LFDB v SM

Case [2015] FCA 725

FEDERAL COURT OF AUSTRALIA

LFDB v SM [2015] FCA 725

Citation: LFDB v SM [2015] FCA 725
Parties:

LFDB, DBA(AU), DBA(AU) AS TRUSTEE FOR DBP Trust, BWP and SE v SM

LFDB, DBA(AU), DBA(AU) AS TRUSTEE FOR DBP Trust, BWP and SE v SM
File numbers: NSD 353 of 2015
NSD 354 of 2015
Judge: GLEESON J
Date of judgment: 20 July 2015
Catchwords: PRACTICE AND PROCEDURE – applications to set aside registration of freezing orders made by the High Court of New Zealand – whether enforcement of judgments would be contrary to public policy in Australia – whether freezing orders are “registrable NZ judgments” – whether freezing orders are “final and conclusive” judgments – whether freezing orders are orders that, if contravened, would make the first applicant liable to conviction for an offence – whether orders were made in proceedings in rem the subject matter of which was movable property not situated in New Zealand – Trans-Tasman Proceedings Act 2010 (Cth), s 72
Legislation: Federal Court Rules 2011 (Cth), r 34.74
Foreign Judgments Act 1991 (Cth)
Judicature Act 1908 (NZ), Sch 2
Property (Relationships) Act 1976 (NZ) 
Trans-Tasman Proceedings Act 2010 (Cth), ss 4, 65, 66, 68, 72
Cases cited: Adams v Cape Industries Plc [1990] 1 Ch 433
Bank Polska Kasa Opieki Spolka Akcyjna v Opara [2010] QSC 93; (2010) 238 FLR 309
Beidenhope v Cantanor [2011] Fam CA 669
Bouton v Labiche (1994) 33 NSWLR 225
Carl Zeiss Stiftung v Rayner & Keeler Ltd [1970] Ch 506
Chen v Tan [2012] Fam CA 225
CIBC Mellon Trust Co v Stolzenberg [2003] EWHC 13
CIBC Mellon Trust Co v Stolzenberg [2004] EWCA Civ 827
Gambazzi v Daimler-Chysler Canada Inc [2010] 3 WLR 1
International Finance Trust Co Ltd v NSW Crime Commission [2009] HCA 49; (2009) 240 CLR 319
Jenton Overseas Investment Pty Ltd v Townsing [2008] VSC 470; (2008) 21 VR 241
LFDB v SM [2013] NZCA 456
LFDB v SM [2013] NZCA 481
LFDB v SM [2014] NZSC 168
LFDB v SM [2014] NZSC 197
Linprint Pty Ltd v Hexham Textiles Pty Ltd (1991) 23 NSWLR 508
O’Keefe v Calwell [1949] HCA 6; (1949) 77 CLR 261
Pemberton v Hughes [1899] 1 Ch 781
QSC 93; (2010) 238 FLR 309
Schnabel v Lui [2002] NSWSC 15; (2002) 56 NSWLR 119
Siemer v Solicitor-General [2010] 3 NZLR 767
SM v LFDB [2012] NZHC 1152
SM v LFDB [2013] NZHC 1056
SM v LFDB [2013] NZHC 2670
SM v LFDB [2013] NZHC 3105
SM v LFDB [2014] NZCA 326
SM v LFDB [2014] NZCA 326; [2014] 3 NZLR 494
SM v LFDB [2015] NZHC 1217
The Siskina [1979] AC 210
WEA Records Ltd v Visions Channel 4 Ltd [1983] 1 WLR 721
Yang v Chen (No 5) [2011] NZHC 1492
Date of hearing: 4 June 2015
Place: Sydney
Division: GENERAL DIVISION
Category: Catchwords
Number of paragraphs: 125
Counsel for the Applicants: Mr P Herzfeld
Solicitor for the Applicants: Evangelos Patakas & Associates

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AGLC
LFDB v SM [2015] FCA 725
Case
[2015] FCA 725
Decision Date

CaseChat Overview and Summary

The case of LFDB v SM before the Federal Court of Australia involved an application to set aside the registration of freezing orders made by the High Court of New Zealand. The applicants contested the enforceability of these orders under the Trans-Tasman Proceedings Act 2010, arguing that enforcing these orders would contravene Australian public policy. The central legal issues revolved around whether these freezing orders constituted "registrable NZ judgments" under the Act, whether they were "final and conclusive" judgments, and if they were orders that, if contravened, would result in liability for an offence. Furthermore, the applicants questioned whether the orders were made in proceedings in rem concerning movable property not situated in New Zealand.

The court deliberated on the applicants' argument that the freezing orders were interlocutory and not final and conclusive, thus not qualifying as registrable NZ judgments. The applicants cited authorities and texts to support their position that such orders lack the finality required for registrability and enforcement. They also raised concerns about the lack of reasons for the orders and the denial of access to materials before the Court. The court addressed the procedural matters concerning the consolidation of proceedings and ordered the consolidation of specific proceedings to regularise the situation.

Ultimately, the court found in favour of the applicants, setting aside the registration of the freezing orders. The decision hinged on the interpretation of the terms "final and conclusive" and the applicability of these terms to the nature of freezing orders. The court concluded that the freezing orders did not meet the criteria for registrability under the Act, leading to the orders being set aside. The court also ordered the respondent to pay the applicants' costs.

Orders

Orders of the court

1. Proceeding number NSD 645 of 2015 be consolidated with proceeding number NSD 353 of 2015 and continue as one proceeding with the file number NSD 353 of 2015.

2. Registration of the order of the High Court of New Zealand dated 11 March 2015 in proceedings number CI-2011-404-6851 registered in Federal Court proceeding NSD 217 of 2015 be set aside.

3. Registration of the order of the High Court of New Zealand dated 3 June 2015 in proceedings number CI-2011-404-6851 registered in Federal Court proceeding NSD 645 of 2015 be set aside.

4. The respondent pay the applicants’ costs.

Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

1. Registration of the order of the High Court of New Zealand dated 5 February 2015 in proceedings number CI-2011-404-6851 registered in Federal Court proceeding no NSD 109 of 2015 be set aside.

2. The respondent pay the applicants’ costs.

Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

The applicants accept that the February, March and June freezing orders (“relevant freezing orers”) are “judgments” within the meaning of s 4 of the Trans-Tasman Proceedings Act.Final and conclusive judgmentApplicants’ submissions Counsel for the applicants, Mr Herzfeld, contended that each of the relevant freezing orders is not a “registrable NZ judgment” within the meaning of s 66(1)(a) because it is not a “final and conclusive judgment”. Mr Herzfeld made the following submissions:(1)Freezing orders are interlocutory. In The Siskina [1979] AC 210 at 253, Lord Diplock summarised the position as follows:A Mareva injunction is interlocutory, not final; it is ancillary to a substantive pecuniary claim for debt or damages; it is designed to prevent the judgment against a foreign defendant for a sum of money being a mere brutum fulmen.(2)The fact that the definition of “judgment” includes judgments given in interlocutory proceedings does not mean that all judgments given in interlocutory proceedings are final and conclusive. Example of final and conclusive orders made in interlocutory proceedings are a fine for contempt and a fixed costs order in an interlocutory hearing in connection with principal proceedings payable forthwith;(3)Freezing orders are able to be varied or discharged by application to the NZ High Court;(4)The lack of finality of a freezing order is demonstrated by the observation in Dicey and Morris that the only reason that foreign interlocutory freezing orders are enforceable under European regulations is because within Europe “there is no requirement that the judgment be ‘final and conclusive’”: Collins L (ed, Dicey, Morris and Collins on the Conflict of Laws (14th ed, Sweet & Maxwell, 2006) p 652;(5)In the case of the relevant freezing orders, their lack of finality is underscored by the fact that they have already expired and been replaced;(6)The extrinsic material relevant to the Act does not suggest that it was an object to displace the well-established meaning of “final and conclusive”. Mr Herzfeld noted that common law principles applying to the meaning of “final and conclusive” were applied in Bank Polska Kasa Opieki Spolka Akcyjna v Opara [2010] QSC 93; (2010) 238 FLR 309, in interpreting the Foreign Judgments Act 1991 (Cth) (“Foreign Judgments Act”). The key test of finality is whether the foreign tribunal treats the judgment as res judicata of the particular issues between the parties to the litigation: Schnabel v Lui [2002] NSWSC 15; (2002) 56 NSWLR 119 at [77]. The freezing orders fail that test. The words “final and conclusive” have the same meaning in the Trans-Tasman Proceedings Act as those words in the Foreign Judgments Act. (7)The Trans-Tasman Proceedings Act provides a procedure for trans-Tasman enforcement of freezing orders by s 25 of the Act. Mr Herzfeld also referred to leading texts supporting his construction. In particular, he noted that Mortensen R, Garnett R and Keyes M, Private International Law in Australia (3rd ed, LexisNexis Butterworths, 2015) p 149 states that registration of a judgment under the Foreign Judgments Act “will be refused if it is not final and conclusive according to …common law principles…”. Davies M, Bell A and Brereton P, Nygh’s Conflict of Laws in Australia (9th ed, LexisNexis Butterworths, 2014) p 940 also refers to the common law requirement that the judgment must be “final and conclusive” in discussing this requirement under the Foreign Judgments Act.Respondent’s submissions

Ratio Decidendi

Legal Principle Established

They also complain that they did not receive reasons for the making of the freezing orders, apart from a minute of Courtney J dated 5 February 2015, and that the parties to the 11 March 2015 application were denied access to the materials before the Court on the application for freezing orders. REGISTRATION OF JUDGMENTS UNDER TRANS-TASMAN PROCEEDINGS ACTProcedural matters Rule 34.74 of the Federal Court Rules 2011 (Cth) requires that the applications in these proceedings be made by “originating application in the proceeding in which the judgment was registered”. Nevertheless, the Registry required that the originating applications be filed in new proceedings. Thus, the application to set aside the February freezing orders was allocated proceeding number NSD354/2015 and the application to set aside the March freezing orders was allocated proceeding number NSD353/2015. To regularise the position, on 4 May 2015 the Court ordered that:(a)proceeding NSD345/2015 be consolidated with proceeding NSD109/2015 and continue with the former proceeding number – thus proceeding NSD354/2015 is now the only proceeding concerning the February freezing order, and(b)proceeding NSD353/2015 be consolidated with proceeding NSD217/2015 and continue with the former proceeding number – thus proceeding NSD353/2015 is now the only proceeding concerning the March freezing order. The application to set aside the June freezing orders was allocated proceeding number NSD 645/2015. I will order that this proceeding also be consolidated with proceeding NSD 353/2015 and continue with the latter proceeding number. Statutory framework Section 65 of the Trans-Tasman Proceedings Act provides:(1)A registrable NZ judgment cannot be enforced in Australia if it is not registered in an Australian court under section 68. Note: A registrable NZ judgment cannot be enforced in Australia otherwise than in accordance with this Part. (2)Provisions of an NZ judgment that, because of section 71, could be registered in an Australian court under section 68 cannot be enforced in Australia if they are not so registered Section 66 is entitled “Meaning of registrable NZ judgment”. It provides relevantly:(1)A judgment is a registrable NZ judgment if: (a) the judgment is a final and conclusive judgment that is given in a civil proceeding by a New Zealand court; or…(2)However, a judgment is not a registrable NZ judgment if it wholly or partly:(a) relates to an excluded matter; or(b) is a non-money judgment of a kind prescribed by the regulations; or…(i) is an order that, if contravened by a person to whom it is directed, will make the person liable to conviction for an offence in the place where it was made; or(j) relates to a matter of a kind prescribed by the regulations. (3)For the purposes of subsection (1), a judgment is to be treated as final and conclusive even if:(a) a person may appeal against it in a New Zealand court or tribunal; or(b) an appeal against it in a New Zealand court or tribunal has not been finally determined….