COURT
IN THE FEDERAL COURT OF AUSTRALIA
SOUTH AUSTRALIA DISTRICT REGISTRY
GENERAL DIVISION
Spender(1), Gummow(1) and Lee(1) JJ.

CWDS
  Fraud - principal elements of action to set aside judgment alleged to have
been obtained by fraud by way of subornation of witness and/or perjury.
  Judgment - action to set aside judgment obtained at trial  - discussion
whether "fresh evidence" alone supports such a cause of action.
  Practice - pleading - fraud - procedure - setting aside judgment.
  Federal Court of Australia Act 1976
  Foreign Judgments Act 1991 sub-para.7(2)(a)(vi)
  Judicature Act 1873 (UK) s.25(11)
  Trade Practices Act 1974 s.52
  The Constitution, s.73
  Gordon, D.M., "Fraud or New Evidence as Grounds for Actions to set Aside
Judgments" (1961) 77 LQR 358 (et seq. (1908-9) 22 Harv L Rev 600; (1935) 49
Harv L Rev 327)
  Halsbury's Laws of England, 4th Ed. Vol. 26
  Pomeroy, A Treatise on Equity Jurisprudence, 5th Ed. 1941
  Sheridan L.A., "Fraud and Surprise in Legal Proceedings", (1955) 18 MLR 441
  Sheridan L.A., Fraud in Equity 1957
  Ashmore v. Corporation of Lloyds (1992) 1 WLR 446
  Baker v. Wadsworth (1898) 67 LJQB 301
  In re Barrell Enterprises (1973) 1 WLR 19
  Birch v. Birch (1902) 86 LT 364
  Boswell v. Coaks (No. 2) 86 LT 365
  Cabassi v. Vila (1940) 64 CLR 130
  Charles Bright and Co. Ltd. v. Sellar (1904) 1 KB 6
  The Commonwealth v. Verwayen (1990) 170 CLR 394
  Commonwealth Bank v. Quade (1991) 65 ALJR 674
  Darling Downs Investments Pty. Limited v. Ellwood (1988)
  Elna Australia Pty. Limited v. International Computers (Aust.) Pty.
  Limited (1987) 14 FCR 461
  Fabrilius v. Cock (1765) 3 Burr 1771, 97 ER 1090
  Flower v. Lloyd (1879) 10 Ch 327
  Hall v. The Nominal Defendant (1966) 117 CLR 423
  Hazel-Atlas Glass Co. v. Hartford Empire Co. 322 US 238 (1944)
  Ladd v. Marshall (1954) 1 WLR 1489
  Monroe Schneider Associates (Inc.) v. Raberem Pty. Ltd. (1991) 33 FCR 1
  McDonald v. McDonald (1965) 113 CLR 529
  McDonald v. Pier (1922) 1 DLR 670
  McCann v. Parsons (1954) 93 CLR 418
  Orr v. Holmes (1948) 76 CLR 632
  Owens Bank Limited v. Bracco (1992) 2 WLR 621
  Spies v. Commonwealth Bank of Australia (1991) 24 NSWLR 691
  Tovey v. Young (1702) Pr Ch 193; 24 ER 93
  United States v. Throckmorton 98 US 61 (1878)
  Wentworth v. Rogers (No. 5) (1986) 6 NSWLR 534
  Wollongong Corporation v. Cowan (1955) 93 CLR 435

HRNG
PERTH
#DATE 31:7:1992
  Counsel and Solicitors         Mr A. Myers QC, and Mr Campbell
for the Appellants:
  Instructed by:                 Baker O'Loughlin
  Counsel and Solicitors         Mr T. Gray QC
for the Respondents:             Mr Whitington and Mr Blue
  Instructed by:                 Fisher Jeffries

ORDER
THE COURT ORDERS THAT:
  1.  Leave to appeal granted.
  2.  The draft notice of appeal filed on the application for leave be deemed
to be filed on the appeal.
  3.  The appeal be dismissed.
  4.  The appellant pay the respondents' costs of the appeal.
  5.  By consent Item 4 of the Orders not be entered until 14 August 1992.
Note:  Settlement and entry of orders is dealt with in Order 36 of the Federal
Court Rules.

JUDGE1
  The appellants sought leave to appeal from an interlocutory order of a Judge
of this Court (Wilcox J.).  The application for leave came before us in
Adelaide.  It was not opposed and the parties proceeded to argue the appeal on
its merits pursuant to a draft notice of appeal filed by the appellants with
their application.  The interlocutory order the appellants sought to set aside
was the determination by his Honour of a question ordered to be decided as a
preliminary issue.
2.  A short statement of the relevant facts is as follows.
3.  On 8 February 1991 after a trial which occupied 33 days between August and
October 1990, a Judge of this Court (Von Doussa J.) entered judgment in favour
of the respondents ("Solomons") against the appellants in the sum of
$1,695,263.65 and costs.  An appeal against that judgment was dismissed by the
Full Court of this Court on 3 December 1991. (See (1991) 33 FCR 1.)     An
application to the High Court of Australia for special leave to appeal was
refused on 13 March 1992.
4.  On 13 March 1992 the appellants filed an application and statement of
claim in this Court seeking orders setting aside the judgment of Von Doussa J.
and requiring Solomons to pay the costs incurred by the appellants in
connection with the trial and appeal.
5.  At the time of filing the application the appellants also filed a notice
of motion returnable on 16 March 1992 seeking orders for an expedited hearing
of the proceeding.  On 16 March 1992 the hearing of the motion was adjourned
to 18 March 1992.  On 17 March 1992 Solomons filed a notice of motion seeking
orders for the permanent stay or dismissal of the applicants' proceeding on
grounds that it was frivolous or vexatious, an abuse of the process of the
Court, or disclosed no reasonable cause of action.  That motion was made
returnable on 18 March 1992.
6.  When the motions came on for hearing on the morning of 18 March 1992
Wilcox J directed that there be a hearing that afternoon of the following
issue:
         "That there be determined as a preliminary issue the
          question whether it is open to the applicants to
          raise in this proceeding the issue presented by
          them  in para.17.4 of the statement of claim."
7.  His Honour understood that counsel for both parties agreed that the
material contained in the affidavits presented to the Court were sufficient to
allow that question to be determined and that no additional evidence would be
required.  Therefore, there was no reason why argument on the issue could not
be heard later in the day.  Both notices of motion then stood adjourned to
await the determination of the preliminary issue.  His Honour proceeded to
hear the preliminary issue on 18 March 1992 and on 20 March 1992 delivered his
decision in which he determined that it was not open to the appellants to
raise "the issue presented by para.17.4 of the statement of claim".  An order
in those terms was entered on 1 May 1992.
8.  The motion for stay or dismissal of the proceeding continued to stand
adjourned.
9.  In view of the pendency of the strike out motion, it will be necessary to
express a conclusion as to the effect upon the statement of claim of the order
of his Honour notwithstanding that the motion is directed to the proceeding as
a whole rather than any part of the statement of claim.
10.  In the statement of claim the appellants plead that in August 1989
Solomons commenced a proceeding in this Court against the applicants seeking
damages for "breaches of s.52 of the Trade Practices Act 1974 and for
misrepresentations including fraudulent misrepresentations" and set out a
summary of the pleaded issues, the conduct of the trial and the reasons for
judgment in that proceeding. The appellants also plead that on 21 February
1991 Solomons commenced a proceeding in the United States District Court for
the Northern District of California to enforce the judgment of this Court.
11.  The first appellant ("MSA") is incorporated in California and has its
principal place of business in that State.  The second appellant is a United
States citizen who apparently resides in California.
12.  The statement of claim purports to seek to have the judgment set aside on
three separate grounds: discovery of new evidence (para.34); material
non-disclosure of new evidence (para.35); and fraud (para.36).
13.  The nub of those pleadings is contained in para.17 of the statement of
claim which states:
         "As a result of investigations initiated by MSA in
          support of its defence of the Californian
          proceedings, the following evidence has come to the
          attention of MSA ("the new evidence").
                     PARTICULARS
          17.1  Memorandum from Peter Stanes of Feltex,
                New Zealand to Meyer Solomon of
                Solomons dated the 7th and 8th August
                1986.
          17.2  Undated Memorandum setting out
                Solomons' response to the memorandum
                referred to in paragraph 17.1.
          17.3  Memorandum prepared by Geoff Harris of
                Solomons dated the 15 August 1986.
          17.4  The evidence of Potter relating to the
                transactions between MSA and Solomons
                which were the subject of the Federal
                Court trial."
14.  The use of the expression "following evidence" in para.17 of the
statement of claim is unfortunate.  The allegations which present issues for
trial should be pleaded and not left to particulars.  The appropriate
application is then to strike out the pleading, rather than the particulars.
In our view, sense can only be made of para.17 by treating what appears under
the heading "Particulars" as if they were allegations in the pleading itself.
His Honour appears to have proceeded on that footing.  The effect of his
decision is that so much of the pleading of "new evidence" as is specified in
para.17.4 is to be struck out.  No order to that effect has yet been made, but
it is clearly consequential, in our view, upon the decision of His Honour.
15.  On the hearing of the preliminary question, the issue addressed was
whether the evidence of Potter, said to be fresh evidence, was capable of
sustaining a cause of action to set the judgment aside on the ground of fraud
or, alternatively, on the ground of discovery of new evidence.
16.  The pleading of fraud is itself based on alternative foundations as
detailed in paras.25 and 26 of the statement of claim, namely perjury and
subornation of a witness.  In para.25, it is pleaded that the judgment of the
Court was obtained by "false representations to the Court".  Particulars are
given in eighteen sub-paragraphs, the last of which incorporates by reference,
inter alia, the particulars given in para.26.  Again, we would treat these
"Particulars" as allegations in the pleading itself.
17.  In para.26, it is alleged there was a fraud on the Court in that
"Solomons suppressed the evidence through the subornation of a material
witness".  The eight paragraphs of particulars to para.26 allege that Potter
refused to testify at the trial as a result of threats made to him by Mr Meyer
Solomon, the Managing Director of Solomons.  Although the fraud involved in
the allegation in para.26 is not linked directly to para.17.4, the hearing of
the preliminary issue extended to the question of Potter's evidence in respect
of the matters set out in para.26 and one effect of the determination by his
Honour must be that para.26 is to be struck out.
18.  Paragraph 25 is in a different position.  The fraud there specified
involves the giving of false evidence at the trial on behalf of Solomons such
that the judgment is said to have been obtained by fraud of Solomons.  The
evidence relied upon to establish this includes not only the evidence of
Potter, but the undiscovered documents identified in paras. 17.1, 17.2 and
17.3.  It follows that so much of the allegations in para.25 as rests upon the
new evidence to be provided by Potter cannot be sustained in the light of his
Honour's decision. However, so much of para.25 as rests upon the new evidence
provided by paras.17.1, 17.2 and 17.3 remains untouched by that decision.
19.  The pleading of discovery of new evidence is contained in paras.17-21 of
the statement of claim.
20.  In para.21 the appellants purport to shoulder an onus to show a "real
possibility" that if the "new evidence" had been before von Doussa J. he would
not have found in favour of Solomons.  But upon an appeal seeking an order for
a new trial on the ground of fresh evidence an appellant must discharge a
heavier burden.  The terms in which this has been defined have varied.  On one
view the appellant must show that upon such evidence in all probability
(McDonald v. McDonald (1965) 113 CLR 529 at p 532),  or almost certainly (Orr
v. Holmes (1948) 76 CLR 632 at p 640) an opposite result would have been
reached.  In Wollongong Corporation v. Cowan (1955) 93 CLR 435, Dixon C.J.,
Williams, Webb, Kitto and Taylor JJ. at p 444, said:
         "If cases are put aside 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 are put
          on one side, it is essential to give effect to the
          rule that the verdict, regularly obtained, must not
          be disturbed without some insistent demand of
          justice.  The discovery of fresh evidence in such
          circumstances could rarely, if ever, be a ground
          for a new trial unless certain well-known
          conditions are fulfilled.  It must be reasonably
          clear that if the evidence had been available at
          the first trial and had been adduced, an opposite
          result would have been produced or, if it is not
          reasonably clear that it would have been produced,
          it must have been so highly likely as to make it
          unreasonable to suppose the contrary."
21.  In Commonwealth Bank v Quade (1991) 65 ALJR 674 at 676, Mason C.J.,
Deane, Dawson, Toohey and Gaudron JJ., referred to these authorities as
establishing that "the successful party should be deprived of the verdict in
his favour only if the unsuccessful party persuades the appellate court that
there was no lack of reasonable diligence on his part and that it is
reasonably clear that the fresh evidence would have produced an opposite
verdict".  Their Honours described this as a "stringent rule."
22.  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, after exhaustion of the appellate process an action lies to set
aside a judgment on the ground of fresh evidence alone, as pleaded in para.
21.
23.  It will follow from the findings of Wilcox J that even if there is such
an action as one to set aside a judgment on the ground of fresh evidence
alone, the pleading of that cause of action in paras.17-21 and 34 of the
statement of claim must be struck out in so far as it relies upon the evidence
of Potter.  This is because on his Honour's findings the evidence of Potter
could not satisfy the elements of such a cause of action.
24.  As we have indicated, the present proceeding is brought to impeach the
judgment and orders of this Court in an earlier proceeding between the same
parties.  The proceeding is within the jurisdiction of this Court,
consistently with the reasoning in Darling Downs Investments Pty Limited v
Ellwood (1988) 18 FCR 510 at 518-26, and Elna Australia Pty Limited v
International Computers (Aust.) Pty Limited (1987) 14 FCR 461 at 465-7.
25.  However, there was some discussion in argument on the present appeal as
to the relationship between the jurisdiction invoked in the present proceeding
and the powers of appellate courts to admit "fresh evidence".  There was some
discussion also as to whether a separate proceeding, outside that provided for
in the appellate structure, might be brought to seek a fresh trial on the
ground of discovery of "fresh evidence" going not to establish fraud but to
the immediate issues at the earlier trial.  It is appropriate, therefore, to
deal shortly with the subject.
26.  The jurisdiction invoked in an original action to impeach the earlier
judgment for fraud, is, as was pointed out in Wentworth v Rogers (No. 5)
(1986) 6 NSWLR 534 at 538, "equitable in origin and nature".  The position at
common law is discussed by Mr D.M. Gordon QC in his article "Fraud or New
Evidence as Grounds for Actions to set Aside Judgments" (1961) 77 LQR 358,
533.  Once judgment had been entered after trial before a jury, the common law
courts entertained no fresh action to set aside the judgment.  But entry of
judgment was delayed until the term after the trial.  In the meantime, the
disaffected party might present a motion for a new trial.  An order for such a
new trial would be an interlocutory remedy because until the new trial was
concluded there would be no formal judgment, but an order refusing a new trial
would be  final:  Hall v The Nominal Defendant (1966) 117 CLR 423 at 443 per
Windeyer J. The grounds relied upon might include fraud or the discovery of
new evidence.  But the efficacy of the new trial procedure was inhibited by
the absence of a record of the evidence called before the jury (Gordon supra
at 366).  Evidence might be led on the motion that witnesses had been
suborned;  see Fabrilius v Cock (1765) 3 Burr 1771, 97 ER 1090, discussed by
Dixon C.J., Fullagar, Kitto, Taylor JJ. in McCann v Parsons (1954) 93 CLR 418
at 426-427. Their Honours referred to that case as denying the proposition
that in the Supreme Court of New South Wales, before the introduction of the
Judicature system, an application to impeach a jury verdict for fraud might be
brought only as an equity suit and not, as had been done in that case, on a
motion for a new trial brought before the Full Court. But in McDonald v
McDonald (1965) 113 CLR 529 at 532, Barwick C.J. indicated that a separate
proceeding was the preferable course as did Handley J.A. in Spies v
Commonwealth Bank of Australia (1991) 24 NSWLR 691 at 699 (a case involving a
consent order).
27.  The procedure in Chancery by way of a bill of review for a rehearing by
the Lord Chancellor is described by Cozens-Hardy L.J. in Charles Bright and
Co. Ltd v Sellar (1904) 1 KB 6 at 10-11. The equitable jurisdiction  in
addition to allowing rehearing of final decrees before entry, extended to
bills of review to set aside Chancery decrees even after entry.  The "equity"
was based on the presence of fraud or the discovery of new evidence.  Where
fraud was alleged the bill of review could be presented without leave.
Otherwise a preliminary petition for leave was necessary.  Further, the
authority exercised in Chancery extended to restraining, on the grounds of
fraud and discovery of new material evidence, enforcements of final judgments
which had been entered by a common law court:  In re Barrell Enterprises
(1973) 1 WLR 19 at 24-27.
28.  But whilst Chancery might set aside its own decrees, it had to be more
circumspect in dealing with the record as it stood in a common law court and
it would not declare the common law judgment void.  Rather Chancery acted in
personam against the party having the benefit of the judgment, so as to
prevent it taking any advantage from it;  see Hazel-Atlas Glass Co. v Hartford
Empire Co 322 US 238 at 245 (1944); Gordon QC supra  at 367-8.  It might
enjoin (by a species of common injunction) the fraudulent judgment holder from
enforcing the judgment, send issues to a common law court for trial by a new
jury, or oblige the judgment-holder to enter satisfaction of it upon the
judgment roll of the common law court.  Within courts operating under the
Judicature system the common injunction is abolished.  There is no longer any
occasion for the exercise of such indirect methods, because in respect of a
conflict between rules of law and equity with reference to the same matter,
equity prevails;  Judicature Act 1873 (UK), s.25(11).  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 on
a bill of review;  cf Gordon QC, supra at 369-370.
29.  But what of the jurisdiction in respect of new material evidence where
fraud is not alleged?   In In re Barrell Enterprises supra at 24-27, Russell
L.J. pointed out in that case, there were no examples of such an action to set
aside a judgment on the ground of fresh evidence having succeeded in England
since the introduction of the Judicature system and the creation of the modern
appellate structure. In Australia, such a structure is provided by s.73 of the
Constitution and statutes such as the Federal Court of Australia Act 1976.
The reason for the absence of modern decisions, to which Russell L.J.
referred, may be that the jurisdiction no longer exists, having been
supplanted by the statutory appellate system, or that it is otiose, the
occasion for its exercise no longer arising given the remedying by the modern
legislation of the previously perceived deficiencies in the old common law
procedures for review by the writ of error and the motion for new trial.  The
mainspring of the equitable jurisdiction was the view taken in Chancery of the
deficiencies in the common law procedures, this being a general head of
equitable intervention where the remedy of law was inadequate, but with the
statutory improvements achieved in the last century this ground for equitable
intervention diminished; see Pomeroy "A Treatise on Equity Jurisprudence", 5th
Ed., 1941, para 1365.
30.  The treatment of the subject in the present edition of Halsbury
(Halsbury's Laws of England, 4th Ed., Vol. 26, p 286, para 561) as if the
jurisdiction to set aside judgments by reason of "fresh evidence" were still
available thus may need to be treated with caution. (See, Gordon QC, supra at
pp 360-361, 371.)    Halsbury refers to Ladd v Marshall (1954) 1 WLR 1489 at
1491, as support for the continued existence of the jurisdiction but it is
quite plain in that case the Court of Appeal was dealing with an application
for leave to adduce further evidence on an appeal.  As we have indicated
earlier in these reasons, it is unnecessary for us to express a concluded view
on the subject because of the findings of the primary judge.
31.  However, in In re Barrell Enterprises, supra at 24, Russell L.J. said
that he could accept without difficulty the notion that if a judgment has been
obtained by fraud, an action can be brought to set it aside.  Equity has a
broad jurisdiction to unravel fraud and set to rights its consequences;
Sheridan "Fraud In Equity", 1957, pp 66-70.
32.  The principles on which an earlier judgment may be impeached on the
ground of fraud were described as follows by Lord Bridge in delivering the
decision of the House of Lords in Owens Bank Limited v Bracco (1992) 2 WLR 621
at 626-627:
          "(T)he common law rule (is) that the unsuccessful
          party who has been sued to judgment is not
          permitted to challenge that judgment on the ground
          that it was obtained by fraud unless he is able to
          prove that fraud by fresh evidence which was not
          available to him and could not have been discovered
          with reasonable diligence before the judgment was
          delivered.  . . .  This is the rule to be applied
          in an action brought to set aside an English
          judgment on the ground that it was obtained by
          fraud.  The rule rests on the principle that there
          must be finality of litigation which would be
          defeated if it were open to the unsuccessful party
          in one action to bring a second action to
          relitigate the issue determined against him simply
          on the ground that the opposing party had obtained
          judgment in the first action by perjured evidence.
          Your Lordships were taken, in the course of
          argument, through the many authorities in which
          this salutary English rule has been developed and
          applied and which demonstrate the stringency of the
          criterion which the fresh evidence must satisfy if
          it is to be admissible to impeach a judgment on the
          ground of fraud.  I do not find it necessary to
          examine these authorities.  The rule they establish
          is unquestionable and the principle on which they
          rest is clear."
Later (at 632) his Lordship said:
          "An English judgment, subject to any available
          appellate procedures, is final and conclusive
          between the parties as to the issues which it
          decides.  It is in order to preserve this finality
          that any attempt to re-open litigation, once
          concluded, even on the ground that judgment was
          obtained by fraud, has to be confined within very
          restrictive limits."
These remarks were delivered obiter, with a view to contrasting the law as
regards the impeachment of domestic judgments, with the lesser degree of
finality which the common law accorded foreign judgments when actions were
brought upon them in a domestic court, and with the changes to that common law
position brought about by various statutory regimes for registration of
foreign judgments (as to which see, for example, sub-para.7 (2) (a) (vi) of
the Foreign Judgments Act 1991).  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 stringent principles established by the authorities to confine
the jurisdiction have been summarized by Gordon, QC, supra at pp 376-377 as
setting the following requirements:
         "(a)  evidence newly discovered since the trial;
          (b)  evidence that could not have been found by
               the time of the trial by exercise of
               reasonable diligence;
          (c)  evidence so material that its production
               at the trial would probably have affected
               the outcome; and when the fraud charged
               consists of perjury, then:
          (d)  the evidence must be so strong that it
               would reasonably be expected to be
               decisive at a rehearing, and if unanswered
               must have that result."
33.  Where the fraud involved the obtaining of a judgment at law by collusion
between apparently hostile parties to the action, there is authority that the
judgment is a nullity for all purposes in all courts and, without it first
having been set aside, this might be alleged in a collateral proceeding by one
not a party to the collusion:  Cabassi v Vila (1940) 64 CLR 130 at 147.  The
limits of that jurisdiction are still the subject of debate, as the discussion
by Gordon QC indicates (supra at 363-6), and it is not appropriate to pursue
the matter here.
34.  Equity also intervened in cases of "surprise" in the conduct of the
common law proceedings, being sharp practice falling short of fraud. It is
unsettled whether any such jurisdiction still survives: Sheridan, "Fraud and
Surprise in Legal Proceedings", (1955) 18 MLR 441.  But within the conduct of
the original litigation itself, sharp practice is to an extent controlled by
principles of waiver and estoppel and related doctrines.  The point is
illustrated by what was said in The Commonwealth v Verwayen (1990) 170 CLR
394, especially by Gaudron J. at 482-486;  cf. per McHugh J. at 491-497.
35.  The subornation of witnesses is a well established species of fraud in
this field.  However, the significance to be attached to allegations of
perjury has, over a long period, been called into question.  (See: Gordon QC,
supra p 533 et seq, Note (1908-9) 22 Harv.L Rev 600, Note (1935) 49 Harv L Rev
327).  In the Hazel-Atlas Co. case, supra, Black J. was careful to emphasise
that that was not simply a case of a judgment obtained with the aid of a
witness who on the basis of after-discovered evidence was believed possibly to
have been guilty of perjury;  rather, there was a deliberately planned and
carefully executed scheme to defraud not only the Patent Office in obtaining a
patent, but also the Circuit Court of Appeals in an infringement suit brought
upon the patent.  In Cabassi v Vila, supra at 147-8, Williams J. said that he
had been unable to find any case in which a judgment had been set aside where
the only fraud alleged was that the defendant or a witness or witnesses alone
or in concert had committed perjury.  His Honour referred to Flower v Lloyd
(1879) 10 Ch. 327 and Baker v Wadsworth (1898) 67 LJQB 301, as authority that
except in very exceptional cases perjury is not a sufficient ground for
setting aside a judgment.  (See also McDonald v. McDonald, supra per Windeyer
J. at 544.)
36.  Earlier English Chancery decisions to the same effect were discussed by
Miller J. giving a judgment of the Supreme Court of the United States in
United States v Throckmorton 98 U.S. 61 at 67-8 (1878). This judgment is still
regarded in the United States as a leading authority, as is apparent from
Hazel-Atlas Co., supra at 244-5.  One of the decisions referred to by Miller
J. was Tovey v Young (1702) Pr Ch 193; 24 ER 93, where Sir Nathan Wright L.K.
said:
          "(N)ew matter may in some cases be ground for
          relief, but it must not be what was tried before;
          nor, when it consists in swearing only, will I ever
          grant a new trial, unless it appears by deed, or
          writing, or that a witness on whose testimony the
          verdict was given were convict of perjury, or the
          jury attainted . . ."
We are entitled to give weight to this position regarding perjury allegations,
when dealing with the treatment of the preliminary issue by his Honour.
37.  In McDonald v McDonald, supra at 532-3, Barwick C.J. emphasised that
although the evidence of the fraud must be "fresh", it is not necessary that
it would be admissible on the issues between the parties in the action in
which the judgment sought to be impugned was given, 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. at pp 542-543.) But it is necessary to establish
the perpetration of the fraud alleged and the fraud must be "directly
material" to the judgment.  Evidence going to a collateral issue, such as the
credit of witnesses who gave evidence and were cross-examined at the trial may
well lack the necessary materiality, given the reluctance of the courts to
interfere only on the grounds of perjury.  In other cases, the question is
whether the alleged fraud can be said to have probably affected the result.
See generally, Birch v Birch (1902) 86 LT 364, and the speech of the Earl of
Selborne in Boswell v Coaks (No. 2) decided in 1894 but reported as a note to
Birch v Birch.
38.  The statement of a question for determination as a preliminary issue is
not unusual in proceedings to set aside a judgment:
         "It is characteristic of actions of review that,
          because they are readily capable of abuse by
          diehard litigants, they do not proceed to a final
          hearing as a matter of course, but can be brought
          to a premature end at a preliminary hearing."
         (Gordon QC, supra p 360)
The hazards of trying preliminary issues are well recognized.  However, as the
House of Lords has recently reaffirmed in Ashmore v. Corporation of Lloyds
(1992) 1 WLR 446 it is not the right of a plaintiff to have a case tried to
conclusion in such manner as it thinks fit and, if necessary, after all the
evidence on both sides has been adduced.  Lord Roskill described a judge's
role as follows at p 448:
         "It is part of his duty to identify the crucial
          issues and to see they are tried as expeditiously
          and as inexpensively as possible."
39.  In Birch v. Birch, supra, which decided that an order should have been
made in the terms of a motion seeking the dismissal of the action,
Cozens-Hardy L.J. accepted that the primary requirement on a plaintiff in such
a proceeding was to show a reasonable possibility of the alleged fraud being
established and if the material presented by a plaintiff in opposition to a
motion to dismiss the action did not satisfy that test, the motion should
succeed.  See also Spies v Commonwealth Bank of Australia at 700, per Handley
J.A., and McDonald v Pier (1922) 1 DLR 670 at 677-9, per Duff J.
40.  Wilcox J. accepted that conduct which intimidated a witness and prevented
that witness from cooperating with another party to litigation could be
properly described as a fraud upon the Court if it involved the suppression of
evidence.  The material before his Honour showed that the then solicitors for
the appellants, in preparation of the case for trial and in the course of the
trial, had been told by Potter of Potter's fears arising out of a threat that
Potter alleged was made to him on the occasion of his dismissal by Solomons in
September 1986, some four years prior to the commencement of the trial.  His
Honour noted that after the appellants' solicitors had obtained such
information as they could from Potter a decision was made, and Potter was
informed, that the appellants would not be calling Potter as a witness in the
trial.  The only fresh material placed before his Honour in that regard was a
statutory declaration made by Potter on 21 February 1992.  It added little to
the statements already made as to the content and impact of the alleged
threat.  His Honour was clearly satisfied that the substance of the allegation
made by Potter in that regard was well-known to the appellants' solicitors
prior to the commencement of the trial.
41.  After referring to Wentworth v. Rogers and McDonald v. McDonald his
Honour found that the material relied upon by the appellants in relation to
the alleged intimidation of Potter was not fresh.
42.  On the hearing of the appeal the appellants were unable to identify any
particular in Potter's statutory declaration which would give any quality of
freshness to his potential evidence as to the threat or intimidation.
43.  We are of the opinion that the conclusion reached by the primary judge on
this part of the preliminary question involving para.26 of the statement of
claim was the only conclusion available to him on the material presented by
the appellants.
44.  His Honour then proceeded to deal with the remaining aspect of the
preliminary question, namely whether the evidence Potter was said to be able
to give in respect of transactions between the parties would meet the
requirements of a cause of action to set aside the judgment on the ground of
discovery of fresh evidence.  For the reason we have already stated, it is
appropriate to take his Honour's treatment of this aspect as encompassing the
pleading of fraud by perjury in para.26 of the statement of claim.
45.  As to the freshness of the evidence it was said Potter could give, his
Honour found it unnecessary to determine that issue.  His Honour noted that
whilst the appellants may have difficulty in contending that evidence from a
witness whose significance, identity and location were previously known could
not have been sooner discovered, it was possible that the appellants may be
able to show that they had made a discovery of evidence after judgment.
46.  His Honour found it unnecessary to determine the issue because he had
reached the opinion on the material before him that there was nothing of
probative value in the proposed evidence of Potter to undermine any critical
findings of Von Doussa J.  There were matters in respect of which the evidence
of Potter would be in conflict with evidence adduced by Solomons but they were
collateral issues not going to the heart of the decision and it was not the
case that if Potter's evidence had been admitted and accepted an opposite
result would have ensued.
47.  On the hearing of the preliminary question, his Honour asked the then
counsel for the appellants to particularize that part of Potter's evidence
which carried the necessary hallmark of materiality in respect of a probable
reversal of the judgment.  His Honour dealt with each of those particulars and
set out the reasons why none of that evidence would satisfy the test.
48.  Nothing said on the hearing of this appeal has raised the possibility
that the primary Judge erred in any respect in his determination of those
issues.
49.  Each example of allegedly fresh material evidence was no more than a
contribution of further evidence to issues already litigated in the trial.
The additional evidence bearing no stamp ex facie that if received at trial in
all probability it would have reversed the judgment it could not have
satisfied the standard required for any action of this nature contended for in
the statement of claim.
50.  The terms of his Honour's reasons for decision also make it clear that
his Honour accepted that the evidence of Potter relating to alleged fraud by
perjury was incapable of showing as a reasonable possibility that the alleged
fraud had occurred or was directly material to, or had probably affected, the
result of the trial.  Although counsel for the appellants contended that his
Honour's decision had not dealt with that issue, we disagree.  His Honour's
finding that the alleged new evidence lacked probative value and materiality
carries the corollary that the appellants had also failed to show a reasonable
possibility of establishing a case of alleged fraud based on perjury having
regard to the principles referred to earlier.
51.  We have referred to the pendency of the strike out motion and to the need
for us to express a conclusion as to the effect upon the Statement of Claim of
the order of Wilcox J which has been the subject of the debate before us.
First, so much of the pleading of the "new evidence" as is reproduced in para.
17.4 should be struck out.  The pleading in paras. 17-21 and 34 of the claim
to set aside the judgment by reason alone of the new evidence should be struck
out insofar as it relies upon the evidence of Potter pleaded in para. 17.4.
So much of the allegations of fraud (paras. 25-30, 36) as rest upon the new
evidence allegedly to be supported by Potter, cannot stand.  Further, as we
have indicated when discussing the treatment by his Honour of the perjury
allegations, para. 26 should be struck out.  Consequential amendments may also
be appropriate to paras. 31 and 32.
52.  The formal implementation of the order of Wilcox J should be left to the
judge dealing with the pending strike out motion.  Whether leave should be
given to replead the allegations remaining after effect has been given, in the
manner we have described, to the order of Wilcox J is a matter for decision by
that judge, having regard to the outcome of the other issues which will be
before him on the strike out motion.
53.  Leave to appeal should be granted and the draft notice of appeal should
be deemed to have been filed on the appeal, but the appeal should be dismissed
with costs.