Allardyce Lumber Company Limited v Quarter Enterprises Pty Limited (No. 2)
[2012] NSWSC 438
•04 May 2012
Supreme Court
New South Wales
Medium Neutral Citation: Allardyce Lumber Company Limited and Ors v Quarter Enterprises Pty Limited and Anor (No. 2) [2012] NSWSC 438 Hearing dates: 30 June 2011, 5 July 2011, 6 July 2011 Decision date: 04 May 2012 Jurisdiction: Common Law Before: Johnson J Decision: 1. The Applicants' Notice of Motion filed 27 September 2010 is dismissed.
2. The Applicants' Notice of Motion filed 22 July 2011 is dismissed.
3. Parties will be heard on the question of costs.
Catchwords: JUDGMENTS - foreign judgment - judgment of High Court of Solomon Islands - judgment registered after contested application under s.6 Foreign Judgments Act 1991 (Cth) - application under s.7 to set aside registration of judgment - whether judgment registered in contravention of Act - whether High Court of Solomon Islands had jurisdiction - whether judgment obtained by fraud - whether applicable test is different where fraud alleged in obtaining foreign judgment as opposed to local judgment - whether enforcement of judgment contrary to public policy - whether matter in dispute already subject of final and conclusive judgment by other court - whether leave to reopen hearing ought be granted after judgment reserved - reopening application refused - all grounds to set aside registration of judgment rejected Legislation Cited: Foreign Judgments Act 1991 (Cth)
Judiciary Act 1903 (Cth)
Civil Procedure Act 2005
Evidence Act 1995
Uniform Civil Procedure Rules 2005Cases Cited: Allardyce Lumber Company Limited v Quarter Enterprises Pty Limited [2010] NSWSC 807
Allardyce Lumber Company Limited and Ors v Quarter Enterprises Pty Limited and Anor (No. 1) (unreported, 30 June 2011)
Port of Melbourne Authority v Anshun Pty Limited [1981] HCA 45; 147 CLR 589
Aon Risk Services Australia Limited v Australian National University [2009] HCA 27; 239 CLR 175
Walton v Gardiner [1993] HCA 77; 177 CLR 378 at 393
Johnson v Gore Wood & Co (a Firm) [2002] 2 AC 1
Mendikwae Limited v El-Mezin [2000] QSC 56
Vehicle Wash Systems Pty Limited v Mark VII Equipment Inc (1997) 80 FCR 571
Daewoo Australia Pty Limited v Suncorp-Metway Limited [2000] NSWSC 35; 48 NSWLR 692
Deveigne v Askar [2007] NSWCA 45; 69 NSWLR 327
Zhu v Treasurer of the State of NSW [2004] HCA 56; 218 CLR 530
Keele v Findley (1990) 21 NSWLR 444
Yoon v Song [2000] NSWSC 1147; 158 FLR 595
Wentworth v Rogers (No. 5) (1986) 6 NSWLR 534
Benefit Strategies Group Inc v Prider [2005] SASC 194; 91 SASR 544
Briginshaw v Briginshaw [1938] HCA 34; 60 CLR 336
Amalgamated Television Services Pty Limited v Marsden [2002] NSWCA 419
Abouloff v Oppenheimer (1882) 10 QBD 295
Vadala v Lawes (1890) 25 QBD 310
Stern v National Australia Bank [1999] FCA 1421
Jenton Overseas Investment Pty Limited v Townsing [2008] VSC 470; 21 VR 241
D'Orta-Ekenaike v Victoria Legal Aid [2005] HCA 12; 223 CLR 1
Gaskin v Ollerenshaw [2010] NSWSC 788Texts Cited: Davies, Bell and Brereton, "Nygh's Conflict of Laws in Australia", LexisNexis, 2010, 8th edn Category: Principal judgment Parties: Allardyce Lumber Company Limited, John Henry Howden Beverley and Devon George Minchin (Plaintiffs/Respondents)
Quarter Enterprises Pty Limited and Ronald Harry Gibbs (Defendants/Applicants)Representation: Mr F Assaf (Plaintiffs/Respondents)
Mr PE King (Defendants/Applicants)
Jackson Lalic Lawyers Pty Limited (Plaintiffs/Respondents)
Hayes Partners
(Defendants/Applicants)
File Number(s): 2010/54251 Publication restriction: ---
Judgment
JOHNSON J: This judgment relates to the final phase of civil litigation which has taken place in Solomon Islands and in Australia, arising from a dispute concerning the logging, selling and exporting of timber from Solomon Islands.
On 12 August 2010, Davies J registered under Part 2 of the Foreign Judgments Act 1991 (Cth) ("the FJ Act") a judgment dated 20 May 2009 of the High Court of Solomon Islands by which it was adjudged that the Defendants pay to the Plaintiffs the sum of $US315,118.93: Allardyce Lumber Company Limited v Quarter Enterprises Pty Limited [2010] NSWSC 807.
As part of the orders made by Davies J (at [57](2)), the Defendants could, within 28 days after service upon them of notice of registration, apply to set aside the registration. By Notice of Motion filed 27 September 2010, the Defendants sought an order setting aside the registration of the judgment under the FJ Act.
The Parties
The Plaintiffs in this Court are Allardyce Lumber Company Limited ("Allardyce"), John Henry Howden Beverley and Devon George Minchin.
The Defendants in this Court are Quarter Enterprises Pty Limited ("Quarter") and Ronald Harry Gibbs.
Quarter and Mr Gibbs applied to set aside the registration of the judgment. Allardyce, Mr Beverley and Mr Minchin oppose that application.
In this judgment, I will refer to Quarter and Mr Gibbs as "the Applicants" and Allardyce, Mr Beverley and Mr Minchin as "the Respondents".
Background to the Present Application
Allardyce was involved in logging, selling and exporting timber from various sites in Solomon Islands. The civil litigation arose from dealings between Allardyce and Quarter involving the sale of logs.
On 28 August 2000, Quarter commenced proceedings in the High Court of Solomon Islands against Allardyce, Mr Beverley and Mr Minchin. In 1996, Mr Beverley and Mr Minchin were directors of Allardyce, of which Mr Beverley was managing director. Mr Gibbs was a director of Quarter. The litigation involved events which occurred between 1996 and 1999, in which Mr Beverley and Mr Gibbs were the principal protagonists and later the leading witnesses in the trial.
On 22 March 2007, Quarter obtained a judgment against all Respondents after trial before Brown J in the High Court of Solomon Islands in the sum of approximately $US2.7 million. The hearing before Brown J had extended over some seven weeks, with judgment being reserved on 22 September 2005.
The judgment included damages for deceit or negligent misstatement and for breach of contract and restitution.
The Respondents appealed from the High Court decision to the Court of Appeal of Solomon Islands.
The appeal was heard over five days between 7 and 12 October 2007. On 12 March 2008, the Court of Appeal (Lord Slynn of Hadley P, MacPherson and Ward JJA) allowed the appeal with costs, gave judgment for Mr Minchin and ordered a new trial against Allardyce and Mr Beverley.
Following the order for a new trial, Quarter's action came once again before the High Court. An order for security for costs had been made against Quarter. In December 2008, the Respondents made application that the proceedings be dismissed for want of prosecution in respect of the new trial.
On 20 May 2009, Goldsborough J delivered judgment where he dismissed the proceedings and ordered that the costs of Allardyce be paid by Quarter and Mr Gibbs, with his Lordship assessing the amount of costs at $US436,733.97.
Quarter and Mr Gibbs then appealed to the Court of Appeal of Solomon Islands from the dismissal of the proceedings and the costs order made by Goldsborough J.
On 22 July 2009, this appeal was dismissed with costs by the Court of Appeal (Sir Albert Palmer CJ, MacPherson and Williams JJA).
Funds provided by Quarter, as security for costs ahead of the retrial, were used to reduce the sum of costs owed under the order of Goldsborough J of 20 May 2009. As a result, the sum of $US315,118.93 remained owing by the Applicants to the Respondents. Accordingly, the Respondents sought and obtained before Davies J, registration of judgment in that amount.
The Course of the Proceedings
The orders made by Davies J on 12 August 2010, including an order registering the foreign judgment, followed a contested hearing at which, somewhat unusually, the Applicants appeared by counsel to resist the orders sought. This aspect has attracted submissions from the Respondents concerning the legal consequences of the Applicants' participation in that hearing. I will return to this topic later in the judgment.
Before Davies J, Mr PE King of counsel appeared for the Applicants. Mr F Assaf of counsel, appeared for the Respondents. The same counsel appeared before me at the hearing of the application to set aside the registration of the foreign judgment.
Mr King had appeared for Quarter, and later Mr Gibbs, at the hearing before Brown J and the appeals to the Court of Appeal of Solomon Islands determined on 12 March 2008 and 22 July 2009 respectively. He did not appear before Goldsborough J, although Mr D Hayes, his instructing solicitor in those proceedings, appeared before his Lordship.
The hearing before me was not without its complications.
The hearing of the Applicants' Notice of Motion seeking to set aside the registration of the foreign judgment was listed for hearing on 30 June 2011 with a one-day estimate. At the commencement of the hearing, Mr King sought an adjournment of the proceedings on a number of bases. This followed an earlier unsuccessful application to adjourn the hearing before Harrison J, the List Judge, on 27 May 2011.
Amongst other things, Mr King submitted that a constitutional question was raised by the proceedings so that it was necessary for notices to issue for the purpose of s.78B Judiciary Act 1903 (Cth). The suggested constitutional issue concerned alleged inconsistency, for the purpose of s.109 of the Constitution, between relevant provisions of the FJ Act (in particular, s.7) and s.56 Civil Procedure Act 2005 and Rule 53 Uniform Civil Procedure Rules 2005 ("UCPR").
I was entirely unpersuaded that any constitutional issue was raised and I declined to adjourn the hearing for reasons explained in a judgment delivered that day: Allardyce Lumber Company Limited and Ors v Quarter Enterprises Pty Limited and Anor (No. 1) (unreported, 30 June 2011).
The hearing of the Notice of Motion proceeded on 30 June 2011, and continued on 5 and 6 July 2011.
Mr King read a number of affidavits in support of the application. The transcript of the hearing records the evidence which was admitted and rulings made concerning that material (T10-29, 30 June 2011). This material included affidavits of Ronald Harry Gibbs sworn 1 December 2010, 31 January 2011 and 1 February 2011. Substantial parts of the affidavits of Mr Gibbs were relied upon by Mr King as submissions only, and were treated that way by the Court (T14-18, 30 June 2011).
In addition, Mr King read two affidavits of David Anthony Hayes sworn 8 May 2011 and 4 July 2011.
A number of documents were also admitted into evidence in the Applicants' case.
Mr Assaf did not cross-examine Mr Gibbs and Mr Hayes on their affidavits. The Respondents did not adduce any evidence in their case.
At the conclusion of the hearing on 6 July 2011, judgment was reserved.
Without prior notice to my Chambers, the Applicants filed a Notice of Motion on 22 July 2011 seeking leave to reopen the hearing so as to adduce further evidence and, alternatively, seeking an order directing the Respondents to admit certain facts. The Notice of Motion was accompanied by an affidavit of Ronald Harry Gibbs sworn 22 July 2011.
When the Notice of Motion was brought to my attention, I gave directions for the Applicants and Respondents to furnish written submissions on the application for leave.
Having considered the written submissions, including those of the Respondents opposing the application, I declined to make any order as sought in the Notice of Motion. The parties were notified by email from my Associate on 23 August 2011 of this decision and of my intention to give reasons in that respect in my final judgment. Those reasons appear later in this judgment.
The Judgment of Davies J on 12 August 2010
The judgment of Davies J is a helpful starting point in identifying aspects of the Solomon Islands proceedings which are pertinent to this application. His Honour said at [2]-[4]:
"2Quarter Enterprises brought proceedings in the High Court of the Solomon Islands against Allardyce Lumbar Company Limited and its 2 Directors John Beverley and Devon Minchin arising out of contracts concerned with logging, selling and exporting timber. Quarter Enterprises was initially successful in obtaining a judgment against Allardyce for US$2,733,936.54 together with interest and costs.
3Allardyce appealed successfully to the Court of Appeal of the Solomon Islands, a Court comprising Lord Slynn of Hadley P, MacPherson and Ward JJA.
4One of the issues at the trial was the credibility of Ronald Gibbs, a Director and the controlling mind behind Quarter Enterprises. The Trial Judge accepted Mr Gibbs. There appears to have been strong contemporaneous written evidence that cast doubt on important aspects of Mr Gibbs's testimony. The Court of Appeal appears to have accepted that the evidence pointed to Mr Gibbs's having falsified a note which he claimed to be contemporaneous to support his testimony."
Davies J then set out passages from the Court of Appeal judgment (to which reference will be made later in this judgment) before continuing at [7]-[11]:
"7The Court of Appeal then allowed the appeal with costs, set aside the verdicts and judgments of the High Court, dismissed the claim against Mr Minchin (the present Third Plaintiff) with costs and ordered a new trial of the action. They ordered that the costs of the First and Second Defendants (the present First and Second Plaintiffs) abide the event of the new trial.
8Subsequently an order for security for costs was granted. Quarter Enterprises failed to pay the amount required and Allardyce brought an application for dismissal of the proceedings for want of prosecution.
9Under Rule 24.18(f) of the Solomon Islands Courts (Civil Procedure) Rules 2008 there is power to make a costs order against a person who is the effective controlling mind of a body corporate against whom a costs order is made. To that end Mr Gibbs was added as a Respondent to the application whereby Allardyce sought to obtain costs of the proceedings from Quarter Enterprises.
10On 20 May 2009 Goldsbrough J delivered judgment where he dismissed the proceedings and ordered the costs of Allardyce be paid by Quarter Enterprises and Mr Gibbs. He assessed the amount of the costs at US$436,733.97. Quarter Enterprises and Mr Gibbs appealed to the Court of Appeal constituted by Sir Albert Palmer CJ, McPherson and Williams JJA. On a date not made clear in the evidence, but subsequent to 20 July 2009, the Court of Appeal dismissed the appeal with costs.
11It is in respect of the costs ordered by Goldsbrough J to be paid by Quarter Enterprises and Mr Gibbs that the present application is made."
Thereafter, Davies J considered and determined issues raised by the application, including a number of grounds which were relied upon again by the Applicants before me. I will refer to some of his Honour's conclusions in the course of this judgment.
Statutory Framework Under the FJ Act
The Australian Parliament has enacted the FJ Act to make certain overseas judgments, to which the Act extends, enforceable in Australia by registration, thereby obviating the need to bring a cumbersome common law action based on the judgment debt: Davies, Bell and Brereton, "Nygh's Conflict of Laws in Australia", LexisNexis, 2010, 8th edn, at [41.1].
Davies J determined the application for registration of the judgment under s.6 FJ Act. That provision is reproduced in his Honour's judgment (at [12]) and it is not necessary to set it out in full in this judgment. However, the terms of s.6(1)-(4) should be noted, and in particular, s.6(3):
"6 Application for, and effect of, registration of foreign judgments
(1)A judgment creditor under a judgment to which this Part applies may apply to the appropriate court at any time within 6 years after:
(a)the date of the judgment; or
(b)where there have been proceedings by way of appeal against the judgment, the date of the last judgment in those proceedings;
to have the judgment registered in the court.
(2)For the purposes of subsection (1), the appropriate court is:
(a)if the judgment is a money judgment and was given in proceedings in which a matter for determination arises under the Commerce Act 1986 of New Zealand (other than proceedings in which a matter for determination arises under section 3 6 A, 98H or 99A of that Act) - the Federal Court of Australia or the Supreme Court of a State or Territory; or
(b)if the judgment is not a money judgment and was given in such proceedings - the Federal Court of Australia; or
(c)in any other case - the Supreme Court of a State or Territory.
(3)Subject to this Act and to proof of the matters prescribed by the applicable Rules of Court, if an application is made under this section, the Supreme Court of a State or Territory or the Federal Court of Australia is to order the judgment to be registered.
(4)The court's order must state the period within which an application may be made under section 7 to have the registration of the judgment set aside.
..."
It will be observed that s.6(3) FJ Act provides for proof of matters prescribed by the applicable Rules of Court, if application is made under s.6 to the Supreme Court of a State. Rule 53.3 UCPR makes provision for evidence in support of an application for registration of a judgment under the FJ Act. Rule 53.3 UCPR provides (emphasis added):
"53.3 Evidence
(cf SCR Part 59A, rule 3)
(1) The evidence in support of an application for registration of a judgment must include the following:
(a) the judgment or a verified or certified or otherwise duly authenticated copy of the judgment,
(b) if the judgment is not in English, a translation of the judgment into English, certified by a notary public or authenticated by evidence,
(c) evidence showing which, if some only, provisions of the judgment are the subject of the application,
(d) if it is a money judgment, evidence showing the amount originally payable under the judgment,
(e) evidence showing that the Supreme Court is the appropriate court under section 6 (1) of the Foreign Judgments Act 1991 of the Commonwealth,
(f) evidence showing the name and trade or business, and the usual or last known residential or business addresses, of the judgment creditor and judgment debtor,
(g) evidence showing that the judgment creditor is entitled to enforce the judgment,
(h) evidence showing:
(i) that, at the date of the application, the judgment can be enforced by execution in the country of the original court, and
(ii) that, if the judgment were registered in the Supreme Court, the registration would not be liable to be set aside under section 7 of the Foreign Judgments Act 1991 of the Commonwealth,
(i) if interest is payable by the law of the country of the original court on any money which is payable under the judgment, evidence showing:
(i) the rate of interest, and
(ii) the amount of interest which has become due under the judgment up to the time of application for registration, and
(iii) the daily amount of interest which, subject to any future payment on account of the judgment, will accrue after the date of the application,
(j) evidence showing the extent to which the judgment is unsatisfied,
(k) such other evidence as may be required having regard to any regulations made under the Foreign Judgments Act 1991 of the Commonwealth.
(2) The evidence referred to in subrule (1) must relate to those provisions of the judgment that are the subject of the application.
(3) The evidence referred to in subrule (1) (g)-(j) may be evidence to the best of the information or belief of the deponent or witness giving the evidence.
(4) All amounts of money referred to in this rule must be expressed:
(a) in the currency in which the judgment is expressed, and
(b) if the judgment creditor has not made a statement under section 6 (11) (a) of the Foreign Judgments Act 1991 of the Commonwealth, as an equivalent amount in Australian currency calculated in accordance with section 6 (11) (b), (11A) and (11B) of that Act."
It will be observed that Rule 53.3(1)(h)(ii) UCPR provides for evidence to be provided that, if the judgment was registered in the Supreme Court, the registration would not be liable to be set aside under s.7 FJ Act.
Section 7 FJ Act is the provision directly relevant to the present application. Section 7 provides (emphasis is given to the sub-sections relied upon by the Applicants):
"7 Setting aside a registered judgment
(1)A party against whom a registered judgment is enforceable, or would be enforceable but for an order under section 8, may seek to have the registration of the judgment set aside by duly applying to the court in which the judgment was registered, or (where applicable) a court in which the judgment was registered under Part 6 of the Service and Execution of Process Act 1992, to have the registration of the judgment set aside.
(2)Where a judgment debtor duly applies to have the registration of the judgment set aside, the court:
(a) must set the registration of that judgment aside if it is satisfied:
(i) that the judgment is not, or has ceased to be, a judgment to which this Part applies; or
(ii) that the judgment was registered for an amount greater than the amount payable under it at the date of registration; or
(iii) that the judgment was registered in contravention of this Act; or
(iv) that the courts of the country of the original court had no jurisdiction in the circumstances of the case; or
(v) that the judgment debtor, being the defendant in the proceedings in the original court, did not (whether or not process had been duly served on the judgment debtor in accordance with the law of the country of the original court) receive notice of those proceedings in sufficient time to enable the judgment debtor to defend the proceedings and did not appear; or
(vi) that the judgment was obtained by fraud; or
(vii) that the judgment has been reversed on appeal or otherwise set aside in the courts of the country of the original court; or
(viii) that the rights under the judgment are not vested in the person by whom the application for registration was made; or
(ix) that the judgment has been discharged; or
(x) that the judgment has been wholly satisfied; or
(xi) that the enforcement of the judgment, not being a judgment under which an amount of money is payable in respect of New Zealand tax, would be contrary to public policy; or
(b) may set the registration of the judgment aside if it is satisfied that the matter in dispute in the proceedings in the original court had before the date of the judgment in the original court been the subject of a final and conclusive judgment by a court having jurisdiction in the matter.
(3) For the purposes of subparagraph (2)(a)(iv) and subject to subsection (4), the courts of the country of the original court are taken to have had jurisdiction:
(a) in the case of a judgment given in an action in personam:
(i) if the judgment debtor voluntarily submitted to the jurisdiction of the original court; or
(ii) if the judgment debtor was plaintiff in, or counter-claimed in, the proceedings in the original court; or
(iii) if the judgment debtor was a defendant in the original court and had agreed, in respect of the subject matter of the proceedings, before the proceedings commenced, to submit to the jurisdiction of that court or of the courts of the country of that court; or
(iv) if the judgment debtor was a defendant in the original court and, at the time when the proceedings were instituted, resided in, or (being a body corporate) had its principal place of business in, the country of that court; or
(v) if the judgment debtor was a defendant in the original court and the proceedings in that court were in respect of a transaction effected through or at an office or place of business that the judgment debtor had in the country of that court; or
(vi) if there is an amount of money payable in respect of New Zealand tax under the judgment; or
(b)in the case of a judgment given in an action of which the subject matter was immovable property or in an action in rem of which the subject matter was movable property - if the property in question was, at the time of the proceedings in the original, court situated in the country of that court; or
(c)in the case of a judgment given in an action other than an action of the kind referred to in paragraph (a) or (b) - if the jurisdiction of the original court is recognised by the law in force in the State or Territory in which the judgment is registered.
(4)In spite of subsection (3), the courts of the country of the original court are not taken to have had jurisdiction:
(a)if the subject matter of the proceedings was immovable property situated outside the country of the original court; or
(b)except in the cases referred to in subparagraphs (3)(a)(i), (ii) and (iii) and paragraph (3)(c), if the bringing of the proceedings in the country of the original court was contrary to an agreement under which the dispute in question was to be settled otherwise than by proceedings in the courts of the country of that court; or
(c)if the judgment debtor, being a defendant in the original proceedings, was a person who under the rules of public international law was entitled to immunity from the jurisdiction of the courts of the country of the original court and did not submit to the jurisdiction of that court.
(5)For the purposes of subparagraph (3)(a)(i), a person does not voluntarily submit to the jurisdiction of a court by:
(a)entering an appearance in proceedings in the court; or
(b)participating in proceedings in the court only to such extent as is necessary;
for the purpose only of one or more of the following:
(c)protecting, or obtaining the release of:
(i) property seized, or threatened with seizure, in the proceedings; or
(ii) property subject to an order restraining its disposition or disposal;
(d)contesting the jurisdiction of the court;
(e)inviting the court in its discretion not to exercise its jurisdiction in the proceedings.
(6) Where the registration of a judgment is set aside on an application to a court in which the judgment was registered under Part IV of the Service and Execution of Process Act 1901, the applicant must:
(a)forthwith notify the Registrar of the court in which the judgment was registered under this Act of the order setting the judgment aside; and
(b)within 7 days lodge a certified copy of the order in that court."
Davies J drew attention to the interaction between Rule 53.3(1)(h)(ii) UCPR and s.7(2)(a) and (b) FJ Act at [32]-[33] of his Honour's judgment:
"32This somewhat unusual provision [Rule 53.3(1)(h)(ii)] requires the Plaintiff to prove a series of negatives of the matters contained in s 7(2)(a) and (b). No doubt this was inserted because many applications to register a judgment would be done ex parte as rule 53.2(3) and (4) envisage. Requiring some proof of the negative of these listed matters would be likely to reduce the likelihood of applications by judgment debtors under s 7 of the Act.
33The matter has some significance in the present case where the application is made on notice to the Defendants, and those Defendants appeared to resist the registration. Where issue has been taken about the satisfaction of the proof of these negatives, that may give rise either to an Anshun estoppel or an issue estoppel on any subsequent application by the Defendants under s 7."
Davies J returned to this topic at [44]-[45]:
"44In my opinion, the scheme established by rule 53.3 contemplates that on any contested hearing for registration of the judgment a defendant is required to raise and satisfy (in an evidentiary onus sense), if it is able to do so, the Court of any matter falling within s 7 that would, if proved, result in the registration being set aside. It would be entirely inimical to s 56 Civil Procedure Act 2005 for the present application to be regarded as some sort of practice run for a judgment debtor so that the clear issues between the parties are not fully aired but await an application under s 7 of the Act to set aside the registration.
45Ultimately, it will be for the judge hearing any such application to consider if the Defendants are estopped from raising those matters either because of the Anshun principle or because issues estoppel arise from the fact that there was a full contested hearing before me and I have determined the issues raised."
Davies J was satisfied that the requirements of s.6 FJ Act (including those in Rule 53.3 UCPR) were satisfied so that an order was made registering the relevant judgment.
Anshun Estoppel and Abuse of Process
As mentioned above, Davies J (at [33], [45] of his judgment) raised the question whether the appearance of the present Applicants at the s.6 registration hearing, and their participation through counsel at that hearing seeking to oppose registration, gave rise to an estoppel applying the principles in Port of Melbourne Authority v Anshun Pty Limited [1981] HCA 45; 147 CLR 589 ("Anshun").
Anshun estoppel expresses the principle that, in litigating proceedings before a court, parties are expected to put forward their whole case. The High Court in Anshun established a broader form of estoppel by judgment which operates to bar parties (except under special circumstances) from raising issues in litigation which they should have and could have raised in previous litigation between them.
By appearing in this case to contest registration, the Applicants have left themselves open to an Anshun argument. Davies J adverted to the Applicants "endeavouring to keep their powder dry until they make an application to set aside any judgment" at [16] of his Honour's judgment:
"In the manner I shall describe, it became clear during the course of the hearing that the Defendants decided on a course that may be characterised as endeavouring to keep their powder dry until they make an application to set aside any judgment I gave in favour of registration. This may have the unwelcome outcome for the Defendants that, having had the opportunity to present evidence on this application, and having made submissions on the issues joined on this application, they will not be permitted to raise these issues for a second time."
Davies J referred, at [20]-[22], to evidence filed and served by the present Applicants, but ultimately not ready by Mr King at the s.6 hearing:
"20The Defendants had filed and served 2 affidavits of Ronald Harry Gibbs of 16 June 2010 and 16 July 2010 but did not ultimately read those affidavits. I mention that for 3 reasons. First, both Mr Beverley and Mr Kingmele responded to matters raised in Mr Gibbs's earlier affidavit in the expectation that that affidavit would be read. Mr King objected to paragraph 2 of Mr Beverley's affidavit of 19 July 2010. I provisionally admitted that paragraph saying that I would reconsider the matter when all of the evidence was before the Court. Mr King chose not to read Mr Gibbs's affidavit and, accordingly, paragraph 2 of Mr Beverley's affidavit (with the exception of annexure 'C' referred to in that paragraph) is now irrelevant and I reject it. Annexure 'C' contains a copy of the Court of Appeal Act of the Solomon Islands. In my opinion, s 174(1)(b)(c) Evidence Act 1995 justifies the admissibility of that document and I admit it into evidence.
21Secondly, Mr King's written submissions referred to matters in Mr Gibbs' s affidavits. Since those affidavits were not read, there was no evidentiary basis for some of Mr King's submissions. I shall refer more particularly to these matters when dealing with whether the Plaintiffs have satisfied the requirements of the Act and the Rules.
22Thirdly, the decision by Mr King not to read Mr Gibbs's affidavits is likely to be relevant if, as foreshadowed by Mr King, an application is subsequently made by the Defendants to set aside any registration of the judgment. I shall return to that matter presently."
Later, at [41]-[43], Davies J said:
"41I raised with Mr King whether application had been made to McPherson JA to recuse himself and he informed me that it had. However, he chose to lead no evidence about that matter notwithstanding that his written submissions referred to an affidavit from Mr Gibbs dealing with the issue. I have no doubt that this is because Mr King intends to try to lead the evidence of these matters on an application to review my judgment if it goes against his clients' interests. In this regard, Mr King points to the judgment of Ambrose J in Mendikwae Limited v Adel Ibrahim El-Mezin [2000] QSC 056.
42In Mendikwae the defendant appeared on an application to register a default judgment, and put forward reasons why it should not be registered including whether service of the foreign proceedings should be set aside (see s 7(2)(v) of the Act). Ambrose J held that the Plaintiff was entitled to register the judgment but that the defendant would be able to raise those matters on any application to set aside the registration.
43Whilst, at first blush, this would appear to provide support for Mr King's position, a closer analysis suggests otherwise. The Uniform Civil Procedure Rules 1999 (Qld), in relation to registration of foreign judgments under the Act, are significantly different in certain respects from the NSW UCPR. In particular, there is no equivalent to the requirement in the NSW Rules of rule 53.3(1)(h)(ii) - the provision that requires the negating of the grounds in s 7 of the Act for setting a registration aside. There was, therefore, no occasion, for Ambrose J to consider the matters in s 7, as I have been required to do, on an application to register the judgment."
Submissions of the Parties
Before me, Mr Assaf submitted that a clear Anshun estoppel operated in this case which prevented the Applicants from arguing that the registration of the judgment should be set aside. It was submitted that one of the key policy reasons justifying such an estoppel is the desirability of avoiding conflicting judgments: Anshun at 603-604.
Mr Assaf submitted that another policy reason justified Anshun estoppel in this case, being the statutory scheme for regulating civil proceedings in this State under the Civil Procedure Act 2005, including the obligation to facilitate the just, quick and cheap resolution of the real issues in dispute. Emphasis was placed, as well, upon the decision of the High Court of Australia in Aon Risk Services Australia Limited v Australian National University [2009] HCA 27; 239 CLR 175 at 217 [112]-[113] that, "in seeking the just resolution of the dispute, reference is made to parties having a sufficient opportunity to identify the issues they seek to agitate".
Mr Assaf submitted that it was plainly unreasonable for the Applicants not to have raised, before Davies J, all of the matters now sought to be raised on the s.7 FJ Act application. He submitted that the Applicants had ample opportunity before Davies J to raise and argue all of the grounds now relied upon. It was submitted that the Applicants' conduct in that regard is not consistent with their obligations under s.56 Civil Procedure Act 2005.
Even if the Applicants were not shut out from raising s.7 FJ Act grounds at all, Mr Assaf submitted that they should not be permitted to advance arguments on grounds argued before and determined by Davies J.
Mr Assaf submitted as well that the present application constitutes an abuse of process. He submitted that the present application, even if it did not give rise to an estoppel, is unjustifiably vexatious and oppressive, as the Applicants seek to litigate a new case that has already been disposed of by earlier proceedings: Walton v Gardiner [1993] HCA 77; 177 CLR 378 at 393. He submitted that there was a public interest in finality of litigation and a party should not be twice vexed in the same matter: Johnson v Gore Wood & Co (a Firm) [2002] 2 AC 1, approved by French CJ in Aon Risk Services Australia Limited v Australian National University at 194 [34].
Mr Assaf submitted that, in the present case, the Applicants had offered no explanation as to why the matters now sought to be raised were not raised at the hearing before Davies J. In any event, Mr Assaf noted that many of the matters now raised were in fact decided by Davies J. He submitted that the Court should not permit the Applicants to proceed upon the basis that the initial application in which they participated before Davies J constituted a "practice run".
Mr King emphasised that the statutory scheme under ss.6 and 7 FJ Act provided for two stages so that the Applicants could not be shut out from bringing an application under s.7, merely because they participated in the s.6 FJ Act registration application.
It was this issue, amongst others, in relation to which Mr King sought to raise a constitutional issue. As I mentioned above (at [25]), I was unpersuaded that such an issue was raised in this case.
Decision
It is clear that s.6(3) FJ Act provides for the applicable Rules of Court in the relevant State to identify matters to be proved as part of a registration application.
I agree with Davies J's view (at [32]) that the rationale for inclusion in Rule 53.3(1)(h)(ii) UCPR of prima facie negativing factors under s.7 FJ Act is to enhance the registration process, and introduce a procedure which reduces the prospect of a later application to set aside the judgment.
Where a party, such as the Applicants, appears to resist a registration application upon grounds including s.7 factors, there is a real question as to whether, as a matter of practical reality, a court hearing the registration application should approach the application upon the basis that the two procedures under ss.6 and 7 are being rolled into one hearing, albeit involving two stages, namely s.6 registration and, if registration is effected, an application to set aside the registration itself.
There is very considerable force in the submissions of Mr Assaf that, in circumstances where the Applicants appeared to oppose the s.6 FJ Act registration application with evidence (the tender of which was not pressed), the Applicants are vulnerable to an argument that the Anshun principle should operate so as to require them to put their evidence and arguments, once and for all, at that hearing.
There is force in Mr Assaf's submission that the approach adopted by the Applicants in this case leaves open the prospect that, in proceedings under the FJ Act, different Judges of this Court may potentially reach different conclusions, thereby exposing one of the vices mentioned in Anshun.
I have determined that the Applicants ought not be shut out from seeking to set aside the registration of the judgment under s.7 FJ Act, because they attended and participated in the s.6 hearing before Davies J.
In taking this view, I do not seek to encourage the approach adopted by the Applicants in this case. Amongst other things, this approach will serve to protract the two hearings and add to the costs of the parties in taking steps under the FJ Act, a statute designed to reduce the scope for protracted and duplicated litigation.
However, the scheme under the FJ Act involves two separate steps, being registration under s.6 and the right to apply to set aside the judgment under s.7 FJ Act.
A party moving for registration under s.6 bears the onus of proof on that application. The opposing party moving to set aside registration of a judgment under s.7 FJ Act bears the onus of proof on that application. The FJ Act does not state that a s.6 application must proceed as an ex-parte application. Section 6(4) requires a s.6 order to "state the period within which an application may be made under section 7 to have the registration of the judgment set aside". This is a statutory indicator that the process is intended to involve two separate steps.
I propose to determine the present application on its merits. That said, the judgment of Davies J will be of considerable assistance in determining a number of issues ventilated on the application, in particular where, as will be seen, I agree with the conclusions of Davies J on relevant issues.
I share the view of Davies J that the decision of Ambrose J in Mendikwae Limited v El-Mezin [2000] QSC 56 does not materially assist the Applicants. In that case, a litigant appeared in person to contest the registration application. The presiding Judge proceeded to register judgment, expressly leaving it open to the person to make application under s.7 to set aside the registration of the judgment. As Davies J observed, there are differences in the statutory scheme as between New South Wales and Queensland. Further, it is apparent that the presiding Judge was influenced by the unrepresented status of the person, so that the opportunity to make separate application to set aside registration at a later time was especially appropriate.
This is far removed from the circumstances of this case where Mr King, instructed by Mr Hayes, appeared before Davies J to resist registration of the judgment, in circumstances where he and Mr Hayes had been engaged for several years for the Applicants in this litigation in the Courts of Solomon Islands. It is tolerably clear that the Applicants' legal representatives before Davies J ought to have been in a position to ventilate all issues upon which they sought to rely to resist registration of the judgment, in circumstances where Rule 53.3(1)(h)(ii) UCPR required Davies J to consider grounds under s.7 FJ Act which were said to have application to the case.
However, notwithstanding these considerations, I have determined that the principles of Anshun estoppel and abuse of process ought not stand in the way of the Applicants contending that the registration of the judgment ought be set aside under s.7 FJ Act. Amongst other things, I have in mind that the hearing before me should be a once-and-for-all opportunity for the Applicants to advance arguments with respect to s.7 grounds upon which they seek to rely. This litigation has a long history and the judgment challenged on this application relates to costs.
Grounds Under s.7 FJ Act Relied Upon by Applicants
The Applicants seek to set aside the registration of the relevant judgment upon the following grounds:
(a)that the judgment was registered in contravention of the FJ Act: s.7(2)(a)(iii) FJ Act;
(b)that the High Court of Solomon Islands had no jurisdiction to make the orders made on 20 May 2009 in the circumstances of the case: s.7(2)(iv) FJ Act;
(c)that the judgment of the High Court of 20 May 2009 was obtained by fraud: s.7(2)(xi) FJ Act;
(d)that enforcement of the judgment of 20 May 2009 would be contrary to public policy: s.7(2)(xi) FJ Act; and
(e)that the matter in dispute in the High Court of Solomon Islands had, before 20 May 2009, been the subject of final and conclusive judgment by a court having jurisdiction in the matter: s.7(2)(b) FJ Act.
It is appropriate to consider each of these grounds in turn. In doing so, I observe that detailed written submissions were relied upon by the parties, supported by detailed oral submissions which are recorded in the transcript. I do not propose to rehearse at length the submissions made with respect to each ground. Rather, I will refer directly to matters which are necessary for the purpose of determining the various grounds relied upon.
In approaching each of the grounds relied upon by the Applicants, I bear in mind that the Applicants bear the onus of proof to demonstrate that the registration of the judgment ought be set aside.
Ground Under s.7(2)(a)(iii) FJ Act - The Judgment was Registered in Contravention of the Act
Submissions of Parties
Mr King submitted that the High Court order of Goldsborough J on 20 May 2009 did not constitute a "money judgment" under s.3 FJ Act and accordingly, was not registrable in the Supreme Court of New South Wales. He submitted further that there was no money judgment as the judgment related to a foreign currency. In this respect, he relied upon Vehicle Wash Systems Pty Limited v Mark VII Equipment Inc (1997) 80 FCR 571.
Mr King submitted that the Summons did not state that the judgment creditor wished the judgment to be expressed in the currency in which it was expressed, so that registration was in contravention of s.6(11) FJ Act. Mr King acknowledged that Davies J, at [51], had rejected this contention, which Mr King submitted was an erroneous conclusion by his Honour.
Mr Assaf submitted that Davies J had determined this submission adversely to the Applicants at the earlier hearing. He submitted that the Applicants' reliance upon the decision in Vehicle Wash Systems Pty Limited v Mark VII Equipment Inc was misconceived, with that decision being readily distinguishable from the present case. Mr Assaf pointed as well to the decision of Austin J in Daewoo Australia Pty Limited v Suncorp-Metway Limited [2000] NSWSC 35; 48 NSWLR 692, where his Honour disagreed with the conclusions of Finkelstein J in Vehicle Wash Systems Pty Limited v Mark VII Equipment Inc.
Mr Assaf submitted that, in any event, the Applicants could not now seriously contend that there was no debt, the judgment of the High Court being conclusive as between the Applicants and the Respondents: s.12 FJ Act. In addition, Mr Assaf submitted that the Applicants must be taken to have acknowledged the existence of the judgment and the debt it created, by virtue of the fact that they had partially satisfied the High Court judgment in an amount of $US121,615.04.
Decision
The expression "money judgment" is defined in s.3 FJ Act to mean "a judgment under which money is payable".
Davies J described the judgment which came to be registered in the following way at [23]:
"The judgment of Goldsbrough J giving rise to the present application is relevantly in these terms:
[2]The Defendants' costs of the trial in the sum of USD436,733.97 (being costs assessed at USD473,693.97 less USD36,960.00 being the equivalent of the negotiated bank guarantee of SBD300,000.00) be paid jointly and severally by the Claimant and Gibbs provided that the Third Defendant's costs which are assessed in the sum of USD419,053.26 are included in the total costs as set out above."
I record my agreement with the conclusions reached by Davies J at [28], and [51]-[55] with respect to this issue, where his Honour said:
"28The certified copy of the judgment makes it clear that the judgment is a money judgment but was not given in proceedings arising under the Commerce Act 1986 of New Zealand. The judgment, therefore, falls within S 6(2)(c) of the Foreign Judgments Act making this Court the appropriate court.
...
51It seems to me that the judgment creditors have stated that they wish the judgment to be registered in US dollars, as judgment was given in that currency by the High Court of the Solomon Islands. A further statement that that they wished it to be registered in US dollars would have been mere superfluity. In my view, the provisions of s 6(11)(b), (11A) & (11B) are not engaged.
52Secondly, Mr King submitted that the judgment should not be registered because the Certificate from the Acting Registrar of the Solomon Islands court involved setoffs between three different judgments, being those of Goldsbrough J and the 2 judgments of the Court of Appeal. In my opinion this is a complete misunderstanding of what appears in that Certificate. The Certificate provides a procedural history of the matter including details of all of the costs orders and moneys that have been paid in satisfaction of them. The Certificate shows, in complete accordance with the judgment of Goldsbrough J and the affidavit of Mr Beverley, what remains unsatisfied from the judgment of Goldsbrough J. The Plaintiffs seek only to register that judgment and nothing else. They do not seek to register what is contained in that Certificate.
53Thirdly, Mr King submitted that the wrong order had been sought by the Plaintiffs. He asserted that what the Plaintiffs were required to seek was 'An order that the judgment of the High Court of the Solomon Islands be registered.' He said that the order sought does not comply with the Act. Indeed, he said that the Act does not require the applicant even to identify the amount of the judgment, only the currency of the judgment in which the judgment is to be registered. I do not accept these submissions.
54The order sought asks for a judgment in the amount of the unsatisfied portion of the judgment given by the foreign court and it continues 'pursuant to the section 6(1) of the Foreign Judgments Act 1991 (Cth)'. In my opinion that was an appropriate order to seek. It is necessary to specify the amount of the judgment sought to be registered because s 6(7) provides that when registered a judgment has the same force and effect as if it was originally given in this Court. Further s 6(12) speaks of a judgment being registered in respect of an amount of money, being whatever amount is owing on the day registration is sought.
55In the event that I accepted this submission of the Defendants, the Plaintiffs apply to amend to seek an order in these terms:
An order that the judgment of the High Court of the Solomon Islands for US$315,118.93 be registered.
If, contrary to the view I have expressed, an order for registration of a judgment should have been sought, I consider the error is one of form and not substance. In those circumstances I would grant leave to the Plaintiffs to amend as asked. There can be no prejudice to the Defendants. Even if the order sought did not make clear what was asked for, it was abundantly clear from the affidavits that the Plaintiffs were endeavouring to have the foreign judgment registered. Mr King was in no doubt, because all of his arguments were directed to the asserted failures of the Plaintiffs to comply with the Act and the Rules when seeking to register the judgment."
I am satisfied that the judgment in the present case is an enforceable money judgment given in a superior court of a country in relation to which Part 2 of the FJ Act applies. The relevant judgment relates to costs.
I accept the submissions of Mr Assaf that the decision in Vehicle Wash Systems Pty Limited v Mark VII Equipment Inc does not assist the resolution of this ground.
I am entirely unpersuaded by the Applicants that any foundation has been demonstrated for the Court to conclude that the relevant judgment was registered by Davies J in contravention of the FJ Act.
Ground Based on s.7(2)(iv) FJ Act - The High Court of Solomon Islands had no Jurisdiction in the Circumstances of the Case
Submissions of the Parties
Mr King submitted that Goldsborough J had no jurisdiction to make an order against Mr Gibbs on 20 May 2009 in respect of proceedings which had terminated by an order of another court.
He submitted further that the High Court had no power to make orders on 20 May 2009 in respect of Mr Minchin's position, when he had been dismissed from the proceedings by order of the Court of Appeal.
Mr King submitted further that the order to the ANZ Bank to direct payment of the sum held as security for costs to the Respondents' lawyers was not made within jurisdiction. He submitted that the order of 20 May 2009 was not a "matter" in which an order against Mr Gibbs should have been made at all.
Mr Assaf observed that the written submissions of Mr King before Davies J had contended that there was no jurisdiction to make an order against Mr Gibbs, but that Mr King had abandoned this submission during the hearing before Davies J.
In any event, Mr Assaf contended that the submission was misconceived. He submitted that the question under s.7(2)(a)(iv) was not whether the High Court had jurisdiction under its domestic law, but whether in terms of the law of the place of registration, the High Court was possessed of jurisdiction in the international sense: Davies, Bell and Brereton, "Nygh's Conflict of Laws in Australia", above, at [41.16].
Mr Assaf referred to s.7(3) FJ Act. He submitted that there can be no doubt that the High Court had jurisdiction in respect of both Quarter and Mr Gibbs.
He submitted as well that Mr Gibbs had voluntarily submitted to the jurisdiction of the High Court.
Decision
I accept Mr Assaf's submission referred to at [89] above concerning the relevant "jurisdiction" for the purposes of s.7(2)(a)(iv) FJ Act.
The proceedings in Solomon Islands involved an action in tort and contract brought by Quarter against the Respondents. Claims in tort and contract are both claims in personam: Deveigne v Askar [2007] NSWCA 45; 69 NSWLR 327 at 347 [98]; Zhu v Treasurer of the State of NSW [2004] HCA 56; 218 CLR 530 at 572-573 [124].
To my mind, the High Court had jurisdiction with respect to Mr Gibbs. Judgment was given in an action in personam. Mr Gibbs voluntarily submitted to the jurisdiction of the High Court: s.7(3)(a)(i) FJ Act.
I record and adopt the following statement of Davies J at [9]:
"Under Rule 24.18(f) of the Solomon Islands Courts (Civil Procedure) Rules 2008 there is power to make a costs order against a person who is the effective controlling mind of a body corporate against whom a costs order is made. To that end Mr Gibbs was added as a Respondent to the application whereby Allardyce sought to obtain costs of the proceedings from Quarter Enterprises."
Goldsborough J, at [34] of the High Court judgment, said:
"Mr Gibbs was brought into this matter on the question of costs. He is the Managing Director of the Plaintiff Company. He addressed the court on this question. Whilst there was no concession from counsel from the Plaintiff Company in this regard, Mr Gibbs told the court, not by way of concession but as a positive assertion on his part, that he was indeed the controlling mind of the company."
Mr Gibbs was a party to the proceedings before the High Court (Goldsborough J) and the subsequent unsuccessful appeal to the Court of Appeal. He made submissions on the question whether a costs order should be made against him.
No part of s.7(5) FJ Act applies to assist the Applicants.
It has not been demonstrated by the Applicants that there was no jurisdiction to make a costs order against Mr Gibbs.
No other submission advanced for the Applicants under this ground has merit.
This ground has not been made good.
Ground Based Upon s.7(2)(a)(vi) FJ Act - The Judgment was Obtained by Fraud
This ground constituted a substantial focus of the Applicants' argument before me.
The submissions of counsel concerning this ground involved at least two issues:
(a)whether the same test ought be applied to an application to set aside a foreign judgment on the ground that it had been obtained by fraud as would apply to an application of that type to set aside a local judgment;
(b)whether, whatever test was to be applied, the Applicants had established here that the judgment was obtained by fraud.
Submissions of the Parties
Mr King made detailed submissions on the nature of the test to be applied. Put shortly, he submitted that I should follow the decision of Dunford J in Yoon v Song [2000] NSWSC 1147; 158 FLR 595 and not that of Rogers CJ Comm D in Keele v Findley (1990) 21 NSWLR 444. This approach would see the United Kingdom authorities being applied concerning application to set aside a foreign judgment on the ground of fraud.
He submitted that it was sufficient to show that the foreign court was misled into coming to a wrong decision by evidence which was false, and that it was not necessary to show that fresh facts have been found since the original judgment. He relied upon the analysis of legal principles in Yoon v Song at 298-300 [15]-[22] and the authorities referred to therein.
Mr King submitted that two areas of fraud were relied upon in relation to the judgment of 20 May 2009:
(a)the fact that the costs orders sought to be enforced stemmed from and included those of the Court of Appeal of 12 March 2008, which judgment was itself influenced by fraud;
(b)the fact that the High Court was misled into "mulcting without power" the ANZ Bank for funds to be paid to the Respondents' lawyers, where those funds had been provided as security for costs for the purpose of a retrial.
Mr King's submissions in support of these propositions extended to a range of documents and the judgment of the Court of Appeal of 12 March 2008.
With respect to the first area, he submitted that the Court of Appeal was misled by counsel appearing for Quarter into believing that a file note of Mr Gibbs had been concocted. Mr King's submissions touched upon the alleged conduct of the counsel and solicitor then appearing for the present Respondents, during the discovery process for the purpose of the proceedings heard by Brown J, and in submissions put thereafter to the Court of Appeal.
With respect to the second area, Mr King submitted that fraud was involved in the process which saw ANZ Bank monies being directed for payment to the lawyers for the present Respondents.
The written and oral submissions of Mr King involved a close examination of various documents in an effort to demonstrate that the judgment of the Court of Appeal had been obtained by fraud.
Mr Assaf submitted that the Court should follow the decision of Rogers CJ Comm D in Keele v Findley, so that the same principles which govern an application to set aside a local judgment by reason of fraud should apply to applications to set aside a foreign judgment upon the fraud ground.
Whichever legal test was to be applied, however, Mr Assaf submitted that the Applicants had failed completely to demonstrate that the judgment had been procured by fraud. He submitted that the Applicants were seeking, in effect, to relitigate the proceedings under this ground.
To the extent that the Applicants' argument was based upon a submission that the Court of Appeal was somehow misled by submissions made by counsel for the present Respondents, Mr Assaf noted that Mr King (who had appeared for the Applicants at the long trial before Brown J) also appeared before the Court of Appeal, so that Mr King was in a position to make submissions to the Court of Appeal on the topic now complained of in this Court.
Further, he submitted that the focus of Mr King's submissions in this Court concerned but one of many errors found by the Court of Appeal in the approach of the trial Judge. Mr Assaf submitted that, in reality, a series of errors by the trial Judge had been found by the Court of Appeal, so that a focus on this single issue did not bear upon the basis upon which the judgment of the Court of Appeal was obtained.
In any event, Mr Assaf submitted that the Applicants had fallen far short of demonstrating fraud in any sense of the word.
Decision
The question for consideration is whether the Court is satisfied that the judgment which was registered was "obtained by fraud".
In the result, it is not strictly necessary that I express a concluded view on the legal question which has been debated. Whichever test is applied, the Applicants have fallen far short of satisfying me that the judgment was obtained by fraud. However, as the issue was fully debated, I will express my conclusion on this topic.
In my view, there are powerful reasons for adopting the construction given by Rogers CJ Comm D in Keele v Findley. The adoption of this approach would see an alignment between the tests for setting aside a local judgment and a foreign judgment, in circumstances where it is difficult to see any contemporary justification for the view adopted in the United Kingdom.
The Keele v Findley approach would see the uniform application of the principles in Wentworth v Rogers (No. 5) (1986) 6 NSWLR 534 concerning the setting aside of a judgment obtained by fraud, whether the judgment was foreign or local.
I have given careful consideration to the judgment of Dunford J in Yoon v Song which expresses a contrary view. With respect, I favour the reasoning of Rogers CJ Comm D in Keele v Findley.
In Benefit Strategies Group Inc v Prider [2005] SASC 194; 91 SASR 544, Bleby J (Vanstone and Anderson JJ agreeing) observed at 558-559 [41] that the view that the principles enunciated by Kirby P in Wentworth v Rogers (No. 5) concerning setting aside local judgments should be applied equally to the enforcement of foreign judgments, was "convincingly advocated" by Rogers CJ Comm D in Keele v Findley. Bleby J went on to observe (at 559 [41]) that, despite widespread criticism of the United Kingdom approach, it had been accepted in decisions of other single Judges in Australia (including Yoon v Song).
In a highly persuasive analysis, the authors of the leading Australian text in this field have concluded that the reasons given by Rogers CJ Comm D in Keele v Findley "can only be described as compelling" so that "Australian courts need no longer regard the English cases as binding", with principle favouring the "rejection of the English rule, as the text writers have long and unanimously argued": Davies, Bell and Brereton, "Nygh's Conflict of Laws in Australia", above, at [40.62]-[40.71], in particular, at [40.71].
[21] This is not a case where what is suggested is that there has been a denial of natural justice in the sense that there was no notice given or no opportunity to participate in the hearing. It is worth noting, however, that even where that is the basis for the public policy ground the task of the applicant in persuading the court not to enforce the foreign order is a difficult one, as exemplified by the judgment of Einstein J in Norsemeter Holdings AS v Boele (No 1). What is submitted here is that the public policy ground is enlivened because there has been substantial injustice.
[22] I accept that substantial injustice, either because of the existence of a repugnant law or because of a repugnant application of the law in a particular case, may invoke the public policy ground. But it will only do so where the offence to public policy is fundamental and of a high order. For the public policy ground to be invoked in this context enforcement must offend some principle of Australian public policy so sacrosanct as to require its maintenance at all costs."
I am entirely unpersuaded that the Applicants have demonstrated that the enforcement of the judgment would be contrary to public policy.
The judgment of Goldsborough J of 20 May 2009 arose in circumstances where the Applicants had not prosecuted the retrial of the matter following the orders of the Court of Appeal. The orders of the Court of Appeal had provided the opportunity to the Applicants to prove their case following a hearing on the merits, unattended by the numerous errors which had infected the judgment of Brown J. Having been presented with that opportunity, the Applicants did not prosecute the retrial.
Thereafter, the Court of Appeal, on 22 July 2009, dismissed an appeal from the judgment of Goldsborough J after a hearing at which Mr King, for the Applicants, had an opportunity to contend (without success) that Goldsborough J had fallen into error.
It has not been demonstrated that it would be contrary to public policy for the Respondents to enforce the judgment made by Goldsborough J.
I reject this ground relied upon by the Applicants.
Ground Based Upon s.7(2)(b) FJ Act - The Matter in Dispute in the Proceedings had Before the Date in Judgment in the Original Court Been the Subject of a Final and Conclusive Judgment by a Court Having Jurisdiction in the Matter
Submissions of the Parties
Mr King developed an argument, by reference to procedural provisions in Solomon Islands which he contended gave rise to this ground for setting aside the registration of the judgment. The submission, developed in writing, contended that Goldsborough J, sitting in the High Court on 20 May 2009, had no authority to tax and to make orders in respect of costs of the Court of Appeal or to award costs of the original trial.
Mr Assaf submitted that the argument of the Applicants did not demonstrate a basis for the relief sought and that the argument itself was misconceived.
Decision
I am entirely unpersuaded that the Applicants have demonstrated that the registration of the judgment of Goldsborough J of 20 May 2009 ought be set aside because the matter in dispute had been the subject of a final and conclusive judgment already by that time.
The judgment of Goldsborough J demonstrated that the parties were represented before his Honour, including Mr Hayes appearing for the Applicants, and with the whole question of costs (including assessment) being the subject of determination, without objection, by Goldsborough J. It has not been demonstrated that this course was not available to Goldsborough J because of any earlier judgment of a Court in Solomon Islands.
I reject this ground of the Applicants.
Discretionary Considerations
Submissions of the Parties
Mr King submitted that this Court should exercise any relevant discretion in favour of the Applicants. He pointed to what was said to be the unsatisfactory nature of the first decision of the Court of Appeal and the second decision of the Court of Appeal. He submitted that the Applicants had been "treated harshly and unjustly by the Solomon Islands courts".
Mr Assaf submitted that an entirely contrary view should be adopted with respect to the hearings by various courts in Solomon Islands, culminating in Quarter failing to prosecute its case at the retrial.
Decision
I am entirely unpersuaded that the discretionary considerations relied upon by Mr King have been demonstrated in this case. Quarter and Mr Gibbs undertook what became protracted litigation in the Courts of Solomon Islands, with the first-instance judgment in their favour being resoundingly and emphatically overturned by a Court of Appeal presided over by eminent Judges. The conclusions expressed by the Court of Appeal demonstrated that the first-instance judgment was profoundly flawed. It was not possible, the Court of Appeal said, to save "something from the wreck" (see [145] above).
The orders of the Court of Appeal allowed Quarter the opportunity to prove its case at a retrial, with findings of fact and law to be made by the presiding trial Judge by reference to evidence adduced at the retrial. If the Applicants wished to contend that different factual findings should be made concerning the events of 21 February 1997, there would have been an unfettered opportunity to present evidence and arguments in that respect at the retrial.
However, Quarter did not prosecute its claim in a manner which was open to it. Goldsborough J made orders and the second Court of Appeal heard and dismissed an appeal from that judgment.
In my respectful view, the Courts of Solomon Islands (at least after the first trial) have discharged their duties in a manner which does not warrant the criticisms which the Applicants direct to them.
The Applicants' approach to this application brings to mind the observations of Gleeson CJ, Gummow, Hayne and Heydon JJ in D'Orta-Ekenaike v Victoria Legal Aid [2005] HCA 12; 223 CLR 1 at 18 [37]:
"Parties who fail in litigation, whatever its subject, may well consider the result of that litigation to be wrong, even unjust. Seldom will a party have contested litigation without believing, or at least hoping, that it will be resolved in that party's favour. If that party does not succeed, an explanation for failure may be sought in what are perceived to be the failures of others - the judge, the witnesses, advocates - anyone other than the party whose case has been rejected."
It is the regrettable fact that strongly contested civil litigation may lead to an outcome which leaves the losing party dissatisfied and financially worse off. That this is the outcome here does not provide a proper and reasonable foundation for the Applicants to avoid their responsibilities under the relevant judgment.
None of this, it seems to me, assists the Applicants in the exercise of any discretion relevant to the Court's present function.
Application to Reopen Proceedings Following the Court Reserving Judgment
I have mentioned earlier in this judgment the fact that, after judgment was reserved on 6 July 2011, the Applicants filed a Notice of Motion, without prior contact with my Chambers, seeking to reopen the hearing. I directed that written submissions be filed with respect to that application. In due course, I indicated that I refused the application and would give reasons for that decision in my final judgment. What follows constitutes my reasons for this conclusion.
The principles to be applied on a reopening application were summarised helpfully by Garling J in Gaskin v Ollerenshaw [2010] NSWSC 788 at [13]-[23]. I apply those principles to this application. The Court has a discretion whether to grant leave to reopen, with the overriding purpose in s.56 Civil Procedure Act 2005 to facilitate the just, quick and cheap resolution of the real issues in the proceedings being kept firmly in mind. It is necessary to consider whether it is in the interests of justice to grant the application.
The Applicants' Notice of Motion sought leave to reopen the hearing to admit a further affidavit of Ronald Harry Gibbs sworn 22 July 2011 or, alternatively, seeking a direction that the Respondents be required to admit certain facts as contained in a letter of Hayes Partners dated 14 July 2011.
By the time this Notice of Motion had been filed, the Applicants had had more than ample opportunity to develop arguments and adduce evidence at the hearing before Davies J on 19 July 2010, in which they chose to participate, and in particular, at the hearing before me which extended over three sitting days between 30 June 2011 and 6 July 2011.
It is necessary to keep in mind that the present application is an application to set aside the registration of a judgment under the FJ Act. The judgment relates to a costs order made in civil proceedings.
If the Applicants wished to take the steps sought to be achieved as set out in the affidavit of Mr Gibbs sworn 22 July 2011, there was every opportunity to do so at the three-day hearing in this Court which concluded on 6 July 2011.
To the extent that one part of the application may seek to overcome the inability of Mr King to explain, in the course of his reply (T103-106, 6 July 2011), why the appeal books before the first Court of Appeal (23 volumes) ought be admitted in evidence before me, I observe that Mr King did not seek leave to take further steps in this regard before the hearing concluded on 6 July 2011. To the extent that Mr King articulated the purpose of the tender of the 23 volumes, he said the purpose was to "ensure that, if your Honour is in any doubt about any submission put or otherwise, your Honour is able to make an inquiry" (T106.18, 6 July 2011). This unappealing purpose did not warrant the wholesale tender of multiple appeal books.
However, the affidavit of Mr Gibbs went far beyond that. Accompanying the affidavit were more than 300 pages of assorted documents. The affidavit itself and the accompanying documents raised further factual matters which, if the application was allowed, would have involved a further hearing, with prejudice being experienced by the Respondents.
Like other affidavits of Mr Gibbs read at the hearing before me, much of this affidavit was argumentative in content, mixing submissions with factual elements.
Significantly, no explanation was proffered by the Applicants in the material in support of the Notice of Motion as to why this application was not made prior to or at the hearing itself.
To reopen the hearing in the circumstances which presented themselves would be entirely contrary to the provisions contained in s.56ff Civil Procedure Act 2005 and the principles expressed in Aon Risk Services Australia Limited v Australian National University at 186-187 [17], 188-189 [23].
By the conclusion of the hearing on 6 July 2011, a substantial discretionary indulgence had already been extended to the Applicants by the provision of time over three sitting days to allow the hearing of their application. In my view, no basis was demonstrated for yet another phase of the hearing in this matter which has already occupied different courts in different countries now on several occasions.
I accepted the submission of the Respondents that the reopening application ought be declined and that the alternative form of relief, namely a requirement that the Respondents admit facts, ought not be the subject of any order by the Court.
I observe, in any event, that I do not consider that the material sought to be relied upon would have materially assisted the Applicants on any of the grounds relied upon.
It was for these reasons that I declined the application to reopen this hearing.
Conclusion
I have rejected the Applicants' grounds in support of the application to set aside registration of the judgment under s.7 FJ Act. I will make an order that the Applicants' Notice of Motion filed 27 September 2010 be dismissed.
In addition, I will make an order dismissing the Applicants' Notice of Motion filed 22 July 2011.
At the conclusion of the hearing, I was requested to provide an opportunity to the parties to make submissions as to costs in light of my judgment, when delivered.
The ordinary rule is that costs should follow the event, so that an order would ordinarily be made that the Applicants should pay the Respondents' costs of the hearing of the application determined by me. Mr Assaf foreshadowed that an application will be made for a special costs order on an indemnity basis. I will hear the parties on that application if it is pressed.
I make the following orders:
(a)the Applicants' Notice of Motion filed 27 September 2010 is dismissed;
(b)the Applicants' Notice of Motion filed 22 July 2011 is dismissed;
(c)I will hear the parties on the question of costs.
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Decision last updated: 07 May 2012
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