Pt Bayan Resources TBK v BCBC Singapore Pte Ltd & Ors

[2015] HCATrans 57

[2015] HCATrans 057

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
  Perth  No P44 of 2014

B e t w e e n -

PT BAYAN RESOURCES TBK

Applicant

and

BCBC SINGAPORE PTE LTD

First Respondent

KANGAROO RESOURCES LIMITED

Second Respondent

ATTORNEY‑GENERAL OF WESTERN AUSTRALIA

Third Respondent

Application for special leave to appeal

FRENCH CJ
HAYNE J

TRANSCRIPT OF PROCEEDINGS

AT SYDNEY ON FRIDAY, 13 MARCH 2015, AT 10.10 AM

Copyright in the High Court of Australia

MR B.W. WALKER, SC:   May it please the Court, I appear with my learned friend, MR P. KULEVSKI, for the applicant.  (instructed by Clayton Utz Lawyers)

MR A.S. BELL, SC:   If it please the Court, I appear for my learned friend, MR D.J. ROCHE, for the respondent.  (instructed by Herbert Smith Freehills).

FRENCH CJ:   Yes, Mr Walker.

MR WALKER:   Your Honours, the following aspects of this matter suggest the appropriateness, we submit, of a grant of special leave.  First is that the interpretation of the court rule in question is one that applies beyond the particular court.  It is the subject of what might be called national co‑operation; not federal co‑operation, national co‑operation.

The second thing is that the rule in question, in light of the statutory power held, it is common ground, to give power to make it, is one that does not travel beyond the correct understanding of the inherent jurisdiction of the court.  The next is that the aspect of inherent jurisdiction which would be at question concerns the power, the limit of power, that aspect of jurisdiction, authority to decide, in relation to an important connection ‑ ‑ ‑

FRENCH CJ:   What is the jurisdiction power analysis here?  I mean, the term “inherent jurisdiction” is used which is really a reference to court’s powers.

MR WALKER:   Yes, it is.  That is why it is important, in our submission ‑ ‑ ‑

FRENCH CJ:   How does this work in a federal jurisdiction analysis, because that is what the court is purporting to exercise?

MR WALKER:   Yes, in our submission, there is no explanation of how ‑ ‑ ‑

FRENCH CJ:   Where is the matter, I suppose, is the first question.

MR WALKER:   Or, what is the matter?  The matter is that there has been a determination of power to decide almost eschewing a search for limit or boundary.  Now, in our submission, that is quite at odds with the notion of jurisdiction in the sense of power to decide and the exercise of a federal jurisdiction where definition is at the heart of the matter.

FRENCH CJ:   So the first thing that happens in the Supreme Court of Western Australia is somebody turns up with an application for a freezing order.

MR WALKER:   And they say, this is an application for a freezing order in aid of that which may never happen and about which I cannot give any meaningful undertaking to commence, namely, an application under a federal statute for the registration and enforcement of a money judgment from a court of Singapore, being one of the countries whose money judgments have been adjudged by the Commonwealth Executive, to attract the reciprocity, which is the diplomatic basis of the combined legislative and executive decision at the level of the Commonwealth that there should be such a statutory, I will call it, cause of action, for the enforcement of a money judgment.

Now, that is, we submit ‑ and your Honours have read both the reasons below at both levels and our written submissions here ‑ we submit that that is an essential departure from what the Court has hitherto – this Court and any other appellate court in this country ‑ has seen as the necessary connection in order to justify what is the, I will call it, relatively new found freezing order jurisdiction.

HAYNE J:   Well, whether it is a departure, it is at least a step.

MR WALKER:   It is unquestionably a step to which it would be excessive politeness to say, a mere increment, scarcely noticeable.  This is a very large step because the contingency here is not, will they get their money judgment in Singapore.  That is the same contingency as applies when you seek a Mareva or freezing order for any cause of action not yet adjudicated in a domestic court.

Rather, the contingency is, could there ever be any jurisdiction, any substantive jurisdiction engaged in the Australian court.  The case presents as an ideal vehicle to test whether there is a limit to be seen in the repeated language, admittedly in cases that have never addressed this point ‑ that is why special leave should be granted – but the language hitherto from which the profession tries to find the law has always referred to the protection against accusations of futility or nugatory operation of the exercise of a substantive jurisdiction to quell a controversy in this Court ‑ in the court in question from which the relief is sought.  Now, by contrast, to go back to my catalogue of reasons why special leave is required ‑ ‑ ‑

HAYNE J:   Well, the point becomes, does it not, whether it is necessary that there be a controversy to quell as the pre‑condition for ‑ ‑ ‑

MR WALKER:   Quite so.  Now, here ‑ ‑ ‑

HAYNE J:   Now, that may be yes, may be no, but the question is, you say, important and nationally so.

MR WALKER:   Exactly so, and the difference we respectfully offer, without suggesting what the outcome ought to be, but the difference that is thrown up by this case is that hitherto the controversy has been about what I will call, I hope not tendentiously, the substantive rights and obligations between parties.  Does X owe Y money?  Here, on any view of it, indeed, the other side must embrace this, the substantive controversy is, should a foreign money judgment be registered and enforced and that does not sound substantive and ‑ ‑ ‑

HAYNE J:   Well, if a foreign money judgment is ‑ ‑ ‑

MR WALKER:   Ever arises.

HAYNE J:   ‑ ‑ ‑ given, should that judgment, if it is granted, be enforced.

MR WALKER:   That is right, and pursuant to a federal statutory scheme to which I will come in a moment.  Now, the next reason why, in our submission, this is ripe for special leave and would, regardless of the outcome, most usefully inform not only the application of but perhaps the reframing of court rules is, of course, that it relates to matters which are right at the heart of international commerce which itself is right at the heart of the economic life with which the court systems of this country ‑ ‑ ‑

UNIDENTFIED MAN:   Excuse me, I have been refused access to the Court.  I have been refused access to Court.

FRENCH CJ:   Now you ‑ ‑ ‑

UNIDENTFIED MAN:   What the hell is going on?

FRENCH CJ:   You will have to be ‑ ‑ ‑

UNIDENTFIED MAN:   I am a strong Australian.

FRENCH CJ:   You will have to be quiet.

UNIDENTFIED MAN:   I want access to Court.  They will not allow me to take an action in Court.

FRENCH CJ:   The Court will now adjourn.  This person must be removed from the Court.

AT 10.17 AM SHORT ADJOURNMENT

UPON RESUMING AT 10.33 AM:

FRENCH CJ:   Well, Mr Walker, we might hear from Mr Bell.

MR WALKER:   If it please the Court.

FRENCH CJ:   Not that your time is being overtaken.

MR BELL:   That worked well.  Your Honours, might I begin first with just addressing the three points my friend made?  First he said, his first point was, the case involves a question of interpretation of a rule in a national scheme.  No question of interpretation of the rule arises.  The rule is in clear terms and the criteria required to be satisfied were established and not challenged.  So, no question of construction or interpretation of the rule arises.

The second point with regard to inherent jurisdiction ‑ the way that arose in the present case is this. Order 52A makes it clear in subparagraph 6 that nothing in the rule detracts from the inherent jurisdiction, and then in relation to the rule‑making powers in the Supreme Court of Western Australia, so it was not section 17 of the Foreign Judgments Act but the independent rule‑making powers in Western Australia, consistent with some Western Australian Court of Appeal authority.  The extent of that power was said to be co‑extensive with the inherent jurisdiction.

So, his Honour Justice Le Miere and the Court of Appeal said it can be considered as a question of inherent power which has the same content as the rule‑making power expressly conferred on the Supreme Court of Western Australia, and the Foreign Judgments Act then contemplates that the Supreme Court money judgments will be enforced in the Supreme Courts and the Supreme Court rules will may kick in, may kick in, because what is being done by this rule is in aid, not of the prospective Singapore judgment, but is in aid of and incidental to the prospective enforcement of a Western Australian judgment because the foreign judgment on registration is given the effect of a judgment of the Supreme Court of Western Australia and then it is enforceable throughout Australia et cetera.

The reason why one focused on the inherent power and the reason why there is absolutely nothing surprising or wrong as a matter of principle in their Honours’ analysis is because the inherent power has been identified really from the beginning of Mareva or a freezing order jurisprudence in this country as the source of power.  The broad power to make rules, exercise powers in support of “the administration of justice”, a very broad phrase, and that is picked up in the New South Wales Court of Appeal decision in Riley v McKay which was then in turn picked up by the High Court in Jackson v Sterling Industries right through Cardile.

It was the same inherent power that this Court drew upon in Cardile to extend or consider whether there was power to restrain the dissipation of assets of a third party, a person who is not party to any substantive dispute.  One also has, if one considers the question of principle, two very well‑established categories of case, where there is no existing proceedings on foot.  So, the power has often been exercised and held to exist validly in circumstances where no court proceedings, whether in Australia or elsewhere, have even been commenced.  Freezing orders can be granted, and are granted, when the requisite facts are established urgently in anticipation of the commencement of some subsequent proceedings.  Similarly ‑ ‑ ‑

HAYNE J:   Commonly on the undertaking to commence those proceedings.

MR BELL:   Yes, quite.  Also, the power has been exercised ‑ and there are cases which are referred to in the judgments ‑ in the arbitration context where ex hypothesi there are no proceedings on foot in a court.  The court’s jurisdiction has not been engaged, but what is anticipated is if the award pans out in favour of the moving party, and it may not ‑ of course, it may not, that is the whole point about this, it is necessarily proleptic ‑ but if it does, that award will then be sought to be enforced under the commercial arbitration enforcement mechanisms, which are wholly analogous, we would say, as a matter of principle, with the Foreign Judgments Act.  It is a process effectively of registration or enforcement of the award, registration of the foreign judgment. 

Now, Justice Brennan said in Jackson v Sterling Industries in the passage we have picked up, and his Honour Justice Buss and the Court of Appeal picked up, he described the jurisdiction or the power, if you like, to grant a freezing order as incidental ‑ “incidental”, that was his word ‑ to the jurisdiction of the court to give judgments and see that those judgments are enforced and not frustrated and that is necessarily always prospective.

There is never any guarantee in a Mareva or a freezing order case that the judgment, if it has not yet been decided ‑ I mean, you can, of course, have Mareva post‑judgment, but it is also very common and, indeed, probably more common to have them pre‑judgment and sometimes even pre‑commencement, and in those circumstances, there can be no undertaking given.  There is no guarantee, as Justice Murphy pointed out, there is no distinction between a domestic and a transnational case in this context because there is no guarantee that the plaintiff will ever succeed so it is all necessarily proleptic, but that has never been seen as a problem.

HAYNE J:   Now, does this case take a step that has not been taken before?

MR BELL:   It does not take a step that has never been taken before in common law cases ‑ ‑ ‑

HAYNE J:   No, in this country.

MR BELL:   No, it is not novel in this country, no.  There is a decision of Justice Campbell in a case Davis v Turning ‑ Justice Campbell of the Supreme Court of New South Wales in 2005.  That was applied by Justice Hasluck in Celtic Resources, a decision in the Supreme Court of Western Australia.  In a case called Severstal, which came up to this Court, and your Honour, I think, certainly the Chief Justice sat on the special leave application and special leave was refused, that was precisely the same paradigm as this case and in that case there were proceedings on foot in India which had not come to judgment.

There was a desire expressed and evidence accepted and established that the moving party in India would seek to enforce against some assets in Australia, being shares in an Australian company.  Exactly the same pattern, if you like, or permutation of facts, parties, both foreign parties, and freezing of it was granted by Justice Sackar, upheld in the New South Wales Court of Appeal and special leave refused.  That is the decision in Severstal which is referred to at page 108 in the application book at paragraph 165, and your Honours will see the references to Davis v Turning Properties in paragraph 157 and following and Celtic Resources in 161.

In other common law jurisdictions, to answer your Honour Justice Hayne’s question, as Justice Buss noted, a number of jurisdictions ‑ page 104 of the application book, 149, Lord Nicholls’ speech in Mercedes Benz and the reasoning which goes exactly to this jurisdictional point, is there power, and Mercedes Benz was coming from Hong Kong, not England, so it was not depending on the Supreme Court Act ‑ drawing on Lord Nicholls, orders of this kind have been made in those jurisdictions ‑ you see Jersey, the Isle of Man, British Virgin Islands and Cayman Islands.

Now, they are small jurisdictions but it is not surprising that those jurisdictions would have a vibrant Mareva practice, for reasons that your Honours may appreciate.  Then your Honours will also see that the Privy Council dealt with the same question at paragraph 147 on page 103 in Walsh v Deloitte, a decision which came up through the Bahamas.  So, your Honours, it is correct, the High Court has not looked at this factual pattern.  It had the opportunity in Severstal but special leave was refused.

Now, the Chief Justice raised the question about federal jurisdiction.  That was not a point taken, or the focus of contest by our friends, and Justice McLure, the President, records that in her Honour’s at application book 73 at paragraph 36.  Her Honour raised the federal jurisdiction point in her Honour’s reasons and said at the end of the paragraph:

This was not subject of submission by the parties, probably because (as we shall see) all roads lead to Rome.

Now, I want to use that evocative phrase to make ‑ ‑ ‑

FRENCH CJ:   I suspect if Justice Gummow were here, he would be saying, we need to know what kind of jurisdiction we are exercising.

MR BELL:   Well, yes, no doubt, and no doubt my friend, Mr Walker, will be chastised for not taking the point.

FRENCH CJ:   Justice McLure, for example, referred to section 79 as picking up the inherent jurisdiction in the Supreme Court.

MR BELL:   Yes, and your Honour will find no criticism in my friend’s written submissions of that aspect of her Honour’s ‑ or in the grounds of appeal and, of course, it does not ‑ ‑ ‑

FRENCH CJ:   It might be thought that the notion of the question of how the power to grant a Mareva injunction, in effect, fits within the framework of federal jurisdiction conferred in this case.

MR BELL:   Well, your Honour, there is one very simple answer which emerges from the reasoning, although not expressed under the heading of federal jurisdiction.

FRENCH CJ:   Yes.

MR BELL:   All judges, all four judges, Justice Le Miere at first instance and the three, agree that the rule is authorised by section 17 of the Foreign Judgments Act and so there is no ‑ in our submission, to understand the authority, or source of power to make the rule, that derives, and we would say derives from other sources as well, but to the extent the Court has a concern or an interest in the federal jurisdiction matter, it is wholly answered, in our submission, by the concurrent findings in relation to section 17, and section 17 is ‑ ‑ ‑

FRENCH CJ:   That is a matter going to the power to make the rule.

MR BELL:   Quite, but ‑ ‑ ‑

FRENCH CJ:   When is the jurisdiction engaged?

MR BELL:   The jurisdiction is engaged by the making of an application.  There is a dispute between the parties, that is, the underlying commercial dispute which happens to be being litigated in Singapore, just as it could happen to be being arbitrated, whether in New South Wales, Western Australia or Singapore.

So, there is a dispute, there is a matter.  There is, in terms of nexus then, the terms of the rule make it very plain that various criteria have to be satisfied, including the court needing to be satisfied that, (a) the foreign judgment can be enforced in Australia and that was ticked; Singapore is a reciprocal country.  Secondly, that there is a sufficient prospect that a local Supreme Court would enforce that judgment, if given, and that was ticked and satisfied, and then, of course, there would have to be the ‑ I will put it more general ‑ freezing order requirements, a threat of dissipation and good prospects of success on the underlying dispute.

FRENCH CJ:   Well, you would say the relevant matter arises under the Foreign Judgments Act.  Is that right?

MR BELL:   Yes, yes.

FRENCH CJ:   Even at the point at which you are applying for the freezing order.

MR BELL:   Quite, and when one goes then to section 17 of the Act – and, of course, if 17 authorises the rule, any section 109 point absolutely goes away, it can scarcely be said that Order 52A, if authorised by the Foreign Judgments Act, is consistent with it.  I mean, that is just a basic problem and why the 109 point is, in our submission, weak to ‑ I will just say weak.

Section 17, your Honours, is a very broad rule‑making power. Your Honours find it in a number of places. It is in the legislative materials but it is also ‑ if your Honours have that bundle of legislative materials, it is section 17(1) and (2). Importantly, a couple of points we would make. One, it is non‑exhaustive and so the types of rules which can be made are set out in (a) to (e) but introduced by the word “including”, so it is a classic non‑exhaustive statement; and secondly, subsection (2) of section 17 makes it plain that it:

does not affect any power to make rules under any other law –

which in this case was why one can also look to section 167 of the Supreme Court Act (WA) et cetera, and section 16(1), I think, which are referred to as sources of the power to make Order 52A.  Now, your Honours ‑ ‑ ‑

HAYNE J:   All of that presupposes, ultimately, does it not, that there is an ‑ ‑ ‑

MR BELL:   Yes, but in our submission, your Honour, (a) it has never been suggested in terms that there was no matter and that was a clean answer.  The constitutional attack in this case was twofold, one based on 109, and there was a point taken at first instance but not pursued on the Court of Appeal about judicial power and that has not been pursued.  Never a point taken that there was no matter here.

But, in any event, your Honour, there plainly is a matter, as there is a matter when, for example, a quia timet ex parte injunction is sought, or, for example, when an Anton Piller order is granted, there may be no extant dispute in an Anton Piller, or as your Honour Chief Justice French held when sitting in the Federal Court, for preliminary discovery.  There is no difficulty about finding ‑ well, when I say there is no difficulty, your Honour held that there was no constitutional issue or problem with pre‑trial discovery.

Now, here we have plainly got a dispute between these parties.  There is undoubtedly a lis.  It is a major commercial dispute.  The circumstances arose because foreign judgments ‑ and that includes Singapore judgments and Australian judgments for that matter ‑ are not enforceable in Indonesia where the applicant has the vast majority of its assets.  It did, however, have some assets, namely, shares in an Australian company.

The Foreign Judgments Act, as is plain on its face but also as has been held by Chief Justice Bathurst, is designed to facilitate the enforcement of foreign judgments, and the rule here in turn is complementary, and I use complementary advisedly, to pick up the language from Shanahan v Scott about rule‑making powers, is complementary to that plain facilitative purpose.  Nothing could be, as Justice Buss pointed out, less likely to facilitate any meaningful jurisdiction to enforce foreign judgments than for the successful judgment creditor to engage the Foreign Judgments Act only to find that the Supreme Court which has the power to register and enforce lacks the power to prevent that Australian judgment, because that is what it becomes, that Australia judgment, from being frustrated by the removal of assets from this country.

Now, I can accept, as Justice Hayne has put to me, the High Court has not addressed a case of this kind, but we have four very strong judgments; Justice Le Miere in particular at first instance, and then Justice Buss, the leading judgment in the Court of Appeal, considering all the arguments, considering extensively the jurisprudence, both Australian and overseas and not just Australian in this context, so Davis and Celtic et cetera, but also ‑ ‑ ‑

HAYNE J:   Those are arguments for us saying that the decision below is plainly right.

MR BELL:   That is right.

HAYNE J:   The question becomes then whether a special leave Bench should do that or it should go into a Full Court.  You say it is plainly right, that is controverted.  Should it go into a Full Court?

MR BELL:   All these transnational matters are interesting, almost by virtue of their subject matter, but that is not the criteria.  That is not the criteria ‑ ‑ ‑

HAYNE J:   Not for me, Mr Bell, not for me anymore.

MR BELL:   Well, all right.  Well, very well, your Honour.  Your Honour probably will not be bothered by this case if special leave is granted because of the passage of time.  But, your Honour, what your Honour put to me is absolutely right, it lacks sufficient prospects.  Even if it be perceived to be an important question, it lacks sufficient prospects because what one had in the judgments below, as I was saying, is not just consideration of cases with the same fact pattern but also a rigorous examination of the principles.  The foundation from Riley v McKay is picked up in Jackson v Sterling Industries about the administration of justice.

The notion that this jurisdiction is incidental to the power to enforce and execute judgments ‑ tick both of those boxes.  The flexibility of the jurisdiction and the fact that in this area, consideration such as undertakings et cetera are conditioned as a matter of discretion ‑ conditioned as a matter of discretion.  There were a number of discretionary points taken at first instance, including that it is a foreign judgment and may never be enforced et cetera, but those discretionary arguments ‑ or another one was, we can get one in Singapore, so you do not need to get one here.  Of course, the assets are here so that is why we are here.

FRENCH CJ:   Time is up, Mr Bell.  I am sorry.

MR BELL:   Thank you, your Honour.  That is right.

FRENCH CJ:   There will be grant of special leave in this matter.  Time estimate, Mr Walker?

MR WALKER:   Probably a day, your Honour.

MR BELL:   I think so.

FRENCH CJ:   Yes.  There is a set of proposed time directions and it is possible the matter may be listed for May.  Justice Hayne, of course, does not retire until June.

AT 10.54 AM THE MATTER WAS CONCLUDED