Citation: El Ketab v Lawindi [2001] NSWSC 249
Court: Supreme Court of New South Wales, Equity Division (Construction List)
Date: 6 April 2001
Judge(s): Hunter J
Background
The plaintiff (a self-represented litigant in the underlying dispute) sought to set aside a judgment entered by Einstein J on 24 September 1999 in separate proceedings. That earlier judgment had enforced an arbitration award of approximately $72,885 against the plaintiff, together with a costs order. The plaintiff had been unable to attend the 1999 hearing due to ill health and was represented only by a solicitor instructed solely to seek an adjournment.
During the 1999 hearing, Einstein J asked whether there were any Court of Appeal proceedings on foot to set aside the arbitration award. The plaintiff's solicitor said he was unaware of any. Counsel and the instructing solicitor for the defendant were present in court and said nothing, despite being aware of those proceedings.
The plaintiff argued that this silence constituted fraud, and that had Einstein J known of the Court of Appeal proceedings, judgment would not have been entered. He sought a declaration that the 1999 judgment was obtained by fraud, and orders either setting it aside or restraining its enforcement.
Legal Issues
- Whether the silence of the defendant's legal representatives, in the face of a direct question from the bench about related Court of Appeal proceedings, amounted to fraud sufficient to set aside the 1999 judgment.
- Whether the plaintiff's own conduct, including his failure to provide a defence to his solicitor and his subsequent inaction after receiving notice of the contentious passage in the judgment, was relevant to the court's assessment.
- Whether the court had jurisdiction to set aside the judgment in any event.
Decision
Hunter J dismissed the fraud claim. The court found that no case of fraud had been made out. The defendant's counsel and solicitor remained silent when Einstein J asked about related proceedings, but the court did not characterise that silence as fraudulent conduct sufficient to vitiate the judgment. The plaintiff had been specifically asked by his own solicitor for instructions as to any defence during a short adjournment in the 1999 hearing and had declined or failed to provide any.
The court also noted that the plaintiff had received Tremback's notes shortly after the 1999 judgment was delivered and was aware of the contentious passage in Einstein J's reasons. Despite this, he took no steps to correct the judgment. Instead, he pursued an application for leave to appeal in November 1999, which was later rescinded by the Court of Appeal in February 2000. These proceedings were not commenced for another six months after that.
Hunter J observed, without resolving the jurisdiction question definitively, that there was no basis on which the judgment should be set aside even assuming jurisdiction existed. The protracted litigation had generated costs far exceeding the value of the underlying arbitration award.
Orders Made
- The summons is dismissed.
- The plaintiff is to pay the defendant's costs of the proceedings.
Key Takeaways
- A party seeking to set aside a judgment on the ground of fraud must establish that fraud was actually committed; mere silence by opposing legal representatives, without more, did not satisfy that threshold in this case.
- The Supreme Court treated the plaintiff's own failure to provide instructions on available defences, despite being directly prompted by his solicitor during a hearing adjournment, as a significant factor weighing against any claim that the earlier judgment was improperly obtained.
- Where a party becomes aware of an error or contentious passage in a judgment shortly after it is delivered, a failure to take prompt steps to correct it can be taken into account when the party later seeks to challenge the judgment on related grounds.
- In dismissing the summons, Hunter J highlighted the cumulative and disproportionate nature of the litigation, with legal costs substantially exceeding the amount of the arbitration award that had sparked the dispute.
- A judgment may contain an erroneous statement from the bench without that error, or the failure of a party's representatives to correct it, automatically constituting fraud sufficient to enliven the court's power to set aside the judgment.
Legislation and Cases Referenced
Legislation:
- Commercial Arbitration Act 1984 (NSW)
Cases:
- No specific cases were cited in the text of the judgment provided.