Celtic Resources Holdings PLC v Arduina Holding BV - [2006] WASC 103

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS

CITATION: CELTIC RESOURCES HOLDINGS PLC -v- ARDUINA HOLDING BV & ORS [2006] WASC 103

CORAM: JENKINS J

HEARD: 26 APRIL 2006

DELIVERED : 26 APRIL 2006

FILE NO/S: CIV 1363 of 2006

BETWEEN: CELTIC RESOURCES HOLDINGS PLC
Applicant
AND
ARDUINA HOLDING BV
First Respondent
AUSTOCK NOMINEES PTY LTD (ACN 054 990 359)
Second Respondent
ASX SETTLEMENT AND TRANSFER CORPORATION PTY LTD (ACN 008 504 532)
Third Respondent

Catchwords:

Private international law - Foreign judgments - Enforcement- Mareva order - Purpose of Mareva order to assist in enforcement of foreign judgment not able to be registered in Australia - Need to establish actual or potential abuse of process - No material change in factual situation since previous application was dismissed

Legislation:

Foreign Judgments Act 1991 (Cth), s 6(6)

Result:

Application dismissed

Category: B

Representation:

Counsel:

Applicant:     Mr B H Taylor
First Respondent           :     Mr M J Hardy
Second Respondent       :     Mr G S French
Third Respondent         :     No appearance

Solicitors:

Applicant:     Talbot & Olivier
First Respondent           :     Hardy Bowen
Second Respondent       :     Gadens Lawyers
Third Respondent         :     No appearance

Case(s) referred to in judgment(s):

Celtic Resources Holding PLC v Arduina Holdings BV & Anor [2006] WASC 68
Raveh v The Official Receiver of the State of Israel in his capacity as Liquidator North America Bank Ltd (in liq) [2002] WASCA 27

Case(s) also cited:

Ashtiani v Dashi [1987] QB 888
Jackson v Sterling Industries Ltd (1987) 162 CLR 612
Mestert v Durban Roodepoort Deep Ltd [2004] WASCA 309
Republic of Haiti v Duvalier [1989] 1 All ER 456

JENKINS J: The applicant seeks a Mareva order. The applicant relies upon three affidavits of Melanie Maynard Byrne. The first is a comprehensive affidavit sworn 13 April 2006 which I will refer to as the 13 April affidavit. The second is an affidavit sworn to correct an error in the 13 April affidavit and was sworn on 21 April 2006. I will refer to this as the 21 April Byrne affidavit. The third affidavit of Ms Byrne sworn 26 April 2006, deals with proceedings in the High Court of Justice of England ("the court of origin"). I will refer to this as the 26 April affidavit.
The error, which has now been corrected in the 21 April affidavit, was the annexure of an incorrect document. The 13 April affidavit purported to annex as MMB70 a copy of an order obtained by the applicant on 31 March 2006 in the court of origin. An earlier order was annexed in error. The 21 April affidavit annexes the later order.
The first respondent appears by counsel to oppose the application.
Two issues have arisen in the course of the application. The first is whether a Mareva order can be made to assist in the enforcement of a foreign judgment which cannot yet be enforced in Australia. The second is whether, if it can, in the exercise of my discretion I ought to make such an order.
Due to the application having been brought on for hearing on an urgent basis counsel for the first respondent has not had time to consider the first issue and restricted his submissions to matters going to the exercise of my discretion. In support of those matters he relies upon his own affidavit sworn 21 April 2006 in opposition to the grant of the Mareva order. However, counsel does not concede the first issue.
The second respondent also appeared by counsel. He sought and was given leave to withdraw after submitting that the second respondent's only interest in the matter was to ensure that if a Mareva order was made, the second respondent only be prevented from dealing with the assets of the first respondent that it holds on its direction and not with any other assets.
It is not in dispute that the only assets the first respondent owns in Australia are shares in Emperor Mines Ltd. The second respondent holds these shares at the direction of the first respondent. The second respondent holds a larger parcel of shares in Emperor Mines Ltd and it naturally wishes to ensure that it is not prevented by any order from dealing with the balance of its shares in Emperor Mines Ltd.
This is the second application for a Mareva order that the applicant has made in this Court in a short period of time in respect to the first respondents' shares in Emperor Mines Ltd. The first application was heard by his Honour Hasluck J together with an application by the applicant to register a judgment that it obtained in the court of origin on 8 March 2006.
The judgment provides that the applicant has permission to enforce an arbitration award it has obtained against the first respondent dated 22 February 2006 in the same manner as a judgment or order. Further, it adjudges that the first respondent pay the applicant ₤916,338 sterling.
On 21 March 2006, his Honour refused to register the 8 March judgment and refused to grant the Mareva order. He subsequently published his reason for decision as Celtic Resources Holding PLC v Arduina Holdings BV & Anor [2006] WASC 68.
It would have been preferable for this application to be heard by Hasluck J but his Honour was unable to hear it because of other court commitments. It is unnecessary for me to set out all the relevant facts as Hasluck J summarised them in his judgment. These reasons are to be read with his Honour's judgment.
It is sufficient for me to summarise those reasons by saying that at [18] ‑ [19] his Honour refused to register the 8 March judgment because the Foreign Judgments Act 1991 (Cth), s 6(6) was explicit that a foreign judgment could not be registered if it could not be enforced in the country of origin court and the 8 March judgment could not be so enforced because it had not at that stage been served upon the first respondent.
The 13 April affidavit now establishes that service has been effected and that the first respondent has appealed both the arbitration award and the 8 March judgment. Consequently, these are further reasons or substitute reasons why the judgment cannot now be enforced in the country of origin pending the resolution of the appeals. Thus, it still cannot be registered under the Foreign Judgments Act (Cth). The applicant does not submit otherwise.
Further, his Honour declined to grant a Mareva order in respect to the first respondent's interest in certain shares of Emperor Mine Ltd saying (at [59] – [62]):
"In my view it would circumvent and be inconsistent with the prescribed procedure in the country of origin if a Mareva order was made of the kind proposed which indirectly had the effect of enforcing the judgment in question or, putting it another way, made provision for the judgment to be enforced in due course by ensuring that the assets of the judgment debtor are not dissipated.
I distinguish what was said by Campbell J in the Davis case (supra) in that the circumstances in that case did not give rise to a perceived inconsistency between the procedural requirements of the country of origin in regard to a suspension period after service of the judgment before enforcement could take place. Moreover, in circumstances where the judgment cannot be presently registered in this State, it cannot be said that there is as yet any abuse of process or likely abuse of the process in this Court, especially in circumstances where the underlying cause of action does not appear to be enforceable by or have any connection with proceedings commenced in this Court.
For all these reasons, after weighing up the dictates of equity and good conscience, I do not consider that a sufficient case for Mareva relief has been made out. In addition, it cannot be said that Celtic has shown a good arguable case that the rights vested in it by virtue of the judgment will be enforceable in this state at a time when the judgment has not been and cannot yet be registered in this state, notwithstanding the substantial body of evidence before me that the judgment has the potential to be registered in this state eventually. These observations apply with equal force to Austock.
This conclusion, which weighs against the exercise of the discretionary power to grant Mareva relief makes it unnecessary for me to proceed to the further question as to whether there is a real risk of Arduina's assets being dissipated. I will make no finding as to that."
In these paragraphs his Honour refers to the Davis case. He had previously summarised the effect of that decision at [46] – [50] of his judgment wherein he said:
"In Davis v Turning Properties Pty Ltd [2005] NSWSC 742, Campbell J was prepared to make a Mareva order to assist the enforcement of certain court orders obtained in the Bahamas, even though those orders had not yet been registered in New South Wales.
Indeed, as counsel for Celtic emphasised in the course of argument before me, it was a case in which the judgment could not be registered because the Bahamas was not a country to which the facilities of the Foreign Judgments Act have been extended.
The reasoning of Campbell J suggested that the proceedings for a Mareva order are not proceedings for an injunction; the Court must inquire as to whether there is prima facie evidence of those facts which are the basis for the grant of the particular interlocutory relief in question; and a reasonably arguable basis for any question of law involved as to the facts.
His Honour indicated also that the administration of justice New South Wales is not confined to the orderly disposition of litigation which was begun and tried in that state. The administration of justice in New South Wales includes the enforcement in that state of rights established elsewhere.
Importantly for present purposes, his Honour held that there is an inherent jurisdiction to make an order in aid of the enforcement of a foreign judgment in Australia whether that judgment has yet been obtained or not. Counsel for Celtic in the present case relies upon that conclusion. These cases suggest that Australia's superior Courts have at least an inherent jurisdiction to grant Mareva relief in relation to assets in Australia in aid of foreign proceedings."
As Hasluck J also pointed out, Campbell J's views in the Davis case differ from those of Murray J of this Court expressed in Raveh v The Official Receiver of the State of Israel in his capacity as Liquidator North America Bank Ltd (in liq) [2002] WASCA 27. Hasluck J referred to the Raveh case at [43] ‑[44] of his judgment as follows:
"I pause here to note that it is on this basis that it is said Mareva relief can be obtained against the second named respondent, Austock, even though no action has been commenced against or judgment obtained in respect of that party. In that regard counsel for Celtic relies upon the decision of the High Court in Cardile v LED Builders Pty Ltd (1999) 198 CLR 380.
In Official Receiver of State of Israel v Raveh (2001) 24 WAR 53, the plaintiff proposed to have a judgment obtained in the District Court of Israel registered as a foreign judgment in Western Australia. The plaintiff's application for an injunction was refused on the grounds that it was not related to an underlying right or cause of action pursued in the Supreme Court of Western Australia. Murray J was of the view that a Mareva order could only be granted to operate upon a defendant who seeks to evade or acts in a way calculated to defeat the enforcement in the Supreme Court of Western Australia of a substantive right pursued by the plaintiff in that Court."
Given Hasluck J's refusal to grant the Mareva order the applicant's only option, in the normal course of events, would be to appeal his Honour's decision. I do not understand that it has done so.
The applicant submits that there have been events subsequent to its first application which enable it to make a fresh application at first instance without abusing the processes of this Court. Those events are that on 27 March 2006 the applicant obtained a freezing injunction in the court of origin, which relevantly prevents the first respondent from disposing of, dealing with or diminishing in value any of its assets whether they are in or outside England and Wales up to a value of ₤1,500,000 sterling.
The order specifically said that the prohibition included the first respondent's shares in Emperor Mines Ltd. The freezing order authorised the applicant to seek to enforce the freezing order in this Court and/or to seek an order of a similar nature in Australia. The freezing order was obtained ex parte. On 31 March 2006 at an inter partes hearing, in which the first respondent did not put on evidence, the applicant obtained a continuation of the freezing order in identical terms until a further hearing in respect of the application on a date to be fixed.
The applicant's counsel advised me from the Bar table that he understood that no further date had yet been fixed.
The applicant submits that this application is not made to challenge the correctness of Hasluck J's decision but rather to seek a Mareva order based on these new facts which were not considered by his Honour. Although the orders of the court of origin are before me there is no transcript of the proceedings or a copy of the Court's reasons for decision. I thought that it was desirable that these be obtained, if possible, prior to me making my decision. Therefore I adjourned the application for a short period to see if they could be obtained. I am now informed by the 26 April affidavit that in respect to the ex parte freezing order there is no transcript of the hearing available and no written reasons for decision were delivered. I am advised that the hearing was of short duration and that Clarke J advised the applicant's counsel that he had read the material and was prepared to grant the order in respect to the hearing on 31 March 2006.
Ms Byrne deposes that she has been advised that the first respondent sought additional time to put on its objections to the freezing injunction of 27 March 2006. Thus, on 31 March 2006 Tomlinson J granted a continuation of the freezing orders to continue in force until the first respondent had put on its evidence in opposition to the freezing injunction. She further deposes that she has been advised that there was a discussion about the applicant's intention to enforce the freezing injunction in Western Australia.
Whilst it seems that the court of origin was satisfied that the applicant was entitled to protect its position under the 31 March judgment and accordingly granted the continuation of the freezing orders, it does appear from the 26 April affidavit that there will be a defended hearing in respect to the application for the freezing orders. Again the court of origin gave extempore reasons on 31 March 2006 and there is no copy of them available to me.
In my opinion the first question for my determination is whether the granting of the freezing orders after Hasluck J has made his decision in respect to the first application has rendered his Honour's reasoning no longer applicable.
If his Honour's reasoning is still applicable and the facts are not materially different, then in my view I should decline to rehear this application on its merits as to do so would be, in my view, an abuse of the Court's processes in the sense that a party is not permitted to bring multiple first instance applications based on the same or similar facts and against the same party in order simply to seek a different outcome.
By saying this I am not suggesting that the applicant, its solicitors or counsel have acted in a deliberately abusive manner, merely that the effect of the application would be an abuse of the processes of this Court unless I agree with the applicant that there has been a material change in the facts.
The applicant submits that the granting of the freezing orders has changed the situation because Hasluck J refused to grant a Mareva order not because he was of the view that a Mareva order could never be made to enforce a foreign judgment but because in the circumstances of this case as they were before him it would be inconsistent with the prescribed procedure in the United Kingdom for a Mareva order to be made which "made provision for the judgment to be enforced in due course by ensuring that the assets of the judgment debtor are not dissipated".
I respectfully understand his Honour to have held that if the 8 March judgment could not be enforced in the United Kingdom, this Court should not make an order to assist in its enforcement. Hasluck J distinguished the Davis case on the basis that there were no provisions in the country of origin in that case which prevented the relevant order of the country of origin from being enforced in that country. In that case, the country of origin was the Bahamas.
Secondly, Hasluck J held that where the 8 March judgment could not be enforced in Western Australia it could not be said that there was any abuse of process or likely abuse of process in this Court especially where the underlying cause of action does not appear to be enforceable by or have any connection with proceedings commenced in this Court.
Thus Hasluck J's decision appears to have been based on two grounds, the first being that an order of this Court should not assist to enforce a judgment that cannot be enforced in the country of origin. Unlike the Davis case there were legislative impediments to the enforcement of the 8 March judgment in the United Kingdom. The second ground being that a Mareva order should not be made where there was no abuse of process or likely abuse of process in this Court because the 8 March judgment is not currently able to be enforced by this Court and nor does it have any connection with the proceedings commenced in this Court.
I pause here to note that I, respectfully, see no inconsistency between what his Honour said in respect to this second ground and what he said in his judgment at [51] about embracing the view that the processes of the Court include the enforcement of a foreign judgment "when obtained in the Australian court" and that in the meantime a freezing may be made to prevent the frustration of that purpose. His Honour made similar comments at [56]. It seems to me that in [51] of his reasons his Honour supported the view that pending the registration of a registrable foreign judgment or after a foreign judgment was registered and pending its enforcement in an Australian court a Mareva order may be ordered by the Australian court to prevent a frustration of the process of enforcement in Australia. However his final view as expressed in [60] of his judgment appears to be based on the view that a Mareva order may not be granted by the Court where the foreign judgment is not registrable in Australia, as he found the 8 March judgment not to be.
The applicant says that the first ground for refusal to grant the Mareva order is no longer applicable to the facts as they are now because the court of origin has seen fit to make a freezing order comparable to a Mareva order which in its effect provides for the preservation of the first respondent's assets, including those in Australia.
Further, the court of origin has expressly envisaged that an application for a similar order may be made to an Australian court. Thus the applicant says there can no longer be any suggestion that it would be inconsistent with the prescribed procedure in the United Kingdom for a Mareva order to be made which "made provision for the judgment to be enforced in due course by ensuring that the assets of the judgment debtor are not dissipated".
This is because the court of origin has seen fit to make the equivalent of a Mareva order which has just that effect, despite the fact that the 8 March judgment cannot yet be enforced in the United Kingdom. I am in agreement with the applicant in this respect. It would appear to be nonsensical for this Court to maintain the view that comity with the court of origin required it not to make a Mareva order because the 8 March order could not yet be enforced in England when the court of origin itself did not see that as an impediment to the making of an equivalent to a Mareva order.

Further, now that the freezing order exists, the making of a Mareva order can be viewed as an aid in the enforcement of that order as well. No inconsistency arises for the same reason.
However, that is not, on my reading of his Honour's reasons, the only basis for the decision of Hasluck J. The second ground, as I have said, is that until the 8 March judgment is registrable in Australia, there can be no abuse of the processes of this Court or likely abuse of the processes of this Court which would justify the making of a Mareva order.
His Honour's comments must be a reference to the principle that the purpose of a Mareva order is to prevent the abuse of the process of the Court by the frustration of its remedies. It might be said that, as discussed in the decision of Hasluck J and in the cases to which he refers, there is a difference of opinion between some Judges as to when and if a Mareva order may be granted to assist in the enforcement of a foreign judgment especially where it cannot yet be enforced in Australia.
As I have said, his Honour Hasluck J came to a certain view about that, which was that until the 8 March judgment is registrable in Australia there can be no abuse of the processes of this Court or likely abuse of the processes of this Court which would justify the making of a Mareva order.
In my opinion, the granting of the freezing orders does not in any way affect the applicability of this reasoning of Hasluck J. The making of freezing orders has not rendered either the 8 March judgment or the freezing orders capable of being registered in this Court. Thus on Hasluck J's analysis, they have not given rise to an abuse of the processes of this Court or a potential abuse of the processes of this Court which would justify the grant of a Mareva order.
Consequently it does not appear to me that the granting of the freezing orders presents a materially different factual situation from that which was before Hasluck J and upon which he made his decision. It would therefore be inappropriate for me to hear and re‑determine afresh this application. In effect, the factual and legal issues between the parties in this application are substantially the same as they were between the parties in the application heard by Hasluck J.
While this may not strictly be a case of issue estoppel, in my view, the parties are bound by the decision of Hasluck J and the applicant cannot now seek a different outcome based on facts which are not materially different from those that were before Hasluck J. For these reasons I would refuse the application.