Judgment of: S Westgarth, Deputy President; R Perrignon, Senior Member
The Appeal Panel dismissed an appeal from the Consumer and Commercial Division of the Tribunal, holding that there were no relevant grounds to set aside consent orders made by the Tribunal below.
As a starting point, the Appeal Panel observed (at [26]) that a consent order may be set aside in certain circumstances, applying the Appeal Panel’s holding in Prenc v Stojcevski [2016] NSWCATAP 244 at [43]-[44]:
“A consent order can properly be described as an order which expresses an agreement in a more formal way than usual and can be set aside on any basis upon which the underlying agreement could be set aside: Taheri v Vitek (2014) 87 NSWLR 403; [2014] NSWCA 209 at [71]. In Harvey v Phillips (1956) 95 CLR 234; [1956] HCA 27, Dixon CJ, McTiernan, Williams, Webb and Fullagar JJ stated, at 243 -4:
“The question whether the compromise is to be set aside depends upon the existence of a ground which would suffice to render a simple contract void or voidable or to entitle the party to equitable relief against it, grounds for example such as illegality, misrepresentation, non-disclosure of a material fact where disclosure is required, duress, mistake, undue influence, abuse of confidence or the like. … [T]here is a dictum of Lindley L.J. which is distinct enough: “… nor have I the slightest doubt that a consent order can be impeached, not only on the ground of fraud but upon any grounds which invalidate the agreement it expresses in a more formal way than usual .... To my mind the only question is whether the agreement on which the consent order was based can be invalidated or not. Of course if that agreement cannot be invalidated the consent order is good”: Huddersfield Banking Co. Ltd. v. Henry Lister & Son Ltd [(1895) 2 Ch 273 at 280].”
It might be noted that the High Court in that case refused to set aside the compromise despite the “very unwilling and ephemeral character of the consent which the plaintiff was led to give.” The High Court in this regard said, at 244:
“But it is enough if she expressed a real intention to consent, even if experience might have suggested that it was an attitude she was not likely to maintain. In the circumstances one might have expected that she would be asked to sign a written authority. But that was not done. However the finding of the Supreme Court, supported as it is by evidence, suffices to establish that she definitely did give her authority, however reluctant it may have been. It is impossible to regard the authority she thus gave as insufficient to support the compromise. The issue is one which must be considered from the defendants’ point of view as well as from hers.” (par 43 and 44)”
The Appeal Panel then considered (at [27]) the principles relevant to whether a consent order can be set aside, summarised in McDonald v McDonald [2016] NSWCATAP 252 at [59], as follows:
“(1) At common law, a consent order may be set aside on the same basis as the underlying agreement may be set aside;
(2) Whether the agreement constituting the compromise can be set aside depends upon the existence of a ground which would suffice to render a simple contract void or voidable or entitle the party to equitable relief against it, grounds for example such as illegality, misrepresentation, non-disclosure of a material fact where disclosure is required, duress, mistake, undue influence, abuse of confidence and the like;
(3) In order to set aside a consent order on one of the above bases, it must be possible to point to some contumelious conduct on behalf of the respondent for instance:
(a) with respect to duress, it must be shown that illegitimate pressure was placed on the appellant such that there was no reasonable alternative but for her to submit;
(b) with respect to undue influence, not only must there be a source of power to deprive the other person of free and voluntary consent, but it must be shown that the agreement was the result of the actual influence;
(4) With respect to mistake:
(i) the misapprehension must arise in relation to a fact, law or circumstances that affects the substance of an obligation or the mistaken party’s motives for entering into the contract;
(ii) a common mistake arises when the mistaken belief is held by both parties;
(iii) a unilateral mistake is where one party is mistaken but where there are no other vitiating circumstances, such as misleading or deceptive conduct, fraud or misrepresentation, a unilateral mistake will not generally constitute a basis for setting aside an agreement unless the mistake is a serious mistake in relation to a fundamental term of the agreement and the other party knew of, or contributed to, the mistake.
(5) With respect to other doctrines which may be applicable, such as unconscionable dealing, it must be shown that one party to the transaction was at a special disadvantage in dealing with the other party because of illness, ignorance, inexperience, impaired faculties, financial need or other circumstances that affect their ability to conserve their own interests, and the other party takes unconscientious advantage of the opportunity. It must be emphasised that the disadvantage must be “special” to disavow any suggestion that the principle applies whenever there is some inequality of bargaining power between the parties. What must be present is some disabling condition or circumstance which seriously affects the ability of the innocent party to make a judgment in their own interests, when the other party knows or ought to know of the existence of that condition or circumstance and of its effect on the innocent party.
(6) There may be other factors which arise such as non est factum which defence would arise in very limited circumstances to persons who, through circumstances such as blindness or illiteracy, are unable to have any understanding of the meaning of the document evidencing the agreement and who signed it in the belief it was radically different to what was in fact signed.”
In the present case, the Appeal Panel held that (at [47]), per the principles outlined in McDonald v McDonald, there were no relevant grounds to set aside the consent orders made by the Tribunal below:
“[T]he evidence does not disclose that illegitimate pressure was placed on the homeowners such that there was no reasonable alternative but to submit to the settlement, the evidence does not disclose that the homeowners were deprived of free and voluntary consent and that the settlement was the result of the actual influence of the Senior Member, nor does the evidence establish that the homeowners were at a special disadvantage given the presence of two advocates capable of advising them.”
