Ridout v O'Brien

Case [2004] WASC 137

JURISDICTION     :   SUPREME COURT OF WESTERN AUSTRALIA

IN CHAMBERS

CITATION:   RIDOUT & ANOR -v- O'BRIEN & ORS [2004] WASC 137

CORAM:   MASTER NEWNES

HEARD:   23 APRIL 2004

DELIVERED          :   23 JUNE 2004

FILE NO/S:   CIV 2493 of 2003

BETWEEN:   PETER ALLAN RIDOUT

CHRISTOPHER JOHN RIDOUT (as Executors of the Estate of the late GEORGE EDWARD RIDOUT)
Plaintiffs

AND

GREGORY MICHAEL O'BRIEN
First Defendant

COMMONWEALTH BANK OF AUSTRALIA
Second Defendant

CORRS CHAMBERS WESTGARTH
Third Defendant

CAROLINE BROWN
Fourth Defendant

ALEX McLEAN
Fifth Defendant

FERRIER HODGSON
Sixth Defendant

PHILLIP RUNDELL
Seventh Defendant

SHERIFF OF WESTERN AUSTRALIA
Eighth Defendant

PRICEWATERHOUSECOOPERS
Ninth Defendant

Catchwords:

Practice and procedure - Application to strike out plaintiffs' claim - Claim that prior judgment obtained by fraud - Relevant principles - Whether facts relied on to establish fraud must not have been discoverable by reasonable diligence before the trial - Turns on own facts

Legislation:

Nil

Result:

Plaintiffs' action dismissed

Category:    B

Representation:

Counsel:

Plaintiffs:     Mr S J Brown

First Defendant             :     No appearance

Second Defendant         :     Mr A J McLean

Third Defendant           :     No appearance

Fourth Defendant          :     No appearance

Fifth Defendant            :     No appearance

Sixth Defendant            :     No appearance

Seventh Defendant        :     No appearance

Eighth Defendant          :     No appearance

Ninth Defendant           :     No appearance

Solicitors:

Plaintiffs:     In person

First Defendant             :     No appearance

Second Defendant         :     Corrs Chambers Westgarth

Third Defendant           :     No appearance

Fourth Defendant          :     No appearance

Fifth Defendant            :     No appearance

Sixth Defendant            :     No appearance

Seventh Defendant        :     No appearance

Eighth Defendant          :     No appearance

Ninth Defendant           :     No appearance

Case(s) referred to in judgment(s):

Bourke v Beneficial Finance Corporation Ltd (1993) 47 FCR 264

Cabassi v Vila (1940) 64 CLR 130

Commonwealth Bank of Australia v Ridout Nominees Pty Ltd & Ors [2000] WASC 37

Hip Foong Hong v H Neotia & Company [1918] AC 888

Johns v Cosgrove (2002) 1 Qd R 57

Jonesco v Beard [1930] AC 298

McCann v Parsons (1954) 93 CLR 418

McDonald v McDonald (1965) 113 CLR 529

McHarg v Woods Radio [1948] VLR 496

Monroe Schneider Associates (Inc) v No 1 Raverem Pty Ltd (No 2) (1992) 37 FCR 234

Nicholls v Carpenter (1974) 1 NSWLR 369

Owens Bank Ltd v Bracco [1992] 2 AC 443

Owens Bank Ltd v Etoile Commerciale SA (1995) 1 WLR 44

Spies v Commonwealth Bank (1991) 24 NSWLR 691

Toubia v Schwenke (2002) 54 NSWLR 46

Wentworth v Rogers (No 5) (1986) 6 NSWLR 534

Case(s) also cited:

Blair & Perpetual Trustee Co Ltd v Curran (Adams' Will) (1939) 62 CLR 464

Burton v Shire of Bairnsdale (1908) 7 CLR 76

Dart v Norwich Union Life Australia Ltd [2002] FCA 168

Foss v Harbottle (1843) 2 Hare 461

General Steel Industry Inc v Commissioner for Railways (NSW) (1964) 112 CLR 125

Gould v Vaggelas (1985) CLR 215

Haines v Australian Broadcasting Corp (1995) 43 NSWLR 404

Port of Melbourne Authority v Anshun Pty Ltd (1981) 147 CLR 589

Prudential Assurance Co Ltd v Newman Industries Ltd (No 2) [1982]…

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AGLC
Ridout v O'Brien [2004] WASC 137
Case
[2004] WASC 137
Decision Date

CaseChat Overview and Summary

In the case of Ridout v O'Brien, the court addressed an application to strike out a plaintiff's claim that a prior judgment was obtained by fraud. The dispute centred on the conditions under which a judgment could be set aside due to alleged fraud, particularly focusing on whether the fraud was discoverable through reasonable diligence before the original trial. The court was tasked with determining the specific requirements for establishing fraud in such contexts, particularly the necessity for fresh evidence that was not available at the time of the original judgment.

The legal issues before the court included whether the facts relied upon to establish fraud must have been undiscoverable by reasonable diligence prior to the original trial, and if the fraud alleged was sufficient to warrant setting aside the judgment regardless of the availability of fresh evidence. The court considered various authorities on the matter, including the decisions in Bourke v Beneficial Finance Corporation Ltd, Monroe Schneider Associates (Inc) v No 1 Raverem Pty Ltd (No 2), Hip Foong Hong v H Neotia & Company, Cabassi v Vila, and McDonald v McDonald. It examined the principles established in these cases regarding the setting aside of judgments due to fraud, the need for fresh evidence that was not ascertainable at the time of the original trial, and the strict proof required to substantiate fraud claims.

The court concluded that while a party could bring an action to set aside a judgment obtained by fraud, the fraud must be established by strict proof. The fraud must be sufficiently material and supported by fresh evidence that could not have been discovered with reasonable diligence before the original judgment was rendered. The court emphasised the importance of finality in litigation and noted that mere suspicion of fraud, based on facts discovered post-trial, was insufficient to warrant relief. The plaintiff needed to demonstrate that the new evidence was both well-supported and material enough to reasonably alter the outcome of the action.

The court ruled that the plaintiffs' claim could proceed, but only if they could substantiate their allegations of fraud with evidence that was not discoverable through reasonable diligence prior to the original trial. This decision underscored the necessity for precise and clear particularisation of fraud allegations, supported by strict proof, to successfully challenge a prior judgment on grounds of fraud.

Orders

Orders of the court

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Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

The Bank contended that none of the essential elements required for an action of this nature existed in this case. It submitted that in a claim of this nature the fraud alleged must be proved by fresh evidence which was not available, and could not have been discovered with reasonable diligence, before the judgment was delivered and it must be so material that its production at the trial would probably have affected the outcome. Counsel referred to Bourke v Beneficial Finance Corporation Ltd (1993) 47 FCR 264 and Monroe Schneider Associates (Inc) v No 1 Raverem Pty Ltd (No 2) (1992) 37 FCR 234. It was submitted that where the charge consists of perjury, the fresh evidence must be so strong that it would reasonably be expected to be decisive at a rehearing and, if unanswered, must have that result. The plaintiffs accepted that in respect of perjury, the Court must be satisfied that the evidence sought to be adduced was not able to be ascertained at the time of the trial and, if proved, it would have altered the result. I would note in passing that in Cabassi v Vila (1940) 64 CLR 130, Williams J said, at 147 ‑ 8: "I have been unable to find any case in which a judgment has been set aside where the only fraud alleged was that the defendant or some witness or witnesses alone or in concert had committed perjury. In fact the court has said that except in very exceptional cases perjury is not a sufficient ground for setting aside a judgment." The plaintiffs contended that, on the other hand, where it is sought to set aside a judgment for fraud, if fraud is proved and it was relevant to the issues in the action, the original judgment can be set aside regardless of whether or not there is fresh evidence which could not reasonably have been discovered before the original trial. The plaintiffs' counsel referred to Hip Foong Hong v H Neotia & Company [1918] AC 888, Cabassi v Vila (supra) and McDonald v McDonald (1965) 113 CLR 529 in support of that proposition. It is clearly established that a party who claims that an adverse judgment was obtained by the fraud of the other party can bring an action to set aside that judgment. The appropriate procedure is to bring a new action: Jonesco v Beard [1930] AC 298; McDonald v McDonald (supra). In such an action, the fraud complained of is put in issue and that fraud only: McHarg v Woods Radio [1948] VLR 496. It is not necessary in order to obtain a new trial to establish all the elements of an action for damages. It is enough to establish affirmatively that the earlier action was tainted by fraud: McDonald v McDonald (supra), Nicholls v Carpenter (1974) 1 NSWLR 369. But, as in all actions based on fraud, particulars of the alleged fraud must be stated with specificity and clarity: Spies v Commonwealth Bank (1991) 24 NSWLR 691; McHarg v Woods Radio Pty Ltd (supra), and the allegation must be established by the strict proof which such a charge requires: Jonesco v Beard (supra); Wentworth v Rogers (No 5) (1986) 6 NSWLR 534 per Kirby P at 538. Mere suspicion of fraud, raised by fresh facts later discovered, will not be sufficient to secure relief. The plaintiff must show that the new facts are so evidenced and so material that it is reasonably probable that the action will succeed. This rule is founded in the public interest in the finality of litigation: Wentworth v Rogers (No 5) (supra) per Kirby P at 538 ‑ 9.