McVey v St Vincent's Hospital (Melbourne) Ltd
[2005] VSCA 233
•22/09/2005
SUPREME COURT OF VICTORIA
COURT OF APPEAL
No. 3745 of 2004
| WILLIAM JAMES McVEY | |
| Applicant | |
| v. | |
| ST. VINCENT'S HOSPITAL (MELBOURNE) LTD. | Respondent |
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JUDGES: | EAMES and ASHLEY, JJ.A. and HOLLINGWORTH, A.J.A. | |
WHERE HELD: | MELBOURNE | |
DATES OF HEARING: | 17 and 30 August 2005 | |
DATE OF JUDGMENT: | 22 September 2005 | |
MEDIUM NEUTRAL CITATION: | [2005] VSCA 233 | |
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Public Trustees – Administration order giving power to administrator to conduct County Court proceedings on behalf of protected person – Compromise agreement reached between administrator and defendant for dismissal of proceedings brought by protected person – Whether State Trustees as administrator acted within power to enter compromise – Guardianship and Administration Act 1986, ss.46(1), 49, 50, 52, 58B, 60A, 60D.
Appeal – Notice of appeal issued while protected person subject to administration order – Notice of appeal void – Application for leave to appeal – Whether appeal has any prospects of success.
Practice and procedure – Compromise - Judgments and Orders – Appeal – Judgment entered by consent of parties – Whether appeal open from consent order – Order perfected – Whether judgment may be set aside on appeal to Court of Appeal –
County Court Act 1958 s.74(7).
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| APPEARANCES: | Counsel | Solicitors |
| For the Applicant | Appeared in person | |
| For the Respondent | Mr A. Clements | Phillips Fox |
EAMES, J.A.:
The applicant, William McVey, acting without solicitors, filed a writ in the County Court on 29 September 2003 by which he sued St Vincent’s Hospital (Melbourne) Ltd (hereinafter referred to as “St Vincent’s”). The writ was generally indorsed. It raised a claim for damages for personal injuries, being traumatic stress disorder, anxiety state, shock and pain and suffering, allegedly caused by the hospital’s negligent treatment of the applicant “on or about 1987.”
On its face this non-particularised claim was long out of time. Apparently recognising such a problem, on 30 September 2003 the appellant filed a summons seeking an extension of time under s. 23A of the Limitation of Actions Act 1958.
In support of his s.23A application Mr McVey swore an affidavit in which he asserted that the injuries had been sustained by him on 21 April 1987, and that he had suffered brain damage and other physical and psychological injuries due to the conduct of an air meatogram performed as part of a CT scan conducted by the defendant. He contended that he had received an excessive dose of ionising radiation in the course of that procedure. Although the applicant had been an in-patient of the Royal Victorian Eye & Ear Hospital, and not St Vincent’s, it was common for imaging procedures for patients of the former hospital to be performed by the staff at St. Vincent’s, where appropriate equipment was located.
In his affidavit supporting the application for an extension of time the applicant contended that he had not earlier issued proceedings as he was not fully aware of the details of his injuries and of the cause thereof. He contended that he had over many years attempted to obtain copies of the medical records relating to his treatment at St. Vincent’s by virtue of Freedom of Information requests to both that hospital and Royal Victorian Eye & Ear Hospital, and it was from the latter hospital that in 2003 he obtained two documents which had in fact emanated from St. Vincent’s and were dated 21 April 1987. Those documents related to the CT Scan procedure about which complaint is now made. Neither document, on its face, discloses any evidence of any deficiency in the conduct of tests on the applicant, but they do identify medical practitioners who had been apparently concerned with the procedures undergone by the applicant.
After issuing proceedings no statement of claim was ever filed, thus the applicant’s specific allegations as to the alleged breach of duty by the hospital were never exposed, nor was St Vincent’s answer to the claim given.
On 5 November 2003 the application for an extension of time was listed in the County Court Practice Court before his Honour Judge Fagan, who made orders for discovery and set down the s.23A application for hearing on 28 July 2004. In response to the s.23A application St Vincent’s went on affidavit, by its solicitors, deposing that no records at all were retained by it relating to the applicant’s attendance in 1987 and asserting specific prejudice by reason of the applicant’s delay in commencing the proceeding.
The appointment of an Administrator
On 8 June 2004 the Victorian Civil and Administrative Appeals Tribunal made an order under the Guardianship and Administration Act 1986 (hereinafter “the Act”) appointing State Trustees Limited as administrator of the applicant’s estate for limited purposes. That order was made upon the application of Mr McVey.
By virtue of s.46(1)(a)(ii) the Tribunal may only make an administration order where it is satisfied that the person “is unable to make reasonable judgments in respect of the matters relating to all or any part of her or his estate by reason of the disability.” In material which the applicant has placed before us it is disclosed that he had been diagnosed as suffering a psychiatric illness, namely, paranoid schizophrenia.[1] The Tribunal made an order in the following terms, inter alia:
[1]Dr John Jagoda, report 31 May 2004, Exhibit 19 to applicant’s folder of documents dated 30 August 2004.
“The Tribunal is satisfied that the proposed represented person has a disability; is unable by reason of that disability to make reasonable judgments about their estate; and needs an administrator.
The Tribunal orders that:
1.State Trustees Limited . . . be appointed limited administrator of the estate of the represented person with powers limited to legal proceedings in relation to the represented person. This includes but is not limited to legal proceedings in relation to McVey v St Vincent’s Hospital, any workcover claims, any outstanding probate issues and any outstanding wages owed to the represented person.
2. State Trustees is to investigate and report back to the Tribunal within 4 weeks on the represented person’s financial affairs and his ability to continue to manage them independently.
. . .
4.This administration order be reassessed no later than 8 December 2004.”
The applicant told us that he applied for the administration order because he believed that it would enable him to obtain legal representation for the pursuit of his negligence claim. It seems that he had engaged and then parted company with more than one solicitor over a period of time, not only in connection with his claim against the hospital.
The compromise agreement for dismissal of the proceedings
On 17 June 2004 State Trustees filed in the County Court a notice by solicitor for a party who had previously acted without a solicitor, advising that it now acted for the applicant. On the same day a letter on State Trustees’ letterhead and bearing that date was delivered to the Associate to Judge Harbison, the judge in charge of the list, signed by Ms Marcia Jarvis, a solicitor with the Legal Branch of State Trustees. Ms Jarvis advised that State Trustees now acted. The author advised that on 8 June an order had been made in VCAT to appoint State Trustees administrator with powers limited to the conduct of legal proceedings. The author noted that the proceedings were listed before that judge the following day for call-over.
The author advised that “the parties have reached an agreement that the proceedings be dismissed with no order as to costs”. The defendant’s solicitor, Mr Ben Hall, counter-signed the letter in confirmation of St Vincent’s consent to an order being made in those terms. The author asked whether the order would be made in chambers or whether the solicitors would need to attend.
On 18 June 2004 Judge Shelton, sitting in chambers, made an order in which he noted that he acted “upon reading correspondence from State Trustees dated 17 June 2004”. The terms of his Honour’s order were as follows:
“I DO ORDER AS FOLLOWS BY CONSENT
1. That the proceeding be dismissed.
2. No order as to the costs of the proceeding.”
On the previous day, 17 June, and apparently unaware of the settlement negotiations and agreement, the applicant had issued a summons seeking an adjournment of the s.23A proceeding from the proposed hearing date of 28 July 2004 for a period of three months. That followed a request in writing by the applicant to the solicitors for St. Vincent’s seeking its consent to such an adjournment so that he could pursue his efforts to obtain medical and other evidence to support his s.23A application. That request had been rejected.
Upon learning that the proceeding had been dismissed the applicant, on 1 July 2004, filed a notice of appeal. He did so personally, at a time when the administration order remained in place.
Was the notice of appeal valid?
The first question which arises is whether the notice of appeal issued in those circumstances was valid. By s.58B(1)(b) of the Act, upon appointment as administrator it is the duty of the administrator, inter alia, “to manage the affairs of the represented person and to exercise all rights statutory or otherwise which the represented person might exercise if the represented person had legal capacity”. Pursuant to s.58B(2)(l) an administrator may, in the name of and on behalf of the represented person, bring and defend actions and other legal proceedings in the name of the represented person. By s.50(1) the administrator is empowered to sign and do all such things as are necessary to give effect to any power or duty vested in the administrator.
Section 52(1) provides that where an administration order has been made the represented person, until revocation of that order, “is to the extent that the represented person’s estate is under the control of the administrator, deemed incapable of dealing with, transferring, alienating or charging her or his money or property or any part thereof or becoming liable under any contract without the order of the Tribunal or the written consent of the administrator”. By s.52(2) every dealing by a represented person “in respect of any part of the estate which is under the control of the administrator is void and of no effect and the money or property the subject of the dealing, transfer, alienation or charge by any represented person is recoverable by the administrator in any court of competent jurisdiction”.
There is no definition of “estate” for the purpose of s.46(1)(a)(ii)[2] but the lodging of a notice of appeal rendered the applicant liable to orders as to costs and in lodging his notice of appeal while the administration order continued the applicant was dealing with that part of his estate which was the subject of the order, namely such rights as were concerned in legal proceedings against St Vincent’s. In my opinion, he was not empowered to take that step, nor, indeed, was he empowered to file a summons seeking an adjournment of the hearing of the s.23A application, because that step was also taken when the administration order applied to the proceedings. That conclusion is consistent with authority.
[2]The word “estate” is, however, defined in s.3 of the State Trustees (State Owned Company) Act 1994 to mean “real and personal estate” and by s.35 of that Act a new Division 3A of Part 5 was inserted into the Guardianship and Administration Act 1986, one of the new provisions being s.58B, in the terms in which it now appears.
The terms of s.54H and s.54I of the repealed Public Trustee Act 1958 were in nearly identical terms to those of s.52(1) and (2) of the Guardianship and Administration Act 1986. In Re Barnes, A Protected Person[3] Beach J. held, citing the decision of the Court of Appeal in Re Walker[4], that whilst a person was subject to a protection order the estate of that person could be dealt with only by the Public Trustee. Beach, J. quoted with approval the words of Eve, J. in Re Marshall[5] who, in applying the decision of the Court of Appeal held that were the situation otherwise “this unsatisfactory result would follow, that the affairs of the person of unsound mind, although put under the control of one person, the receiver, would in fact be controlled by two persons – namely, the person of unsound mind and the receiver.”
[3][1983] 1 V.R. 605, at 608.
[4][1905] 1 Ch. 160.
[5][1920] 1 Ch 284 at 288-9.
The analysis by Beach, J. of the effect of the legislative provisions was accepted by all members of the New South Wales Court of Appeal in David by Her Tutor The Protective Commissioner v David and Anor.[6]
[6](1993) 30 NSWLR 417, at 432, per Kirby, P.; at 438-9, per Sheller, J.A. (with whom Priestley, J.A. agreed).
In my opinion, therefore, the notice of appeal was void (as was the summons whereby application was made for an adjournment). That defect of the notice of appeal might, however, be capable of being overcome.
As I will later discuss, the administration order was revoked on 19 July 2004 and thereafter the applicant did not lack capacity to issue a notice of appeal. A fresh notice of appeal would now be out of time but he could apply to this court for leave to file the notice of appeal out of time pursuant to s.74(2A)of the County Court Act 1958. Mr McVey said that he would make such application were we to conclude that the notice of appeal was void. In exercising its discretion whether to grant such an application one relevant factor would be the court’s assessment of the prospects of success of an appeal against the order of Judge Shelton. Unless such an appeal had some prospects of success then leave to file a notice of appeal out of time should be refused: see Jackamarra v. Krakouer.[7]
[7](1998) 195 C.L.R. 516, at 521.
For the reasons which follow, I consider that any appeal against the order of Judge Shelton would be bound to fail and leave to appeal out of time should be refused, but before addressing the question whether the appeal would have any prospects of success, there is a further preliminary question which was raised by counsel for St Vincent’s and which needs to be addressed.
Does s.74(7) of the County Court Act 1958 preclude jurisdiction to appeal?
In this case the applicant has not sought to set aside the judgment order which had been made by Judge Shelton by consent of the parties. Instead, he has purported to appeal that judgment. The applicant must first demonstrate that he has a right of appeal, at all. The respondent denied that he has. Mr Clements submitted that the situation is governed by statute.
Section 74(7) of the County Court Act 1958 reads:
“(7). No appeal shall lie from any judgment or order of the court, if before it is pronounced the parties agree, in writing signed by themselves or their practitioners, that it shall be final”.
The letter dated 17 June 2004 did not, in terms, constitute a written agreement that the order of dismissal of the proceedings “shall be final”, although the implication of agreeing to the dismissal of a proceeding may well be that there is agreement that no further action will be taken to revive it[8]. Whilst s.17A(1)(a) of the Supreme Court Act 1986 expressly precludes an appeal from an order made in the Trial Division by consent, unless the Court of Appeal grants leave, there is no equivalent provision in the County Court Act.
[8]An attempt to re-litigate issues settled by a consent judgment would be liable to be set aside as an abuse of process (see Guy v. Walker (1892) 8 TLR 314), unless the agreement itself had been set aside pursuant to contract law principles (see Huddersfield Banking Co Ltd v. Henry Lister & Sons Ltd [1895] 2 Ch 273, at 280).
It may well be, as Mr Clements contends, that s.74(7) is intended to achieve the same result as s.17A(1)(a) but given the conclusion I have reached as to the lack of any prospects of success of an appeal, even if it was properly before us, it is unnecessary to reach a concluded view as to whether s.74(7) applies here, and appropriate that we do not do so. We have not had the benefit of submissions in opposition to those advanced on behalf of the respondent and the issue is not clear cut.
Assuming that leave was given to file the present notice of appeal out of time, and assuming further (without deciding) that s.74(7) of the County Court Act does not preclude the appeal, I turn, then, to the question whether an appeal would have any prospect of success. As to that question, Mr Clements submitted that even if s.74(7) did not bear the construction he gave it, any appeal would fail because no error had been demonstrated in the course taken by the judge in acting on the consent agreement so as to enter judgment. Alternatively, counsel submitted that a consent order which embodied a compromise agreement between parties could only be set aside if the underlying agreement could be invalidated, and in this case, he submitted, no such attack on the agreement could succeed.
Did the Judge err?
There is only one substantive ground of appeal contained in the applicant’s notice of appeal. Ground 1 reads:
“Incorrect advice and decision made on behalf of the plaintiff by State Trustees from inappropriate documentation to concur that a proceeding is insufficient in content of its merits and for the dismissal to be granted.
Reason being due to delay in obtaining medical legal reports in support of affidavit to be lodged by County Court order that an affidavit in support of claim be filed by 20th July 2004.”
As the terms of ground 1 reflect, the applicant complains of an error made by his administrator, State Trustees, rather than any error on the part of the judge in making the consent order dismissing the proceedings. There was also a “Ground 2” in the notice, which I will not set out. That was not in fact a ground of appeal, at all, but merely sought re-instatement of the application under s.23A for an extension of time and also sought an adjournment of that hearing so that medico-legal reports could be obtained to support the application.
Plainly, no error could be demonstrated on the part of the judge, who simply entered judgment on the papers by reference to what is agreed to have been the consent agreement entered between the defendant, through its solicitors, and the plaintiff, by his representative appointed under the Guardianship and Administration Act 1986. The applicant seeks to argue that the judgment ought be overturned on appeal not because of any error of the judge nor, indeed, because of any impropriety on the part of St Vincent’s in entering agreement with State Trustees, but on the basis that State Trustees exceeded its statutory authority in reaching the agreement with St Vincent’s. Thus, the applicant seeks to have the judgment set aside by challenging the validity of the consent agreement upon which it was based. Before considering the legal principles which govern such a challenge to a judgment entered pursuant to a consent agreement, it is appropriate, first, to consider the bases for the applicant’s contentions that State Trustees acted beyond power in reaching the agreement with St Vincent’s.
Did the administrator act beyond power?
Section 48(3) of the Guardianship and Administration Act 1986 provides that “where a decision is made, action taken, consent given or thing done by an administrator under an order made by the Tribunal the decision, action, consent or thing has effect as if it had been made, taken, given or done by the represented person and the represented person had the legal capacity to do so”. In terms, that sub-section appears to render futile any appeal which seeks to set aside the agreement, since it would make the agreement binding on Mr McVey. Mr McVey contends, however, that that provision is qualified by the terms of s.49(1) and (2) which provide:
“49. Exercise of power by administrator
(1)An administrator must act in the best interests of the represented person.
(2)Without limiting sub-section (1) an administrator acts in the best interests of the represented person if the administrator acts as far as possible –
(a)in such a way as to encourage and assist the represented person to become capable of administering the estate; and
(b)in consultation with the represented person, taking into account as far as possible the wishes of the represented person.”
Mr McVey has deposed that he was unaware that State Trustees proposed entering an agreement with St Vincent’s for the dismissal of the proceedings. He contends that he would not have agreed to that course had he been consulted and he also contends that the action taken was not in his best interests. The agreement, he therefore submits, was void or voidable by virtue of the several breaches of s.49.
In support of his contention as to the failure of compliance with s.49 Mr McVey sought to tender the transcript of proceedings conducted on 19 July 2004 before a Senior Member of VCAT in the Guardianship List. On that day the applicant successfully sought the revocation of the limited administration order made at VCAT on 8 June 2004. A solicitor representing State Trustees appeared at the hearing. Mr McVey has sought to rely on that material before us as fresh evidence on the appeal. That application is opposed by counsel for St Vincent’s, but it seems to us to constitute fresh evidence and we will admit it on this application[9].
[9]As to whether evidence meets the test for admission as fresh evidence see Fletcher Constructions v. Varnsdorf [1998] 3 V.R. 812, at 824.
It must first be said that State Trustees is not a party before us and no submissions have been made on its behalf in answer to the assertion of Mr McVey that s.49 was not complied with. The transcript of the VCAT proceeding records, however, that the solicitor for State Trustees stated in the hearing that she had consulted with Mr McVey on 15 June, and that she had also considered a legal opinion provided by counsel engaged on behalf of Mr McVey through PILCH. Furthermore, the solicitor for State Trustees asserted that it had indeed acted in the best interests of the applicant when agreeing to the settlement of the proceedings, in that he was saved from incurring substantial legal costs on an action which had no prospects of success.
Mr McVey contends that State Trustees’ lawyers could not have reached an informed opinion as to the prospects of success of his action since they did not have before them essential medico-legal and other evidence. That, of course, assumes that any such material would have emerged had the applicant been granted further time in which to procure it.
In support of his submissions, Mr McVey has sought to rely on a large volume of material, comprising affidavits and exhibits, which was not before the judge below. He applied to have that material treated as fresh evidence on the appeal, pursuant to r.64.22(3). In the course of argument Mr McVey accepted that much of that material was related to the question of negligence in the performance of the CT scan and to the prospects of success of an application under s.23A, rather than to the circumstances surrounding the entry of the consent judgment. For reasons later discussed, that material has no relevance to the present application.
The Court deferred making a ruling on the admissibility of the material for the purpose of this application for leave to appeal out of time, but, having regard to the fact that Mr McVey is unrepresented, we advised the parties that we would examine all of the material in order to assess whether it raised any matters relevant to Mr McVey’s contention that the consent order ought be overturned. The Court indicated that it would rule later on the admissibility of the material.
Challenge to a perfected consent order
As earlier noted, Mr Clements submitted that the judgment could not be set aside on appeal as it derived from a compromise agreement between the parties. Counsel acknowledged that there may be some circumstances where the agreement itself could be invalidated, thus enabling the setting aside of an order based on the agreement, but denied that there was any basis for such a challenge in this case. The applicant contended that the agreement can be set aside by virtue of State Trustees having exceeded its power under the Act.
Before considering those competing arguments as to the validity of the compromise agreement it is appropriate to consider the bases at common law whereby an order based on a consent agreement might be set aside. As to that question a further issue arises - one which was not argued by Mr Clements - by virtue of the fact that the County Court order in this case was not only based on a consent agreement but had also been perfected.
The order made by Judge Shelton has been perfected, that is, it has been authenticated and entered into the records of the County Court. As a general rule, the public interest in there being finality of litigation decrees that, once perfected, a judgment entered upon a consent agreement can not be set aside: Bailey v. Marinoff[10]. In Permanent Trustee Co (Canberra) Ltd v. Stocks & Holdings (Canberra) Pty Ltd[11] Brennan, J. noted that there may be exceptions to that general rule, namely, ”. . . those which are founded upon the inherent jurisdiction of the court to ensure that its procedures do not effect injustice; those which are authorized by statute and those which override the general rule in order to give relief where the judgment is obtained by fraud or by an agreement which is void or voidable”. Mr McVey would contend that his case falls into one or more of those categories.
[10]Bailey v. Marinoff (1971) 125 C.L.R. 529, at 539
[11](1976) 28 FLR 195, at 198, per Brennan, J. See, too, Tasmanian Outstanding Property Investments Pty Ltd v. Dickerson [2000] TASSC 167, per Cox, C.J. See, too, Bailey v. Marinoff (1971) 125 C.L.R. 529, at 539; DJL v. Central Authority (2000) 201 C.L.R. 226, at [38]; Pollard v. IND [1972] V.R. 955, at 961.
Save for limited purposes, it may be doubted that a judge of the County Court, an inferior statutory court, would have power to set aside a perfected judgment of that court[12]. The only remedy would be by way of appeal to the Court of Appeal, and that is the course the applicant has attempted to pursue. An appellate court has power “to strike off the fetters” which might restrain an inferior court from setting aside a judgment entered pursuant to a consent agreement[13].
[12]Notwithstanding s.73 of the County Court Act 1958, the County Court has apparent jurisdiction, deriving from s.49 and from r.36.07 of the County Court Rules of Procedure in Civil Proceedings 1999 to set aside judgments in some limited circumstances: see Williams “Civil Procedure Victoria”, at [1781.0], [1871.0]. No argument was addressed to the Court on this question and it is unnecessary to express a concluded opinion. I note that in Logwon Pty Ltd v. Warringah Shire Council (1993) 33 NSWLR 13, at 28-30, per Sheller, J.A., a court established by statute was held to have inherent power to set aside a perfected order, a provision similar to s.49 not, however, being capable of providing the power. The inherent power derived from the fact that the statute created it as a superior court of law, not an inferior court. See too, Permanent Trustee Co (Canberra) Ltd v. Stocks & Holdings (Canberra) Ltd, at 198.
[13]Bailey v. Marinoff, at 541, per Gibbs, J.; Permanent Trustee Co (Canberra) Ltd v. Stocks & Holdings (Canberra) Ltd, at 198.
The question, then, is whether the applicant’s appeal would have any reasonable prospects of succeeding on any of the exceptional grounds identified by Brennan, J. If it has then, absent other disqualifying factors, leave to appeal out of time should be granted. Plainly, an appeal could not succeed on the basis of the material that was before the judge, and Mr McVey does not contend otherwise. He acknowledges that the order made by the judge was regular and was based on the signed consent agreement filed with the court.
The issue before us is whether there is an arguable case that the judgment ought be set aside as falling within one of the exceptions to the finality of a perfected judgment, entered by consent. As earlier noted, in Permanent Trustee Co (Canberra) Ltd v. Stocks & Holdings (Canberra) Ltd, Brennan, J. identified three categories of exception. I take Mr McVey to contend that his situation falls within all three categories, although he identifies the same factor under each heading, namely, that the agreement was entered without statutory authority, because State Trustees failed to comply with s.49 of the Act. The non-compliance was said to be twofold: State Trustees failed to act in his best interests, and it failed to consult him as to its intention to reach a compromise with St Vincent’s.
Was the consent agreement void or voidable?
In support of his arguments Mr McVey referred the court to a number of authorities concerned with situations where it was contended that a compromise agreement reached between respective counsel had been entered in excess of counsel’s authority or contrary to specific instructions given by a party. In my view, none of those authorities provide guidance for Mr McVey’s situation. In the first place, and with one exception, each was an instance where a judge or appellate court was asked to set aside a compromise agreement at a time before judgment had been entered and perfected pursuant to the agreement, and the right of a court to set aside a compromise agreement which had been entered under a mistake by counsel for one party and before judgment had been perfected is not in doubt: see Hickman v. Berens[14]. In Neale v. Gordon Lennox[15] the House of Lords held that the power to set aside a compromise agreement which had been entered by counsel contrary to his authority derived from the court’s “general authority over justice between the parties”[16]. Lord Lindlay noted[17] that if the court learned before the order had been drawn up that the agreement had been reached by counsel without consent of one party then the court would refuse to draw up the order.
[14][1895] 2 Ch. 638
[15][1902] A.C. 465, at 473, per Lord Lindlay
[16]At 470, per Lord Halsbury, L.C.
[17]At 473.
In Shepherd v. Robinson[18], cited by Mr McVey, the judgment had not been drawn up when application was made to set the order aside on the basis that counsel had acted contrary to his authority. Bankes, L.J. held[19] that where counsel had apparent authority to compromise an action, and the other party had no notice of any limitation on authority, the client would be bound by such agreement, but that where application was made “before the consent order has been drawn up and perfected” then the consent of the client to the compromise may be withdrawn and the order will not be perfected where the court is satisfied that it was entered with want of authority[20].
[18][1919] 1 K.B. 474.
[19]At 477, see too Warrington, L.J. at 479.
[20]Mr McVey also cited Little v. Spreadbury [1910] 2 K.B., which again did not involve a judgment which had been perfected and Schwartz v. Clements (1944) 197 L.T. 169. In the latter case application was made to the Court of Appeal to set aside a judgment which had been entered by the trial judge notwithstanding that he had been advised that there was a dispute as to whether an agreement to compromise had in fact been reached. The appeal court ordered another judge to try the issue as to whether there had been an agreement reached between the parties. In the present case, however, there is no doubt that an agreement was reached. In Hansen v. Marco Engineering (Aust) Pty Ltd [1948] V.L.R. 198, also cited by Mr McVey, the principle in Neale v. Gordon Lennox was applied, and it confirmed that counsel acting without authority could bind his client as against a third party who acted without notice of the absence of authority. These cases do not assist in resolving the critical question for this case, namely, whether there had been a want of authority.
The leading Australian case on the question is Harvey v. Phillips[21]. That was a case in which a party complained that although she had authorised her counsel to agree to a consent agreement compromising the action she had done so under duress. The party applied to the judge who made the consent order to set aside the judgment and upon his refusal applied for such relief by motion to the Full Court, which dismissed the application. In fact, judgment had not been entered, but no point was taken as to that before the High Court. On appeal the High Court held[22]:
“The learned judge authorised the entry of judgment in accordance with the terms of settlement drawn up. Judgment had not in fact been signed or entered, so we were informed. Had judgment been signed it may be doubted whether it was open to the plaintiff to attack it by making an application to the Full Court in the action to set aside the judgment and compromise. No objection was made on this score.” [My emphasis]
[21](1956) 95 C.L.R. 235.
[22]At 242.
In Harvey v. Phillips the High Court[23] drew a distinction between a case where counsel acted pursuant to actual authority and one where counsel acted pursuant to an apparent or ostensible authority but, whether by mistake or misapprehension, he had acted contrary to his instructions. In the former case the Court doubted that the court had any discretion to set aside the judgment or compromise. As to the latter situation the High Court held that “at all events until the judgment or order embodying the compromise had been perfected” a court had a discretion to refuse to give effect to the agreement and ”perhaps” had a discretion to set the agreement aside. In the latter situation, where the client had withdrawn or limited counsel’s authority to compromise, the other party, even if ignorant of that limitation of authority, could only seek to rely on the ostensible authority of counsel. In that event the Courts would not be obliged to enforce the compromise “when in the circumstances of the case to allow the compromise to stand would involve injustice in view of the restriction of counsel’s authority”[24]. Significantly, for the present case, the High Court added[25]:
“But in the case of a compromise which is made within the actual as well as an apparent authority of counsel a court does not appear to possess a discretion to rescind it or set it aside. The question whether the compromise is to be set aside depends upon the existence of a ground which would suffice to render a simple contract void or voidable or to entitle the party to equitable relief against it, grounds for example such as illegality, misrepresentation, non-disclosure of a material fact where disclosure is required, duress, mistake, undue influence, abuse of confidence or the like. The rule appears, rather, from positive statements of the grounds that suffice (c.f. Halsbury’s Laws of England, vol 26, 2nd, ed, pp 84,85); but there is dictum of Lindlay, L.J. which is distinct enough: ‘… nor have I the slightest doubt that a consent order can be impeached, not only on the ground of fraud but upon any grounds which invalidate the agreement it expresses in a more formal way than usual …. To my mind the only question is whether the agreement on which the consent order was based can be invalidated or not. Of course if that agreement cannot be invalidated the consent order is good’: Huddersfield Banking Co. Ltd. v. Henry Lister & Son Ltd. (1895) 2 Ch. 273, at p.280.”
[23]At 242-3.
[24]At 243.
[25]At 244.
Even if it be accepted that a perfected consent judgment may be set aside on appeal in the exercise of the discretion of an appellate court (as to which I express no concluded view, save to acknowledge that notwithstanding the doubt expressed as to that in Harvey v. Phillips later courts have not held that the perfection of judgment imposed an insuperable barrier[26]), the real difficulty confronting Mr McVey does not turn on the question whether judgment has been perfected but upon the fact that he has not demonstrated an arguable case that State Trustees was acting in want of authority when it reached the consent agreement with St Vincent’s. Nor has he demonstrated an arguable case that the agreement was void or voidable on any other basis.
[26]See, DJL v. The Central Authority (2001) C.L.R. 226, at 244; Waitemata City Council v. MacKenzie [1988] 2 NZLR 242, at 249; Permanent Trustee Co (Canberra) Ltd v. Stocks & Holdings (Canberra) Ltd, at 198; Rockett v The Proprietors “The Sands” Building Units Plan, No.82 (2002) 1 Qd.R 307, at 310 [10]; Paino v Hofbauer (1988) 13 NSWLR 193, at 198, 199-200; Skrijel v. Mengler [2002] VSCA 55, at [18], per Phillips, J.A. Logwon Pty Ltd v. Warringah Shire Council (1993) 33 NSWLR 13 is to the same effect, although that was an appeal to the Court of Appeal against an order by a judge of a superior statutory court seeking to overturn the judge’s order setting aside a perfected consent order.
As the discussion above demonstrates, the consent agreement in this case was not entered on the applicant’s behalf by an agent, as was the situation with all of the cases discussed above. The administrator acted as the alter ego of the applicant. In so doing it had express statutory power to make the compromise agreement, and St Vincent’s was entitled to so assume. Section 18 of the State Trustees (State Owned Company) Act 1994 provides that: “A person[27] is not to be concerned to see or inquire whether – (a) any acts dealings or transactions by or with State Trustees or any officer or agent of State Trustees are or are not within the powers of State Trustees”. The right of a third party to rely on an agreement entered with a representative, without having to address the question whether the representative is acting with the approval or authority of the represented person, is assured by s.48(3). St Vincent’s was entitled, therefore, to rely upon the finality of the judgment entered dismissing the proceeding, and, for the reasons earlier discussed, the agreement was not entered by State Trustees in breach of statutory authority.
[27]“Person” is not defined in this Act but is defined in s.38 of the Interpretation of Legislation Act 1984 to include a body politic or corporate as well as an individual. I have not paused to consider whether this provision might inhibit the power of a judge to examine the question of the authority of State Trustees in a given case.
The fact that the representation order in favour of State Trustees was subsequently revoked can not deny the validity of the agreement earlier reached by it with St Vincent’s. The revocation arose pursuant to the right to seek re-hearing expressly reserved to the applicant in the original order, and reserved as a matter of law by s.60A. Where such an application is made s.60D(1) provides that the application for re-hearing does not affect the operation of the administration order which had been in place. Thus, action taken by State Trustees pursuant to that order could not be retrospectively invalidated by virtue of a later revocation of the order.
Assuming, without deciding, that s.49 imposed a duty on State Trustees which was enforceable by the applicant, and assuming further that there was evidence that it had breached that duty, then Mr McVey’s remedy lay against State Trustees, not against St Vincent’s. The issue of breach of authority, if it was to be litigated at all, would have to be the subject of separate proceedings, against State Trustees.
The need for separate proceedings
Even if the applicant had an arguable case that the agreement had been entered in breach of statutory authority, and even if the fact that he is seeking to challenge a perfected judgment presented no difficulty, then a further obstacle to success would confront the applicant, namely, that any application to set aside the order would have to be the subject of fresh proceedings and could not be pursued under the proceedings against St Vincent’s .
The bringing of a separate proceeding has been held to be the appropriate means to seek to set aside a perfected judgment[28]. Whether that is so in all cases has been doubted[29], but in the present case even if there was an arguable case for setting aside the judgment under one or other of the exceptional grounds identified by Brennan, J., and discussed above (which, as I have said, is not the case, in any event), this Court could not resolve the questions of fact which would need to be addressed, nor would it be appropriate to refer the case back to the County Court because the only relevant proceeding (which remains dismissed) is that of the applicant against St Vincent’s, and in which State Trustees was not a party.
[28]See Permanent Trustee Co (Canberra) Ltd v. Stocks & Holdings (Canberra) Ltd, at 199; Paino v. Hofbauer (1988) 13 NSWLR 193, at 199-200, per Clarke, J.A.; and Spies v. Commonwealth Bank of Australia (1991) 24 NSWLR 691.
[29]Sheller, J.A. in Logwon Pty Ltd v. Warringah Shire Council (1993) 33 NSWLR 13, at 30, Kirby, P. and Powell, J.A. agreeing, held that whilst it was convenient to try the issue in a fresh proceeding it was not obligatory and that it was not inappropriate that the application to set aside a consent order on the ground that the agreement was vitiated by mistake had been determined by a judge upon motion in the same proceeding, rather than by way of fresh proceedings. Sheller, J.A. held that the procedural question was not, however, significant in that case. In any event, the appeal decision concerned an application to set aside judgment which had been heard in a superior court. The judge from whom the appeal was brought had heard evidence and made findings of fact as to the question of mistake concerning the compromise agreement. In the present case the factual question of absence of authority has not been tried and could be determined only by way of a fresh proceeding, one in which State Trustees was a party.
That this application is misconceived is emphasised by the fact that the complaints which the applicant seeks to raise concerning the entry of the judgment are directed not at St Vincent’s and its advisers, but against State Trustees, who are not parties to this proceeding or appeal, and from whom we have heard no evidence or submissions. Although Mr McVey seeks to agitate the question whether State Trustees acted beyond power and in breach of s.49, that question can not be resolved by us.
Whether s.49 imposed the obligation on State Trustees for which Mr McVey contends and whether he has a right to challenge the authority of State Trustees to compromise his action are matters that were not the subject of any substantive submissions before us. Whatever be the correct legal position on those questions, the questions of fact surrounding the decision of State Trustees to reach the compromise agreement are not capable of being addressed on appeal from the decision of Judge Shelton. They are issues that would fall for determination on a trial of that question to which State Trustees was party.
These considerations combine to emphasise the fact that on the material before us (including the “fresh evidence”) Mr McVey has no remedy against St Vincent’s with respect to setting aside the compromise agreement, and even if he had then the questions of fact and law could only be addressed by fresh proceedings, not by attempting to set aside the perfected judgment in the proceeding which had been dismissed.
Finally, I note that in his supplementary submissions, Mr McVey referred us to various authorities dealing with the principle of rescission ab initio of contracts. Those authorities have no application to the revocation of the order under the statutory scheme which governs the agreement in this case.
Conclusion
In my view, it is plain that the proposed appeal must fail. Any remedy which the applicant has would be against State Trustees, not St Vincent’s. Accordingly
there could be no purpose in granting leave to appeal out of time. That application should be refused.
I return to the question of the “fresh evidence”.
The vast bulk of the evidence, even if “fresh”, is irrelevant to the application before us. Having examined all of the material I am quite satisfied that it could not have led to a successful appeal against the order of Judge Shelton even if leave to appeal had been granted and all of that material had been admitted on the appeal as fresh evidence.
The application to rely on that material should be refused, save that the transcript of the VCAT proceeding on 19 July 2004, the copies of the orders made at VCAT by Member Dudycz on 8 June 2004, and by Senior Member Scott on 19 July 2004, together with the medical report of Mr John Jagoda, dated 31 May 2004 should each be received as fresh evidence on this application.
Finally, I make it clear that nothing I have said should be taken as suggesting that I am encouraging the applicant to issue fresh proceedings, whether against State Trustees or anyone else. Nor am I to be taken as suggesting that were he to bring such proceedings he would have reasonable prospects of success in them. Those questions do not require resolution by us and we have not been called upon to address the legal or factual issues which might be relevant to any such proceedings.
In my opinion, the oral application for leave to appeal out of time should be dismissed.
ASHLEY, J.A.:
I agree with Eames, J.A. that the appeal purportedly commenced by Notice of Appeal filed 1 July 2004 was incompetent. I also agree with his Honour that Mr McVey should be permitted to rely upon certain “fresh evidence” and that his informal application for leave to appeal out of time should be refused.
HOLLINGWORTH, A.J.A.:
I agree that the applicant’s notice of appeal dated 1 July 2004 is void, and that leave to appeal out of time should be refused, for the reasons put forward by Eames, J.A. I also agree with the order his Honour proposes in relation to the receipt by this court of fresh evidence.
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