Bettaform Pty Ltd v Leighton Contractors (Philippines) Inc - [2019] SASC 175

SUPREME COURT OF SOUTH AUSTRALIA
(Civil)
BETTAFORM PTY LTD v LEIGHTON CONTRACTORS (PHILIPPINES) INC
[2019] SASC 175
Judgment of The Honourable Justice Hinton
11 October 2019
PROCEDURE - CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS - ENDING PROCEEDINGS EARLY - DEFAULT JUDGMENT - SETTING ASIDE
Application to set aside judgment obtained in default of appearance.
On 11 May 2001 a summons to which there was annexed a Statement of Claim was issued out of this Court at the behest of Bettaform Pty Ltd (Bettaform) to Leighton Contractors (Philippines) Inc (Leighton), a company incorporated and registered in the Philippines. In the Statement of Claim Bettaform pleaded that it and Leighton, as well as two other entities (Datem and Datemform), entered into a contract in February 1999. A condition of this contract was that Leighton would make payments to Bettaform’s bank account in Adelaide from such monies that were payable to Datem in accordance with a repayment schedule included in the contract. Bettaform alleged that non-payment by Leighton of the amounts set out in the schedule with the exception of the first two payments constituted a breach of contract.
An affidavit of service sworn by officers of a law firm in the Philippines deposed that the documents were served on Leighton at its office in the Philippines. Leighton did not file an appearance to the summons within the prescribed time. As a consequence, Bettaform filed an application in this Court on 24 September 2001 for directions under rule 24.01 of the Supreme Court Rules 1987 (SA) (the 1987 Rules). On 10 October 2001 a Master of this Court granted Bettaform’s application, and ordered that Bettaform have leave to enter judgment in default of appearance by Leighton in the amount owing under the contract as pleaded in the Statement of Claim plus interest and costs. Six days later, on 16 October 2001, the Master ordered that Bettaform recover from Leighton the sum owing under the contract plus interest and costs pursuant to rule 24.02 of the 1987 Rules (the default judgment).
Late in 2002 Bettaform instituted proceedings in the Regional Trial Court, Branch 137, Makati City, in the Republic of the Philippines (the Regional Trial Court) seeking enforcement of the default judgment (the enforcement proceedings). The enforcement proceedings, which remain on foot, were defended by Leighton on the basis that it was Datem (and not Leighton) who was privy to the contract and who had the obligation to make the payments pursuant to the repayment schedule. Datem and Datemform were also engaged in related proceedings in the Regional Trial Court against Bettaform and Leighton in July 2000 (the related proceedings), which were subsequently dismissed by the Court of Appeals in the Philippines.
Notwithstanding Leighton’s confidence that it was not a privy to the contract as alleged by Bettaform, and hence not liable to make the repayments to Bettaform, in 2014 and 2015, following a review of the status of the enforcement proceedings, Leighton made the decision that it would apply to this Court to have the default judgment set aside. The application was subsequently made on 24 May 2016 (the application).
In support of the application Leighton submitted that the default judgment should be set aside because it had been irregularly obtained in three respects; first, Bettaform had not established that it had jurisdiction to try the claim in this Court, secondly, Bettaform did not validly serve the proceedings on Leighton, and thirdly, in seeking leave to enter judgment in default, Bettaform did not proceed upon proper affidavit evidence. In the alternative, Leighton submitted that if the default judgment had been regularly obtained, this Court should exercise its discretion to set aside the judgment given that Leighton had a strong prima facie defence to Bettaform’s claim and Bettaform had adduced no evidence to suggest that it would suffer irremediable prejudice if the default judgment were set aside. Bettaform opposed the application on the basis that the default judgment had been regularly obtained and that it would not be appropriate for this Court to exercise its discretion to set aside the judgment, given that Leighton had not taken action to set aside the judgment for over 14 years and there was no proper explanation for this extraordinary delay.
Held, dismissing the application:
1. The default judgment was not irregularly obtained.
2. It is not appropriate for this Court to exercise its discretion to set aside the default judgment.
Local and District Criminal Courts Act 1926 (SA) s 25; Supreme Court Civil Rules 1987 (SA) rr 2, 8, 12, 13, 18, 19, 20, 21, 24; Supreme Court Civil Rules 2006 (SA) r 24, referred to.
Agar v Hyde (2000) 201 CLR 552; Anlaby v Praetorius (1888) 20 QBD 764; Aon Risk Services Australia Ltd v Australian National University (2009) 239 CLR 175; Aristocrat Technologies Australia Pty Ltd v Allam (2016) 90 ALJR 370; Distillers Co (Biochemicals) Ltd v Thompson [1971] AC 458; Ford v Gray (1988) 50 SASR 425; Gosman v Ockerby [1908] VLR 298; Sandery v Kowalski [2016] SASC 175; Voth v Manildra Flour Mills Pty Ltd (1990) 171 CLR 538; Watson v Anderson (1976) 13 SASR 329, considered.

BETTAFORM PTY LTD v LEIGHTON CONTRACTORS (PHILIPPINES) INC
[2019] SASC 175
Application
HINTON J:
Introduction

This is an interlocutory application filed by the defendant, Leighton Contractors (Philippines) Inc (Leighton), seeking an order that the default judgment obtained on 16 October 2001 by the plaintiff, Bettaform Pty Ltd (Bettaform), be set aside and thereafter that the action be stayed.
The application was first heard in November 2016. After reserving judgment the parties requested that no judgment be delivered until such time as they had had the opportunity to mediate the dispute. As will be seen the dispute involves a number of corporate bodies resident outside Australia and related proceedings have been instituted outside Australia. No doubt this made the task of organising the mediation difficult and the mediation itself complex. It was not until September 2018 that the Court was advised that the mediation had failed.
For the reasons that follow I would dismiss the application.
Background
On 11 May 2001 a summons to which there was annexed a Statement of Claim was issued out of this Court to Leighton at the behest of Bettaform.[1] The summons expressly stated that it was to be served out of the State of South Australia and in the Philippines pursuant to rules 12 and 18.02 of the Supreme Court Rules 1987 (SA) (the 1987 Rules). This reflected the fact that, as pleaded in the Statement of Claim, Leighton was a company incorporated and registered in the Philippines. In further acknowledgement of this fact, a Notice of Summons to be Served out of the Jurisdiction[2] (in a form compliant with rule 18.04 of the 1987 Rules and Form 11) and a Request for Service Abroad[3] (in a form compliant with rule 20(b) of the 1987 Rules and Form 12) were also issued on 11 May 2001 by the registry at the behest of Bettaform.
[1]    FDN 1.
[2]    FDN 2.
[3]    FDN 3.
Bettaform is a South Australian company. Leighton is a Filipino company with 60% local ownership and the balance held by various UK and Asian-based entities within the broader Leighton Group.
The following is taken from the Statement of Claim.
In or around November 1998 Leighton entered into a contract with the Rockwell Land Corporation for the construction of a retail shopping centre and car park in Manila known as the Rockwell Centre. On 18 January 1999 Leighton issued a Notice of Award to the Datemform Construction Corporation (Datemform) to carry out works on the Rockwell Centre.
Datemform is a company incorporated and registered in the Philippines. The shares in Datemform were held by two companies, Bettaform and Datem Inc (Datem). Bettaform was incorporated in South Australia and engaged in formwork design and construction, precast design and construction, and general construction. Datem was a company incorporated and registered in the Philippines. Datemform had six directors, two, David Schultz and David Lynch, were also directors of Bettaform whilst three, Levy Espiritu, Arnold de Asis and Morris Agoncillo, were also directors of Datem. The sixth director was Les Johnston.
On 25 January 1999 Leighton and Datemform entered into a sub-contract for the Rockwell Centre (the Rockwell sub-contract) constituted of the 18 January 1999 Notice of Award, minutes of a meeting between Leighton and Datemform on 24 January 1999, and a document entitled, “Sub-contract for Design and Construction of Precast Concrete and Formwork between Leighton Contractors (Philippines) Inc and Datemform Construction Company”.
On 27 January 1999 a meeting took place attended by David Lynch and Levy Espiritu from Datemform, and by Peter Gomm and John McCann, senior managers employed by Leighton who had authority to act on behalf of and bind Leighton. It is pleaded that at this meeting Mr Gomm demanded that Datemform agree to relinquish its rights under the Rockwell sub-contract and that Datem accept the sub-contract in its own right. The demand was repeated by Mr Gomm in a meeting held on 12 February 1999 attended by Mr McCann, Mr Espiritu, Mr Agoncillo, Mr Schultz, Mr Manuele and Mr Lynch.
In paragraph 13 of the Statement of Claim Bettaform pleaded that on 17 February 1999 Leighton, Bettaform, Datem and Datemform met and agreed that:
13.1The Rockwell sub-contract would be rescinded with the consent of all parties.
13.2[Leighton] would enter into a new sub-contract (“the new sub-contract”) with Datem on the same terms and conditions as the Rockwell sub-contract save and except as to the making of payments to Bettaform in accordance with the agreed schedule set out in paragraph 13.7 herein.
13.3 [Leighton] would draw up the contractual documents in the name of Datem.
13.4 Bettaform would transfer its shares in Datemform to Datem.
13.5The assets and liabilities of Datemform and any of its commercial interests would be transferred to Datem.
13.6 During the time required to effect the transfer of assets from Datemform to Datem, the directors of Datemform and Datem would use their best endeavours to fulfil Datemform’s contractual obligations.
13.7 [Leighton] would make payments to Bettaform’s bank account in Adelaide from such monies that were payable to Datem in accordance with the repayment schedule as follows:

DATE AMOUNT (PESO) CONVERSION RATE AMOUNT ($AUS)

April 1999

July 1999

August 1999

September 1999

October 1999

November 1999

December 1999

January 2000

February 2000

March 2000

April 2000

May 2000

June 2000

July 2000

August 2000

September 2000

October 2000

November 2000

December 2000

January 2001

February 2001

March 2001

April 2001

6.5 million

1.9 million

3.21 million

3.21 million

3.21 million

3.21 million

3.21 million

3.21 million

3.21 million

3.21 million

2.71 million

2.71 million

2.71 million

1.11 million

1.11 million

1.11 million

1.11 million

1.11 million

1.11 million

1.11 million

1.11 million

1.11 million

1.11 million

25.06

25.13

25.36

26.69

25.69

26.04

26.31

25.81

25.26

25.25

24.17

24.74

26.09

26.58

26.03

25.31

25.82

25.93

28.05

27.28

25.47

24.12

26.08

$259,377.49

$75,606.84

$126,577.28

$120,269.76

$124,951.34

$123,271.88

$122,006.84

$124,370.39

$127,078.38

$127,128.71

$112,122.46

$109,539.20

$103,871.21

$41,760.72

$42,545.04

$43,856.18

$42,989.93

$42,804.09

$39,570.78

$40,683.63

$43,584.11

$46,020.47

$42,561.35

Total

$2,082,547.70

May 2001 – August 2002

1.11 million per month

The 17 February 1999 agreement pleaded as being part oral and part written with the written component located in the minutes of the 17 February 1999 meeting initialled by Mr Espiritu, Mr Agoncillo, Mr Schultz, Mr Lynch and Mr Manuele and in a letter dated 18 February 1999 from Datemform to Leighton.
Clause 14.2 of the Statement of Claim then stated:
In the alternative the term as to payment in Adelaide was implied by reason of the fact that Bettaform was a company incorporated in South Australia, which transacted business primarily in South Australia, and which only kept a bank account in Adelaide. In the further alternative there was a variation of the agreement of 17 February 1999 by letter dated 29 March 1999 from Bettaform to Leighton Philippines which requested payment into Bettaform’s Commonwealth Bank of Australia account at St Agnes South Australia and by subsequent payment into that account of an amount due by Leighton Philippines.
Datem entered into the new sub-contract with Leighton soon after the 17 February 1999 meeting. The new contract was in substantially the same terms as the Rockwell sub-contract except that it included the 18 February 1999 letter from Datemform to Leighton and incorporated the terms of that letter as conditions of the new sub-contract.
From the above it is apparent that as at the date of the action being instituted monies were due and payable under the terms of the February 1999 contract.
The Statement of Claim stated that Leighton had made only two payments to Bettaform, being those for July and August 1999, both by the telegraphic transfer to the bank account of Bettaform in Adelaide in accordance with the above payment terms. Bettaform claims that under the contract it is owed $1,884,904.60.
Returning to the Notice of Summons to be Served out of the Jurisdiction, the document was engrossed as being addressed to Leighton Contractors (Philippines) Inc of 9^th Floor, Insular Life Building, 6781 Ayala Avenue, Makati City, the Philippines. Further, the document stated that an action had been commenced against Leighton by Bettaform in this Court, attached a copy of the summons and Statement of Claim, advised Leighton that it was required within 60 days of service of the Notice to file an appearance in the registry of this Court, and warned that if Leighton did not file an appearance judgment may be awarded against the company in its absence.
The Request for Service Abroad formally requested that the summons and Statement of Claim be transmitted “through the proper channel” to the Philippines for service on Leighton at 9^th Floor, Insular Life Building, 6781 Ayala Avenue, Makati City, the Philippines or elsewhere in the Philippines directly through the Australian Embassy in the Philippines.
On 1 June 2001 the solicitors for Bettaform applied for an order extending the time in which they were required to serve the summons outside the State.[4] In support of that application Bettaform filed an affidavit from Mr Peter Britten-Jones, sworn on 1 June 2001.[5] Mr Britten-Jones was employed by the firm Cowell Clarke who had the carriage of the proceedings on behalf of Bettaform. Mr Britten-Jones deposed:
I am instructed to seek an extension of time within which to serve the summons and statement of claim and the notice of summons to be served out of the jurisdiction all of which are to be served on the Defendant which is a company resident in the Philippines.
The Supreme Court Rules 1987 require that these documents be provided to the Registrar of this Honourable Court, who then forwards them to the Attorney General of South Australia, who in turn forwards them to the Department of Foreign Affairs and Trade in Canberra, who in turn forwards them to the Australian Embassy in the Philippines, who then will attempt to effect service on the Defendant company.
I am concerned that the process outlined in the paragraph above may take more than 3 months and hence I am instructed to seek an extension of time for an extra 2 months to 11 October 2001 to serve the documents.
[4] FDN 4.
[5] FDN 5.
On 7 September 2001 an affidavit of service sworn by Mr Cecilio Villanueva and Mr Arnold Perez was filed in this Court.[6] Messrs Villanueva and Perez worked for a law firm in the Philippines, Quasha Ancheta Peña & Nolasco in Makati City. The firm was retained by the Australian Embassy in Manila to effect service of Bettaform’s proceedings. In their affidavit Messrs Villanueva and Perez depose to the summons and Statement of Claim having been served on 20 July 2001 on Leighton at their office located on the 9^th Floor of the Insular Life Building, 6781 Ayala Avenue, Makati City, the Philippines. The affidavit further deposed that the documents were given to a Ms Elsa Mariano who identified herself as the Executive Secretary to Leighton’s Country Manager and as authorised to receive the documents. Ms Mariano signed and dated a copy of each of the summons and Statement of Claim copies of which were, in turn, exhibited to the affidavit of service.
[6] FDN 6.
Perusal of the exhibits to Messrs Villanueva and Perez’s affidavit reveals that Ms Mariano was in fact provided with, and signed as receiving, three documents — the summons, the Statement of Claim and the Notice of Summons to be Served Out of the Jurisdiction.[7]
[7] FDN 6.
On 24 September 2001 Bettaform filed an application seeking directions pursuant to rule 24.01 of the 1987 Rules.[8] An affidavit from Mr Britten-Jones, sworn 10 September 2001,[9] was filed in support. Mr Britten-Jones exhibited to his affidavit a letter that he received from the Department of Foreign Affairs and Trade, dated 5 September 2001, which spoke of the receipt by the Australian Embassy in Manila of Messrs Villanueva and Perez’s affidavit in addition to exhibiting a copy of the affidavit.
[8] FDN 9.
[9] FDN 8.
In support of the 24 September 2001 application Mr Britten-Jones filed written submissions.[10] For reasons that will become apparent it is necessary to set out those submissions in full. Mr Britten-Jones submitted:
[10] FDN 10.
1.    On 11 May 2001 the plaintiff filed:
1.1Request for Service Abroad in Form 8;
1.2Notice of Summons to be served out of jurisdiction;
1.3Summons and Statement of Claim; and
1.4Application for Directions.
2.    The plaintiff is a company whose registered office is situated in Adelaide.
3.    The defendant is a company whose registered office is situated in the Philippines.
4. Rules 18 and 20 of the Supreme Court Rules 1987 govern service out of the jurisdiction in a non-convention country.
5.    The Philippines is a country with which Australia does not have a convention regarding legal proceedings in civil and commercial matters.
6.    Rule 18.02 (e) (v) provides that a summons may be served out of Australia without leave of the Court wherever the subject matter of the claim is or relates to a contract a breach of which was committed within the jurisdiction wherever the contract was made.
7.    The plaintiff alleges at paragraph 13 of the Statement of Claim an agreement by which the defendant agreed to make certain payments to the plaintiff’s bank account in Adelaide. At paragraph 17.2 of the Statement of Claim the plaintiff alleges that the defendant has breached the agreement by failing to make the required payments. Consequently it is submitted that the plaintiff falls within Rule 18.02 (e) (v).
8.    The High Court in Agar v Hyde (2000) 173 ALR 665 considered a similar rule (to Rule 18.02) contained in Part 10 of the Supreme Court Rules 1970 (NSW). Chief Justice Gleeson said at paragraphs 50 to 52:
“50. In deciding whether Part 10 Rule 1A applied, and thus permitted service outside Australia of the originating process in these two actions, attention must be directed to the way in which the claims made by the respondents are framed. The paragraphs speak of “proceedings [which] are founded on” a specified matter such as a cause of action arising in the State or a tort committed in the State. That focuses attention upon the nature of the claim which is made. That is, is the claim a claim in which the plaintiff alleges that he has a cause of action which, according to those allegations, is a cause of action arising in the State?
51.The inquiry just described neither requires nor permits an assessment of the strength (in the sense of the likelihood of success) of the plaintiff’s claim…
52. Often enough, the statement of claim will reveal all that it is necessary to know to assess whether a plaintiff’s claim is of the requisite kind. But that may not always be so. For example, the place of making of a contract, or the place of breach of a contract, may not appear from the pleading and some evidence may be required to establish that a relevant paragraph of Part 10 Rule 1A is engaged….”
9.    Rule 18.04 requires a Notice of Summons (in Form 7) to be served.
10.   Rule 20 provides the procedure for service of a Notice of Summons or other documents in a non-convention country.
10.1The notice may be served through the Embassy of Australia.
10.2The party requesting such service shall proceed according to Rule 19 sub-rules (a), (b) and (c).
11.   Rule 19 provides for the following procedure to be adopted.
11.1File a request for Service Abroad in Form 8 together with the documents to be served (Rule 19 (a));
11.2The documents to be served shall be sealed with the seal of the Supreme Court and shall be forwarded by the Registrar to the Attorney General for South Australia for transmission through the proper diplomatic channel to the foreign country (Rule 19 (b)); and
11.3An official certificate from the embassy establishing the date of service of the document shall be deemed sufficient proof of such service and shall be filed in the Registry (Rule 19 (c)).
12.   The solicitors for the plaintiff provided the documents to be served to the Registrar.
13.   Cowell Clarke received a letter dated 5 September 2001 from the Legal Branch of the Commonwealth Department of Foreign Affairs and Trade which enclosed an affidavit of service it had received from the embassy in Manila, the Philippines. (Affidavit of Peter Britten-Jones sworn on 10 September 2001.)
14.   The Notice of Summons, Summons and Statement of Claim were served on the defendant on 20 July 2001 by the law firm QUASHA ANCHETA PENA and NOLASCO as the lawful representative of the Australian Embassy in Manila. (Affidavit of Cecilio, A. Villanueva and Arnold D. Perez sworn 23 July 2001 with annexures A, B, C and D.)
15.   The time limit for filing an appearance by the defendant was 60 days from the date of service (Rule 8(d)).
16.   The 60 days within which to file an appearance ended on Wednesday 19 September 2001.
17. By application dated 21 September 2001, the plaintiff has applied ex parte pursuant to Rule 24 for directions and leave to enter judgment in default.
18.   Rule 24.02 says:
“Upon proper affidavit evidence the Court ex parte may give leave to enter judgment in default of appearance or give such other directions as the justice of the case may require”.
19.   The plaintiff seeks an order of the Court that the plaintiff recover from the defendant the sum of $1,884,904.60 plus interest and costs in terms of the attached minutes of order.

On 10 October 2001, after hearing submissions from Mr Britten-Jones, a Master of this Court granted the application and ordered that:
1. The plaintiff have leave to enter judgment in default of appearance by the defendant for the sum of $2,094,046.45 (plus interest) pursuant to Rule 24.02 made up of $1,884,904.60 (claimed in the Statement of Claim) and $209,141.85 (as set out in the attached schedule) [being amounts owed from May 2001 to September 2001];
2. The defendant pay the plaintiff’s costs of the application and this order.
Subsequently, on 16 October 2001 the Master made the following order:[11]
THE DEFENDANT having failed to file an appearance to the summons THE COURT ORDERS that pursuant to leave to enter judgment granted on 10 October 2001 the plaintiff recover from the defendant the sum of $2,094,046.45 (plus interest) and costs.
The evidence
[11] FDN 11.
i. Leighton’s case
In support of its case Leighton tendered affidavits from:
i.     John McCann, sworn 28 April 2016 (FDN 15);
ii.   Paul Corbett, sworn 20 May 2016 (FDN 16);
iii.     Paul Corbett, sworn 5 September 2016 (FDN 23);
iv.   Claudie Mendoza, sworn 23 May 2016 (FDN 17); and
v.    Claudie Mendoza, sworn 14 September 2016 (FDN 27).
In addition to the affidavit material tendered, Mr McCann and Mr Corbett were cross-examined on their affidavits.
ii. Mr Corbett’s evidence
a. A forensic decision was made
Mr Corbett is the Chairman of Leighton and has held that position since 2013. In his first affidavit Mr Corbett explained that as Chairman he had access to all of Leighton’s records. Further, he was authorised by the Leighton shareholders to make decisions and give directions on the company’s behalf, including in relation to the defence of these proceedings and any other proceedings issued by or against Leighton.
Leighton is one of a group of Leighton companies, those companies operating in different parts of the world including Australia.
Mr Corbett deposed that his knowledge of these proceedings is derived from a combination of briefings he received from Ms Acuzena Perilla, an accountant employed by Leighton between 1998 and 2015 (and now engaged by Leighton as a consultant), from his and Ms Perilla’s review of Leighton’s records in respect of this matter, and from reviewing Mr McCann’s affidavit of 28 April 2016.
From what he has read and been told it is Mr Corbett’s understanding that Leighton was not a party to any contract with Bettaform as alleged in these proceedings. Leighton suggests that if Bettaform is owed the money it claims in these proceedings, the appropriate defendant is Datem.
From perusing Leighton’s records Mr Corbett states that Leighton, presumably having received the proceedings instituted in this Court by Bettaform, obtained legal advice from its lawyers in the Philippines both before and shortly after default judgment was obtained. That advice was to the effect that:
·this Court did not have jurisdiction in the matter;
·the proceedings had not been validly served on Leighton;
·Leighton was not a party to any contract with Bettaform;
·Datem was the proper defendant to any claim of the nature made against Leighton; and
·there were other proceedings between Bettaform and Datem in the Philippines in which the issues subject of the claim brought against Leighton in this Court should be resolved.
Mr Corbett exhibited to his affidavit two letters from a law firm in the Philippines, Romulo Mabanta Buenaventura Sayoc & De Los Angeles, dated 12 January 2001 and 5 November 2001 and addressed to Mr Stephen Blagden, one time Commercial Manager of Leighton, in which the lawyers confirm their advice regarding Leighton’s prospects of defeating any action brought in the Philippines to enforce a default judgment obtained in South Australia. The second letter states:
Leighton may interpose the following defenses:
A.     Defenses based on technicality:
·    The Australian [sic] has not acquired jurisdiction over Leighton Philippines;
·    Service of summons upon Leighton Philippines in the Philippines was not valid;
·    Leighton Philippines may not be sued in Australia where it does not do any business;
·    There is a pending suit between Bettaform and Datem in which the issue as to the entity entitled to the release of monies from Rockwell project should resolved [sic];
·    Leighton Philippines has no interest in the monies, and Datem and Bettaform should litigate against each other.
Defense on the merits:
·    Leighton Philippines did not commit to pay directly to Bettaform. In the Minutes of the 17 February 1999, Datem, Inc. consented to Leighton paying direct to Bettaform monies falling due to Bettaform from the Rockwell contact.
·    Countermanding its consent, Datem later demanded the release of monies in the letter dated August 31, 2000, or suggested putting the monies in escrow pending the suit with the RTC of Makad.
We have no doubts that the Philippine courts will sustain our position.
Mr Corbett conceded that based on this advice Leighton elected not to defend the proceedings in this Court preferring instead to defend any enforcement action in the Philippines, if such action were taken by Bettaform.
In his second affidavit Mr Corbett refers to a statement made by Mr Britten-Jones in his second affidavit that Cowell Clarke received a letter from Ward and Partners, Solicitors, dated 15 November 2001 indicating that it acted on behalf of Leighton. Mr Corbett’s interrogation of Leighton’s files failed to uncover any information to suggest that Leighton engaged Ward and Partners. In any event, he referred to the Ward and Partners’ letter and the express reservation by Leighton of all rights and to the reference that the letter should not be construed as an acceptance or submission to the jurisdiction of this Court.
b. The proceedings in the Philippines
Bettaform’s enforcement proceedings
Late in 2002 Bettaform instituted proceedings in the Regional Trial Court, Branch 137, Makati City, in the Republic of the Philippines, seeking the enforcement of the default judgment obtained in this Court (the enforcement proceedings). Datem was joined as a party to the enforcement proceedings on the application of Leighton. The enforcement proceedings have not been concluded. Mr Corbett advised that as at the date of his swearing his first affidavit, Bettaform had closed its case in the enforcement proceedings and that a demurrer to Bettaform’s case had been dismissed with the consequence that when the matter resumed Datem and Leighton would go into evidence.
Following judgment being reserved, on 21 March 2019 the solicitors for Bettaform, with the consent of Leighton, forwarded to my chambers the following material updating the Court on the progress of the enforcement proceedings:
·Decision of the Philippines Regional Trial Court in the matter of Bettaform Pty Ltd v Leighton Contractors (Philippines) Inc, dated 20 September 2018;
·Motion for Clarification/Correction of the Philippines Regional Trial Court in the matter of Bettaform Pty Ltd v Leighton Contractors (Philippines) Inc, dated 22 October 2018;
·Motion for Reconsideration of the Philippines Regional Trial Court in the matter of Bettaform Pty Ltd v Leighton Contractors (Philippines) Inc, dated 26 October 2018;
·Order of the Philippines Regional Trial Court in the matter of Bettaform Pty Ltd v Leighton Contractors (Philippines) Inc, dated 29 November 2018;
·Notice of Appeal, filed by Leighton in the Philippines Regional Trial Court in the matter of Bettaform Pty Ltd v Leighton Contractors (Philippines) Inc, dated 20 December 2018; and
·Notice of Appeal, filed by Datem in the Philippines Regional Trial Court in the matter of Bettaform Pty Ltd v Leighton Contractors (Philippines) Inc, dated 14 December 2018.
The Regional Trial Court judgment of 20 September 2018 makes plain that Leighton did not contest the existence of the default judgment but rather defended the proceedings in the main on the basis “that there were no factual [and] legal bases to impute any liability to it” as it was Datem (and not Leighton) who was privy to the contract and who had the obligation to make the payments pursuant to the repayment schedule. Leighton had “acted as mediator to facilitate [and] resolve the difficult and sensitive situation that developed between them”. Further, and in any event, the proceedings that Bettaform commenced in this Court on 11 May 2001 were instituted for a malicious purpose since Bettaform and Datem at the time were embroiled in legal proceedings for declaratory relief. The judgment also records that Datem contended that Bettaform had failed to establish that this Court had jurisdiction over the subject matter of the enforcement proceedings and over Leighton. In this regard Datem pointed to the fact that the evidence that Bettaform tendered in the proceedings, comprising in the pleadings and documents filed in this Court, the rules of this Court, certificates and the resolution on the change of name of Bettaform, were not sufficient to prove that this Court had jurisdiction. Further, service of the proceedings had not been effected in compliance with the rules of either the courts of the Philippines or this Court. Further again, as Datem’s position was that the place of payment was not expressly agreed upon in the February 1999 agreement, it should have been presumed to be the domicile of Leighton, being the Philippines.
In its judgment the Regional Trial Court found that this Court had acquired jurisdiction over Bettaform’s claim. The Regional Trial Court found that Bettaform had validly served on Leighton the Notice of Summons and Statement of Claim in accordance with rules 19 and 20 of the 1987 Rules. The Regional Trial Court elaborated:
At the inception, the court highlights its recognition of the jurisdiction of the Australian Supreme Court over Bettaform’s claim against Leighton, when it denied the Demurrer to Evidence. Bettaform’s Statement of Claim, its cause of action against Leighton was grounded on the latter’s breach of its contract with Bettaform, which falls within the jurisdiction of regular courts of Australia. Section 5 in conjunction with Section 18.02 (e) (v) of the Australian Rules categorically provides that in cases of breach of contract committed within the jurisdiction wherever the contract was made, summons may be served out of Australia without leave of the Australian Court. Since the enumeration in Section 18.02 constitutes an exception to the general rule requiring leave of the Australian Court in effecting service of summons outside of its jurisdiction, said provision proves that the said court has jurisdiction over all causes of action stated thereunder.
… The court is satiated that indeed said judgement issued by the Australian Court is within the ambit of its jurisdiction. The court asserts no indispensability of even applying the doctrine of processual presumption that the Supreme Court of South Australia is a court of regular and civil jurisdiction, and it validly acquired jurisdiction over Leighton.
[footnotes omitted]
In bringing its judgment to a close the Regional Trial Court said:
Matters of remedy and procedure such as those relating to the service of summons or court process upon the defendant, the authority of counsel to appear and represent a defendant, and the formal requirements on a decision, are governed by the lex fori or the internal law of the forum. Here, the law of the forum is the procedural law of South Australia, where the judgment was rendered. Evidence relating to the underlying transaction subject of the foreign judgment should not be afforded any weight, as grounds to repel a foreign judgment should be based on matters extrinsic to its merits. Once the authenticity of the foreign judgment is proved, the party attacking a foreign judgment is tasked with the burden of overcoming its presumptive validity. Regrettably, Leighton and Datem did not repel such evidence. They never proved that [the] Australian Court has no jurisdiction over Bettaform’s claims, that Leighton was not properly notified of the proceedings before the Australian Court, or that the rendition of the Foreign Judgment was tainted with fraud, or clear mistake of law or fact. Neither did Leighton deny that it received the Notice of Summons to be served out of the jurisdiction, Summons and Statement of Claim served by Messrs. Villanueva and Perez of the Law Firm of Quasha Ancheta Peña & Nolasco. Rule 18.02 (e) (v) of the Australian Rules allows the service of summons outside its jurisdiction in cases involving breach of contract committed within the jurisdiction where the contract was made.
[footnotes omitted] [emphasis in original]
The Court ordered:
WHEREFORE, in view of the foregoing disquisitions, judgment is rendered in favor of Bettaform, Pty. Ltd. Bettaform is enjoined to stringently comply with the Supreme Court of South Australia’s default Judgment dated October 16, 2001 in Supreme Court Action No. 758.
Since judgment was handed down Bettaform has motioned for clarification/correction from the Regional Trial Court on whether it was in fact Leighton (and not Bettaform) who was ordered to comply stringently with the default judgment, a motion for reconsideration filed by Datem and Leighton has been dismissed, and both Leighton and Datem have appealed.
The proceedings instituted by Datem and Datemform
On or around 24 July 2000 Datem and Datemform commenced legal proceedings in the Regional Trial Court, Makati City, Branch 147, in the Republic of the Philippines against Bettaform and Leighton. The Petition filed by Datem and Datemform referred to a joint venture having been formed by Bettaform and Datem in 1995 to bid for a contract to construct the substructure and superstructure for the ABS-CBN Broadcasting Corporation building in Quezon City, commonly known as “Project 9501”. The Petition confirms that Datemform was formed as the vehicle for the joint venture. The joint venture was successful in its Project 9501 bid. Datemform experienced delays in discharging its obligations under the Project 9501 contract. Claims and cross-claims were made. The issues were resolved in the Construction Industry Arbitration Commission. The Commission determined that Datemform and ABS-CBN were mutually liable and thus proceeded to make an award both against Datemform and ABS-CBN, with the net outcome being that Datemform was to pay ABS-CBN the amount of Php17,081,997.99 which attracted legal interest at 6% per annum from 24 February 1998. Datemform was unsuccessful in appealing the Commission’s award.
Datem and Datemform’s Petition refers to the circumstances leading to the liquidation of Bettaform’s interest in Datemform in circumstances similar to those pleaded by Bettaform in this Court. Pursuant to the agreement to liquidate Bettaform’s share in Datemform and the sale of that share to Datem, Bettaform was to receive, the Petition states, a total of Php70 million paid in instalments. In their Petition Datem and Datemform claim that it was agreed that a portion of the amount to be paid (Php30 million) may need to be revised downwards to account for taxation liabilities. Under the heading, “Statement of Petitioners’ Interest Under the Agreement”, the Petition states:
Petitioners’ interest in these provisions involve the manner and mode of payment of the “share” of BETTAFORM in the project, as well as, BETTAFORM’s, tax obligations on its “share”, in particular its 35% income tax liability and other liabilities thereon, if any. Further, it is likewise interested in BETTAFORM’s share in its liability arising from its being a joint venture partner of DATEM in DATEMFORM in connection with the Arbitral award in the ABS-CBN Arbitration case, which is now final and executory;
…
That it is necessary and proper for the Court to make a declaration on the issues or questions involving respondent BETTAFORM or its “share’s” liability to answer and pay for taxes and transfer fees, in particular the 35% income tax, as well as, other obligations as a joint venture partner of DATEM in DATEMFORM, including its proportionate (50%) liability on the ABS-CBN Arbitration case, and that this declaration will terminate the uncertainly [sic] or controversy which gave rise to the instant action;
In the prayer that follows Datem and Datemform seek a declaration as to their rights and duties.
In its Answer to the Petition, filed on or about 28 September 2000, Leighton pleads that Datem and Datemform state no cause of action against it, and that it was not party to any agreement, merely brokering the agreement between Datem, Datemform and Bettaform.
In its Answer, filed on or about 27 August 2001, Bettaform claimed that as part of the agreement with Datem, Bettaform would be released from any liability for Project 9501 and thereby for the ABS-CBN award. Bettaform further claimed to have performed its obligations under the 1999 agreement, whilst Datem and Datemform have instituted the proceedings “in order to maliciously delay payment” of the sums due under Datem’s agreement with Bettaform. By way of counterclaim Bettaform sought the enforcement of the agreement it entered with Datem and the payment of the Php64.89 million outstanding (two payments having been made). Importantly, Bettaform pleaded that the case was not one amenable to a declaration under the law of the Philippines as the petitioners were already in breach of the agreement.
Six observations may be made at this juncture. First, the Datem and Datemform action was commenced before Bettaform instituted proceedings in this Court. Second, following on from the first, there is no evidence before me to indicate when the Datem and Datemform action was first served on Bettaform. Third, Datem and Datemform have joined Leighton but do not appear to plead a case against Leighton. Fourth, Leighton’s Answer was filed before Bettaform instituted proceedings in this Court. Fifth, following on from the fourth, there is no evidence before me to indicate when Leighton’s Answer was served on Bettaform. Fifth, Bettaform’s Answer and counterclaim, filed after Bettaform instituted proceedings in this Court but before it applied for default judgment, does not purport to plead a case against Leighton. Sixth, in his written submissions Mr Britten-Jones made no mention at all of the Datem and Datemform action instituted against Bettaform in the Philippines.
On 15 April 2009 the Regional Trial Court delivered its judgment. The parties appealed. On 10 October 2014 the Court of Appeals upheld Bettaform’s appeal and dismissed the Petition. The Court of Appeals held that the Regional Trial Court erred in holding that the case was one appropriate for a grant of declaratory relief. As at the time that Datem and Datemform instituted their action in the Regional Trial Court, a cause of action had accrued in favour of Bettaform by virtue of Datem’s failure to make payments in accordance with the 1999 agreement. Declaratory relief was reserved for cases where an authoritative statement on rights and obligations was required for the guidance of parties in the enforcement of a contract or in securing compliance, not to settle issues arising from the alleged breach of a contract.
The position is reviewed
Mr Corbett explained that prior to August 2015 the extent of his involvement in this matter was limited to having been provided with an initial briefing by Ms Perilla. As a consequence of that briefing he was satisfied that Leighton’s approach to matters was reasonable. He asked to be kept updated on the status of the proceedings in the Philippines as they unfolded. His view at that time was that the matter was essentially one between Bettaform and Datem and was better managed by external lawyers in the Philippines where it would ultimately be resolved. He did not think that it was a matter that required his input or involvement.

Notwithstanding Leighton’s failed demurrer in the Regional Trial Court Mr Corbett deposed:
19.Based on discrete advice exhibited at PC3 and PC5 (and I repeat and refer to those paragraphs in respect of the basis on which such advice is disclosed), it remains LCPI’s view that:
19.1          Bettaform was not properly established jurisdiction in the Supreme Court of South Australia in respect of the issues alleged in these proceedings, because:
(a)      there was no contract between Bettaform and LCPI;
(b)    even if there was, there was no term of that contract which:
(i)     required conduct in South Australia; or
(ii)    was breached in South Australia; and
(c)      the proceedings were not properly served, because:
(i)the Affidavit of Peter Britten-Jones sworn on 10 September 2001 in these proceedings confirms that Bettaform relies on service on Ms Elsa Mariano, an executive secretary, as effective service; and
(ii)LCPI’s advice as exhibited at PC5 is that service was required to accord with Philippines law, which provides that it must be made upon a corporation’s president, managing partner, general manager, corporate secretary, treasurer or in-house counsel (none of which roles were held by Ms Mariano) in order to be valid;
19.2   further, or in the alternative, the Supreme Court of South Australia is not a proper forum to determine the matter, and the leave given to Bettaform to enter the Judgment was not properly granted, particularly in the context of:
(a)the fact that any contract which did arise as alleged by Bettaform arose wholly in the Philippines and is on the face of it subject to Philippines law; and
(b)the material non-disclosures … [not made by Bettaform to the Master of this Court] …
19.3          further, LCPI has no substantive liability to Bettaform in respect of the matters alleged in these proceedings, regardless of the form.
The advice to which Mr Corbett referred was provided by Pulido & Tiamson, Attorneys. Amongst other things, Pulido & Tiamson advised:
The summons was served to someone other than Leighton’s president, managing partner, general manager, corporate secretary, treasurer, and in-house counsel. Thus, it is not valid. The South Australian Court failed to acquire jurisdiction over Leighton. Consequently, the Decision of said Court is invalid.
We believe that the foregoing is a strong argument that will be considered by the trial court.
Bettaform has an outside shot (10%) of enforcing the decision of the South Australian Court in the Philippines.
We believe that the chance of enforcing the foreign decision is low. This is primarily based on the arguments as to the defects in the jurisdiction of the South Australian Court. This is further reinforced by the fact that Bettaform failed to offer in evidence any law showing that the Supreme Court of South Australia has jurisdiction over the case for collection of sum of money.
Moreover, [t]he judgment in default of the Supreme Court of South Australia dated 16 October 2001 is based upon a clear mistake of fact and/or law. The documents supposedly considered by the South Australia Court filed to establish the existence of any monetary obligation on the part of LCPI in favour of Bettaform.
[emphasis in original]
It must be recalled that Mr Corbett’s affidavits and the opinion quoted above were both prepared prior to the recent judgment of the Regional Trial Court in the enforcement proceedings.
Notwithstanding Leighton’s confidence, in 2014 and 2015 in-house lawyers reviewed the status of the enforcement proceedings and underlying issues “with fresh eyes and with a view to bringing them to a resolution”. Following the review the decision was made that Leighton would apply to this Court to have the default judgment of 16 October 2001 set aside.
In oral evidence Mr Corbett repeated Leighton’s rationale for electing not to defend the proceedings in this Court as follows:
I had discussions with a number of staff in my office, including Ms … Perilla they advised me that they obtained some legal advice at the time but the proceedings had not been served properly, and that here was no contract between Bettaform and Leighton, and therefore they were the reasons we decided not to proceed.
Mr Corbett clarified that the recommendation that he received to apply to this Court to have the default judgment set aside occurred “in the context that investigation and advice would be required as a preliminary step” to determine whether or not such an avenue would be available for Leighton to pursue taking into account factors including the legal merits, what would be involved on a practical level (such as costs) and whether or not Leighton would have access to the evidence it required. He elaborated:
8.6subsequent to receiving that recommendation, I caused LCPI to consult with lawyers in South Australia regarding the procedure to and prospects of applying to set aside the default judgment in these proceedings, which took until early 2016. In particular:
(a)I caused LCPI to engage Minter Ellison. Minter Ellison had not had any prior involvement in the matter at that time;
(b)in late 2015, LCPI communicated with Minter Ellison … and with Holly Hamilton, a legal counsel employed by LCAL, and Jean-Paul Wallace, legal counsel employed by Leighton Contractors in Australia. I considered practical issues including the availability of potential witnesses and the costs that would be involved in proceeding. The range of costs anticipated in pursuing this application were significant by comparison with the type of cost that was being incurred in respect of the process in the Philippines, and warranted careful consideration; they were certainly not ‘run of the mill’ and included LCPI’s consideration as to whether or not to proceed;
(c)in or about mid-January 2016, Holly Hamilton notified me that following a period of enquiries she had been able to make contact with John McCann and that he was prepared to assist by giving evidence in support of an application. There was no-one else who remained associated with LCPI who could have given evidence covering the range of topics ultimately dealt with in the McCann Affidavit, and this was a critical development;
(d)at approximately the same time, LCPI committed to proceed with the application;
8.7subsequent to committing to proceed with the application, substantive further investigation was required in order to prepare the evidence which was filed in support of the application. …
8.8following these investigations, LCPI’s application, proposed defence, and evidence in support of this application were prepared and finalized. This process occurred as quickly as reasonably practicable noting the logistical issues associated with the fact that McCann is based [in] Queensland, I am based primarily in Singapore but travel regularly, LAL and LCAL are based in Hong Kong, LCPI and all of its records are based in the Philippines, and LCPI’s solicitors and the Court are based in Adelaide.
Mr Corbett explained that, it was in or around August 2015 when he received advice from the Leighton group of companies’ internal lawyers that Leighton should approach this Court and make the present application. The change in approach was linked not to any revaluation of the merits of Leighton’s case but due to an impatience with the process in the Philippines and a desire on the part of other members of the Leighton group of companies to bring the matter to ahead. Mr Corbett points to a change in structure and personnel in the other companies as one reason for the change in approach in addition to correspondence written in more recent times from Cowell Clarke in which it seeks to obtain the assistance of the Small Business Commissioner and an Australian member of the Leighton Group in dealing with the matter.
Subsequent to receiving the recommendation that Leighton make this application, Mr Corbett caused the company to retain lawyers in South Australia and sought advice on the prospects of applying to set aside the default judgment. That occurred in late 2015 and early 2016.
In mid-January 2016 Leighton located Mr McCann. It was considered that Mr McCann being available to give evidence was a critical development to its revaluation of its approach to the dispute with Bettaform, Datem and Datemform. It was determined that this application should be made. Further, the delay that was experienced by the need to review Leighton’s electronic and hard copy records and to make applications in the courts in the Philippines for copies of relevant materials to be produced as part of the application.
Mr Corbett deposed that if Leighton’s application in respect to setting aside the judgment is allowed but the Court refuses to stay the proceedings, Leighton will defend the action in this Court. A proposed Defence that was annexed to the affidavit of Mr Corbett sworn 20 May 2016.
iii. Leighton’s Defence to Bettaform’s claim
As is to be expected, Leighton, in its draft Defence, largely admits the facts contained in the Statement of Claim save with respect to the detail of what was agreed at the February 1999 meeting. In the draft Defence it claims to have brokered the meeting and denies that it was a party to any agreement reached at the meeting. Any agreement reached was between Bettaform, Datem and Datemform. Further, Mr Gomm and Mr McCann expressly stated at the meeting that there was no intention on the part of Leighton to be bound as part of any contract. It is added that the agreement that was discussed was outside of the ordinary business of Leighton such that neither Mr Gomm nor Mr McCann had the Authority to bind Leighton, if indeed they did. The Defence states that the only commitment of any note given by Leighton was a non-binding consent given to Datem to make such payments as may fall due and payable to Datem’s nominee. Such commitment was given after the meeting of February 1999 at the time of Leighton entering into the new sub-contract with Datem and was subject to Leighton obtaining written authorisation from Datem releasing Leighton from any claim to the funds to be paid to Datem’s nominee on each occasion of such payment.
Interestingly, Leighton pleads a case in the alternative; one to the effect that if the Court were to find that Leighton entered into an agreement at the meeting, it was an agreement with Datem and Datemform only and not with Bettaform. Further, any such agreement was that Leighton and Datemform would mutually release one another from any obligation in respect of the sub-contract between them in relation to the Rockwell Project, that Leighton would prepare and issue to Datem (and Datem would accept) a new sub-contract in identical terms in respect of the Rockwell Project, that Leighton would reasonably consider, and if possible consent to any request by Datem, that Leighton make such payments as may fall due to Datem under the new sub-contract to Datem’s nominee instead, and that Datem would accept any payment made by Leighton to its nominee in discharge of payment obligations of an equivalent monetary value otherwise owed by Leighton to Datem.
As to the two payments made to Bettaform, the draft Defence denies that they were made out of any obligation on the part of Leighton owed to Bettaform and adds that they were made at the direction of Datem and in good faith without any admission on the part of Leighton as having entered into a contractual agreement with Datem and Bettaform. Lastly, Leighton concedes that no further payments have been made but states that that is because it is under no obligation to make payments to Bettaform and could not make payments without Datem’s authorisation.
iv. Mr McCann’s evidence
I understand the purpose of Mr McCann’s evidence to be supportive of Leighton’s contention that it had a defence of substance to Bettaform’s claim which, if the default judgment were set aside, and the proceedings were not stayed, it was committed to prosecuting.
Between around 1998 and January 2004 Mr McCann was employed by Leighton as a construction and project manager. In that role he managed the building division of Leighton and oversaw individual projects, including the construction of the Rockwell Centre (the Rockwell project). Mr McCann reported directly to Peter Gomm, Leighton’s Country Manager.
In his affidavit Mr McCann deposed that following Leighton winning the tender to construct the Rockwell Centre, Leighton engaged Datemform as a sub-contractor on the project. In or around January 1999 Mr McCann became aware that personalities associated with the Rockwell Land Corporation, for whom Leighton was constructing the Rockwell Centre, objected to Bettaform’s involvement in the project. Attempts by Leighton to resolve the issue failed. Leighton then turned to Datem and Bettaform to resolve the issue amongst themselves.
In the following weeks Leighton remained in contact with Datem and Bettaform. Leighton came to realise that there were problems in the relationship between Datem and Bettaform arising from their involvement in the ABS-CBN project which also involved some of the same personalities as were involved in the Rockwell Land Corporation. Leighton became concerned that Datemform would be compromised in its ability to meet its obligations in relation to the construction of the Rockwell Centre. Consequently, Mr McCann and Mr Gomm hosted a meeting between Bettaform and Datem on 17 February 1999 at Leighton’s offices. Mr McCann deposed:
17.3Bettaform and Datem ultimately agreed to end the joint venture on the basis that Datem would pay money to Bettaform to buy out its share in the Joint Venture, and retain the assets of the Joint Venture, including the formwork facilities they had built together in the Philippines and involvement in the Rockwell Project and other projects. …
…
17.5the payment schedule at the end of the Agreement … represented all of the money that Datem would pay to Bettaform in consideration for Bettaform’s share of the Joint Venture. The specific instalments were calculated based on Bettaform and Datem’s expectations of profits on all of their projects, including the Rockwell Project. The amounts were calculated and agreed upon by Datem and Bettaform …
In his affidavit Mr McCann claimed that he and Mr Gomm did no more than assist the parties to arrive at a consensus. When it came to drafting a written agreement, Mr McCann and Mr Gomm acted as scribes, handwriting the terms agreed and printing the agreement for the representatives of Bettaform and Datem to sign. Mr McCann insisted that neither he nor Mr Gomm contributed “to formulating the payment amounts or any of the other terms of the agreement between the two companies”. He deposed:
17.6once Bettaform and Datem agreed on the schedule, their representatives asked Gomm and I if LCPI would assist in facilitating the payments due from Datem to Bettaform, by paying money which would otherwise be due to Datem in relation to the Rockwell Project directly to Bettaform’s Australian bank account on Datem’s behalf. I was told by the representatives of both companies that the request was made because Bettaform wanted some form of security for the payments, and felt more comfortable having another party being involved with the payments;
…
17.8In response to the request, Gomm and I each said words to the effect that we wanted to help the parties resolve their dispute and were open to making payments as requested by the parties mutually if it were possible, but could not commit to it, as we would need to:
(a)    obtain advice on whether we were able to do so lawfully and without causing any adverse tax implications;
(b)    obtain approval from the internal financial and legal advisers for the company, who were based in Hong Kong at the head office of another Leighton group entity;
(c)    ensure that both parties agreed on our role and recorded it appropriately in a more formal written agreement, which would incorporate and supersede the notes taken on the day; and
(d)    obtain express written authorization for each payment from Datem before it was sent, because they were the party to whom we would owe a contractual obligation;
17.9neither Gomm or I agreed to or took any position on the overall payment amount set out in the Agreement or the individual payments set out in the Schedule. It would not have been possible for us to do so, as:
(a)   while the payments that Datem expected to receive through its work on the Rockwell Project formed part of their calculation, they were not the only component contributing to the quantum of the payment schedule that the companies had written up, and we had no involvement in the other projects which contributed to those amounts; and
(b)   even in relation to the Rockwell Project, we had no ability to control whether Datem adhered to the expected production and progress schedule such that payments would fall due from LCPI to Datem on the timeframes anticipated.
Mr McCann emphasised that neither he nor Mr Gomm signed the agreement nor were they asked to do so by either Datem’s or Bettaform’s representatives. It was not suggested to them that Leighton was a party to any agreement entered that day. Mr McCann reiterated that he and Mr Gomm were present in the capacity of facilitators and no more. In his oral evidence Mr McCann said:
Q… Firstly, it was a concern to you to ensure that there be no disruption of the project by reason of Datem Form [sic] being involved; is that right.
AYes, that’s correct.
QThe difficulty that arose because of Datem Form’s [sic] involvement in the project was occasioned by Bettaform being a party to the joint venture and some other dispute that was afoot in connection with another project in the Philippines.
AYep, that’s correct.
QFrom your perspective as project manager on behalf of [Leighton], it was important to try and ensure that that dispute didn’t disrupt the Rockwell project. That’s right, isn’t it.
AYes, that’s correct.
QSo, from [Leighton]’s point of view and yours as project manager, you were keen to see a transaction occur as a consequence of which Bettaform could be removed from the Rockwell Project and a replacement subcontract entered with Datem Inc. only. That’s right, isn’t it.
AYes.
QIn that regard, there were discussions at that meeting at Leighton’s offices in February 1999, were there not.
AYes, there was.
QI suggest to you that at that meeting, in fact, your recollection is faulty as you sit there today and there was discussion about Bettaform and Datem seeking the assistance of [Leighton] and, indeed, the agreement of [Leighton], to facilitate the payments to Bettaform. You agree with that, don’t you.
AI don’t agree fully with your statement, no.
QWhat aspect don’t you agree with.
AWe agreed that we would assist, but not agree to any payment because it was not our - we only facilitated that meeting.
QI understand that’s what you say. In your affidavit, you make it clear there was discussion about that subject, but you were concerned about whether you had authority to commit [Leighton] to such an arrangement.
AThat’s correct.
On 18 February 1999 Mr McCann and Mr Gomm received a letter sent on the Dateform letterhead and signed by Mr Espiritu and Mr Schultz. The letter suggests Leighton undertook a number of obligations in consideration for which Datem would acquire Bettaform’s interest in Datemform. Those obligations included:
Leighton will pay to Bettaform Pty. Ltd. the total amounts for each month referred to in the attached schedule from the monthly progress billings on the project.
On 29 March 1999 Mr McCann received a letter from Mr Schultz sent on Bettaform letterhead. The letter stated that Leighton had agreed to pay Bettaform in accordance with the schedule provided in the minutes of the meeting on 17 February 1999 and confirmed in the letter dated 18 February 1999. Mr Schultz noted that the payment schedule referred to an “up front payment of P6.5m”. He considered that this should have come from the downpayment made to Datem and that Leighton should remit P3.5 million from the billings due for payment for that month and the month after to ease the cash flow for Datem. Mr McCann deposed that the downpayment was not able to be made and in consequence there were no project billings to remit at the time the letter was sent. Mr McCann responded to Mr Schultz’s letter on 29 April 1999 stating that Bettaform’s agreement in relation to the P6.5 million was with Datem (and not Leighton) and further that Leighton was only making payments to Bettaform to assist it.

In his affidavit Mr McCann deposed that following the 17 February 1999 meeting Datem struggled for a long time with delivery of work on the Rockwell project with the consequence that there were no billings to remit until later than anticipated. Throughout that time Bettaform continued chasing Leighton and Datem for payment. By letter dated 18 May 1999 Mr McCann wrote to Bettaform referring to concerns raised about Datem’s ongoing involvement in the Rockwell project, the client having requested that Datem be removed from the project, and advising:
I have therefore put on hold the transfer of the money until we can sort out this issue once and for all. At this point Datem do not have enough assetts [sic] on site to cover the moneys given to them, therefore I cannot expose Leighton to any further risk.
Once the project gains momentum, I have no problem forwarding the money as agreed, however I trust you under the precarious we now find ourselves in.
I had previously approved the payment and the cheque had been drawn for Colin to send to your bank. If the matter is resolved in the next few days then we will send the money, as Datem have given me documentation approving the transfer.
Mr McCann considered that the passages from his 18 May 1999 letter quoted immediately above were “consistent with my firm recollection that LCPI at all times required express written authorization from Datem before it was able to make any payment to Bettaform on Datem’s behalf, and made that requirement express to both Datem and Bettaform”.
Payments to Bettaform were made on two occasions — 18 August 1999 and 13 September 1999. In each instance payment was deducted from monies owed to Datem as authorised by Datem. Mr McCann did not consider that Leighton was authorised to make payments to Bettaform in the absence of express approval by Datem.
On 14 September 1999 Datem wrote to Leighton as follows:
With respect to the Payment Schedule Agreement between Datem, Inc. and Bettaform Pty Ltd dated February 15, 1999 we would like to inform you to only remit the amount of ONE MILLION SIX HUNDRED TEN THOUSAND PESOS (P 1,610,000) per month starting September 1999 to cover item 1, 2, 3 amounting to [illegible] and Item 5 amounting to P0.5m of the said schedule.
Leighton’s remittance to Bettaform from the Rockwell Project amounting to P 1.6m will have to be discontinued pending finalization of DATEM INC’s contract amount for the said project and the terms of payment by DATEM INC to ABS-CBN BROADCASTING CORPORATION as settlement of the claims for Project 9501.
Two days later, on 16 September 1999, Mr McCann wrote to Datem:
We are in receipt of your letter of 14^th September 1999 regarding Bettaform Remittances and comment as follows:
1.   The agreed payment schedule was duly signed by all parties, and therefore any changes to the payment schedule should be agreed by the same.
2.   In discussion with yourself and Arnold De Asis last month it was agreed that no changes should be made to the payment [schedule] unless sanctioned by Vic Manuel and David Schultz.
3.   In order to ensure that there is no miss communication will you urgently obtain approval to allow us to adjust the previously agreed amount.
In cross-examination it was put to Mr McCann that Leighton subsequently received instructions from Datem to cease making payments whereupon Leighton sought indemnification from Datem in relation to any action Bettaform may consequently have against Leighton. Mr McCann agreed with both propositions.
v. Mr Mendoza’s evidence
Mr Mendoza is an Attorney in the Philippines and a junior partner in the firm of Pulido & Tiamson. His first affidavit is in the nature of expert evidence regarding the practices and procedures of the judicial system in the Philippines. It provides context in which the decisions of the Regional Trial Court and Court of Appeals to which I have referred may be understood. In his first and second affidavits Mr Mendoza also provides his opinion as to what would be required to effect service of the proceedings instituted in this Court in accordance with the law of the Philippines. In short, Leighton, being a corporation, under rule 14(11) of the 1997 Rules of Civil Procedure service had to be upon the president, managing partner, general manager, corporate secretary, treasurer or in-house counsel. Leighton contends that Ms Mariano, the Executive Secretary to Leighton’s Country Manager, is not one of the persons upon whom the proceeding may validly be served in compliance with rule 14(11).
Bettaform’s case
Bettaform relied upon affidavits from the following:
i.     Cecilio A C Villanueva and Arnold D Perez, sworn 23 July 2001 (FDN 6);
ii.   Peter Britten-Jones, sworn 10 September 2001(FDN 8);
iii.     Peter Britten-Jones, sworn 10 August 2016 (FDN 19);
iv.   David Anthony Schultz, sworn 10 August 2016 (FDN 18);
v.    David Anthony Schultz, sworn 12 August 2016 (FDN 20); and
vi.   Joel Raymond R Ayson, sworn 26 August 2016 (FDN 22).
I have already dealt with Messrs Villanueva and Perez’s affidavit and also with Mr Britten-Jones’ first affidavit.
i. Mr Britten-Jones’ evidence
Mr Britten-Jones is now a barrister. At the material time he was an associate at Cowell Clarke. Mr Britten-Jones was able to access the file at Cowell Clarke for the purposes of preparing his second affidavit.
In his affidavit Mr Britten-Jones tells of proceedings instituted by Bettaform against Leighton in October 2000 after Cowell Clarke had written to Leighton demanding payment of the amount outstanding under the contract of February 1999 and received a response from Leighton to the effect that it was not liable for any such payment. It is unnecessary to trace the history of the October 2000 proceedings instituted in this Court. It is enough to state that they were withdrawn upon it being realised that service of the summons and Statement of Claim had not been effected in accordance with the rules.
The current proceedings were, as mentioned above, instituted in May 2001. Mr Britten-Jones explains that as the Philippines was not a party to the Hague Convention, he proceeded to arrange for service of the proceedings instituted in 2001 under rule 20 of the 1987 Rules. I have set out the steps taken by Mr Britten-Jones above.
In his second affidavit Mr Britten-Jones stated that he had no recollection of attending before the Master on 10 October 2001 or of the oral submissions he made on that day. Cowell Clarke’s file contains a written note of his attendance but no greater detail.
On 18 October 2001 Cowell Clarke caused the sealed judgment issued in the present case to be served on Leighton by letter. That letter requested payment of the judgment within seven days and advised that if payment were not made within the time stipulated proceedings to enforce the judgment would be instituted in the Philippines. Some five days later Cowell Clarke wrote to Leighton Holdings Ltd in New South Wales ostensibly in an effort to have the Australian company bring some pressure to bear corporate relative in the Philippines.
On 15 November 2001 Ward and Partners sent a letter to Mr Britten-Jones via facsimile, as mentioned earlier in these reasons. In that letter Ward and Partners stated that they acted on behalf of Leighton and were in the process of taking instructions on whether judgment had been regularly obtained. Five days later, on 20 November 2001, Cowell Clarke wrote to Ward and Partners advising that lawyers in the Philippines had been engaged to institute proceedings to enforce the judgment signed in this Court. Cowell Clarke did not hear further from Ward and Partners.
The concluding paragraphs of Mr Britten-Jones’ second affidavit deal with the proceedings instituted by Datem and Datemform against Bettaform in the Philippines. It appears that Cowell Clarke first became aware of these proceedings when it received a letter on 16 November 2000 from counsel representing Datem and Datemform in the Philippines. The letter purported to serve certain documents filed in the Filipino action. In December 2000 Cowell Clarke engaged Ponce Enrile Reyes and Manalastas, Attorneys, to act for Bettaform in the Filipino proceedings. On 24 December 2000 Bettaform issued a motion to dismiss the Filipino proceedings. That motion was subsequently dismissed and Bettaform was ordered by the Regional Trial Court of Makati to file an answer by 14 August 2001. From my treatment of the Filipino proceedings above it is plain that Bettaform actively defended the proceedings until such time as they were dismissed by the Court of Appeals.
ii. Mr Schultz’s evidence
In his first affidavit Mr Schultz confirms that he was and remains a director of Bettaform.
Exhibited to the first affidavit of Mr Corbett is an affidavit sworn on 20 June 2006 by Mr Schultz in the proceedings in the Philippines between Datem, Datemform and Bettaform. Mr Schultz refreshed his memory from that affidavit. He remains of the view that the content is true and correct. It tells a story consistent with the Statement of Claim filed in this Court. Mr Schultz referred to an exchange of letters between Bettaform and Leighton. In particular:
i.By letter dated 29 April 1999 Leighton wrote to Bettaform advising, amongst other things, that Leighton would ensure that the first instalment for the July claim, of Php1.9 million, would be sent direct as previously documented;
ii.By letter dated 3 July 1999 Leighton advised Bettaform that the July payment was not expected to be paid until mid August;
iii.By letter dated 19 August 1999 Leighton confirmed the telegraphic transfer to Bettaform of the sum of $74,449 (Php1.9 million); and
iv.By letter dated 14 September 1999 Leighton confirmed the telegraphic transfer of $123,209.14 (Php3,210,000).
Mr Schultz also deposed to receiving a copy of Mr McCann’s letter of 16 September 1999 to Datem as referred to earlier in these reasons.
Evidence was taken in the enforcement proceedings on 14 September 2015. On that day Mr John Porter, Mr McCann’s successor at Leighton, gave evidence. Importantly, he confirmed that Leighton extracted an indemnity from Datem upon cessation of payments to Bettaform or soon thereafter. That tends to suggest that Leighton was concerned that it might be exposed to Bettaform. At another point in his evidence Mr Porter refers to a contract between Bettaform, Leighton and Datem as the basis for Leighton having made payments to Bettaform.
In his affidavit Mr Schultz refers to the enforcement proceedings in the Philippines providing a history not materially different to Mr Corbett’s. However, he adds one important point being that since taking out this application Leighton has sought to have the enforcement proceedings suspended.
Mr Schultz makes the point that the in-house review of the status of the proceedings in the Philippines conducted by Leighton took place before August 2015. Leighton then waited until May 2016 before making this application. That delay was not subsequently explained by Mr Corbett in his second affidavit.
Mr Schultz deposes to Bettaform having incurred the following in legal costs:
i.$71,802.74 in connection with the present application;
ii.$40,681.77 in pursuing the enforcement proceedings and defending the Datem and Datemform proceedings in the Philippines since October 2001;
iii.Travel and accommodation costs since October 2001 to and in the Philippines totalling $32,397.90.
iii. Mr Ayson’s evidence
Mr Ayson is a partner of the firm, Quasha Ancheta Peña & Nolasco in Manilla. His affidavit was admitted in answer to those of Mr Mendoza. Like Mr Mendoza, Mr Ayson gives expert evidence on the law of the Philippines and in particular the law relevant to effecting the service of legal proceedings. Mr Ayson agrees with Mr Mendoza that the applicable rule was rule 14(11) of the 1997 Rules of Civil Procedure. However, he expresses the opinion that service upon Ms Mariano amounted to effective service upon Leighton’s General Manager being the Country Manager. In this regard he equates Leighton’s idea of a Country Manager with the rules’ conception of a General Manager and further considers that the service upon the Executive Secretary of the Country Manager amounted to service upon the Country Manager. For reasons that will become clear it is not necessary for me to resolve the dispute between Mr Ayson and Mr Mendoza.
Submissions
Leighton contends that in three respects the default judgment was irregularly obtained:
i.Bettaform did not establish that this Court had jurisdiction to try the claim. More specifically, Bettaform failed to establish that the contract subject of the Statement of Claim was breached in this State within the meaning of rule 18.02(e)(v);
ii.Bettaform did not validly serve the proceedings on Leighton. More specifically, Bettaform failed to effect service in accordance with rule 18.05(b);
iii.In seeking leave to enter judgment in default, Bettaform did not proceed “[u]pon proper affidavit evidence” as required by rule 24.02. More specifically, Bettaform did not adduce affidavit evidence establishing that rule 18.02(e) was enlivened, that rule 18.05(b) was complied with, and which disclosed the existence of related proceedings in the Philippines in which Leighton denied that it owed any contractual obligation to Bettaform. Further, Bettaform did not adduce evidence sufficient to satisfy the court that the proceedings would not be stayed on the basis that the Supreme Court of South Australia was clearly the inappropriate forum in which to determine the claim.
With respect to the first asserted irregularity, the starting point for Leighton’s submission was the constitutional limits upon the application of the laws of the State and the necessity that there exist a real connexion between the cause of action and the State. Rule 18.02(e)(v) purported to describe what amounted to a real connection. Accepting this, it was incumbent upon Bettaform to either plead in its Statement of Claim sufficient material facts from which the Court may conclude that the rule is satisfied, or, to adduce evidence of relevant facts establishing the basis upon which jurisdiction is enlivened. Relying on Agar v Hyde Leighton submitted that there is a strong argument in that jurisdiction was not enlivened.[12] Further, if reason arises to query the existence of jurisdiction, the Court is obliged to investigate the issue sufficiently to form a view as to whether or not it does have authority to determine the controversy.
[12] (2000) 201 CLR 552.
In the present case Leighton acknowledged that Bettaform relied upon the alleged failure by Leighton to make payment in South Australia in accordance with the terms of the alleged contract, but contended that it was not sufficient for Bettaform to establish on the face of the statement of claim that it had an arguable claim. Rather it was necessary to establish that a term of the contract required that Leighton make payment in South Australia. That was a matter of construction of the alleged contract. Whilst the creditor’s place of residence was a factor attracting significant weight, it was not necessarily decisive. To the extent that the relevant term may be implied, it must be necessary for the reasonable or effective operation of the contract. In the present case Bettaform was solely reliant upon the allegations contained in the Statement of Claim which were inadequate to establish that as a term of the contract payment was to be effected in South Australia. Additional evidence was required.
Leighton also pointed to the evidence of Mr McCann and Mr Corbett as casting real doubt upon the bona fides of Bettaform’s claim and indicative of the need to adduce further evidence to establish jurisdiction. Leighton added that the shortcomings were compounded by the absence of any evidence as to the law of the Philippines, contending in effect that the law applicable to any contract was the law of the Philippines. Leighton contended:
55.Accordingly, the material before the Court at the time of the hearing on 10 October 2001 was plainly insufficient to establish jurisdiction pursuant to rule 18.02(e), and it was not open to the Court to grant leave to enter Judgment on that date.
56.As a result, the Judgment must be set aside and the action dismissed. This Honourable Court plainly has no discretion to uphold a judgment that was entered without proper compliance with its rules regarding founding of jurisdiction, which cannot by any test be said to be a ‘trifling’ irregularity. Further, there is no basis on the evidence now before the Court to infer that the irregularity is capable of remedy by the device of amendment to pleadings.
57.In the alternative, if the Court considers there to remain a live controversy over the enlivening of the Court’s jurisdiction, it must set aside the Judgment to allow that controversy to be resolved.
In response Bettaform submitted that the Statement of Claim made quite clear that the terms of the contract required Leighton to make payments in South Australia and that Leighton had breached the contract in failing to do so. The fact of the breach of non-payment in this State was sufficient to bring the matter within the jurisdiction of this Court.
Next, Leighton contends that in purporting to affect service of the proceedings outside Australia Bettaform failed to comply with rule 18.05(b) in that it was required to serve the proceedings in accordance with the law of the Philippines. That requirement necessitated that on the application for default judgment Leighton adduced expert evidence as to the validity of service in the Philippines in accordance with the law of the Philippines. It did not do so. Further the evidence of Mr Mendoza establishes that the mode of service deployed was not in accordance with the law of the Philippines.
For its part Bettaform points to the affidavit of Messrs Villanueva and Perez as complying with rules 13 and 18.06(a). Bettaform contends that that is sufficient to amount to evidence of service having been effected in a manner compliant with rule 18.05. Further, and in any event. Bettaform relies upon the deeming provision contained in rule 19(c). No evidence having been adduced to the contrary, that deeming provision is to be given full force and effect. Further again, Bettaform points to the affidavit of Mr Ayson filed by Leighton in support of this application. It contends that having regard to the law of the Philippines as described by Mr Ayson, such service as was effected through the Australian Embassy in Manila was compliant with the law of the Philippines. Importantly, the affidavit of service states that Ms Mariano identified herself as the person authorised to accept service of the Bettaform proceedings on behalf of Leighton by the Country Manager. Lastly, Bettaform points to the fact that assertions of alleged defective service were similarly made in the Philippines and had been rejected by the Philippines courts. Ultimately, any alleged failure was not the fault of Bettaform but rather the Australian Embassy and should not be sheeted home to Bettaform.
Leighton further submitted that upon the application for default judgment it was incumbent upon Bettaform to make full and frank disclosure of the existence of the related proceedings in the Philippines, any claims made for the same sum of money subject to the proceedings in other proceedings against the same or another defendant, and any denial of liability by Leighton expressed. In this regard it is contended that the institution of the proceedings in this State were oppressive, vexatious or an abuse of process on account of the fact that they purported to litigate the identical or same issue as subject of a controversy elsewhere. Further, it is contended that if the proceedings may be considered only “related” to those in the Philippines, in the sense that while they arise out of the same substratum of facts there are differences between the parties and the issues being litigated, the institution of such proceedings may still be an abuse of process having regard to the content of the controversy considered as a whole. In the present case, Bettaform failed to make any disclosure of the proceedings on foot in the Philippines, let alone the fact that issues raised in those proceedings were founded on the same substratum of facts and the fact that the relief sought overlapped. Leighton submitted:
… the commencement and continuance (if permitted) of these proceedings would be oppressive and vexatious in the Voth and Ocean Sun Line sense in that:
85.1the finding of fact already reached by the Philippines Court of Appeals is directly relevant to matters in issue in these proceedings, given the reference in the Minutes to Datem giving “consent” to LCPI making payments to Bettaform and the evidence of McCann and Corbett as to revocation by Datem of any authorization to make payments to Bettaform on its behalf, such that issues of comity between Courts arise;
85.2 the South Australia Supreme Court is a clearly inappropriate forum for the proceedings, noting:
(a) the likelihood that the lex fori in respect of the alleged contract is the Philippines, and the factual matters underlying that likelihood …
(b) that those same factual matters make the Courts of the Philippines the most natural forum for the dispute; and
(c) no evidence has been put forward by Bettaform as to any legitimate personal or juridical advantage which it would obtain from proceeding in South Australia; and
85.3 the pursuit of proceedings in South Australia would be likely to significantly prejudice if not entirely bar LCPI’s ability to pursue by way of third party claim within the same proceedings indemnity from Datem in respect of any liability which it is found to owe Bettaform, given the restrictions on jurisdiction … and the lack of any nexus with South Australia as between LCPI and Datem, resulting in a further multiplicity of proceedings.
[footnote omitted]

In the Statement of Claim Bettaform expressly pleaded that the agreement reached between Bettaform, Leighton, Datem and Datemform obliged Leighton to make payments to Bettaform’s bank account in Adelaide in accordance with the schedule. In my view, non-payment as alleged in the Statement of Claim assumes a significance here in South Australia where Bettaform is resident. I think it was open to the Master to be satisfied that the dispute was one in relation to which this Court had jurisdiction. I think it was open to the Master to be satisfied on the material before him that the claim was one falling within rule 18.02(e)(v).
I note that in his written submissions Mr Britten-Jones alerted the Master to Gleeson CJ’s observations in Agar v Hyde.[36] Doing so would have alerted the Master to the question of whether the material before the Court was sufficient to satisfy it that the allegations gave rise to a cause of action arising in this State. The orders made evidence the Master’s satisfaction.
[36] (2000) 201 CLR 552.
Mr Britten-Jones’ submissions also referred the Master to rule 24.02 of the 1987 Rules. In the circumstances it may be inferred that the Master had regard to the question of whether there was proper affidavit evidence before the court and was satisfied accordingly. That is not surprising. Once the Master was satisfied that Leighton was properly served, the inference arising from the failure to file an appearance was that Leighton did not wish to defend the action. The drawing of such inference is one that courts approach robustly where service has been effected, the proceedings contain a warning that the court may proceed in the absence of the defendant if it does not take the required action, and sufficient time in which to take action has passed. I accept that the inference does not overcome the need for the court to satisfy itself that the matter is one in relation to which it has jurisdiction, but if a defendant has been properly served there is a measure of comfort that the court may take from the defendant’s silence in drawing conclusions from the Statement of Claim and such affidavit evidence as is filed by the plaintiff.
Quite obviously, a plaintiff proceeding under rule 24 of the 1987 Rules is not required to prove its case on oath. The reference in rule 24.02 to proper affidavit evidence is not to be construed as requiring the plaintiff to file, in effect, its case in writing. In the present case, for the reasons I have given I consider the Statement of Claim adequate of itself to satisfy the Master that this Court had jurisdiction. Even if paragraph 13.7 were absent, and Bettaform was reliant upon its alternate case,[37] I consider that objectively the terms of the alleged contract required payment in Adelaide. Again, the alleged omission or failure on Leighton’s part as alleged has a significance in this State.
[37] See Statement of Claim at paragraph 14.2.
Mr Britten-Jones’ written submissions make no reference to the proceedings instituted by Datem and Datemform in the Philippines. Cowell Clarke were aware of the proceedings. There is no transcript of the application before the Master on 10 October 2001. Mr Britten-Jones has no memory of the oral submissions he made.
In the Datem and Datemform proceedings the petitioners sought declarations as to Bettaform’s tax liability on the amounts payable to it pursuant to the February 1999 contract in addition to a declaration that Bettaform was liable as a joint venture partner in Datemform for the amount owed by Datemform to ABS-CBN as determined by the Construction Industry Arbitration Commission.
Leighton was joined as a party to the proceedings. In its Answer, filed before Bettaform’s Answer, Leighton pleaded that no cause of action was raised against it and that the judgment sought by Datem and Datemform would neither benefit nor injure it. It was joined, it contended, in order that the petitioner may obtain orders compelling it to release money that it had retained and held to Datem’s account.
Leighton did float the idea that it had brokered the agreement between Datem and Datemform on the one hand and Bettaform on the other, but Leighton did not plead a case to the effect that it did not enter into any contractual arrangement in February 1999 that invoked obligations owed to Bettaform. That is not to be critical of Leighton, the fact is that Datem and Datemform’s Petition did not require that Leighton do so.
In its Answer Bettaform claimed that declaratory relief was not available to Datem and Datemform, a contention which ultimately found favour with the Court of Appeals. Further Bettaform denied the paragraphs of the Petition in which Datem and Datemform pleaded the terms of the contract before pleading the terms relevant to the resolution of the issues in relation to which declaratory relief was sought.
Annexed to the Petition was the minutes of the meeting of 17 February 1999 which Bettaform pleaded in this Court comprised a component of the contract with Leighton. Clause 5 read:
Leighton will draft contract documents in the name of Datem Inc on the same terms & conditions as presently contracted to by Datemform. An additional schedule will be included by which Datem Inc consent to Leighton paying direct to Bettaform monies falling due to Bettaform from the Rockwell Contract, arising from the transfer of the contract from Datemform to Datem Inc.
The Datem and Datemform proceedings did not require the courts of the Philippines to determine the existence or content of any agreement involving Leighton nor what, if any, obligations Leighton owed Bettaform arising from such agreement including clause 5. Had Datem and Datemform been granted the relief they sought, it is likely that the outcome would have resulted in the variation of the contract of February 1999 to reflect the reduced amount payable to Bettaform. What such variation may have meant for Leighton cannot be determined.
I do not consider Bettaform’s Answer at odds with the Statement of Claim that it filed in this Court.
The ambit of the duty to make full and frank disclosure requires that the applicant supply “the place of the absent party to the extent of bringing forward all the material facts which that party would presumably have brought forward in his defence to the application”.[38] What was Bettaform to bring forward? True the Datem and Datemform proceedings were related to the action instituted by Bettaform, but to what purpose would Leighton, had it attended before the Master, have referred the Master to those proceedings? The issues to be litigated in the Philippines were different and did not overlap. It must be remembered that Datem and Datemform did not contend that there was no February 1999 contract pursuant to which payments were to be made to Bettaform. Nor that Leighton did not have a role in the arrangement. The outcome of the Datem and Datemform proceedings may have affected the amount Bettaform claimed against Leighton, it may have given rise to a cause of action in Leighton against Datem and Datemform or, if Datem and Datemform were joined, given rise to some sort of set off. Of course, Bettaform’s primary position was that the Datem and Datemform proceedings were incompetent.
[38] Thomas A Edison Ltd v Bullock (1912) 15 CLR 679 at 682 (Isaacs J).
I am satisfied that there was a connection between the proceedings sufficient that the duty to make full and frank disclosure warranted the Master being informed of their existence and the issues in dispute. However, the evidence before me does not allow me to conclude that Bettaform did not advise the Master of the related proceedings. At first blush, it may be considered unusual that Mr Britten-Jones did not make any reference to the Philippines proceedings in his written submissions, however closer scrutiny of the submissions shows that they endeavour to do no more than step the Master through the applicable rules of court. It is reasonably possible that Mr Britten-Jones left the issue of the Datem and Datemform proceedings to be dealt with orally, after all Cowell Clarke were aware of the related proceedings. Further, the content of the submissions suggests that they were meant to operate in tandem with oral submissions and there was an oral hearing.
I do not think this is a case where it can be said that had the Master been advised of the related proceedings in the Philippines he would, for that reason alone, have refused to grant Bettaform leave to enter judgment. Upon being satisfied that Leighton was served, it was open to the Master to conclude that despite its Answer, Leighton did not wish to defend the Bettaform proceedings. From the Statement of Claim it would have been obvious to the Master that Leighton was a sophisticated, well-resourced litigant who had the benefit of advisers and was more than capable of making strategic legal decisions.
In Voth Mason CJ, Deane, Dawson and Gaudron JJ said:[39]
In the present case, the court has before it an application to set aside service effected pursuant to an ex parte grant of leave to serve outside the jurisdiction. Where a case falls within a category in which the legislature has seen fit to allow service outside the jurisdiction if, but only if, the leave of a court is first obtained, that court should not grant leave unless it is positively persuaded that it should do so. Plainly, it should not be so persuaded unless the plaintiff satisfies it that the case is of the relevant category and that the proceedings would not be subsequently stayed as an abuse of process on forum non conveniens grounds or for some other reason. …
[39] Voth v Manildra Flour Mills Pty Ltd (1990) 171 CLR 538 at 564.
It was then incumbent upon Mr Britten-Jones to satisfy the Master that the proceedings would not be subsequently stayed as an abuse of process on forum non conveniens grounds or for some other reason. I am inclined to think that had Mr Britten-Jones undertaken this task some reference would be made to the applicable authorities in his written submissions. Unlike the question of whether Mr Britten-Jones disclosed the existence of the related proceedings which Cowell Clarke knew about, there is no suggestion that he or the firm turned their minds to the question of whether the matter may be stayed on forum non conveniens grounds.
In Voth Mason CJ, Deane, Dawson and Gaudron JJ continued:[40]
… In such a case [an application to set aside a judgment obtained in default] the onus should remain on the plaintiff on a subsequent application to set aside the service outside the jurisdiction. Otherwise, the ex parte order for service outside the jurisdiction, if onus of proof were to prove decisive, would confer an enduring advantage upon a plaintiff notwithstanding that the expanded evidence on a contested application to set aside service indicated that the applicant had not been entitled to that ex parte order.
[40] Voth v Manildra Flour Mills Pty Ltd (1990) 171 CLR 538 at 564.
The relevant test is to be found in the judgment of Deane J in Oceanic Sun Line Special Shipping Co Inc v Fay.[41] Deane J said:[42]
In the light of the foregoing and at the cost of some repetition, it is possible to identify in summary form what I see as the modern content of the traditional principles governing the power of a court in this country to order that proceedings which have been regularly instituted within jurisdiction should be dismissed or stayed on inappropriate forum grounds. That power is a discretionary one in the sense that its exercise involves a subjective balancing process in which the relevant factors will vary and in which both the question of the comparative weight to be given to particular factors in the circumstances of a particular case and the decision whether the power should be exercised are matters for individual judgment and, to a significant extent, matters of impression. The power should only be exercised in a clear case and the onus lies upon the defendant to satisfy the local court in which the particular proceedings have been instituted that it is so inappropriate a forum for their determination that their continuation would be oppressive and vexatious to him. Ordinarily, a defendant will be unable to discharge that onus unless he can identify some appropriate foreign tribunal to whose jurisdiction the defendant is amenable and which would entertain the particular proceedings at the suit of the plaintiff. Otherwise, that onus will ordinarily be discharged by a defendant who applies promptly for a stay or dismissal if he persuades the local court that, having regard to the circumstances of the particular case and the availability of the foreign tribunal, it is a clearly inappropriate forum for the determination of the dispute between the parties. The reason why that is so is that, once it is accepted that the adjectives “oppressive” and “vexatious” are not to be narrowly or rigidly construed and are to be applied in relation to the effect of the continuation of the proceedings rather than the conduct of the plaintiff in continuing them, the continuation of proceedings in a tribunal which is a clearly inappropriate forum would, in the absence of exceptional circumstances being established by the plaintiff (cf. Spiliada Maritime Corp. v. Cansulex Ltd.), be oppressive or vexatious to such a defendant if there is some available and appropriate tribunal in another country. Admittedly, that approach to the “vexatious” and “oppressive” test is less stringent and less rigid than would have been accepted in the nineteenth century. Under it, the applicable test pursuant to traditional principles can, in the ordinary case, properly be seen as an “inappropriate forum” test. It cannot, however, properly be seen as a “more appropriate forum” test since the mere fact that a tribunal in some other country would be a more appropriate forum for the particular proceeding does not necessarily mean that the local court is a clearly inappropriate one.
[footnotes omitted]
[41] (1988) 165 CLR 197. See also Voth v Manildra Flour Mills Pty Ltd (1990) 171 CLR 538.
[42] Oceanic Sun Line Special Shipping Co Inc v Fay (1998) 165 CLR 197 at 247-248.
In Voth Mason CJ, Deane, Dawson and Gaudron JJ added: [43]
It follows that, subject to the question of onus discussed in the preceding paragraph, the principles to be applied in applications to set aside service and in applications for a stay on inappropriate forum grounds are those stated by Deane J. in Oceanic Sun. In the application of those principles the discussion by Lord Goff in Spiliadaof relevant “connecting factors” and “a legitimate personal or juridical advantage” provides valuable assistance.
The fact that the onus of proof will differ according to whether the application is an application to set aside service effected outside the jurisdiction pursuant to leave or an application to stay the proceedings is inevitable: this flows from the issue to which the test is relevant. In one case, should the court assume jurisdiction? In the other, should the court decline jurisdiction? As Spiliada recognizes, there will be a difference in onus regardless of the precise content of what is seen as the appropriate test. The question whether the local court is a clearly inappropriate forum focuses, on both kinds of application, upon the inappropriateness of the local court and not the appropriateness or comparative appropriateness of the suggested foreign forum. In practice, the differing onus should raise no real difficulty.
[footnotes omitted]
[43] (1990) 171 CLR 538 at 564-565.
In the present case the related proceedings render the likelihood of Datem and Datemform being joined as parties almost inevitable. The contract alleged was one for the extraction, in effect, of the South Australian company from the Rockwell Centre project. It was not one for the provision of goods or services in the Philippines. True it is that steps had to be taken predominantly in the Philippines to extract Bettaform, but the dispute is not over any one of those steps. It is purely one relating to the payment of monies which all parties concede, at one level, were payable. The primary issues in dispute are twofold; by who was payment to be effected, and, was the amount payable to be discounted for any taxation or other liability. Those liabilities are said to arise by virtue of the law of the Philippines or contractual obligations entered into in the Philippines. With respect to the latter, I have in mind Bettaforrm’s alleged liability for part of the Construction Industry Arbitration Commission award arising from the ABS-CBN project which, like the February 1999 agreement, may be considered as visibly located in the Philippines. This is a strong indicator that the body of law applicable to the February 1999 agreement was that of the Philippines. If the matter went to trial, the witnesses involved would likely be limited to those in attendance at the February 1999 meeting and those who participated in the related negotiations, primarily a mixture of Australians and Filipinos.
Applying Voth, it is for Bettaform to satisfy me that this Court was not a clearly inappropriate forum in which to pursue its claim in the sense that if the claim were to proceed their continuation would not be oppressive and vexatious to Leighton. Any determination I make must be made in the current context. That is to say, the fact that Leighton made the tactical decision not to defend the proceedings and that 15 years passed before it decided to make the present application become relevant considerations. Whilst I am inclined to the view that had Leighton made this application promptly after being advised that judgment had been entered the argument that this Court was clearly the inappropriate forum in which to determine the claim would have enjoyed substantial prospects of success, in my view the passage of time and Leighton’s tactical decision amount to exceptional circumstances. I do not overlook my conclusion that it is likely that Mr Britten-Jones did not raise or attempt to satisfy the Master that the proceedings were of a kind likely to be stayed on forum non conveniens grounds. But in the end I think the injustice that would be visited upon Bettaform were it to be concluded that this Court was clearly an inappropriate forum in which to prosecute the claim and thereupon stay the matter outweighs any vexation or oppression in the relevant sense occasioned Leighton.
I am not persuaded that the default judgment was irregularly obtained.
I turn to the question of whether I should set aside the default judgment in the exercise of my discretion.
As it turns out, Leighton was indeed served effectively with the Bettaform proceedings. Further, it had time to consider the claim, to take advice and to determine what course of action it would take, all before default judgment was obtained. It determined not to defend the proceedings but to deal with Bettaform’s claim as part of any enforcement action taken in the Philippines. Default judgment was obtained. Leighton was advised of this soon after. Enforcement proceedings were instituted. Leighton defended and continues to defend those proceedings. Leighton remained committed to its chosen legal strategy for 14 years and until it decided to institute the current application.
This application is born of Leighton’s impatience with the progress of proceedings in the Philippines.
I accept that Leighton has an arguable defence and that, if this application is granted it will prosecute that defence either in this Court or in the enforcement proceedings.
The financial and human cost to Bettaform associated with granting this application is significant. I appreciate that the same personalities will have been involved in the proceedings in the Philippines, and that I may award costs against Leighton, but to grant the application will be to impose a burden in this country long thought resolved.

The prejudice to Bettaform inherent in the passage of time is obvious. So too the interruption to the administration of business by this Court and the impact upon other litigants whose matters are awaiting decision.
I also do not overlook the time and money spent in the Philippines and the imposition upon the time of the Regional Trial Court. All that time and money invested in an inquiry set at nought should this application be granted. Costs orders are only a partial remedy.
The position in which Leighton now finds itself is of its own making. It attracts little sympathy in that regard. The courts of the community of nations are entitled to expect that corporate citizens will engage appropriately with those judicial systems in which they become involved. Leighton’s tactical decision in these proceedings does it little credit. I caution myself that punishing Leighton forms no part of this application.
The claim is for a substantial amount of money, but that would have been obvious to Leighton when it decided not to contest the action. The risks associated with not contesting the action would likewise have been weighed by Leighton.
Ultimately, I am persuaded that the application should be dismissed.

DATE	AMOUNT (PESO)	CONVERSION RATE	AMOUNT ($AUS)
April 1999 July 1999 August 1999 September 1999 October 1999 November 1999 December 1999 January 2000 February 2000 March 2000 April 2000 May 2000 June 2000 July 2000 August 2000 September 2000 October 2000 November 2000 December 2000 January 2001 February 2001 March 2001 April 2001	6.5 million 1.9 million 3.21 million 3.21 million 3.21 million 3.21 million 3.21 million 3.21 million 3.21 million 3.21 million 2.71 million 2.71 million 2.71 million 1.11 million 1.11 million 1.11 million 1.11 million 1.11 million 1.11 million 1.11 million 1.11 million 1.11 million 1.11 million	25.06 25.13 25.36 26.69 25.69 26.04 26.31 25.81 25.26 25.25 24.17 24.74 26.09 26.58 26.03 25.31 25.82 25.93 28.05 27.28 25.47 24.12 26.08	$259,377.49 $75,606.84 $126,577.28 $120,269.76 $124,951.34 $123,271.88 $122,006.84 $124,370.39 $127,078.38 $127,128.71 $112,122.46 $109,539.20 $103,871.21 $41,760.72 $42,545.04 $43,856.18 $42,989.93 $42,804.09 $39,570.78 $40,683.63 $43,584.11 $46,020.47 $42,561.35
Total	$2,082,547.70
May 2001 – August 2002	1.11 million per month