Singh v Kaur Bal [No 3]
[2012] WASC 243
•4 JULY 2012
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS
CITATION: SINGH -v- KAUR BAL [No 3] [2012] WASC 243
CORAM: EM HEENAN J
HEARD: 25 JUNE 2012
DELIVERED : 4 JULY 2012
FILE NO/S: CIV 1264 of 2006
BETWEEN: SARDUL SINGH
Plaintiff
AND
TEESHALDIP KAUR BAL
First DefendantMAN MAHAN SINGH
Second DefendantSATWANT KAUR
Third Defendant
Catchwords:
Applications for committal for contempt - Alleged noncompliance with judgment and orders of court - No express order or prohibition in judgment in relation to conduct alleged - Whether implicit prohibition by judgment of conduct alleged - Judgment and orders relating to real property in Malaysia - Subsequent proceedings commenced by defendants in Malaysian courts to challenge efficacy in Malaysia of orders and instruments resulting from judgment - Ambiguity and uncertainty over effect of judgment in relation to conduct in Malaysia - Judgment and orders obtained without appearance by defendants - Failure by plaintiff to comply with undertaking given to Federal Magistrates Court when obtaining leave to proceed under the Bankruptcy Act 1966 (Cth) - Failure by plaintiff to comply with undertaking unexplained and unremedied - No application for leave to appeal pending - Alternative application by plaintiff to amend terms of judgment - Judgment unable to be varied except on appeal - Requirements for contempt of court - Disobedience of court orders - Conduct calculated to frustrate implementation of court orders - Significance of availability of jurisdiction for antisuit injunction - Significance of foreign proceedings - Plaintiff's appearance in and consent to orders in Malaysian court
Legislation:
Bankruptcy Act 1966 (Cth), s 53
Result:
Applications for committal for contempt dismissed
Category: A
Representation:
Counsel:
Plaintiff: Mr A P Hershowitz
First Defendant : Mr S S Sandhu
Second Defendant : No appearance
Third Defendant : Mr S S Sandhu
Solicitors:
Plaintiff: Eapon Carlose
First Defendant : S S Sandhu
Second Defendant : No appearance
Third Defendant : S S Sandhu
Case(s) referred to in judgment(s):
ACCC v Collings Construction Co Ltd (Unreported, NSWSC, BC 9702850 2 July 1997)
Advan Investments Pty Ltd v Dean Gleeson Motor Sales Pty Ltd [2003] VSC 201
ANZ Banking Group Ltd v Merribee Pastoral Industries Pty Ltd (1998) 84 FCR 367
Autodesk Inc v Dyason [No 2] (1993) 176 CLR 300; [1993] HCA 6
British South Africa Co v Companhia de Moçambique [1893] AC 602
Burrell v The Queen [2008] HCA 34; (2008) 238 CLR 218
Cameron v Cole (1944) 68 CLR 571; [1994] HCA 5
Coward v Stapleton [1953] HCA 48; (1953) 90 CLR 573
CSI Ltd v Cigna Insurance Australia Ltd (1997) 189 CLR 345
De L v Director-General, New South Wales Department of Community Services (No 2) (1997) 190 CLR 207; [1997] HCA 14
Eastman v The Queen [2008] FCAFC 62
Exhibit and Publishing Pty Ltd v Consolidated Business Media Pty Ltd [2006] WASC 26
Isaacs v Robertson [1985] AC 97
Jendrell Australia Pty Ltd v Kesby [1983] 1 NSWLR 127
Leslie v GE Commercial Corporation (Australia) Pty Ltd [No 2] [2009] WASCA 28
Matta v The Queen [2011] WASCA 2
Neath Canal Company v Ynisarwed Resolven Colliery Company (1875) LR 10 Ch App 450
Pelechowski v The Registrar of the Court of Appeal (NSW) (1999) 198 CLR 435; [1999] HCA 19
R v Metal Trades Employers Association; Ex Parte Amalgamated Engineering Union, Australian Section [1951] HCA 3; (1951) 82 CLR 208
Redwing Ltd v Redwing Forest Products Ltd (1947) 177 LT 387
Ricketts v Mornington (1834) 7 Sim 200; 58 ER 813
Rubie v Rubie (1911) 13 CLR 350; [1911] HCA 71
Singh v Kaur Bal [2008] WASC 62
Singh v Kaur Bal [2011] WASC 303
Singh v Kaur Bal [No 2] [2010] WASC 69
Singh v Official Trustee in Bankruptcy [2007] FMCA 1367; 214 FLR 84
Singh v Official Trustee in Bankruptcy [2008] FMCA 521
Singh v Official Trustee in Bankruptcy [2011] FMCA 677
Singh v Singh [2009] WASCA 53
Societe Nationale Industrielle Aerospatiale v Lee Kui Jak [1987] AC 871
Stambulich v Ekamper [No 4] [2008] WASCA 189
State of Western Australia v Wallam [2008] WASC 117(S)
Webster v Southwark London Borough Council [1983] QB 698
Wilson v Bates (1838) 3 My & Cr 197; 40 ER 900
Woodward v Earl of Lincoln (1674) 3 Swans 626; 36 ER 1000
Young v Jackman (1986) 7 NSWLR 97
Yzerman v Schofield [2011] WASC 200
EM HEENAN J: By chamber summons filed by the plaintiff on 31 August 2011 and later amended on 16 November 2011 the plaintiff has sought, among other things, an order that the first and third defendants be committed to prison, or such other order or orders as the court deems fit and appropriate, pursuant to O 55 r 4(2) of the Rules of the Supreme Court 1971 (WA) for their contempt of the court orders dated 22 March 2010 read with the orders dated 9 July 2010 on the grounds set out in the notice attached to the summons.
There were two notices attached to that chamber summons each directed to the first and third defendants. As will be seen there are some shortcomings and inconsistencies in the plaintiff's documents and there is no record on file of the chamber summons in its amended form although there are some fiats suggesting that leave to amend was granted. Nor is it clear which of the notices by the plaintiff to the first and third defendants is the notice of the alleged contempt relied upon. Minor though these irregularities may appear in other circumstances they are capable of bearing a far greater significance in an application for committal of contempt of court where strict proof of compliance with all necessary procedures including clear and unambiguous identification of the alleged contempt is essential.
These are not the least of the plaintiff's shortcomings. Far more serious is the unexplained and as yet unremedied failure by the plaintiff to fulfil written undertakings given by his counsel to the Federal Magistrates Court of Australia when seeking and obtaining leave to proceed with this action against the second defendant, then a bankrupt, pursuant to s 53(3) of the Bankruptcy Act 1966 (Cth). These undertakings required the plaintiff to apply for leave to amend the statement of claim in this action and, in particular, the form of relief sought to recognise the interests of the Official Trustee as trustee in bankruptcy of the second defendant's estate. This failure to comply with the undertaking, compounded as it has been by a later amendment to the statement of claim in further disregard to the interests of the Official Trustee and other creditors of the second defendant, has led to a judgment being entered after default of defence in terms inconsistent with the undertakings and in disregard of the interests of the Official Trustee.
It is now conceded by the plaintiff that the terms of this judgment may require variation and an alternative form of relief sought, in a still later amended chamber summons, seeks a variation of the substance of the judgment to put it into a form which would satisfy the undertaking which was given to the Federal Magistrates Court.
This deplorable state of affairs, the responsibility which must rest solely on the plaintiff and his legal advisors at the time, poses a number of additional complications in the determination of the present application. These are:
(a)whether the fact that the final judgment of this court pronounced and entered on 22 March 2010 by Hasluck J which was later varied by order of Mazza J on 9 July 2010 pursuant to a liberty to apply, should be regarded for the purposes of the contempt applications as final and conclusive, notwithstanding that it was obtained and entered without compliance by the plaintiff with the undertakings given to the Federal Magistrates Court and in a form which, in the light of the circumstances now known may be in need of variation on appeal or otherwise;
(b)the application to have the first and third defendants committed for alleged contempt is brought by the plaintiff who is himself in contempt of court for failing to fulfil the undertakings in seeking, obtaining and attempting to enforce a judgment which is not in conformity with the undertaking given: Neath Canal Company v Ynisarwed Resolven Colliery Company (1875) LR 10 Ch App 450; and
(c)whether the final judgment of this court can now be varied, otherwise than on appeal, to conform with the requirements of the undertaking, as sought by the plaintiff's alternative claim for relief.
These issues are examined more fully later in these reasons. Important though they are they should not be permitted to obscure or deflect attention from the central issue in the current application, namely whether the commencement and prosecution by the first and third defendants of proceedings in the High Court of Malaysia, which relate to these present proceedings, constitutes a breach or disobedience of the terms of the judgment of this court as entered on 22 March 2010 and later varied by the order of Mazza J of 9 July 2010.
The resolution of that issue requires some familiarity with the extent of the considerable litigation between these parties.
Background
Regrettably the differences underlying this litigation stem from a family dispute leading to an action in the District Court of Western Australia and then to further litigation in this court to set aside property transactions entered into by the second defendant designed to defeat creditors and especially the plaintiff. The plaintiff and second defendant are brothers. The third defendant is the second defendant's wife and the first defendant is his daughter.
In 1998 the second defendant, as purchaser, entered into an agreement with Keprim Pty Ltd ('Keprim') to purchase an interest in a restaurant business. In January 2002 Keprim commenced proceedings in the District Court against the second defendant, for the balance of the purchase price of the business, namely the sum of $128,500 and damages. In September 2003 Keprim assigned its right, interest and title to that debt and cause of action to the plaintiff who was substituted as plaintiff in the District Court action. In July 2005 the plaintiff obtained a judgment in the District Court action against the second defendant for $173,349 plus costs. It is the plaintiff's attempts to enforce that judgment against the second defendant which have, eventually, led to these proceedings.
Until September 2003 the second defendant had been the registered proprietor of land situated at No 2 Jalan Lim Swee Aun, Taiping, Malaysia (which the parties have referred to as 'the Malaysian property'). In September 2003 the second defendant transferred his interest in the Malaysian property to the first and third defendants. Furthermore, at material times the second and third defendants have been resident in Western Australia living at their home in Kinross (which they refer to as 'the Kinross property'). In about July 2003 the second and the third defendant transferred their interests in the Kinross property to the first defendant.
In June 2005 the plaintiff commenced other proceedings in this court (CIV 1009 of 2005) against all present defendants and another defendant seeking orders that the transfer of his interest in the Kinross property and certain other transfers were voidable as alienations of property made with the purpose and/or intent to defraud his creditors, and in particular the plaintiff, within the meaning of s 89(1) of the Property Law Act 1969 (WA). In so far as the action concerned the alienation of the second defendant's interest in the Kinross property it was successful. Beech J ordered that the transfer of the second defendant's interest in the Kinross property was voidable of the suit of the plaintiff under s 89 and gave related relief requiring the first defendant to pay certain monies to the Official Trustee as trustee of the bankrupt estate of the second defendant: Singh v Kaur Bal [2011] WASC 303. That judgment was entered on 11 November 2011 and is currently subject to a pending appeal.
In February 2006 the second defendant became bankrupt whereupon all his assets vested in the Official Trustee in Bankruptcy.
This present action was commenced by the plaintiff on 22 March 2006. By it the plaintiff sought to have declared void, under s 89(1) of the Property Law Act, the second defendant's alienation of the Malaysian property to the first and third defendants as a further alienation of property made for the purpose and/or intent of defrauding his creditors. The action was commenced after the second defendant had been made bankrupt and hence was instituted in disregard of the prohibition against commencing proceedings against a bankrupt in respect of a provable debt without leave of the court ‑ meaning the court in bankruptcy ‑ s 58(3)(b) of the Bankruptcy Act. Such leave may be sought and given retrospectively for proceedings already begun without knowledge of the bankruptcy. So it came about that the plaintiff applied, very belatedly, for leave to commence and continue these present proceedings against the second defendant, then a bankrupt, by application to the Federal Magistrates Court. Leave was granted by order of Federal Magistrate Lucev on 7 September 2007 but subject to specific undertakings which the Federal Magistrates Court required of the plaintiff and which were given in writing: Singh v Official Trustee in Bankruptcy [2007] FMCA 1367; 214 FLR 84. These were the undertakings already mentioned and details of which will be fully set out later. These were then embodied as conditions in the order granting leave on a nunc pro tunc basis.
It is sufficient to say at this point that the undertakings and conditions required the plaintiff to amend the statement of claim and the parties in this present action to give notice to the Official Trustee as representative of the bankrupt estate of the second defendant of the claim that in the event of the alleged fraudulent alienation of the Malaysian property to defeat creditors being held to be voidable, that the result be held for the benefit of the Official Trustee to be dealt with on behalf of the creditors of the bankrupt estate. As I have said already, those undertakings were given but not acted upon.
Challenge to jurisdiction
Following the service of the writ of summons in this action, the three defendants entered conditional appearances and applied by motion to set aside the writ of summons on the grounds that this court had no jurisdiction to hear the action. They also sought an order staying the plaintiff's action against the second defendant because of s 58 of the Bankruptcy Act. That led to the plaintiff's application to the Federal Magistrates Court for leave to commence and proceed in this action which was granted by Lucev FM as already stated. Consequent upon that development the defendants also applied for these proceedings to be dismissed or stayed on the basis that this court was a forum non conveniens.
The application to dismiss or stay the proceedings on ground of jurisdiction was based on the contention the subject matter of the litigation was land in a foreign jurisdiction and that in accordance with what is known as the 'Moçambique rule' this court did not have jurisdiction to entertain an action for determination of the title to, or right to, possession of any immoveable situated out of the jurisdiction: British South Africa Co v Companhia de Moçambique [1893] AC 602. That application was heard and dismissed by Master Sanderson on 29 April 2008: Singh v Kaur Bal [2008] WASC 62, essentially on the basis that the relief sought did not come within the ambit of the Moçambique rule and because all the defendants were present within the jurisdiction the court could act in personam against them and compel them to recognise the rights and entitlements of the plaintiff and other creditors to the Malaysian property if, indeed, the claim under s 89 of the Property Law Act succeeded.
The defendants sought and obtained leave to appeal to the Court of Appeal from that decision but their appeal was dismissed on 26 February 2009: Singh v Singh [2009] WASCA 53, the court consisting of Martin CJ, Pullin JA and Newnes AJA (as his Honour then was). The leading judgment of the Court of Appeal was given by Pullin JA with whom Martin CJ and Newnes AJA agreed. Essentially the court upheld the reasoning of Master Sanderson also concluding that the Moçambique rule did not apply and that this court had in personam jurisdiction over the defendants within this State. The court referred to a series of authorities at [23] ‑ [31] which demonstrated that for over 250 years courts of equity have exercised jurisdiction in personam in relation to foreign land against persons locally within the jurisdiction in cases of contract, fraud and trust.
In upholding the jurisdiction to entertain and determine the plaintiff's claim in this action, the Court of Appeal proceeded to deal with a further objection raised by the defendants, namely, that even if the plaintiff succeeded and obtained relief of the kind he sought resulting in orders being made by this court for the Malaysian property to be dealt with in a particular way such orders would not be, or would not necessarily be, enforceable under the law of Malaysia. It was not necessary for the Court of Appeal finally to determine that submission because the court was satisfied there was nothing in Malaysian law which would prevent the claimed decrees of the Western Australian court operating in Malaysia if that became necessary: Pullin JA at [49]. In the course of coming to that conclusion Pullin JA made certain observations about the expectations and obligations of the defendants to comply with orders or decrees which might be made by this court in the final determination of the action. Because the defendants place reliance on these dicta it will be necessary to return and examine them more closely once the essential issue of the nature of the alleged contempt has been more fully explained.
It is necessary to make one further observation about the decision of the Court of Appeal on the jurisdiction question because it gives further prominence to the undertakings given by the plaintiff to the Federal Magistrates Court in obtaining leave to proceed under the Bankruptcy Act. At [7] Pullin JA said of that procedure:
… Orders were made in the Federal Magistrates Court granting the [plaintiff] leave, nunc pro tunc, to commence and to take such steps as had already been taken in the Supreme Court action and to take any fresh steps in the proceedings on certain conditions, including that the [plaintiff] would not oppose the Official Trustee in Bankruptcy being joined in the proceedings at any time, and that the [plaintiff] would hold the property the subject of [the] Supreme Court proceedings or any moneys received in those proceedings for the Official Trustee in Bankruptcy on behalf of the bankrupt estate of the [second defendant].
As a result of the dismissal of their objections to the jurisdiction of this court to try and to determine this action, the defendants' conditional appearances became unconditional ‑ RSC O 12 r 6(2) so that the defendants became subject to the jurisdiction of the court ‑ at least so far as it extends. This may have consequences in a foreign jurisdiction if those defendants then seek to challenge any resulting judgment on the grounds of want of jurisdiction in a court in that foreign jurisdiction ‑ see Yzerman v Schofield [2011] WASC 200 [51] ‑ 54]. However, it is possible that the court may have in personam jurisdiction against defendants resident within its jurisdiction but may still not have in rem jurisdiction over a foreign immovable such as land situate in a foreign jurisdiction.
Events leading to judgment of 22 March 2010
By chamber summons of 24 June 2009 (that is after the jurisdiction appeal) the plaintiff sought leave to amend his statement of claim in the action to make extensive changes to the form of relief claimed. However, no changes were proposed to the allegations of fact contained in the body of the statement of claim itself. Among the changes were additions or variations to the claim for declarations that the transfer of the Malaysian property to the first and third defendants was void as against the plaintiff. The plaintiff then sought, for the first time, a declaration that:
…
(d)The first and third defendants as constructive trustees held and hold the said property on trust for the plaintiff.
(e)The first and third defendants are liable to account to the claim for all sums, if any, having a mortgage on the said property and loaned after September 2003.
…
(i)The plaintiff be at liberty to sell the said property by private treaty or public auction and apply the net proceeds thereof in satisfaction or partial satisfaction of the sum of $173,349 plus interest and costs payable pursuant to the judgment obtained in CIV 5 of 2002 all costs herein ordered to be paid by the defendants.
(j)The plaintiff account to the first and third defendants for all sums received by him from the sale of the said property and pay them the net balance remaining if any.
The defendants were not legally represented in this action at any stage until after the judgment of 22 March 2010. By 24 June 2009 the conditional order of the Federal Magistrates Court had been made. These proposed amendments were inconsistent with the undertakings given by the plaintiff when obtaining that order and with the conditions imposed upon the leave so granted. The application for leave to amend the statement of claim as sought was granted by Hasluck J on 12 October 2009 apparently without contest. It is enough to observe, at this point, that the relief claimed as so amended did not provide for any recognition of an interest in the Malaysian land, if the transaction were to be set aside as a fraudulent alienation, by the Official Trustee in Bankruptcy and sought to have conferred upon the plaintiff what was tantamount to a secured interest in the Malaysian property by the declaration of constructive trust and by the conferral of a power of sale over the Malaysian property with directions for payment from the proceeds to the plaintiff to satisfy the outstanding District Court judgment.
In due course the plaintiff applied for judgment in the action against the defendants in default of defence. Because of the requirements of O 22 r 7 of the RSC it was necessary for the application to come on as a motion for judgment. It came before Hasluck J on 22 March 2010 and although the defendants had notice of the application they did not appear. The application for judgment was primarily pursuant to O 22 of the RSC in default of defence but also under O 14 for summary judgment. In full and careful reasons for decision, Hasluck J concluded that the plaintiff was entitled to judgment and relief as sought in the amended statement of claim: Singh v Kaur Bal[No 2] [2010] WASC 69 and entered judgment accordingly.
The exact terms of the judgment are, of course, crucial to the present application. The judgment as entered is as follows:
1.The transfer of the second defendant's interest in the property at No 2 Jalan Lim Swee Aun, Birch Village 34000, Taiping, Perak, Malaysia, erected on lot number 1257, Mukim of Tupai, District of Larut, Perak, Malaysia, held under GM 632 to the first and third defendants in September 2003 was an alienation of property by the second defendant with intent to defraud his creditors within the meaning of s 89(1) of the Property Law Act1969.
2.The first and third defendants had, at the time of the alienation, notice of the second defendant's intent to defraud the plaintiff within the meaning of s 89(3) of the Property Law Act 1969.
3.The said transfer is void as against the plaintiff.
4.The first and third defendants as constructive trustees held and hold the whole of the said property on trust for the plaintiff.
5.The first and third defendants are liable to account to the plaintiff for all sums, if any, owing on a mortgage on the said property and loaned after September 2003.
6.The first and third defendants provide the plaintiff with a statement of account from the mortgagee of moneys owing on a mortgage, if any, on the said property at the time it was transferred to the first and third defendants, and any moneys thereafter loaned from or paid to the mortgagee.
7.The first defendant and/or third defendant do within 21 days from the date hereof pay the plaintiff or the said mortgagee all moneys owing on a mortgage, if any and loaned after September 2003 to enable the mortgage to be discharged.
8.Upon receipt from the plaintiff's solicitors of:
(i)A transfer document conveying to the plaintiff absolutely the said property and/or
(ii)An irrevocable power of attorney in favour of the plaintiff or his nominee in Taiping, Perak, Malaysia authorising the plaintiff or his nominee to discharge any mortgage, remove any encumbrance, give any occupant the requisite notice to vacate the premises, and sell the said property, the first and third defendants execute, in the presence of a duly authorised staff of the Malaysian Consulate in Perth, the said document or documents, and return the same, together with the duplicate certificate of title to the plaintiff's solicitors within seven days of receipt of the document or documents from the plaintiff's solicitor.
9.The plaintiff be at liberty to sell the said property by private treaty or public auction and apply the net proceeds thereof in satisfaction or partial satisfaction of the sum of $173,349 plus interest and costs payable pursuant to the judgment obtained in CIV 5 of 2002 and all costs herein ordered to be paid by the defendants.
10.The plaintiff account to the first and third defendants for all sums received by him from the sale of the said property and pay them the net balance remaining if any.
11.The defendants:
(i)do all other things and execute all other documents appropriate and necessary to give effect to the declarations/order herein, and
(ii)are hereby restrained from doing anything that will impede or hinder the property being made available to the plaintiff for the aforesaid purposes.
12.The costs of this action including any reserved costs, to be paid by the defendants to the plaintiff.
13.The plaintiff be at liberty to apply for further orders, if appropriate and necessary.
Subsequent variation of the judgment of 22 March 2010
By chamber summons of 10 June 2010 the plaintiff applied to vary the terms of the judgment of Hasluck J of 22 March 2010. I was informed at this hearing, without objection, that this application was made because of some actual or anticipated difficulties which were thought might arise from the documents referred to in paragraph 8 of the judgment being executed before the staff of the Malaysian Consulate in Perth. The basis for the application to vary the judgment was not identified. As far as it is possible to tell, it seems to have rested upon the liberty to apply contained at par 13 of the judgment itself. This application for variation came before Mazza J in chambers on 9 July 2010 and on this occasion the defendants were represented by counsel. The variation to the judgment was made as sought and the order of Mazza J of 9 July 2010 is in the following terms:
1.The judgment herein dated 22 March 2010 be varied by deleting order no 8 and substituting therefor the orders following.
2.Upon receipt from Eapon Carlose, the plaintiff's solicitor, of an Irrevocable Power of Attorney in triplicate, the copy of which is attached to the plaintiff's Supplementary Submissions dated 8 July 2010, pertaining to the property with a house erected thereon, at No 2 Jalan Lim Swee Aun, Birch Village 34000, Taiping, Perak, Malaysia, held under GM 632 lot number 1257, Mukim of Tupai, District of Larut, Perak, Malaysia, the first and third defendants do execute, in the presence of a Notary Public in Perth and in accordance with directors of the plaintiff's solicitor, the three copies of the Power of Attorney, and return the same, unamended and duly executed, together with the duplicate Certificate of Title the said property to the plaintiff's solicitor no later than 4.00 pm 30 July 2010.
3.The plaintiff be at liberty to apply for further orders if appropriate and necessary.
4.There be no order as to costs.
It is now accepted by the plaintiff that, in compliance with the judgment and orders of Hasluck J as varied by Mazza J the second and third defendants have executed the Power of Attorney as proffered by the plaintiff's solicitor and have returned all copies of that document together with the duplicate Certificate of Title to the Malaysian property to the plaintiff's solicitor. There has been no evidence that the plaintiff or any other person on his behalf has called on the defendants to do any other things or to execute any other documents appropriate or necessary to give effect to the declaration/orders as contemplated by par 11 of the judgment or at all. So far as the defendants are concerned they are adopting the position that they have done all that is required of them under the judgment of this court of 22 March 2010 as varied by the orders of 9 July 2010. However, the plaintiff submits that they are in contempt of court and have disobeyed the terms of paragraph 11(b) of the judgment by commencing and prosecuting proceedings in the Malaysian High Court in relation to the Malaysian property.
Recent proceedings in the High Court of Malaysia
On or about 22 July 2011 the present first defendant and third defendant (as plaintiffs) commenced proceedings against the present plaintiff (as defendant) in the High Court of Malaysia at Taiping (originating summons number 24‑151‑07/2011). In short, the first and third defendants (as plaintiffs) sought orders and declarations from the High Court of Malaysia to the effect that the Supreme Court of Western Australia did not have jurisdiction to determine the issues, or all the issues, in the present action resulting in the judgment of Hasluck J of 22 March 2010. They also sought orders and injunctions to the effect that the irrevocable power of attorney granted by the present first and third defendants to the plaintiff pursuant to that judgment is unenforceable because of the alleged lack of jurisdiction and also because of other reasons deriving from the law of Malaysia.
The originating summons in the High Court of Malaysia was later amended. The evidence on the present application by the plaintiffs of the terms of the originating summons as amended now pending before the High Court of Malaysia in that cause is that:
By this summons the plaintiffs seek the determination of the Court on the following questions. Namely:
1.Whether the default judgment in the Supreme Court of Western Australia dated 22 March 2010 in CIV 1264/06, declaring that the transfer of property situated at number 2, Jalan Lim Swee Aun Birch Village 34000, Taiping, Perak, Malaysia, erected on lot number 1257, Mukim of Tupai, District of Larut, Perak, Malaysia, held under GM 632 ('the immovable property') to the first and second plaintiffs in September 2003 was an alienation of property by one Man Mahan Singh with intent to defraud his creditors within the meaning of section 89(1) of the Property Law Act 1969 of Western Australia and whether the subsequent orders of the Supreme Court of Western Australia made under that default judgment are void and have no legal binding force whatsoever in Malaysia on the grounds that:
(i)All transfers and order in rem relating to the transfer of land in Malaysia can only be made by the High Court of Malaysia under Malaysian National Land Code 1965.
(ii)The Supreme Court of Western Australia has no jurisdiction whatsoever to give any judgment or orders in rem relating to immovable property in Malaysia.
(iii)The High Court of Malaya has exclusive jurisdiction in rem under sections 340, 417 and 5 of the Malaysian National Land Code 1965 to declare the transfer of any immovable property in Malaysia as being fraudulent to the exclusion of all other courts and in particular the Supreme Court of Western Australia.
(iv)Any documents of transfer or any documents giving authority to the defendant to transfer the said immovable property, executed by the first and second plaintiffs under orders of the Supreme Court of Western Australia, are not registrable in and do not have any force of law in Malaysia.
2.Whether the Power of Attorney granted by the Supreme Court of Western Australia to the defendant in respect of the immovable property in Malaysia is void and has no legal binding force in Malaysia on the grounds that:
(i)Any power of attorney executed by the first and second plaintiffs under an order of the Supreme Court of Western Australia, empowering the sale and transfer of land is invalid in Malaysia.
(ii)A power of attorney empowering the sale and transfer of land in Malaysia will only be valid if executed under orders made by the High Court of Malaya.
(iii)The power of attorney seeks to bypass the laws of Malaysia and in particular the National Land Code 1965 and the enforcement of foreign judgments in rem or in personam in Malaysia and is void and has no legal force in Malaysia.
(iv)The said power of attorney dated 29 July 2010 was not voluntarily given by the applicants as the applicants were compelled to sign the power of attorney by an order of the Supreme Court of Western Australia and under threat of contempt of the Court and is ineffective under the National Land Code 1965 in that it seeks to enforce orders in rem and to divest the registered proprietors of their interest and to order the transfer of immovable property in Malaysia without first seeking appropriate orders from the High Court of Malaya under the National Land Code 1965.
3.Whether any judgment and orders given by the Supreme Court of Western Australia can only be enforced in Malaysia by the defendant either registering the judgment under the Reciprocal Enforcement of Judgments Act 1958 and in accordance with O 67, Rules of the High Court, 1980 or by obtaining a judgment of the High Court of Malaya under the common law by instituting a fresh suit under the original cause of action.
Further, the plaintiffs seek that an injunction be granted permanently restraining the defendant and/or his agents from using the power of attorney and any judgment or orders made by the Supreme Court of Western Australia in relation to the immovable property in Malaysia and from seeking any further orders or judgments except in the High Court of Malaysia.
In that cause in the High Court of Malaysia an interim injunction was granted on 10 August 2011, so far as the evidence adduced on this application discloses, on an ex parte basis, restraining the defendant in the proceedings in Malaysia (the present plaintiff) from:
(a)using the irrevocable power of attorney; from seeking any other orders, judgments or directions in relation to the property directing the Registrar of Land Titles to remove any caveat or other encumbrance placed on the property other than from and under directions of the High Court of Malaysia;
(b)using any foreign judgments or orders made in relation to the property unless the judgments were either registered under the Reciprocal Enforcement of Judgments Act 1958 and in accordance with O 67 Rules of the High Court 1980 or a judgment of the High Court in Malaya is obtained under the common law by instituting a fresh suit under the original cause of action;
(c)using any judgment or order of the Supreme Court of Western Australia made under s 89(1) of the property law of this State;
(d)seeking any other judgments, orders or directions in relation to the property other than from the High Court of Malaya
until the full and final disposal of the originating summons.
The present plaintiff (as defendant) has by his solicitors or counsel entered an appearance in the proceedings in the High Court of Malaysia and his Western Australian solicitor has filed an affidavit on his behalf in opposition to the application and the relief sought.
An interlocutory injunction application came on for hearing before a judge in the Malaysian court on 31 May 2012 and on that occasion the present plaintiff (as defendant to the Malaysian proceedings) was represented by counsel and the interim injunction was extended, with minor and immaterial variations, by consent until the full and final disposal of the originating summons in the High Court of Malaya.
Those proceedings are still pending in the High Court of Malaysia and under the terms of the interim injunction granted by that court the present plaintiff is precluded from proceeding to utilise the irrevocable power of attorney or to seek to register any changes to the ownership of the land in Malaysia pending the disposition of the challenge in the Malaysian court to the validity or enforceability, in that country, of the judgment and orders of this court by Hasluck J as varied by Mazza J.
It is the commencement and prosecution of those proceedings in Malaysia which, so the present plaintiff submits, are designed to frustrate and prevent the implementation of the orders of this court, which constitutes the alleged contempt for which he seeks that the first and third defendants should be committed or otherwise punished.
I have previously mentioned that there are some discrepancies between the two notices of the alleged contempts to the first and third defendants given by the plaintiff. There is a third variant of that notice which is annexed to the affidavit of Mr E Carlose, the solicitor for the plaintiffs, sworn 31 August 2011. This is undated but is addressed to the first and third defendants and reads as follows:
1.The conduct alleged against you constituting your contempt of court is that, in originating summons number 24‑151‑07/2011 commenced by you in the Malaysian High Court in your capacity as registered owners of the subject property at number 2, Jalan Lim Swee Aun, Perak, Malaysia ('the property'),
(a)on 22 June 2011, you applied for and are seeking a permanent injunction to restrain the plaintiff ('Sardul') from using the power of attorney executed by you in his favour pursuant to the, and
(b)you also applied for and, on 10 August 2011, obtained an ex‑parte interim injunction preventing Sardul from using the said power of attorney.
2.It is alleged that your conduct aforesaid was deliberate, intentional and in flagrant breach or contravention of the order herein dated 9 July 2010 read with the judgment dated 22 March 2010, which required you, in effect, to not only execute the power of attorney but also restrain you from taking the above steps you took in Malaysia.
…
Solicitor for the plaintiff
Eapon Carlose
Submissions were made on behalf of the defendants that the existence of three forms of the notice of default, in different terms, meant that the plaintiff had failed to specify clearly and unambiguously what constituted the alleged contempt of court and that such a failure meant that the procedures essential for a successful application for an order for committal had not been observed and that the application should, for that reason also, fail. I shall return to this topic later when discussing the authorities relied upon by the defendants but I have come to the conclusion that the success or failure of the present application does not depend on this issue. The existence of three notices, in different terms, specifying the alleged default does provide some basis for the defendants' submissions but, while the two earlier notices are rather prolix, there can be little doubt from either of them, or from the third notice, that the action of the defendants alleged to give rise to the contempt complained of is the institution of proceedings in the Malaysian court challenging the enforceability in that country of the judgment and orders of this court and of the validity or enforceability of the power of attorney given pursuant to that judgment. As I have said earlier, this is unmistakably the crucial issue for this application and its central significance should not be diminished by other peripheral issues.
The undertakings given by the plaintiff in the Federal Magistrates Court
Reference has already been made to the undertakings required by Federal Magistrate Lucev when granting conditional leave under s 58 of the Bankruptcy Act for the present plaintiff to commence and proceed with this action in this court. The terms of that undertaking appear in the affidavit of the second defendant sworn 30 January 2012 in the following terms:
Applicant's undertaking
The Applicant [the present plaintiff] hereby undertakes that, upon leave being granted herein to continue proceedings in CIV 1264 of 2006 in the Supreme Court ('the ACTION') against the Second Respondent [the present second defendant] the Applicant:
1.will seek an amendment of the Statement of Claim filed in the ACTION so as to delete the claim for an order that the net proceeds of sale be applied in satisfaction or partial satisfaction of amounts due and owing from the Second Respondent to the Applicant,
2.will not take any further steps in the ACTION without giving 7 days' notice to the First Respondent [the official trustee in bankruptcy],
3.will not oppose the First Respondent being joined in the ACTION at any time,
4.will hold the property the subject of the ACTION or any monies received in the ACTION for the First Respondent on behalf of the bankrupt estate of the Second Respondent and
5.will notify the First Respondent of any settlement proposed to be entered into in respect of the ACTION and not enter into any settlement unless consented to by the First Respondent.
That undertaking was dated 31 July 2006 and was signed by the plaintiff and by the plaintiff's solicitor.
It is clear that none of pars 1, 2, 4 and 5 of the undertaking was ever complied with by the plaintiff. This has recently given rise to more controversy between the parties resulting in another hearing before Magistrate Lucev in the Federal Magistrates Court in September 2007 (PEG 239 of 2011) part of the transcript of which is exhibited to the affidavit of the second defendant sworn 31 August 2010. That hearing appears to be the result of a reference by the Official Trustee in Bankruptcy to the Federal Court of a complaint made by the second defendant that the undertaking given had been breached and that its existence had not been disclosed to Hasluck J in the present proceedings.
How leave to commence these proceedings under the Bankruptcy Act was sought and granted in the Federal Magistrates Court can be seen from the decisions and orders of that court which are Singh v Official Trustee in Bankruptcy (2007) FMCA 1367 (7 September 2007), which is a decision giving conditional leave nunc pro tunc to commence and pursue the current proceedings in this court. The order of the court recites the conditions being in the form of the undertakings as set out.
The next decision of the Federal Magistrates Court is Singh v Official Trustee in Bankruptcy [2008] FMCA 521 (24 April 2008), which relates to a similar application for leave to commence and pursue proceedings in this court granted nunc pro tunc but in CIV 1009 of 2005, relating to the Kinross land.
The third is the decision of Singh v Official Trustee in Bankruptcy [2011] FMCA 677 (6 September 2011). This also involves the grant of leave under s 58(3) of the Bankruptcy Act 1966 for the plaintiff to commence and take such steps as have already been taken to allow the trial and the proceedings in CIV 1009 of 2005 to proceed and is granted on conditions.
In the reasons for the last of these judgments his Honour at [25] records significant criticisms of the applicant as a result of his failure to comply with the undertaking in relation to proceedings CIV 1009 of 2005 in this court. His Honour observed that that failure, and the failure to comply with the conditions upon which leave was granted to proceed in the present action, CIV 1264 of 2006 (see [24]) 'are matters which, on the face of it, the applicant conceded may constitute a contempt of this court which, if correct, would make them actionable upon application by the second respondent'. In those reasons, the learned magistrate recorded that it was apparent that the applicant (the present plaintiff) had in Supreme Court proceedings CIV 1264 of 2006:
(i)extracted an order from the Supreme Court contrary to the 2007 conditions and
(ii)failed to inform the Supreme Court of the 2007 conditions …
In an attempt to diminish the significance of the non‑compliance with the undertakings it has been submitted by the plaintiff that an application has now been made to vary the orders insofar as the proceeds of the sale of the Malaysian property are concerned. The submission is that the orders relating to the plaintiff having a beneficial interest in the Malaysian property and the manner in which it is to be dealt with do not touch upon those parts of the judgment which it is alleged the first and third defendants have disobeyed and that, in any event, the undertaking and the conditions imposed by the Federal Magistrates Court were merely imposed for the benefit of creditors.
It is these matters which raise the question of whether the plaintiff is in contempt himself through his failure to comply with the conditions of the Federal Magistrates Court and in failing to inform this court of those conditions; his counsel's undertaking before the trial; and in taking the judgment in the terms in which it was obtained from Hasluck J. If so, the question arises as to whether the plaintiff can be heard to pursue his present application for contempt in view of that conduct.
The next and associated question is whether or not the failure to comply with the undertaking and obtaining a judgment from this court in breach of it can be cured by the application to vary the terms of the judgment of Hasluck J which is now before this court on the present application. It will be necessary to return to each of these matters after the basis of the submissions by the plaintiff to support his present application for committal of the defendants has been set out.
Application to vary the judgment of 22 March 2010
In the minute of proposed amended chambers summons by the plaintiff filed 16 November 2011 which sets out the terms of the orders sought by the plaintiff on the present application, par 3 seeks the following relief:
3.The relief sought in the statement of claim and granted in the judgment herin [herein] on 22 March 2010 be varied by deleting the requirement that the net proceeds of sale of the subject property at number 2, Jalan Lim Swee Aun, Taping, Parek, Malaysia ('the property'), be applied in satisfaction or partial satisfaction of the sum of $173,349 plus interest and costs payable pursuant to the judgment obtained in CIV 5 of 2002 and all costs herein ordered to be paid by the defendants' and substituting therefore the requirement that the plaintiff hold the net proceeds thereof for the official assignee in bankruptcy on behalf of the bankrupt estate of Man Mahan Singh.
This is the plaintiff's tardy attempt to deal with the situation created by his breach of the undertakings given to the Federal Magistrates Court which form the conditions of the grant of leave to proceed obtained in 2007 under s 58(3) of the Bankruptcy Act. Although the summons does not say so in express terms, it amounts to an application to vary a final judgment of this court after the judgment has been entered and perfected. Such a variation, even if made, would still not satisfy the terms of the undertaking and the conditions upon which leave to proceed was granted by the Federal Magistrates Court. Indeed, it is doubtful whether, with the time that has elapsed and the progress which has occurred in the action, that undertaking could now ever be fully satisfied. The proposed variation also fails to deal with par 4 of the judgment which declares that the first and third defendants hold the Malaysian property on trust for the plaintiff although, by implication, the variations actually sought would be inconsistent and irreconcilable with par 4 of the judgment.
Standing in the way of the application to vary the judgment is the principle of finality. In Eastman v The Queen [2008] FCAFC 62 [22] the Full Court of the Federal Court of Australia consisting of Spender, Gray and Logan JJ said:
[t]he final and binding effect of a judicial determination forms the basis of a number of principles. A judgment of a superior court of record is binding on the parties to the proceeding in which it is given. It cannot be ignored, or treated as a nullity, whatever defects there might be in it. Even if the judgment is beyond the jurisdiction of the court giving it, this does not deprive it of its binding effect, and it must be obeyed unless and until properly set aside, eg on appeal: Cameron v Cole (1944) 68 CLR 571 at 590 per Rich J, 598 per McTiernan J and 607 per Williams J and Re Macks; Ex Parte Saint [2000] HCA 62; (2000) 204 CLR 158 at [20] and [53], per Gaudron J, [148] per McHugh J, [216] per Gummow J, [255] per Kirby J and [344] ‑ [344] per Hayne and Callinan J.
Explanations of the principle of finality are also to be found in many other cases, including Stambulich v Ekamper [No 4] [2008] WASCA 189 [18] ‑ [21] (Pullin JA); Leslie v GE Commercial Corporation (Australia) Pty Ltd [No 2] [2009] WASCA 28 [7] (Steytler P) and Matta v The Queen [2011] WASCA 2 [13] (Buss JA) where his Honour said, with the agreement of McLure P and Mazza JA:
Thirdly, this court does not have any express of implied general power under the Supreme Court Act 1935 (WA), the Criminal Appeals Act, the Rules of Court or any other statute to which we were referred by counsel for the appellant, or any general inherent power, to re‑open and re‑consider formal perfected criminal orders made by the Court of Criminal Appeal …
There have been instances in which a final Court of Appeal may in special circumstances vary a perfected order. These are rare and are necessitated by the interests of justice where the error leading to the need for variation cannot be attributed to the neglect or default of the party seeking the rehearing: Autodesk Inc v Dyason [No 2] (1993) 176 CLR 300; [1993] HCA 6 and De L v Director-General, New South Wales Department of Community Services (No 2) (1997) 190 CLR 207; [1997] HCA 14, 215. However, at least in criminal proceedings, once the order has been perfected the power and jurisdiction of the court dealing with it has been exhausted and it cannot be varied by that court: Burrell v The Queen [2008] HCA 34; (2008) 238 CLR 218. It seems that there may be 'narrow exceptions' to this rule ‑ see State of Western Australia v Wallam [2008] WASC 117(S) and per Steytler P in Leslie v GE Commercial Corporation (Australia) Pty Ltd [No 2] [2009] WASCA 28 but it is unnecessary to examine them on this occasion as there has been no submission that they may have any bearing on this present application. (On this subject generally see D. Lanham, The Reviewability of Superior Court Orders (1988, 16 Melbourne University Law Review) 603 ‑ 632.
Not only does the application to vary the judgment of 22 March 2010 offend against the principle of finality but it is even more egregious by being made to a single judge in the trial division of the court who was not the trial judge. How it could be suggested that one judge could vary a final judgment of another judge has been left entirely unexplained.
It may be possible, even now long out of time, for the defendants to apply for leave to appeal to the Court of Appeal to deal with the issue which has arisen but they have, at least so far, showed no inclination to do so. Whether it would be possible for the plaintiff, whose breach of undertaking has led to this situation, to apply for leave to appeal out of time to the Court of Appeal to deal with the matter is not something which has been raised and, therefore, is quite unnecessary to address.
Accordingly, I conclude that I have no power to vary the final decision of Hasluck J as sought or at all. Even if I did have that power, I would not exercise it in these circumstances because any problems associated with the terms of the judgment are unmistakably due to the plaintiff's breach of his counsel's undertakings to the Federal Magistrates Court and the conditions imposed by that court on the leave granted to proceed under the Bankruptcy Act. It may be open for the Official Trustee in Bankruptcy to apply further to the Court of Appeal on behalf of the bankrupt estate of the second defendant, to deal with the situation which has arisen as he is the officer charged with the control and protection of the bankrupt's property but any initiative in that regard is a matter for the trustee.
This history and the breach by the plaintiff of the undertakings and conditions relating to the leave to proceed which have resulted in a judgment conferring interests on the plaintiff rather than upon the official trustee are matters which, in my opinion, may be taken into account if and when it is necessary to consider any discretion which may be available in granting or withholding the relief sought by the plaintiff to commit the defendants for alleged contempt.
Contempt of court
As a superior court of record this court has extensive power to punish for contempt: R v Metal Trades Employers Association; Ex Parte Amalgamated Engineering Union, Australian Section [1951] HCA 3; (1951) 82 CLR 208, 254. The procedure for dealing with an alleged contempt can be found in RSC O 55 r 1 and r 4 but that rule is not the sole source or limit of the court's powers. It is a civil contempt to refuse or to neglect to do an act required by a judgment or order of the court within the time specified in the judgment or order or to disobey a judgment or order requiring a person to abstain from doing a specified act. It is also a civil contempt to act in breach of an undertaking given to the court on the faith of which the court sanctions a particular course of action or inaction ‑ Halsbury's Laws of Australia, vol 5 [105‑250]. It is not, however, a contempt to fail to comply with a declaratory order but such a failure may found a basis for an injunction to require that person to act, or refrain from acting otherwise than, in accordance with the obligations as so declared by the court: Webster v Southwark London Borough Council [1983] QB 698 Proof of the alleged contempt must be established beyond reasonable doubt whether the allegation is of a criminal or a civil contempt: Witham v Holloway (1995) 183 CLR 525.
The plaintiff submits, and I accept, that to prove a civil contempt of court involving an alleged breach of an order of the court the applicant must prove (a) that an order was made by the court; (b) that the terms of the order are clear, unambiguous and capable of compliance; (c) that the order was served on the alleged contemnor or excused in the circumstances or service dispensed with pursuant to the rules of court; (d) that the alleged contemnor has knowledge of the terms of the order; and (e) that the alleged contemnor has breached the terms of the order and that the act or omission which constituted the breach of the order was deliberate and voluntary: Advan Investments Pty Ltd v Dean Gleeson Motor Sales Pty Ltd [2003] VSC 201.
The plaintiff submits that an order of a competent court must be obeyed so long as it remains in force. The submission proceeds that it is no answer to a charge of contempt that the order or judgment was made without jurisdiction or that it should not have been made because of a number of vitiating factors. For this the plaintiff relies on the decision of Cameron v Cole (1944) 68 CLR 571; [1994] HCA 5 in a passage from the judgment of Rich J at 590 in part for that proposition and cites in further support: ANZ Banking Group Ltd v Merribee Pastoral Industries Pty Ltd (1998) 84 FCR 367, 380. See also Jackson v Stirling Industries Pty Ltd (1987) 162 CLR 612, 616 (Mason CJ); and 627 (Brennan J). Nevertheless, there are avenues available to a party aggrieved to apply to the court for relief from compliance with an order improperly made: Isaacs v Robertson [1985] AC 97 and Woodward v Earl of Lincoln (1674) 3 Swans 626; 36 ER 1000.
Rubie v Rubie (1911) 13 CLR 350; [1911] HCA 71 is authority that enforcement proceedings, in that case an order of attachment for non‑payment of maintenance, can be taken and enforced notwithstanding that the judgment ordering that was irregular. In that case, Griffiths CJ said (353 ‑ 364):
It is contended that, although the fact that a party to a suit disputes the validity of an order made against him does not justify his disobedience of it, yet it may be very material for the Court, in the exercise of its discretion to grant or refuse an attachment, to consider the circumstances under which the order was made. Reference was made to the case of Drewry v Thacker 3 Swans 529 at 546 in which Lord Eldon LC, referring to the disobedience of an order for an injunction, said ‑ 'On an application against persons guilty of a breach of it, the court would forget its duty, if it did not give to them the benefit of the fact that the order ought not to have been made.'
In Russell v East Anglican Railway Co 3 Mac & G 104 at 124 Lord Truro LC referring to this passage, said: ‑ 'All that I can understand is, that the court in administering punishment would attend to all the circumstances of the case, and, amongst others, to the circumstances under which the order has been made, but that is not at all intended to impugn the general principle that is laid down, that an order once made by this Court must be obeyed. I can only understand the words "must be obeyed" as meaning that if the order is not obeyed, the party shall be liable to punishment.' No one can cavil at that statement of the law. But if a party induces the Court to make an order per incuriam which is contrary to natural justice, I think that the Court is not bound to enforce the order by attachment, but may stay its hand until an opportunity has been given to the other party to apply to the Court to set the order aside. In this respect there is a manifest distinction between disobedience to a positive order forbidding the doing of an act, an order which so long as it subsists ought to be obeyed at all costs ‑ and an order to do an act ‑ the consequence of which if done might be irrevocable which order, as afterwards appears to the court, should not have been made.
The plaintiff submits that the terms of par 11(b) of the judgment amount to an injunction restraining the defendants from doing anything that will impede or hinder the Malaysian property being made available to the plaintiff for the aforesaid purposes. It is further contended that the commencement of the proceedings in the Malaysian court to challenge the validity or enforceability of the judgment of this court in Malaysia and similarly to challenge the validity and effectiveness of the power of attorney obtained pursuant to the judgment amount to a flagrant and deliberate breach of that injunction.
The plaintiff seeks to invoke the observations of McHugh J (in dissent) in Pelechowski v The Registrar of the Court of Appeal (NSW) (1999) 198 CLR 435; [1999] HCA 19, 462 where his Honour said:
[85]Understandably in the present case, the charge of contempt against the appellant was confined to the breaching of a particular order. This has enabled him to mount an argument concerning the jurisdiction of the District Court to make the order in question. But his conduct was so blatant, so contemptuous of the authority of the courts of justice, and so calculated to cause litigants generally to lose confidence in the capacity of courts to protect their rights that I think that he might properly have been charged with contempt of the administration of justice as a continuing process …
[86]Wherever the conduct of a person may be seen as undermining the authority of the courts of justice generally or as calculated to destroy the confidence of potential litigants or witnesses in the capacity of the sovereign's courts to protect their rights, a contempt of court can occur although no proceedings are on foot or the conduct is not tied to specific proceedings or a particular court …
Upon the basis of those observations the plaintiff submits that the defendants are in contempt by attempting to frustrate the implementation of the judgment and orders of this court.
Several things need to be said in answer to that submission. In Pelechowski's case the successful applicant had been convicted of a contempt of court for disobeying the terms of an injunction made by a judge in the District Court of New South Wales, after entering judgment for a money sum, that the applicant should not in any way attempt to deal with or dispose of certain assets until the judgment had been satisfied. In the High Court it was unanimously held that this injunction was beyond the power and jurisdiction of the District Court of New South Wales which, being an inferior court of limited statutory jurisdiction, meant that the injunction was a nullity and need not be obeyed (see McHugh J [71]). For that reason, the applicant succeeded in his appeal against his conviction for contempt. In this present case, for reasons already canvassed, there can be no basis for treating the judgment of 22 March 2010 as invalid or a nullity. It is one which is enforceable unless and until varied or set aside. In this present case the defendants are not alleged to have committed some unspecified contempt of a kind to be seen as undermining the authority the courts of justice generally. They are alleged to have committed a contempt of a specific kind, namely of knowingly and deliberately disobeying an order restraining them as set out in par 11(b) as already mentioned. Accordingly, I do not consider that the observations of McHugh J in Pelechowski are germane to the present issue as they do not deal with the crucial issue of whether or not the defendants' conduct amounts to a disobedience or non‑compliance with the term of the judgment relied upon.
Dicta in the Court of Appeal about possible proceedings in Malaysia
Counsel for the plaintiff also submitted that the Court of Appeal has proceeded on the basis that any judgment which might eventually be given in these proceedings would be obeyed by the defendants and that this is an indication that the obligations later imposed by the judgment require the defendants fully to respect and obey that judgment in Malaysia. With respect, I do not consider that any such conclusion can be drawn from the decision of the Court of Appeal or from the passages relied upon by the plaintiff. Reference was made to the observations of Pullin JA at [35] where his Honour said:
Returning then to the appellant's submission, it is necessary to note that there is a premise behind it, which is that if a decree is made compelling the appellant's wife and daughter to hold the Malaysian property on trust or take the action decreed or ordered, that they would disobey the decree or order. It is on that premise that the appellant argues that an official of the Supreme Court would have to execute the transfer and that Malaysian law would not recognise such a transfer signed by such an official. The premise behind this submission cannot be accepted. The assumption must be that if the Supreme Court makes the decrees that the appellant's wife and daughter, being parties to the proceedings, will obey the decree.
And then, at [38]:
The respondent submits that it would not be necessary to enforce a judgment of the Supreme Court in Malaysia. He seeks declarations about the quality of the conduct of the appellant and the appellant's wife and daughter and seeks in personam relief. If in personam decrees or orders are made in Western Australia against the appellant's wife and daughter requiring them to execute documents (such as a transfer) and produce the duplicate title which could then be used to reconvey the land to the appellant, then the judgment of the Supreme Court would not have to be enforced in Malaysia. The transfer and title would simply be taken to Malaysia and registered in the Malaysian office of titles in accordance with Malaysian law. If the decree is that the appellant's wife and daughter hold the Malaysian property on trust that would not have to be enforced in Malaysia. As a result, it is unnecessary to deal with ground 6 which, in essence, contends that the Malaysian courts would not recognise the Australian judgment.
Nevertheless, Pullin JA went on to consider the submissions that the Malaysian law would not recognise a decree of this court in the terms sought by the plaintiff and then said at [49] that it was arguable that there was nothing in Malaysian law which would prevent the claimed decrees of this court being enforced in Malaysia if that became necessary.
It must immediately be noticed that this analysis proceeded on the footing that the judgments and decrees of this court as then sought would require the sale of the Malaysian property and that the proceeds of sale be ultimately applied to satisfy the outstanding judgment in favour of the plaintiff. There was then no claim for relief that the first and third defendants held the Malaysian property as constructive trustees for the plaintiff. It was this action which it was said might require the co‑operation of the first and third defendants.
As already noticed, the relief later sought in those terms is inconsistent with the undertaking given to the Federal Magistrates Court and with the conditions imposed on the leave to proceed granted under s 58(3). It seems that the obligations of the plaintiff under those undertakings and conditions may not have been fully revealed to the Court of Appeal. However, this is not a matter which would in any way detract from the purport and significance of the observations of Pullin J on this topic.
I am satisfied that there is nothing in his Honour's observations to provide a basis for the submission that the judgment and decrees pronounced in this court on 22 March 2010 are, ipso facto, binding and enforceable in Malaysia. His Honour did not say so and was not asked to say so. His Honour observed that one should proceed on the basis that the defendants would obey the terms of the judgment. There cannot be the slightest dispute that this is so. The defendants say they have. They have handed over the duplicate certificate of title and have granted the power of attorney as ordered. Whether a challenge to the enforceability of that power of attorney in Malaysia succeeds or not will be a matter for the courts of Malaysia to decide according to the law of that country. Whether the judgment pronounced in this court on 22 March 2010, if not varied or set aside, will be sufficient to vest the Malaysian land in the plaintiff will likewise be a matter for the courts in Malaysia to decide. The very point of the decision of the Court of Appeal when upholding jurisdiction in this action was that this court had the power to act in personam upon parties within the jurisdiction but not in rem against land in a foreign jurisdiction. There is, therefore, nothing in the passages relied upon by the plaintiff in the reasons for decision of the Court of Appeal to support the submission that there has been a contempt of court as alleged.
Submissions for the defendants
First, the defendants submit that the notice specifying the alleged breaches amounting to contempt is defective because it fails distinctly to state the specific acts or omissions constituting the contempt, thus failing an essential requirement as identified in Coward v Stapleton [1953] HCA 48; (1953) 90 CLR 573 [10]. The submission is that the specific terms of the judgment are not identified or set out in the notice of default and that there is no attempt to cross‑reference the notice to relief sought in Malaysia and that, consequently, the defendants are not properly 'charged'. I have already observed that the notices of default are somewhat unsatisfactory because of their number and prolixity. It is true that none of them identifies the particular provisions of the judgment of this court said to have been disobeyed or how or why the acts relied upon constitute disobedience. Nevertheless, the intent of the notices is reasonably clear in specifying that the commencement of proceedings in Malaysia in challenge to the validity or enforceability of the judgment of this court in that country constitutes the alleged contempt. I will, therefore, although with some disquiet, treat the notices as being effective in nominating and identifying the action said to constitute the alleged contempt.
As to whether or not there has been any disobedience or non‑compliance by the defendants with the terms of the judgment by the commencement and pursuit of the proceedings in the High Court of Malaysia, the defendants submit that there is nothing in the judgment which in any way curtails their freedom or ability to bring such proceedings in that country. The submission for the defendants is that the terms of the judgment of this court cannot, on any reasonable basis, or alternatively without ambiguity, be construed as amounting to an anti‑suit injunction or as ousting the jurisdiction of the Malaysian court over the property or limiting the rights of the defendants in the relief or access which they may seek from the Malaysian court. The defendants also submit that there is no evidence that between 22 March 2010 and now the plaintiff attempted to sell the Malaysian property and so, the submission goes, it follows that the Malaysian proceedings have not interfered with any such sale. As to this, however, the relief in Malaysia being sought is for an injunction to restrain the plaintiff from dealing with the Malaysian property pending the determination of those proceedings and, accordingly, I do not consider that this last point raised by the defendants should be accepted.
More significantly, the defendants submit that before any committal for contempt of court could occur it is necessary for the plaintiffs to show a clear breach of a direct and unambiguous order of the court. They rely on Redwing Ltd v Redwing Forest Products Ltd (1947) 177 LT 387 where Jenkins J observed, 390:
A defendant cannot be committed for contempt on the ground that upon one of two possible constructions of an undertaking being given he has broken his undertaking. For the purpose of the relief of this character I think the undertaking must be clear and the breach must be clear beyond all question.
and also upon the observations of Bainton J in ACCC v Collings Construction Co Ltd (Unreported, NSWSC, BC 9702850 2 July 1997) [15] where his Honour said:
In my judgment if there be any ambiguity, uncertainty or want of clarity in an order whether it be mandatory or prohibitive it should be construed contra proferentum, the proferens being not the judge pronouncing the order, but the party seeking it …
In addition, the defendants point to various indications in the course of these proceedings or in the application for leave in the Federal Magistrates Court which indicate that it has been, from an early stage, recognised that in the event of a judgment adverse to the defendants concerning the Malaysian property being given questions may arise as to the enforceability of orders of this court in Malaysia. There was an allusion to this possibility in the application before Lucev FM on 5 December 2006 (see the affidavit of the third defendant of 19 December 2011 at pages 5 to 7). In the judgment of Hasluck J of 22 March 2010 at [23] his Honour referred to the absence of the defendants in the proceedings before him, saying that this might well be due to the fact that pursuant to legal advice they did not wish to submit to the jurisdiction of the court and that this might have some bearing upon enforcement proceedings at a later stage. Similar possibilities were mentioned at the hearing before Hasluck J on 22 March 2010 and on the application before Mazza J on 21 June 2010.
There is a well established jurisdiction for the court, in appropriate cases, to grant what have been called anti‑suit injunctions to restrain the commencement or prosecution of proceedings in foreign courts by a defendant or defendants who are within the jurisdiction and amenable to such injunctive powers of the court. See generally Spry, Equitable Remedies (6th ed, 2001) 335 ‑ 338 and Meagher Gummow & Lehane's Equity Doctrines and Remedies (4th ed, 2002) [21‑165]. This jurisdiction has been recognised in Australia in CSI Ltd v Cigna Insurance Australia Ltd (1997) 189 CLR 345. For an explanation that the true basis of the jurisdiction to grant such an injunction to prevent the taking or continuation of foreign proceedings is that they constitute an abuse of the process of the court see Societe Nationale Industrielle Aerospatiale v Lee Kui Jak [1987] AC 871 which identifies a series of considerations pertinent to the exercise of that jurisdiction or the granting of such a remedy.
There is nothing in the terms of the judgment of 22 March 2010 which expressly prohibits the defendants from commencing proceedings in a foreign court or these particular proceedings in the High Court of Malaysia. Nevertheless, the plaintiff submits that par 11(b) of the judgment amounts to an implicit prohibition. I cannot accept that submission. Firstly, for reasons already given, the possibility of proceedings being brought in Malaysia or questions arising in that country about the enforceability of any judgment of this court was well recognised before the judgment was entered. If the judgment had been intended to restrain or prohibit such action it would, in those circumstances, almost certainly have said so expressly. So far as the evidence available on this point goes, it suggests the contrary, that the possibility of proceedings in Malaysia was recognised but was regarded as being outside the scope of the relief being sought in the action in this court. Secondly, if it had been intended that the terms of the judgment should act as an anti‑suit injunction, then the law and principles dealing with that jurisprudence should have been addressed in submissions to the learned trial judge who would, in those circumstances, no doubt have considered the matter in his reasons for decision. There is no sign that anything of this kind was ever sought from the learned trial judge or that any attention was directed to whether or not the terms of the judgment would serve as an anti‑suit injunction.
To my mind, these are very powerful reasons for suggesting that no such construction, as sought by the applicant, should be given to par 11(b) of the judgment. The terms of 11(b) can readily and sufficiently be read and applied as prohibiting the defendants from interfering with or frustrating within this jurisdiction the orders requiring them to execute a power of attorney, deliver the duplicate certificate of title or (before the variation of the terms of the judgment by Mazza J) to execute a registrable transfer. There is no reason to give them any wider application.
For these reasons I am satisfied that the terms of the judgment do not prohibit the defendants from instituting or prosecuting proceedings in the High Court of Malaysia dealing with this property. This being the case, the entire basis for the application for the alleged contempt fails and the application must be dismissed.
Because of the complexity of the issues which have arisen and the unsatisfactory conduct of the plaintiff in acting in breach of the undertaking given to the Federal Magistrates Court and of the conditions imposed by that court on the leave to proceed, it is necessary to address some further subsidiary issues.
There is every reason to act on the basis that the plaintiff is himself in contempt for failing to comply with the undertakings given to the Federal Magistrates Court and the conditions imposed on the grant of leave to proceed: Jendrell Australia Pty Ltd v Kesby [1983] 1 NSWLR 127. This consequence is not avoided by the fact that the undertaking was given to the Federal Magistrates Court and not to this court. The undertaking required certain things to be done and disclosed to this court and the order granting leave made by the Federal Magistrates Court imposed conditions on the grant of leave in similar terms, all of which were ignored and not disclosed to this court until recently.
On the very point of whether or not proceedings could be taken in this court without leave being granted under s 58(3) of the Bankruptcy Act where such leave was necessary, Master Newnes (as his Honour then was) said in Exhibit and Publishing Pty Ltd v Consolidated Business Media Pty Ltd [2006] WASC 26 [42] that the requirement to obtain leave under s 58 is not some mere procedural irregularity but is a matter of substance.
A party who has not obtain leave as required under s 58(3) or who has not complied with the terms of the leave is not competent to move for judgment in the consequent cause.
Master Newnes said, invoking the observations of Menzies J in Cameron v Cole, that such a defect was so fundamental as to create an unconditional right, ex debito justitiae, to have the judgment set aside. Just how such a judgment may be set aside is another matter. Here the indications are that this could only be done on appeal ‑ Isaacs v Robertson [1985] AC 97, 103 (Lord Diplock).
The defendants submit, citing Young v Jackman (1986) 7 NSWLR 97, that a person will not be heard when he is guilty of contempt and that this principle extends to where the contempt has prima facie been demonstrated or alternatively where the party has confessed the facts so that it is not necessary that there should be an actual finding of contempt. (See also Wilson v Bates (1838) 3 My & Cr 197; 40 ER 900 and Ricketts v Mornington (1834) 7 Sim 200; 58 ER 813 and Halsbury's Laws of Australia, vol 5 [105 ‑ 585]
Having regard to these circumstances, I do not consider that even if there had been a disobedience to the terms of the judgment as entered by Hasluck J, which I am satisfied there has not been, this plaintiff should not be permitted to be heard or to pursue further steps in the action unless and until he has remedied the breaches of the undertaking. For that reason, I would have refused to make any order in the way of committal or otherwise for contempt at the least for a certain period to allow a reasonable opportunity for the plaintiff to remedy his breaches of undertaking and/or to allow the defendants to apply, as they may be advised, to set aside this judgment or for it to be varied as may be necessary to comply with the conditions upon which the leave to proceed under s 58(3) had been granted.
As I am satisfied that there has been no breach on the grounds alleged of the orders of the court by the first or second defendants, the application for contempt must be dismissed.
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