Ding Yong v Song Lihua
[2024] VSC 720
•25 November 2024
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
COMMON LAW DIVISION
ENFORCEMENT LIST
S ECI 2024 02895
IN THE MATTER of an application by Ding Yong for registration of a judgment under the Foreign Judgments Act 1991 (Cth)
BETWEEN:
| DING YONG | Plaintiff |
| v | |
| SONG LIHUA & ORS (according to the attached Schedule) | Applicants |
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JUDGE: | Irving AsJ |
WHERE HELD: | Melbourne |
DATE OF HEARING: | 20 September 2024 |
DATE OF JUDGMENT: | 25 November 2024 |
CASE MAY BE CITED AS: | Ding Yong v Song Lihua & Ors |
MEDIUM NEUTRAL CITATION: | [2024] VSC 720 |
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PRACTICE AND PROCEDURE — Application to set aside the registration of the registered judgment under s 7(2)(a)(xi) of the Foreign Judgments Act 1991 (Cth) — Whether enforcement of the judgment would be contrary to public policy — Whether applicants denied procedural fairness in the foreign court — Application dismissed.
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Mr H Hill-Smith of counsel | Chua Tan & Associates |
| The Applicants in person |
TABLE OF CONTENTS
Introduction................................................................................................................................... 1
Applicants’ evidence.................................................................................................................... 1
Second applicant’s evidence........................................................................................................ 7
Plaintiff’s evidence........................................................................................................................ 8
Legislative provisions and principles...................................................................................... 14
Consideration.............................................................................................................................. 18
Conclusion.................................................................................................................................... 23
HIS HONOUR:
Introduction
On 17 June 2024, the Court made orders registering the judgment of the High Court of the Hong Kong Special Administrative Region given on 26 June 2018 in proceeding HCA 1543/2014, under s 6(3) and (15) of the Foreign Judgments Act 1991 (Cth) (the registered judgment).
On 19 July 2024, the applicants, who were the first to fourth defendants in the Hong Kong proceeding, made an application to set aside the registration orders. This application was opposed by the plaintiff.
For the reasons given below, I have decided that the applicants’ summons must be dismissed.
Applicants’ evidence
In support of their application, the applicants rely on:
(a) the affidavits of Song Lihua affirmed 29 July 2024 and 7 September 2024;
(b) the unsigned affidavit of Gordon Scott Chalmers filed 6 September 2024; and
(c) the submissions of the first applicant filed on 3 September 2024.
First applicants’ evidence
The first applicant (Ms Song) is the founder and director of the third and fourth applicant. Ms Song, via her corporate vehicles, was engaged in the business of manufacture and sale of organic skincare products in the Hong Kong Special Administrative Region of the People’s Republic of China (HK) and the People’s Republic of China (China).
The second applicant (Mr Chalmers) was a director of the third applicant and Ms Song’s assistant at the material time that this dispute originally arose.
On 13 May 2010, the plaintiff (Mr Ding) entered into a Memorandum of Understanding (Jasmin agreements) with Ms Song whereby Mr Ding, through his corporate vehicle Golden Chain, invested RMB ¥10 million in the third applicant Jasmin Holdings (Jasmin) for a 10% shareholding. The Jasmin agreements also included various distribution agreements, share option agreements and a shareholders agreement.
On 14 May 2010, Mr Ding paid RMB ¥1 million as part of the RMB ¥10 million. Ms Song deposed that Mr Ding cited cash flow issues as the reason as to why he paid only RMB ¥1 million out of the total of RMB ¥10 million.
From 1 July 2010 onwards, Mr Ding’s distribution company called APC was granted exclusive distribution rights to the Jasmin skincare range in China.
On 16 August 2010, Mr Ding paid another USD $400,000 as the second part payment of the RMB ¥10 million.
On 5 November 2010, Mr Ding paid the outstanding amount of USD $1,099,000, completing the RMB ¥10 million investment.
Ms Song deposed that Mr Ding, in spite of having exclusive distribution rights to the Jasmin skincare in China, did not genuinely attempt to sell the company’s products. Further, she alleged that from the period of signing of the Jasmin agreements to November 2010 when Mr Ding completed his RMB ¥10 million investment, his team took sensitive data, such as product formulations, production process and auditing processes of the third and fourth applicant businesses (Jasmin businesses), in the name of doing due diligence.
Ms Song deposed that Mr Ding insisted that Mr Chalmers visit Mr Ding’s factory to assist with the implementation of the organic certification process, and improve the formulation and manufacturing process of Mr Ding’s products since he and his team lacked experience in this field. Mr Chalmers did so and spent considerable time training Mr Ding’s team. Ms Song also deposed that Mr Ding arranged to have his personnel visit Ms Song’s factory to learn the Jasmin businesses’ methods and procedures. She alleged that the real purpose behind this visit was to learn the trade secrets of the Jasmin businesses.
Ms Song deposed that Mr Ding’s behaviour eventually had become hostile. She stated that she discovered that he had approached customers of the Jasmin businesses directly to sell them his own branded products.
On 15 March 2011, Mr Ding asked Ms Song to return his RMB ¥10 million investment within a period of 15 days. Ms Song refused on the grounds that there was no clause in the Jasmin agreements which required her to return the investment under any circumstances. Ms Song deposed that the investment was explicitly intended as a capital investment, bearing the risks and rewards associated with equity investments and was not a loan.
Ms Song deposed that on 18 March 2011, Mr Ding, along with his wife and various men forcibly entered into Ms Song’s China office and forced her to sign bank forms granting Mr Ding access to the Jasmin businesses bank accounts. Ms Song deposed that on gaining access, Mr Ding froze the accounts and transferred the money to his own accounts. Thereafter, Ms Song alleged, on 23 March 2011, Mr Ding froze the Jasmin businesses’ accounts in China.
Ms Song alleged that on 30 March 2011 Mr Ding misappropriated USD $199,086.51 from the Jasmin businesses’ account to his own company account without approval. Ms Song commenced a proceeding in the High Court of Hong Kong for a Mareva injunction. On 3 June 2011, this proceeding was dismissed. Further, the proceeding was characterised by the High Court of Hong Kong as malicious, false and vexatious.
Ms Song deposed that High Court of Hong Kong ordered that the bank accounts belonging to the Jasmin businesses be unfrozen. However, the Hong Kong and Shanghai Banking Corporation (HSBC) bank decided to wait for a board resolution. As Mr Ding refused to participate in any further board meetings and sign any ‘banking mandate’, the bank accounts remained frozen.
Ms Song said that since that time, Mr Ding refused to cooperate with the applicants.
Ms Song deposed that from May 2011 to August 2011, she received intimidating calls from Mr Ding and his associates, threatening harm to her and her two children. She stated that the calls disturbed her so much that she hired body guards for protection.
Ms Song alleged that Mr Ding sent men to the office of her business in Shenzhen, China, who arrived unannounced and refused to leave until they saw Ms Song. Ms Song said that their actions frightened both her staff and management and that she was forced to hide at home.
Ms Song deposed because of the above circumstances and faced with the risk that the Jasmin businesses were at risk of insolvency because of the frozen bank accounts, she decided to enter into a settlement agreement on 2 September 2011 (Settlement Agreement) in a bid to avoid insolvency.
The Settlement Agreement was based on the applicants paying back Mr Ding’s original investment in two stages, the first upon signing (less the funds already embezzled and costs) and the remaining RMB ¥5,000,000 after a two year ‘good behaviour’ period with included both non-compete and non-circumvention clauses.
Ms Song deposed that in spite of signing the Settlement Agreement, the bank accounts belonging to the Jasmin businesses remained frozen.
On 1 December 2011, Ms Song made the first payment of RMB ¥3.5 million towards the Settlement Agreement.
Ms Song said that, in December 2011, fearing for her and her children’s safety, Ms Song moved with her children to Hong Kong before moving to Australia in 2012 for the sake of personal safety.
Ms Song submitted that over the next two years, she discovered that Mr Ding and his company were using the Jasmin businesses’ name and address to sell their products. Ms Song raised this complaint with Mr Ding who denied it.
Ms Song filed an application in the High Court of Hong Kong, on the basis of Mr Ding’s alleged breach of the non-compete and non-circumvention clauses in the Settlement Agreement.
Mr Ding then filed a claim in the High Court of Hong Kong seeking that the applicants pay the remaining RMB ¥5 million. Ms Song deposed that she refused to pay on the grounds that the plaintiff had breached the Settlement Agreement. However, Ms Song alleged that once legal proceedings had started, Mr Ding removed all of his products that were being sold under the Jasmin businesses’ name and address from storefronts. She alleged that Mr Ding bribed shop managers who were no longer willing to cooperate with Ms Song.
On 18 November 2016, Ms Song made an application in the High Court of Hong Kong to amend her pleading to include the ground that the Settlement Agreement was signed under duress. This application was rejected.
On 4 July 2018, the High Court of Hong Kong gave judgment against the applicants to pay the remaining RMB ¥5 million to Mr Ding.[1]
[1]While Ms Song says that the judgment was given on 4 July 2018 in paragraph 3.32 of her affidavit affirmed 29 July 2924, the registered judgment was given on 26 June 2018.
Ms Song said that the applicants lost the case because she and Mr Chalmers lived in Australia and were not legally represented in the Hong Kong proceeding; they were not properly served with documents; that Mr Ding removed the evidence of the breach of the Settlement Agreement; and because Mr Ding’s legal team manipulated the proceeding to persuade the judge to deny the applicants’ application for amendment of the pleading.
On 22 July 2018, Ms Song filed an application for leave to file and serve a notice of appeal. Ms Song said that she was not properly served with the registered judgment because it was sent via normal airmail from Hong Kong to Australia. Her appeal sought to raise the issue that she had not been allowed at the trial to amend her pleading to argue she entered the Settlement Agreement under duress. She said that she received the Hong Kong judgment only 3 days before the appeal deadline on 21 July 2018. Ms Song’s application for leave to appeal was dismissed on 7 November 2018. Ms Song deposed that she was unaware of the date on which her application for leave to appeal was to be heard and so did not attend.
Ms Song said that the registered judgment relied heavily on the Settlement Agreement. As the Settlement Agreement was signed under duress, she argued that the registered judgment itself had no basis to stand on. Ms Song said that the applicants were compelled to sign the Settlement Agreement under extreme duress as any refusal to sign would have meant that the bank accounts remained frozen.
Ms Song deposed that the High Court of Hong Kong’s refusal to allow the applicants’ appeal added to the injustice. She said that she was not properly served as the judgment was sent by air mail to Australia only six days before the appeal deadline on 19 July 2018 and she received the judgment only three days before the deadline on 21 July 2018. She said that this time frame did not allow sufficient time for an appeal. Ms Song emphasizes that this was done even though Mr Ding’s solicitor had earlier communicated with Ms Song via email, thus ensuring that Ms Song could not respond or appeal on time.
Ms Song stated that she flew into Hong Kong immediately and filed the appeal on 22 July 2018, two days before the deadline but the appeal was rejected on the ground that it had not been properly filed. Her subsequent summons seeking leave to appeal was dismissed on 7 November 2018 in her absence.
In Ms Song’s affidavit affirmed 29 July 2024, she gave evidence in relation to the interest component of the registration orders. Ms Song deposed that the interest component was no longer enforceable under s 4(4) of the Limitation Ordinance Cap 347 of the Laws of Hong Kong which limits a claim to interest in respect of any judgment debt to 6 years from the date the interest became due. Ms Song said that the interest claim in this case accrued from 2 December 2013 and so any interest from 2 December 2017 was not enforceable. Ms Song claimed the same was true of the interest component of the judgment debt itself.
Ms Song submitted that Mr Hei’s assertion (discussed below) that interest should start from the date of the judgment was inconsistent with Mr Ding’s claim for interest as a component of the judgment debt.
Second applicant’s evidence
Mr Chalmers filed an unsigned affidavit on 6 September 2024.
Mr Chalmers stated that he had been employed between 2004 and 2016 in a managerial and operational role in the Jasmin businesses. He denied that he was ever a director or shareholder, either before, during or after his employment in the Jasmin businesses.
He deposed that he was declared bankrupt in Australia on 8 April 2015 which discharged him of any and all debts as at that time, both in Australia and Hong Kong. He further said that on 22 December 2015 Ms Song informed Mr Ding’s lawyer at that time, Steven Wong, of Mr Chalmers’ bankruptcy. Mr Chalmers said he also sent Mr Ding’s solicitors an email on 4 January 2016 proving his bankruptcy and requesting that he be removed as a defendant from the Hong Kong case.
Mr Chalmers said that on 16 November 2016 he wrote to the High Court of Hong Kong requesting that he be excused and removed from the case. He said that he also faxed this request and separately hand delivered it via Ms Song on 11 July 2017 to the High Court of Hong Kong.
Mr Chalmers stated that he again wrote to Judge Ng at the High Court of Hong Kong of the situation of his bankruptcy on 29 May 2017, requesting that at the hearing scheduled for 5 June 2018, he be removed from the case.
Mr Chalmers stated that he wrote to his bankruptcy trustee seeking their clarification regarding the issue. On the trustee’s advice, he argued that his bankruptcy extinguished all his debts and contingent liabilities and therefore, any obligations to be involved in this case.
Mr Chalmers deposed that Mr Ding has tried to prosecute his case through a variety of different law firms. However, none of these firms acknowledged his bankruptcy or even his emails. He stated that the High Court of Hong Kong also did not express ‘any interest’ in his position.
Mr Chalmers also said that he was never been served with the documents that were filed at the High Court of Hong Kong, receiving only copies of the proceedings from Ms Song.
Mr Chalmers agreed that Ms Song was placed under duress when signing the Settlement Agreement. He argued that the registered judgment should be set aside on that basis to protect the principles that underpin the Australian legal and business systems.
Plaintiff’s evidence
The plaintiff opposed the application to set aside the registration of the judgment and relied on:
(a) the affidavit of Lau Ka Hei sworn 19 August 2024; and
(b) submissions filed on 10 September 2024.
Mr Hei is a solicitor of the High Court of Hong Kong and is the solicitor for the plaintiff, Mr Ding.
Mr Hei deposed that Mr Yong filed a writ of summons on 8 August 2014 and commenced a civil action in the Court of First Instance at the High Court of Hong Kong with the case no. HCA 1543/2014.
Mr Hei deposed that the applicants filed their acknowledgement of service in the above legal proceeding and each gave the same address of service, being Level 8, Two Exchange Square, 8 Connaught Place, Central, Hong Kong (Address for Service). Throughout the Hong Kong proceeding the applicants did not updated or changed their Address for Service. Under the laws of Hong Kong, there is no requirement to submit an email address for service on the acknowledgement of service, save for substituted service specifically ordered by a Court.
Mr Hei deposed that the purpose behind the acknowledgement of service is to provide an address to which documents can be validly served for the duration of the proceeding. Under Order 65, r 5(1) of the Rules of the High Court (Cap. 4A of the Laws of Hong Kong) (RHC), service of any document, not being a document which is required to be served personally, may be effected by leaving the documents at the proper address or by post to the proper address. Pursuant to Order 65, r 5(2) of the RHC, the proper address shall be the address of service unless the person has no address of service. Mr Hei deposed that in practice, the address of service is stated on the applicant’s acknowledgement of service. In case of any change in the address of service, the party must file a notice of change of address of service with the Court.
Mr Hei deposed that Ms Song and Mr Chalmers filed an amended defence on 29 October 2014 without leave of the Court pursuant to Order 20, rule 3 of the RHC. He said that at that time, both Ms Song and Mr Chalmers were represented by a firm of solicitors by the name of Gall. The Jasmin businesses filed their defence on 29 October 2014. Mr Hei said that at that time, the Jasmin businesses were also represented by Gall.
Mr Hei deposed that Ms Song and Mr Chalmers only became self-represented from 9 February 2015. Both Ms Song and Mr Chalmers filed their notice to act in person with the same address of service in Hong Kong, again being the Address for Service. Mr Hei deposed that service of all legal processes to Ms Song was duly made to the Address for Service.
Mr Hei deposed that on 18 November 2016 Ms Song filed a summons for leave to amend the amended defence to allege entry into the Settlement Agreement was caused by duress (summons). Pursuant to Order 20, rules 3(1) and 5(1) of the RHC, any party may only amend their pleadings once without leave of the Court and thereafter the Court may allow any party to amend their pleadings. Mr Hei deposed that though the practice is that parties are not required to file any affirmation in support of this type of application, Ms Song nevertheless did so, filing an affirmation dated 18 November 2016.
The time estimate stated on the summons was 3 minutes. Mr Hei deposed that the practice in Hong Kong Courts is that parties are not required to file any written submissions for a 3-minute hearing but to make oral submissions at the hearing in front of the Master sitting in Chambers.
Mr Hei deposed that the hearing date and time were both stated in the body of and printed on the top left corner of the summons as 09:30am on 23 January 2017. Mr Hei said that Ms Song, who personally took out the summons, must therefore had knowledge of the hearing date and time, and that there was no legal requirement for her to be otherwise notified of the hearing of her summons.
The summons was heard at 09:30am on 23 January 2017. Ms Song did not appear. Under Order 32, rule 5 of the RHC, where any party to a summons fails to attend on the hearing, the Court may proceed in their absence. The summons was heard and dismissed for want of prosecution by the Order of Master Hui on 23 January 2017.
Mr Hei deposed that as a result of the above order, the final pleading of Ms Song in the Hong Kong proceeding remained the amended defence.
Mr Hei deposed that Ms Song appeared in person at the trial on 5, 6 and 8 June 2018 at the High Court of Hong Kong.
Mr Hei deposed that while Hong Kong Court hearings are audio-recorded, the Courts do not give out hearing transcripts with the usual practice being that any party who wishes to obtain the transcript applying to the Court for leave to produce transcripts, with reasons and indication of the relevant parts of the hearing and paying the production fees. Mr Hei deposed that while Courts may give directions on their own motion to produce transcripts, no such leave or direction was given for the trial.
A notice of handing down judgment was issued by the Hong Kong Court of First Instance on 25 June 2018. As per the second page of the notice, it was sent by post to the applicants’ Address for Service.
Mr Hei deposed that the trial judgment dated 26 June 2018 noted that the principal focus of Ms Song’s submission and testimony before the Court was that she was forced to enter into the Settlement Agreement under duress and out of fear, by reason of the threats and intimidating behaviour of Mr Ding. The judgment however noted that that line of defence was not pleaded in spite of Ms Song being given ample opportunity to do so. The Court therefore dismissed the submission.
The trial judgment further noted that under the relevant law a contract entered into under duress is only voidable and not void. The Court held that since the applicants had affirmed the Settlement Agreement by accepting Mr Ding’s performance of his obligations under the Settlement Agreement, the Settlement Agreement could not be argued to have been void. Mr Hei argued that the duress argument thus failed not only because it was not pleaded but also because the applicants affirmed the Settlement Agreement.
Mr Hei deposed that under the RHC, there is no legal requirement for the Court to serve the judgment on a party’s Address for Service, instead parties are sent the notice of handing down judgment by the Court to their Address for Service. The trial judgment was also posted on the Hong Kong judiciary website on the same day it was given.
There is also no legal requirement for a party to serve a copy of the judgment on the opposing party. Mr Hei deposed that he nevertheless sent the trial judgment to Ms Song at her Australian address out of professional courtesy. I note though that he admits that he could not locate a copy of the letter that was sent. Mr Hei denied that the trial judgment was sent to Ms Song at an address that was known to no longer be a valid address. He deposed that on review of the court documents and as per his knowledge, the address remained unaltered.
Mr Hei noted that if a party’s Address for Service previously identified to the Court changes, then the practice is for that party to file a notice of change of Address for Service with the Court and to serve a copy on the other parties. In the absence of such a notice, service is effected on the unaltered and existing Address for Service.
Mr Hei deposed that Ms Song applied to the Court of First Instance for extensions of time to appeal by way of summons on 26 July 2018 (first appeal summons) and filed her affirmation in support on the same day. Ms Song had deposed that she had received the trial judgment on 18 July 2018.
Mr Hei stated that the plaintiff filed their written submissions on 10 September 2018.
The Court of First Instance gave its judgment on 7 November 2018 dismissing the first appeal summons. Mr Hei submitted that this judgment was partly overturned (as to costs) by the Court of Appeal.
Ms Song applied to the Court of Appeal for an extension of time to appeal by way of summons on 8 November 2018 in CAMP 163/2018 (second appeal summons).
Ms Song’s written submissions were attached to the second appeal summons and she submitted further written submissions on 8 January 2019. Mr Hei deposed that the plaintiff submitted his submissions on 31 January 2019.
The Court of Appeal gave judgment on 10 May 2019 in which it accepted Ms Song’s explanation for her delay in filing an appeal but nevertheless refused to extend the time limit for appealing on the grounds that there was no prospect of success. The Court of Appeal did however overturn the costs order under the 7 November 2018 judgment.
Ms Song did not apply for leave to appeal to the Court of Final Appeal within the 28 day time limit to apply for leave under Section 24 of the Hong Kong Court of Final Appeal Ordinance, Cap. 484 of Laws of Hong Kong. The other applicants did not file any appeal against the trial judgment either.
Mr Hei deposed that Ms Song’s interpretation of s 4(4) of the Limitation Ordinance was incorrect. That subsection reads:
An action shall not be brought upon any judgment after the expiration of 12 years from the date on which the judgment became enforceable, and no arrears of interest in respect of any judgment debt shall be recovered after the expiration of 6 years from the date on which the interest became due.
According to Mr Hei, a judgment takes effect from the day of its date by virtue of Order 42, r 3(1) of the RHC. The judgment debt arises on that date and interest on the judgment starts from that same date and is immediately due. In this case, the trial judgment is dated 26 June 2018 and so interest started to accrue from that date. According to Mr Hei, s 4(4) of the Limitation Ordinance would apply on to interest on the trial judgment after 26 June 2024.
Mr Hei deposed that Mr Chalmers wrote to the High Court of Hong Kong on 16 November 2016 informing the Court that he had been declared bankrupt and could not attend the Court proceedings. Mr Hei deposed that Mr Chalmers had been acting in person at that time having filed his notice to act in person on 9 February 2015.
The High Court of Hong Kong made an order dated 12 July 2017 directing that any application for the trustee of the second applicant to join the proceedings be made within 28 days upon service of the order. However, no such application was made.
Mr Chalmers filed his opening submissions on 29 May 2018.
Mr Hei deposed that Mr Chalmers was served with all court documents that he was required to be served with under the RHC. Further, Mr Chalmers being the subject of bankruptcy proceedings in Australia did not as a matter of Hong Kong law extinguish or alter the enforceability of the Hong Kong judgment.
Mr Hei denied that the plaintiff’s legal team engaged in any conduct that compromised the fairness, legitimacy or integrity of the judicial process in Hong Kong in any way. Mr Hei deposed that he is not aware of any attempt by the applicants to have the Hong Kong judgment overturned on the basis of fraudulent conduct by Mr Ding.
Legislative provisions and principles
The applicants’ application to set aside the registration of the judgment is made under Part 2, s 7 of the Foreign Judgments Act 1991 (Cth). This Part of the Act is applicable to superior courts of a country specified in the regulations. Both the Court of Final Appeal and the High Court (consisting of the Court of Appeal and Court of First Instance) of the Hong Kong Special Administrative Region of the People’s Republic of China are specified in the Schedule to the Foreign Judgments Regulations 1992 (Cth).
Section 7 Foreign Judgments Act 1991 (Cth) is in the following terms:
(1)A party against whom a registered judgment is enforceable, or would be enforceable but for an order under section 8, may seek to have the registration of the judgment set aside by duly applying to the court in which the judgment was registered, or (where applicable) a court in which the judgment was registered under Part 6 of the Service and Execution of Process Act 1992, to have the registration of the judgment set aside.
(2)Where a judgment debtor applies to have the registration of the judgment set aside, the court:
(a) must set the registration of that judgment aside if it is satisfied:
(i)that the judgment is not, or has ceased to be, a judgment to which this Part applies; or
(ii)that the judgment was registered for an amount greater than the amount payable under it at the date of registration; or
(iii)that the judgment was registered in contravention of this Act; or
(iv)that the courts of the country of the original court had no jurisdiction in the circumstances of the case; or
(v)that the judgment debtor, being the defendant in the proceedings in the original court, did not (whether or not process had been duly served on the judgment debtor in accordance with the law of the country of the original court) receive notice of those proceedings in sufficient time to enable the judgment debtor to defend the proceedings and did not appear; or
(vi) that the judgment was obtained by fraud; or
(vii)that the judgment has been reversed on appeal or otherwise set aside in the courts of the country of the original court; or
(viii)that the rights under the judgment are not vested in the person by whom the application for registration was made; or
(ix) that the judgment has been discharged; or
(x) that the judgment has been wholly satisfied; or
(xi)that the enforcement of the judgment, not being a judgment under which an amount of money is payable in respect of New Zealand tax, would be contrary to public policy; or
(b)may set the registration of the judgment aside if it is satisfied that the matter in dispute in the proceedings in the original court had before the date of the judgment in the original court been the subject of a final and conclusive judgment by a court having jurisdiction in the matter.
(3)For the purposes of subparagraph (2)(a)(iv) and subject to subsection (4), the courts of the country of the original court are taken to have had jurisdiction:
(a) in the case of a judgment given in an action in personam:
(i)if the judgment debtor voluntarily submitted to the jurisdiction of the original court; or
(ii)if the judgment debtor was plaintiff in, or counter-claimed in, the proceedings in the original court; or
(iii)if the judgment debtor was a defendant in the original court and had agreed, in respect of the subject matter of the proceedings, before the proceedings commenced, to submit to the jurisdiction of that court or of the courts of the country of that court; or
(iv)if the judgment debtor was a defendant in the original court and, at the time when the proceedings were instituted, resided in, or (being a body corporate) had its principal place of business in, the country of that court; or
(v)if the judgment debtor was a defendant in the original court and the proceedings in that court were in respect of a transaction effected through or at an officer or place of business that the judgment debtor had in the country of that court; or
(vi)if there is an amount of money payable in respect of New Zealand tax under the judgment; or
(b)in the case of a judgment given in an action of which the subject matter was immovable property or in an action in rem of which the subject matter was movable property – if the property in question was, at the time of the proceedings in the original, court situated in the country of that court; or
(c)in the case of a judgment given in an action other than an action of the kind referred to in paragraph (a) or (b) – if the jurisdiction of the original court is recognised by the law in force in the State or Territory in which the judgment is registered.
(4)In spite of subsection (3), the courts of the country of the original court are not taken to have had jurisdiction:
(a)if the subject matter of the proceedings was immovable property situated outside the country of the original court; or
(b)except in the cases referred to in subparagraphs (3)(a)(i),(ii) and (iii) and paragraph (3)(c), if the bringing of the proceeding in the country of the original court was contrary to an agreement under which the dispute in question was to be settled otherwise than by proceedings in the courts of the country of that court; or
(c)if the judgment debtor, being a defendant in the original proceedings, was a person who under the rules of public international law was entitled to immunity from the jurisdiction of the courts of the country of the original court and did not submit to the jurisdiction of that court.
(5)For the purposes of subparagraph (3)(a)(i), a person does not voluntarily submit to the jurisdiction of a court by:
(a) entering an appearance in proceedings in the Court; or
(b)participating in proceedings in the court only to such extent as is necessary;
for the purpose only of one or more of the following:
(c) protecting, or obtaining the release of:
(i)property seized, or threated with seizure, in the proceedings; or
(ii)property subject to an order restraining its disposition or disposal;
(d) contesting the jurisdiction of the court;
(e)inviting the court in its discretion not to exercise its jurisdiction in the proceedings.
(6)Where the registration of a judgment is set aside on an application to a court in which the judgment was registered under Part IV of the Service and Execution of Process Act 1901, the applicant must:
(a)forthwith notify the Registrar of the court in which the judgment was registered under this Act of the order setting the judgment aside; and
(b) within 7 days lodge a certified copy of the order in that court.
Section 8 of the Foreign Judgments Act 1991 (Cth) provides:
(1)If the court in which a judgment is registered is satisfied that the judgment debtor has appealed, or is entitled and intends to appeal, against the judgment, the court may order that enforcement of the judgment be stayed pending the final determination of the appeal, until a specified day or for a specified period.
(2)If the court in which a judgment is registered makes an order on the ground that the person is entitled and intends to appeal against the judgment, the court must require the person, as a condition to the order, to bring the appeal by a specified day or within a specified period.
(3)Every order is to be made on the condition that the judgment debtor pursues the appeal in an expeditious manner.
(4)An order may be made or such other conditions, including conditions relating to giving security, as the court in which the judgment is registered thinks fit.
In Kok v Resorts World at Sentosa Pte Ltd,[2] Martin CJ (with whom Murphy and Beech JJA agreed) stated:
[2](2017) 323 FLR 95; [2017] WASCA 150, [14]-[18].
The Act was enacted against the background of well-established common law principles regarding the recognition and enforcement of foreign judgments, one of which was (and is) that a foreign judgment would not be enforced if to do so would be contrary to public policy. In that context, common law cases concerning that principle are of assistance in applying s 7(2)(a)(xi).
There are many decisions dealing with the principles applicable to a determination that the registration of a foreign judgment must be set aside on the ground that the enforcement of the judgment would be contrary to public policy. Generally speaking, those decision endorse the propositions embodied in the master’s reasons. It is well established that:
It is immaterial that the judgment does not accord with Australian law. The efficacy of the judgment is to be judged not according to Australian law but according to the law [of the relevant foreign jurisdiction].
Further, an application to set aside registration of a foreign judgment is not an occasion for a court to review the merits of the foreign decision by reference to the law of the relevant jurisdiction, nor can registration be set aside even if it is apparent that the foreign court has erroneously applied the law of the jurisdiction in which the judgment has been registered.
The legal principles in this area reflect the interests of comity in the respect and recognition of the institutions of other sovereign states which are considered to provide ‘substantial reciprocity of treatment for Australian judgments’. That is why the authorities reveal few instances in which a foreign judgment has not been enforced or registered on the ground of public policy.
Different terminology has been used to describe the narrow and limited range of circumstances in which enforcement will be refused because if would contravene public policy. Expressions used include:
·violation of ‘some fundamental principles of justice, some prevalent conception of good morals, some deep rooted tradition of the common weal’;
·if ‘enforcement were to offend some moral, social or economic principle so sacrosanct in [the forum’s] eyes as to require its maintenance at all costs and without exception’; and
·‘where the offence to public policy is fundamental and of a high order’.
[citations omitted].
Consideration
The applicants submitted that the Court should set aside the registration of the judgment pursuant to s 7(2)(a)(xi) of the Foreign Judgments Act 1991 (Cth), because enforcement of the judgment would be contrary to public policy by reference to four grounds:
(a) The contract on which the judgment is based was formed under duress;
(b) Ms Song was denied procedural fairness at the trial in Hong Kong; and
(c) Ms Song was denied procedural fairness in attempting to appeal the judgment in Hong Kong;
(d) Mr Ding tried to register the judgment without the knowledge of Ms Song by purposely using a fake address.
The effect of the registered judgment is to enforce the terms of the Settlement Agreement dated 2 September 2011 between Ms Song and Mr Ding.
At the trial in Hong Kong, Ms Song had sought to defend the action by relying on evidence that she was forced to enter into the Settlement Agreement under duress and out of fear, by reason of threats and intimidating behaviour carried out either by or at the behest of Mr Ding. The trial judge determined that the matters sought to be raised by Ms Song had not been pleaded ‘despite ample opportunity had been afforded to her to do so, and this court simply cannot entertain an unpleaded defence’. The trial court thus prevented Ms Song from relying on her evidence that she had entered the Settlement Agreement under duress.
Ms Song sought to rely on Stephenson LJ’s comments in Israel Discount Bank of New York v Hadjipateras,[3] that ‘[t]here is authority for holding that it would be contrary to public policy for our courts to enforce a judgment based on a transaction which may have been tainted by undue influence.’ In support of this comment Stephenson LJ made reference to the case of Kaufman v Gerson,[4] in which, ‘this court refused to enforce a contract, valid in France where it was made, against a woman who had been coerced into making it by threats that her husband would be prosecuted if she did not pay the balance of what he had criminally misappropriated from the plaintiff.’ The basis upon which the Court in Kaufman refused to enforce the contract was that it violated a moral principle which ought to be universally recognised, or that it contravened what the law of England deemed an essential moral interest.[5] Stephenson LJ stated that he did ‘not doubt that an agreement obtained by undue influence, like an agreement obtained by duress or coercion, may be treated by our courts as invalidating a foreign judgment based on the agreement, or as a ground for not enforcing it as contrary to the distinctive public policy of this country.’[6] His Honour emphasised however, that ‘it was only because the law or practice of foreign country…differed from that policy that the question of the validity of the contract or judgment was raised in the court of this country. It was out of this conflict that those cases arose.’[7] Stephenson LJ concluded:
It is impossible for the second defendant, who is at fault in not raising this defence in the New York court, to impeach the court’s judgment. That failure, in my opinion, destroys both the defences which he wishes to argue, and it would not be contrary to public policy to enforce the judgment in the New York action or the agreement of guarantee and submission to the jurisdiction of the New York court on which that judgment is based.
[3][1983] 3 All ER 129 at 133 (Stephenson LJ with whom O’Connor and Goff LJJ agreeing).
[4][1904] 1 KB 591, [1904-7] All ER Rep 896.
[5]Ibid.
[6]Ibid 134.
[7]Ibid.
In this case there was no suggestion that a defence of duress or undue influence was unavailable at law in the Hong Kong court. Rather, the judge in the Hong Kong court refused to allow Ms Song to rely on evidence going to her defence of duress or undue influence because she had not, despite ample opportunity, pleaded that defence. Further, the Hong Kong judge found that as a matter of Hong Kong law, a finding of duress or undue influence would not have resulted in the Settlement Agreement being void, but rather voidable. The Hong Kong judge found that in circumstances where Ms Song and the other applicants had subsequently affirmed the Settlement Agreement by, among other things, pleading that Mr Ding had breached the Settlement Agreement, it was not open to Ms Song to rely on the defence of duress or undue influence. Thus the Hong Kong court did not allow Ms Song to rely on that defence because it had not been pleaded, but additionally found that such a defence would not have been successful.
In these circumstances the applicants’ argument that the registration of the judgment should be set aside on the basis that the contract on which the judgment is based was formed under duress, must fail. It was not formally raised in the Hong Kong court, despite being available at law. If raised in that court, in the circumstances of the case, it would have failed. An application to set aside the registration of a foreign judgment is not an opportunity to raise a defence that could have been raised in the foreign proceeding.
Ms Song’s second and third grounds raise a denial of procedural fairness at the trial and appeal respectively.
In relation to the trial Ms Song’s evidence was that:
(a) on 18 November 2016 she flew to Hong Kong and filed a summons seeking leave to amend her defence to include duress;
(b) despite being informed by the court clerk that she would be notified when the hearing date on the face of the summons was approved by the court, she did not receive that confirmation nor was she informed the court date had been confirmed in any of her follow up calls to the court;
(c) as a result, Ms Song did not attend the hearing of her summons and it was dismissed for want of prosecution.
In relation to the appeal Ms Song’s evidence was:
(a) the Hong Kong trial court gave judgment on 26 June 2018, with the deadline to file an appeal being 24 July 2018;
(b) Ms Song only received notice of the judgment when it was posted to her by Mr Ding’s solicitors six days before the appeal deadline;
(c) Ms Song flew to Hong Kong on 21 July 2018 and tried to file her appeal the following day;
(d) the Hong Kong Court of Appeal registry rejected her notice of appeal and Ms Song’s summons filed 26 July 2018 seeking an extension of time to file an appeal was also rejected.
Ms Song submitted that procedural fairness is an immutable characteristic of a court and that there is authority to support the proposition that a denial of procedural fairness, ‘in the sense that there was no notice given or no opportunity to participate in the hearing’ may justify setting aside registration of a foreign judgment.[8]
[8]Jenton Overseas Investment Pte Ltd v Townsing (2008) 21 VR 241, 246; Norsemeter Holdngs AS v Boele (No 1) [2002] NSWSC 370.
I am satisfied that both of Ms Song’s procedural fairness grounds must fail. I have reached this view for the following reasons. First, I accept Mr Ding’s counsel’s submission that in order to justify setting aside the registration of the foreign judgment, it would be necessary to establish a gross denial of procedural fairness involving a denial of substantive justice in exceptional circumstances.[9] Second, Ms Song and the other applicants could have pleaded duress as part of their original or amended defence but did not, despite being legally represented at the time the defence and amended defence were prepared. Third, Ms Song’s summons seeking to amend her defence was dismissed because she did not attend the hearing of the summons. The date for the hearing of the summons was endorsed on the face of the summons that was accepted for filing and returned to Ms Song. Fourth, in my view it was Ms Song’s responsibility to monitor the progress of her case and to inform the court in the proper way of any change to her address for service. I do not accept that in the absence of confirmation of the hearing of the summons by the court, it was reasonable for Ms Song to not attend the court on the date of the hearing as endorsed on her summons. Put another way, Ms Song’s non-attendance on the date for the hearing of her summons, in the circumstances of this case, did not constitute a denial of procedural fairness. Fifth, despite not being permitted to rely on her evidence of duress, the trial judge considered the defence and found the applicants could not rely on it in circumstances where they had affirmed the Settlement Agreement. Sixth, neither the failure of a court to accept a document for filing nor a court’s refusal to extend time for filing an appeal, without more, amount to a denial of procedural fairness.
[9]Nyunt v First Property Holdings Pte Ltd (2022) 408 ALR 277, 308; [2022] NSWCA 249 (Bell CJ, Macfarlan and Gleeson JJA agreeing).
In relation to Ms Song’s complaint about the interest component of the registration orders, I agree with counsel for Mr Ding, that Ms Song appears to have confused and conflated two different interest components. The first of these is Mr Ding’s claim for interest on the debt from 2 December 2013 which the Hong Kong judgment allowed as a component of the judgment debt itself, ie, the judgment debt is made up of the principal debt and interest from 2 December 2013 to 26 June 2018. The second interest component is statutory interest on the totality of the judgment debt which runs from the date of judgment, being 26 June 2018. Understood in this way it is clear that s 4(4) of the Limitation Ordinance did not bar Mr Ding’s claim for interest from 2 December 2013.
The facts of this case do not involve a denial of substantial justice or gross denial of procedural fairness so as to make registration of the foreign judgment contrary to Australian public policy.
Ms Song’s ground that Mr Ding applied to register the judgment without notice to her must also fail. This is for the simple reason that there is no requirement that an applicant for registration of a foreign judgment provide notice. Indeed r 11.03(1) of the Supreme Court (Miscellaneous Civil Proceedings) Rules 2018 (Vic) provides that such an application may be made ‘without notice to any person’.
Finally, Mr Chalmers objection to the registration of the foreign judgment to the extent it affects him, on the basis of his Australian bankruptcy must be rejected. Mr Chalmers’ Australian bankruptcy was irrelevant to proceedings taken against him in Hong Kong during the period of his bankruptcy. I accept that Mr Chalmers’ trustee in bankruptcy was aware of the Hong Kong proceeding and did not seek to become involved. Further, by operation of s 6(7) of the Foreign Judgments Act 1991 (Cth), the Hong Kong judgment took effect as a judgment of this Court upon its registration on 17 June 2024. This date was well after Mr Chalmers’ bankruptcy had been discharged. Accordingly, I am not satisfied that Mr Chalmers’ bankruptcy provides a basis for setting aside registration of the Hong Kong judgment.
Conclusion
For the reasons given above, I have decided that the applicants’ application to set aside the registration of the Hong Kong judgment must be dismissed.
My preliminary view, subject to any submissions the parties may wish to make, is that costs should follow the event and so the applicants should pay the plaintiff’s cost of the applicants’ summons filed 19 July 2024. I request the parties confer on the question of costs. If the parties are unable to reach agreement on the question of costs within 7 days of the date of this judgment, I will list the proceeding for oral submissions on costs.
SCHEDULE OF PARTIES
| S ECI 2024 02895 | |
| BETWEEN: | |
| DING YONG | Plaintiff |
| - v - | |
| SONG LIHUA | First Applicant |
| GORDON CHALMERS | Second Applicant |
| JASMIN HOLDINGS LTD | Third Applicant |
| JASMIN INTERNATIONAL LTD | Fourth Applicant |
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