Lollis v Loulatzis (No 3)
[2008] VSC 231
•27 June 2008
| Do Not Send for Reporting | ||
| IN THE SUPREME COURT OF VICTORIA | Not Restricted | |
AT MELBOURNE
COMMON LAW DIVISION
No. 8583 of 2003
| STELLA LOLLIS | Plaintiff |
| v | |
| ANTHONY KASI LOULATZIS | First Defendant |
| and | |
| IRENE PETRUCCELLI | Second Defendant |
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JUDGE: | KAYE J | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | 23 June 2008 | |
DATE OF JUDGMENT: | 27 June 2008 | |
CASE MAY BE CITED AS: | Lollis v Loulatzis & Anor (No 3) | |
MEDIUM NEUTRAL CITATION: | [2008] VSC 231 | |
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PRACTICE – Application to set aside authenticated judgment and substitute judgment for damages by reason of conduct of defendant after judgment – Whether inherent jurisdiction – Supreme Court (General Civil Procedure) Rules 2005 – Rule 66.14.
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Ms C H Sparke | Middletons |
| For the First Defendant | Mr A J Vriends | NA Young & Co |
| For the Second Defendant | Ms S Bingham | Beaumont Lawyers |
HIS HONOUR:
This is an application, by summons by the plaintiff, to vacate or set aside part of the orders which I made after delivering judgment in the matter, and to substitute different orders in lieu. The application is made on the basis that this Court has power to make such an order, either pursuant to the inherent jurisdiction of the Court, or alternatively pursuant to Rule 66.14 of the Rules of the Supreme Court.
The background to the application may be shortly stated. The plaintiff is the registered proprietor of a residential property at 25 Green Street, Camberwell. The first defendant is her eldest son. The second defendant is the former partner of the first defendant, and they have two children. Since the early 1990s the first defendant, and since 1995 the second defendant, had resided at the property. In these proceedings, commenced in 2003, the plaintiff claimed possession of the property against both defendants. She also sought damages in the form of mesne profits. The defendants resisted the claim for possession, based on a counterclaim by the first defendant. In that counterclaim, the first defendant sought a declaration that the plaintiff held the property on trust for him, or a charge over the property. He claimed to be entitled to that relief on the basis of a promissory estoppel.
After a trial lasting 18 days, I delivered written reasons for judgment on 18 December 2007.[1] I held that the first defendant had not established any basis of estoppel alleged by him in his counterclaim, and that accordingly the plaintiff was entitled to an order for possession of the property. I found that the fair rental value of the property, for the period of trespass claimed by the plaintiff, was $208,630. However, I also found that the first defendant had made substantial improvements to the property, and that he had expended very significant sums of money, and carried out very many hours of work, in doing so. I held, in the circumstances of the case, that the defendants were entitled to offset, against the damages claimed by the plaintiff, the cost to the first defendant of carrying out those works, which I found to be at least $400,000. Accordingly, I dismissed the plaintiff’s claim for damages.
[1]Lollis v Loulatzis & Anor [2007] VSC 547
After delivering judgment, I adjourned the matter for further submissions in relation to the issues of costs, and the nature of the orders to be made by me. I heard those submissions on 15 February 2008. On 20 February, I delivered written reasons[2] for judgment in relation to those submissions, and pronounced orders in the matter, which included, inter alia, the following order:
“(3) The claim by the plaintiff for damages against both defendants is dismissed.”
[2]Lollis v Loulatzis & Anor (No.2) [2008] VSC 35
Those orders were authenticated by the Prothonatory on 13 March 2008.
The Application
The current application has been brought by the plaintiff on the ground that, since I delivered judgment, the first defendant has removed from the property a number of the improvements which he had previously effected to it. The plaintiff submits that the first defendant has thereby “falsified” the basis on which I dismissed the claim by the plaintiff for damages against him and the second defendant. Accordingly, the plaintiff, by this application, seeks the following orders:
“(a) Order 3 of the orders dated 20 February 2008 of the Honourable Justice Kaye be vacated or set aside; and
(b) Order 3 of the said orders be substituted with orders as follows:
‘3A Order that the defendants pay to the plaintiff the sum of $208,630 by way of rent or mesne profits for the period from 1997 to November 2007; and
3B Order that the defendants pay to the plaintiff the sum of $590 per week for each week from the date of issue of this summons until the hearing and determination of the application;
3C Order that the defendants pay interest on the sum referred to in Order 3A hereof’.”
Evidence
The plaintiff’s application is based on affidavits by her third son, Anthony Loulatzis, and his wife, Tracey Loulatzis. They deposed to the observations which they made at the premises after attending and inspecting them in March of this year. They have each exhibited to their affidavits a list of the items which have been removed from the premises, and photographs showing damage to the premises caused by the removal of those items.
In addition, the plaintiff called evidence from Mr Karl Cundall, a real estate valuer. Mr Cundall gave evidence at the trial. He had valued the property, as at November 2007, in the sum of $1 million. Of that value, he attributed $845,000 to the land and $155,000 to the improvements. He stated that if the property had not been renovated by the first defendant, its value would then have been $885,000. Mr Cundall further inspected the property on 11 April 2008. He noted significant damage to the house, and that fixtures and fittings had been removed from it. He stated that, as a result, the property, in its current state, is uninhabitable. In his opinion, the property, as at April 2008, was worth $875,000. He ascribed some of the diminution in the value, since November 2007, to a decline in the market. In fact, he expressed the view that if the property, in April 2008, had been in the same state as it was in November 2007, it would have been worth $970,000. In respect of his valuation of the property in its current state, he ascribed $835,000 to the value of the land, and $40,000 to the value of the house. He expressed the view that, because of its current state, a prudent purchaser probably would not renovate it, or repair the damage which was caused by the removal of the fixtures and fittings by the first defendant, but rather would demolish the house, and redevelop the site.
In response, the first defendant has sworn an affidavit admitting that he removed the items listed by Anthony and Tracey Loulatzis in their affidavits, with two exceptions. He has asserted that those items were removed with care, and that he did not cause damage to the premises in doing so. In his affidavit he states that those items were his to remove, since he purchased and installed each of them. He refers to evidence given by the plaintiff at the trial of the proceedings, in which the plaintiff stated that she did not request, or like, the renovations carried out by the first defendant to the house.
The second defendant has sworn an affidavit in which she deposes that the first defendant and she separated in early January 2008. The second defendant further states that she ceased to reside at the property on 24 February 2008, and since then has lived at another address with the two children. She denies that she played any part in the removal of the items from the property in respect of which the plaintiff now claims relief.
Submissions
As I stated, the plaintiff makes this application relying on what she claims is the inherent jurisdiction of the Court to grant the relief sought in the summons, or alternatively on Rule 66.14 of the Rules of the Supreme Court. Ms Sparke, who appeared for the plaintiff, referred me to a number of cases, including the decisions of the High Court in Autodesk Inc & Anor v Dyason & Ors[3] and of the Court of Appeal in Kabat Investments Pty Ltd & Anor v Compleat Imports Pty Ltd & Anor[4], in support of the submission that the Court has an inherent jurisdiction to set aside or vary an order, which has already been authenticated, in circumstances such as this case. Ms Sparke submitted that the Court has an inherent jurisdiction where a party has, by its unilateral action, “falsified” the basis upon which a decision was made in its favour. She submitted that the first defendant, by removing, and thus nullifying the value of, the improvements made by him to the house, had “falsified” the basis upon which I previously held that the defendants were not liable to the plaintiff for mesne profits.
[3](1993) 176 CLR 300.
[4][2002] VSCA 134.
On the other hand, the defendants submit that this Court does not have jurisdiction to make the orders sought by the plaintiff. Mr Vriends, who appeared for the first defendant, submitted that a Court does not have power to set aside or rehear a judgment which has been authenticated (or passed and entered into the records of the Court), save in certain exceptional circumstances, none of which apply to this case. He referred to decisions such as Bailey v Marinoff[5] and In Re St Nazaire Co[6]. He further submitted that Rule 66.14 does not empower the Court to make any other order than one staying or suspending a judgment or order previously made by it. Further, he submitted that if the Court does have power to make the orders sought by the plaintiff in this application, it should not make those orders, as the plaintiff has alternative means of redress available to her. Ms S. Bingham, who appeared for the second defendant, supported those submissions.
[5](1971) 125 CLR 529.
[6](1879) 12 Ch D 88.
Inherent Jurisdiction
It is convenient first to consider whether this Court has an inherent jurisdiction to vary or set aside orders in circumstances such as those which exist in this case. In my view, the short answer to that question is that this Court does not have any such power. It is a well established principle that once an order of a Court has been perfected in a form which accurately expresses the intended form of the order (such as by being authenticated under the Rules of the Supreme Court), the Court which made that order has no jurisdiction to alter or rescind it, save in particular exceptional circumstances. Those exceptions are, in general, confined to circumstances which involve clarification of the recorded judgment, or to making minor alternations to a judgment which do not affect the operative and substantive part of the judgment, and to circumstances (such as fraud and breach of natural justice) which impeach the obtaining of the judgment or order.
That principle was stated, in the clearest terms, by the High Court in Bailey v Marinoff[7]. In that case the New South Wales Court of Appeal had made a self-executing order, by which an appeal was dismissed by the subsequent failure of an appellant to deliver appeal books in the time fixed by that order. Subsequently, after the effluxion of that time, the Court of Appeal made a second order extending the period of time within which the appellant might deliver the appeal books. The respondent in the appeal then brought an appeal to the High Court from that order. The High Court unanimously held that the New South Wales Court of Appeal did not have any power, inherent or otherwise, to further deal with the appeal which had already been dismissed pursuant to the first order made by it. Menzies J stated the relevant principle as follows:
“This appeal is not concerned with the power of a court to alter orders in pending litigation. It is concerned with the power of a court to make an order in litigation which, without any error or lack of jurisdiction, has been regularly concluded and is no longer before the court. To recognize the problem is, I think, to solve it. However wide the inherent jurisdiction of a court may be to vary orders which have been made, it cannot, in my opinion, extend (to) the making of orders in litigation that has been brought regularly to an end. … As I read the judgments, however, there is clear recognition that a court cannot, by a further order, get rid of the operative and substantive part of its judgment.”[8]
Similarly, Barwick CJ, who agreed with Menzies J (and Walsh J), stated:
“Once an order disposing of a proceeding has been perfected by being drawn up as the record of a 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. In my opinion, none of the decided cases lend support to the view that the Supreme Court in this case had any inherent power or jurisdiction to make the order it did, its earlier order dismissing the appeal having been perfected by the processes of the court.”[9]
[7](1971) 125 CLR 529.
[8]Ibid, 531 to 532; see also 535 (Walsh J).
[9]Ibid, 530 to 531.
Gibbs J, who dissented in the result, stated the applicable principle in the following terms:
“It is a well settled rule that once an order of a court has been passed and entered or otherwise perfected in a form which correctly expresses the intention with which it was made the court has no jurisdiction to alter it … The rule rests on the obvious principle that it is desirable that there be an end to litigation and on the view that it would be mischievous if there were jurisdiction to rehear a matter decided after a full hearing. However, the rule is not inflexible and there are a number of exceptions to it in addition to those that depend on statutory provisions such as the slip rule found in most rules of court. Indeed, as the way in which I have already stated the rule implies, the court has the power to vary an order so as to carry out its own meaning or to make plain language which is doubtful, and that power does not depend on rules of court, but is inherent in the court … Further it has been held that a court may amend a part of a judgment or an order which is ‘not the operative and substantial part’ … Similarly the rule that a court may review an order made ex parte has been said to be ‘a rule of natural justice’ … or ‘an elementary rule of justice’ … and this can only mean that the power is traceable to the inherent jurisdiction. Moreover, it has been held that in certain cases circumstances occurring since the judgment may warrant the making of a supplemental order … and this seems to be another example of the inherent power.”[10]
[10]Ibid, 539 to 540, citations omitted.
Similar views were reiterated by the High Court in Gamser v The Nominal Defendant[11]. In that case the plaintiff had suffered extensive injuries in a motor vehicle accident. The trial judge awarded him damages, which were subsequently reduced by the Court of Appeal. The plaintiff appealed from that decision to the High Court. However, before the appeal came on, the plaintiff’s injuries were found to be much more severe than had been thought by the medical witnesses who had given evidence at trial. The plaintiff sought to approach the Court of Appeal to seek relief from that court arising from those new circumstances. In a second decision, the Court of Appeal dismissed that application on the ground that it had no jurisdiction to set aside its previous judgment or to reopen the matter. The plaintiff appealed to the High Court (inter alia) from that order. The High Court dismissed that appeal, holding that the Court of Appeal did not have power, either in its inherent jurisdiction, or under its rules, to set aside a judgment by reason of circumstances occurring after a case had been disposed of. Aickin J (with whom Barwick CJ and Gibbs J agreed) stated:
“As to the question of whether there was in the Court inherent jurisdiction to make the orders sought, Glass JA took the view that the decision of this Court in Bailey v Marinoff was fatal to the argument. In that case, this Court held that when an appeal has been finally disposed of in a Court of Appeal by an order duly entered, it has no inherent power to re-open the case on an application made after the order has been entered. That general proposition is no doubt subject to the rule that a judgment apparently regularly obtained may be impeached upon the ground of fraud, and there would seem to be no reason why that rule should not apply to judgments upon appeal, although it is difficult to visualize how a judgment of an appellate court could be obtained by fraud. … The majority judgments in Bailey v Marinoff appear to me to make it clear that there is no inherent power to set aside judgments by reason of changed circumstances on application made after the case has been finally disposed of.”[12]
[11](1977) 136 CLR 145; see also DJL v The Central Authority (2000) 201 CLR 226, 245.
[12]Ibid, 154; see also at 147 (Gibbs J), 150 to 151 (Murphy J).
In this application the plaintiff relies, inter alia, on the decision of the High Court in Autodesk Inc & Anor v Dyason & Ors[13]. However that decision does not assist the plaintiff. In that case the High Court had given judgment against the respondent. Before the judgment was entered, the unsuccessful respondents applied to the Court to vacate the judgment on the ground that, without fault on their part, they had had no opportunity to be heard on three issues which were involved in that decision. That application was dismissed. In separate reasons, the Justices referred to a jurisdiction, in the court, to recall a judgment which it had pronounced, at least before formal entry of it. Their Honours stated that that power should be exercised sparingly.[14] However, that case is distinguishable from the present case for two reasons. First, the application was made before the judgment was entered. Secondly, and significantly, the application was made to the High Court, in respect of a judgment pronounced earlier by that court in the same proceeding. The jurisdiction referred to in the judgments of the members of the court is a jurisdiction peculiar to the High Court, as a court of appeal of last resort. Thus, in referring to the Court’s exceptional jurisdiction to recall an earlier judgment, the Justices specifically spoke in terms of the power of “this Court” to reconsider a matter previously argued before it.[15]
[13](1993) 176 CLR 300.
[14]Ibid, 302 (Mason CJ); 308 (Brennan J); 317 (Dawson J); 322 (Gaudron J).
[15]See for example 308 (Brennan J); 317 (Dawson J).
In Autodesk, the High Court referred to its previous decision in Wentworth v Woollahra Municipal Council[16]. That case also concerned an application made to the Court by an appellant for an order vacating an earlier order by the High Court dismissing her appeal. In refusing that application, the Court again referred to the exceptional jurisdiction which the High Court has to reopen a judgment which has previously been pronounced by it. Their Honours stated:[17]
“However, as we had occasion to point out recently in State Rail Authority of New South Wales v Codelfa Construction Pty Ltd[18], the circumstances in which this Court will reopen a judgment which has been pronounced are extremely rare. The public interest in maintaining the finality of litigation necessarily means that the power to reopen to enable a rehearing must be exercised with great caution. Generally speaking, it will not be exercised unless the applicant can show that by accident without fault on his part he has not been heard.”
[16](1982) 149 CLR 672.
[17]Ibid, 684.
[18](1982) 150 CLR 28.
Similarly, in State Rail Authority of New South Wales v Codelfa Construction Pty Ltd[19], the High Court made it clear that it had had an exceptional jurisdiction to rehear argument in relation to judgments previously pronounced by it, because it was a court of last resort. In considering that there was such an exceptional jurisdiction, Mason and Wilson JJ referred to two decisions of the Privy Council, each of which determined that, as a court of last resort, their Lordships had power to set aside an order previously made by them. Thus in Rajunder Narain Rae v Bijai Govind Sing,[20] the Privy Council stated:
“It is impossible to doubt that the indulgence extended in such cases is mainly owing to the natural desire prevailing to prevent irremediable injustice being done by a court of the last resort, where by some accident, without any blame, the party has not been heard, and an order has been inadvertently made as if the party had been heard.”
[19]Ibid.
[20](1839) 11 Moo Ind App 181, 220; 18 ER 269, 284; see also Venkata Narasimha Appa Row v Court of Wards& Ors (1886) 11 App Cas 660, 663.
In his separate judgment in Codelfa, Brennan J similarly stated:
“Application is now made by the Authority, prior to the passing and entering of the judgment of this Court, seeking rescission of the order remitting the relevant issues to the Arbitrator for determination. Although this Court can no longer be constituted as it was constituted when its orders were made, there is, in my opinion, jurisdiction to recall the order remitting the relevant issues if appropriate grounds are shown. That jurisdiction inheres in this Court as a final court of appeal to prevent irremediable in justice being done by a Court of last resort, but the occasions of its exercise must be rare indeed.”[21]
[21](1982) 150 CLR 28, 46; see also Metwally v University of Wollongong (1985) 60 ALR 68, 71.
Thus, the plaintiff gains no support from the decisions of Autodesk, Wentworth and Codelfa, for the proposition that this Court has an inherent jurisdiction to vary or set aside an order already authenticated by the Prothonotary, other than in the limited type of circumstances identified by Gibbs J in Bailey v Marinoff. Indeed, the exceptional nature of the jurisdiction described by the High Court in each of those decisions lends further support, if it is needed, to the decisions of the Court in Bailey v Marinoff and Gamser, to which I have referred, and which, in my view, clearly establish that there is no such inherent jurisdiction in this Court, save in limited exceptional circumstances of the kind to which Gibbs J referred in Bailey v Marinoff.
In the course of argument, I was also referred to three further decisions in support of the proposition that this Court does have an inherent jurisdiction to set aside the earlier orders authenticated by the Prothonotary. The first decision is that of Batt and Buchanan JJA, of the Court of Appeal, in Kabat Investments Pty Ltd & Anor v Compleat Imports Pty Ltd & Anor[22]. In that case, a judge of the County Court adjourned a trial, and made an order for costs in favour of the plaintiffs. Subsequently, the defendants applied to another judge of the County Court to vacate that costs order. The judge refused that application. The defendants sought leave to appeal from that order. That application was refused. Buchanan JA (with whom Batt JA agreed) stated:[23]
“Assuming that there is a power to vacate orders even when perfected (see Autodesk Inc v Dyason (No 2) (1993) 176 CLR 300, 317 per Dawson J; University of Wollongong v Metwally(No 2) (1985) 60 ALR 68; Re Bruce (1886) 12 VLR 696), in our opinion, except in a case of necessity, which is not shown to have existed here, any power to vacate an order is to be exercised by the Court or judge who made the original order.”
[22][2002] VSCA 134.
[23]Ibid, [10].
Buchanan JA then quoted the following passage from the judgment of the Full Court of the Supreme Court of Victoria in Re Bruce:[24]
“We are of opinion … that the Court of Insolvency, like every other court, or judge of a court, has power to set aside an order made by it or by him upon being satisfied either that the order has been made improvidently, or that facts have been withheld from him which should have been disclosed to him, but which were not disclosed either through negligence or some other cause. Every court and every judge has, we think, power to do that, and to set aside any act of their or his own shown to have been done under circumstances which operated to deprive his mind of the power of exercising a fair judgment at the time.”
[24](1886) 12 VLR 696, 709.
Pausing there, I make three observations. First, in Kabat, Buchanan JA assumed – but did not decide – that there is a power to vacate orders when perfected. Secondly, as I have already demonstrated, the first two authorities referred to by his Honour relate to the exceptional power of the High Court to vary an order already made by it. Thirdly, in my view, the decision in Re Bruce, when analysed, does not support the existence of a general inherent jurisdiction to set aside or vary an authenticated order or judgment.
In Bruce’s case, Judge Trench, of the Court of Insolvency, being satisfied that an offer of composition had been accepted by three-fourths in number and value of the creditors of an insolvent, released his estate from sequestration. Subsequently, a creditor, which had proved its debt in the estate of the insolvent, applied to the Court of Insolvency for an order revoking or setting aside the order of Judge Trench. It relied on an affidavit in support of that application to the effect that the creditor had received no notice of the insolvent’s intention to apply to the Court of Insolvency for orders releasing his estate from sequestration. Judge Casey, who heard the application, held that he did not have the power to set aside the order of Judge Trench, and therefore refused the application. The creditor appealed from that decision to the Full Court. Its grounds of appeal[25] included (inter alia) that it had no notice of the insolvent’s application, and that the order of Judge Trench had been obtained by fraud. Dr Madden, who appeared for the insolvent on the appeal, argued, as a preliminary point, that Judge Casey did not have power to set aside the order previously made by Judge Trench. It was that submission which was rejected by the Full Court. The passage of the judgment of the Full Court, quoted above, in isolation is expressed in broad terms. However, it must be understood in the context of the issues before the Court. Thus, later in its judgment, in reaching its conclusion, the Full Court expressly accepted the principles stated by Judge Casey, namely, that he had no power to set aside the order of Judge Trench, save upon proof that the previous proceedings “were tainted with fraud, irregularity or error.”[26] The Full Court, however, disagreed with Judge Casey’s conclusion that there was no proof that such circumstances existed in that case.
[25]Ibid, 700.
[26]Ibid, 711.
Thus, in my view, when Re Bruce is analysed, it is no more than an instance of the exceptional group of cases, referred to by Gibbs J, where an order was obtained by fraud, and where it has been made, in effect, ex parte, and contrary to natural justice.[27] Indeed, if, on the other hand, Bruce’s case is authority for the existence of a wider, more general, jurisdiction to set aside or vary an order of a court which has been perfected, it is inconsistent with Bailey v Marinoff and Gamser, and therefore would not be good law.
[27]Bailey v Marinoff (1971) 125 CLR 529, 540.
Another decision to which Ms Sparke referred in this context is that of Habersberger J in Tapoohi v Shiff & Company (a firm) & Ors[28]. In that case the plaintiff sued three defendants. On 3 December 2004 the plaintiff and the second and third defendants, at a directions hearing, sought and obtained orders by consent dismissing the claim against the second and third defendants. Subsequently, the sole remaining defendant (the first defendant) made an application that that order be vacated, and in lieu of it, an order be made that the plaintiff’s claim against the second and third defendants be “discontinued” (instead of dismissed). The defendant sought that order because it apprehended that, if the proceedings against the second and third defendants stood dismissed, its rights of contribution against those defendants (as asserted in third party proceedings) might thereby be compromised. Habersberger J acceded to that application, and made orders in the form sought by the defendant.
[28][2005] VSC 178.
In his reasons for judgment, his Honour held that the Court had a “well established” power to vacate or set aside part of an order which had already been authenticated. His Honour noted “indeed no party opposing the application suggested otherwise”.[29] His Honour referred to and relied on the passage from the judgment of the Full Court in Bruce, to which I have referred, and the decisions of the High Court in Autodesk Inc v Dyason (No 2) and University of Wollongong v Metwally (No 2), to which I have also referred. However, for the reasons I have already stated, in my view those cases do not support the proposition that this Court possesses an inherent jurisdiction to vacate or set aside all or part of its order when the order has been authenticated, save in exceptional circumstances such as those referred to by Gibbs J in Bailey v Marinoff. In this respect, I note that Habersberger J accepted that he had jurisdiction to make such orders, in circumstances where no party to the application contended that he did not have that power. In any event, it seems that the first defendant had been taken by surprise by the application, in December 2004, for the proceeding against its co-defendants to be dismissed, as it had not been given any notice of that application. Thus, it was effectively deprived of an opportunity to oppose it. Accordingly, it seems that the application, in Tapoohi’s case, came within one or more of the exceptions referred to by Gibbs J in Bailey v Marinoff.
[29]Ibid, [20].
The third judgment to which Ms Sparke referred was the decision of Balmford J in National Australia Bank Ltd v Petit-Breuilh (No.3)[30]. In that case, Balmford J, acting under the slip rule, amended earlier orders made by her, in proceedings in which she had previously given judgment. By the amended orders, her Honour vacated six earlier costs orders against the defendants (who had ultimately succeeded at trial), and in lieu made orders that the plaintiff pay the costs of the defendants in respect of each of the interlocutory applications in respect of which those orders had previously been made. Her Honour purported to make those orders pursuant to the “slip rule”.[31] Balmford J also based her conclusion on the passage from the judgment in Re Bruce,[32] to which I have referred above.
[30][2000] VSC 291.
[31]Ibid, [23] to [25].
[32]Re Bruce (1986) 12 VLR 696, 709.
As I have already indicated, in my view, the decision of the Full Court in Re Bruce does not support the existence of a general inherent jurisdiction of this Court to set aside or vary previous judgments or orders which have been authenticated and passed into the records of the Court. With respect, it is not entirely clear whether Balmford J relied on that decision, as distinct from the “slip rule”, as a basis for making her decision. It may well be that her Honour had power to make those orders, in any event, as “supplemental orders” in the proceeding.[33]
[33]Compare Preston Bank Co v William Allsop & Sons [1895] 1 Ch 141, 143-4 (Lord Lindley); Caboolture Park Shopping Centre (In Liquidation) v White Industries (Queensland) Pty Ltd (1993) 45 FCR 224, 235-6; Victoria Legal Aid v County Court of Victoria & Anor (2004) 9 VR 686, 694 [15]; [2004] VSCA 113 (Chernov JA).
In my view, the foregoing review of the authorities makes it plain that, subject to certain well established exceptions, there is no inherent jurisdiction in the Court to set aside or vary orders which have been perfected by authentication by the Prothonotary. That longstanding rule is based on the principle that it is in the public interest that there be an end to litigation.[34] In DJL v The Central Authority[35], the High Court described how the exceptions to that rule – such as those referred to by Gibbs J in Bailey v Marinoff[36] - are substantially a creature of history. In particular, the exception relating to judgments obtained by fraud derives from the equitable jurisdiction of the Court of Chancery. Indeed, where it is sought to impeach a judgment for fraud, the application is usually made in a separate proceeding seeking the equitable remedy.[37]
[34]Bailey v Marinoff (1971) 125 CLR 529, 539 (Gibbs J).
[35](2000) 201 CLR 226, 243 and following [33] and following.
[36](1971) 125 CLR 529, 540.
[37]DJL v Central Authority (2000) 201 CLR 226, 245; McHarg v Woods Radio Pty Ltd [1948] VLR 496, 497 (Herring CJ).
Ms Sparke conceded that she could not point to any authority which supports the existence of an exception in circumstances such as the present. She did not contend that the defendants had, by fraud, established a defence to the claim against them for damages. Indeed, plainly, the facts do not support such a suggestion at all. Nothing has been put to me, in this application, to impeach the evidence, at trial, as to the renovation works carried out by the first defendant, or their cost. There is no suggestion that that evidence was such as to constitute a fraud. Indeed, at trial, the question of whether the improvements by the first defendant to the house might be offset against the claim for damages was substantially raised by me. It was barely addressed by the defendants’ then counsel in his final submissions.[38]
[38]Lollis v Loulatzis & Anor [2007] VSC 547, [217] – [218]
However, Ms Sparke submitted that, nonetheless, I should accept that this case constitutes an exception to the ordinary rule relating to the finality of perfected judgments. She submitted that the effect of the conduct of the first defendant, since judgment, has been to eliminate the basis upon which I held that the defendants were not liable to the plaintiff for damages for trespass. She submitted that if the first defendant had indulged in the same conduct before judgment, the plaintiff would have been entitled to judgment for the whole of the damages sought by her. By his conduct, she argued, the first defendant has thus “falsified” the basis upon which I held that the plaintiff was not entitled to those damages. In essence, Ms Sparke contended that, in this respect, the case is comparable to the exceptional cases based on fraud.
The difficulty with Ms Sparke’s argument, however attractive it is, is that it lacks any basis in authority. The “fraud” exception, referred to in the authorities, is applicable where it is established that one party, as a result of its fraudulent conduct, has obtained a judgment. In those circumstances the judgment is impeached for fraudulent conduct by a party antecedent to the obtaining of the judgment. The “fraud” exception is governed by a number of established principles, which, in essence, require the establishment of such fraud by strict proofs.[39] None of the cases to which I have had reference provide any justification for the existence of an exception in circumstances in which, after the completed entry of judgment, one party has acted in a manner which would undermine a basis upon which the case was earlier decided.
[39]See for example McHarg v Woods Radio Pty Ltd [1948] VLR 496, 498-9 (Herring CJ); Ronald v Harper [1913] VLR 311, 318 (Cusson J); Grierson v R (1938) 60 CLR 431, 436 (Dixon J); Cabassi v Vila (1940) 64 CLR 130, 147-8 (Williams J); Wentworth v Rogers (No.5) (1986) 6 NSWLR 534, 538-9 (Kirby P); Price v Stone [1964] VR 106, 109 (Gillard J); Flower v Lloyd (1877) 6 ChD 297, 299-300 (Jessel MR); Birch v Birch [1902] P 130, 137-8 (Cozens-Hardy LJ); Jonesco v Beard [1930] AC 297, 300-1 (Lord Buckmaster).
In light of the settled state of the authorities, the strictness of the rule relating to the finality of perfected judgments, and the stated rationale for that rule, I am not persuaded that this case constitutes, by parity of reasoning or otherwise, a recognisable exception to the rule relating to the finality of perfected judgments. Accordingly, it follows that I do not have an inherent power to vary or set aside the orders which I pronounced on 20 February 2008, and which were authenticated by the Prothonotary on 13 March 2008.
Rule 66.14
The next question is whether I have power to make any such an order pursuant to Rule 66.14. That rule states:
“The Court may stay execution of a judgment, or make such order as the nature of the case requires, on the ground of matters occurring after judgment.”
Ms Sparke submitted that, on its proper construction, Rule 66.14 provides the Court with a discretion to set aside or vary an authenticated judgment or order in a case such as this. She submitted that, unlike its predecessor – Order 42, Rule 27 of the Rules of the Supreme Court – Rule 66.14 contains an unfettered power to set aside or vary an authenticated order or judgment. Although such a power should be exercised sparingly, nonetheless she submitted that this is an appropriate case in which it ought to be invoked.
In my view, both as a matter of authority, and on its proper construction, Rule 66.14 does not empower me to make the orders sought by the plaintiff. In particular, I consider that the decision of the High Court in Gamser v Nominal Defendant[40] is binding authority for the proposition that a rule, such as Rule 66.14, does not entitle this Court to set aside a judgment which has been regularly entered.
[40](1977) 136 CLR 145.
In Gamser, the plaintiff appellant based his appeal, in the alternative, on Part 42 Rule 12(1) of the Rules of the Supreme Court of New South Wales, which provided:
“A person bound by a judgment may move for a stay of execution or some other order on the ground of matters occurring after the date on which the judgment takes effect and the Court may on terms make such order as the nature of the case requires.”
Aickin J (with whom Barwick CJ, Gibbs and Stephen JJ agreed) held that that rule did not empower a Court to set aside a judgment which had already been regularly entered.[41] Murphy J[42] came to the same conclusion, noting that “very clear language” would be required before a rule could be construed to enable a Court to reopen a decision after judgment had been entered. Similarly, in Permewan Wright Consolidated Pty Ltd v Attorney-General for the State of New South Wales,[43] Reynolds JA referred to Pt 42 r 12 and stated:
“It has been held that neither this power nor the inherent power of the court extends so far as to allow the changing or dissolution of an order regularly made and entered as this order was: Gamser v Nominal Defendant … .”
[41]Ibid, 153.
[42]Ibid, 150.
[43](1994) 35 NSWLR 365, 367.
Ms Sparke submitted that the decision in Gamser should be distinguished, because of the different wording of the New South Wales rule. In particular, she pointed out that that rule only enabled a party who was “bound” by a judgment to “move” for an order described in that rule. By contrast, she submitted, Rule 66.14 is not so limited.
In my view, however, that difference is to no effect. Clearly, only a party affected or bound by an order could utilise Rule 66.14. Further, the difference in the wording between the two rules does not logically support a conclusion that the power, contained in Rule 66.14, should be radically different to that contained in the New South Wales provision. In particular, in my view, the reasoning of the High Court, in Gamser’s case, is applicable to Rule 66.14. The principle, that once a judgment or order has been regularly passed and entered into the records of the Court, it may not be varied or set aside save in exceptional circumstances, is longstanding and well established. It is based on the importance of finality in litigation. As Murphy J stated in Gamser, it would require clear language for a statutory rule to abrogate that principle, and to provide for a broad discretionary power to set aside or vary a perfected order of the Court. The language of Rule 66.14 is not such as to dictate such a conclusion which would involve a radical departure from existing legal principle. In my view, the phrase “or make such order” in Rule 66.14, was intended to be construed eiusdem generis. That phrase was included in the rule to amplify the powers of the Court to make orders in respect of the execution of its judgments and orders, in light of circumstances occurring after judgment. It does not, in my view, empower the Court to set at nought, or vary, a judgment or order already made by it, and which has been authenticated.
That conclusion is supported by the context of Rule 66.14. Rule 66 contains a number of provisions relating to the enforcement of judgments and orders. It is not concerned with the composition, completion or amendment of judgments and orders. Thus, Rules 66.02, 66.03 and 66.04 are concerned, respectively, with the enforcement of judgments for the payment of money, for the possession of land, and for the delivery of goods. Rule 66.05 is concerned with the enforcement of a judgment requiring a person to carry out a particular act, or to abstain from carrying out an act. Rules 66.06, 66.07 and 66.08 are concerned with the enforcement of subpoenas and orders for the attendance of persons at Court. Rules 66.09 and 66.10 require the service of any judgment which is to be enforced by proceedings for contempt. There then follows a miscellany of rules. Rule 66.11 is concerned with substituted performance; Rule 66.12 with the enforcement of judgments by or against persons who were not a party to the proceedings; and Rule 66.13 with the imputed abandonment of a judgment where a person, in whose favour it is pronounced, fails to comply with a condition prescribed in the judgment. Rule 66.15 enables a Court to make an order in aid of the enforcement of a warrant of execution, and Rule 66.16 provides a general provision for the stay of execution of judgments. Thus, the statutory context of Rule 66.14 reinforces the conclusion that Rule 66.14 is concerned with matters pertaining to the execution and enforcement of judgments and orders, and that it does not provide for the variation or deletion of orders after they have been authenticated.
Finally, I do not accept that the history of Rule 66.14 supports the conclusion for which Ms Sparke has contended. Rule 66.14 is, in one sense, expressed to be wider than its predecessor, Order 42 Rule 27, which only applied to a party “against whom judgment has been given”. However, the change in Rule 66.14 – to enable any party to apply – does not, logically, enlargen or alter the nature of the relief afforded by the rule. As I have stated, in my view, the decision of the High Court in Gamser, and the proper application of principles of statutory construction, both lead to the same conclusion, that Rule 66.14 does not empower me to make the orders sought by the plaintiff in this application.
Conclusion
For those reasons, I have come to the conclusion that this Court does not have the power, either by way of inherent power or under Rule 66.14, to vary or rescind paragraph (3) of the order made on 20 February 2008, and which has been authenticated, in the circumstances relied on by the plaintiff. Accordingly, the plaintiff’s application should be dismissed.
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