Nyunt v First Property Holdings Pte Ltd

[2023] HCATrans 87

[2023] HCATrans 087

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
  Sydney  No S170 of 2022

B e t w e e n -

MICHAEL NYUNT

Applicant

and

FIRST PROPERTY HOLDINGS PTE LTD

Respondent

Application for special leave to appeal

KIEFEL CJ
STEWARD J

TRANSCRIPT OF PROCEEDINGS

AT CANBERRA ON FRIDAY, 16 JUNE 2023, AT 9.50 AM

Copyright in the High Court of Australia

MR C.S. WARD, SC:   May it please the Court, I appear with my learned friend MR P.F. SANTUCCI for the applicant.  (instructed by Marque Lawyers)

MR I.C. COLQUHOUN, SC:   May it please the Court, I appear with MR T.J. BOYLE for the respondent.  (instructed by HFW Australia)

MR WARD:   Your Honours, there are three grounds of proposed appeal, although the third raises two grounds, because there is a House v The King discretion that flows from ground 3 into ground 4.  Could I describe the nature of the grounds.  Ground 1 centrally raises for determination the effect of a competing foreign judgment, in this case entered in Myanmar before the Singapore judgment on a default basis was obtained ‑ ‑ ‑

KIEFEL CJ:   Could you remind me how much money is involved in the default judgment?

MR WARD:   Around US$66 million, your Honour, plus interest earned – well in excess of that by now, I think.  It is at the – my learned friend has it – page 164 of the appeal book sets it out.  There are two separate judgments – they are roughly, broadly speaking, half each comprising that sum.

Ground 1 relates to what I will describe as the Natmauk Lane Declaratory Proceedings.  The respondent, First Property Holdings, commenced proceedings in Myanmar in May 2003 seeking a form of relief under section 53 of the Myanmar Transfer of Property Act.  Could I ask your Honours to turn to page 86 of the application book, because I think it is important that I explain to your Honours the synergy and similarity between the Myanmar and the Singapore proceedings.  Page 86 of the appeal book, paragraph 39, you see that the essence of the Myanmar Natmauk Lane Proceedings are there set out.

Could I expressly direct your Honours’ attention to paragraph (3), an allegation of a conspiracy by my client and his wife to execute a deed of sale which transferred the Natmauk Lane property to my client and his wife.  And paragraph (4), an allegation that that transfer was in breach of clause 8.2 of a convertible performance debenture which prevented the joint venture company known as TCC – Town and City – from disposing of any assets until certain criteria had been satisfied.  Significantly, in paragraph (5):

that the consideration provided . . . was “excessively low” (that is, the property was sold –

to my client:

at an undervalue) –

In paragraph (6), an allegation that there was a failure to:

act in good faith in executing the deed of sale –

and in paragraph (7), most significantly:

that Mr Nyunt “gave priority to his own interest over –

that of the joint venture company and that of the present respondent:

and, in doing so, was “in breach of fiduciary duty owed to –

the joint venture company.  Now, that proceeding ran for many years in Myanmar.  Whilst it was pending – I am sorry, not whilst it was pending, it was determined in January 2015 – and your Honours will find that at application book 87, paragraph 42:

Almost 12 years later, on 14 January 2015, the Natmauk Lane Declaration Proceedings were dismissed in the Yangon Western District Court –

Now, it is said that that was:

on the basis that First Property failed to attend.

There is more to it than that – and I will come to the circumstances in which that occurred.  It is more than a technical failure to attend; there were a number of failures and ultimately, on the day in question, there was a decision by the court that nobody with a:

“power of attorney” to appear for First Property –

had appeared.  The effect, we say, of that decision was that it was final and conclusive, unless set aside on appeal.  There was an appeal by First Property in Myanmar against that decision – and that appeal failed with the result that we say that decision was final and conclusive.  Now, notwithstanding those events, also in 2015 – but after that decision – First Property commenced civil proceedings against my client in Singapore.  Would your Honours perhaps turn to application book, page 114 – coincidentally, also, at paragraph 114 of the Court of Appeal’s judgment.  At the foot of page 114, over to page 115, we see the nature of the pleading in Singapore.

KIEFEL CJ:   This is January 2016, is that right?

MR WARD:   Yes, it was amended.  But, yes.  Your Honours will see, again, particularly in what appears in paragraph (3) at page 115, a description of the central allegation made in Singapore.  It alleged:

the Defendants’ fraudulent breach and/or fiduciary duties in procuring the Natmauk Lane Transaction –

which was said, then, to sound in the plaintiffs, then described as First Property, being:

deprived of the opportunity and/or lost its chance to realise and/or obtain the full benefits of the investment in the Natmauk Lane Properties –

I will not go further into the pleadings.  We say that there is relative identity of the substance of the claims.  That sounds in this way.  Ultimately, there was judgment on the Natmauk Lane – your Honour has asked about the quantum – the Natmauk Lane component of the claim ultimately amounted to US$42,700,000 on the default judgement which was reached on the basis of expert evidence which was not challenged because my client had not seen it at the time of the default judgment, for lots of reasons.

STEWARD J:   Mr Ward, what do you say about paragraph 164 of the primary judge and the receipt of expert evidence about why the Myanmar proceeding was dismissed, and the characterisation by the primary judge of that being a technical matter and:

not a question of First Property having abandoned the case.

You take issue with that, I assume?

MR WARD:   We do, your Honour.  Would your Honour perhaps turn to – the primary judge goes on at paragraph 176 and 177 to deal with the issue more fully.  At 176, the expert, Mr Thien, had apparently said that the:

declaratory relief proceedings was not “final and conclusive” in the relevant sense, noting proceedings pending in that Court to have the dismissal order set aside.

My client apparently then made the obvious submission that his:

evidence in cross-examination accepted, however, that the judgments in Myanmar were final and conclusive unless appealed or set aside.

And of course, they were not set aside after that appeal had been concluded.  So, that is our response to that proposition.  Her Honour at paragraph 177 did not expressly determine the issue.  It is quite clear that her Honour says, I do not need to go into the detail of these arguments.  The reason for that is that the primary judge disposed of this issue on the basis that the matter in dispute was not identical, that is, the Myanmar matter in dispute in her Honour’s view was one relating to the Transfer of Property Act, whereas the Singapore proceedings were expressly pleaded only as a breach of fiduciary duty.

KIEFEL CJ:   It is correct, though, to say that the Myanmar proceedings involved plans relating to property, as distinct from debt.

MR WARD:   Yes.  But expressly premised upon the proposition that there had been a breach of fiduciary duty giving rise to the property claim.  Can I address it in this way, your Honour - - -

STEWARD J:   That is really the issue.  It is different revenues, rather than a cause of action, as it were.

MR WARD:   Yes.  We accept completely there is a difference of remedy.  Can I address it in this way, because this is the heart of the ground 1 appeal point.  Would your Honours turn to the text of section 7(2)(b)?  I am sure you are familiar with it, but it appears at page 148 of the application book.  And section 7(2)(b) does not in terms speak of res judicata nor cause of action estoppel, nor issue estoppel, nor Henderson v Henderson estoppel.  It speaks of the satisfaction of the court that the “matter in dispute” in the proceedings in the original court had:

been the subject of a final and conclusive judgment –

In our construction, “matter in dispute” encompasses at least the first three of the four possible categories of a merger being a strict res judicata, we may not, strictly speaking, be in that – particularly because there is a difference of remedy and we accept that.  And that may lead me to seek to slightly amend what we have put in our proposed notice of ground of appeal ground 1 to encompass, also, a cause of action estoppel.

We say that this is a plain enough case of a cause of action estoppel where the very substance of the case has been determined wholly on procedural grounds – and I will come to what we say about that – there appears to be a divergence of authority between Australia and the United Kingdom in that regard.  But we say that there has been a merger – in the sense of cause of action estoppel, at least, if not a strict res judicata – which is within the meaning of the words:

matter in dispute in the proceedings in the original court –

the Myanmar court – and that has:

been the subject of a final and conclusive –

determination by the Myanmar court.

STEWARD J:   Do you accept that (b) is a discretionary power?

MR WARD:   Yes, we do.

STEWARD J:   Subject to House v The King?

MR WARD:   Yes, yes.

STEWARD J:   So, what do you say is the error in the exercise of the discretion?

MR WARD:   The error is that the court ‑ ‑ ‑

STEWARD J:   Failure to characterise ‑ ‑ ‑

MR WARD:   Yes.

STEWARD J:   ‑ ‑ ‑the Myanmar proceeding as ‑ ‑ ‑

MR WARD:   There are two errors.  The primary judge’s error is different, with respect, to the Chief Justice’s error in the primary judgment of the Court of Appeal.  The primary judge’s error is one of characterisation of the matter in dispute.  Her Honour, with respect, we think, referred only to the form of relief and not to the substance of the proceedings.

The Chief Justice determined it with the other members of the Court agreeing on an entirely different basis.  His Honour did not really analyse the form of relief point but, instead, determined that solely – and very swiftly – on the basis that the proceedings were not determined on the merits.  Your Honours will find that at application book, pages 124 to 125.  Paragraph 143.

STEWARD J:   Yes.

MR WARD:   The difficulty with this reasoning is that his Honour the Chief Justice has relied upon Rogers v The Queen for the proposition that there has been:

no “final judicial decision of a question between the parties” –

because Natmauk Lane was dismissed on purely procedural grounds.  That, with respect to his Honour, we say, is not the correct statement of law in this country.  We have referred your Honours in writing to decisions of this Court and other superior courts in this country, including Chamberlain, Linprint, Zetta and, indeed, even Rogers, we say, which stand for the proposition that for a res judicata to arise – in our reading from Zetta and the Federal Court Reports – for a res judicata to arise, the proposition that there must be both a final judgment and it must be on the merits is contrary to a well‑established position in Australia that res judicata applies to a final judgment by default or by consent.

Indeed, Zetta was, itself, a case in which counsel withdrew, I think, and that was held to be capable of generating a res judicata.  We accept that the English authorities and, in particular, Carl Zeiss, the authorities that flow from Carl Zeiss take a different view about what is needed to form a res judicata in the strict sense – that is, a determination on the merits.  In our submission, here, plainly enough, there has been a full merger – whether by means of a strict res judicata or a cause of action estoppel – in the sense that the cause of action upon which the applicant sued in Myanmar, which is relevantly identical, although not in relief, but in substance, as the pleaded case in Singapore – was the subject of a cause of action estoppel following the dismissal in Myanmar.

One might ask, your Honours, if it were not for Singapore’s attempt to reopen in Singapore, what more could Mr Nyunt have done?  He had successfully defended, in Myanmar, all of the Natmauk Lane Proceedings – that judgment is either worth something or it is not, and we say it is worth something.

STEWARD J:   Why do we ignore the remedy for the purposes of (b) in determining what is a “final and conclusive judgment”?  Is the judgment not necessarily the relief that was granted by the court ‑ ‑ ‑

MR WARD:   No.

STEWARD J:   ‑ ‑ ‑ in this context?  And if so, why not?

MR WARD:   No, because, your Honour, as the Court says – I have not got the paragraph number in front of my mind, but as this Court said in Chamberlain, one has to look beyond – in a cause of action estoppel, one looks beyond the form of relief, the bare form of relief, to what in substance has been decided.  And what, in substance, the property proceedings in Myanmar were based upon was an allegation of breach of fiduciary duty and transfer not in good faith or under value.  Which is precisely the allegation ‑ ‑ ‑

STEWARD J:   In Chamberlain it was the recovery on the assessment in the Supreme Court.

MR WARD:   Yes.  That is right.

STEWARD J:   The order of the court got the figure wrong.

MR WARD:   Exactly, yes.  Yes.  But the reasoning assists us, your Honour, with respect.

STEWARD J:   Yes, I see.

MR WARD:   In answer to your Honour’s question in a more direct fashion, the question, we say, is not one of construction of what is a “final and conclusive judgment”, that is the is it procedural or not procedural problem.  The question is more one of a characterisation of what is the matter in dispute, for the purposes of the statute in 7(2)(b), and that seems to be a question which has not been addressed, we think, squarely in this country in quite the way we are putting it in this case.

KIEFEL CJ:   It is a question of fact, though.  Is it not largely a question of fact or mixed fact and law?  But it depends largely on the facts of the particular case.

MR WARD:   I cannot argue with that, your Honour, yes.  Yes.  But we say the facts here are relatively straightforward.  They will turn, we say, on a comparison of the pleaded cases, in terms of the allegations of fact that are pleaded.

KIEFEL CJ:   Why would one not regard this application, or the appeal that is proposed, as largely concerning the application of facts to settled principle?

MR WARD:   Because we think the principle is not settled, the facts are.  I cannot answer it better than that.  We think that the facts will turn on a comparison of two statements of claim.  The principle ‑ ‑ ‑

STEWARD J:   That is a question of characterisation, and whether they meet the words “final and conclusive judgment”.

MR WARD:   Yes, and the correct – the connotation and characterisation that is to be put to the words “matter in dispute” in 7(2)(b).  There is nothing more I can say about that, that is, we say, there is a question of law as to what is the – the primary judge approached “matter in dispute” as being referrable solely to the form of relief sought.  The Court of Appeal, in the paragraphs that I have just taken your Honours to, did not address that in any depth at all and instead relied solely upon the procedural merits dichotomy – that being, we say, an issue that was determined wrongly against us and, obviously, with great significance.

Your Honours, I do not propose to say anything else about proposed ground 1.  I should say, your Honours, obviously, all of the three headings of possible appeal are severable in that your Honours may wish to grant leave on some but not others; or one but not others.  Could I next address – because we are dealing with this topic – proposed grounds 3 and 4, which are the Tarmway Plaza Possession Proceedings, which arise in an almost identical way, but in a slightly different temporal context – unfortunately for my client.  At the same time, or more or less the same time as First Property sued in Myanmar on the Natmauk Lane Proceedings, they commenced proceedings in relation to a second joint venture property called ‑ ‑ ‑

KIEFEL CJ:   You have a timing problem here, too.

MR WARD:   Yes, I have a timing problem, yes.

KIEFEL CJ:   Because the Tarmway Possession Proceedings were concluded after, and not before, the default judgments were entered.

MR WARD:   Exactly.  And that is why we cannot rely on 7(2)(b) – because the words, plainly enough, do not assist us.

KIEFEL CJ:   And in relation to ground 4, that is not really a special leave ground, is it?

MR WARD:   Ground 4 will flow only from ground 3.

KIEFEL CJ:  About reopening cases?

MR WARD:   Ground 4 applies ‑ ‑ ‑

KIEFEL CJ:   It is a discretionary consideration.

MR WARD:   Yes.  Ground 4 is a discretion that we say flows from ground 3.

KIEFEL CJ:   Where the appeal court has held that the primary judge – the rejection of the evidence was well-founded, having regard to procedural rules.

MR WARD:   Yes.  So, your Honour, what I would say about ground 3 is that if your Honours were satisfied that ground 3 succeeded, then the House v The King error flows necessarily from the incorrect application of what we say is the law in ground 3.  Ground 3 does not rely on 7(2)(b) because it cannot, and that is because the words of 7(2)(b) referred to:

had before the date of the judgment in the original court –

so, we have the temporal problem.  We do, however, say that it is within section 7(2)(a)(xi), which is the public policy exception.  We accept that we are asking public policy to do some work in that regard, but it is capable of doing that work.

Can I say this to your Honours.  The choice of whether or not to proceed in any place as plaintiff was always that of First Property.  They elected to proceed in Myanmar, they litigated the Tarmway Plaza Possession Proceedings for many, many years in Myanmar.  Whilst they were in the process of litigating in Myanmar on that application, they brought the claim in Singapore on, again, relevantly identical substantive grounds, and this time there is no particular difference about the form of relief sought – the Tarmway proceedings were not strictly based on the property law in Myanmar.

It was, at all times, their election and it is simply fortuitous timing for them that the merits decision in Myanmar came after they obtained a default judgment without a strict examination of the merits other than in a default sense in Singapore.  We have referred your Honours, I think, to two cases.  There are, in our submission, authorities which – I see the time, your Honours, is that my ‑ ‑ ‑

KIEFEL CJ:   Do you want to finish your submission?

MR WARD:   Could I finish that submission and simply say that, your Honour, in relation to ground 2, could I address the ground 2 waiver in this way and only for 30 seconds.

In our submission, there is strength in the waiver in the non‑exclusive jurisdiction clause in the sense that First Property had, by its lengthy prosecution of the proceedings in Myanmar, expressly waived by its conduct all right to rely upon what was otherwise correctly analysed by his Honour the Chief Justice as a non‑exclusive jurisdiction clause which would have granted ‑ ‑ ‑

KIEFEL CJ:   It was a submission to jurisdiction clause, though, not an exclusive jurisdiction clause, was it not?

MR WARD:   Yes.

KIEFEL CJ:   That is relevant.

MR WARD:   If it had been an exclusive jurisdiction clause, we would not be here.

KIEFEL CJ:   That is right.

MR WARD:   Non‑exclusive jurisdiction clause, though, your Honour – the fact that it is not exclusive certainly does not preclude suit in any other place – that is not the point we seek to raise.  The point we seek to raise is one of waiver by conduct over many years following ‑ ‑ ‑

KIEFEL CJ:   It is really a form of estoppel you are arguing.

MR WARD:   Yes.  Those are our submissions, your Honours.

KIEFEL CJ:   We need not call on the respondent.  In our view, the proposed appeal has insufficient prospects of success to warrant the grant of special leave.  Special leave is refused, with costs.

AT 10.13 AM THE MATTER WAS CONCLUDED