Clone Pty Ltd v Players Pty Ltd (In Liquidation) (Receivers & Managers Appointed) & Ors [2017] HCATrans 260 (13 December 2017)

Last Updated: 13 December 2017

[2017] HCATrans 260

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
Adelaide No A22 of 2017

B e t w e e n -

CLONE PTY LTD

Appellant

and

PLAYERS PTY LTD (IN LIQUIDATION) (RECEIVERS & MANAGERS APPOINTED) (ACN 056 340 884)

First Respondent

GREGORY MICHAEL GRIFFIN

Second Respondent

DARREN JOHN CAHILL

Third Respondent

CHRISTOPHER STEPHEN McDERMOTT

Fourth Respondent

LIQUOR & GAMBLING COMMISSIONER

Fifth Respondent

ATTORNEY-GENERAL OF SOUTH AUSTRALIA

Sixth Respondent

Office of the Registry
Adelaide No A23 of 2017

B e t w e e n -

CLONE PTY LTD (ACN 060 208 602)

Appellant

and

PLAYERS PTY LTD (IN LIQUIDATION) (RECEIVERS & MANAGERS APPOINTED) (ACN 056 340 884)

First Respondent

GREGORY MICHAEL GRIFFIN

Second Respondent

DARREN JOHN CAHILL

Third Respondent

CHRISTOPHER STEPHEN McDERMOTT

Fourth Respondent

LIQUOR & GAMBLING COMMISSIONER

Fifth Respondent

ATTORNEY-GENERAL OF SOUTH AUSTRALIA

Sixth Respondent

KIEFEL CJ
GAGELER J
KEANE J
GORDON J
EDELMAN J

TRANSCRIPT OF PROCEEDINGS

AT CANBERRA ON WEDNESDAY, 13 DECEMBER 2017, AT 10.17 AM

Copyright in the High Court of Australia

____________________

MR B.C. ROBERTS, SC: May it please the Court, I appear with my learned friend, MR R. BONIG, for the appellant. (instructed by Finlaysons Lawyers)

MR A.S. BELL, SC: May it please the Court, I appear with my learned friend, MR P. ZAPPIA, QC, for the first to fourth respondents. (instructed by Griffins Lawyers)

MR C.D. BLEBY, SC, Solicitor-General for the State of South Australia: May it please the Court, I appear with my learned friend, MR B.L. GARNAUT, for the sixth respondent. (instructed by the Crown Solicitor (SA))

KIEFEL CJ: Yes, Mr Roberts.

MR ROBERTS: May it please the Court. The majority of the Full Court erred in setting aside a perfected judgment on the basis of malpractice within the meaning of Quade without any finding of fraud and without applying the principles relevant to the equitable jurisdiction.

KIEFEL CJ: Could I interrupt you at this early point just for points of clarification about the notice of appeal? The fraud there referred to in ground 2 is fraud in equity, which I would assume to mean that species of conduct - a range of conduct which comes under the umbrella of fraud as recognised by equity. Is that what you are referring to in ground 2?

MR ROBERTS: No, your Honour. The fraud for the purpose of the exclusively equitable jurisdiction has developed as requiring actual or red-blooded fraud, and that is the fraud that we submit is required for a setting aside of a perfected judgment in the exclusively equitable jurisdiction.

KIEFEL CJ: Even if it did not require actual fraud, as you call it – what do you mean by “actual fraud”? Perhaps we should reflect on that.

MR ROBERTS: Conscious dishonesty.

KIEFEL CJ: Conscious dishonesty. I see. I take it from ground 3.4 that it has to be conduct which is material in the sense that it affects the outcome.

MR ROBERTS: That is our submission, yes.

KIEFEL CJ: Well, regardless of how you characterise the fraud, it is your ground that the finding of malpractice in the sense of a kind of unprofessional recklessness does not rise to the required level in equity.

MR ROBERTS: That is so. It requires some elaboration which I will attend to in due course in relation to recklessness. Recklessness as used by the trial judge and as adopted by the Full Court was a species of departure from a standard of care whereas, in our respectful submission, recklessness in the sense in which it is used in this area of discourse requires relevantly an appreciation of a relevant risk and a running of the relevant risk, that is, it is dishonesty in a usual Derry v Peek sense.

KIEFEL CJ: Yes, all right, I have interrupted you now. I will let you get back to where you were.

MR ROBERTS: If the Court pleases. Your Honours, in respect of the first ground of appeal, I propose to address what I submit is the correct test and then move into the course of trial because your Honours will see that there are some disputes as to the course of the relevant trial and why it is that I submit that the findings of the Full Court relevantly erred in formulation of the test and do not meet the relevant standard in equity.

The test to be applied in the equitable jurisdiction, we submit, did not arise in Quade because Quade was not considering an application to set aside a perfected judgment. Rather, Quade addressed the test to be applied on an application for a new trial on appeal and the appellate system, in our respectful submission, provides the principal qualification to the general principle that controversies once quelled cannot be reopened and in that context, that appellate context that was before the court in Quade, different considerations applied.

GORDON J: Is it right that in Justice Hargrave’s judgment at paragraph 81 that the matter was conducted by agreement that Quade was the governing authority at first instance?

MR ROBERTS: Not completely. I will take your Honours to the relevant material shortly. The pleaded case of my client was that fraud was required and that the jurisdiction was not invoked by a reference to Quade-style malpractice. The case was opened in writing on that basis and the question as to whether fraud was required was identified by Justice Hargrave as being, relevantly, my client’s position and counsel for Players in the course of opening submitted that fraud was wrong and that it was in fact only malpractice that was required.

There was a concession by my client in its closing submissions that Quade was the relevant test but at the same time the Attorney-General was appearing throughout, by leave, under the Crown Proceedings Act and throughout the Attorney-General submitted that as a matter of law there was an insufficient attraction of the jurisdiction unless one reached fraudulent conduct.

The Attorney-General was submitting that in the context of the inherent jurisdiction relevantly governing matters as distinct from solely an equitable jurisdiction. The Attorney-General now concedes to the contrary following the decision in NH but, relevantly, species of dishonest conduct was what was required according to the Crown’s submissions.

So, in my submission, the trial was conducted itself prior to closing submissions on the basis that fraud would be required and, even when one reached closing submissions, as Justice Hargrave’s decision goes on to consider in the paragraphs following paragraph 81 that Justice Gordon is referring to, his Honour then went on to deal with the Crown’s argument that a different test applied because it was not the appellate jurisdiction but instead an application to set aside a perfected judgment.

Can I invite your Honours to take up the decision in Quade, which is case 5 on the Attorney-General’s list. Your Honours would be familiar with the decision as being a failure to make discovery by the respondent – the appellant on appeal, I should say - that was unexplained. At page 139 about point 7 the Court there articulated what was before the Court, where they described it in these terms:

Accordingly, we will confine our consideration of the appeal at this stage to the question of what is the appropriate approach (or “test”) to be adopted by an appellate court for determining whether a new trial should be ordered when documents which should have been discovered were not discovered by the successful party.

This was an appeal, a regular appeal, under section 24 of the Federal Court Act. At the foot of page 139, the Court identifies there the general circumstance applying where it is mere “fresh evidence” from the decision of Justice Dixon in Orr v Holmes and your Honours will see in the quote the reference to putting to one side a case:

where a trial has miscarried through misdirection, misreception of evidence, wrongful rejection of evidence or other error and if cases of surprise, malpractice or fraud –

In each of those instances, in our respectful submission, Justice Dixon is referring to identification of error being sufficient to set aside a common law verdict as distinct from in any of those instances identifying relevantly a jurisdiction in equity, that is the compendious expression “surprise, malpractice or fraud” is relevantly addressing a consideration on appeal for setting aside a verdict.

That is significant, in our respectful submission, because the question of the scope of the equitable jurisdiction has, in our learned friends’ submissions, extended to surprise or malpractice. In our submission, the Court will find the compendious expression as only having been used in the context of an appeal.

At the top of page 141, about point 2 on the page, the Court refers to a case of failure to comply with a discovery order coming within the category of a case of malpractice:

and be a stronger case than the category of “cases of surprise”, which were both expressly exempted from the above statement of what we have referred to as the “general” rule.

“Surprise” in that context has been used by the Court as something less than “malpractice” – relevantly, a form of denial of procedural fairness which had and was recognised as a basis of – or a ground of appeal and a new trial on appeal in cases such as Thomas v The Crown and in that context, again, is addressing cases of surprise in the context of a statutory appeal.

Finally, in this decision, at page 142, the Court will see in the final paragraph on that page what we submit is ultimately the question in this area of discourse – whether it be the appellate test or, indeed, the equitable test – that the misconduct:

has had the result that relevant evidence in his possession has remained undisclosed until after the verdict.

That becomes what is a significant factor, in our submission, in respect of the second ground of appeal. I make that submission because it is relevantly a concurrent finding that the particular file of the Commissioner was produced to the solicitors for both parties and was inspected by both parties, but Justice Hargrave relevantly excused the inspection by the unsuccessful Players parties as being a junior lawyer inspecting the file for a different purpose and thus excusing his failure to relevantly identify that the document was within the file that was so being inspected.

In my submission, the entry of orders, including following appeal, is the formal act that concludes the disposition of proceedings. That is well accepted. The policy rationale for the importance attached to the perfection of orders is again well established. Can I invite your Honours to the decision of Burrell v The Queen, which is case 2 on the Attorney’s list. At paragraph 15 of the report the Court remarked of the fundamental principles about finality and the reference:

That tenet finds reflection in rules concerning the bringing of an action to set aside a final judgment on the ground that it was procured by fraud and in doctrines of res judicata and issue estoppel.

In relation to the reference to the ground that a judgment was set aside because it was procured by fraud, the Court there referred to DJL v Central Authority. That reference, in our respectful submission, to fraud being the exception to finality in respect of a perfected order has been a formula routinely adopted by the Court, not only in DJL v Central Authority but additionally in Gamser at page 154, in D’Orta-Ekenaike at paragraph 34, in SZFDE, at 16; and in NH at paragraph 99.

So, it is routinely a formula of setting aside a perfected judgment on grounds that it was procured by fraud rather than any compendious expression, for example, of “fraud, malpractice and surprise” and, indeed, in DJL, in the very paragraph following that footnoted in Burrell, the Court at paragraph 38 stated the relevant qualifications as earlier considered, namely, the appellate jurisdiction or the equitable jurisdiction to set aside for fraud were otherwise, subject to those exceptions, the position was that in Bailey v Marinoff, namely that the order of the court was “beyond recall”.

EDELMAN J: What do you say is meant by “procured by fraud”? Does that import a causal connection and if so, is it any causal connection or does the causal connection have to go to the heart of the jurisdiction?

MR ROBERTS: My submission is that it does import a causal connection. That is apparent from such cases as Chief Justice Barwick in McDonald but, in my submission it does require a causal connection. As to the extent of the causal connection it must be sufficiently material, in my respectful submission, to make it probable that had that evidence of being relevantly available or not distorted that a result would have been different at first instance. At paragraph 16, the - - -

EDELMAN J: Would that apply even in cases of perjury then?

MR ROBERTS: It applies, in my submission, with greater force in cases of perjury, perjury being a recognised exception to setting aside a judgment for fraud because of the policy consideration inherent in differing witnesses having a different account of events and necessarily in that circumstance, one only of those witnesses telling the truth, at least in a material number of cases and the policy recognised that to permit allegations of perjury to be run as a ground to set aside a judgment would give rise to a risk of a plethora of applications.

So it is part of the reason why, in the Gordon requirements that I will turn to, the perjury has been regarded as being a special case requiring a higher degree of cogency of the evidence. It is also, I think, evident in Justice Williams’ decision in Cabassi v Vila that relevantly there is a higher degree of cogency required where it is perjury.

EDELMAN J: Sorry, just one final point then. That means then in your ground 2 that the Chief Justice was raising with you that your reference to it being limited to fraud is really a reference to it being limited to judgments that are procured by fraud in the sense that you have just explained.

MR ROBERTS: Yes.

EDELMAN J: Right.

MR ROBERTS: If the Court pleases. In paragraph 16, the Court explained the significance of finality and as one of the relevant grounds why finality is an important principle of law, the court describes:

the sharpest spur to all participants in the judicial process . . . to get it right the first time.

That, in our respectful submission, is an important consideration when one comes to the due diligence requirement that arises in ground 2 of the appeal. At paragraphs 18 and 20, the Court identifies the significance of perfection of the orders as not being a matter of mere form but rather that after the orders have been relevantly perfected, that is the watershed marking both the conclusion of the litigation in the court and providing conclusive certainty about the result.

So, in our respectful submission, the dichotomy between the appellate process that was being considered in Quade and the equitable jurisdiction once orders have been perfected has a sound basis in both principle and in policy. After perfection of orders, the court’s inherent power is limited by the general principle of finality.

The Court recently addressed that matter in NH and can I, in that context, turn to what is, in my submission, a recognised distinction in principle between the appellate jurisdiction and that of a perfected judgment. The difference was relevantly identified by the Chief Justice in McCann v Parsons which is case 10 on the Attorney-General’s list.

At the foot of page 425 of the report – this is a decision in the appellate context where it was a consideration as to whether there was both fresh evidence and fresh evidence amounting to fraud for the purpose of an appeal. I am sorry, I think I indicated this was in the judgment of the Chief Justice; it is in the judgment of the plurality. At the foot of page 425 there is a reference to the opinion of Lord Buckmaster in Jonesco v Beard and the reference to the fraud jurisdiction to set aside or impeach a completed judgment. At the top of page 426 the Court remarked that:

This passage is misconstrued if it is regarded as applicable to such a case as the present. In the first place it relates to a completed judgment, not to a verdict already subject to a pending new trial motion.

That, in our respectful submission, is a sound distinction in principle, recognising that the appellate principles are different from those applying in respect of a perfected judgment. In our respectful submission there is a principle basis for the distinction. It is not merely the recognition of the importance of finality once orders are perfected but, moreover, equity has a longstanding jurisdiction to set aside a perfected judgment and it is an exercise of original jurisdiction rather than appellate jurisdiction.

The original bill, rather than a bill of review, is part of an original jurisdiction where equity will redress fraud. By contrast, rights of appeal against common law verdicts are a creature of statute. In our respectful submission, one does not import into a jurisdiction that is equitable in nature and origin principles that are developed outside of equity other than by a coherent development of the law and one that commences with the conceptual foundation for the equitable jurisdiction.

Significantly, as to why there ought be a difference in approach between the appellate jurisdiction and the equitable jurisdiction, the equitable jurisdiction is liable to be exercised by courts which are coordinate or, indeed, inferior to the court’s orders that are sought to be impugned. It is the very nature of it being a fresh action rather than an appellate action and that, in our respectful submission, militates in favour of a different and higher test that it is outside of appellate review and potentially involves a single judge setting aside orders that have potentially been to an ultimate Court of Appeal.

GORDON J: Is that not also what - the corollary of that is the point made in Jonesco v Beard that because it is an original action the particulars of the allegation of the fraud must be given with such specificity that they are able to be identified clearly because the allegation has to be proved strictly?

MR ROBERTS: Yes, in our respectful submission. It is the recognition that it is a focus in the original equitable jurisdiction upon the fraud itself rather than a consideration akin to fresh evidence as to the supplement to the original trial process. It is a distinctly different process than one conducted on appeal. In our submission, it is for that reason that the broader equitable jurisdiction permitting a bill of review is subsumed within and rendered otiose by the appellate structure.

That is the subject, in our respectful submission, of the decision In re St Nazaire Co (1879) 12 Ch D 88 at pages 96 and 97, and relevantly endorsed in our submission by the Court in DJL v Central Authority at paragraphs 35 to 38. In respect of the original bill, as I have submitted, that has survived because that was an exercise of an original jurisdiction to relieve against fraud and that is the subject of remarks in Cabassi v Vila and in McDonald v McDonald to that effect.

Your Honours, while there are differing standards of fraud in equity, the fraud relied upon, in our submission, to set aside a perfected judgment must be actual fraud involving conscious and deliberate dishonesty. I have, in my outline of argument, referred to decisions in Ireland and Hong Kong in respect of which prior notice had not been given and insofar as my learned friend is embarrassed by that I draw the Court’s attention to that.

The position in the United Kingdom, in our respectful submission, commenced relevantly from the decision in Patch v Ward which is case 7 on our list, which was a case in the equitable jurisdiction pre-Judicature Act, addressing a non-disclosure by the solicitor for the second mortgagee who had taken an assignment of each of the relevant mortgages which rendered an affidavit that he had sworn regarding the receipt of rents potentially misleading.

So there was a question of a misleading affidavit and a non-disclosure by the solicitor of the assignment. Lord Cairns at page 206 of the report observes that this was an application to set aside a perfected judgment in equity and at the foot of page 206 his Honour addresses:

what is meant and what must be meant by fraud, when it is said that you may impeach a decree signed and enrolled on the ground of fraud.

His Honour says at the top of page 207 the fraud must be:

actual fraud, such that there is on the part of the person chargeable with it the malus animus, the mala mens putting itself in motion and acting in order to take an undue advantage of some other person for the purpose of actually and knowingly defrauding him.

Likewise, at pages 212 and 213 in the judgment of Sir John Rolt, at the foot of page 212 about point 9 his Honour holds that:

the fraud must be actual positive fraud, a meditated and intentional contrivance to keep the parties and the Court in ignorance of the real facts of the case, and obtaining that decree by that contrivance. Mere constructive fraud –

is insufficient. Now, that position - - -

EDELMAN J: That was not being stated as an absolute proposition. It could not have been, could it, because there was long-established jurisdiction, for example, in cases - perfected judgments brought ex parte or perfected judgments for the benefit of infants or people under disabilities where things that are far less than fraud were sufficient.

MR ROBERTS: Yes, I accept that. What his Honour is there dealing with, in my respectful submission, is the test to be applied in ordinary inter partes litigation. There is, as your Honour Justice Edelman observes, an exception that has always been regarded in respect of ex parte hearings and, relevantly, cases where there is a fiduciary relationship – for example, a compromise involving an infant – where, in that limited circumstance, the antecedent compromise that is then to receive the sanction of the Court, is capable of being set aside for reasons of equitable fraud. But, in cases where the application is to set aside a trial conducted between two adversaries, common law fraud is the test there advanced and the test thereafter followed.

The subsequent restatement of the test is found in my submission in The Ampthill Peerage decision which is case 11 on my list. This was a decision where the House of Lords were addressing the question of fraud for the purpose of the Legitimacy Declaration Act but, in the course of addressing what would suffice for fraud for the purpose of the Legitimacy Declaration Act, addressed the question of what would be sufficient fraud for the purpose of setting aside the perfected judgment.

At page 570 of the report in the judgment of Lord Wilberforce, about point H of the page, continuing to page 571, point C of the page, Lord Wilberforce described the requirement to set aside a perfected judgment as requiring fraud in a strict legal sense requiring conscious and deliberate dishonesty. Then, likewise, in the judgment of Lord Simon of Glaisdale at page 590, commencing at point H and extending to 591, point C. The consideration of the meaning of the statute was advanced by reference to what is required to set aside a perfected judgment in law and his Honour at point B on page 591 says:

To impeach a judgment on the ground of fraud it must be proved that the court was deceived into giving the impugned judgment by means of a false case known to be false or not believed to be true or made recklessly without any knowledge on the subject.

That is the emergence of the concept of recklessness for the purpose of Justice Hargrave’s decision. It is phrase being used in the context of actual dishonesty and it means there, in a Derry v Peek sense, whether the statement was made without care whether it was true or false. In the case of a failure to make discovery where only actual fraud will suffice, in our submission, it requires either an intentional failure or a failure which is designed or calculated ignorance. It is not mere carelessness.

The position of the New Zealand Supreme Court recently stated is that in the decision of Redcliffe which is case 13 on my list. At paragraph 29 of the judgment - this is - - -

KIEFEL CJ: That is Commissioner of Inland Revenue v Redcliffe Forestry Venture [2012] NZSC 94; [2013] 1 NZLR 804.

MR ROBERTS: My apologies, Chief Justice. This is a decision where the contention was that the Commissioner of Taxation ran a case knowingly in circumstances where the Tax Act provided to the contrary and that was said to be relevant fraud capable of setting aside a perfected judgment. At paragraph [29] the New Zealand court unanimously remarked that:

In cases brought under the fraud exception, only fraud in the strict legal sense will suffice -

relying upon Lord Wilberforce’s words in The Ampthill Peerage. Significant to ground 2, at paragraph [33] the court describes, commencing at line 35, the requirement for due diligence and materiality. In respect of due diligence the court described the test as being:

Evidence that was available at the time of trial, and could reasonably then have been adduced, will only be considered in special circumstances.

So, that is a slightly watered-down version from the position pertaining in the United Kingdom which requires it as a jurisdictional requirement. Here, it is a limited exception where the want of due diligence will otherwise be fatal to the application other than in special circumstances. At paragraph [43] is a concept that I return to in the context of ground – I am sorry, it is paragraph [42] – a concept I return to which is that that I raised in the context of Quade that the relevant consideration is whether evidence was relevantly denied to the unsuccessful party. In that context, the court noted that:

where the fraud exception to finality is properly invoked, the party challenging the judgment will be able to show that his or her ability to mount an effective case was compromised by the fraudulent conduct of the other party. It is this consideration which provides the rationale for not insisting on finality. But this rationale is not applicable in the present context. The subpart –

that is the relevant provision of the Act:

was there to be seen in the legislation and was thus inherently incapable of concealment.

So, in our respectful submission, the focus of the relevant fraudulent conduct must be upon whether it has in fact denied the relevant evidence to the unsuccessful party.

Finally, can I refer the Court to the decision, case 10 on my list, which is a current statement, in my submission, of the position in the United Kingdom. It is Takhar v Gracefield Developments Ltd [2017] 3 WLR 853. The requirement for conscious dishonesty is relevantly stated by the court at paragraph 24 by reference to the statement of position in Royal Bank of Scotland v Highland Financial Partners requiring “conscious and deliberate dishonesty” and relevantly describing what is required for materiality in the United Kingdom as being “an operative cause of the court’s decision” – addressing the causation requirement I think that your Honour Justice Edelman raised with me – in that:

it must be shown that the fresh evidence would have entirely changed the way in which the first court approached and came to its decision.

On the question of due diligence, while I am in this decision, at paragraph 54 the court there described - - -

KIEFEL CJ: How is due diligence relevant in the context of this case?

MR ROBERTS: In the second ground of appeal, the findings both of Justice Hargrave and upheld on appeal were that the solicitors for the unsuccessful Players parties failed to exercise due diligence, that had they have exercised due diligence the finding of Justice Hargrave is that the relevant document would have been found and therefore they were relevantly deprived of the relevant evidence by reason of the multiplicity of, on the one hand, the malpractice as found and, on the other hand, the Players parties’ own failure to exercise due diligence in searching out and bringing that evidence to bear at trial.

EDELMAN J: This authority that you are taking us to on the due diligence point acknowledges that the position in England is different from the position in Australia, at paragraph 49.

MR ROBERTS: It postulates the position that the decision of the New South Wales Court of Appeal in Toubia v Schwenke is to contrary effect, which it is. My submission is that Toubia v Schwenke is contrary to the decision in Monroe Schneider and the position in Toubia v Schwenke is wrong. But your Honour, with respect, is quite right, that it is postulating that there is an inconsistency between the Australian position in Toubia and that adopted in the United Kingdom.

EDELMAN J: You are also submitting that we should reject the approach of Justice Brennan in Gould v Vaggelas?

MR ROBERTS: My submission is that the principles applicable in the tort of deceit are not applicable because of what has been described in SZFDE, which I will take the Court to momentarily, as being particular practices that are developed in the context of an application to set aside a perfected judgment, in recognition that the aphorism that fraud unravels all is not universally true and not true in the context of an application to set aside a perfected judgment.

GAGELER J: Does paragraph 24 of Takhar in the quotation from Royal Bank of Scotland really sum up the entirety of your legal case?

MR ROBERTS: In relation to the matters other than due diligence, we would submit that that statement of principle in paragraph 24 of Takhar is a correct statement of the principle. Does that answer your Honour’s question?

GAGELER J: I think so.

MR ROBERTS: Can I then submit that equitable jurisdiction should, as a matter of policy, be confined to actual fraud. There is no policy reason, in our submission, for a relaxation of equity’s insistence upon actual fraud. The principles of finality are as important in the present-day environment, with demands on the justice system, as they have ever been. In our submission, actual dishonesty provides both a justifiable exception of finality and a clear test that provides certainty to the exception.

The question of surprise has been raised in the respondents’ submissions. My submission is that surprise has never been recognised as a basis to set aside a perfected judgment in the equitable jurisdiction outside of circumstances pertaining to the enrolment of the decree itself, that is, when the decree was enrolled early or enrolled in circumstances that were misleading. That provided the basis in equity, but there is no reported decision where there has ever been a case of surprise being used to set aside a perfected judgment.

EDELMAN J: What about the foreclosure cases, the foreclosure cases where the applicant submits and proves to the Court that the applicant is able to put the respondent in exactly the same position as the respondent would have been if the error had not been made?

MR ROBERTS: Surprise, I do submit, has a continuing role in equity including in the circumstance that your Honour Justice Edelman is raising with me. Relief against forfeiture generally involves still a survival of surprise but my submission is that surprise as a basis to set aside a perfected judgment has never been itself recognised.

EDELMAN J: Even in the order for foreclosure cases?

MR ROBERTS: The very nature of the foreclosure is that, in my submission, it is not relevantly going behind the order. It is recognising a separate equity that permits the recognition of the property rights. So, it is not undermining the judgment in any sense that undermines finality, in my submission.

In Monroe Schneider the court observed that there was a question mark as to whether - or the court, in fact, referred to it as remaining unsettled as to whether surprise had survived, referred in that context to an article by L.A. Sheridan and that Sheridan article itself refers to there never having been any reported instance of an application for setting aside a perfected judgment for surprise.

But, as a matter of policy, in my submission, is that the existence of such a jurisdiction would be inconsistent with the historical insistence by courts of equity upon actual fraud. Irrespective, no case of surprise is advanced in this cause. It is not a pleaded case. It is not a case that is sought now to be advanced. The only case that has ever been sought to be advanced is one of malpractice within the meaning of Quade.

To that end, can I take the Court to the way in which the case was developed on the pleadings. Your Honours will find in the appeal book 1 at page 36 is the appellant’s points of claim where at paragraph 59 it is alleged that the conduct of my client through its legal advisers amounted to malpractice of the kind identified in Quade. There is no fraud case there identified.

In response, in the points of defence at page 74 of appeal book 1, your Honours will find at paragraph 27.2, following a denial of the relevant malpractice, a denial of the application of Quade principles and a pleading that:

Quade does not address the test for setting aside a perfected judgment following trial and appeal but rather considers the powers of a court on appeal –

at 27.3 a denial of the jurisdiction to set aside the orders on the basis of the matters alleged, in paragraph 29 a broader or more generalist denial of any jurisdiction to grant the relief on the grounds pleaded.

Our learned friends have made reference to how the case was conducted and I have provided your Honours with some short extracts of some transcript at trial and the submissions at trial. I understand my learned friend may have opposition to the Court receiving reference to those submissions. In my submission, when my learned friend is making positive submissions as to how the case was, in fact, advanced and, relevantly, referring to transcript, it is appropriate that the Court have reference to the record below. Can I submit that the Clone’s written opening at trial – which your Honours will find behind tab 1 – at - - -

GORDON J: Could you just explain to me what the proposition is that you ultimately make or submission you ultimately make when we get to the end of these materials?

MR ROBERTS: Two matters. The first is that the trial itself was conducted on the parties having joined issue that malpractice was insufficient because equitable fraud was required.

GORDON J: Yes.

MR ROBERTS: And, relevantly, when it is submitted that, in effect, we should be foreclosed from advancing the submissions we are advancing because of the manner in which the trial was conducted, the trial was conducted throughout on the basis that fraud was required.

GORDON J: I see.

MR ROBERTS: The second matter is that the Attorney-General throughout was submitting that actual dishonesty was required and, therefore, the suggestion that findings of dishonesty have not been made by reference to the manner in which the case was conducted is wrong, in our submission.

GORDON J: Thank you.

KIEFEL CJ: The point you made earlier was that a concession was made in closing submissions.

MR ROBERTS: There was a concession made by my client that Quade was, relevantly, the test but never by the Attorney-General. And, the Attorney-General, having intervened on the question of law, made it a live issue at trial as to whether the test was as the Attorney-General submitted.

KIEFEL CJ: How did the concession come about?

MR ROBERTS: In the closing argument, and it is in the written closing where Quade has conceded that the compendious expression, “fraud, malpractice or surprise” was sufficient to invoke the jurisdiction. It was, as the Full Court observed, a concession that was wrongly made.

Behind tab 1, in the written opening of Clone at trial, your Honours will find in the last page behind that tab at 59, 60 and 62 a denial of jurisdiction based on anything less than fraud. During the course of the plaintiff’s oral opening at page 7 of the transcript – and this is behind tab 2 – commencing at line 29, Justice Hargrave remarked to counsel for Players:

The case against you seems to be that you have to establish fraud. Given the state that this case has got to, I think that’s what’s said in the written outline of opening by Clone.

Players, through Mr O’Bryan, submitted:

It is, we submit it’s wrong in law, wrong. Quade is the test we submit, it’s not fraud.

So the parties had relevantly joined issue for the purpose of the trial that fraud was required on Clone’s case and on Players case it was malpractice within the meaning of Quade. Then when Mr O’Bryan came to close the plaintiff’s case – that is, Players case – at trial, he made explicit that there was no aspect of his case involving actual dishonesty – no aspect of his case extending beyond an objective standard, meaning malpractice within Quade. That is found behind tab 3. At page 889, commencing at line 6, Mr O’Bryan submitted:

We’re not submitting that it’s deliberate in the sense that there was or that there is evidence today of malice of forethought –

At page 897, so three pages on, commencing at line 17, addressing my client’s written outline of closing - - -

GORDON J: Sorry, what page was this?

MR ROBERTS: Page 897 - - -

GORDON J: Thank you.

MR ROBERTS: - - - commencing at line 17, addressing my client’s outline of opening:

Paragraph 16 again treats the matter as though it is a matter of mens rea. Your Honour will see in para.16 the words ‘consciousness’ . . . ‘state of mind’. They’re all irrelevant we submit. The test is an objective test. It doesn’t depend upon any mens rea on the part of the individuals. The question is: as a result of what occurred has there taken in the round been an abuse of process of the sort which we complain of in this case.

Then, at page 908, the following page of the book, commencing at line 14, Mr O’Bryan made explicit that:

moral turpitude is not the relevant test –

Now, throughout the proceeding, the Attorney-General’s case was that set out in its closing, which is found behind the fourth tab, and at paragraph 13 the first instance decision at Redcliffe, which adopted the test from The Ampthill Peerage, was referred to as requiring “actual dishonesty” and, at paragraph 14 the extract from The Ampthill Peerage as requiring actual dishonesty.

At paragraph 16 a reference to a requirement for “the deliberate suppression of material facts” and a requirement for “a mental element of intention or recklessness”. Then, at paragraph 42, having addressed the inherent jurisdiction as an alternative to the equitable jurisdiction, it concludes:

regardless of the specific source of the power to . . . such non-fraudulent malpractice, is insufficient to invoke the power.

That, relevantly, sounds in the analysis by Justice Hargrave between paragraphs 79 and 89 as to the test where his Honour is relevantly addressing the test that was advanced by the Attorney-General. So, in our respectful submission, the case that is now sought to be advanced by my client and contended for by the Attorney on appeal was a case that was fairly open from the manner of the conduct of the trial.

No findings of fraud or conscious dishonesty were made. In my submission, that was inevitably so in a case where it was not being advanced by Players. The trial judge could not, in my respectful submission, properly make a finding of fraud when it was not pleaded and when it was not being put to witnesses that there was conscious dishonesty or relevant recklessness within the context of the dishonesty requirements of recklessness in a Derry v Peek sense. Instead, the findings of the primary judge addressed the departure from the standard of care and not any sense of designed or calculated ignorance.

Can I give your Honours a short contextual matter as to the finding of the malpractice findings. The question was, at first instance, an issue of a non-discovery of a third copy of an agreement. I will provide your Honours with the reference to where that agreement is. It is in appeal book 1, on page 126, where your Honours will find in clause 11(i) a marking on the word “NIL” and extending to the left into the word “for”. That is the question that is being advanced; that is, the non-disclosure of this iteration of the agreement in circumstances where the two discovered copies, P9 and D9 are found respectively at pages 107 and 117, each with a like mark on the word “NIL” or at least on the letters N and I of the word “NIL”.

The so-called discovery dispensation order is found at page 139 of the appeal book and is order 10. That order provides from the master:

On the understanding that the 5th and 6th defts –

that is, the Liquor Licensing Court and the Licensing Commissioner:

will make available to the other parties their files . . . I dispense with the need for them to comply –

with the order earlier made for verified discovery. So the issue was the question of whether my client, through its counsel and solicitors, engaged in malpractice by the failure to discover a file that was produced to both the plaintiff and defendant camps and inspected by both but where, as I submitted, Justice Hargrave excused the Players parties for not relevantly appreciating the significance of it on the basis that it was a junior lawyer inspecting for a limited purpose. That is paragraph 273 of Justice Hargrave’s remarks.

In terms of the findings of Quade-style malpractice made by Justice Hargrave at paragraph 178, his Honour deals with the discovery dispensation order and the fact that that, in his Honour’s view, gave an actual and immediate ability to inspect – that made it within Clone’s power on his Honour’s finding. That was overturned on appeal but instead the Full Court found it was within Clone’s custody.

At 183, his Honour makes a finding that is significant, we submit, which is that the practitioners each considered a further copy of the document to be irrelevant – a mere further copy. That evidence is not rejected. On the contrary, at 183 his Honour makes explicit that he is not rejecting that evidence as untruthful but regards it as being unreasonable “to the extent of recklessness”.

Now, unreasonable “to the extent of recklessness”, in our submission, is to conflate two distinctly different concepts. Unreasonableness can never reach the heights of recklessness. It can stand as objective evidence from which dishonesty might be inferred but his Honour makes no such finding. On the contrary, what his Honour does is to equate a gross standard of unreasonableness as being recklessness and being sufficient for the purpose of malpractice.

At paragraphs 186 to 190 his Honour’s description of Mr McNamara SC for my client was that Mr McNamara did not give any thought to the question of whether there was an obligation to inform the other party; that is the antithesis of the consciousness required for a dishonesty finding. At 191 there is a finding that he shut his eyes to any possibility that it might be relevant but that is not in context a dishonesty finding.

I have referred in case 14 to a very recent decision of the Full Court of the Federal Court in Sullivan v Trilogy Funds Management Limited [2017] FCAFC 153 where at paragraph 311 the Court was considering a finding of “wilful blindness” made by the relevant directors where a case of dishonesty was not being run and the Court there recognised that:

deliberately ignoring factual information which a person knows may be material to a decision, is akin to fraud –

explains why that is so, that it involves “designed or calculated ignorance”. At 312, the judge was not required to decide wilful blindness in the sense of dishonesty, like in the case at Bar when there was no dishonesty case being run. At 316 and 317, a finding that the relevant director:

turned a blind eye to issues and discrepancies is consistent with a high degree of carelessness: it does not necessarily imply designed or calculated ignorance -

and, therefore, fell within rubric of carelessness, rather than rubric of wilful blindness for the purpose of fraud. We submit that is how these findings are to be construed.

Relevantly at paragraph 192, his Honour dealt with the junior counsel and the solicitor to the effect that they did not give “proper consideration” as to discovery. That is a failing in a standard care. At 200, considered whether junior counsel in fact engaged in deliberate conduct and finds that he did not and uses the term “recklessness” in contradistinction and, in our respectful submission, is there indicating a failing in standard of care rather than a form of dishonesty that recklessness would in the relevant area of discourse convey.

At 203, his Honour having found that the solicitor engaged in “reckless” conduct finds that she ought to have considered the question of discoverability without just delegating that to counsel and that is necessarily a finding of a failing in a standard of care and at 204 the finding is that the:

legal team ought to have appreciated the potential significance of the –

agreement and the failure to consider the question “was reckless”. Necessarily, that is again the antithesis of a finding that there was a calculated indifference, they failed to relevantly consider at all. At 240, his Honour finds that the actions of each of the:

practitioners fell far short of the standard to be far short of the conduct to be expected of prudent legal practitioners –

that is, a measure of standard of care, and, finally, at 291, in a different context; that is the failure of the Players parties to have exercised due diligence, his Honour described that failing as being:

an error of judgment in the context of a trial, but not reckless.

Now, his Honour self-evidently, we would submit, is not there finding that there was any form of conscious dishonesty by the Players parties when his Honour is drawing the distinction between an error of judgment and recklessness. His Honour is extending the degree of failing from the standard of care. The majority of the Full Court likewise did not consider any question of conscious dishonesty. The test applied by Justice Blue is that at paragraphs 322 and 323. There his Honour held that, in effect, the Full Court was misled and it is therefore:

reasonably possible that the result of the appeal might have been different –

on appeal, and therefore the greater strictures that might otherwise apply in equity ought not be applied in a form of exercise of discretion and he thus applied Quade in the equitable jurisdiction, at paragraph 323. Now that, in our respectful submission, is to entirely misapply equitable principle. The starting point was to apply equitable principle and not a broader invocation to a form of discretion to do a broader form of justice.

At paragraph 388, his Honour explains that further and explains relevantly that had the Full Court not have been misled, therefore, a form of malpractice might have been available as a contention and therefore there should not be any stricter test applicable in equity.

EDELMAN J: There was no application to the Full Court to reopen or to set aside the orders of the earlier Full Court, was there?

MR ROBERTS: Does your Honour mean the findings of the Gray, Blue and Stanley Full Court that in the interlocutory stages addressed matters?

EDELMAN J: Sorry, no application to the Full Court to set aside the orders that had previously been made by the Full Court that is alleged to have been misled.

MR ROBERTS: Yes, implicitly there were. There was an application by the Players parties to set aside at first instance both the orders of Justice Vanstone at trial and also the orders as varied by the Full Court.

EDELMAN J: I see.

MR ROBERTS: It is appeal book 1, page 40, I am told.

EDELMAN J: Thank you.

MR ROBERTS: The submission we advance is that the position postulated by Justice Blue at paragraph 388 is wrong. The equitable jurisdiction needed to be applied according to its own principles and not in some ambulatory approach according to whether a Full Court had been misled. It is wrong in logic because the equitable jurisdiction is only ever invoked if it can be found or held that the court, including following perfection of judgment following appeal, has laboured under a misapprehension, whether that be that the trial judge was misled and the error did not come to the attention of the first Full Court, or the Full Court itself was misled.

In either event, the equitable jurisdiction is being invoked to set aside a perfected order and there is no basis in logic for applying a test that would otherwise have applied on appeal. In relation to authority to the contrary, Justice Aickin in Gamser addressed the prospect that a Full Court may have been misled and relevantly held that the approach would apply in the same way as if it was a single judge that had been misled.

The approach of Justice Stanley is – I am sorry, before I leave Justice Blue, can I just foreshadow this? Paragraphs 389 and 390 are both wrong, in our respectful submission, when it comes to the ground 2 considerations. At 389 his Honour found that the question of a want of diligence is:

of a different nature and a different order of magnitude to malpractice.

It is to pose the wrong question, in our submission. The question is whether it is a justifiable exception to finality and not whether the relevant malpractice or fraud was more serious than a failure to exercise diligence; by definition it must be.

At 391, his Honour finds relevantly that, unless there was this different approach that he has adopted and advocated relevantly for the first time, that Quade-type principles can be applied in equity, the applications based on mere fresh evidence would be applied differently, but that is to presuppose that there is any basis for an application in equity based on mere fresh evidence. That would be a bill of review. So his Honour relevantly has assumed that a bill of review would be open. It is simply flawed reasoning, in our respectful submission.

At paragraph 392, his Honour poses his materiality test which requires that any standard above “that it cannot have affected the outcome” is sufficient, which is wrong, in our submission, and moreover he imposes for the first time in any jurisprudence that I have been able to locate, an onus on my client to prove that matter rather than this being the ordinary legal onus to be borne by the applicant. Justice Stanley addresses matters in paragraph 437 in relation to the test. In paragraph 437, he, like Justice Blue, found that:

Clone should be permitted to argue on appeal –

certain aspects inconsistent with the contentions regarding the concession about Quade. At 438, in that context, his Honour finds:

The Quade principles do not apply as such to the court’s application in its equitable jurisdiction –

That is in the last two lines of 438. What is intended by that is unclear. With respect, they do not apply at all. At 439, his Honour finds that the test is that in three appellate decisions of this Court and that in Toubia v Schwenke, which was the New South Wales Court of Appeal addressing section 66 of the Motor Vehicles Act. None of those involve at all consideration of the equitable jurisdiction. At paragraph 440, his Honour finds that it is sufficient that there be:

serious misconduct or malpractice amounting to fraud or analogous to fraud.

His Honour then addresses various formulations of the test, largely taken from appeal cases, and his use of the reference to “misconduct or malpractice” relevantly masks the issue of dishonesty inherent within fraud. At 441, his Honour finds:

For the reasons set out above, I consider the . . . misleading submissions . . . constitute malpractice that is analogous to fraud.

But the misleading submissions were only ever addressed in a context of the objective nature of the submissions. At 455, at about line 20 of the page, he says:

The issue of the degree of culpability of Clone must be decided objectively.

That, in our respectful submission, has led him into error. At 459 to 463, his Honour, much like Justice Blue, addresses a hypothetical “if the Full Court had not been misled”, and at 470 postulates a conclusion that the Full Court applying Quade would have ordered a new trial. That, in our respectful submission, is not a consideration that properly arises in the equitable jurisdiction.

At 472, his Honour, having found that Quade was not the relevant test and that the relevant test was that in McDonald and in McCann v Parsons, then nonetheless finds that the judge did not err in the exercise of a discretion where it applied an entirely different test. With respect, it follows axiomatically that if the test has been wrongly applied one cannot say that the discretion has been properly exercised. Justice Debelle, dissenting at paragraphs 704 and 711, found that Quade was the test.

In relation to the malpractice from discovery, at 186 to 197, Justice Blue addressed really recklessness in much the same way as the primary judge did which is that there was relevantly a failure to make or to properly consider the question of discovery but at 186 Justice Blue refers to that in the context of the parties being:

reckless in not turning minds to –

discovery.

GORDON J: When you say 186, do you mean page 186 of the - - -

MR ROBERTS: My apologies, your Honour. It is paragraph 186 of Justice Blue’s decision.

GORDON J: I see.

MR ROBERTS: Which is page 325 of the second appeal book. His Honour then finds that there was no error in the judge finding that the practitioners were reckless in not turning their minds to discovery, which is again that degree of carelessness. Likewise at 189, in the context of the solicitor, it is a “not giving any consideration to the question” of discovery when she ought to have as found at 192 which is again a degree of carelessness. So, there is no consideration at all by either Justice Stanley or Justice Blue on any question of recklessness within the context in which it is used in The Ampthill Peerage.

In relation to the misleading of the Court, which was found by the first time by the majority of the Full Court and not found by Justice Hargrave, Justice Blue addressed that at paragraph 214. I am traversing potentially into time that I have agreed with the Solicitor that I would take. Might I just briefly confer with the Solicitor? I am indebted to my learned friend.

At 214 to 218, Justice Blue addressed the question of the Court having been misled by reference to section 52 cases. So, his Honour was self-evidently there addressing the matter as a question of an objective consideration rather than any deliberate or reckless, in the relevant sense, misleading of the Court.

At paragraph 245, in footnote 96, his Honour made that explicit. His Honour was considering the question as to whether the Court was, in fact, misled as distinct from why counsel was engaging in the conduct that he was – making explicit that this was an objective consideration rather than counsel’s subjective motivations. So his Honour has addressed this as though the question of fraud is established by an objective standard of malpractice.

In relation to Justice Stanley’s findings of malpractice, they are found at paragraph 424 and, again, it is explicit that he is there addressing the question of the malpractice from the making of discovery without any consideration of the knowledge or intention of the practitioners. In relation to the misleading of the Court, at paragraph 434, his Honour dealt with that as though the submission was objectively misleading. So it was a pure objective consideration without any finding or consideration of the mental element and in consequence a finding that the submission constituted malpractice.

So, in our respectful submission, properly understood, there is no finding made, not surprisingly, in a context where the case was being advanced as one of an objective consideration with no allegation of dishonesty ever being advanced by Players as being one of an objective consideration of a breach of a standard of care of the practitioners. In our respectful submission, that is insufficient.

Can I turn then briefly to the question of ground 2? Can I invite the Court to take up the decision in SZFDE which is case 9 on my list? For the sake of the transcript, it is SZFDE & Anor v Minister for Immigration and Citizenship [2007] HCA 35; (2007) 232 CLR 189. This is a case involving a fraud on the Tribunal that was the subject of a specific legislative protection that was significant to the decision as is apparent from the statement of the Court at paragraph 53 of the judgment.

In the context of that the question was considered as to how much fraud unravels and at paragraph 15, some statements of principle to the effect that fraud unravels everything which in paragraph 16 were then said of, to contrary effect, that:

The vitiating effect of fraud is not universal throughout the law . . . Further, particular principles, or at least practices, have been developed with respect to collateral attacks in later litigation upon the outcome in earlier litigation where this was alleged to have been vitiated by fraud -

citing Monroe Schneider. The perjury reference, I think, consistent with what I was answering your Honour Justice Edelman about earlier is then made and the reference then to the precept engaged as being that identified as favouring the finality of litigation which was the test in Owens Bank v Bracco which remains the current state of the law in the United Kingdom. At paragraph 29 the Court then said this:

Any application of a principle that “fraud unravels everything”, requires consideration first of that which is to be “unravelled”, and second of what amounts to “fraud” in the particular context. It is then necessary to identify the available curial remedy to effect the “unravelling”.

So, in our respectful submission, that is required in this case and it is not really as simple as simply identifying that there was fraud and, therefore, for example, a due diligence consideration need not apply.

Can I then invite the Court to take up the decision of the Full Federal Court in Monroe Schneider which, in my respectful submission, reflects a correct statement of principle. It is case 4 on my list and it is Monroe Schneider v No 1 Raberem Pty Ltd [1992] FCA 367; (1992) 37 FCR 234. In that case, the statement of claim – sorry, I retract that – this was a case involving an application to set aside a perfected judgment following appeal and an unsuccessful application for special leave, like the case at Bar. At 236 at about point 7 on the page:

The statement of claim purports to seek to have the judgment set aside on three separate grounds: discovery of new evidence . . . material non-disclosure of new evidence . . . and fraud.

At 237 at about point 2 on the hearing of the separate question the Full Court was addressing:

whether the evidence of Potter, said to be fresh evidence, was capable of sustaining a cause of action –

either on the ground of it being fraud - proven fraud, should I say, or alternatively on the ground of new evidence. At the foot of page 237, through to about point 5 on page 238, the court is addressing the fresh evidence question. There is a finding of the judge that remained, Justice Wilcox below, that the fresh evidence was insufficient. But at about point 4 the court says this:

The present appeal does not concern an application within the appellate process for a new trial. There is a real question, to which we refer later, as to whether –

fresh evidence can sustain any application. Between pages 238 and 239 is a consideration of attempts to go behind a perfected judgment in equity. At about point 9 on the page, a recognition that the fraud jurisdiction survived, the court says:

Hence there has been no difficulty in treating all judgments impeached for fraud in a Judicature system court in the same way as previously Chancery treated its own decrees –

The court then doubted whether fresh evidence not amounting to fraud could be a basis or whether it has been supplanted or rendered otiose by the statutory appellate system, much in the way that the court in DJL v Central Authority subsequently reasoned. At about point 5 of page 240, a recognition in Barrell Enterprises and accepted by the Full Federal Court that:

if a judgment has been obtained by fraud, an action can be brought to set it aside –

citing L.A. Sheridan “Fraud In Equity”, which is an article that refers to a requirement for actual fraud. The court then cites Owens Bank Ltd v Bracco in its obiter remarks as requiring reasonable diligence, that being set out as a statement of the position of the law in England where an English judgment was sought to be set aside on the ground of fraud which was obiter because the question concerned a foreign judgment rather than an English judgment.

The court cites with approval that the law in Australia is to that effect and relevantly cites from the Gordon article at about point 5 on page 241, which sets the four requirements which we submit ought be endorsed by this Court. There is then, about point 7 of the page, a reference to “surprise” and a question as to whether it is unsettled as to whether that jurisdiction survives.

At page 242, at about point 7 of the page, having dealt with McDonald v McDonald and the requirement that the fresh evidence need not be admissible in the original proceeding, the court says:

But it is necessary to establish the perpetration of the fraud alleged and the fraud must be “directly material” to the judgment.

That is the causation issue:

Evidence going to a collateral issue, such as the credit of witnesses –

will not suffice.

In other cases, the question is whether the alleged fraud can be said to have probably affected the result –

citing Birch v Birch and Boswell v Coaks. In our respectful submission, that question of materiality is a correct statement of the equitable principle and that was relevantly then, at page 244, at about point 5 of the page, one of the two reasons why the fraud case could not go forward because the evidence of Potter:

was incapable of showing as a reasonable possibility that the alleged fraud had occurred –

that is, it was not sufficiently cogent – and additionally, it is with that reference to “or”:

was directly material to, or had probably affected, the result of the trial.

So, in our respectful submission, the materiality requirement is there inequity upheld by the Full Federal Court consistent with the United Kingdom position and should be adopted in this Court.

In relation to the question of the first requirement in – I am sorry, I have indicated in my outline of argument – that is the written outline – the long line of cases at footnote 61 that have followed Monroe Schneider in this jurisdiction. It has also been followed in New Zealand save that the due diligence requirement is not immutable in that jurisdiction as I took your Honours to earlier and it reflects the current position in the United Kingdom.

In relation to the question of the first requirement and whether the evidence be fresh, my submission is that involves a twofold requirement, both that the fraud be detected – the fraud be newly detected and not known of at trial – but, additionally, that the evidence that it concealed relevantly be fresh, that is that that evidence was not relevantly available to the party at trial.

In my respectful submission, that is consistent with both the Quade reference and the Redcliffe reference that I have taken your Honours to. It is also consistent with the judgment of Justice French, as his Honour then was, in Spalla v St George Finance (No 5) [2004] FCA 1262 at paragraph 88, where the relevant fraud in that case was that the bank had not corrected the plaintiff in relation to submissions that it was advancing that could have been determined from the transaction documents that were before the Court. Relevantly, Justice French found that the evidence was not fresh because it was in plain sight for all to see and relevantly the fact that the plaintiff had not determined that to be the position was immaterial.

As I have indicated, at paragraph 237 of Justice Hargrave’s decision, he found, relevantly, that this file that contained the third copy agreement had been inspected but excused that because the lawyer was a junior lawyer looking at the file for a different purpose.

EDELMAN J: On your submission then, a document that is reasonably accessible by one party but not accessed by that party because the other side says “I can tell you as an officer of the court that there is nothing available in a file”, a judgment that is then obtained because that key document had not been obtained by the other party could not then be set aside for fraud.

MR ROBERTS: My submission does go that far. Clearly, your Honour is postulating an extreme case - - -

EDELMAN J: A different example, yes.

MR ROBERTS: - - - where, as an officer of the court, there is a question as to whether you have, in fact, been relevantly denied the evidence because you were properly relying upon reassurance from another officer of the court. But my submission is if the evidence is reasonably available to you, it has not been relevantly denied.

Moreover, that same consideration falls into the question of the due diligence requirement because the due diligence requirement – I am sorry, I should have given your Honours the reference to, on this topic, the findings of the Full Court. Justice Blue at paragraph 265 found that it was the finding of Justice Hargrave that the file had been inspected but he found relevantly that the practitioner had not seen the relevant document because had he have seen it he would have done something with it. But in either event the file was – as Justice Debelle remarked at paragraph 646 – not a large file and it was easy to locate the document within the file.

In terms of the second requirement that the evidence could not have been found by the exercise of due diligence, the finding of Justice Hargrave at 291 was that there was a separate failing of due diligence, and an additional practitioner, Mr Tisato, the principal instructing solicitor, failed to exercise due diligence. At 281, his Honour finds that had that due diligence been exercised, the file would have been produced and the document would have been located.

That finding of want of diligence was upheld on appeal: Justice Blue, at paragraph 280, and Justice Debelle, at 646. Relevantly, they found additional want of diligence and found that another practitioner, Mr Griffin, failed to exercise due diligence. That is at paragraph 285 of Justice Blue and paragraph 648 of Justice Debelle.

Paragraph 288 is where Justice Blue effectively disregards that ultimately and finds it to be immaterial because it was less significant. At paragraph 446, Justice Stanley finds that a lack of diligence is only relevant where the unsuccessful party deliberately or recklessly fails to make the relevant inquiry. In our respectful submission, that is to completely misapprehend the test, which is one as to whether this is a justifiable exception to finality.

In that context, Justice Kirby, in DJL v Central Authority, at paragraph 100, said relevantly that the evidence needs to have been denied to the relevant party without fault on his part, which, in my respectful submission, militates in favour of this being a jurisdictional requirement.

In relation to Toubia v Schwenke, I have submitted previously that the analogy is inapt. If your Honours accede to the submission that fraud for the tort of deceit is “will unravel all” but that it is relevantly an inapt analogy because, for this purpose, the question is that posed by the Court at paragraph 29 of SZFDE: what is the circumstance in which the court is being asked to exercise the jurisdiction?

Finally, on the question of materiality, Justice Hargrave found that it was a real possibility that may have tipped the balance. By contrasting what he said were material doubts that remained as to the provenance of this third copy agreement - he said that at 237 – but that is to be weighed against the weight of other evidence that suggested that there had been no deliberate marking.

The Full Court, on that topic, found that it may have tipped the balance. They did not go further and find in accordance with the findings of the Full Court in Monroe Schneider. As I submitted earlier, at paragraph 390, Justice Blue on this topic is wrong in casting an onus on my client to establish that it would have made no difference. Justice Stanley is wrong, in my submission, in finding a mere possibility is sufficient to overturn the finding.

Could I just close on this submission; finally, there is an interrelationship, in my submission, between the first and second grounds of

appeal. The importance of finality mandates that it is an exception to go behind a perfected judgment if the standard of malpractice, to use the finding of the court below, is sufficient to set aside a perfected judgment, there is very real reason for great strictures at the question of jurisdictional requirements when it comes to the question of the basis upon which the application might be made. So, in my respectful submission then, at one point or other of the inquiry and in my ultimate submission, both, there must be deference to finality given to the strictures in which this jurisdiction may be exercised. If the Court pleases.

KIEFEL CJ: Yes, thank you. Yes, Mr Solicitor.

MR BLEBY: May it please the Court. We have agreed that I will speak until quarter past 12. My submissions will be necessarily limited. So I can make it clear, I announce that I rely fully on my written submissions. Your Honours should have our outline of oral argument. The Attorney’s position at trial and then on appeal in the Full Court, on the question of a power to set aside a perfected judgment outside of the statutory appeals process, was as my learned friend has described it but it also was that the power extended to circumstances where there had been conduct analogous to fraud; that was the phrase that was used.

Now, that phrase originated at the interlocutory stage with Justice Kourakis, as he then was, in the judgment in this matter which is reported at (2012) 279 LSJS 1 at paragraph 103. I will not take your Honours to that. We did not offer, if you like, content of any great particularity to what conduct analogous to fraud might be said to be but that submission was premised on a contention that the power to set aside a perfected judgment was located in the inherent jurisdiction of the court which to all intents and purposes has subsumed the equitable jurisdiction. That thesis of the inherent jurisdiction was pursued by the Director in the case of NH v Director of Public Prosecutions [2016] HCA 33; (2016) 90 ALJR 978 and was rejected by this Court, in particular at paragraph [67] through [74] of the judgment and paragraph [70], to be more precise..

The Attorney’s position, therefore, is necessarily narrowed to what the equitable jurisdiction alone allows and that is to set aside perfected judgments and the Attorney’s submission is that this is limited to judgments procured by fraud in the strict sense, as has been described by my learned friend; that is, it is requiring deceit.

Now, your Honour Justice Edelman asked some questions designed to say what was really meant by “procured by fraud”. Can I make a short comment along these lines? If your Honours would take up our written submissions, right towards the end at paragraph 46 we have taken issue with ground 2 on the requirement of reasonable diligence in the case of fraud, and I will speak to that very briefly in a moment.

But we depart from Clone’s position on the reasonable diligence test and what we have submitted, and your Honours will see at paragraph 46, that there remains of course a discretion to set aside if fraud is shown. In our subparagraphs to paragraph 46 we have made submissions as to what we say will inform the discretion, one of which is the absence of any prior reasonable diligence.

But we make the submission at 46.4 one of the discretionary considerations is whether the original judgment was actually obtained by the fraud, that is to say, was it sufficiently material? To be clear, in response to the question of Justice Edelman, we say that really comes in at that point as to whether relief will be given. Just on that question of reasonable diligence, because I really only propose to touch very briefly - - -

KIEFEL CJ: I am sorry, just to clarify what you are saying, are you saying the question of materiality encompasses and overtakes questions of due diligence?

MR BLEBY: No, your Honour, I am not. I am saying if fraud is shown, the jurisdiction to set aside is there.

KIEFEL CJ: It is invoked, yes.

MR BLEBY: Whether it will be exercised as a matter of discretion will depend on a number of things. Reasonable diligence is not entirely irrelevant but it is not, if you like, a criterion before the jurisdiction will be exercised.

KIEFEL CJ: I see. Yes, thank you.

MR BLEBY: Materiality also remains a consideration to that end. As I said, we take issue on the second ground with Clone’s position. We have set out from - really it is paragraphs 41 and onwards of our written submissions on this ground and - - -

EDELMAN J: So, by the jurisdictional requirement of fraud, you mean causative fraud or fraud that procures the judgment?

MR BLEBY: Yes, it has to be – ultimately it has to have that materiality. But the development in England that a lack of reasonable diligence on the part of the other party is a requirement appears to have come about through a conflation of the requirements of the old bill of review on the one hand and the original bill on the other.

Our researches suggest – and this is paragraph 43.1 of our written submissions – that the case of Phosphate Sewage Company Ltd v Molleson (1879) 4 AC 801 contains a statement that requires reasonable diligence, and from then on there appears to have been a reiteration of this step in the requirement of reasonable diligence. But in Phosphate Sewage, the fraud was actually the underlying cause of action. It was not a complaint of what had occurred at trial. So there appears to have been a – and that conflation then continues in the cases that we have listed throughout paragraph 43.

There never seems to have been a principled statement as to why the requirement of lack of reasonable diligence suddenly comes in to qualify fraud. That is really all I wanted to say in oral submissions about that. We have tried to - - -

KIEFEL CJ: You mean it was elevated to a requirement to be satisfied in order to obtain a remedy where the jurisdiction in fraud is invoked?

MR BLEBY: That is right, your Honour, and we cannot see on our researches where that actually came from originally other than possibly by, if you like, a misconception of the starting point in the Phosphate Sewage Company. That is the best that we can do on that and I do not particularly propose to dwell on ground 2 given the time that I have.

What I was proposing to do was speak to the cases that are raised by the first to fourth respondents as to what is the relevant equitable jurisdiction in the situation we are facing and the meaning of fraud in this situation. The first to fourth respondents’ submissions commence at paragraph 29 of their written submissions and at point 5 of our oral outline we look to engage with the cases that are invoked by these respondents to support a broader conception of when equity would interfere with a perfected judgment to this end.

Now, the first of these cases which is cited at paragraph 31 of the respondents’ submissions is Richmond v Tayleur [1721] EngR 247; (1721) 24 ER 591. The headnote to this reads that:

On a bill to set aside a decree against an infant for fraud, if the same be not fraudulent, though in every respect not so equitable, the court will not set it aside.

The decree was not set aside in that case. The critical passage – I will come back to the facts in a moment, but the critical passage appears at page 592 of the report, commencing:

the plaintiff’s bill is grounded upon the fraud and collusion made use of in obtaining the former decree against his wife, then a tender infant; and if any fraud or surprise upon the court had been proved, I would have set aside the decree; but on the contrary, it appears that the court was fairly and fully apprised of the case –

et cetera. So, it was found there was no relevant fraud. The reference to surprise - - -

GAGELER J: Mr Solicitor, this is 300 years ago.

MR BLEBY: It is, your Honour, I am responding to what is put up. It might not be that useful to the Court then and I will move on. But can I put it in this way? The reference to surprise was the idea of surprise upon the Court and it was not given content. That was followed in an equally old case that is relied on by the respondents at paragraph 31 of Barnesly v Powel [1748] EngR 391; 27 ER 930. That case - - -

GORDON J: That suffers, too, from defects, does it not? The principles are not elaborated.

MR BLEBY: Indeed, your Honour.

GORDON J: Is that not the case where the Court ultimately determined that the Court of Equity lacked jurisdiction to determine the question of forgery?

MR BLEBY: Yes, your Honour. As I understand it, all that is raised by the respondents in this case in support of this idea of a more flexible equitable jurisdiction was this concept of imposition.

GORDON J: There is no elaboration of it, is there?

MR BLEBY: Not in this report, your Honour. There was a later report which is on no one’s list. I was not supposed to take the Court to it but it indicates that the imposition was getting the plaintiff to consent to probate of the will that had been obtained was a forgery. That was just the idea of what the imposition actually was. All I was going to refer to that was to say when we are looking at extended concepts like fraud and imposition, there is little to suggest that there is any content other than fraud.

GAGELER J: Mr Solicitor, do you anywhere identify affirmatively what you say a plaintiff has to establish on an original bill to impeach a judgment for fraud before you get to the question of discretion?

MR BLEBY: Yes, your Honour. At paragraph - - -

GORDON J: Paragraph 32.

MR BLEBY: Yes, 32 and then 37, your Honour. We say that the cases of Patch v Ward, The Ampthill Peerage and then – I am sorry, Patch v Ward (1867) LR III Ch App 203, The Ampthill Peerage (1977) AC 547 and the Commissioner of Inland Revenue v Redcliffe Forestry Venture Ltd [2012] NZSC 94 which all establish - - -

GORDON J: They are, in a sense, the submissions which were put on behalf of the appellant.

MR BLEBY: They are, your Honour, and we support that.

GAGELER J: What causal connection between the fraud and the judgment forms part of the equitable cause of action?

MR BLEBY: Your Honour, we rely, in particular, on the judgment. It is in footnote 156 of our written submissions – Johns v Cosgrove (2002) 1 QR 57 at paragraphs [94] to [95] – that the court must have regard to whether the subject for it was sufficiently immaterial to justify rescission. So that, obviously, requires an assessment. But, it means sufficiently material is – it is almost a question begging but - - -

GAGELER J: Do you say that that informs a discretion?

MR BLEBY: We do, your Honour. If fraud is established, the jurisdiction is enlivened. The question then is where the relief goes.

EDELMAN J: But, your jurisdictional question of causation becomes in having procured the fraud. So, there is a question of causation before one even gets to the exercise of discretion that is built into the requirement or having - - -

MR BLEBY: That is where the judgment was procured by the - - -

EDELMAN J: - - - procuring the judgment by fraud.

MR BLEBY: As it is, the fraud is of no materiality whatsoever to the judgment. It is difficult to see what the complaint would be, I suppose.

GORDON J: I must say, for my part, I have a difficulty that materiality is left to the second stage of that analysis. It cannot be, can it?

MR BLEBY: No.

EDELMAN J: If fraud is required to be causative in the sense of “but for” causative then it will always be material.

MR BLEBY: Yes, your Honour. I accept that.

GAGELER J: So what is left for discretion?

MR BLEBY: It may be that there is nothing left.

EDELMAN J: Delay might be a factor?

MR BLEBY: Yes, exactly, but in terms of what further work the causative nature of the fraud would have to do in that case, yes. We are probably trying to put some angels on the head of a pin there.

KIEFEL CJ: Due diligence in the sense that the party seeking the remedy, with further effort, could have discovered the matter, perhaps. That is questionable, is it not?

MR BLEBY: Where we say due diligence still may have some work to do is that there may be some case where, notwithstanding that a judgment has been procured by fraud, if the party truly has just not conducted its case properly at trial - and there might be some level of egregiousness that needs to be attached to that – the court would ultimately look not to reward that. That would probably have to be a relatively extreme case.

GORDON J: That is just equitable concepts of clean hands and all of those sorts of considerations, is it not?

MR BLEBY: It is, your Honour, yes. I am not taking it any higher than that. Your Honours, I will move to one of the cases – it just falls over 100 years in age. It is Nocton v Lord Ashburton [1914] AC 932. This is at 5.6 of our oral outline. The respondents, at paragraph 35 of their written submissions, cite certain passages in that case relating to what is described as the exclusive equitable jurisdiction where fraud did not necessary require an intention to cheat. That case concerned a breach of duty arising from a fiduciary relationship - that was that between solicitor and client.

The allegation was that the solicitor had improperly advised his mortgagee client to release part of the mortgage security and thereby rendering the security insufficient. The charge of fraud was not proved but the House of Lords held that the plaintiff was not precluded by the form of his pleading from claiming relief on the basis of the fiduciary relationship.

At pages 946 to 947, Viscount Haldane reviewed Derry v Peek, which, of course, was an action for deceit tried in the concurrent Chancery jurisdiction. It would ultimately have been held in Derry v Peek, of course, that on an action for deceit it was necessary to prove actual fraud. There was nothing arising out of the relationship in Derry v Peek that retracted anything other than a general duty of honesty. I take your Honours to pages 951 to 952.

EDELMAN J: Mr Solicitor, the real point of Nocton v Lord Ashburton was that the Courts of Equity, until Derry v Peek, had never accepted the common law requirements for deceit and Nocton v Lord Ashburton was the retaliation of Derry v Peek. It was winding back the common law requirements in the context of a fiduciary relationship.

MR BLEBY: That is right, which does not speak to this situation. Yes, your Honour, and all I was saying about that was that there was a duty of universal obligation, but where you have some special relationship, and your Honour spoke about infants and Nocton v Lord Ashburton makes those broad statements about the special relationships of which the fiduciary relationship is the classic example, that will not be required.

All I am doing is trying to point out that, when we are on nothing other than the universal obligation of honesty and the application to set aside a perfected judgment, neither Nocton nor any of the cases cited by the first to fourth respondents, provide a principal basis for saying anything other than actual fraud is required. That is the short point.

The only other perhaps point that is necessary to make on that theme is there has been some reference in their submissions to your Honour Justice Edelman’s judgment in a recent judgment in Ramsay Health Care Australia v Compton (2017) 91 ALJR 803. For the purpose of this exercise it remains also important to distinguish between that jurisdiction where equity would provide relief in respect of the common law judgments and then when Chancery would set aside its own judgments on an original bill for fraud and it is critical, in my submission, to keep that distinction clear as well. We are not in the former, we are in the latter, and the submissions that are made to explicate the broader, more flexible equitable jurisdiction, those cases have to be looked at for what they are, not as being analogous to this case. May it please the Court.

KIEFEL CJ: Yes, thank you, Mr Solicitor. Yes, Mr Bell.

MR BELL: Your Honours have our three-page outline and we flag in paragraph 3 of that what we see as the two issues of principle raised by the appeal. The first one we put really is the corollary of what is being put against us, whether malpractice, and I would emphasise misleading of the courts because that is not a concept that your Honours have heard much about from either the appellant or the State, but one is dealing here with not just malpractice but findings – unchallengeable findings – that the trial judge, Justice Vanstone, and the Full Court were misled by the conduct of the appellant.

But just to go back to the formulation of the issues, whether malpractice or the misleading of the courts below are sufficient to enliven the jurisdiction. Then, whether that jurisdiction is conditioned in the sense of has rigid requirements built into it or whether one might have thought more familiarly in terms of equitable jurisdiction, it is a broad jurisdiction exercised with care, of course, but by reference, ultimately, to the ends of justice in the particular circumstances of the case.

Now, as to that latter point, your Honour, we say and we say that the authorities in Australia, at least, support strongly the view that equity’s jurisdiction is not to be confined by the imposition of requirements or conditions to be satisfied once that jurisdiction has been engaged. So, the first question of principle is how is the jurisdiction engaged.

Secondly, once that jurisdiction is engaged, are there any further conditions or is it discretion into which feeds various relevant factors such as the degree of materiality, possibly questions of due diligence and considerations of finality as well. They are all relevant factors that can influence the exercise of discretion, as no doubt can other matters such as equitable defences such as delay and the like. But they are the large issues of principle.

As to the first one, the proposition that the appellant and the State are contending for – namely that Derry v Peek fraud is the universe of occasions on which equity may intervene to set aside a judgment – is a very surprising submission to a student of history or a student of equity. It is almost a non-sequitur.

The jurisdiction of equity is traditionally enlivened not by a common law narrow notion of deceit, although obviously that may be one category. But as the cases demonstrate – and your Honours do have the benefit of an exceedingly learned judgment by Justice Blue working through the history of these cases – they demonstrate that this jurisdiction – and there is a distinction here between the original jurisdiction to impeach a judgment, which Chief Justice Barwick said in McDonald should be brought in separate proceedings and the House of Lords in Hip Foong Hong said should be brought in separate proceedings, as indeed was that case - where you have a case such as that, the circumstances in which equity will intervene have been enumerated over the centuries. We do not shy away from that fact that it is over the centuries because this is a solid well-established jurisdiction.

One sees in the cases reference to fraud. One sees in the cases reference to equitable fraud, which of course is a far larger concept than Derry v Peek. One sees in the cases, as indeed the State submitted, cases analogous to fraud and analogous, we would submit, to equitable fraud. One sees reference to imposition. One sees reference to surprise. One sees reference to mistake. One sees reference to malpractice. One sees reference to withholding information from court, the suppression evidence and the subordination of witnesses.

Your Honours, as I have indicated - and I will come to that part of Justice Blue’s judgment where he surveys that history, but if I could take your Honours first in appeal book 2 at page 392, paragraph 440 – a key paragraph in Justice Stanley’s decision and a paragraph which – paragraph 440 - which we say is admirably succinct, your Honours will see he opens paragraph 440 by enumerating, with footnote references, those familiar equitable circumstances in which the jurisdiction has been said to be capable of being enlivened.

He notes, for example, at the top of page 109 of the report that:

Surprise has been characterised as sharp practice falling short of fraud.

He then goes on to indicate that there are not then further preconditions to the exercise of the power although obviously there are factors or considerations which properly and classically inform its exercise. We would submit that this is classic Chancery equitable jurisprudence, and it is not inconsistent with a proper respect for the doctrine of finality. All it does in respect of the doctrine of finality is to recognise as a very powerful discretionary factor the role that finality plays.

However, as Sir Anthony Mason or as the Mason Court said in Quade – and I will come to the different context in Quade – but as that Court said and as Sir Owen Dixon said in Wollongong Corporation, there is a distinction between dealing with questions of finality when one is talking about a judgment which has been regularly obtained on the one hand, and a judgment which has not been regularly obtained.

The various instances catalogued by Justice Stanley in paragraph 440 are all instances which would lead a court – and of course the court has to be satisfied that its jurisdiction is enlivened, and that is an important task which we overcame and held on appeal. But once the court is satisfied that the judgment below has not been regularly obtained because, for example, there has been a reckless failure to give discovery or because the trial judge was misled or not only was the trial judge misled, but the Full Court was further misled in considering an appeal from the judge’s judgment, because we have those findings - - -

GAGELER J: What do you mean by misled?

MR BELL: Well, misled in that they were – the judges, as Justice Stanley and Justice Blue found, on a matter which they regarded as of key significance to the matter before them, given – led to a false understanding of the picture. So, for example, one of the key forensic matters in this case, a key forensic matter, was whether these photocopies with what Clone said were a scratch originated from what was said to be a single photocopying event, that is to say, the two copies that were before her Honour and before the Full Court it was able to be demonstrated did originate from a single photocopying of the original document because they were created, the evidence indicated, at the same time as a result of photocopying the original.

However, the non-discovered copy, it was held, did not originate from the same photocopying event. That was a very powerful forensic matter because it made inherently less likely the appellant’s theory that the scratch was not a pen scratch but was a photocopying scratch, because what it would mean is that the same photocopier had to have the same scratch on the glass – or that it was the same photocopier and the same origin of the marking. You can see how that panned out.

There were findings that there was a hair on the glass or a marking on the glass and the Full Court found, Justices Blue and Stanley found, that had the third copy agreement been disclosed, it would also have been found that it did not originate from the same single photocopying event and to further the answer to your Honour Justice Gageler, what was very significant for Justices Blue and Stanley was that they satisfied themselves that this was a matter upon which both Justice Vanstone at first instance and Justices Doyle and Layton were actively concerned about, in the course of interactions during the hearing of the appeal.

This was a question they wished to know answers to and insofar as they were told what they told, and they were not told what they were not told, we have findings that they were misled on a key matter. Now, that is different, I volunteer, to them finding that a “but for” test was satisfied. There was a finding, and we say this is more than sufficient; particularly in equity, particular in equity, that is more than sufficient to enliven the court’s jurisdiction where there is, as was found, a real possibility, a real possibility that the verdict may have been different.

That is sufficient to engage the jurisdiction, that is sufficient to satisfy the notion of the judgment having been procured by fraud or we would say surprise. Can I take your Honour Justice Edelman, because your Honour Justices Edelman and Gageler put both the questions focused on that, can I take your Honours, in Justice Blue’s judgment to the extract in Jonesco v Beard, paragraph - - -

GORDON J: Just before you do that, could you tell me what the high point is from your perspective to support that submission that you have a finding sufficient to enliven its jurisdiction.

MR BELL: Yes, that they had been misled and - - -

GORDON J: What is the paragraph number that you say is the finding that gives rise sufficiently to enliven the jurisdiction?

MR BELL: There are a number, your Honour.

GORDON J: I see.

MR BELL: I am not evading it, there are a number, because - - -

GORDON J: No, that is fine.

MR BELL: The Full Court found that there were three separate matters that were sufficient to enliven the jurisdiction and they deal with them in different places and in the two judgments. So, I will give you the references but just to be clear, there was a finding that the reckless - - -

GORDON J: You can come back to it.

MR BELL: - - - I will answer your Honour’s question but I will feed through the references in due course. There was a finding that the reckless failure to discover the document engaged the jurisdiction and that was described as serious malpractice.

GAGELER J: Without more?

MR BELL: Without more. This is the difference between Justice Hargrave at first instance and the Full Court. Justice Hargrave did not find that there was misleading of the court beyond that. He just said that was the only matter which engaged the jurisdiction. But the Full Court went on. They said there were two other independent matters which engaged the jurisdiction. We only need one, quite frankly, but we had three. The second one was the misleading of Justice Vanstone and the third was the misleading of the Full Court. Our friend’s submissions really were silent on this notion of the misleading of the Full Court.

KIEFEL CJ: But whenever there has been a failure of discovery one could say that the courts, at first instance and on appeal, are misled because the evidence is not whole.

MR BELL: Your Honour is absolutely right and that is what Justice Hargrave held. But the difference between Justice Hargrave and Justices Blue and Stanley is they said there was a separate, distinct misleading of Justice Vanstone and the Full Court in the answers senior counsel gave to their Honours respectively in the course of submissions. So that the separate, misleading - - -

KIEFEL CJ: But it still does not mean anything more than that. The whole picture was not available.

MR BELL: No, but - - -

KIEFEL CJ: Once you take account of the findings that there was no intention.

MR BELL: Well, there is a finding that there was reckless failure to discover, which we say is satisfactory in equity in any event - - -

KIEFEL CJ: But there is no intentional misleading. Misleading here refers to an effect of the failure to discover.

MR BELL: We submit, your Honour, that is still adequate to engage equity’s jurisprudence because what it means is that there exists a judgment – judgments of the court, involving very serious findings about some individuals, concurrently with a finding that the court which made those findings was misled.

KIEFEL CJ: But these serious findings are really in relation to professional conduct, are they not? They are not findings in relation to wrongdoing.

MR BELL: I am talking about the serious findings in the original judgment, effectively the finding that the evidence of the striking through had been concocted. So that was the context of the dispute.

KIEFEL CJ: We are not going behind the findings of the Full Court or the primary judge in these actions today, are we?

MR BELL: No, no. We are definitely not. But that was an important part in the findings of Justice Blue and Justice Stanley that in a case where very serious allegations of concoction of evidence were made before Justice Vanstone and the Full Court and Justice Vanstone and the Full Court were very anxious at a Briginshaw level about making those findings and asked questions about the number of copies, whether the original file still existed, et cetera, and when deliberate decisions were taken.

Those judges were misled and we would submit that equity would not tolerate an outcome where any judgment, let alone one involving such serious findings and such serious consequences as the original judgments did, had been obtained as a result of misleading of the court, even if it was not intentional misleading. I will come to Lord Mostyn’s Case where it seems not to have been intentional misleading - - -

KIEFEL CJ: Your submissions seem to focus upon the effect of the omission, the non-discovered document, rather than the conduct which produced the effect.

MR BELL: No. I think, with respect, not, your Honour. They focus on both. It is not binary, because the first finding about reckless failure to discover is akin in equity to intentional conduct. We have made reference to various authorities. I accept that the misleading of the court, one is looking at the objective effect, but our position is not a binary one.

Could I return to the question of causation that Justice Edelman and Justice Gageler raised. I want to take the Court to Jonesco, referred to in paragraph 358 of Justice Blue’s decision in the Full Court. Can I draw your Honours’ attention to that extract of the quote at the foot of the page:

Were such fraud properly established I agree with the Court of Appeal in holding that the whole judgement would thereby have been vitiated. Fraud is an insidious disease, and if clearly proved to have been used so that it might deceive the Court –

It is that language of “might deceive the Court” that we will also see in other judgments. We will also see in Justice Menzies’ rejection in McDonald of Mr Gordon QC’s conditions that it would have probably to have affected the outcome. Justice Menzies explicitly rejected Mr Gordon’s second and third requirements, namely, that it had to be established that it probably would have affected the outcome.

We have findings that there was a real possibility – we have concurrent findings, we have a finding of Justice Hargrave and we have, if anything, stronger findings of Justice Blue and Justice Stanley, that this was a significant probative issue, a matter of key forensic significance in the trial about which the court was keenly aware, and a finding by them that there was a real possibility that it would have affected the outcome.

There are, I suppose, three possibilities. In a case where the Court on an application such as this is satisfied that it could not have affected the outcome we would accept that the jurisdiction is not engaged – that the judgment would not have been procured by fraud, in that sense. That is why their Honours went through the task of asking themselves could this have affected the outcome.

If they had concluded that it could not have affected the outcome, one would be out of court. The jurisdiction would not be enlivened. But then the choice is between one where was there a real possibility as held that it could have or does one have to prove further. Do not forget this is a situation where ex hypothesi one has established fraud or surprise, et cetera, and in equity, equity takes a view about causation traditionally and classically which is sympathetic to the position of the party which has been the subject – the victim of the inequitable conduct.

So we would submit that – and the reason this feeds into discretion, appropriately feeds into discretion is because at the discretionary stage, the jurisdiction having been engaged, the court will – as happened in this case – look at and weigh questions of degree. So they will look at the seriousness of the malpractice or the fraud or the surprise or the mistake. They will look at the seriousness of that.

They will also look at the degree of culpability of the party seeking to set aside. So if there has been some element to which the party seeking to engage the court’s jurisdiction lacks some diligence, the court will take that into account and here the court indicated that, though there was a finding there was a lack of diligence it was at a low level and that low level was contrasted to the seriousness of the malpractice that was found to have existed.

So it is in that weighing of matters, similar to the weighing exercise that takes place in Quade cases because these factors in Quade are weighed – in Quade there is no requirement to show that the fresh evidence would probably have made a difference. In Quade the requirement is that the fresh evidence would possibly have made a difference.

KEANE J: But that is because it is concerned with a challenge on appeal to the integrity of the judgment on the basis that there has been some imperfection or blemish in the trial.

MR BELL: Yes.

KEANE J: This jurisdiction is not about imperfections or blemishes in the trial.

MR BELL: Yes. With respect, your Honour, if the trial has resulted in a judgment such that it can be said, as could be said here and has been said in various cases, that the judgment has not been regularly obtained, we would respectfully take issue with your Honour. There is a difference there between having another crack at the reasoning in the trial, et cetera, but it is looking at - - -

KEANE J: This is not a jurisdiction that is concerned to ensure that the trial process has operated perfectly. It is not about irregularly obtained judgments. It is about judgments that are procured by fraud. It is not, as Justice Stanley said, judgments that may be tainted by some form of misconduct. It is distinctly more serious than that.

MR BELL: We certainly accept it is serious and that is why the conduct which engages the jurisdiction has to be established on the balance of probabilities and because it is a serious allegation the court has to be comfortable that that has been established. We do not, for one moment, step away from the fact that this is a serious jurisdiction to be exercised cautiously. But I do want to try and demonstrate to your Honour - - -

KEANE J: The court has been led – the court has been led to the wrong conclusion.

MR BELL: Yes.

KEANE J: Deliberately led to the wrong conclusion – the wrong ultimate conclusion.

MR BELL: Yes.

KEANE J: Not to a state of not being sure one way or the other about a step on the way to the conclusion but that the court has actually been led to the wrong conclusion.

MR BELL: Yes.

KEANE J: The findings in this case are a long way short of that.

MR BELL: The findings only go to possibility. We will come to the question because it an important question for my client because this case – contrary, I think, with respect to what the counsel for the appellant said – this case was fought from day two of the trial by reference to Quade and the Quade considerations. On appeal, it was fought by reference to Quade considerations and whether the requirements were satisfied including – and I will demonstrate this directly now. If your Honours go to paragraph - - -

EDELMAN J: Just before you do, if your supposed test, based on possibility, is correct, then all of the cases that refused to apply the jurisdiction to perjury would be inexplicable. The whole reason why perjury, despite being fraud, is not sufficient is because it is almost impossible to prove that, but for the perjury, the judgment would have been different.

MR BELL: It is true that perjury has traditionally been put in a more strenuous basket, but it is not correct that one does not engage the jurisdiction by satisfying a “but for” case. The cases, with respect, Justice Keane, do not say that. The cases talk, as the House of Lords in Jonesco said, about whether it might affect the result. I will take you to that, because this is an area where - - -

GORDON J: But Jonesco proceeds on the basis of actual fraud properly particularised in a new proceeding giving sufficient seriousness to give rise. One cannot just pluck out that one line in a judgment out of the context in which it arises.

MR BELL: With respect, your Honour, I did not mean to do that. I was aware of that passage, which provided one answer to Justice Edelman, but there are other passages. If I could take your Honours, perhaps, to the - - -

GORDON J: I think we have distracted you from this task of where you were before. I do not seek to - - -

MR BELL: All right, thank you. Could I take your Honours back to paragraph 89 of Justice Blue and paragraph 89 of Justice Blue, 305, second-last line of the page:

Clone accepts that, if it recklessly failed to discover the hotel licence copy, its conduct amounted to malpractice capable, subject to issues of reasonable diligence and materiality and exercise of the residual discretion, of justifying setting aside the original judgment.

Now there were such findings and those findings of reckless failure to discover are in Justice Hargrave’s judgment - I will read onto the transcript the paragraph references: 191, 200, 203 and 204. In the Full Court, 186 to 197 and this is reckless failure so a relevant mental element; 186 to 197 and 424. Then could I take your Honours back then to paragraph 92 of Justice Blue’s judgment and in paragraph 92 - - -

KIEFEL CJ: These are just contentions, are they not?

MR BELL: Pardon, your Honour.

KIEFEL CJ: The judges here just listing contentions.

MR BELL: No, but the fourth-last line, your Honour:

Clone takes issue with the Players’ contention but accepts that, if its conduct was misleading, it amounted to malpractice capable, subject to issues of reasonable diligence and materiality and exercise of the residual discretion, of justifying setting aside the original judgment.

GAGELER J: What are you getting out of that passage?

MR BELL: I am coming back to the proposition as to how this case was fought. Both at trial and on appeal there was an acceptance, quite contrary to what is now being put, that actual Derry v Peek fraud was required. There was an acceptance at trial and below - - -

KIEFEL CJ: To what end? Special leave has been granted.

MR BELL: To what end, your Honour. There are two ends. One, we submit that those concessions were made properly in accordance with the authorities that Justice Blue reviewed and which I will take your Honours to.

KIEFEL CJ: The authorities either stand for the propositions or they do not.

MR BELL: That is true.

KIEFEL CJ: You do not get it by way of some form of estoppel.

MR BELL: No, but it also does go to quite a material question of costs. These are extraordinarily expensive proceedings for my clients. If this Court were to find at the end of the day that the appellant succeeded by reference to a test different to that which it advanced before Justice Hargrave and different to the basis on which it proceeded in the Full Court, and even if it were to win there should be important costs consequences in favour of my client. Can I draw your Honour’s attention also, in this procedural context – I know it is not the main game – to Justice Blue’s decision, paragraphs 312 to 314.

GORDON J: What is the point we should take from those paragraphs?

MR BELL: From 312 to 314. This, your Honour, that contrary, with respect, to the suggestion that it was only in final submissions at the trial that the appellant accepted Quade was the relevant rubric for discourse, if your Honours look at paragraph 313 and then 314 there was a reference – an outline of issues handed up, provided by the judge, following receipt of my client’s then opening, articulated the appropriate approach by reference to the decisions in Quade and Brookfield. That was a decision of Justice Lander, which set aside a perfected judgment by reference to these considerations. You will see their Honours’ reference to “malpractice” there and:

there was a real possibility that the result would have been different. The list of key issues was premised on diligence and materiality being factors to be taken into account on an overall exercise of a discretion and not being essential requirements for Players to succeed.

At the commencement of the second day of trial, Senior Counsel for Clone informed the judge that Clone agreed with the substance of the key issues.

So, obviously – I just make that point because it is an important point for my client. We raised it on the special leave application as well in relation to the grant of leave on ground 1. Your Honour is right, of course, to point out to me that leave has been granted on ground 1 and I do not canvass that.

But we did indicate at the time and we indicate in our submissions and I have done so again that, were the Court ultimately to accede to the submissions advanced by Clone by reference to a different test both as to actual deceit and as to mandatory conditions or, indeed, to either, it would be fundamentally different to the way both the trial was run, and those paragraphs in 89 and 92, to which I have referred, is a reference to how the appeal was run. So that is the point I wish to make.

KIEFEL CJ: That might be a convenient time, then, Mr Bell. The Court will adjourn until 2.15.

AT 12.45 PM LUNCHEON ADJOURNMENT

UPON RESUMING AT 2.15 PM:

KIEFEL CJ: Yes, Mr Bell.

MR BELL: Thank you, your Honour. Could I come directly to the matter on which attention was focused before lunch – the question, really, of materiality and causation – and make this submission, that they are not the same. To be engaged, the fraud or equitable fraud or malpractice has to be material and that malpractice or fraud will not be material if it could not have affected the result. But, it must be so, it will not be material. So, the evidence which was withheld, relevantly, will not be material and the fraud, therefore, or the malpractice, will not be material if it could not have – was not capable of affecting the result. But, if one concludes that it is capable of affecting the result – or was capable of affecting the result – we say that the materiality requirement is satisfied.

KEANE J: So that in every case where relevant case is not adduced, materiality is satisfied.

MR BELL: No – not where relevant evidence is not adduced. There has to be, in a case like ours, some withholding of it.

KEANE J: Do not worry about the descriptor of the conduct which leads to it. Just in terms of the focus on materiality - - -

MR BELL: Yes.

KEANE J: - - - your submission is that wherever evidence that might have made a difference to the result is not adduced, that is materiality satisfied.

MR BELL: It is never just that. It has to be accompanied by the malpractice. That is materiality satisfied. That then generates this result: you then have what I might describe as a spectrum of materiality. A judge might find, as Justice Stanley in fact found at paragraph 474 of his judgment, that it would have affected the result. His Honour went further than any of the others and he said it would have affected the result – 474.

KIEFEL CJ: His Honour also, at 474, seems to think that misleading constitutes malpractice, which seems to be something of an inversion of how one considers a matter.

MR BELL: That is a separate matter to which I will come, your Honour. The point I am making on materiality is that one can have a spectrum of materiality. You might be very confident that it would have. You might form a view that there was a real likelihood, as Justice Blue found, or a real possibility, but, because it is so difficult after the event to reach a concluded view, that view, when coupled with the other discretionary factors such as “was the other party at all culpable and, if so, to what degree and was there delay?” feeds into the discretionary mix, not as conditions but as considerations, the strength of which will vary in any given case.

So that, no doubt – and this is precisely how actually Mr Sullivan who was appearing for Clone in the Court of Appeal put it – appearing before Justice Hargrave put it – one can have sliding scales. If one takes the view that the malpractice is very material in the sense that there was a high degree or high possibility or even a likelihood of affecting the result, that would tend powerfully in favour of setting aside the judgment, notwithstanding the importance of finality. If one is far less confident – and minds might differ on this – if one is far less confident, that might tend against the exercise of discretion to set aside. But that might be balanced by a complete absence of culpability or a very modest degree of culpability on the part of the complainant.

So, what I am doing is trying to answer various questions which have come from your Honours. I gave an answer before lunch to Justice Gordon by reference to that part in the Jonesco v Beard Case where I drew the Court’s attention to the phrase “might deceive”, that expression “might deceive”, and your Honour said, well, that was a case on particular facts, but I said there are other cases which use that same less absolute language than “probably would have” or “but for”, and I said to Justice Keane that I would also take you to other cases, which I now do because what we will see is, consistent with what I put, that materiality is not the same as “but for” causation.

It is a negative criterion - if I could use that expression, and I put this before lunch - in other words, if the Court satisfies itself whatever the fresh evidence is, even if it were withheld, even if it were withheld with the greatest malice.....imaginable, even if the party withholding it thought it was terribly important and withheld it. But if the court reached the view that it was not capable of affecting the result in the way the issues were before the court, then that would not satisfy the materiality requirement.

GAGELER J: Now, you reject then the view that has been taken in the English Court of Appeal.

MR BELL: Yes, and in Owens Bank v Bracco. And, we explain why. That view in the English Court of Appeal flows from – and this is treated in our submissions – it is the Phosphate Case – and there is analysis of this in our submission. It flows from a common law decision. It flows from a very narrow and, we say, incomplete view of the history of the jurisprudence.

GAGELER J: So, when did the jurisprudence go wrong in England?

MR BELL: In England?

GAGELER J: At what point?

MR BELL: In England? It went wrong in Owens Bank v Bracco which did not refer to the Privy Council in Hip Foong Hong, which I have taken your Honours to, or the House of Lords in Jonesco v Beard. Those cases were not referred to. It was concerning – and Justice Handley in the Court of Appeal in Toubia and, obviously - - -

GORDON J: I speak only for myself though, Mr Bell. So, many of those cases are appellate cases.

MR BELL: Your Honour, Hip Foong Hong is not.

GORDON J: It was a new trial motion.

MR BELL: No – separate proceedings, separate proceedings. Hip Foong Hong was not an appeal. It was separate proceedings, your Honour, to set aside affected judgment.

GORDON J: It was a new trial motion, Mr Bell, I am pretty sure.

MR BELL: But, just as the Privy Council said in that case and Chief Justice Barwick said in McDonald, the proper way to set aside a judgment for fraud or malpractice or surprise, is in separate proceedings. We respectfully submit that although it is a procedurally different context that one is still talking about the equitable jurisdiction and that is a very important point, but can I try and make good the point I made about what is required in terms of whether “but for” causation is required. Can the Court immediately to Hip Foong Hong [1918] UKPC 65; [1918] AC 888 and to page 894, starting at the bottom of 893:

however, urged on the appellants’ behalf that the learned judge’s conclusion was due to a misapprehension on his part of a decision . . . that case it was stated, in . . . an application is made for a new trial on the ground of discovery of new evidence “it must at least be such as is presumably to be believed, and if believed would be conclusive.”

Than Lord Buckmaster says this:

But that case had nothing to do either with fraud or with surprise, as was indeed pointed out. It dealt merely with the claim for a new trial based on the ground that further evidence could be obtained that was not obtainable when the trial took place.

Just pausing there: this, with respect, is the key distinction, a distinction between an application for a new trial by reference to fresh evidence simpliciter and where there are certain requirements and more stringent requirements and cases of fraud or surprise. Lord Buckmaster goes on to say:

Fraud or surprise or both are the ground of the application in the present case, and the learned judges were in error in thinking that the authority in itself had any direct and present application to the matter . . . In all applications for a new trial the fundamental ground must be that there has been a miscarriage of justice. If no charge of fraud or surprise is brought forward, it is not sufficient to show that there was further evidence that could have been adduced to support the claim . . . the applicant must go further and show that the evidence was of such a character that it would, so far as can be foreseen, have formed a determining factor in the result.

That is if there is no charge of fraud or surprise. His Lordship continues:

Such considerations do not apply to questions of surprise, and still less to questions of fraud. A judgment that is tainted and affected by fraudulent conduct is tainted throughout, and the whole must fail –

This language of “taint” and “affectation” - - -

KIEFEL CJ: Does that mean without more, on proof of fraudulent conduct, the judgment goes?

MR BELL: There is more. It has to be material. That is to say, if the judgment was affected. In other words, if that which was withheld was relevant to an important issue in the case – and they are our facts; we have given your Honour lots of references to that. The judges below said that this was very important because it went to a key issue in the case. Just pause there, that language of “taint” and “affectation”.

Could I take your Honour back to Justice Blue’s judgment in the appeal book, page 366, paragraph 357, where his Honour has set out this passage from Lord Buckmaster. If your Honours have that, can I point out something which is potentially quite significant. In the authorised report, which your Honours have, in the last line of 357 there is a mis-transcription. The last sentence reads “is tainted and effected”.

That is not the correct spelling. “Effect” would suggest brought about by the fraud – caused by the fraud. That is not the word Lord Buckmaster used, as I pointed out by going to the authorised English report. This is a mis-transcription. I am not being pedantic here. It matters. There is a distinction, explicitly drawn by Lord Buckmaster in the Privy Council, between causation requiring “but for” causation in the case of an application for a new trial based on fresh evidence, absent fraud or surprise, something which is not required where fraud or surprise is concerned.

KIEFEL CJ: If it is going to be important, as you suggest, does it matter whether it is Justice Blue’s mistake in transposing it from the law reports or whether it is the editors of the reports?

MR BELL: No, it is just something I noticed. When I went back to the original, as I thought it consistent with my understanding of principle, “affected” is the word used. It has to be. It must be “affected” because Lord Buckmaster is drawing a distinction between a judgment effected – i.e. brought about by fraud – and a judgment affected or tainted by fraud. What affected or tainted simply means is that the fraud or the misconduct or the malpractice must be material.

Now, that decision and that passage is picked up with approval by this Court in McCann. It is convenient, your Honour – most convenient – perhaps just to say in Justice Blue’s judgment, because he sets out the relevant passage. It is in paragraph 362. The Court referred in McCann, both to Jonesco v Beard, and I have already made the relevant point about the use of the “might deceive” expression in that case. But if your Honours look towards the end of paragraph 362, on page 85 of the extract, you will see there is reference to:

Lord Buckmaster in Hip Foong Hong v Neotia & Co dealt with the effect of fraud and surprise in a passage –

and, again, pick up – they are quoting the headnote but drawing this very distinction that I am drawing. And that is why, when your Honours go to the next paragraph in the judgment, the reference to Sir Owen Dixon in Wollongong Corporation v Cowan, the Chief Justice put aside cases of surprise, malpractice or fraud before going on to deal with the requirements when there was an application for a new trial by reference to fresh evidence, conscious no doubt he, Sir Owen, had of course been a member of the Court in McCann v Parsons, which is reported immediately before Wollongong Corporation in the Commonwealth Law Reports.

Then, your Honours, to make good this point, staying in Justice Blue’s judgment, one comes to McDonald v McDonald, a decision of this Court under Chief Justice Barwick. And his judgment, your Honour, was one in which Sir Frank Kitto agreed. If your Honours turn the page to page 86 of the report, so it is page 370 of the appeal book, your Honours again will see reference to Hip Foong Hong and Jonesco v Beard. His Honour says this:

It is not necessary in that event that the evidence of the fraud, the surprise of the subornation, though it should be “fresh”, should be evidence which would be admissible on the issues between the parties in the action –

Now, just pausing there, if that is not necessary how can it be a requirement that it, but for the withholding of that evidence, the result would have been different. But it becomes even more explicit. He goes on to say:

or that it should be found to be probably conclusive of those issues.

Your Honours see that phrase. Now, what his Honour is saying is in a case of surprise or fraud – his Honour also gives the example of subornation - it is not a requirement that it probably be conclusive of those issues.

GAGELER J: What was the nature of this process before the Court?

MR BELL: McDonald v McDonald - - -

KEANE J: Page 530, in the first full paragraph, there was:

An application for a new trial to the Full Court –

and described in the next paragraph as:

The appeal to the Full Court was supported by an affidavit - - -

MR BELL: Yes. I can accept that, your Honour, but my point is this. The courts have drawn this distinction between what is required when you have near-fresh evidence and what is required when you have surprise or fraud. What they have said is, where you have surprise - - -

GORDON J: But, in the context, Mr Bell, of an application for a new trial in the appellate process.

MR BELL: Yes, yes. But, your Honour, let me answer that directly. If, in the appellate context the Court is more receptive to the party who has been the victim of the surprise or the fraud – and these cases demonstrate that very clearly because they do not have these more onerous requirements in a case of near-fresh evidence – that points powerfully and is consistent with the original chancery jurisdiction to impeach a judgment for fraud or surprise. That is the history which Justice Blue goes to considerable length to point out. This was separate. Impeaching a judgment for fraud or surprise was not a basis of a statutory appeal. It was a separate cause of action. In the modern system, one might have an attempt to impeach within an appellate process. The question is, once the judgment is perfected, does it or should it make a difference? In our submission, the answer is clearly, no.

KIEFEL CJ: Mr Bell, in the passage from McDonald that you read - his and Justice Blue’s judgment - Chief Justice Barwick concludes:

Whether or not the Court does so must finally depend on the Court’s view as to whether or not the interests of justice . . . require such a course.

What would be the considerations, going to the interests of justice?

MR BELL: The considerations going – and thank you, your Honour, for drawing it to my attention – because we say, ultimately, once the jurisdiction is engaged, that is the test. And, the considerations going to the interests of justice which were weighed by Justice Stanley and Justice Blue, included this – they were conscious of the importance of finality but they were also conscious that this was not a judgment which had been regularly obtained because – three reasons – there had been a reckless failure to discover a very important document.

There is no doubt that they considered it was a very important document and they described the malpractice as serious. They would not have described the malpractice as serious if it was not such a centrally important document in the context of the allegations being made. They looked at that. Where you have – and this Court pointed this out in Quade – where you have a judgment which has been obtained or its obtaining has been contributed to by the withholding of material information to which we would add, misleading of the Court, et cetera – it is a more powerful case for intervention than any other.

The degree of importance will depend on the analysis of the competing considerations on the particular facts, but it is a more compelling case and whatever - finality is an important goal but it is not an absolute goal. The corollary of our friend’s submission is this – and this was something the majority were acutely alive to – a party who has failed to disclose a document and then it finds itself subject to an appeal and continues to fail to disclose that document, as happened here, because discovery is an ongoing obligation – continues to fail to disclose that document would, on our friend’s argument, be in a superior position as a result of that reckless failure to disclose the document, if it were more difficult after perfection of the judgment to set it aside.

EDELMAN J: No, because if the taint then affected the Full Court or the appellate court, it would be an application to set aside the appellate court or Full Court’s decision on exactly the same basis.

MR BELL: But, your Honour, these proceedings did that.

EDELMAN J: Yes, but one need not change the test, the setting aside the primary judge’s decision.

MR BELL: Yes, in which case the conclusion to what your Honour has just put to me is that Mr Sullivan was right to accept that Quade was the right test all along because the application was also brought within the original proceedings. Two proceedings were brought. One was a separate proceeding and one was a motion in the original proceedings, but the relief sought in both was the same, and it is very important – this is why we say in our outline that what their Honours did was actually very understandable.

They said this, you have a situation where the trial judge was misled by the non-discovery of a key document. The Full Court continued to be misled by that non-discovery, by that malpractice, which was reckless malpractice. The way they reasoned was this, Justice Blue I think in particular. Had the malpractice not continued at the point of the appeal, had the document come forward then, you have a Quade case.

The only reason that did not occur was because the concealing, the non-discovery, the reckless non-discovery, continued. They said in those circumstances one way you can analyse this is to say, well, is it really a quasi-Quade case because, but for the ongoing misleading conduct or the reckless failure to disclose, this would have come out in the first Full Court, my client would have made a Quade application and the Quade criteria would have been satisfied, because that is what Justice Blue and Justice Stanley and Justice Hargrave found. So the justice of this case, in our respectful submission, has been delivered and answered.

To return to your Honour the Chief Justice’s question, it is not an attractive result in the equitable jurisdiction or any jurisdiction, for that matter, for a party which has been found to have engaged in reckless malpractice to be better off having survived the appellate process, continuing to conceal the material or not discover the material, to be in a superior position than if it had not.

That is, with respect, a perverse inducement to wrongdoing and the court would not in those circumstances give to finality – the importance it gives to finality in the situation of the kind referred to by Sir Owen Dixon in Wollongong Corporation absent fraud, surprise or malpractice. That is why he put those matters to one side.

This strand of reasoning based on Hip Foong Hong, picked up in this Court in McCann, picked up in Wollongong and then picked up in McDonald - and could I just take your Honours back to McDonald. I referred your Honours to what Chief Justice Barwick said on the causation question about not being required in cases of fraud or malpractice. Justice Kitto agreed. But Justice Menzies dealt with this in two places. If your Honours have the appeal book, page 371 of the appeal book, Justice Menzies – a section of Justice Menzies judgment is set out. In the fourth paragraph:

Where, however, the acceptance of fresh evidence would also prove a party’s fraud at the earlier trial, it seems that it is not necessary to go to the length of showing that, had the evidence been available at the earlier trial, it would have produced an opposite result.

This is a direct answer to your Honour Justice Edelman’s question and the proposition that your Honour Justice Keane put to me and then a little bit further down that paragraph he refers to Lord Buckmaster and McCann and Wollongong and then at the foot of the page he turns to this article of Mr Gordon QC and points out, somewhat embarrassingly to the author of the article, that no reference was made to the cases - Hip Foong Hong, Wollongong, McCann, Robinson.

He, Justice Menzies, expressly rejects various conditions which Mr Gordon said had to be established as opposed to were discretionary, including the last and your Honours will see, which would have produced an opposite result at an earlier trial.

Now, your Honour, that line of country has been faithfully applied in three intermediate appellate decisions – at least three intermediate appellate decisions in this country including, just sticking with his Honour Justice Blue’s judgment, Wentworth v Rogers (No 5) - that is at paragraph 365 - and can I just point out in the passage extracted in the second-last line Justice Kirby as President referred to “procured through fraud or other taint”. That is partly a response to the suggestion that this is confined to Derry v Peek.

I think your Honours have seen enough in terms of Wollongong Corporation, et cetera, that Justice Stanley was right. There are a whole host of equitable reasons for intervention. It is not confined to Derry v Peek. Then there is the decision in Johns v Cosgrove in the Queensland Court of Appeal at paragraph 368. Picking up McDonald v McDonald, in the middle paragraph about three lines, four lines in, says:

Some degree of materiality and causation is implied in the requirement that the judgment be “tainted”, “affected” or “obtained” by the fraud, and the concept of automatic extinction of a judgment upon an ill-defined degree of connection by means of those terms seems too blunt an instrument with which to govern this area -

and then talks about the need for, in a sense, the supervisory exercise of discretion and then concludes:

The authorities suggest however that it will be a rare case where a party who was shown to have been privy to fraud which has misled the court in proceedings resulting in a judgment in that party’s favour will be permitted to retain the benefit of the judgment.

Now, I will come to some more findings about the misleading and give your Honour those references to make good my promise to Justice Gordon. I think I gave your Honour the references to the findings of recklessness but not misleading - I will come to that.

Then the third of the Court of Appeal decisions I wish to refer your Honours to was Toubia v Schwenke referred to in 369 of Justice Blue and that is a decision of Justice Handley, Justice Heydon and Justice Hodgson and it rejects - can I put it this way, it rejects the argument being made by the appellant in this Court today. I commend the whole of the decision to your Honours because it also analyses Owens Bank v Bracco.

It points to the significance of the Privy Council decision in Hip Foong Hong. It points to the decision of McDonald and, indeed, expresses the opinion that McDonald actually precludes the argument being made and we would submit that is correct because the point I should have pointed out in McDonald is this: Chief Justice Barwick said the application which was there being made should have been, and this I think is the best answer, your Honour Justice Gordon, about what we submit, with respect, is the non-significant appellate proceedings. Chief Justice Barwick- - -

GORDON J: Did you say the non-significance?

MR BELL: - - - the non-significance of the fact that these cases - his Honour Chief Justice Barwick in McDonald v McDonald said the proper way to complain about fraud or perjury is in a separate action, i.e. outside the appellate process and his discussion and then his distinction between, and Lord Buckmaster had said the same thing in Hip Foong Hong. That is, we would respectfully submit, really important because it illustrates that the principles which are identified in the Privy Council, et cetera, picked up in this Court, are not dependent upon or reliant upon the fact that they appear in cases dealing with appeals.

KIEFEL CJ: Mr Bell, where in Toubia v Schwenke is the question of materiality addressed? The appellant referred to it, of course, to suggest that it was wrong with respect to the question of due diligence but I do not think we were taken to passages dealing with materiality.

MR BELL: No, your Honour, really the discussion begins, I think, on page 51, paragraph 23. There is a reference to - - -

GORDON J: Paragraph 37 on page 54 is where, I think, Justice Handley says he would not follow the dicta in Owens, et cetera, on due diligence.

MR BELL: Yes. Then, your Honour the Chief Justice, paragraph 41. It is the “fresh facts are material”. So fraud is established if the fresh facts are material. That statement is more than amply satisfied in this case because – our friends will not take issue with this – Justice Stanley and Justice Blue found that the evidence not disclosed - can I just make it clear that the evidence not disclosed was not just seen to be the further copy but what was discerned from the file, namely, that that further copy had emanated from a separate photocopying event, to use the language used.

There is no doubt that their Honours Justice Blue and Justice Stanley thought that those fresh facts were material to the issues in the case. They obviously were because that was an absolutely central issue on which her Honour, as found by the second Full Court and the first Full Court, agonised, because they were being asked to make very serious findings.

That is the direct answer to your Honour the Chief Justice’s question. The whole of this decision – I am conscious of the time – contains what one might expect to be a very learned analysis of the authorities and also a critique of Owens Bank v Bracco. One of the points in Owens Bank v Bracco that is made is that the – I will come to Monroe Schneider.

In Monroe Schneider, the statement that Owens Bank v Bracco represents the law in Australia was conceded. It was not the subject of any argument. Monroe Schneider expressly refers to that, that it was accepted by counsel in the case that it represented the law. We say it does not and we say it is wrong for other reasons, and I will come to those.

But there is Toubia. Now, your Honours, Toubia itself, special leave was refused. I do not put any jurisprudential store in that. But Toubia has been followed on many, many occasions throughout the country and those references your Honours will find in our written submissions – the full written submissions, not the oral outline – at paragraph 60, footnote 147, followed twice by the New South Wales Court of Appeal in Quarter Enterprises and Donnelly v ANZ.

GAGELER J: In the context of considering the equitable action?

MR BELL: I cannot give your Honour a responsible answer to that. I can check. I will need to check. I would not feel confident. But that was the subject of Toubia. That was the discussion.

GAGELER J: Well, it was obiter, was it not? I mean, it is the background to considering the - - -

GORDON J: Section 66 question.

GAGELER J: Section 66 of the Motor Accidents Act.

MR BELL: Yes, your Honour is right.

EDELMAN J: Special leave was refused in that case on the basis that the section 66 principles were not in doubt. Is that right?

MR BELL: Mr Zappia informs me he thinks this point was argued on the special leave application, this jurisdictional point, but when I say this jurisdictional point, the point we are discussing, but we would also need to check that. I apologise for not being able to answer that.

But could I then come to this Court’s decision in Quade? I do so obviously conscious of the fact that it is a different procedural context, as has been pointed out. But what was said by the Court – Quade (1991) 178 CLR 134. I want to focus on what is said by the whole Court at pages 142 over to 143 because this puts in probably better words than I can what I was attempting to answer the Chief Justice with, namely, that in a sense where you have a case such as this which is actually a fortiori Quade because Quade, it is to be remembered, was not a case of fraud, but there was a non-discovery and a non-explanation for the discovery. I do not think it goes so far as to describe the conduct as malpractice or serious malpractice, but it was unexplained discovery. Picking up the first full paragraph at 142:

The position is, however, different in a case such as the present where the unavailability of the evidence at the trial resulted from a significant failure by the successful party to comply with an order for the discovery of relevant documents in his possession or under his control. The application to that category of case of the general rule that a new trial should only be ordered on the ground of fresh evidence if it is “almost certain” or “reasonably clear” that the opposite result would have been produced if the evidence had been available at the first trial would, particularly where the failure was deliberate or remains unexplained, serve neither the demands of justice in the individual case –

Then we emphasise this:

nor the public interest in the administration of justice generally. In so far as the demands of justice in the individual case are concerned, it would cast upon the innocent party an unfairly onerous burden of demonstrating to virtual certainty what would have happened in the hypothetical situation which would have existed but for the other party’s misconduct.

Just pausing there, that is the point which Justice Blue picked up in paragraphs 387 and 388 of his judgment and it is consistent with the way that equity in other contexts erects a presumption of effect or materiality to be displaced by the equitable wrongdoer. Your Honours know that principle in other areas of equity. So that was what the court said about the interests in the immediate case. But then they go on:

In so far as the public interest in the administration of justice generally is concerned, it would be likely to ensure to the successful party the spoils of his own default and thereby encourage, rather than to penalize, failure to comply with pre-trial orders and procedural requirements.

We submit just so and even more so where the defaulting party has survived the appellate process with the default, in our case – more than just non-discovery – but serious malpractice as found – this consideration is more powerful because what it means is you would have extant on the books for the public to look at you would have a judgment – let us just say the first Full Court’s judgment sitting there undisturbed. But you have the second Full Court’s judgment saying there was serious malpractice. This judgment was affected or tainted by serious malpractice going to a material issue. You have one judge saying it would have made a difference, another judge saying there was a real possibility it would have made a difference but you cannot do anything about it.

Finality is important but it is not absolute. It has to be examined in context. What we would offer to your Honours is this. The considerations of finality are not excluded from the exercise of the discretion. We never said that. They are a factor to be taken into account as, indeed, they were by Justice Hargrave, Justice Blue and Justice Stanley. I will give your Honours those references. They are in our written submissions. They were.

But where a judgment has not been regularly obtained – which is this case and that is the language Sir Owen Dixon used in Wollongong Corporation to, in a sense, subsume those cases to which he put to one side – surprise, fraud, malpractice - where a judgment has not been regularly obtained, the principle and policy considerations suggesting that finality should win the day are, in our respectful submission, greatly diminished for the same reasons articulated in Quade.

Accepting the different context, this is powerful reasoning and we say it is even more powerful in a situation where the reckless non-discoverer has survived the appellate process by continuing its reckless non-discovery. There is no question of delay or anything of that nature on the facts of this case.

Now, what their Honours in Quade then did, as your Honours know, much like Chief Justice Barwick in the passage your Honour the Chief Justice pointed out to me, they went to the ends of justice as the test. They did not identify as preconditions or mandatory requirements any of the types of considerations that Mr Gordon QC’s article and our friends are saying should be preconditions to the exercise of jurisdiction, but rather, we say, completely consistent with equity’s history and practice, recognised that jurisdiction must be exercised judiciously, cautiously and with full regard to the importance of finality but were not going to straitjacket themselves. The Equity Court was not going to straitjacket itself in what it could do to correct an injustice at the end of the day.

That is not only good policy, in our respectful submission, but it is sensible because, quite frankly, this notion of reaching a satisfactory decision, would it actually have made a result, would it possibly have made a result, short of calling Justice Vanstone as a witness in the case, no one can ever know. One can try and reconstruct it, et cetera.

But if it is material and if there is a real possibility, if on the spectrum and material that was sufficiently great, taking into account the other factors to warrant the equitable intervention, then there is nothing wrong with that. That is, in our submission, the delivery of justice. It results in the setting aside of the judgment. It does not mean the plaintiff – the appellant – cannot have a new trial, cannot pursue what it was originally pursuing. But what it does ensure, what it does deliver, is that those new proceedings will be regularly conducted unlike what, ex hypothesi, will have been established through the existence of fraud or malpractice or misconduct. That is at the foot of 142.

EDELMAN J: Assume your submissions were to be accepted that the historical equity jurisdiction to set aside a judgment was virtually unlimited, given the breadth of the concept of surprise, and that it only had to lead to a material effect upon the judgment, is there not today a real difficulty with reconciling the breadth of that jurisdiction with the detail of the appellate process and the limits upon the appellate process? It could, in theory, just about set at nought all of the rules and the legislation that govern the appellate procedures.

MR BELL: We would submit respectfully not, your Honour. The ability to appeal and to engage in review had always existed. The fact that it is now reflected in statute does not, with respect, alter that. We do not submit that this is a jurisdiction likely to be engaged and we pleaded out in considerable detail malpractice. Your Honours were taken to a bit of the pleading, but there were pages of details which founded really the findings, some of which we have set out in paragraph 19 of our submissions. So it is not a question of rocking up to court asserting surprise, it has to be within a recognised category and it has to be demonstrated that it is material.

EDELMAN J: Historically “surprise” sometimes meant nothing more than a mistake.

MR BELL: Well, yes, but, your Honour, if there is a case to be made for confining the jurisdiction, we would submit the line is not to be drawn at Derry v Peek which is completely ahistorical, in our respectful submission, utterly ahistorical. The line is not to be drawn with Derry v Peek. It must at the very least include the kind of serious malpractice that we have established in these proceedings.

Now, the answer to what your Honour has put lies not in rejecting my submission but in a refinement in an appropriate case of what the ambit of surprise, either in this day and age or in this context or both, but one should not throw the baby out with the bathwater, in my respectful submission.

This is an important jurisdiction. It is a jurisdiction which has a long history. If one took the view that McDonald needs to be overruled by this Court, and our friends make a submission I think in paragraph 43 of their written submissions that it might need to be overruled, one can ask does this meet John v The Commissioner of Taxation-style overruling requirements and the answer has to be no.

It is based on a long lineage of cases referred to by this Court time and time again. Its policy underpinnings are sound. There has not been a split in the decisions of this Court - McDonald v McDonald, Quade is unanimous, Wollongong Corporation - I think there is a plurality. McDonald v McDonald, Justice Barwick, Justice Kitto and Justice Menzies; McCann is a judgment of Sir Owen Dixon with whom Justices Williams, Webb, Kitto and Taylor all agreed.

If you look at the matter by reference to the criteria, and I know the criteria have an element of flexibility in them for overruling and reopening but nonetheless, when one looks at some of the suggested criteria for overruling, this does not fit comfortably into that category and the decisions - to the extent it is put against us, Owens Bank v Bracco does not refer to Hip Foong Hong. It was a case about recognition of foreign judgments under the Foreign Judgments Act and whether one could refuse to recognise a foreign judgment on the grounds of fraud. That was the context at Owens Bank v Bracco as I remember from my conflict of laws days.

But it does not represent the law in Australia and it has been skilfully analysed not just by Justice Handley in Toubia but, with respect, by Justice Blue in the decision below. Can I just try and identify that? Your Honours, Justice Blue at paragraphs 375 and following made an analysis of Mr Gordon’s article and where he derived the so-called conditions from.

Again, his Honour goes into detail but he does demonstrate that apart from missing certain key cases Mr Gordon drew almost exclusively on a series of common law decisions which of course were narrower than those in the equity line. At 376 Justice Blue referred to Owens Bank v Bracco and as he says at 377, the point in Owens Bank v Bracco was conceded by the defendant.

So you have the passage in Owens Bank v Bracco being conceded and then when picked up in Monroe Schneider also conceded without argument. So these are not decisions – this is not a decision, with the greatest respect, to the distinguished law lords who were party to it, which faithfully reflected the earlier decisions of the Privy Council and the House of Lords which have been picked up here.

Your Honours, we also add to the analysis and the critique of Owens Bank v Bracco, so there is the critique given by Justice Handley, there is the critique given by Justice Blue and then in paragraph 67 of our written submissions – and I am indebted to Mr Zappia for his research on this – it points out that Owens Bank v Bracco in the House of Lords picked up the statement from the Court of Appeal which was said to be based on a decision, Phosphate Sewage Company v Molleson – this is 67 of our written submissions – and, as is there put, that case simply does not stand for what it was said to stand for in the English Court of Appeal.

I am reminded that the learned Solicitor-General for the State agrees with our analysis and our critique of Owens Bank v Bracco. So, your Honours, to the extent it is put up against us, we say, well, look at the position in England; strong reasons for respectfully not following it and criticising it as per incuriam on that basis. It drew on a case which simply did not stand as authority for the proposition for which it was cited.

KIEFEL CJ: Where are we in relation to your outline of argument?

MR BELL: Yes, your Honour. I have in a sense jumped forward to focus heavily on causation because that was obviously a matter of importance which was raised. I think I am content on the first question of principle – this is to say that is this Jonesco and Derry v Peek deceit – common law deceit – or is it broader than that. I am content to rest on what we put.

I took your Honours to Justice Stanley, paragraph 440, which listed all the other circumstances. I have taken you to Sir Owen Dixon, malpractice. Malpractice is picked up by Justice Menzies in McDonald expressly and malpractice as a concept which travels with fraud in this territory is picked up by the Full Court in Quade. So, respectfully, there is no basis on which it could be concluded that this was confined to Derry v Peek.

To the extent that our friends rely on the judgment of Sir John Rolt in the decision in Patch v Ward, can I refer your Honours to the analysis we make of that decision in our written submissions – paragraph 38 of our written submissions. One point that we make there is that our friends have unfortunately cut off – when they refer to this in their written submissions – the continuation of what Sir John Rolt said. It was tentative. To the extent he said it required actual deceit, but less than that, he said:

would probably not be sufficient – at all events I think could not, after such delay as has occurred in this case, be deemed sufficient –

In other words, he was not making any absolute statement confining the situation to deceit. Nor, can I add, was the Supreme Court of New Zealand in the case Commissioner of Inland Revenue v Redcliffe Forestry Venture, which my friend referred. One only needs to go to paragraph 1 of the decision of the court given by Justice McGrath where he said this:

The general rule is that, once a court having jurisdiction to hear and determine a proceeding has entered its final judgment, that judgment is binding on the parties unless it is set aside on appeal. There are, however, certain identified exceptions. Under one of them a final judgment may be challenged in separate proceedings which claim that the judgment was procured by fraud.

That is true. That is one of the exceptions. Another of the exceptions is surprise. Another is malpractice, et cetera. This was not stating definitively – in fact, it was doing the opposite – it was expressly adverting to. That is consistent with the other New Zealand decision our friends rely on – Shannon v Shannon, which really, on analysis, says nothing more than this is a jurisdiction to be exercised with caution.

There are factors which you would advert to – they are the Quade-type factors but if you think there was a lack of reasonable diligence that will not automatically mean a judgment will not be set aside. That is no more or no less than a recognition that a jurisdiction exists to be exercised cautiously in the interests of justice, with various identified factors.

So that case, in our respectful submission, does not assist and in Canada, your Honours, we have referred in our written submissions to the – in paragraph 69 of our written submissions to the – in footnote 174, the decision in Canada v Granitile Inc. As Mr Roberts correctly pointed out, in their three-page outline, the appellant has made reference to an Irish decision and a decision in Hong Kong that had not been referred to in their written submissions. We found out about those references this morning. I have not had a chance to review those cases, to look at the position in Hong Kong or Ireland so I think we would, in respect of those, not having had any opportunity to look at that, seek - - -

KIEFEL CJ: Do you wish to put a note into the Court?

MR BELL: Short leave.

KIEFEL CJ: Say within seven days.

MR BELL: Thank you, your Honour. Now, can I return – I am almost – I am on track in terms of our allocation.

KIEFEL CJ: What is the allocation?

MR BELL: I think I am to finish at 3.45 and we are finishing at 4.00, if that is convenient to the Court. That was the allocation we had discussed which has been adhered to.

KIEFEL CJ: You have not told me, though, where we are in relation to your outline.

MR BELL: Yes. So, your Honour, I have certainly covered propositions 1 to 5, 7, 8, 12 and 13. I will touch briefly on a couple of the other propositions then I want to make a submission about Monroe Schneider, which our friends put a lot of store on. Just before I go to those, I need to give the Court the references, as I said I would, to the key findings as to the misleading of Justice Vanstone and as to the misleading of the Full Court. Now, as to the – Justice Blue 244 to 262 - - -

GORDON J: Sorry, could you say that again, please, Mr Bell?

MR BELL: Justice Blue’s decision at judgment paragraphs 244 to 262 and 321 to 322 and in Justice Stanley’s decision at 426 to 436, 455, 463 and 474. Their Honours in those passages demonstrate, we say, apart from reaching the conclusions that her Honour and the Full Court were misled in a material respect, do identify how those judges in the earlier proceedings – how central and important the supressed material was for the issues in that case. So they do make good what I have been saying about materiality, if your Honours accept what I have been putting, as short of causation but something which was required to be satisfied. They engaged with that question, looked at it and worked through it.

Now, your Honours, if I return to the short outline. In respect of proposition 6 and, in a sense, I have touched on it but one can see a scale here. There is the bill of review for pure, fresh evidence. There is the less stringent review for fraud or surprise, impeaching a judgment. And then one has got Quade, which was an appellate decision but it is in the context of something short of malpractice. Quade is not predicated on malpractice; it is just non-discovery.

Now, if one were trying to grade those three scenarios the court’s intervention would be most likely to be expected, one would submit, where fraud or surprise or malpractice have been established. It is more serious than simply the discovery of fresh evidence and it is more serious than simply non-discovery, short of reckless or intentional non-discovery. So one would expect the test.

Now, the only qualification that one might up would be considerations of finality, but your Honours have my submission on that. Finality where the judgment is not regularly obtained is a much less powerful but not irrelevant consideration.

Could I ask your Honours, if your Honours would not mind annotating, at the end of paragraph 6 of our short outline, what I had intended to refer to as “PS”, they are our written submissions 49 to 51. They are the paragraphs which explain why it was not inappropriate for Justice Blue and Justice Stanley, in justly disposing of this case, to go through a quasi-Quade analysis. Justice Stanley did not apply Quade but he said as he found that the Full Court had been misled you could also get to the result by saying, “Well, if the Full Court had not been misled Quade would have been available, Quade would have been satisfied” et cetera. So that is where those paragraphs deal with that.

Then, your Honours, in proposition 9 - your Honours have this point, that on the second issue of principle conditions, the State is with my clients in terms of its analysis and submissions in relation to – this is the so-called Gordon requirements. The State says correctly, in our submission, that they are not requirements or preconditions to the exercise of the equitable jurisdiction. I am indebted also to the learned solicitor for pointing out that at the trial the State did not argue for Derek v Peek simpliciter; they expressly said, as he pointed out, fraud or cases analogous to fraud.

Now, on that the question of fraud and equitable fraud, this Court has of course made important observations about equitable fraud in recent decisions and we refer – fraud and equity. This Court cited Professor Hanbury’s work in its decision in SZFDE v Minister for Immigration [2007] HCA 35; (2007) 232 CLR 189, and that is referred to in paragraph 35 of our written submissions, and what was quoted was this:

in equity the word fraud applied “indifferently to all failures in relations wherein equity set a certain standard of conduct”.

Next, your Honours, can I make the point in our proposition 10 in the three-page document, this question of reasonable diligence, we submit, really cannot have a very powerful role to play where one is talking about where the malpractice involves misleading of the court. We observe that our learned friend’s notice of appeal, the grounds of the notice of appeal at page 493 of appeal book 2, ground 3 is directed towards “malpractice for failure to disclose a document”. It is not directed towards malpractice in misleading the court and we think that is probably deliberate because it is where the court has been misled in a material way. As Justice Thomas said in the Queensland Court of Appeal, it is going to be a very rare case where a judgment is not set aside.

Proposition 11 picks up a concept your Honour Justice Edelman articulated, not originated by that critically but it is a sound concept, we submit, that there is a sensible distinction to be drawn which our submissions and our case seeks to do, between the existence of power and the exercise of power. An analogy is that international freezing order case, the PT Bayan Case, the Court delivered a couple of years ago, and it was dealing with partly the inherent jurisdiction. It is much more sensible when one is dealing with either the inherent jurisdiction or the equitable jurisdiction, to maintain ultimate flexibility in the court.

So, you might have criteria where the jurisdiction is engaged but then once it is engaged, the power exists. One should not then be concerned to qualify the power or create categories for the exercise of power because every time one does that, one is hamstrung or straight jacketing oneself in areas which are of such potential importance as correcting an injustice where a court has been misled, correcting fraud, correcting actual fraud, maybe correcting surprise and mistake and the like.

So, really, a way of thinking about the distinction between the two sides of the argument here is - our friends would seek to constrain the existence of the power, rather than recognise that the exercise of the power may legitimately take different factors into consideration and that is one way of thinking about the divide between the two parties, at least on what we have described as the second issue, whether the exercise of the power, once engaged, should be conditioned further, à la Mr Gordon’s conditions or whether it should be more like the approach articulated by this Court in the different context in Quade.

Now, Monroe Schneider, your Honours, I will start with a trite point but nonetheless an important one, it is not a decision of this Court and we have pointed to a wealth of decisions - - -

KIEFEL CJ: It is perhaps not difficult to infer who the author might be though - - -

MR BELL: Possibly, possibly not, but your Honour to - - -

KIEFEL CJ: - - - and that it has been referred to with approval by this Court in DJL v Central Authority.

MR BELL: Yes, but those cases in this Court which have footnoted it have also footnoted McDonald.

KIEFEL CJ: That is the point, is it not, that Monroe Schneider Associates v No 1 Raberem Pty Ltd [1992] FCA 367; (1992) 37 FCR 234 at 242, their Honours refer to McDonald and to the passages to which you have referred and the judgments of the Chief Justice and Justice Menzies, and it is said:

the point being that if the court concludes upon –

this is about point 7 - - -

MR BELL: Sorry, your Honour, page?

KIEFEL CJ: Page 242, about point 7 in the paragraph commencing “In McDonald v McDonald:

the point being that if the court concludes upon the fresh evidence that the judgment was obtained by fraud, that is sufficient to justify setting it aside and ordering a new trial: see also Menzies J - - -

MR BELL: Yes.

KIEFEL CJ: Their Honours go on:

But it is necessary to establish the perpetration of the fraud alleged and the fraud must be “directly material” to the judgement.

They discuss collateral issues and then go on:

In other cases, the question is whether the alleged fraud can be said to have probably affected the result.

MR BELL: Yes. Your Honour, first, as I have pointed out, the line of authority does not use that concept of probability. That is the first point.

KIEFEL CJ: Have you had regard to the authorities cited for that proposition at the conclusion of that paragraph?

MR BELL: I just need to check that, your Honour, but the point I was making in the response I gave to your Honour is that this is not referring to Hip Foong Hong. It is not referring to Jonesco v Beard. Further, insofar as it refers to Justice Menzies’ judgment in McDonald, that is the judgment which, as I have shown to your Honour, expressly rejected the notion that, if it would probably have affected the result, that is not a requirement of this jurisdiction.

Can I go back and analyse this decision. The first point about this decision, your Honours, is on page 240, there is a reference to the broad jurisdiction to unravel fraud, about the middle of the page. Then there is a reference to Owens Bank v Bracco. As their Honours point out over the page, at 241:

These remarks –

in Owens Bank v Bracco:

were delivered obiter, with a view to contrasting the law as regards the impeachment of domestic judgments, with the lesser degree of finality –

so that prior to international law context affected in turn by the Foreign Judgments Act. And then, as I pointed out earlier:

It is not disputed on the present appeal that the law in Australia is to the same effect as that described by Lord Bridge.

The point was not argued, with respect, your Honour. And this was a case in which the court never needed to get to first base because of Justice Wilcox’s findings that what was said to have been concealed was known in a relevant sense, so there was no engagement of the jurisdiction. So this is itself an obiter. With the greatest respect to the members of the Court, obviously, they are obiter observations which draw on other obiter observations from Owens Bank v Bracco which were in turn not the subject of argument but were conceded, wrongly, we submit, as reflecting the law in Australia. Their Honours go on to refer about two-thirds of the way down the page to the decision in Cabassi v Vila:

The limits of that jurisdiction are still the subject of debate . . . not appropriate to pursue the matter here.

So, this is not seeking to provide a universal statement. Then a reference to equity’s intervention by reference to surprise and sharp practice and then – inconsistent with our friend’s first proposition, subordination of witnesses, well-established species of fraud – this is not Derry v Peek. This is broader – consistent with all the submissions we have put.

Then, your Honours, the reference to McDonald v McDonald at 242 to which your Honour drew my attention, this – particularly the passage extracted from Justice Barwick about the evidence not being required to be admissible – that is very hard, with respect, to square with an acceptance by this Full Federal Court that it must have probably made a difference to the result because - - -

EDELMAN J: You can defraud people in ways other than by inadmissible evidence.

MR BELL: Yes, that is true.

EDELMAN J: With a “but for” requirement.

MR BELL: But this discussion was in the context of fresh evidence. It is true that there are different ways of defrauding people but this is a question of the evidence and Chief Justice Barwick says it does not need to be admissible. It is very hard, with respect, to square - - -

GORDON J: I think the point is, Mr Bell, it is not admissible at large. What Chief Justice Barwick is pointing out is that it does not need to be admissible on the issues between the parties in the action. It can be referable to fraud on a different issue. In other words, one is not bound by the issues - - -

MR BELL: In that case, it is hard to see that it would be material, your Honour.

KIEFEL CJ: The point there is that, really, in the language there used – in the summary of what Chief Justice Barwick has said – the point being made is that the judgment was obtained by fraud. Does that not imply causation? It is the same as what we have discussed earlier today about it being procured by fraud. There has to be a - - -

MR BELL: With respect, your Honour, observations – obiter observations in a case where this was not argued, where the law was conceded to be in England, you cannot, with respect, drive the result here where there is such a wealth and long line of authority. May I point out, with respect, that the reference to Justice Menzies at point 5 of that page – Justice Menzies at 542 to 543 – that is the very page on which Justice Menzies rejects Mr Gordon QC’s statement that there is a requirement that the fresh evidence would probably have altered the result.

So, we, with respect, do not see this judgment as any more than a typically learned discussion of some of the issues in this area. It would not be necessary for the decision – and to the extent it has been picked up in footnotes in this Court, it has not been picked up in the context of this Court considering the principles for setting aside judgment. It has been picked up simply as reference to the equitable jurisdiction to set aside judgment and it is an example of that.

KIEFEL CJ: I think that is correct.

MR BELL: It is an example of that.

KIEFEL CJ: This page has not been footnoted.

MR BELL: No.

KIEFEL CJ: This particular page has not been footnoted. I think it is the earlier references that have, at pages 239 and 240.

MR BELL: Yes. Then, your Honours, at 244, at about point 5, the paragraph beginning “The terms of his Honour’s reasoning” seems to revert to the language of:

reasonable possibility that the alleged fraud had occurred or was directly material to, or had probably affected, the result of the trial.

Their Honours are not, with respect, engaging in this “but for” question which is before this Court. Your Honour the Chief Justice asked me about the decision referred to at 242, under that passage Boswell v Coaks.

KIEFEL CJ: Yes.

MR BELL: Justice Blue dealt with that judgment and we will adopt his Honour’s analysis. It is at paragraph 353.

KIEFEL CJ: Did you say paragraph 353?

MR BELL: Paragraphs 353 and 354 of Justice Blue’s judgment. Your Honours, to complete those submissions on Monroe Schneider, it is dealt with in paragraph 14 of our short submission, our three-page submission. But that in turn picks up paragraphs 65 and 66 of the fuller written submission where I make those points, one of which is of course that, as we point out in the last sentence of 66, the same cases which refer to Monroe Schneider – the same cases in this Court which footnote Monroe Schneider also footnote McDonald. There is no suggestion that this Court by footnoting Monroe Schneider is indirectly throwing out years of consistent jurisprudence, in our respectful submission, in this Court.

Now, your Honours, the topic of finality is referred to in paragraph 16 of our short outline. I have already touched on this. It refers your Honours on to paragraphs 45 to 47 and 63 to 64 of our main submissions. Just pausing there, special leave was granted in this case very deliberately on the grounds of principle. There was an attempt to canvass various findings and special leave was confined.

If the Court finds consistently with our submissions that the jurisdiction was engaged and it is then an exercise of discretion, there is no basis for the interference where that discretion was exercised by Justice Blue and Justice Stanley. This Court, apart from anything else, simply does not have the material before it. The record in this case is vast, as your Honours might imagine. It has such detailed and prolonged history, including, effectively, four records.

My learned friend, Mr Roberts, handed up some material, which we learned he was going to do yesterday, I think in aid of his submission that we had always put Quade in issue. I tried to demonstrate by reference to paragraphs 312 to 314 of Justice Blue’s judgment that from day 2 of the trial, Quade malpractice and the Quade considerations were accepted as the territory for battle.

We have also given your Honours the reference in paragraphs 4 and 6 of our main written submissions to the fact that the Court of Appeal matter was fought expressly on the basis of Quade, that it was a weighing exercise and that different factors, which our friends now say should be conditions, might have different weight. That would be for the judges.

There is some short material – which is very much done on the run because we have not really had a chance to go back and look at the full record. But to counter what we apprehend our friend is trying to demonstrate by his supplementary materials, we have some short materials which pick up statements made by Mr Sullivan in the proceedings before Justice Hargrave and submissions from the Court of Appeal where Clone certainly accepted that this was a Quade-style – I am only making these points and only seeking to supplement the record with short additional materials because, as I mentioned before lunch, if the Court is against us, there is a question vitally important - - -

KIEFEL CJ: This is put on the question of costs only.

MR BELL: - - - to my client because if the Court does rule against us, it will be on a basis which, with respect, was not the basis on which the trial was fought, nor was it the basis on which the Court of Appeal was fought. We sought findings consistent with the test which was agreed. That test only required us to establish that there was a reasonable possibility. My predecessor was asked in the Court of Appeal would we have run the trial any differently. The answer to that was no in terms of - we did not suggest that other evidence would have been led - - -

GORDON J: The problem was your pleaded case never rose that high. It never rose, but putting aside the way the case was run, as I understand the pleadings, it never rose to a case of actual fraud. Is that right?

MR BELL: Not actual fraud, no, malpractice, but, your Honour, it was accepted that Quade-style malpractice could engage the jurisdiction and reckless failure to discover could engage – that is the purpose of my reference to - - -

GORDON J: No, I understand 312 to 314. I understand the point. I am just making the point that your pleading never rose to - - -

MR BELL: Yes, but had the point been taken – if we had not proceeded from day 2 of the trial in the way we did then no doubt the Court would have been asked to find that it would probably have made a difference rather than as a reasonable possibility of doing that.

KIEFEL CJ: Perhaps if you would like to just hand up - - -

MR BELL: Certainly, your Honour.

KIEFEL CJ: This is on the issue of costs and in relation to - to counter – is there an index to tell us, without having to read all of it, where we are going to find the relevant parts?

MR BELL: There is an index. If I could give your Honours a one-page note with the relevant paragraphs of the document.

KIEFEL CJ: Could you provide that within 24 hours?

MR BELL: Yes, your Honour. There is a loose page in the materials which is an extract of the transcript before Justice Hargrave and at 796, line 23, the judge said:

In a sense, the strength of the - or the degree of malpractice, just like the degree of lack of diligence, are relevant factors, simple as that.

MR SULLIVAN: Of course, yes, and I will take your Honour very briefly to Quade in one moment.

HIS HONOUR: Yes.

MR SULLIVAN: But, for instance, if your Honour was to find very, very serious malpractice, perhaps your Honour would have to be satisfied -

et cetera. Then over the page - - -

EDELMAN J: Although on the pleadings, Quade was pleaded and it was disputed on the pleadings that Quade was the appropriate test, by the time the trial had opened it was common ground that Quade was the test to apply.

MR BELL: That is what we submit. As Justice Blue recounts in those paragraphs, the judge got the opening submissions by I think it was Mr O’Bryan for my clients. They referred to Quade. The judge did a summary of issue based on the opening submissions and put it to Mr Sullivan. He said, “Do you agree these are the key issues?” and it

picked up Quade and the discretionary factors in the context of malpractice and as Justice Blue records from the second day of the trial that was how that matter was conducted, and of course Quade was maintained on appeal as the appropriate test. If it please the Court, they are our submissions and we will – 24 hours and seven days for the Irish, Hong Kong.

KIEFEL CJ: Yes, thank you. Mr Roberts.

MR ROBERTS: First, my learned friend submitted that the finding of Justice Vanstone was that there was a single photocopying event and, in the Full Court or in the subsequent trial, there was a finding, on the balance of probabilities of two photocopying events, the submission was wrong at both levels. Justice Vanstone made no finding of a single photocopying event and neither did the Full Court make a finding as to two photocopying events. Justice Blue made such a finding. But, Justice Hargrave found that:

doubts remain as to the provenance –

and was not prepared to make such a finding. That is at paragraph 237. Justice Debelle at 654 to 655 found that it was not possible “on the balance of probabilities” to determine whether there were multiple copying events and it was mere conjecture. Justice Stanley, at paragraph 463 found a very curious finding having found that it was not possible to say one way or the other, it was a possibility. His Honour described the possibility in this way:

While I accept that it is arguable that the third copy agreement cannot be conclusively proven to have been copied from the original agreement, it is possible that each of P9 and D9 are the results of separate photocopying events.

So there is one judge alone who has found, on the balance of probabilities, multiple photocopying events.

Next, in relation to my learned friend’s reference to Jonesco, the preceding sentence to “might deceive the court” was that fraud is an insidious disease. In my respectful submission, the court was there referring to actual dishonesty and in the context of actual dishonesty referred to “might deceive the court”. On the topic of “probably affected the result” and what was said in Monroe Schneider at page 242 on “probably affected the result”, that is precisely the language in Birch v Birch, the reference to which is in 1902 - apologies, I will take it from Monroe Schneider. I might come back to the reference there.

At page 368 in a decision of Lord Justice Williams, his Honour remarked “Nor do I think in such a case the discovery could properly be described as fishing, but in each case it is a question of degree. Is the fact alleged to have been discovered so evidenced and so material as to make it reasonably probable that the action will succeed? If it is, I think the action ought not to be stayed.”

So this was on an application to stay the proceedings as being an abuse of process because it was a collateral attack on a perfected judgment. The stay ought be ordered unless it was that it was reasonably probable that the result would have different.

GAGELER J: Well, I think 1992 is the year when, according to Dr Bell, everything went wrong.

MR ROBERTS: No, this was in 1902 - - -

GAGELER J: 1902, I am sorry.

MR ROBERTS: The other decision referred to at page 242 of Monroe Schneider was Boswell v Coaks [1894] 6 R 167. The relevant extract is at page 174 in the Earl of Selborne’s speech where it is remarked:

whether anything material to disturb (if proved) the judgment of this House had been newly discovered by the plaintiff. That involves a double proposition ; first, that some-thing has been newly discovered –

that is the fraud:

which is all they have attempted to prove, and then that that something is material. And there is a total defect both of allegation and of evidence of that which alone could make it material.

On that basis, the judgment below was upheld. Your Honours, my learned friend then submitted that the question of materiality and causation are not the same thing. In my respectful submission, the approach to the question of causation ought to be that in paragraph 24 of the Court of Appeal’s decision in Takhar. That was case 10 on my list that I took the Court to where they described the relevant materiality as being an operative cause of the court’s decision to give the judgment in the way that it did.

Next, my learned friend submitted that at paragraph 474 Justice Stanley found that the result would have been decided differently. That is in the context of his Honour’s consideration of the appeal judgment and whether the appeal court would have applied Quade and therefore the lower test in respect of whether Justice Vanstone’s trial decision would have been decided differently, his Honour dealt with that at paragraph 465 where his Honour’s finding was that it was a reasonable possibility.

In relation to Hip Foong and the debate that passed arguendo between my learned friend and your Honour Justice Gordon, Hip Foong was a new trial motion where the appeal rights where not yet exhausted. That is apparent from page 189 of the report, and the use of that procedure to enable something more than affidavit material but in fact exploration of the evidence of the fraud and cross-examination is relevantly the desired procedure.

That emerges from Jonesco v Beard and is simply a proper recognition that if you are going to have a trial on a question of fraud you need factual findings to have the fraud proved. It is not, in my respectful submission, any notion of a relaxation or equalisation of the test.

Next, in relation to Owens Bank v Bracco being wrong and per incuriam because they were not taken to Jonesco, your Honours will see that the authorities that were relied upon by the House of Lords in that decision were McIlkenny and Hunter which are case 3 and case 1 on my list of authorities. They are the cases where there has been a consideration of the res judicata and the extent to which you can have a collateral attack on a judgment on the basis of an allegation of fraud.

Next, in relation to the quote from Wollongong, my learned friend took your Honours to paragraph 363 of Justice Blue’s decision where he quoted from Wollongong. But in that passage – for reasons that, perhaps, explain the misapprehension of principle by Justice Blue – he excluded from the quote the commencing words which were “In a case where you have a misdirection, misreception of evidence or wrongful rejection of evidence or other error, or cases of fraud, malpractice or surprise”. So, his Honour, with respect, has failed to appreciate, viewed in the totality of the sentence, what the Chief Justice was referring to was appealable error.

Next, in relation to McDonald v McDonald, the question of admissibility of the evidence of fraud and the question of whether it is material are distinct questions and properly analysed, in my respectful submission, in Monroe Schneider. They are distinct questions because you may, for example, have collateral proof of subordination of a witness, that is, deliberate, fraudulent conduct inducing a witness to lie.

That that evidence was not admissible in the original cause does not affect the question of materiality. When one then looks to the evidence of that relevant witness at trial it may still have been material evidence at trial which you now know, after the event, was the subject of fraudulent subordination of perjury. So, it is, in my respectful submission, a distinctly different question.

Next, in relation to the question of McDonald v McDonald, the case was in fact the fresh evidence case. It was not a question of fraud or even malpractice on appeal. That is evident from what in fact occurred in McDonald v McDonald where obiter remarks distinguishing on the one hand a fresh evidence case and on the other hand a case where there had been some form of taint at trial, that is apparent from the Chief Justice’s judgment at page 532, from Justice Taylor’s judgment at 534 and from Justice Menzies’ judgment at page 540.

Next, in relation to McDonald v McDonald in Justice Menzies’ rejection of Mr Gordon’s article, Justice Menzies referred to four decisions: Hip Foong, Wollongong, McCann, and Robinson v Smith. The first three of course were appeal cases. The fourth, Robinson v Smith, was a common law motion for a new trial before perfection of the judgment.

In context, his Honour is merely saying, in my submission, that insofar as those requirements would be required on an appeal, they are wrong. But that is not in fact what the article is addressing. The article is addressing it in the way in which the Full Court applied it in Monroe Schneider, which is where it is in the equitable jurisdiction to set aside a perfected judgment for fraud.

Next, in relation to Toubia v Schwenke, that was a case where the only question before the court was whether section 66 of the Motor Vehicles Act ability to recover a judgment on the basis that it had been procured by fraud was subject to a reasonable diligence defence, so it did not give rise to a broader consideration of the equitable jurisdiction, save that at paragraph 22 of the reasons, a submission from counsel that the test applicable to that applying in equity ought be applied and, in the context of that, Justice Handley addressed whether there was a requirement for reasonable diligence in the equitable jurisdiction where one was setting aside a perfected judgment.

In that context, what was assumed was actual fraud, at paragraphs 38 and 41. What was in the context of an actual fraud finding held against it was that in the tort of deceit one does not need to establish actual fraud. So in the event that there was a finding of actual fraud, as distinct from a lesser species of malpractice, it was said that a reasonable diligence requirement would not operate.

But for the reasons I have earlier addressed, it is more than distinguishable in this case. My submission is that SZFDE and the more recent decision of the New South Wales Court of Appeal in Nadinic, which I have also cited in my outline, have overtaken the question of “fraud unravels all”.

Next, in the debate between - your Honours, my apologies, I cannot now recall the context of the debate – my learned friend submitted that appellate procedures would not be undermined. I think it was in the context of a debate with your Honour Justice Edelman. Can I invite your Honours to the decision of the Master of the Rolls in In re St Nazaire [1879] 12 Ch Div 88 at 99 where that context of undermining time limits for appeal and the like was a relevant consideration in a post-Judicature Act context.

Next, in relation to Redcliffe, my learned friend referred at paragraph 1 to one ground to set aside for fraud. At paragraph 28 of the court’s judgment they explained why judgments may be the subject of collateral attack. One illustration of an expansion of what was said at paragraph 1 was an attack on a judgment not yet perfected. That is the citation at footnote 31 in paragraph 28.

Next, in relation to ground of appeal 2.2, a failure to disclose the document is, in my submission, sufficiently broad to encapsulate both the discovery issue and counsel’s failure to draw the court’s attention to it. Next, my learned friend submitted in relation to Monroe Schneider that, with respect, it was obiter only in relation to the fresh evidence question – on the topic of fresh evidence that had been resolved by Justice Wilcox, and their Honours remarked that it was therefore unnecessary strictly for them to consider fresh evidence as a ground, but they went on to do it, anyway.

But the approach at 244 is a rejection of the fraud case for reasons there found. In relation to that my learned friend submitted that it was language of “a reasonable possibility”. It is not, with respect. At page 244 their Honours found there was not a reasonable possibility of the fraud being proved because this was a preliminary question, but further that the fraud did not probably affect the result. So the reasonable possibility was to the standard of proof of the fraud. The reasonable probability was the language of the court in relation to materiality.

Penultimately, in relation to the question of citations in this Court of Monroe Schneider, in SZFDE, the Court, at paragraph [16], in the question of finality of judgments and the extent to which fraud unravels all, did cite Monroe Schneider from pages 238 to 243.

Finally, in relation to the question of the conduct of the case below, your Honours will find the issue of the acceptance of the issues as being something of a red herring, with respect. At paragraph 13 of Justice Hargrave’s decision, he set out the issues. The issues as he set them out relevantly include the extent of any malpractice – I am sorry, I retract that.

What degree of culpability was his first issue, the extent of any likelihood of the result being different and whether Players exercised reasonable diligence. So his Honour has provided a list of issues in something of a conventional way and the acceptance that those issues encapsulated the matters in the case is not, as Justice Blue remarked, an acceptance that this all became a discretion.

The concession relating to Quade was made for the first time in the closing submissions and there is no reference other than that to the test otherwise applicable in the court below. My submission is questions of costs ought not be dealt with until the conclusion of the judgment in the conventional way in the event that there is to be a submission regarding the conduct of the proceedings. If necessary, the parties ought to have an opportunity to be heard at that point rather than - - -

KIEFEL CJ: Do you mean we will go over it again; is that what you are suggesting?

MR ROBERTS: Your Honour, my submission is simply that it is undesirable now to be addressing the question of costs in advance of any ruling of the Court.

KIEFEL CJ: I think the parties ought to be very clear that the hearing today has been a hearing on all issues, including costs.

MR ROBERTS: My submission is that what was then clear through the conduct of the proceedings was that the parties had joined issue. In relation to that joinder of issue, even insofar as there had been a relaxation of that joinder of issue, the Attorney-General’s submissions at trial meant that the question of actual dishonesty needed to be dealt with. So, in my respectful submission, nothing has changed below.

In relation to the question of the way in which the Full Court proceeded, what my learned friend did not take your Honours to was paragraph 315, which was the concession that the case could not have been done differently – that is the Justice Blue decision. I think my learned friend did refer to the concession. The relevant recording of the concession is at paragraph 315 of Justice Blue’s decision.

I am sorry, I had indicated that that was my final submission. Could I just make one further reference. My learned friend referred to Ramsay Health Care v Compton, a recent decision of this Court [2017] HCA 28. At paragraph 54 in the judgment of the plurality, it was remarked that the:

scrutiny by a Bankruptcy Court of the debt propounded by a judgment creditor seeking a sequestration order in no sense involves an attempt to impeach the judgment.

So, in my respectful submission, it is simply not a like case. In relation to the citation of Birch v Birch, which I was not able to give the Court, it is [1902] 86 LTR 364. If the Court pleases.

KIEFEL CJ: You have no reply.

MR BLEBY: Your Honours, just one very short matter. The matter of Hip Foong Hong that my friend relied on, at paragraph 354 of his judgment at page 365 of the appeal book, Justice Blue said that:

Since Boswell v Coaks, it has been accepted that an application to set aside a judgment on the ground of fraud or surprise should generally be brought by a separate action rather than by motion in the original action.

His Honour cites Hip Foong Hong and Jonesco v Beard. The only reference to that in Hip Foong Hong is at page 894 after the critical passage about fraud and surprise, where it says that the laws only have to add that:

where a new trial is sought upon the ground of fraud, procedure by motion and affidavit –

et cetera; that is to say, it is an obiter comment. It only references fraud. Similarly in Jonesco v Beard at pages 300 to 301, the only reference to this procedure is on fraud. It is not clear to us where his Honour Justice Blue got the reference to fraud or surprise as being the motivator for that separate motion. May it please the Court.

KIEFEL CJ: Thank you. The Court reserves its decision in this matter and adjourns to 9.45 am tomorrow for pronouncement of orders and otherwise to 10.00 am.

AT 4.12 PM THE MATTER WAS ADJOURNED