The latest from the High Court: June 2018

EQUITY

Power of a court to set aside a perfected judgment – fraud

Clone Pty Ltd v Players Pty Ltd (In liquidation) (Receivers and Managers Appointed) [2018] HCA 12 (21 March 2018) concerned the scope of the equitable power of the Supreme Court of a state to set aside its own perfected judgment.

The proceedings concerned a dispute about the interpretation of a lease executed between the parties and, in particular, whether the lease provided for a transfer of lease premises and licences for ‘NIL’ consideration. That dispute turned on whether the respondent had struck through the word NIL when the lease was executed. No original of the lease was found and copies of the lease produced to the Court by the parties were inconclusive, but tended to suggest the word was not struck through. However, unbeknown to the respondent, junior counsel for the appellant had been told by an employee of the Liquor and Gambling Commissioner (‘Commissioner’) about another copy of the lease (the ‘third copy’) that showed the strike through more clearly. The employee was instructed not to copy the lease, to avoid its discovery, and later subpoenas were directed at files held by the Commissioner that did not contain the additional copy of the lease, meaning that the third copy was never produced to the respondent. A fourth copy was, however, produced to the Court as part of a further file, but was never called on.

At first instance, the South Australian Supreme Court found for the appellant, largely because of a finding that the word NIL was not struck through. The respondent later found out about the third and fourth copies and brought proceedings to set aside the judgment and to get a new trial. The respondent alleged malpractice on the part of the appellant and argued that the judgment could therefore be set aside. The primary judge and the Court of Appeal accepted those arguments.