Mobi-Light Inc v KK Machinery Pty Ltd
[2010] WADC 105
•19 JULY 2010
JURISDICTION : DISTRICT COURT OF WESTERN AUSTRALIA
IN CHAMBERS
LOCATION: PERTH
CITATION: MOBI-LIGHT INC -v- KK MACHINERY PTY LTD & ANOR [2010] WADC 105
CORAM: PRINCIPAL REGISTRAR GETHING
HEARD: 7 JULY 2010
DELIVERED : 19 JULY 2010
FILE NO/S: CIV 712 of 2010
BETWEEN: MOBI-LIGHT INC
Plaintiff
AND
KK MACHINERY PTY LTD
First DefendantPAUL LAMARR
Second Defendant
Catchwords:
Summary judgment - Foreign judgment - Whether final and conclusive - Whether obtained by fraud - Effect of stay in foreign jurisdiction
Legislation:
Nil
Result:
Summary judgment awarded
Representation:
Counsel:
Plaintiff: Mr J MacLaurin
First Defendant : Mr A Hershowitz
Second Defendant : No appearance
Solicitors:
Plaintiff: Griffith Hack Lawyers
First Defendant : Paiker & Overmeire
Second Defendant : Not applicable
Case(s) referred to in judgment(s):
Abouloff v Oppenheimer & Co (1882) 10 QBD 295
Attorney-General of Botswana v Aussie Diamond Products Pty Ltd [No 2] [2009] WASC 301
Australian and New Zealand Banking Group Limited v Cawood [1987] 1 Qd R 131
Benefit Strategies Group Inc v Prider (2005) 91 SASR 544
Blohn v Desser [1962] 2 QB 116
Close v Arnot, unreported, SCt of NSW; 10107 of 1996; 21 November 1997
Damberg v Damberg (2001) 52 NSWLR 492
De Santis v Russo [2000] QSC 065
Ellis v McHenry (1871) LR 6 CP 228
Godard v Gray (1870) LR6QB 139
Grant & Ors v Spaanderman & Anor, unreported; SCt of WA; Library No 8932; 21 June 1991
Grant v Easton (1883) 13 QBD 302
Hospitals Contribution Fund of Australia v Hunt (1982) 44 ALR 365
Keele v Findley (1990) 21 NSWLR 444
Miliangos v George Frank (Textiles) Ltd [1976] AC 443
Monroe Schneider Associates (Inc) v No 1 Raberem Pty Ltd (1992) 37 FCR 234
Morgan v Pallister [2004] WASC 188
Neilson v Overseas Projects Corporation of Victoria Ltd [2005] HCA 54; (2005) 223 CLR 331
Norman v Norman (No 2) (1968) 12 FLR 39
Norsemeter Holdings AS v Boele (No 1) [2002] NSWSC 370
Nouvion v Freeman (1889) 15 App Cas 1
Regie National des Usines Renalt SA v Zhang [2002] HCA 10; (2002) 210 CLR 491
Trainor Asia Ltd v Calverley [2007] WADC 124
Vadala v Lawes (1890) 25 QBD 310
Webster v Lampard (1993) 177 CLR 598
Wentworth v Rogers (No 5) (1986) 6 NSWLR 534
Yoon v Young Dung Song (2000) 158 FLR 295
PRINCIPAL REGISTRAR GETHING: In this action, the plaintiff seeks to recover as a debt money said to owing pursuant to a judgment of the Third District Court in and for the Salt Lake County in the State of Utah ("Utah Court"). A copy of the judgment dated 13 November 2009 is annexed to the writ ("Utah Judgment"). By application dated 30 April 2010, the plaintiff has sought summary judgment, which is the subject of these reasons.
The plaintiff relies on affidavits by its Utah attorney Jonathon Parry sworn 29 April 2010 ("Parry Affidavit") and by its Perth lawyer Paul Mallon sworn 30 April 2010 ("Mallon Affidavit"). At the hearing on 7 July 2010, the plaintiff sought to rely on a further affidavit of Jemma Elizabeth Holt, a lawyer employed by the plaintiff's current solicitors, sworn that day. Ms Holt's affidavit annexed a second affidavit of Mr Parry. The first defendant objected to the plaintiff relying on this affidavit on the basis that he had not had the opportunity to take instructions on it. I gave the plaintiff the choice of proceeding without reliance on the affidavit or postponing the hearing for a week or so. The plaintiff chose to proceed without reliance on Ms Holt's affidavit, which is what occurred.
The first defendant relies on affidavit sworn by its solicitor Harold Paiker on 6 July 2010. Mr Paiker's affidavit annexes an affidavit sworn by Richard F Ensor, an attorney retained by the first defendant in Utah for the purposes of the proceedings there, sworn 23 June 2010 ("Ensor Affidavit").
The second defendant entered an appearance in person on 21 April 2010. He was in court in person on 18 May 2010 at the first return of the chamber summons. The court listing letter dated 2 June 2010 advising of the date of the hearing was sent to him at his address for service. By facsimile dated 29 June 2010 the second defendant requested additional time to "finalize the establishment of his defense". This appears to be a reference to the order made on 18 May 2010 which gave him until 29 June 2010 to file and serve any affidavit in opposition to the application for summary judgment. By letter dated 30 June 2010, sent to his address for service, the second defendant was advised by the Court that the Court could not of its own motion reset the time for him to comply with the order made. He was further advised that the plaintiff's application for summary judgment was listed for hearing on 7 July 2010, and that the hearing would proceed on its merits unless the Court made an order to the contrary either at or before the hearing. I am satisfied that the second defendant has notice of the hearing, along with sufficient opportunity to place before the Court any material in opposition to the application. In any event, the evidence filed and submissions made by the first defendant apply equally to the second defendant.
Factual background
The plaintiff is incorporated in Utah and carries on the business of the design, manufacture and sale of portable light towers and other equipment. It was sued by DayNight LLC, a Utah limited liability company in the Utah Court ("DayNight"). The exact nature of DayNight's claim is unclear from the papers before me.
The plaintiff counterclaimed against DayNight and three other parties, the first defendant, the second defendant (referred to as "Cactus Jack") and one Cory Rowe (together, the "Utah Defendants"). In summary terms, the nature of the plaintiff's counterclaim is that:
(a)Mr Rowe was a former employee of the plaintiff who knew certain confidential information about the plaintiff's business;
(b)the second defendant is the general manager of the first defendant;
(c)the first defendant was a client of the plaintiff;
(d)DayNight was created in June 2008, and is (or was) in the business of designing, manufacturing and selling portable light towers;
(e)the second defendant was also the general manager of DayNight;
(f)in about June 2008, Mr Rowe left the employ of the plaintiff and commenced employment with DayNight; and
(g)both the second defendant and Mr Rowe used information confidential to the plaintiff to compete with the plaintiff in the design, manufacture and sale of portable light towers.
The Utah Defendants filed a defence denying the allegations in the counterclaim.
There was a preliminary injunction hearing on 7, 8 and 30 October 2008. By order effective 14 November 2008, the Utah Defendants were restrained, among other things, from using or disclosing any of the plaintiff's confidential information until a trial on the merits. This decision is annexed to the Parry Affidavit.
An issue in the Utah action was whether Mr Rowe ought to have returned to the plaintiff the hard drive from his laptop computer which was alleged to contain the plaintiff's confidential information. After the request was made, Mr Rowe and the second defendant destroyed the laptop. The Judge found that the "intentional destruction of the laptop computer permanently deprive[d] Mobilight and the Court of the evidence contained on the laptop computer" (par 22).
The plaintiff subsequently sought specific sanctions against the Utah Defendants. There was a hearing on 5 January 2009, and a decision dated 24 March 2009 was subsequently handed down. The Judge made an order for default judgment against the Utah Defendants. This decision is annexed to the Ensor Affidavit.
A final judgment was issued on 18 November 2009. This is the Utah Judgment defined above. A copy is annexed to the Mallon Affidavit. The relevant terms of the Utah Judgment are as follows:
"… On November 10, 2009, the Court issued its Memorandum Decision granting Mobi-Light, Inc.'s Motion for Entry of final Judgment. In that Memorandum Decision, the Court ruled, inter alia, as follows:
1.That the claims remaining in the case do not overlap factually or legally with the claims Mobilight (sic) seeks judgment upon, and finding no just reason for delay, granted Mobilight's request for Rule 54(b) certification.
2.That Mobilight is entitled to an award of attorney's fees and costs, and that the amount of such fees and costs requested are reasonable in light of the complexity of the case and the scope of the litigation.
3.That the form of the Final Judgment has the requisite specificity and properly focuses on the use or disclosure of trade secrets, and that consistent with the Court's prior decisions, there is a 'cognizable danger' that the plaintiff may further misappropriate Mobilight's trade secrets in the future, particularly since the trade secrets which were misappropriated were contained in an electronic format.
THEREFORE, having reviewed the record in this matter; and, having considered the Second Affidavit of Rinehart L. Peshell pertaining to Mobi-Light's attorney's fees and costs incurred in pursuing Mobi-Light, Inc.'s First, Second, Third, Fourth, Fifth, Sixth, Tenth and Thirteenth Claims for Relief, and, otherwise being full advised in the premises and for good cause appearing:
IT IS HEREBY ORDERED, ADJUDGED AND DECREED as follows:
1.Mobi-Light, Inc. is granted final judgment against Counterclaim Defendant DayNight, LLC and Third‑Party Defendants KK Machinery Pty, Ltd., W. Cory Rowe, and Paul 'Cactus Jack' La Marr with respect to the First, Second, Third, Fourth, Fifth, Sixth, Tenth and Thirteenth Claims for Relief of Mobi-Light, Inc.'s First Amended Counterclaim and Third-Party Complaint.
2.Mobi-Light, Inc. is granted a permanent injunction against Counterclaim Defendant DayNight, LLC and Third‑Party Defendants KK Machinery Pty, Ltd., W. Cory Rowe, and Paul 'Cactus Jack' La Marr enjoining them, and each of them, to cease and desist from using or disclosing to any other person or entity any of Mobi‑Light, Inc.'s Confidential Information, including its trade secrets.
…
5.Mobi-Light, Inc. is awarded and Counterclaim Defendant DayNight, LLC and Third-Party Defendants KK Machinery Pty, Ltd., W.Cory Rowe and Paul 'Cactus Jack' La Marr shall pay to Mobi-Light, Inc. the total fixed-sum Judgment Amount of $120,692.07 in court costs and attorney's fees incurred by Mobi-Light, Inc., calculated as follows:
a.Attorney's fees incurred from May 23, 2008 through May 22, 2009 ……………….$90,113.75
b.Costs incurred from May 23, 2008 through May 22, 2009 …………………..……$30,578.32
$120,692.07
6.The Judgment Amount shall bear interest of 2.4% per annum, in accordance with Utah Code Ann. § 15-1-4, until the Judgment amount, as may be augmented by attorney's fees and costs incurred hereafter in collecting said Judgment Amount, is paid in full;
7.The fixed Judgment Amount of $120,692.07 shall be augmented in the amount of reasonable costs and attorney's fees expended in enforcing and collecting said Judgment by execution or otherwise, as shall be established hereafter by affidavit; and,
8.Pursuant to Rule 54(b) of the Utah Rules of Civil Procedure, this Judgment represents the express determination, with no just reason for delay, of a final judgment between the above-named parties for the First, Second, Third, Fourth, Fifth, Sixth, Tenth and Thirteenth Claims for Relief of Mobi-Light, Inc.'s First Amended Counterclaim and Third-Party Complaint. The Court finds that certification pursuant to Rule 54(b) is appropriate because the claims remaining between the parties in this Case No. 080913997 are separate from and do not overlap with the First, Second, Third, Fourth, Fifth, Sixth, Tenth and Thirteenth Claims for Relief of Mobi-Light, Inc.'s First Amended Counterclaim and Third‑Party Complaint."
Mr Ensor deposes that the plaintiff has engaged in "collection efforts" in the USA and has recovered over $13,000 from Mr Rowe and $8,229 from a sale of the first defendant's property.
Issues in dispute
The basic legal principles regarding summary judgment applications are summarised in the judgment of Pullin J in Morgan v Pallister [2004] WASC 188 in the following terms (at [4]):
"The plaintiff carries the burden of persuading the court that the claim is a good one, that there is no defence to it, that leave to defend should not be granted, and that judgment should be given for the plaintiff. The party showing cause against the application assumes an evidentiary burden but the overall legal burden of persuasion remains on the applicant. The power to order summary judgment should be exercised with great care and should never be exercised unless it is clear that there is no real question to be tried. It is clear however, that the procedure is not confined to cases which are immediately plain and obvious and the fact that a transaction is intricate does not disentitle the plaintiff to relief in a clear case. It was never intended that when the facts are in dispute, an action should be disposed of summarily. If a defendant's affidavit reveals inconsistencies which might in a trial persuade a court not to believe the defendant's evidence, this will not necessarily lead to judgment for the plaintiff. It is not necessary to cite authority for these propositions."
Where there are disputed facts, and in the absence of cross‑examination, the application is to be determined on the basis that the defendant's version of the facts, assuming that it is not inherently incredible, would ultimately be accepted at the trial of the action: Webster v Lampard (1993) 177 CLR 598 at 608 per Mason CJ, Deane J and Dawson J. In the same case, the members of the High Court had previously commented that the "issue before the learned Master on the application for summary judgment was … whether the material demonstrated that the action should not be permitted to go to trial in the ordinary course because it was apparent that it must fail" (at 602).
One potential area of disputed fact is that of Utah law. The content of foreign law is a question of fact to be proved by expert evidence, ordinarily by the party relying on it: Neilson v Overseas Projects Corporation of Victoria Ltd [2005] HCA 54; (2005) 223 CLR 331 [115], [185], [249]; Regie National des Usines Renalt SA v Zhang [2002] HCA 10; (2002) 210 CLR 491 [68]; Damberg v Damberg (2001) 52 NSWLR 492 at 505 ([119]; Attorney-General of Botswana v Aussie Diamond Products Pty Ltd [No 2] [2009] WASC 301 [19].
In the present case, I am satisfied that both Mr Parry and Mr Ensor are experts in relation to Utah law. To the extent that there is a conflict between them, in a summary judgment application I must accept the evidence of Mr Ensor on behalf of the first defendant.
As regards the pre‑conditions to the grant of summary judgment, Mr Mallon deposes in his affidavit his belief that the defendants have no defence to the plaintiff's action (par 10).
Courts in Australia recognise and accept that foreign judgments can be sued upon at common law provided that they are satisfied that the judgment was regularly obtained by a court of competent jurisdiction: Benefit Strategies Group Inc v Prider (2005) 91 SASR 544 at 559; Grant & Ors v Spaanderman & Anor, unreported; SCt of WA; Library No 8932; 21 June 1991; Trainor Asia Ltd v Calverley [2007] WADC 124. The foreign judgment is treated as creating a debt which the plaintiff may enforce: Nouvion v Freeman (1889) 15 App Cas 1 at 8; Grant v Easton (1883) 13 QBD 302 at 303.
Judgments from USA courts are not able to be enforced under the Foreign Judgments Act 1991 (Cth): see Foreign Judgments Regulations 1992 (Cth). The plaintiff must rely on the position at common law.
At common law, a foreign judgment may be enforced if three conditions are met:
(a)the foreign court had jurisdiction to make the judgment under its own law;
(b)the judgment was final and conclusive; and
(c)the judgment was for a fixed amount.
Nouvion (supra) at 9 ‑ 10, 12, 17; Grant (supra) at 8 – 11; Trainor Asia (supra). The onus is on the party seeking to rely on the judgment to satisfy the court that these prerequisites are met: Grant at 8.
The first defendant conceded that the Utah Court had jurisdiction to make the judgment under its own law and that the judgment was for a fixed amount.
The first defendant asserted that:
(a)the judgment was not final and conclusive;
(b)the action is not competent in that it is not between the identical parties as in the Utah Court and specifically cannot be enforced against the first defendant severally, but only jointly;
(c)there is some evidence that the judgment was obtained in circumstances where fraud is said to have been an issue;
(d)if judgment was to be awarded, it should be reduced by the amounts already paid by the other parties against whom judgment was ordered.
Each of these is dealt with in turn.
Was the judgment final and conclusive?
There are three bases on which the first defendant asserts that the Utah Judgment is not final and conclusive. The first, set out in the defence, is that the Utah Judgment is the subject of an appeal. Mr Ensor confirms that the first defendant is appealing the Utah Judgment.
Mr Parry gives uncontested evidence as to Utah law in relation to appeals. The position under Utah law is that an appellant may apply for a stay. "If the judgment debtor fails to make such application, and/or if the trial court or appellate court refuses to grant a requested stay, the judgment creditor may proceed to collect upon the judgment during the pendency of the appeal" (par 8). Mr Parry goes on to depose that neither the first nor second defendant has applied to stay the Utah judgment pending the appeal (par 9).
I am satisfied that under Utah law the fact that the Utah Judgment is under appeal does not prevent it from being final and conclusive.
The second basis on which the first defendants contends that the Utah Judgment is not final and conclusive is that there are still parts of the proceedings in Utah pending determination (see par 3(b) of the defence).
Mr Parry deposes, that under Utah law, the fact that some counterclaims are on foot in the Utah Proceedings does not, in this case, effect the status of the Utah judgment, nor the right to execute upon it. In this regard, in the formal order set out at par 11 above the Judge expressly rules that the remaining claims in the case do not overlap factually or legally with the claims the plaintiff seeks judgment on. The Judge granted certification pursuant to r 54(b) of the Utah Rules of Civil Procedure, a copy of which is annexed to Mr Parry's affidavit. Rule 54(b) allows a court to direct that judgment be entered in relation to some but not all claims in a action. I am satisfied that under Utah law, the fact that part of the legal proceedings are yet to be determined does not prevent the Utah Judgment from being final and conclusive.
The third basis on which the first defendant contends that the Utah Judgment is not final and conclusive is that it is able to, and intends to, apply to stay the judgment. The stay appears to be based on evidence that the plaintiff's former Vice‑President of Operations, one Michael Gulbraa, contacted Mr Rowe to advise him that the plaintiff's president, one Mr Johnson, instructed him (Mr Gulbraa) to destroy harmful evidence relating to the first defendant's claims. A transcript of the telephone conversation in which the admission was made is annexed to Mr Paiker's affidavit.
Mr Ensor deposes that he has attempted to schedule a deposition hearing with Mr Gulbraa, but has not been able to do so. Mr Ensor has issued a subpoena for his deposition testimony.
The relevant portions or Mr Ensor's affidavit are as follows:
"11.Utah Rule of Civil Procedure 60(b) allows a Court to grant a party relief from its previous judgments upon certain circumstances. Specifically, Rule 60(b)(6) states that '[o]n motion and upon such terms are just, the court may in the furtherance of justice relieve a party or his legal representative from a final judgment, order, or proceeding for the following reasons: … (5) … it is no longer equitable that the judgment should have prospective application; or (6) any other reason justifying relief from the operation of the judgment." A true and correct copy of Utah R. Civ. P. 60(b) is attached hereto as Exhibit E.
12.I will be filing a motion in the immediate future, once the testimony of Mr. Gulbraa is complete, seeking relief under Rule 60(b)(5) and (6) to relieve KK Machinery from the effects of the November 2009 Judgment.
13.In addition, Utah Rule of Civil Procedure 62(b) states that collection efforts on a judgment may be stayed pending the resolution of a motion filed under Rule 60. Specifically, Rule 62(b) states that 'In its discretion and on such conditions for the security of the adverse party as are proper, the court may stay the execution of, or any proceedings to enforce, a judgment pending the disposition … of a motion for relief from a judgment or order made pursuant to Rule 60…' A true and correct copy of Utah R. Civ. P. 62 is attached hereto as Exhibit F.
14.Utah Rule of Civil Procedure 62(h) further states that '[w]hen a court has ordered a final judgment on some but not all of the claims presented in the action under the conditions stated in Rule 54(b),' like in the case of the Mobilight/KK Machinery dispute, 'the court may stay enforcement of that judgment until the entering of a subsequent judgment or judgments and may prescribe such conditions as are necessary to secure the benefit thereof to the party in whose favour the judgment is entered'.
15.I will also be requesting that the Court stay Mobilight's efforts to collect on the November 2009 Judgment, pursuant to Rule 62(b) and 62(h), based upon Mobilight's intentional destruction of evidence relevant to KK Machinery's claims in this matter."
What is apparent from each of the provisions of the Utah Rules of Civil Procedure relied on by Mr Ensor is that they either stay the Utah Judgment or relieve the first defendant from complying with it. The provisions concerned, on their face, do not challenge the validity of the underlying judgment; rather, they assume it exists, but relieve against its consequences. I do not consider that any of the foreshadowed applications undermines the fact that the Utah Judgment is final and conclusive.
Accordingly, I am satisfied that the Utah Judgment is final and conclusive.
Where the proposed stay applications have relevance is to the issue of whether the District Court should stay any judgment granted pursuant to the present application. I return to this issue at the conclusion of these reasons.
Is the action competent?
As set out in par 11 above, the judgment was against "DayNight LLC and Third Party Defendants KK Machinery Pty, Ltd, W. Cory Rowe, and Paul 'Cactus Jack' La Marr".
The defendant cites the decision in Blohn v Desser [1962] 2 QB 116 as authority for the proposition that the "parties to proceedings which led to the foreign judgment and to the proceedings for enforcement must be the identical and in the same interest". In my view, the decision in Blohn (supra) is not authority for a proposition in these terms. In the case, the plaintiff sued a partnership firm in Austria and obtained a judgment against the firm. She sought to execute the judgment against one of the partners of the firm in England. Diplock J held that the judgment was not final and conclusive as against the defendant. Specifically, his Honour stated (at 124):
"This, however, does not conclude the matter. The plaintiff did not obtain a judgment against the first defendant personally, but only a judgment against the firm. The judgment is no doubt final and conclusive against the firm and can be executed against the partnership assets. But in Austrian law of itself it creates no personal liability against the first defendant and gives no right of execution against her personal effects. In order to render her personally liable in Austrian law a further action must be brought against her in Austria and a further judgment against her personally must be obtained. This is not merely a procedure for obtaining execution of an existing judgment, for, in the action against her, although she would be estopped by res judicata from raising any defence which could have been raised in the action against the partnership, she could raise other defences personal to herself, such as that she was not a partner at the relevant time, or defences arising after the original judgment, such as payment of the debt in whole or in part.
In my opinion, the judgment against the partnership firm is not enforceable against the first defendant in England on the alternative grounds either (a) that it is not a judgment against her personally, or (b) that if it is, it is not a final and conclusive judgment."
In the present case the judgment is expressed to against each Utah Defendant as separate legal entities. For example, there is no reference to a partnership or trading name in which they were collectively acting.
I am satisfied from the face of the Utah Judgment, and the context of the decisions which preceded it, that it may be enforced against each of the Utah Defendants without the need to join all of them in the current proceedings.
This leaves the remaining issue of the extent to which the Utah Judgment can be enforced against the first and second defendants. The key issue here is the extent to which the first and second defendant are each liable for the full amount of the monetary judgment, or whether they are only liable for 25 per cent of it. There is nothing in the affidavit material before me which answers this question under Utah law. The effect of the first defendant's submissions is that in the absence of evidence, the court cannot be satisfied that the either the first or second defendant is individually liable for the entirety of the Utah Judgment.
In the absence of evidence, the court will ordinarily assume that foreign law is identical to Australian law: Neilson (supra) [16], [45], [116], [125]; Attorney-General of Botswana (supra) [19]. Courts are, however, reluctant to make the assumption where there is reason to question its correctness: Damberg (supra), at 505 - 522 ([119] ‑ [160]). The present case is not easily amenable to the application of any general principle which is contained in Australian law, for example, the laws relating to enforcement against partners or joint tortfeasors. The question turns on how a Utah court would interpret, and allow execution on, the Utah Judgment in this regard.
Given the care that I am required to exercise in a summary judgment application, I am not presently satisfied that the plaintiff is entitled to judgment against each of the first defendant and the second defendant in excess of 25 per cent of the Utah Judgment. However, it does not seem in the interests of justice, nor of the efficient case management of this action, for the action to continue through to trial on this issue alone. Rather, it seems appropriate that I allow the parties a short opportunity to provide expert evidence on how a Utah court would enforce the Utah Judgment in this respect.
Fraud
An Australian court may decline to enforce a foreign judgment that was fraudulently obtained: Benefit Strategies (supra) at 556. The onus of proving fraud will lie with the defendant at trial. To resist a summary judgment application, the defendant must produce evidence raising a triable issue in relation to fraud: Benefit Strategies at 556.
The starting point is that, with some caveats, the principles governing the refusal to enforce a foreign judgment on the ground of fraud are the same as those governing the setting aside of a domestic judgment for fraud: Benefit Strategies at 558 - 559; Keele v Findley (1990) 21 NSWLR 444 at 449, 458. Both decisions just cited affirmed the following statement of the principles relating to domestic judgments set out by Kirby P (with whom Hope and Samuels JJA agreed) in Wentworth v Rogers (No 5) (1986) 6 NSWLR 534 at 538 - 539:
"First, the essence of the action is fraud. As in all actions based on fraud, particulars of the fraud claimed must be exactly given and the allegations must be established by the strict proof which such a charge requires: Jonesco v Beard [1930] AC 298 at 301; McHarg v Woods Radio Pty Ltd (at 497).
Secondly, it must be shown, by the partly asserting that a judgment was procured by fraud, that there has been a new discovery of something material, in the sense that fresh facts have been found which, by themselves or in combination with previously known facts, would provide a reason for setting aside the judgment: see Lord Selbourne LC in Boswell v Coaks (No 2) (1894) 6 R 167 at 170, 174; 86 LT 365 at 366, 368; Cabassi v Vila (1940) 64 CLR 130 at 147; McDonald v McDonald (1965) 113 CLR 529 at 533; Everett v Ribbands (1946) 175 LT 143 at 145, 146; Birch v Birch [1902] P 130 at 136, 137 - 138; Ronald v Harper [1913] VLR 311 at 318. This rule has an ancient lineage: see, eg, Shedden v Patrick (1854) 1 Macq 535 at 615, 622; Halsbury's Laws of England, 4th ed, vol 26, par 560 at 285. It is based upon a number of grounds. There is a public interest in finality of litigation. Parties ought not, by proceeding to impugn a judgment, to be permitted to relitigate matters which were the subject of the earlier proceedings which gave rise to the judgment. Especially should they not be so permitted, if they move on nothing more than the evidence upon which they have previously failed. If they have evidence of fraud which may taint a judgment of the courts, they should not collude in such a consequence by refraining from raising their objection at the trial, thereby keeping the complaint in reserve. It is their responsibility to ensure that the taint of fraud is avoided and the integrity of the court's process preserved.
Thirdly, mere suspicion of fraud, raised by fresh facts later discovered, will not be sufficient to secure relief: Birch v Birch (at 136, 139); McHarg v Woods Radio Pty Ltd (at 498); Ronald v Harper (at 318). The claimant must establish that the new facts are so evidenced and so material that it is reasonably probable that the action will succeed. This rule is founded squarely in the public interest in finality of public litigation and in upholding judgments duly entered at the termination of proceedings in the courts.
Fourthly, although perjury by the successful party or a witness or witnesses may, if later discovered, warrant the setting aside of a judgment on the ground that it was procured by fraud, and although there may be exceptional cases where such proof of perjury could suffice, without more, to warrant relief of this kind, the mere allegation, or even the proof, of perjury, will not normally be sufficient to attract such drastic and exceptional relief as the setting aside of a judgment: Cabassi v Vila (at 147, 148); Baker v Wadsworth (1898) 67 LJQB 301; Everett v Ribbands (at 145, 146). The other requirements must be fulfilled. In hard fought litigation, it is not at all uncommon for there to be a conflict of testimony which has to be resolved by a judge or jury. In many cases of contradictory evidence, one party must be mistaken. He or she may even be deceiving the court. The unsuccessful party in the litigation will often consider that failure in the litigation has been procured by false evidence on the part of the opponent and the witnesses called by the opponent. If every case in which such an opinion was held gave rise to proceedings of this kind, the courts would be even more burdened with the review of first instance decisions than they are. For this reason, and in defence of finality of judgments, a more stringent requirement than alleged perjury alone is required.
Fifthly, it must be shown by admissible evidence that the successful party was responsible for the fraud which taints the judgment under challenge. The evidence in support of the charge ought to be extrinsic: cf Perry v Meddowcroft (1846) 10 Beav 122 at 13 - 139; 50 ER 529 at 534, 535. It is not sufficient to show that an agent of the successful party was convicted of giving perjured evidence in the former proceeding, the result of which it is sought to impeach. It must be shown that the agent, in so acting, was in concert with the party who derived the benefit of the judgment: Ronald v Harper (at 318); Sheddon v Patrick (at 643).
Sixthly, the burden of establishing the components necessary to warrant the drastic step of setting aside a judgment, allegedly affected by fraud or other relevant taint, lies on the party impugning the judgment. It is for that party to establish the fraud and to do so clearly. In summary, he or she must establish that the case is based on newly discovered facts; that the facts are material and such as to make it reasonably probable that the case will succeed; that they go beyond mere allegations of perjury on the part of witnesses at the trial; and that the opposing party who took advantage of the judgment is shown, by admissible evidence, to have been responsible for the fraud in such a way as to render it inequitable that such party should take the benefit of the judgment."
The caveat is that there is that there is conflicting authority on points two and four. The balance of the authorities supports the view that in relation to foreign judgments:
(a)it is not necessary to show that the fraud is based on fresh evidence found since the original judgment; and
(b)it is sufficient to show that the foreign court was induced by fraud to come to a wrong decision by evidence which was false.
Benefit Strategies 558 - 559; De Santis v Russo [2000] QSC 065 at par 16; Yoon v Young Dung Song (2000) 158 FLR 295 at 298 - 300; Monroe Schneider Associates (Inc) v No 1 Raberem Pty Ltd (1992) 37 FCR 234 at 241; Norman v Norman (No 2) (1968) 12 FLR 39 at 47; Close v Arnot, unreported, SCt of NSW; 10107 of 1996; 21 November 1997. These decisions follow the line of authority going back to Abouloff v Oppenheimer & Co (1882) 10 QBD 295 and Vadala v Lawes (1890) 25 QBD 310.
To the contrary is the decision of Rogers CJ Comm D in Keele (supra). Rogers CJ Comm D declined to follow the decisions in Oppenheimer (supra) and Vadala (supra), instead holding that the same rules should apply to setting aside judgments for fraud in domestic and foreign decisions. There was thus a requirement for a new discovery of something material, or fresh evidence, showing fraud. On the facts of the case the before the court, the plaintiff sought to enforce a judgment of a United States court. The defendants had sought to resist enforcement of the judgment on the ground that false evidence given at the trial of the action. It was common ground that the defendant could not satisfy the test laid down in Wentworth (supra). His Honour awarded summary judgment to the plaintiff.
Notwithstanding the intellectual force of the decision in Keele, the balance of the authority supports the view that the decisions in Oppenheimer and Vadala represent the law in Australian. In any event, for the purposes of a summary judgment application, it is appropriate that I resolve any conflict in the authorities or possible development in the law in favour of the defendant: Hospitals Contribution Fund of Australia v Hunt (1982) 44 ALR 365 at 373. It is thus not necessary for the first defendant to show that the fraud is based on fresh evidence found since the original judgment. On the other hand, it is sufficient to show that the foreign court was induced by fraud to come to a wrong decision by evidence which was false.
However, fraud must still be established. It is not sufficient for the defendant to raise a matter of defence which was raised or could have been raised in the foreign proceedings, even though it would have been a complete answer to the claim: Ellis v McHenry (1871) LR 6 CP 228 at 238 - 239. Nor is it sufficient for the defendant to assert that it was erroneous on the merits through a mistake of fact or law: Godard v Gray (1870) LR6QB 139 at 150; Norsemeter Holdings AS v Boele (No 1) [2002] NSWSC 370 at [14].
In the present case, the fraud is that the plaintiff may well also have engaged in the destruction of evidence, as set out in par 9 above. Mr Ensor deposes that, under Utah law, a party "who has engaged in fraud or deceit in the business under consideration will be denied equitable relief when fairness and good conscience so demand". He continues, in "other words, a party who seeks and equitable remedy must have acted in good faith and not in violation of equitable principles" (par 10).
In the present case, there is nothing in the decision dated 24 March 2009 (annexed to Mr Ensor's affidavit) which suggests that the decision to grant default judgment was made in reliance of any equitable principles. Rather, the decision on its face was made pursuant to r 37(g) of the Utah Rules of Civil Procedure, a copy of which is annexed to Mr Parry's affidavit.
To raise a triable issue that, if the action went to trial, the Utah Judgment would be set aside for fraud, the first defendant must show that there is a triable issue that the Utah Court was induced by fraud to come to a wrong decision by evidence which was false. There is no material before me to the effect that the evidence relied on by the Utah Court was in any way false. Rather, at best, the first defendant's case is that had the Judge known of the plaintiff's destruction of evidence, the Judge may not have exercised the discretion to award judgment as a sanction on the Utah Defendants. This seems to me to fall within the principle set out above from the decision in Ellis (supra) that the defendant seeks to raise a matter of discretion (not even defence) which could have been raised in the foreign proceedings. This is not sufficient to give rise to a triable issue that the Utah Judgment could be set aside for fraud.
Effect of partial recovery against other Utah parties
As noted in par 12 above, the Utah Judgment has been partially satisfied. The plaintiff submitted that the appropriate course for me to adopt, should I otherwise be persuaded that judgment should issue, is to partially suspend enforcement of it. The first defendant submitted that I ought not to grant judgment in the first place.
It is important to note that the present application is not to register a foreign judgment. Rather, it is to enforce it by way of an action for debt. Accordingly, as a matter of principle, it seems to me that the Court should not enforce as a debt a debt which is not actually due and payable. The extent of judgment should thus be limited to the unpaid amount.
Conclusion
The plaintiff has established a right to summary judgment. However, on the evidence as it currently stands, the judgment against each of the first defendant and the second defendant would be limited to 25 per cent of the Utah Judgment, less any amounts paid by that party. As I noted above, the parties should be given a short opportunity to provide evidence on Utah law on this point.
The judgment should carry interest as set out in the Utah Judgment from the date of that judgment until the date of the present judgment. The interest calculation should take into account when the amounts already collected were received.
The judgment is sought in United States dollars. There is no impediment to a plaintiff seeking judgment in a foreign currency, at least where that is justified by the cause of action in question. This can occur where the proper law of the contract is the law of another country or where a contract specifically provides for a loan and repayment in foreign currency: Miliangos v George Frank (Textiles) Ltd [1976] AC 443 at 463, 467, 497, 500 - 501; Australian and New Zealand Banking Group Limited v Cawood [1987] 1 Qd R 131 at 134. Here as the cause of action is based on the Utah Judgment, the plaintiff is justified in seeking judgment in United States dollars. It is then a question of discretion whether the judgment is expressed in foreign currency or whether there is a rider to the order allowing payment of the equivalent amount in Australian dollars at the time of payment or the issue of enforcement proceedings in Australia: Miliangos (supra) at 463, 467 ‑ 470, 497 ‑ 498, 501 ‑ 502; Carwood (supra) at 134.
My preliminary view is that the judgment should at this stage be expressed in Australian dollars to facilitate enforcement. Evidence should be provided as to the exchange rate.
There remains the issue raised earlier as to what, if any, orders ought to be made to reflect the fact that there is a stay application foreshadowed in Utah. The Court has power to suspend enforcement pursuant to Civil Judgments Enforcement Act 2004 (WA) s 15. It would, for example, seem unjust for the plaintiff to be restrained from enforcing the Utah Judgment in Utah, but able to enforce it in Western Australia. On the other hand, it would be equally unjust for the first defendant to keep deferring the execution of judgment in Western Australia on the basis of a stay application which is continually being foreshadowed, but never actually made.
My preliminary view is that the appropriate order is to grant a suspension order pursuant to Civil Judgments Enforcement Act s 15 on an interim basis, with a directions hearing in, say, 8 weeks time. By then there should be some clarity on whether a stay application has been made in Utah. However, I will hear from counsel on this.
I also request counsel for the plaintiff to provide a minute setting out the amount in which judgment is sought, reflecting my comments above.
In view of the outstanding issues, I have published this judgment by letter to the parties and have listed a directions hearing seven (7) days from publication to settle final orders.
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