Prider v Benefit Strategies Group Inc & Anor
[2006] HCATrans 50
[2006] HCATrans 050
IN THE HIGH COURT OF AUSTRALIA
Office of the Registry
Adelaide No A34 of 2005
B e t w e e n -
TREVOR LAURENCE PRIDER
Applicant
and
BENEFIT STRATEGIES GROUP INC AND ASTROTECH ENTERPRISES INC
Respondents
Application for special leave to appeal
GUMMOW J
HAYNE J
CRENNAN J
TRANSCRIPT OF PROCEEDINGS
FROM ADELAIDE BY VIDEO LINK TO CANBERRA
ON FRIDAY, 10 FEBRUARY 2006, AT 10.43 AM
Copyright in the High Court of Australia
MR M.F. BLUE, QC: May it please the Court, I appear with MR J.S. RODER for the applicant. (instructed by Sykes Bidstrup)
MR W.J.N. WELLS, QC: If the Court pleases, I appear with my learned friend, MS K.N. THOMAS, for the respondents. (instructed by Fisher Jeffries)
GUMMOW J: Yes, Mr Blue.
MR BLUE: In this matter the respondents obtained in California a joint judgment in a sum of $2.625 million plus costs and interest, leaving aside an award of pecuniary damages which is not relevant before this Court. Having obtained that judgment the respondents then instituted proceedings in the Supreme Court of South Australia based upon that judgment. The common law recognises that a foreign judgment ‑ ‑ ‑
GUMMOW J: What is the special leave point, Mr Blue?
MR BLUE: The special leave point is whether a joint obligation such as created by a judgment of a foreign court can give rise to several judgments in favour of the plaintiffs. It is our contention that this was a joint entitlement of the plaintiffs that arose from the California judgment and under Australian law a joint entitlement must translate to a joint claim and joint judgment in the Australian court. In respect of that proposition we rely upon the decision of this Court in Australia Workers’ Union v Bowen 72 CLR 575which is tab 4 in our book of authorities to which I take the Court, a decision in 1946.
The facts of that case were that there were proceedings in a court in New South Wales by a number of plaintiffs against a number of defendants. The proceedings were unsuccessful and an order was made for costs in favour of the defendants as against the plaintiffs. There were, in fact, some 17 defendants altogether. The High Court held that that judgment for costs gave rise to a joint ‑ ‑ ‑
GUMMOW J: That was a bankruptcy question.
MR BLUE: Yes. It was, on the facts, but the High Court held ‑ and this is Chief Justice Latham at page 583, Justice Starke at 585, Justice ‑ ‑ ‑
GUMMOW J: What is a particular passage in Sir John Latham?
MR BLUE: It is page 583 at about point 6:
Only one writ of execution can be issued for the one judgment debt to which joint judgement creditors are entitled, and a bankruptcy notice in the case of such creditors can be effective only when issued by or on behalf of all the judgment creditors. So also a bankruptcy petition –
Then Justice Starke at the bottom of page 585 said:
The order for costs in favour of the defendants in the suit in the Supreme Court gave them a joint right; they may be described as joint creditors.
And then over the page at 586, point 7, he said:
Thus it is a general rule that “all the persons with whom a contract is made must join in an action for the breach of it”.
He was talking there about contract but the facts of this case involved a liability arising from a judgment debt. And then at 587, point 2, he said:
Any one of several co-plaintiffs may give the defendant a release from the action, which is good ‑ ‑ ‑
HAYNE J: Where do we find this in your draft notice or your application?
MR BLUE: Your Honour, it is at application book ‑ ‑ ‑
GUMMOW J: We have the draft notice at page 72 but that just talks about public policy and fraud.
MR BLUE: It is in the summary of argument at application book page 76, the first full paragraph on that page and the next paragraph.
GUMMOW J: That is dealing, is it not, with the punitive damages?
MR BLUE: No, your Honour, with respect, that is dealing solely with the ‑ ‑ ‑
GUMMOW J: Is that not a reflection of what appears at page 63, line 10?
MR BLUE: No, your Honour. There is no challenge in this Court to the punitive damages or to the severing.
GUMMOW J: Exactly.
MR BLUE: Rather, what we are dealing with solely is the…..
HAYNE J: We are back on board, I think.
MR BLUE: Yes. If the Court pleases. The two sentences are:
What the primary judge did was to create and enter judgment for two new liabilities –
We are talking here about a liability $1 million in favour of the second plaintiff and about $1.5 million dollars in favour of the first plaintiff. It is quite different from the liability which arose as a result of the judgment of the Californian Court.
GUMMOW J: What do you say about paragraph 101 in Justice Gray’s judgment at page 26 as to what was in play before him? Certainly not Australian Workers’ Union v Bowen.
MR BLUE: Well, that is the precise…..
GUMMOW J: Yes. You are back again, let us hope more permanently.
MR BLUE: That is the precise passage in the judgment of Justice Gray which we challenged before the Full Court, but at application book page 23 the Full Court was against us. It set out the ‑ ‑ ‑
GUMMOW J: Page?
MR BLUE: I am sorry, page 64. At paragraph 81 the Full Court set out, in effect, my learned friend Mr Wells’ argument or contention to that effect which was accepted by Justice Gray, and then Justice Bleby says ‑ ‑ ‑
GUMMOW J: My note that what I wrote beside that was, “Not in draft notice of appeal, application book 72”.
MR BLUE: Yes, can I come back to that? But in terms of identifying your Honour Justice Gummow asked me about the passage in Justice Gray’s judgment, it was that passage which Justice Bleby then upheld at paragraph 82 and then in turn, if I go to our summary of argument at application book, page 76, line 10 through to paragraph 8, it is that point that is subject of paragraphs 7 and 8. Paragraph 8 we go on to argue that:
It would not have been open to the court to award the respondents, at trial, separate judgements different in nature to the foreign judgement –
That is the point. You cannot start with a joint entitlement which for the common law is treated as a debt arising from the obligation arising from the foreign judgment and end up with several judgments in different amounts. In other words, the co-plaintiffs cannot come to Court with a joint ‑ ‑ ‑
GUMMOW J: Well, at bottom the question is in jurisprudential terms, what is the right, the nature of the right, which founds the distinct action which is brought in Australia on the foreign judgment, is it not?
MR BLUE: Precisely, your Honour, yes.
GUMMOW J: And is there any detailed discussion of that anywhere in the classic texts on enforcement of foreign judgment?
MR BLUE: There is, yes. It is not on our list but Nygh’s 7th edition Conflict of Laws deals with it at page 182. I might be ‑ ‑ ‑
GUMMOW J: What does he say?
MR BLUE: He says:
the plaintiff can rely on the foreign judgment as imposing an obligation on the defendant to pay the sum adjudged. Since this is a sum certain the plaintiff can sue for the amount like any other simple contract debt by taking out a specially endorsed writ.
GUMMOW J: I know all that but that does not face up to the particular question here, which is more sophisticated, is it not?
MR BLUE: Yes. The particular question here is a question of joint entitlements leading to ‑ ‑ ‑
GUMMOW J: The question is, if you chopped a piece of cheese in two are you creating something different to that which you are seeking to enforce?
MR BLUE: Yes, your Honour. And it is a question, your Honour, that could ‑ ‑ ‑
GUMMOW J: Is that discussed anywhere? Has this joint and several problem come before anywhere?
MR BLUE: Yes, it has, your Honour.
GUMMOW J: In the context of enforcement, not in the context of Australian Workers’ Union v Bowen.
MR BLUE: No, your Honour, not in the context of enforcement of a foreign judgment but it has come up ‑ ‑ ‑.
GUMMOW J: Well, that is what I am asking.
MR BLUE: No, it has not, your Honour, but we are really putting two areas of law together.
GUMMOW J: I am not saying that is a bad thing but I just want to know.
MR BLUE: No, your Honour. The juxtaposition of the two principles has not been specifically dealt with but in domestic law the question of enforcing a joint entitlement ‑ ‑ ‑
GUMMOW J: There is a question of characterisation here too. What does the law of California say about the nature of this judgment? Does it say anything different to what the common law in South Australia says about its nature, questions of jointure and severance and so on?
MR BLUE: As far as we are aware, your Honour, it does not. Now, there was not any specific evidence before the court about the law of California in this respect.
GUMMOW J: Well, that may be a problem for you.
MR BLUE: We would submit not, for two reasons. Firstly, Damberg v Damberg ‑ ‑ ‑
GUMMOW J: As to the appropriateness of the vehicle, that is all I am saying.
MR BLUE: Yes. But your Honour, firstly we would submit that the onus is on the plaintiff on this issue because it is an issue that arises in terms of its cause of action, namely in debt arising on the foreign judgment, so it would bear the onus. Your Honours will recall that this was just a summary judgment application but there was limited evidence given.
Secondly, we would rely on the principle that there is a presumption that foreign law is the same as Australian law at least in certain circumstances and in that respect we have cited Damberg v Damberg at tab 5.
GUMMOW J: Yes.
MR BLUE: We would submit that presumption ‑ ‑ ‑
GUMMOW J: We know about that.
MR BLUE: We would submit that that presumption would apply particularly here where we are dealing with a US common law system derived from the English common law and that the basic principles of joint entitlements derive from that law. But in terms of the domestic law I might just finish taking the Court to Australian Workers’ Union v Bowen. I took the Court to the judgment of Justice Starke. If I could take the Court to the judgment of Justice Dixon at page 589 about point 4 he held that:
If one of two creditors or claimants desired to put a joint right in suit, he might, upon giving a proper indemnity, be permitted by the common law courts to sue in the name of the other creditor or claimant as well as his own. But preparedness to afford a proper indemnity was a condition of his being allowed to proceed in their joint names.
Obviously, that is proceeding on the basis that joint claimants must join in the suit, albeit one can cause the other to be joined.
Then finally, Justice Williams dealt with the point at page 591. At about point 5 he said:
The order created a joint right in the defendants to be paid and a joint liability in the plaintiffs to pay the costs within the specified period . . . It was the defendants jointly and not severally who were the persons for the time being entitled to enforce the order as a final judgment against the plaintiffs within the meaning of s. 52 (j) –
Now, that ‑ ‑ ‑
HAYNE J: There was no want of parties here.
MR BLUE: No, your Honour, there was not. Can I ‑ ‑ ‑
HAYNE J: Your complaint is about the entry of separate judgments at trial?
MR BLUE: Precisely, your Honour.
HAYNE J: If you are right in your contention, there should have been a single judgment entered in favour of the two plaintiffs against your client for the whole sum. Is that right?
MR BLUE: Precisely, your Honour. We had objections to that course as well and they were made before Justice Gray at the outset, and in light of those objections to that course the plaintiffs did not persist with that application. Instead they sought the several judgments. I will just take the Court to two other authorities very briefly on the point. The first is ‑ ‑ ‑
HAYNE J: What disadvantage or consequence now follows from the entry of separate judgments in lesser amounts for the two plaintiffs? What is the practical consequence of what you say is the legal error that has been made at trial?
MR BLUE: Your Honour, the practical consequence is that the substantive law now in Australia is different as to events that might occur. For example, if the defendant should obtain a release from one of the plaintiffs in respect of a joint liability, that will operate as a release for both. This Court has held in an analogous situation in Australian Capital Television that that is the position of common law so, equally, if the defendant were to make a payment to one of the defendants, that would be a payment to both.
In Australia we have now certain substantive law consequences of the judgment, whereas in America there is a joint judgment. There might be payments in America, there might be a release in America with different consequences, so we really had a severance of the original liability and the position of the United States as compared to the position in Australia. But, with respect, we would submit that it would not matter if there were no practical consequences. It remains that the ‑ ‑ ‑
GUMMOW J: Well, it might at the level of a grant of special leave, you see?
MR BLUE: Well, yes. I ‑ ‑ ‑
HAYNE J: It is a proceeding which seems to have occupied the courts of South Australia from either December 2002, or perhaps December 2003, through much of 2004. I mean, really.
MR BLUE: Indeed, your Honour. And that ‑ ‑ ‑
HAYNE J: On a summary judgment application.
MR BLUE: Indeed, your Honour, and that was the plaintiff’s doing in the manner in which they prosecuted it and really a consequence of the plaintiff seeking summary judgment rather than letting the matter proceed to trial.
HAYNE J: The summary judgment application seems to have taken about 20 days.
MR BLUE: I understand there was a hearing on 20 separate days. I do know how much of each day was taken.
HAYNE J: No.
MR BLUE: And indeed, our Full Court in Wicklow v Doysal had criticised the use of the summary judgment procedure in circumstances where it does involve an extended hearing.
Can I just take the Court briefly to one other case on our list. I think it was sent separately to the Court. It is Australian Securities Ltd v Western Australian Insurance Co Ltd (1929) 29 SR (NSW) 571, a very succinct passage at 572 ‑ ‑ ‑
GUMMOW J: Tab? Is this in ‑ ‑ ‑
MR BLUE: No. It is not actually in the book, your Honour, but I understand that it was sent by facsimile separately to the Court.
GUMMOW J: Yes, we have it.
MR BLUE: If I could just take the Court to page 572 at about point 4 where the acting Chief Justice said:
The defendant objects that that declaration sets out a joint agreement, an agreement with the plaintiff and others jointly, and not an agreement upon which he is entitled to sue severally. The whole question for us is a question of construction, whether the agreement is a joint or a several agreement. If it is clearly joint, then the plaintiff has no several right of action. If it is clearly several, then he is entitled to sue.
That succinctly puts the point, we say, of Australian law and it is our submission that the Full Court was wrong in taking ‑ ‑ ‑
HAYNE J: Do the Rules of Court of South Australia say anything about the enforcement of a judgment in favour of joint plaintiffs and, in particular, severance of that joint judgment?
MR BLUE: No, they do not. As far as I know, your Honour, they do not deal with the enforcement of a joint judgment. They do deal with joint entitlements and they say that prima facie, where there is joint entitlement, all plaintiffs must be joined but there are circumstances in which there can be dispensation from that. Those circumstances usually involve the person jointly entitled being joined as a defendant so that they are bound by the result. So that is our first point.
Our second point is in relation to the question of onus on summary judgment applications. It is our contention that Justice Gray, and in turn the Full Court in upholding his reasons, erred and held that in the summary judgment application under rule 25.02 that there is an onus on the defendant in the first instance in circumstances where ultimately at trial the defendant would bear the onus of proof. In that respect, there is now conflict between a number of decisions of the Full Court of this Court culminating in Settlement Wine Co on the one hand and the decision of the Full Court in this matter on the other. The decision in Settlement Wine Co is at tab 6 of our book.
GUMMOW J: Was the Full Court referred to these other decisions?
MR BLUE: They were and, indeed, your Honour, in our submission, completely misread them because the Full Court cites Settlement Wine Co and quotes a passage but then proceeds to do the exact opposite. The passage in Settlement Wine is at page 152. This is a judgment of Chief Justice King with whom Justice von Doussa concurred. After referring to earlier decisions in Bellas v Kipouros and Wicklow Enterprises in which it had been held that a defendant had no onus on an application such as under rule 25.02, the Full Court went on to deal with the facts of that case. The facts were that it was a claim by an insured against an insurer for damages suffered in a fire. The insurer’s answer was that it was arson. The fire was lit by the insured. The question then arose as to who bore the onus of proof in respect of that. The Full Court held that the onus of proving that the circumstances ‑ ‑ ‑
GUMMOW J: This is at page 51, is it not, of the application book?
MR BLUE: Yes, it is, your Honour. I will read from that part. The Full Court ‑ ‑ ‑
GUMMOW J: They set out what Chief Justice King said in Settlement Wine.
MR BLUE: That is right.
GUMMOW J: And they said “A similar situation prevails in this case.”
MR BLUE: Yes. What they went on to hold at line 35 was:
The onus of proving fraud lay on the appellant. He was required to produce evidence raising a triable issue.
What they held was that the plaintiffs, in this the case the respondents, had no onus at all and in this case they did not introduce any affidavit evidence proving service. There was no evidence before Justice Gray proving service and the Full Court held that in those circumstances the onus was entirely on the applicant, whereas Justice King had held that the onus lay, on a summary judgment application, on the plaintiff, even where the substantive onus of proof at trial would lie on the defendant. He held that clearly where he said that:
So, although the onus of demonstrating that there was no triable issue lay on the respondent, the only potentially triable issue was one in respect of which the onus of proof lay on the appellant. I consider that in those circumstances but slight evidence would be required from the respondent. A statement in an affidavit by a director in quite general terms to the effect that to the best of the deponent’s knowledge and belief there was no substance in the allegation would be sufficient to cast an onus on the appellant ‑ ‑ ‑
GUMMOW J: Yes, we have read that, Mr Blue. The red light is on I see.
MR BLUE: Thank you, your Honour. May the Court please.
GUMMOW J: Thank you. Yes, Mr Wells.
MR WELLS: May it please the Court. I propose to address firstly a question of the form of the judgment. In that respect could I ask your Honours to turn the application book to page 64 in the judgment of Justice Bleby and the Full Court and paragraph 82 where his Honour on behalf of the court expressed his conclusion in relation to the form of the judgment. Your Honours will see there that it starts by saying:
Either plaintiff could have sued the defendant individually in this Court for whatever portion of the judgment, otherwise enforceable by this Court, that that plaintiff might elect to recover.
I will not read the rest of the passage but the rest of that paragraph develops the point. Your Honours, the complaint from the point of view of conflict of laws that is raised on behalf of the applicant as it appears in their outline and, in particular, in that respect at page 75 of the application book ‑ ‑ ‑
GUMMOW J: Is that first sentence of paragraph 82 fully accurate?
MR WELLS: Your Honour, that is what I propose to address, your Honour. For the purposes of the case as it developed before the court, it is, in our respectful submission. Can I put it this way? Putting aside for the moment the issue of whether the form of the judgment can be challenged as being defective by Californian law – and there is well‑established authority now for the proposition that a foreign judgment is inviolable both as to fact and law – by putting that aside, the first point to be made is that in the Supreme Court the plaintiffs, my clients, were not enforcing the foreign judgment. They were enforcing a South Australian obligation which was based on the judgment of the foreign court exercising its international jurisdiction.
CRENNAN J: That is to say, enforcing a debt?
MR WELLS: That is right, your Honour.
CRENNAN J: Arising out of the judgment?
MR WELLS: A debt and let us say for present purposes and for the sake of argument that that constituted the plaintiffs as joint creditors in their action in the South Australian court. It was not necessary for both of the joint creditors to seek to enforce the obligation created by the foreign judgment. It was only necessary for both of them to be before the court in one way or another and it was not necessary once they were there, whether as plaintiffs in the South Australian court or as a plaintiff and a co‑defendant, as sometimes happens when the plaintiffs are not ad idem, it was not necessary for all the relief to be granted to both creditors. Can I put this proposition ‑ ‑ ‑
HAYNE J: Can I just go back a stage? The Californian judgment is reproduced at page 6, is it not? In its terms it appears to be a joint and several judgment, is that right?
MR WELLS: Your Honour, there is, we have to say, ambiguity about that. Your Honour is quite right in saying that it expresses itself at one point in terms of joint ‑ ‑ ‑
GUMMOW J: Well, line 55 on page 6, “jointly and severally”.
MR WELLS: On page 6 of the application book?
GUMMOW J: Yes, line 55:
it is hereby ordered … that Plaintiffs … shall recover from Defendants … jointly and severally ‑ ‑ ‑
MR WELLS: Yes, your Honour. The ambiguity arises in this respect, that is that there were a number of defendants and therefore when one looks at the complete judgment, only part of which is set out on page 6 of the application book, but I understand that my learned friend has provided a full copy of it in the extra materials that he has provided – I am told it is tab 9. On the second page of the sealed order your Honours will see that it provides:
IT IS HEREBY ORDERED, ADJUDGED, AND DECREED that Plaintiffs –
identifying them –
shall recover from Defendants –
identifying them –
jointly and severally, the sum of ‑ ‑ ‑
HAYNE J: What is there that reveals whether the judgment obtained by those two plaintiffs was to be treated as a judgment in their favour jointly or a judgment in their favour severally, or both?
MR WELLS: Your Honour, only that phrase and this, that the court in California was considering a claim by two plaintiffs who were prosecuting their separate causes of action and that if the judgment in the Californian court is to be the subject of any construction it would be understood in that way, because it was not a joint cause of action that was being prosecuted in the Californian court but separate causes of action. If the consequence of that is that the plaintiffs become entitled to a judgment, whether it be said jointly and severally or severally, then, in our respectful submission, no shadow of criticism can be raised against the course that was adopted and followed in the Supreme Court.
The only issue that arises is if as a matter of construction of the Californian judgment it is to be concluded that what strangely, and perhaps unpredictably, it is to be understood as meaning is that the plaintiffs, albeit prosecuting separate causes of action in that court, are granted a joint judgment. So the submissions that I am addressing to your Honours at the moment is upon an assumption which I make against us. The assumption that we make against us is that, as my learned friend is putting it, it was, as I say, strangely to be understood as a judgment in favour of the plaintiffs jointly and not in favour of the plaintiffs severally, hence the submissions that I am presently putting. But, as I say, if the construction is otherwise, then our respectful submission is that the judgment in the Californian court operates at the one time perhaps less favourably to the defendants since it would seem then that ‑ ‑ ‑
GUMMOW J: Is there any expert evidence from a Californian lawyer as to how these orders work?
MR WELLS: No, there was not, your Honour. There was none. There was no expert evidence to the position in Californian law, either as to the judgment or as to the form of the judgment.
GUMMOW J: Yes, Mr Wells.
MR WELLS: Your Honours, what we would say is that if this is to be interpreted as a judgment in favour of the plaintiffs severally then the complaint raised by the applicant might, in the first instance, be actually more understandable since it would then entitle each of the plaintiffs to enforce separately a judgment for the full amount, which would be more than what they had claimed. But in the Supreme Court the ability of each plaintiff to bring a separate claim because they had a separate right resulted in their being able to enforce that right to the extent that they desired. By enforcing the right existing severally in each, only to the extent of their claim, they were in fact conferring upon the applicant a benefit which the judgment, if so interpreted, would not have conferred.
So, not only is there no detriment to the applicant in that event, but there is actual benefit because they are put less at risk under the judgment than the Californian judgment places them. If, on the other hand, we are construing the Californian judgment as conferring a joint right on the plaintiffs, thereby creating them joint creditors, your Honours, then that itself confers no detriment upon the applicant. The plaintiffs, either jointly or one or other, can only enforce that judgment to the extent of the total, and not to the extent of two totals, and the only thing that is missing on its face in the Californian judgment, if it be joint, is any agreement between the plaintiffs as to the way in which the proceeds of execution would be apportioned between them.
Your Honours, let us suppose that in the Supreme Court the court made an order enforcing the judgment on conflict of laws principles and one order, that is an order for the full amount in favour of the plaintiffs jointly, but let us suppose that the plaintiffs had between themselves agreed upon an apportionment of that judgment. There would be nothing, if the plaintiffs were so disposed, to prevent the plaintiffs in securing the order also to guard their own interests in that respect by securing one order as against the defendants but, as between themselves, either cross‑injunctions or cross‑stays in order to ensure that each only became entitled to a portion of the total judgment which was theirs.
Your Honours, what has happened is that, effectively, instead of one judgment with cross‑injunctions and cross‑stays as between the plaintiffs, there have been simply two judgments which do two things: recognise and enforce the judgment as against the applicant but at the same time recognise and enforce the apportionment agreement as between the plaintiffs. In that way, in our respectful submission, the result is actually a result which benefits the applicant and certainly confers upon them no detriment and it was a course that was capable of being followed under rule 25.03 which specifically entitles a plaintiff on a summary judgment to seek and to enforce part only of any relief claimed.
Can I conclude, your Honours, by making a short submission on the onus point, which my learned friend addressed, and in that respect ‑ ‑ ‑
GUMMOW J: The Settlement Wine point?
MR WELLS: Yes, if your Honour pleases. At application book page 51 is set out, really, the Full Court consideration of the point. Your Honours, at the risk of repeating what is there, in our respectful submission, the Full Court correctly applied the principles in relation to rule 25. The Full Court correctly concluded that the onus lay upon the plaintiff, my client, to show that there was no triable issue and it applied that but, as Chief Justice King said, in the passage which is cited from Settlement Wine at page 51, line 19, the matter has to be approached carefully when what is raised is a positive defence. In this case a positive defence was sought to be raised, I might add not on the affidavit at all but by submissions. It was sought to be put by reference to affidavit that there was evidence of a fraudulently obtained judgment by reason of the perjury of the process servers.
The process server’s evidence was not necessary in order to recognise and enforce the Californian judgment in this court but it was referred to with a view to try to establish such a defence. What the Full Court said, following Chief Justice King, was that where there is a positive defence then the defence has to be at least brought forward in order for the plaintiff then to discharge the onus that remains on it of showing that there is no triable issue.
The Full Court expressed that at paragraph 34 in terms of an evidentiary onus, but both the primary judge, Justice Gray, and the Full Court concluded by an examination of the material, which included the affidavit evidence and the cross‑examination of the applicant and the findings of the primary judge in relation to that cross‑examination, that nothing had been brought forward sufficiently to require the plaintiff to turn around and show no triable issue.
In that respect, the plaintiff’s onus had been discharged as a consequence and the working out of the well‑understood principle and the well‑understood existence of the onus in relation to a positive defence resulted in a correct view, in our respectful submission, of the way in which to apply the onus. The applicant had failed to produce sufficient to even require the plaintiff then to discharge the ultimate onus that lay on them of showing no triable issue, which is another way of saying that even on the evidence as brought forward by the applicant there was nothing there that suggested a triable issue. In those circumstances, our respectful submission is that the onus was properly discharged…..have seen that in relation to the facts themselves the Full Court took the view in any event that the fraud that was necessary to be showed was a fraud in which the plaintiff was shown to be complicit but ‑ ‑ ‑
GUMMOW J: We do not need to hear you any further on fraud, Mr Wells.
MR WELLS: If the Court pleases. Those are our submissions then. May it please the Court.
GUMMOW J: Yes, thank you. Yes, Mr Blue.
MR BLUE: Thank you, your Honour. We have two points in reply. The first is as to the question of the effect of the US judgment which is at tab 9 of our book. It is our submission that it is not tenable to construe that judgment as anything but creating joint entitlement in the plaintiffs, firstly, because the words “jointly and severally”, appearing at line 17, appear after and clearly qualify the names of the defendants. That is it is clear that it is the defendants’ liability which is specified to be joint and several; it is not the plaintiffs’ entitlement.
Secondly, under expressio unius, if it had been intended to be a joint and several or a several entitlement, then those words would have appeared after the names of the plaintiffs. Thirdly, it is inconceivable that the US court intended that there would be several judgments to the plaintiffs each in the sum of $2.6 million, ie, each plaintiff would get a judgment for $2.6 million. The only tenable construction is that the court is ‑ ‑ ‑
GUMMOW J: This is a default judgment. This was a default judgment, was it not?
MR BLUE: It was, yes, your Honour, but there is still some limited, apparently, judicial involvement in the granting of the default judgment because it involved damages. Much like our procedure, there was a pronouncement by a judge, but it is our submission that it is simply untenable to say that the court intended that there be a several judgment for the first plaintiff for 2.6 million which it could enforce and a several judgment for the second plaintiff for 2.6 million where it was only the total of the two claims that added up to the sum of 2.6 million.
The Court will see that the attorneys’ fees and the costs and the interest are all expressed in unitary terms, all flowing from the damages. But it is our submission that it is not tenable to construe the judgment as a several judgment as opposed to a joint judgment.
GUMMOW J: Why should we get involved in the invidious task of construing this instrument?
MR BLUE: Well, our submission is that this Court will not, if leave is granted, need to deal with that, that the plaintiff did not choose to lead any evidence to the effect that this would give rise to several liability and, further, that this Court would simply apply Australian law and this Court decided in Australian Workers Union v Bowen that where an order was made in favour of a number of parties then it would be treated as joint.
GUMMOW J: What do you say about Mr Wells’ further point that in the end what has happened is a result which makes practical sense, achieving immediately what otherwise might have to be achieved through cross‑litigation between the parties?
MR BLUE: Well, Mr Wells’ process of reasoning appeared to involve a torturous process of agreements or cross‑injunctions as between the plaintiffs. It is our submission that the law does not work that way. A defendant has a right that if the obligation is joint then the defendant has certain rights arising from that. For example, payments were made in the United States to the plaintiffs and yet those payments have not been credited against either of these two judgments, but the difficult question – or payments totalling $US26,000 were paid according to Justice Gray.
GUMMOW J: What were you debating for all these days before Justice Gray?
MR BLUE: As I understand it, a lot of it dealt with the collateral issue of whether security should be granted ‑ ‑ ‑
GUMMOW J: I see.
MR BLUE: ‑ ‑ ‑ and cross‑examination on that issue. That was the majority of the time. Aside from that, I understand there were a number of hearings, at least two hearings, on these issues, one in December and then one ultimately in August the following year.
GUMMOW J: Yes, all right. Thank you.
MR BLUE: May the Court please.
GUMMOW J: We will take a short adjournment.
AT 11.26 AM SHORT ADJOURNMENT
UPON RESUMING AT 11.31 AM:
GUMMOW J: Each respondent obtained judgment against the applicant for an amount which, if the applicant be correct, was less than the amount of judgment to which the respondents were jointly, but not severally, entitled against the applicant.
There being no exploration in the Supreme Court of South Australia of whether the judgment obtained in California created joint or several rights or joint and several rights, the questions of principle which the applicant would seek to agitate in this regard in this Court would be considered here upon an exiguous and insufficient factual foundation.
That makes the case an inappropriate one for grant of special leave to enter upon those matters. There are otherwise insufficient prospects of success upon the further ground urged by the applicant. Accordingly, special leave is refused with costs.
We will adjourn to reconstitute.
AT 11.33 AM THE MATTER WAS CONCLUDED
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