Benefit Strategies Group Inc v Prider

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SUPREME COURT OF SOUTH AUSTRALIA

(Civil: Application)

BENEFIT STRATEGIES GROUP INC & ANOR v PRIDER

[2007] SASC 250

Judgment of The Honourable Justice Gray

4 July 2007

PRIVATE INTERNATIONAL LAW - FOREIGN JUDGMENTS - EFFECT AND ENFORCEMENT

Application to set aside judgments - judgments entered in this Court by way of enforcement of foreign judgment - foreign judgment has since been set aside and declared to be void ab initio by foreign Court - whether judgments by this Court should be set aside - Held: application allowed - a foreign judgment is only binding and conclusive so long as it stands - where a judgment is made entirely on the basis of a foreign judgment, and the foreign judgment is later overturned and set aside, good reason exists to set aside the judgment that relied on it.

Supreme Court Rules 1987 (SA) r 25 and r 84.12; Foreign Judgments Regulations 1992 (Cth), referred to.
Benefit Strategies Group Inc v Prider (2004) 237 LSJS 1; Benefit Strategies Group Inc v Prider (2005) 91 SASR 544; Copping v ANZ McCaughan Ltd (1996) 67 SASR 525; Venquelin v Bouard (1863) 15 CB (NS) 341; Boyle v Victoria Yukon Trading Company (1902) 9 BCR 213; Ainslie v Ainslie (1927) 39 CLR 381; Schnabel & Ors v Lui & Ors [2002] NSWSC 15, considered.

BENEFIT STRATEGIES GROUP INC & ANOR v PRIDER
[2007] SASC 250

Civil

GRAY J

  1. On 21 May 2007, I made an order on the application of the defendant, Trevor Laurence Prider, setting aside judgments entered summarily in favour of the plaintiffs, Benefit Strategies Group Inc and Astrotech Enterprises Inc.  The plaintiffs, the defendant and the non-parties have settled all issues between them.  This application was not opposed by any party.  I now publish my reasons for granting the application.

    Background

  2. On 1 May 2002, the Superior Court of California for the County of Orange filed and entered a default judgment against the defendant in favour of the plaintiffs.  On 19 November 2004, summary judgments were entered pursuant to Rule 25 of the Supreme Court Rules 1987 (SA) by way of enforcement of the default judgment.[1]  The default judgment formed the sole basis for and entire substratum of the summary judgments.

    [1] Benefit Strategies Group Inc v Prider (2004) 237 LSJS 1 (Gray J); Benefit Strategies Group Inc v Prider (2005) 91 SASR 544 (Bleby, Vanstone and Anderson JJ); Prider v Benefit Strategies Group Inc [2006] HCATrans 50 (Gummow, Hayne and Crennan JJ – special leave refused).

  3. On 5 July 2005, the defendant instituted proceedings in the California Court against the plaintiffs seeking to set aside the Californian default judgment.  On 9 May 2006, the California Court entered a declaratory judgment in favour of the defendant against the plaintiffs in which it was ordered adjudged and decreed that, inter alia, the default judgment was void ab initio and of no force and effect, and that the California Court had not had jurisdiction over the defendant when…

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Details
Case
[2007] SASC 250
Decision Date

CaseChat Overview and Summary

The case of Benefit Strategies Group Inc v Prider involved a dispute over the enforceability of a foreign judgment in South Australia. The plaintiffs, Benefit Strategies Group Inc and Astrotech Enterprises Inc, sought to enforce a default judgment obtained against the defendant, Trevor Laurence Prider, in the Superior Court of California. The South Australian Supreme Court granted summary judgments in favour of the plaintiffs, enforcing the Californian judgment. Subsequently, the Californian default judgment was set aside and declared void ab initio by the Californian Court, prompting the defendant to apply to the South Australian Supreme Court to set aside the summary judgments. The application was not opposed by any party.

The primary legal issue before the court was whether the South Australian summary judgments, which were based entirely on the now-void Californian default judgment, should be set aside. This required the court to consider the effect of the removal of the substratum of the summary judgments, as well as the court's inherent power to set aside sealed judgments under Rule 84.12 of the Supreme Court Rules 1987. The court had to balance the principle that a foreign judgment is binding and conclusive as long as it stands with the need to ensure justice in the case.

The court found that the South Australian summary judgments were based solely on the Californian default judgment, which had been set aside and declared void. As a result, the basis for and substratum of the South Australian summary judgments had been removed. The court held that the South Australian summary judgments should be set aside because they were made on the basis of a foreign judgment that was later overturned. The court relied on Rule 84.12 of the Supreme Court Rules 1987, which grants the court the power to set aside a judgment if the justice of the case requires it. The court concluded that good reason existed to set aside the summary judgments, given that the foreign judgment on which they were based was no longer valid.

The court's decision to set aside the summary judgments was grounded in the principle that a foreign judgment is only binding and conclusive as long as it stands. The court emphasised that the Californian default judgment, which formed the sole basis for the South Australian summary judgments, had been set aside and declared void ab initio. This removal of the substratum of the South Australian judgments created a compelling reason to set them aside. The court's reasoning reflected a careful consideration of the legal principles governing the enforceability of foreign judgments and the court's inherent power to ensure justice in individual cases.

Orders

Orders of the court

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Background

Background to the litigation

On 21 May 2007, I made an order on the application of the defendant, Trevor Laurence Prider, setting aside judgments entered summarily in favour of the plaintiffs, Benefit Strategies Group Inc and Astrotech Enterprises Inc. The plaintiffs, the defendant and the non-parties have settled all issues between them. This application was not opposed by any party. I now publish my reasons for granting the application.Background On 1 May 2002, the Superior Court of California for the County of Orange filed and entered a default judgment against the defendant in favour of the plaintiffs. On 19 November 2004, summary judgments were entered pursuant to Rule 25 of the Supreme Court Rules 1987 (SA) by way of enforcement of the default judgment.[1] The default judgment formed the sole basis for and entire substratum of the summary judgments.[1] Benefit Strategies Group Inc v Prider (2004) 237 LSJS 1 (Gray J); Benefit Strategies Group Inc v Prider (2005) 91 SASR 544 (Bleby, Vanstone and Anderson JJ); Prider v Benefit Strategies Group Inc [2006] HCATrans 50 (Gummow, Hayne and Crennan JJ – special leave refused). On 5 July 2005, the defendant instituted proceedings in the California Court against the plaintiffs seeking to set aside the Californian default judgment. On 9 May 2006, the California Court entered a declaratory judgment in favour of the defendant against the plaintiffs in which it was ordered adjudged and decreed that, inter alia, the default judgment was void ab initio and of no force and effect, and that the California Court had not had jurisdiction over the defendant when it made the default judgment. The defendant now seeks an order setting aside the summary judgments delivered by this Court, on the ground that the basis for and substratum of the summary judgments has been removed.The Court’s Power to Make the Orders Sought Rule 84.12 of the Supreme Court Rules 1987 empowers the Court to set aside summary judgments. That rule provides:The Court may vary or set aside a judgment or order at any time if the justice of the case so requires. In Copping v ANZ McCaughan Ltd,[2] Lander J observed:[3][I]t is clear enough from the authorities to which I have referred that, notwithstanding the absence of an inherent jurisdiction in the court to set aside a perfected judgment, a court may be invested with the power by statute or can by the making of its own rules of practice and procedure arrogate to itself the power to set aside, vary or revoke a judgment, even after that judgment has been sealed.In my opinion this Court has done that by the passing of r 84.12 ……Rule 84.12 was first made at the time of the introduction of the 1987 Rules. It had no corresponding rule in the 1947 Rules. If it did no more than state the common law position, namely that a court had no jurisdiction to vary or set aside a judgment after it was sealed, there was no point in its introduction. Moreover if it was limited in its application to a time before the sealing of a judgment or order it would have said so, and it would not be in terms that talk of an exercise of power “at any time”. The Rule-makers would have been acutely aware of the decisions of the High Court limiting the inherent jurisdiction of the court in the manner described and would therefore have seen this as a remedial rule enabling the court, whether exercising jurisdiction at nisi prius or banco, to vary or set aside sealed judgments or orders if the justice of the case requires.[2] Copping v ANZ McCaughan Ltd (1996) 67 SASR 525.[3] Copping v ANZ McCaughan Ltd (1996) 67 SASR 525 at 567.The Effect of Removal of the Substratum of the Summary Judgments

Evidence

Evidence Before The Court

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Decision

Reasons for decision

In Copping v ANZ McCaughan Ltd,[2] Lander J observed:[3][I]t is clear enough from the authorities to which I have referred that, notwithstanding the absence of an inherent jurisdiction in the court to set aside a perfected judgment, a court may be invested with the power by statute or can by the making of its own rules of practice and procedure arrogate to itself the power to set aside, vary or revoke a judgment, even after that judgment has been sealed.In my opinion this Court has done that by the passing of r 84.12 ……Rule 84.12 was first made at the time of the introduction of the 1987 Rules. It had no corresponding rule in the 1947 Rules. If it did no more than state the common law position, namely that a court had no jurisdiction to vary or set aside a judgment after it was sealed, there was no point in its introduction. Moreover if it was limited in its application to a time before the sealing of a judgment or order it would have said so, and it would not be in terms that talk of an exercise of power “at any time”. The Rule-makers would have been acutely aware of the decisions of the High Court limiting the inherent jurisdiction of the court in the manner described and would therefore have seen this as a remedial rule enabling the court, whether exercising jurisdiction at nisi prius or banco, to vary or set aside sealed judgments or orders if the justice of the case requires.[2] Copping v ANZ McCaughan Ltd (1996) 67 SASR 525.[3] Copping v ANZ McCaughan Ltd (1996) 67 SASR 525 at 567.The Effect of Removal of the Substratum of the Summary Judgments As the United States of America is not a country listed in the schedule to the Foreign Judgments Regulations 1992 (Cth), the plaintiffs when seeking the summary judgments in this Court relied on common law principles. The summary judgments were made on the basis of the default judgment. The defendant was not entitled to have the merits of the case re-examined before this Court. The common law principles that were relied upon in making the summary judgments were that:-The foreign court had exercised a jurisdiction over the judgment debtor that Australian courts recognise;-The foreign judgment was final and conclusive;-There was an identity of parties; and-The foreign judgment was for a certain sum. Relevant to the present application is the requirement that a foreign judgment be final and conclusive before it can be enforced. During the application for the summary judgments, counsel for the plaintiffs drew attention to the principle that a foreign judgment can be final and conclusive even though it is subject to appeal and even if an appeal is pending. At the time that the summary judgments were made, neither the defendant nor any other defendants in the California proceedings had taken action to have the default judgment set aside or to appeal from the decision. Counsel for the defendant, during the application for the summary judgments, accepted that a default judgment is considered to be a final and conclusive judgment unless or until steps are taken to set aside the judgment. It was accepted that it was not necessary that a decision be correct to be final and conclusive. It was submitted and accepted that a court of competent jurisdiction may correctly or incorrectly decide a case, and that in either case the decision would remain binding unless reversed on appeal.

Ratio Decidendi

Legal Principle Established

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