceedings in default of compliance. Relying upon the “extreme width of the Court’s powers to dispense with compliance with its own rules”, identified by Priestley JA in Southern Cross Exploration NL v Fire & All Risks Insurance Co Ltd,[38] Kirby P stated: [39]

“In the light of this holding, the argument of the opponents that the Court did not have jurisdiction or power to grant the relief sought by the claimant appears hopeless. However, the opponents advanced their argument by reference to a number of decisions, particularly in the English Court of Appeal, concerning the circumstances which arise when, pursuant to compromise, a contract between parties is effected by a court order. It is true that some of the observations in the English cases, if read widely, would suggest a want of jurisdiction in a court to vary a consent order which amounts to a contract between the parties, made for consideration. …

To the extent that any of these decisions suggest that this Court loses the discretion which is expressly conferred upon it by the rules, I would disagree.”

35.    J Tarrant, “Consent Orders Based on Binding Contracts” (2011) 28 JCL 237; see also J Tarrant, Amending Final Judgments and Orders (Federation Press, 2010), dealing with the so-called “slip rule”.

36. (1987) 11 NSWLR 573.

37. Supreme Court Rules 1970, Pt 2, r 3.

38. (1986) 7 NSWLR 319 at 327-328.

39.    Morgan at 579A-B.

40. The breadth of the power to extend time (now found in UCPR, r 1.12) was confirmed by the High Court in a judgment delivered after Morgan, FAI General Insurance Co Ltd v Southern Cross Exploration NL. [40] However, whether the consent order in Morgan in fact involved a contract or merely an order to which no objection was taken, is unclear. In any event, the present application is not concerned with an extension of time, nor with conditional self-executing orders.

    40. (1988) 165 CLR 268.

41. These issues not having been fully explored by the parties, it is sufficient to dispose of the matter on the most relaxed basis acknowledged by the respondent, namely whether “the interests of justice are served by not disturbing the consensual quelling of a controversy”.

42. How the interests of justice are best served depends upon the other circumstances discussed in these reasons.

(e)   an undetermined appeal

43. Once the case based on feared anomalous outcomes is not accepted, the practical consequences of the appeal not being determined on its merits, and its dismissal being capable of characterization as interlocutory, do not assist the Commission. As noted above, it is necessary to balance the Commission’s quite limited interest in reinstating its appeal against Mr Kinghorn’s actual and direct interests in opposing that course. In a practical sense, Mr Kinghorn’s position was finally determined before the amending legislation took effect. He was entitled to rely upon the agreement reached with the Commission and the resulting consent orders. To some extent, the prejudice to him was limited by the Commission filing its application to reopen the consent orders within days of the orders being entered. Nevertheless, the agreement was reached in circumstances where both parties, but particularly the Commission as the promoter of the proposed legislation, were aware that validating legislation might be forthcoming.

44. It is true that the Commission was pressed by Mr Kinghorn’s solicitors with the importance of it acting in accordance with s 56(3) of the Civil Procedure Act 2005 (NSW) and, on that basis, it was pressed to agree to the orders by which it abandoned its application for leave to appeal. However, the Commission was not an individual citizen pressed by an overweening authority to consent to orders against its interest. It was a statutory authority of the State with access to whatever legal advice it required. There was no evidence that it had obtained advice to the effect that it would breach some statutory or general law duty if it did not accede to the demands of Mr Kinghorn’s solicitors. Nor is it obvious that that would have been so. Its failure to give either conditional assent or consent subject to an expressed intention to reactivate the application for leave should the validating legislation be forthcoming, remained unexplained.

Application for leave to appeal out of time

45. The motion did not seek, by way of alternative relief, leave to file a fresh application for leave to appeal out of time. Nevertheless, the availability of such a step was raised as a reason for allowing the more straightforward course, namely the reopening of the consent orders.

46. That submission should be rejected. The case for a grant of leave to file a further application for leave to appeal is not, so far as the arguments presented in this Court are concerned, any stronger than the reopening submissions considered above. To put it another way, an application for leave to file a further summons seeking leave to appeal would have no better chances of success than the present application. In that circumstance, the theoretical availability of such a step does not assist the Commission on its present application.

Conclusion

47. In these circumstances, the interests of justice did not support a reopening of the orders made by consent pursuant to a consensual resolution of the dispute. Accordingly, the Court dismissed the Commission’s motion.

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Endnotes

Amendments

08 June 2016 - Amending typographical errors in [39], [45] and endnote 31

10 November 2015 - [25] - Adding "the" before "Commission's".

[26] - Amending "Lord's" to "Lords'".

Footnote 15 - Deleting ellipsis.

Decision last updated: 08 June 2016