Teoh v Hunters Hill Council (No 5)

[2012] NSWCA 75

Court of Appeal

Supreme Court

New South Wales

Medium Neutral Citation:

Teoh v Hunters Hill Council (No 5) [2012] NSWCA 75

Hearing dates:

On the papers

Decision date:

12 April 2012

Before:

Allsop P, Beazley JA, Handley AJA

Decision:

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Notice of motion of 1 November 2011 is summarily dismissed.

[Note: The Uniform Civil Procedure Rules 2005 provide (Rule 36.11) that unless the Court otherwise orders, a judgment or order is taken to be entered when it is recorded in the Court's computerised court record system. Setting aside and variation of judgments or orders is dealt with by Rules 36.15, 36.16, 36.17 and 36.18. Parties should in particular note the time limit of fourteen days in Rule 36.16.]

Catchwords:

PRACTICE & PROCEDURE - abuse of process - fourth application for leave to appeal - no change of circumstances or fresh argument - application summarily dismissed.
PRACTICE & PROCEDURE - judgment procured by fraud - application to set aside to be brought in separate proceedings.
FRAUD - judgments & orders - application to set aside for fraud - to be brought in separate proceedings.

Legislation Cited:

Land and Environment Court Rules 1980
Uniform Civil Procedure Rules

Cases Cited:

Ainsworth v Wilding [1896] 1 Ch 673
George M Adams v Waverley Council [1999] NSWLEC 7
Hip Foong Hong v H Neotia & Co [1918] AC 888, 894
Jonesco v Beard [1930] AC 298
Kinch v Walcott [1929] AC 482, 494
Kuwait Airways Corp v Iraqi Airways Co [2001] 1 WLR 429
Logwon Pty Ltd v Warringah Shire Council (1993) 33 NSWLR 13
McDonald v McDonald [1965] HCA 45, 113 CLR 529
Michales v Dimoveski [2007] NSWLEC 443
Permanent Trustee Co (Canberra) Ltd v Stocks & Holdings (Canberra) Pty Ltd (1976) 15 ACTR 45
Perpetual Trustees Australia Ltd v Heperu Pty Ltd (No 2) [2009] NSWCA 387, 78 NSWLR 190
Spies v Commonwealth (1991) 24 NSWLR 691
Teoh v Hunters Hill Council [2009] NSWLEC 121, 167 LGERA 432
Wollongong City Council v Falamaki [2010] NSWLEC 66

Category:

Principal judgment

Parties:

Applicant: Elaine Teoh

Representation:

Applicant in Person
Applicant in Person

File Number(s):

CA 09/298486

 Decision under appeal 

Before:

Allsop P, Beazley JA and Handley AJA

File Number(s):

CA 09/298486

HEADNOTE

[This headnote is not to be read as part of the judgment]

A fourth application for leave to appeal from an interlocutory judgment of the Land and Environment Court refusing to set aside perfected final orders in a Class 4 case was dismissed in Chambers on the papers as an abuse of process.

Judgment

1. THE COURT: This is the fourth application by Mrs Teoh for leave to appeal from the interlocutory judgment of Sheahan J in Teoh v Hunters Hill Council [2009] NSWLEC 121, 167 LGERA 432 (Sheahan J No 2). Her previous applications were dismissed on 10 March 2010, 25 November 2010, and 18 October 2011.

1. On the last occasion of the Court, as presently constituted, foreseeing the possibility of a fourth application, made the following order:

"(2) The Registrar is directed, should the applicant file a further motion seeking, in substance, leave to appeal from the judgment of Sheahan J of 16 September 2009 [2009] NSWLEC 121, to promptly vacate the return date, notify the parties, and refer the papers to a Judge nominated by the President to determine, in Chambers, whether the Court should fix a new return date and notify the parties, or whether Mrs Teoh should be invited to show cause in writing why the Court should not, in Chambers, summarily dismiss the proceedings as vexatious and an abuse of process. "

1. Mrs Teoh wasted no time in making her fourth application which was filed on 1 November 2011.

1. Her motion was based on UCPR Pt 36 r 36.16(1) and sought to reopen this Court's decision of 18 October 2011. Its ultimate purpose was to have the judgment in Sheahan J No 2 reversed on appeal and the judgment in Sheahan J No 1 of 16 September 2008 [2008] NSWLEC 263 set aside under UCPR Pt 36 r 36.15(1).

1. The notice of motion of seven pages set out the basis of the application and it was supported by a five-page affidavit. The Registrar, acting on the Court's orders of 18 October 2011, referred the papers to a Judge and vacated the return date. On 1 February 2012 he gave notice to Mrs Teoh pursuant to order 2 of 18 October 2011, calling on her to show cause in writing why her notice of motion should not be summarily dismissed. Her written submissions of 28 pages and attachments were received on 5 March 2012. Some amendments were received on 12 March.

1. The Court decided, in the interest of finality, that the matter should be considered and determined by the Court as presently constituted.

1. The grounds in the notice of motion include (1) the Court erred in finding that fraud had not been raised, (2) in holding, for various reasons (2), (3), (4), (7)(i), (ii), (iii), that fraud could not be considered, and (3) the Court's inherent jurisdiction in exceptional cases was engaged.

1. Many of these grounds canvassed issues which were or should have been raised in Sheahan J No 1 which has never been directly challenged. These included (3)(b)(i), (ii) sharp practice, incompetence of counsel, collusion in the first hearing, and procedural default, (3)(b)(iii) wrongful exclusion of evidence, (4) excluded information about the method used to determine shadowing; (5) false evidence, (6)(a) insufficient attention to material facts, (6)(b) apprehended bias of Sheahan J and erroneous findings.

1. The submissions about the case in fraud depended on the statement in [8] of the judgment of Handley AJA of 18 October 2011 that "Her claim based on fraud was not pursued" in Sheahan J No 2, repeated in [27].

1. A perfected judgment, which cannot otherwise be challenged, may be set aside on proof that it was obtained by fraud.

1. It has long been established that "the convenient practice" where a judgment is attacked for fraud is for that claim to be brought in a new action, and not by motion: Ainsworth v Wilding [1896] 1 Ch 673, and Kinch v Walcott [1929] AC 482, 494. In Hip Foong Hong v H Neotia & Co [1918] AC 888, 894, this was said to be "the better course".

1. In Jonesco v Beard [1930] AC 298, 300 it was said to be "the proper method". In McDonald v McDonald [1965] HCA 45, 113 CLR 529, 533 Barwick CJ said "A separate proceeding is clearly the preferable course".

1. If proceedings are brought by motion any objection should be taken at an early stage: Ainsworth v Wilding (above) at [679].

1. In Jonesco v Beard (above) at 301 Lord Buckmaster, who gave the principal speech, said:

"If ... for any special reason departure from the established practice is permitted, the necessity for stating the particulars of the fraud and the burden of proof are no whit abated and all the strict rules of evidence apply."

1. In Spies v Commonwealth (1991) 24 NSWLR 691, where the Court directed that separate proceedings be brought to set aside a consent judgment for fraud, Handley JA said at p 700, after a review of the cases, with the concurrence of Mahoney and Clarke JJA, that "a departure from the practice should not be allowed except in the simplest of cases."

1. In Kuwait Airways Corp v Iraqi Airways Co [2001] 1 WLR 429, 434 Lord Slynn, who gave the principal speech, approved the established practice and directed that proceedings to vary a judgment of the House of Lords alleged to be tainted by fraud at the trial, should be brought in separate proceedings (at p 434). The facts were complex and this was the suitable and convenient course.

1. Mrs Teoh alleged fraud in her notices of motion of 20 March and 27 March 2009 (167 LGERA 432 [8]) which came before Biscoe J on 27 March. He told Mrs Teoh that if she wished to proceed with an allegation of fraud it had to be properly pleaded and probably should be the subject of separate proceedings. The transcript records Mrs Teoh accepting this position (Ibid [12]). Both notices of motion were then dismissed.

1. On 4 May 2009 she filed a further notice of motion supported by her affidavit of the same date in which she said that she was not seeking an order based on fraud (Ibid [20]). Her points of claim filed on 5 June 2009 said nothing about fraud, but when the hearing commenced before Sheahan J on 14 July she filed, by leave, and over objection, an amended notice of motion which included a claim in fraud (ibid [20]). Her amended points of claim filed by leave the same day did not plead and particularise that claim (ibid [22]).

1. Since the claim had not been pleaded and particularised it should not have been entertained. Mrs Teoh told Sheahan J that her only evidence of fraud was circumstantial (ibid [66]). The Judge found that her allegations were thin or half-hearted (ibid [67]), and concluded that fraud was not made out (ibid [110]). This was tantamount to summary dismissal. If the Judge had found there was some basis for the claim he would have had to direct pleadings and give the respondents a fair opportunity to answer the claim.

1. Fraud was not raised in Mrs Teoh's written or oral arguments before this Court on 10 November 2010 or 25 July 2011. This partly explains the statements in [8] and [27] of the reasons of Handley AJA of 18 October 2011 that the claim was not pursued.

1. The fact is that Mrs Teoh did not effectively pursue this claim which was never pleaded or particularised, or argued in her second and third applications although by then it would have been too late anyway.

1. Mrs Teoh submitted (submissions 5 March pp 11-13, paras 23-26) that the Land and Environment Court could set aside a judgment for fraud in proceedings commenced by notice of motion. She cited in support decisions of Lloyd J in George M Adams v Waverley Council [1999] NSWLEC 7 (Adams), Pain J in Michales v Dimoveski [2007] NSWLEC 443 (Michales), and Craig J in Wollongong City Council v Falamaki [2010] NSWLEC 66 (Falamaki).

1. She also relied on the judgments of Sheller JA in Logwon Pty Ltd v Warringah Shire Council (1993) 33 NSWLR 13 (Logwon) and of Brennan J in Permanent Trustee Co (Canberra) Ltd v Stocks & Holdings (Canberra) Pty Ltd (1976) 15 ACTR 45. In Logwon Sheller JA said at p 30 that "the commencement of separate proceedings is a procedure of convenience". It does not appear that the respondents objected to the procedure, promptly or at all.

1. In the ACT case Brennan J supported the established practice saying (at p 48): "When a litigant has a right to set aside the judgment on the ground of fraud ... the fraud must be alleged in a fresh action brought to try the issue."

1. Part 13 r 7 of the Land and Environment Court Rules 1980, added in 1991, considered in Logwon (ibid at 30), gave the Court power to set aside or vary an order obtained by fraud. Part 15 r 9(c) of the 1996 Rules conferred the same power.

1. In Logwon this Court upheld the dismissal of a motion to set aside consent orders for mistake. In Adams Lloyd J found fraud and set aside an order on a motion under Pt 15 r 9(c) of the Rules. In Michales a motion under that rule to set aside orders for fraud was dismissed [39], [55] without prejudice to fresh proceedings based on the fraud [55].

1. This power in the Rules of the Land and Environment Court was not incorporated in the Uniform Civil Procedure Rules.

1. The decision of Craig J in Falamaki does not assist Mrs Teoh because the motion under UCPR Pt 36 r 15(1) based on fraud [30], [39], [81], [114] was summarily dismissed [126].

1. Thus the only case where relief based on fraud was granted was Adams where the motion was based on the 1996 Rules.

1. The facts in the present case are complex and the only suitable and convenient course, as Biscoe J recognised, was for any application to set aside the judgment in Sheahan J No 1 for fraud to be brought and pleaded in separate proceedings.

1. In any event, as Lord Buckmaster said in Jonesco v Beard (above) at p 301, if proceedings by a motion are entertained there is still "the necessity for stating the particulars of the fraud".

1. In these circumstances the errors in paras [8] and [27] of the reasons of Handley AJA of 18 October 2011 were not material. This Court could not possibly find on the present material that the judgment in Sheahan J No 1 was procured by fraud.

1. Nothing filed in support of this motion discloses any other basis for reopening our judgment of 18 October 2011. There is no evidence of any change of circumstances and no fresh argument. Nor does the material disclose a basis for concluding that the orders in Sheahan J No 1 were given, made or entered "irregularly, illegally or against good faith" within UCPR Pt 36 r 36.15(1).

1. As the Court held in Perpetual Trustees Australia Ltd v Heperu Pty Ltd (No 2) [2009] NSWCA 387, 78 NSWLR 190 [17] that rule has only limited application to judgments and orders made after a hearing on the merits at which the parties were fully heard. The focus of the rule, as the Court then said [16], is on the orders, not the merits of the decision, or irregularity etc in other steps in the proceedings.

1. There is no reason to doubt the correctness of the decision of this Court of 18 October 2011 or the decision in Sheahan J No 2 that the requirements of UCPR Pt 36 r 36.15(1) had not been established in relation to the judgment and orders in Sheahan J No 1.

1. The final orders in Sheehan J No 1 have been perfected and the Land and Environment Court has no power, on the grounds alleged, to set them aside under its inherent jurisdiction. On any appeal this Court would have no greater power.

1. The notice of motion of 1 November 2011 is therefore an abuse of process and must be summarily dismissed. Lest there be any misunderstanding we make it clear that Order (2) made by this Court on 18 October 2011 remains in force.

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Decision last updated: 12 April 2012