National Australia Bank v Appleby & Ors No. Scgrg-98-415 Judgment No. S328

[1999] SASC 328

NATIONAL AUSTRALIA BANK  V  APPLEBY AND ORS

[1999] SASC 328

1. JUDGE BURLEY.     The plaintiff brought an application for immediate relief (SCR 25.02) to recover monies said to be due under a guarantee.  That application was heard by me and it was successful.  Judgment was entered against all of the defendants.  The third and fifth defendants have appealed from that decision.  I shall refer to them as “the defendants”.  They have also sought to have the judgment (entered on 20 January 1999) set aside.  They rely upon SCR 84.12 which is as follows:-

   “The Court may vary or set aside a judgment or order at any time if the justice of the case so requires.”

2. The appeal has not yet been heard.  The defendants wish to have the judgment set aside so that they may, in turn, advance defences by way of amendment which, it was submitted, were not raised on the application for immediate relief.  The defendants do not, on the application, seek to disturb the conclusion reached in the judgment on the immediate relief application.  It was conceded that those conclusions could only be reviewed on the appeal referred to above.  However, by way of amendment, they seek to add further grounds of defence.

3. During the course of argument I raised with Mr Wells QC, counsel for the defendants, the difficulties which I then had with accepting his argument.  I refer to the transcript (31 et seq):-

   “MR WELLS:  Let’s explore the options, the possibilities, and see where the injustice is if you like, or where the procedural inconsistencies might arise.  If we are successful in this application, and we are allowed to plead these additional defences, they are existing on appeal, and that appeal and the subject of that appeal wouldn’t be altered by the revocation of the judgment here because the order that you would replace it with would effectively confirm immediate relief to the plaintiff in respect to the defences that were pleaded about which there have been argument and the appeal would then be in relation to those grounds of defence.  And we would be, at the same time, in possession of other grounds of events which your Honour has ruled, subject to appeal, are arguable and should be allowed to proceed to trial.  That’s the first consequence, and it’s certainly the consequence we’d contemplate would follow your Honour acceding to our application.

   HIS HONOUR:  Is there not a problem that if I set aside the judgment against which you have appealed, there is nothing that you can go to the appellate court on, because I have set it aside.  There is no determination by me that exists that you could take to the Full Court and say ‘You have to do something about this’.  There are only conclusions that certain defences are not available to you.

   MR WELLS:That’s why I am saying effectively what would result from this would be a variation.  Your Honour says the mechanics would be revocation and the replacement of that with an order which would have the effect of giving us leave to defend on those grounds but not on the grounds your Honour has otherwise -

   HIS HONOUR:  Yes, you don’t want me to revoke the judgment, sorry -

   MR WELLS:We are only seeking a revocation to the extent that it bars us from raising these additional defences.

   HIS HONOUR:  I don’t know that you can do that.

   MR WELLS:Let me accept for the moment that the only way that you see that that can be done would be by revoking the whole judgment and replacing it with another one and then your Honour says: What are you appealing from?  Our submission is, in the end, that is, with great respect, simply a matter of form.  The fact of the matter is that we would be in a position to amend our Notice of Appeal and seek leave to amend our Notice of Appeal so that it was identifying the judgment that had replaced the one that we had initially appealed from.  It wouldn’t, in substance, affect our ability to appeal at all, and indeed what we would do is, we wouldn’t seek to do anything before appearing before the Full Court.  And if our opposition stood up before the Full Court and said ‘This is an incompetent appeal’ our answer would be ‘In form, that’s correct” but because of the revocation and the fresh judgment, the ruling remains as it was and we will simply seek leave to amend our Notice of Appeal so that it constitutes an appeal from the replacing order not from the revoked one.

   HIS HONOUR:  Let’s say you get from me an order saying ‘I revoke the judgment and I substitute for it a determination that grounds A, B and C raised in the defence, as it then was, is not available to the defendants, but grounds D, E and F are, having been now raised before me’, and I give leave to amend accordingly, go through all of that procedure.  Then the reality of your appeal to the Full Court would be, from my determination now, that I varied the original order by substituting a determination that some grounds of your defence are bad and some are good.  Therefore wouldn’t the appeal arise from - in order to test whether or not my confirmation of what I previously determined - wouldn’t you need to appeal from the order that I make?

   MR WELLS:Ultimately that would have to be the position.

   HIS HONOUR:  It wouldn’t be an appeal from the original order, it would be an appeal.

   MR WELLS:From your fresh order.

   HIS HONOUR:  That means - and I am looking at the implications of all of this - that if you do obtain from me the sort of order that we have just discussed, then the appeal that presently is pending before the Full Court is incompetent.

   MR WELLS:Unless it’s amended.  But we would face that position.  If it were incompetent and it were capable of being amended it wouldn’t be incompetent.

   HIS HONOUR:  I dare say you are not particularly concerned.

   MR WELLS:Obviously from the defendant’s [sic]  point of view they are anxious to pursue the defences available to them and a decision will have to be made as to what the defendant’s [sic] best course of action should be in the event your Honour acceded to this application.  I ought to make it clear that, strictly, our position ought to be, if it is to involve a revocation of the judgment and the replacement of the order, of a fresh order, our position here ought to be we are seeking a revocation which will allow us to plead and go to trial on all defences.  Accepting, as we do, that your Honour has ruled on some of them already and that your Honour would propose, if you otherwise acceded to our application, to confirm that position and any fresh order.  That would leave us in a position where we were still opposed to the terms of that order and would then be able to prosecute it by way of appeal by amending the Notice of Appeal or by fresh appeal.”

4. As I have said, the defendants rely upon SCR 84.12.  I can think of no other basis upon which the original judgment might be set aside.  Prior to SCR 84.12, judgments could be altered under the slip rule, if that applied, or an action could have been take to set aside the judgment if it had been obtained by fraud.  Neither of those alternatives apply to this case and so, if I am to accede to the defendants’ application, it must be on the basis that SCR 84.12 enables a discretion to be exercised in favour of the defendants.

5. The cases on the rule are set out at paragraph 84.12.1 of Civil Procedure.  The rule may apply to judgments which have been sealed: Hutchinson v Myer Stores Ltd, an unreported decision of Bollen J, delivered on 21 December 1995, Judgment No S5389.  It may be used, in civil matters, as an alternative to an appeal: Collins v State of SA, an unreported decision of Olsson J, delivered on 20 November 1998, Judgment No S6960.  It may be used to set aside a summary judgment regularly obtained under SCR 25: Commonwealth Bank v Forshaw (1990) 158 LSJS 197. It may in rare and exceptional cases apply to a judgment regularly entered after a trial: Copping v ANZ and McCaughan Ltd, an unreported decision of the South Australian Full Court, delivered on 21 March 1997, Judgment No S5995.

6. If the rule is to be applied on this application, the effect of the rule will modify the concept that there must be finality in litigation.  In particular, it will modify the approach to be taken where, as in this case, litigants at a trial or summary hearing fail to raise points available to them, and face the prospect of not being permitted to raise them on appeal.  If it were otherwise, the simple answer to the defendants’ application would be: seek the leave of the appellate court to raise the new matters.

7. The defendants wish to raise new defences.  For the purposes of this application, I will assume that they are arguable defences.  A judgment stands in their way.  If it is set aside without qualification, the appeal they have instituted from it will fall away.  The defendants will be free to apply to amend or the Court would, on this two-fold application, be free to determine whether or not the amendments should be allowed.  More importantly, if there is no qualification to the setting aside of the judgment, the defendants will be able, at trial, to pursue the original grounds of defence.  The defendants do not seek to achieve this result.  They “concede” that I cannot reverse the effect of the original judgment which is that the grounds of defence set out in the defence at the hearing of the immediate relief application were not made out.  But, I am asked to reverse that part of the judgment which determines that the plaintiff is entitled to recover the debt under the guarantee.  I do not think it is procedurally open to the Court to do so under SCR 84.12 or any other rule.

8. There are, as I have said, two aspects to the judgment which the defendants seek to set aside: first, a determination that money is recoverable under the guarantee from the defendants; and, second, that the defendants have failed to raise a ground of defence.  Those two aspects are reflected in the judgment which is to the effect that the plaintiff recover from the defendants a specified monetary sum.  If proper grounds are disclosed, the judgment may be set aside on the application, but if it is, it is set aside for all purposes.  In my view it is only the appellate Court which may dissect the judgment into its component parts and disallow some and leave others standing.  This is so even where an application under SCR 84.12 takes the place of an appeal because, in my view, it may only legitimately be so used where, if an appeal had been pursued, it would not have been necessary for the appellate Court to dissect the judgment.

9. Policy considerations dictate such a result.  The ability to reopen a case is limited.  In McAdam v Robertson (1999) 202 LSJS 280 (Full Court), Doyle CJ, with whom the other members of the Court agreed, referred to the policy that there should be finality in litigation. I think the Chief Justice’s remarks are applicable to this case. He said (at 288):

   “There is a strong public interest in the finality of litigation.  Once a stage in the process of litigation has been completed, ordinarily it should not be revisited.  Our system of adversary litigation, with the obligation that it imposes upon the parties to present their whole case and to present their best case, would begin to collapse if courts too readily entertained applications to reopen decisions given after a full hearing.  The power can be exercised if some important principle of law has been overlooked, or if there is an apparent misapprehension as to a significant fact, but this is to be distinguished from enabling the party to attempt to persuade a court that it should change its view of a matter that it has considered and decided.”

10. The Chief Justice referred to “a full hearing”.  Mr Wells suggested that an application for immediate relief did not give rise to a full hearing.  This is true in the sense that a summary hearing is not a trial, but the “fullness” of the hearing has, as one of its components, the opportunity to advance grounds of defence.  This is common to both a trial and to a summary hearing.  In fact, on the hearing of an application for immediate relief, the defendant does not have to establish, in a final way, a ground of defence.  It is sufficient if the ground is found to be arguable: Settlement Wine Co Pty Ltd v National and General Insurance Co Ltd (1998) 146 LSJS 150. To that extent, the summary hearing is more favourable to the defendant. I therefore see no material point of distinction, for the purposes of this application, between a trial and a summary hearing.

11. The Chief Justice also referred to the exercise of the power “if some important principle of law has been overlooked ...”.  In this case, the defendants failed to advance defences which might otherwise be available to them, but that is not the same as the Court overlooking an important principle of law in determining the issues raised on the application.  There has been no suggestion, on this application at least, that on the hearing of the immediate relief application, the Court overlooked any important principle of law before arriving at the conclusion which was reached.  Nor has it been suggested that there was any “apparent misapprehension as to a significant fact”.

12. For the above reasons, I have come to the conclusion that SCR 84.12 does not enable the Court to set aside the judgment the subject of this application in the manner contended for by the defendants.  The ordinary construction of the rule when combined with the policy as to finality in litigation precludes the interpretation of the rule advanced by the defendants on this application.  The application must be dismissed.  I will hear the parties as to costs.