Singh v Singh

[2009] WASCA 53

JURISDICTION     :   SUPREME COURT OF WESTERN AUSTRALIA

TITLE OF COURT :   THE COURT OF APPEAL (WA)

CITATION:   SINGH -v- SINGH [2009] WASCA 53

CORAM:   MARTIN CJ

PULLIN JA
NEWNES AJA

HEARD:   8 OCTOBER 2008

DELIVERED          :   26 FEBRUARY 2009

FILE NO/S:   CACV 48 of 2008

BETWEEN:   MAN MAHAN SINGH

Appellant

AND

SARDUL SINGH
Respondent

ON APPEAL FROM:

Jurisdiction              :  SUPREME COURT OF WESTERN AUSTRALIA

Coram  :MASTER SANDERSON

Citation  :SINGH -v- KAUR BAL [2008] WASC 62

File No  :CIV 1264 of 2006

Catchwords:

Private international law - Whether proceedings are to decide title to foreign immoveable property - Whether the claims fall within 'exceptions' to the Mocambique rule - Fraud alleged - in personam relief claimed - Territorial reach of s 89 Property Law Act - Property Law Act - Whether the appellant alienated property with intention to defraud creditors

Legislation:

Property Law Act 1969 (WA), s 89

Result:

Appeal dismissed

Category:    B

Representation:

Counsel:

Appellant:     In person

Respondent:     Mr R K O'Connor QC

Solicitors:

Appellant:     In person

Respondent:     Eapon Carlose

Case(s) referred to in judgment(s):

Australian Securities Commission v Bank Leumi le Israel (1995) 134 ALR 101

Barcello v Electrolitic Zinc Co of Australasia Ltd (1932) 48 CLR 391

Bell Group v Westpac [No 9] [2008] WASC 239

Brady v Stapleton (1952) 88 CLR 322

British South Africa Co v Companhiad Mocambique [1893] AC 602

Cadogan v Kennett (1776) 2 Cowp 432

Cannane v J Cannane Pty Ltd (1998) 192 CLR 557

Carpenter v Strange (1891) 141 US 87

Centurion Trust Co Ltd v Director of Public Prosecutions [2008] WASCA 6

Companhiad de Mocambique v British South Africa Co [1892] 2 QB 358

Conlan v Registrar of Titles [2001] WASC 201

Cook Industries Inc v Galliher [1979] 1 Ch 439

Couzens v Negri [1981] VR 824

Cranston v Johnston (1796) 3 Ves Jun 169; 30 ER 952

Dagi v BHP (No 2) [1997] 1 VR 428

Davis v Cornue 151 NYR 172

Deschamps v Miller [1908] 1 Ch 856

Director of Public Prosecution v Hafner [2004] WASC 32; (2004) 28 WAR 486

Electrical Enterprises Pty Ltd v Rodgers [1988] 15 NSWLR 473

Farah Constructions Pty Ltd v Say‑Dee Pty Ltd [2007] HCA 22; (2007) 81 ALJR 1107

Federal Bank of Australia Ltd v White (1895) 21 VLR 451

First Industry Corp v Goh [2002] WASC 111

Garuda Industries v Grellman (1992) 35 FCR 515

Green v Schneller [2002] NSWSC 671; (2002) 29 Fam LR 346

Griggs Group Ltd v Evans [2005] Ch 153

Harrods Ltd v Stanton [1923] 1 KB 516

Hesperides Hotels Ltd v Muftizade [1979] AC 508

Langdon v Gruber [2001] NSWSC 276

Macquarie Bank Ltd v Sixty‑Fourth Throne Pty Ltd (1998) 3 VR 133

Mateo v Official Receiver in Bankruptcy (2002) 188 ALR 667

McGovern v Victoria [1984] VR 570

Mills v Stockman (1967) 116 CLR 61

Oceanic Sun Lines Special Shipping Co Inc v Fay (1988) 165 CLR 197

Pambula District Hospital v Herriman (1988) 14 NSWLR 387

Penn v Lord Baltimore (1750) 1 Ves Sen 444; (1750) 27 ER 1132

Petrotimor v Commonwealth [2003] FCAFC 3; (2003) 126 FCR 354

Polites v Commonwealth (1945) 70 CLR 60

Potter v Broken Hill Pty Co Ltd (1906) 3 CLR 479

Puttick v Tenon [2008] HCA 54; (2008) 250 ALR 582

R v Dunwoody [2004] QCA 413; (2004) 149 A Crim R 259

Razelos v Razelos (No 2) [1970] 1 WLR 392

Re Doyle; Ex parte Brien v Doyle (1993) 41 FCR 40

Re North Broken Hill Holding Ltd (1986) 10 ACLR 270

Regie National des Usines Renault SA v Zhanng [2002] HCA 10; (2002) 210 CLR 491

Rickards v Attorney‑General (1844) 12 CL & F 30

Silvera v Savic (1999) 46 NSWLR 124

Singh v Kaur Bal [2008] WASC 62

The Commonwealth v Woodhill (1917) 23 CLR 482

Voth v Manildra Flour Mills Pty Ltd (1990) 171 CLR 538

Williams v Lloyd (1934) 50 CLR 341

Zaravinos v Houvardas [2004] NSWCA 421; (2004) 32 Fam LR 490

1. MARTIN CJ:  I agree with Justice Pullin.

2. PULLIN JA:  This is an appeal against the order of Master Sanderson who dismissed the defendant's application in Singh v Kaur Bal [2008] WASC 62. The application was made asking the court to summarily dismiss an action the respondent had brought. The appellant contended that it was not arguable that the court had jurisdiction to entertain the action, and in the alternative, if the court did have jurisdiction, it should refuse to exercise it on the basis that the Supreme Court was forum non conveniens.

The background and the respondent's claims

1. The appellant and the respondent are brothers.  In the action the respondent is the plaintiff and the appellant is second defendant.  The first defendant is the appellant's daughter and the third defendant is his wife. 

2. The respondent claims that the alienation, by the appellant to his wife and daughter, of title to real estate at No 2 Jln Lim Swee Aun, Taiping, Malaysia (Malaysian property) was made with intent to defraud creditors within the meaning of s 89(1) of the Property Law Act 1969 (WA) (the Act). The respondent's statement of claim pleaded inter alia that:

   (a)the appellant and his wife live in a home in Kinross in Western Australia;

   (b)the appellant since 1965 and until September 2003 was the registered owner of the Malaysian property;

   (c)in 1998 the appellant entered into an agreement with Keprim Pty Ltd to purchase a 75% interest in a restaurant business (the first restaurant);

   (d)in February 2000 the appellant and his wife took over the conduct of the restaurant but ceased conducting the restaurant in July 2001 'leaving a sum of $128,5000, being the balance of the purchase price, due and owing to Keprim Pty Ltd';

   (e)in August 2001 or thereabouts, the appellant purchased an interest in another restaurant (the second restaurant) and thereafter commenced involvement with the day‑to‑day operations of the second restaurant;

(f)in January 2002 Keprim Pty Ltd commenced an action in the District Court (DCA 5 of 2002) against the appellant for the sum of $128,500 and damages (the debt);

(g)in or about July 2003 the appellant and his wife transferred the whole of their interest in his house in Kinross to the appellant's daughter;

(h)in September 2003 Keprim Pty Ltd assigned its right, interest and title in the debt to the respondent, and pursuant to the assignment the respondent was substituted as the plaintiff in the District Court action and in July 2005 the respondent obtained judgment in the District Court for a total of $173,349 plus costs;

(i)in September 2003 the appellant transferred his interest in the Malaysian property to his wife and daughter.  (The respondent alleges that the instrument of transfer was executed by the appellant and his wife and daughter in Perth and it was registered in Malaysia);

(j)in effecting the alienation of the Malaysian property the appellant did so with the 'purpose and/or intent to defraud his creditors within the meaning of s 89(1) of the Property Law Act 1969' and his wife and daughter had notice of the appellant's purpose and intention 'and/or they shared the same purpose or intention and/or knowingly participated in the said alienations'.

(k)in September 2004 the appellant transferred 'virtually' his entire interest in the second restaurant to his sister‑in‑law;

(l)in June 2005 in action CIV 1009/2005 the respondent obtained judgment against the appellant declaring that the transfers of his interest in his home in Kinross and the second restaurant were alienations of property made with a purpose and/or intent to defraud his creditors within the meaning of s 89(1) of the Property Law Act 1969.

1. The respondent sought in the prayer for relief:

   (a)an injunction to restrain the wife and daughter from selling or dealing with the Malaysian property;

   (b)a declaration that the transfer was an alienation of property with intent to defraud creditors within the meaning of s 89(1) of the Property Law Act 1969 (WA);

   (c)a declaration that the wife and daughter had notice of the appellant's purpose and intention and that they shared the same purpose or intention and knowingly participated in the alienations;

   (d)an order that the property be sold by private treaty or public auction and that the money be applied in satisfaction of the respondent's judgment in the District Court action;

   (e)that the respondent be at liberty to engaged an auctioneer and settlement agent to sell and complete the sale of the Malaysian property;

   (f)the wife and daughter to deliver up vacant possession of the property to the auctioneer; and

   (g)upon receipt of written notification by the respondent's solicitor of an offer duly executed by a purchaser to execute a transfer in favour of the purchaser and other documents necessary and appropriate to transfer the Malaysian property free of encumbrance to the purchaser and authority to the settlement agent to apply proceeds of sale to meet costs and fees connected with the sale, and secondly to satisfy the judgment debt due and all amounts inclusive of costs awarded to the respondent in CIV 1677/04 and 1009/04, or alternatively to execute a power of attorney in the appropriate form to do all things and execute all documents necessary to effect the sale and purchase of the property.

2. The writ issued on 22 March 2006, but in the month before, on 14 February 2006, the appellant had declared himself bankrupt.  The appellant and his wife and daughter as defendants entered memoranda of conditional appearance at varying times between 30 May 2006 and 14 June 2006 pursuant to O 12 r 6.  The defendants filed a motion to set aside the writ of summons.  The notice of motion sought an order that the proceedings be stayed under the Bankruptcy Act 1966.

3. The respondent then applied to the Federal Magistrates Court of Australia for leave to commence the proceedings in the Supreme Court and for leave to take fresh steps in the proceedings.  Orders were made in the Federal Magistrates Court granting the respondent 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 respondent would not oppose the Official Trustee in Bankruptcy being joined in the proceedings at any time, and that the respondent would hold the property the subject of a Supreme Court proceedings or any moneys received in those proceedings for the Official Trustee in Bankruptcy on behalf of the bankrupt estate of the appellant.

4. Following the commencement of the proceedings in the Federal Magistrates Court the appellant and the other two defendants filed an amended notice of motion in the Supreme Court dated 9 October 2006, seeking summary judgment dismissing the respondent's claim on the ground that the Supreme Court had no jurisdiction to hear and adjudicate upon the writ of summons.  In the alternative, the appellant asked the court to exercise its discretion to dismiss or stay the proceedings on the ground that the Supreme Court was forum non conveniens. 

5. Three affidavits were filed by the appellant and the  other two defendants in support of the notice of motion.  One affidavit by the appellant and one by the appellant's wife and daughter related to the point that no leave had been granted to the respondent to commence the proceedings.  This became irrelevant once the orders were made to overcome this, by the application to the Federal Magistrates Court. 

6. Jaspal Singh Harbhajan Singh (Jaspal Singh) deposed in an affidavit sworn 7 September 2006 that he was the brother of the third defendant (and therefore the brother‑in‑law of the appellant).  This affidavit deposed as follows:

   2)The property in question in this Writ of Summons is immovable property located in Malaysia and in which I held a previous interest.

   3)The property in this Writ of Summons had been held in trust by the Second Defendant on my behalf by virtue of a trust deed dated 14th July 1999.  A copy of the trust deed is marked as 'JSHS-1' and annexed to this affidavit.

   4)In 1999 when the Second Defendant and his family were planning to migrate to Australia, the Second Defendant approached me for financial assistance to raise the money he needed for his Business Migration visa.

   5)At that time I had in my possession the money left to my siblings and I from the estates of our deceased parents.

   6)I advanced to the Second Defendant a sum of Malaysian Ringgit $270,000.00 but demanded that I be given some security for the money that was basically the inheritance that my siblings and I had received from our deceased parents.

   7)On the advice of my solicitor I had a trust deed drawn up on the property mentioned in this Writ of Summons.  Attached is a statutory declaration marked and exhibited as 'JSHS-2' verifying the arrangements that were made and the instructions given to the solicitor by me.

   8)In 2003 the Second Defendant informed me that his financial plans were not       working out in Australia as planned and that he in fact needed to borrow more    money from me.  He indicated to me that he was willing to transfer his properties in Malaysia to me and/or my nominees in settlement of his debt to me and my parents' estate.

   9)I had a discussion with my siblings and we decided that the property should be transferred to our sister, the Third Defendant and/or her nominees, as her share of our deceased parents' estates.

   10)The Third Defendant instructed me to include her eldest daughter, Teeshaldip Kaur Bal, the First Defendant, as the co‑owner of the property.

   11)I accordingly instructed my solicitors to cause the transfer of the property from the Second Defendant to the First and Third Defendants jointly.

   12)I have now instructed my solicitors that should an adverse judgment be given in any Australian court regarding the said properties they are to immediately lodge a caveat on the property to protect mine and my deceased parents' estates' interest.

7. The copy of the trust deed exhibited dated 14 July 1999 contained three recitals which read:

   A)The Trustee is the registered owner of the properties known as No 2, Jalan Lim Swee Aun, Birch Village, 34000 Taiping, Perak held under EM (R) 9969 Lot 1257 Mukim Tupai, Daerah Larut & Matang, Negeri Perak and No 14, Jalan Lim Swee Aun, Birch Village, 34000 Taiping, Perak held under Grant No 16358 Lot No 1606, Mukim Tupai, Daerah Larut & Matang, Megeri Perak (hereafter collectively referred to as 'the said properties').

   B)The Beneficiary has since 1997 provided to the Trustee financial assistance in the form of friendly loans in total amounting to RM270,000.00 (Ringgit Malaysia Two Hundred And Seventy Thousand) only.

   C)It is now agreed between the Trustee and Beneficiary that in consideration of the Beneficiary having provided financial assistance to the Trustee, the Trustee shall hold the said properties in trust for the Beneficiary solely for the benefit of the Beneficiary and when so directed by the Beneficiary transfer the same to the Beneficiary or as the Beneficiary may direct and that the Trustee shall execute this declaration of trust.

8. The operative provisions of the trust deed contained a declaration that the appellant held the 'said properties' on trust for 'the benefit and enjoyment of the beneficiary [Jaspal Singh]' and that 'at the request of the beneficiary, the trustee shall convey the said properties to the beneficiary and/or his nominee(s) absolutely to enable the beneficiary or his nominee(s) to be registered as the assignee/beneficial owner/registered proprietor of the whole of the said properties'.  Exhibit JSHS‑2 to Jaspal Singh's affidavit was a statutory declaration from Jargit Singh dated 1 August 2006, stating that he was an advocate and solicitor of the High Court, Malaya, practising in Kuala Lumpur, Malaysia and he deposed:

   2)On or around July, 1999, I was approached by Man Mahan Singh and Jaspal Singh a/l Harbhajan Singh for legal advice as to the position and legal standing of Jaspal Singh a/l Harbhajan Singh in respect of money he had advanced to Man Mahan Singh and he wanted some form of security for the money advanced.

   3)In the course of the discussion I was informed that Man Mahan Singh was the owner of 2 properties known as No 2, Jalan Lim Swee Aun, Birch Village, 34000 Taiping Perak and No 14, Jalan Lim Swee Aun, Birch Village, 34000 Taiping, Perak.

   4)I [then] advised Man Mahan Singh and Jaspal Singh a/l Harbhajan Singh that Man Mahan Singh could execute a trust deed in favour of Jaspal Singh a/l Harbhajan Singh whereby he would declare that he hold the said 2 properties in trust for Jaspal Singh a/l Harbhajan Singh and agreed to deal with them in such manner as Jaspal Singh a/l Harbhajan Singh may direct.

   5)Both the parties were agreeable to it and I accordingly prepared a trust deed which was signed by both the  parties in my presence.  A copy of the Trust Deed is attached herewith and marked 'JS1'.

9. Also filed was an affidavit of Hardial Singh Khaira (Hardial Singh) dated 11 September 2006.  Hardial Singh deposes to being a law lecturer, graduating with a Bachelor of Law degree from the University of Malaya in 1978, a Master of Law degree from the University of Western Australia in 1991, and admitted as an advocate and solicitor of the High Court of Malaya in 1979.  Since 1989 he has been employed as a law lecturer in the Business School of Murdoch University, Western Australia.  Hardial Singh deposed that Australia is not referred to in the Reciprocal Enforcement of Judgments Act 1958 (Malaysia) but that it would be possible to bring proceedings to enforce a judgment from an Australian court in Malaysia.  He deposed that in such proceedings a defence could be raised that the foreign court had no jurisdiction.  The affidavit discloses that Malaysia has a Torrens system of registration of land title and stated in par 20 that 'even if the title of the registered proprietors could be defeated the property will revert to the trust created on it in 1999 by the second respondent' and stated that under the Malaysian Bankruptcy Act 1967, the property of the bankrupt divisible among creditors would not comprise property held by the bankrupt on trust for any other person. 

10. Hardial Singh also swore an affidavit on 31 January 2008.  It exhibited an article written by Hardial Singh and published in The Quarterly Law Review ([2007] 1 QLR 34). 

11. A further joint affidavit was sworn by the appellant and the other two defendants on 11 September 2006, which made submissions rather than depose to any facts.  The affidavit exhibited what purported to be copies of Malaysian legislation, including the Bankruptcy Act, a copy of parts of the Malaysian National Land Code 1965 and a commentary on the National Land Code.

The master's decision

1. The master dismissed the application made by the appellant and the other two defendants holding that the plaintiff's case was arguable and that the Supreme Court had jurisdiction and was not forum non conveniens.

The appellant's grounds of appeal 

1. The appellants grounds of appeal read:

   1)That the learned Master erred in law in only considering the submissions of the Plaintiff and not referring to, considering and deciding the issues raised by the Appellant in his submissions and further erred in fact in not referring at all to, considering or deciding the application on the facts submitted by unchallenged affidavit evidence.

   2)That the learned Master erred in law in stating that the only real question before him was: 'whether the fact that the property the subject of the transfer executed in Western Australia is in Malaysia is sufficient to bring these proceedings to an end?'  The learned Master failed to refer to or consider and rule on the various submissions made by the Appellant on the Australian law relating to jurisdiction to deal with foreign immovable property.

   3)That the learned Master erred in law in stating that if there has been fraud on the part of the defendants, then the property of the second defendant must be held in trust by the first and third defendants and the court could enforce personal obligations upon those defendants within jurisdiction as the title to immovable property can be acquired, passed, and lost only according to the lex rei sitae.

   4)That the learned Master erred in law in wrongly applying the case of Couzens v Negri [1981] VR 824 in that the learned Master failed to distinguish … [that case and what was determined by that case]

   5)That the learned Master erred in law in not accepting that the Appellant had discharged the onus and proved that an Australian court would be the forum non conveniens as it was clearly the inappropriate forum in that:

   a)It involves immovable property situated in Malaysia and it is only the High Court of Malaya that has the jurisdiction to determine if the transfer of property to the registered proprietors was fraudulent and to make any orders relating to the property.

   b)The Writ of Summons is brought under section 89(1) of the Property Law Act 1969, which has no extra‑territorial jurisdiction to apply in Malaysia or to override the express provisions of section 340(2) of the Malaysian National Land Code 1965.

   c)There is a foreign interest involved in the property, as it had earlier been the subject of a trust created by deed in Malaysia, in favour of one Jaspal Singh in 1999.

   d)The continuation of the proceedings in Australia would be vexatious and oppressive to the Appellant as there is no chance that the Plaintiff could enforce the order made by an Australian court as:

   6)That the learned Master erred in law in accepting the Respondent's admission that any judgment obtained in the Supreme Court of Western Australia cannot be registered in Malaysia but failed to determine as to how the Respondent intended to enforce any judgment or execute any order made by an Australian court in Malaysia and further, in not accepting that any judgment would be brutum fulmen and would render the proceedings futile.

1. The issues raised in the appellant's written submissions and in the submissions made to the master, were that:

   (a)that the court had no jurisdiction to entertain the respondent's action and that if the court did have jurisdiction, then

   (b)in the exercise of its discretion the court should decline to exercise jurisdiction on the grounds that the Supreme Court was the inappropriate forum for the determination of the dispute (forum non conveniens).

2. However, buried in the submissions relating to the second issue was a submission in effect, that as a matter of construction s 89(1) of the Property Law Act conferred no right on the respondent to avoid the alienation of the Malaysian property. The appellant did not identify the issue in that way, instead submitting that s 89(1) 'has no extraterritorial jurisdiction to apply in Malaysia'. Although it might seem appropriate to deal with the construction point first, discussion on that issue will be deferred until after a consideration of the jurisdiction question. For the purposes of considering the jurisdiction issue, the assumption will be made that as a matter of construction s 89(1) does confer the right on a person to avoid the alienation of foreign immovable property by a person within the jurisdiction of the court with the intention to defraud creditors within the jurisdiction.

The jurisdiction of the court

1. In relation to this issue it is necessary to consider the rules of private international law which govern and limit the exercise of jurisdiction of a court concerning foreign property.  The general rule which is referred to as the 'Mocambique rule' is derived from the decision of the House of Lords in British South Africa Co v Companhiad Mocambique [1893] AC 602. The Mocambique case concerned rights in rem (Griggs Group Ltd v Evans [2005] Ch 153 [65]). In the Mocambique case, the Portuguese company claimed to be the owner of the land and sought damages for trespass from the British company. The distinction between an action or rights in rem and an action or rights in personam is discussed by Peter Prescott QC in the Griggs Group case [65] and [66].  See also Centurion Trust Co Ltd v Director of Public Prosecutions [2008] WASCA 6 (McLure JA) [101] and McGovern v Victoria [1984] VR 570, 576. The Mocambique rule as defined in Dicey & Morris The Conflict of Laws, 9th ed, r 79, was approved by the House of Lords in Hesperides Hotels Ltd v Muftizade [1979] AC 508. In Dicey & Morris the rule reads:

   Subject to the exceptions hereinafter mentioned, the court has no jurisdiction to entertain an action for (1) the determination of the title to, or the right to possession of, any immoveable situate out of England (foreign land); or (2) the recovery of damages for trespass to such immoveable.

2. As the master noted, the Mocambique rule has been referred to in the High Court in Potter v Broken Hill Pty Co Ltd (1906) 3 CLR 479 and The Commonwealth v Woodhill (1917) 23 CLR 482. However, more recently the High Court has reserved the standing of the Mocambique rule and of Potter v Broken Hill for further consideration.  See Regie National des Usines Renault SA v Zhanng [2002] HCA 10; (2002) 210 CLR 491 [76]. See also Petrotimor v Commonwealth [2003] FCAFC 3; (2003) 126 FCR 354, 424 ‑ 425, 436. Until the High Court does review the rule it would be advisable to treat the Mocambique rule as good law. See Farah Constructions Pty Ltd v Say‑Dee Pty Ltd [2007] HCA 22; (2007) 81 ALJR 1107 [134] ‑ [135].

3. The case does not concern the Mocambique rule itself.  The respondent's claim falls within an exception to the rule.  This is because in this case the respondent does not deny that the appellant is the legal owner of the Malaysian land, ie the registered proprietor and does not seek an in rem judgment.  His complaint is that the appellant became the registered proprietor by reason of the train of events beginning in Perth, when the appellant signed a transfer of the Malaysian land, and ending with the registration of the transfer in Malaysia.  It was contended that this was an alienation of property with the intent of the appellant to defraud his creditors.  The respondent having become aware of the alienation of the Malaysian property elected to exercise his right to avoid the alienation based on  his allegation that the appellant had the intent to defraud.  In the Supreme Court, he asks for declarations concerning the conduct of the appellant and the other defendants and in personam relief against the defendants.  If the respondent's claims are upheld then the court will 'act upon the conscience' of the appellant and his wife and daughter.  The jurisdiction is not over the property but over the person of each of the defendants.  See Griggs Group [66], [69].

4. What have been referred to as 'exceptions' to the Mocambique rule have long been recognised.  They were described by Parker J in Deschamps v Miller [1908] 1 Ch 856 at 863 ‑ 864 where he said:

   In my opinion the general rule is that the Court will not adjudicate on questions relating to the title to or the right to the possession of immovable property out of the jurisdiction. There are, no doubt, exceptions to the rule, but, without attempting to give an exhaustive statement of those exceptions, I think it will be found that they all depend on the existence between the parties to the suit of some personal obligation arising out of contract or implied contract, fiduciary relationship or fraud, or other conduct which, in the view of a Court of Equity in this country, would be unconscionable, and do not depend for their existence on the law of the locus of the immovable property. Thus, in cases of trusts, specific performance of contracts, foreclosure, or redemption of mortgages, or in the case of land obtained by the defendant by fraud, or other such unconscionable conduct as I have referred to, the Court may very well assume jurisdiction. But where there is no contract, no fiduciary relationship, and no fraud or other unconscionable conduct giving rise to a personal obligation between the parties, and the whole question is whether or not according to the law of the locus the claim of title set up by one party, whether a legal or equitable claim in the sense of those words as used in English law, would be preferred to the claim of another party, I do not think the Court ought to entertain jurisdiction to decide the matter.

5. There is a question as to whether it is correct to refer to these as exceptions to the Mocambique rule or 'as merely examples of circumstances where the Mocambique rule does not apply': see Dagi v BHP (No 2) [1997] 1 VR 428, 439 ‑ 440.

6. Even in the Mocambique case itself, when it was in the Court of Appeal (Companhiad de Mocambique v British South Africa Co [1892] 2 QB 358, 364) Wright J said:

   Courts of equity have, from the time of Lord Hardwicke's decision in Penn v Baltimore, in 1750, exercised jurisdiction in personam in relation to foreign land against person locally within the jurisdiction of the English court in cases of contract, fraud and trust.

   In Griggs Group Ltd v Evans at [66] Peter Prescott QC said that the equitable jurisdiction in personam touching land abroad has existed for 'at least 250 years' (Penn v Lord Baltimore (1750) 1 Ves Sen 444; (1750) 27 ER 1132 was decided in 1750).

7. In Potter v Broken Hill, Barton J referred to the in personam jurisdiction on 503 ‑ 504.  Barton J referred to the United States' case of Davis v Cornue 151 NYR 172, 178, and quoted a statement of the law by Pomeroy; Equity Jurisprudence III, sec 1318:

   The jurisdiction to grant such remedies is well settled.  Where the subject matter is situated within another country or State, but the parties are within the jurisdiction of the court, any suit may be maintained and remedy granted which directly affect and operate upon the person of the defendant and not upon the subject matter, although the subject matter is referred to in the decree, and the defendant is ordered to do or refrain from certain acts towards it, and it is thus ultimately, though indirectly, affected by the relief granted.

8. The following cases provide examples of where courts have assumed jurisdiction (or expressed willingness to assume jurisdiction) to grant in personam relief against a person within the jurisdiction concerning fraud by that person in relation to foreign immoveable property. 

9. In Cranston v Johnston (1796) 3 Ves Jun 169; 30 ER 952 a creditor by unfair processes in a court in the West Indies caused the debtor's land in the West Indies to be sold and then purchased it for less than its value. The English court held that it had jurisdiction to decree that the creditor (who was in England) reconvey the property to the debtor.

10. In Razelos v Razelos (No 2) [1970] 1 WLR 392, Baker J declared that a wife was entitled to ownership of property which the husband had purchased in Greece, using the wife's money which the husband, by threats and fraud, had obtained from his wife and expressed the view that if the husband (who left the country during the hearing) returned to England, there would be the 'chance of enforcement in personam' (404).

11. In Cook Industries Inc v Galliher [1979] 1 Ch 439, Templeman J (as he then was) in an ex tempore judgment, dealt with an application for an order against the defendant requiring him to permit inspection of foreign immoveable property, namely his flat in Paris. The plaintiff alleged that some valuable paintings in the flat were owned by a Mr Sarlie who was said to have spirited the paintings out of the United States to ensure that they did not become available to satisfy a judgment debt owed to United States creditors. The order for inspection was made.

12. As already mentioned, in all these cases the defendant was within the jurisdiction, the land the subject of the action was outside the jurisdiction, and in personam remedies were granted by the courts (or the court expressed itself willing to grant such remedies) to reverse the effects of fraud.

13. The right of a person prejudiced by a fraudulent disposition of property to avoid the disposition existed before the Elizabethan statute also conferring this right was created, and equity would have decreed in personam remedies in support even if the property was out of the jurisdiction. Section 89 of the Property Law Act 1969 reproduces the substance of the Elizabethan statute and the Elizabethan statute is referred to in the explanatory memorandum.  The Western Australian Parliament must be taken to have known of the equitable jurisdiction of its courts to make decrees to deal with fraudulent dealing of foreign immovable property by a person within the jurisdiction and it is therefore clearly arguable that it must have intended to legislate to confer the right on a person, prejudiced by an alienation of foreign immoveable property with intent to defraud creditors, to avoid such a disposition.

The lex situs

1. The appellant then raises a question about the effect of the lex situs, contending in effect, that if there is a decree that the appellant's wife and daughter execute a transfer and the wife and daughter refuse to sign the transfer, that any transfer executed by an official of the Supreme Court of Western Australia would not be 'effective to transfer title'. 

2. Before considering that submission, it is necessary to refer briefly to the relief claimed by the respondent in the writ.  The respondent seeks an injunction restraining the appellant's wife and daughter from selling the Malaysian property, a declaration that the alienation of the Malaysian property was an alienation of property with intent by the appellant to defraud his creditors and a declaration that the appellant's wife and daughter had notice of the appellant's purpose and intention that they shared the same purpose or intention and knowingly participated in the alienations.  Orders are sought that the property be sold and that the appellant's wife and daughter be compelled to, in effect, cooperate with the sale of the property.  An order is also sought that the proceeds of the sale ultimately be used to satisfy judgment debts due to the respondent.  That relief could not now be granted in view of the orders made in the Federal Magistrates Court on 7 September 2007 which were made on condition that any moneys received in the proceedings in this court be moneys which would be held for the Official Trustee in Bankruptcy on behalf of the bankrupt estate of the appellant. 

3. 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. 

The enforcement of a Western Australian judgment in Malaysia

1. The appellant submitted that a judgment of the Supreme Court of Western Australia could not be enforced in Malaysia and referred to Carpenter v Strange (1891) 141 US 87. In that case, Mrs Carpenter, a citizen of New York brought a suit in the Supreme Court of that State against Mrs Strange, alleging that a deed had been executed by Mrs Strange's father before he died, Mrs Strange acting in collusion with him and for the 'fraudulent purpose of defeating the collection of the plaintiff's just and legal claim against the estate of the said testator, and to take so much of his estate as said property represents from liability to said claim'. The court in New York declared that the deed should be set aside and be declared inoperative, void and of no effect. The property in question was property in another State, Tennessee. There was no suggestion that the New York court had no jurisdiction. Mrs Carpenter had however made a mistake because she did not seek in personam relief against Mrs Strange, but rather took the judgment of the New York court to Tennessee and attempted to enforce it there. The Tennessee court refused to enforce it. The US Supreme Court upheld the Tennessee court's decision but made it plain that if Mrs Carpenter had sought in personam relief, this would have been effectual 'through coercion of the defendant; as, for instance, by directing a deed to be executed'. The US Supreme Court noted that there was nothing in the decree of the New York court purporting to exert control over Mrs Strange. It is necessary to observe that the declaration that the deed was inoperative was a declaration about the title. In this case the declaration claimed would not per se affect legal title to the Malaysian property because legal title exists as a result of registration under the Torrens system of land registration in that country.

2. The appellant in this case pointed out that the Tennessee court was not obliged to recognise the judgment of a New York court.  However, it is clear from the summary of Carpenter's case above, why Mrs Carpenter did not succeed.  The United States Supreme Court said:

   No conveyance was directed, nor was there any attempt in any way to exert control over her, in view of the conclusion that the court announced.  Direct action upon the real estate was certainly not within the power of the court; and as it did not order Mrs Strange to take any action with reference to it, and she took none, the courts of Tennessee were not obliged to surrender jurisdiction to the courts of New York over real estate in Tennessee exclusively subject to its laws and the jurisdiction of its courts.  (106)

   As mentioned in the summary above, the United States Supreme Court observed, in effect, that the New York court could have made orders affecting the property.  It said (105) ‑ (106) that:

   While by means of its power over the person of a party, a court of equity may, in a proper case, compel him to act in relation to property not within its jurisdiction.  Its decree does not operate directly upon the property nor effect the title, but is made effectual through the coercion of the defendant, as, for instance, by directing a deed to be executed or cancelled by or on behalf of the party.  … Hence, although in cases of trust, of contract, and of fraud the jurisdiction of a court of chancery may be sustained over the person, notwithstanding lands not within the jurisdiction may be effected by the decree, … yet it does not follow that such a decree is in itself necessarily binding upon the courts of the state where the land is situated.  To declare the deed to Mrs Strange null and void, in virtue alone of the decree in New York, would be to attribute to that decree the force and effect of a judgment in rem by a court having no jurisdiction over the res.

3. 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.

4. However, because the appellant made detailed submissions suggesting that a judgment declaring the alienation of the Malaysian property by the appellant to his wife and daughter would not be recognised in Malaysia, I will deal with it.

5. The appellant contends, relying on the affidavits of Hardial Singh, that the law of Malaysia provides that a judgment of an Australian court could not be enforced under the Malaysian Reciprocal Enforcement of Judgments Act 1958.  That is conceded by the respondent, but Hardial Singh acknowledges that a judgment of the Supreme Court of this State could be enforced by action at common law in the High Court of Malaya.  Hardial Singh deposes that in seeking to enforce a judgment of the Supreme Court of Western Australia in Malaysia by filing an action on the foreign judgment at common law in the High Court of Malaya, a defence could be raised that:

   (a)the Western Australian court had no jurisdiction; and

   (b)even if it did, it would not 'have any better jurisdiction than is reflected in the Reciprocal Enforcement Of Judgments Act 1958'.

   I have already dealt with the first point (the Supreme Court does have jurisdiction) but as to the second point, Hardial Singh contends that:

   8.Under section 5(2) of the Malaysian Reciprocal Enforcement of Judgments Act 1958, a foreign court is only deemed to have jurisdiction if:

   i.it is a judgment given in an action in personam [Section 5(2)(a)]

   ii.the judgment debtor, being a defendant in the original court, submitted to the jurisdiction of that court by voluntarily appearing in the proceedings [Section 5(2)(i)]

   iii.the judgment debtor had before the commencement of the proceedings agreed, in respect of the subject matter of the proceedings to submit to the jurisdiction of that court [Section 5(2)(iii)]

1. It is clear from s 5(2) of that legislation which Hardial Singh exhibited to an affidavit, that this is not an exhaustive statement of the circumstances in which a foreign court is deemed to have jurisdiction in Malaysia.  Hardial Singh fails to refer to s 5(2)(a)(iv) of the legislation which reads:

   If the judgment debtor, being a defendant in the original court, was at the time when the proceedings were instituted resident in … the country of that court.

   The appellant and his wife and daughter were resident in Western Australia.

2. On Hardial Singh's evidence therefore, there is no reason why the judgment of a Western Australian court would not be recognised in Malaysia if the judgment of the Western Australian court is a judgment in personam and the judgment debtor was resident in this State when the proceedings were instituted.

3. The appellant then submits that the Torrens system legislation in Malaysia would mean that a judgment of the Supreme Court would not be recognised in Malaysia. Hardial Singh's affidavits reveal that the Malaysian indefeasibility section is relevantly the same as s 68 of the Transfer of Land Act 1893 (WA) in that the legislation contains a provision stating that title to land once registered is indefeasible 'except in the case of fraud', which means 'actual fraud'. That corresponds with the law here. See Farah Constructions v Say‑Dee Pty Ltd, 192 and Conlan v Registrar of Titles [2001] WASC 201 [166]. The law of Malaysia according to Hardial Singh is that knowledge of a prior interest will not amount to fraud. This corresponds with the law in this State. See Mills v Stockman (1967) 116 CLR 61, 78; Conlan [169]

4. If the respondent's claim for in personam remedies was based merely on the fact that they knew that the appellant was intending to defraud his creditors, then it is arguable that would not be sufficient to establish any cause of action or right to any remedies against the defendants.  The respondent, however, alleges that the appellant's wife and daughter had more than mere notice of the defeasible nature of the appellant's title.  What is alleged is that the appellant's wife and daughter had notice of the appellant's intent to defraud his creditors and that they 'shared the same purpose or intention' and 'knowingly participated in the said alienations'. 

5. In Macquarie Bank Ltd v Sixty‑Fourth Throne Pty Ltd (1998) 3 VR 133, 156 ‑ 157, Tadgell JA said when speaking of registration of a mortgagee's interest under the Torrens system of title:

   If registration of the mortgagee's interest is achieved dishonestly then the registration and with it the interest, allowable to be set aside not because on registration, the registered holder became a constructive trustee but because s 42(1) recognises that fraud renders the interest defeasible.  If, on the other hand, the registration is not achieved by fraud the Act provides, subject to its terms, for an indefeasible interest.

6. This was approved in Farah Constructions v Say‑Dee Pty Ltd at 170.  See also Owen J in Conlan's case [173] ‑ [174].

7. In this case, it is alleged that the appellant's wife and daughter became registered as proprietors of the Malaysian property by fraud.  Whether that is so will have to be decided at trial.

8. As the master correctly noted, this is an application which requires the assumption to be made that the allegations in the statement of claim can be made out.  Whether in fact they are made out, will require evidence to be adduced and a decision then made.  It is only necessary to say that based on the statement of claim, it is arguable that there was actual fraud. 

9. As a result it is arguable that there is nothing in Malaysian law which would prevent the claimed decrees of the Western Australian court being enforced in Malaysia if that became necessary.

The claimed interest of Jaspal Singh

1. The remaining potential complication is the claimed interest of Jaspal Singh.  It appears that he claims that if the transaction constituting the alienation is set aside, then he should be registered as the proprietor of the land.  This court was informed that he lives out of the jurisdiction.  His claim is not a claim as the legal owner.  He claims to have an equitable interest in the Malaysian property but that depends on the proof of the existence, validity and construction of the trust deed and the proof by Hardial Singh that he made 'friendly loans' to the appellant.

2. Order 10 r 1(h) provides that service of a writ or notice of a writ out of the jurisdiction is permissible with the leave of the court whenever:

   Any person out of the jurisdiction is the necessary or proper party to an action properly brought against some other person duly served within the jurisdiction.

3. There is no doubt that Jaspal Singh would be a proper party to the action because the document he seeks to prove and the loans he claims to have made will bear on whether the court would make a decree in favour of the respondent.  These claims may then be determined in the proceedings in this State.

The proper construction of s 89(1) of the Property Law Act 1969 (WA)

1. Section 89 reads:

   (1)Except as provided in this section, every alienation of property made, whether before or after the coming into operation of this Act, with intent to defraud creditors is voidable, at the instance of any person thereby prejudiced.

   (2)This section does not affect the law of bankruptcy for the time being in force.

   (3)This section does not extend to any estate or interest in property alienated for valuable consideration and in good faith or upon good consideration and in good faith to any person not having, at the time of the alienation, notice of the intent to defraud creditors.

2. The statutory ancestor of s 89 of the Act is 13 Eliz c 5 (made perpetual by 27 Eliz Cap 4); see explanatory memorandum to the Property Law Bill 1969.  The Lord Chancellor in Rickards v Attorney‑General (1844) 12 CL & F 30, 42 [8 ER 1306] said that the Elizabethan statute was in turn declaratory of the common law. The Elizabethan statute provided that transfer of property for the purpose of defrauding creditors, was to be 'clearly and utterly void, frustrate and of none [effect]' and provided that the statute did not extend to transfers of property to a bona fide purchaser for value without notice. See Cannane v J Cannane Pty Ltd (1998) 192 CLR 557, 573; Harrods Ltd v Stanton [1923] 1 KB 516, 517.

3. All States of Australia and the Commonwealth legislated to produce the substance of the Elizabethan statute; see s 37A Conveyancing Act 1919 (NSW); s 172 Property Law Act 1958 (Vic); s 86 Law of Property Act 1936 (SA); s 46 Mercantile Act 1867 (Qld); s 40 Conveyancing and Law of Property Act 1884 (Tas). It has been held that although s 121 of the Bankruptcy Act (Cth) is a similar provision the existence of that provision does not mean that s 89 of the Property Law Act runs foul of s 109 of the Constitution.  See Zaravinos v Houvardas [2004] NSWCA 421; (2004) 32 Fam LR 490. For the history of the English legislation and the Australian versions, see Garuda Industries v Grellman (1992) 35 FCR 515; Cannane v J Cannane Pty Ltd.  According to Kerr on Fraud & Mistake, 7th ed, 299, 13 Eliz C 5 was adopted in the United States of America by every State of the Union either as part of the common law or by express legislation.

4. Although the Australian legislation is said to reproduce the substance of the Elizabethan statutes it is, as usual, always important to construe the statute under consideration rather than blindly following decisions based on other versions of the legislation. That means that close attention must be paid to the relevant parts in s 89(1) of the Act. The words or phrases which require particular attention, are the words 'alienation', 'voidable', 'intent to defraud' and 'property' but as usual it is necessary to read the Act as a whole and the section as a whole, and not to confine the meaning of s 89 by concentrating only on the meaning of individual words. Furthermore, it has always been open to a court to have regard to the historical setting of a statute and, by that means, to ascertain what the object of the legislature was: Pambula District Hospital v Herriman (1988) 14 NSWLR 387, 410 (Samuels JA). This is particularly important in this case because the explanatory memorandum to the Act expressly states that s 89 stated that the section was 'a re-enactment in modern form of two old English statutes passed in the reign of Elizabeth I namely, 13 Eliz Cap 5 and 27 Eliz Cap 4 which avoided conveyances made in fraud of creditors'.

5. In R v Dunwoody [2004] QCA 413; (2004) 149 A Crim R 259 [122], Holmes J said that 'such provisions have consistently been interpreted with a purposive approach, having regard to their origin in the Elizabethan statute and the accepted purpose of that statute and its successors'. Lord Mansfield in Cadogan v Kennett (1776) 2 Cowp 432, 434 said that the statutes 'cannot receive too liberal a construction, or be too much extended in suppression of fraud'.

Alienation

1. The word, according to The Macquarie Dictionary means 'at law' a transfer of title to property by one person to another by conveyance or will.  However, the ordinary meaning is shown to mean 'withdrawal' or 'estrangement'.  The Oxford English Dictionary says that the ordinary meaning of the word is relevantly 'the action of transferring the ownership of anything to another'.

2. In my opinion, the meaning of 'alienation' in s 89(1) does not have the confined meaning referred to in The Macquarie Dictionary as the meaning at law.  It has the more general ordinary meaning.  This was the view of Barrett J in Green v Schneller [2002] NSWSC 671; (2002) 29 Fam LR 346, who was considering the meaning of the word in the New South Wales equivalent (s 37A of the Conveyancing Act). He held that the words was synonymous with the word 'transfer' in s 121 of the Bankruptcy Act and that the word covered all of the steps in a transaction taken by the relevant parties.  See also Mateo v Official Receiver in Bankruptcy (2002) 188 ALR 667 which expressed the view that the word 'transfer' in the analogous section of the Bankruptcy Act consisted of the 'whole transaction'  See also Silvera v Savic (1999) 46 NSWLR 124 [78]. The fact that the relevant series of steps involves actions by other person or instrumentalities does not detract from the reality that an alienation may be 'made' by the particular party in question: Green v Schneller [29].

3. In this case the alleged execution of the transfer in Western Australia by the appellant and his wife and daughter and the subsequent lodgement of the transfer at the Titles Office in Malaysia were the steps which amounted to the alienation of the Malaysian property by the appellant to his wife and daughter.  The fact that an official in the Titles Office recorded the transfer on the title does not detract from that conclusion.

Voidable

1. In the Elizabethan statute, the word 'void' is used and in s 89 the word 'voidable' is used. In Brady v Stapleton (1952) 88 CLR 322, Dixon CJ and Fullagar J, when speaking of the former, said at 333:

   The truth seems to be that, although the statute uses, and most emphatically uses, the word 'void', the courts have always treated a fraudulent assignment as effective unless and until a creditor or creditors intervene by levying execution or taking legal proceedings.

2. In my reasons for judgment in First Industry Corp v Goh [2002] WASC 111 the first sentence in [34] reads:

   Although s 89 'emphatically' uses the word 'void', this does not mean void ab initio but void sub modo.

   Some words were accidentally omitted.  The sentence should read:

   Although [the ancestor of] s 89 of the Property Law Act [13 Eliz 1 c 5] s 89 'emphatically' uses the word 'void', this does not mean void ab initio but void sub modo. 

   (I have added in brackets the words which were omitted).

3. Section 89 is not a section conferring jurisdiction on a court. It confers a statutory right on 'any person … prejudiced' by an 'alienation' (fitting the description in the section) to avoid the transaction. An alienation with intent to defraud creditors is not void ab initio. The title of a 'male fide' purchaser is of full effect until there is an election by a person entitled to avoid the alienation. This is explained in detail in Brady v Stapleton, Dixon CJ and Fullagar J at 333.

4. A creditor having elected to avoid an alienation will often ask a court to declare the validity of the creditor's claim to have avoided the alienation.  That can be done by the court exercising its jurisdiction to make a declaration.  If more is required and if common law remedies are inadequate or inconveniently cumbersome (as to which see M J Tilbury, Civil Remedies, vol 1 [4016]), then equity will supply them. 

5. In this case, at least by the commencement of proceedings in this action, the respondent elected to avoid the alienation of the Malaysian property and seeks a declaration that the alienation was accompanied by the relevant fraudulent intent along with other in personam equitable relief to give effect to the respondent's election.

Intent to defraud

1. A 'real intent' to defeat or delay creditors must exist: Williams v Lloyd (1934) 50 CLR 341, 371 ‑ 372 (Dixon J); Cannane (565 ‑ 566); Bell Group v Westpac [No 9] [2008] WASC 239 [9,104] ‑ [9,146] (Owen J); Langdon v Gruber [2001] NSWSC 276 [53] per Austin J; Electrical Enterprises Pty Ltd v Rodgers [1988] 15 NSWLR 473, 497.

2. The fact that there must be an intent to defraud would be significant in relation to a case where a person avoided an alienation of Torrens system land within Western Australia. This is so because of s 6(a) of the Property Law Act.  This provides that except as the Act expressly provides, it does not apply to land under the Transfer of Land Act 1893 if there is inconsistency between the Act and the Transfer of Land Act. If a person taking title to land shares the transferor's intention to defraud rather than simply have notice of the transferor's intention it is arguable that this will amount to 'fraud' within the meaning of s 68 of the Transfer of Land Act. 

3. In this case (as will be seen later in these reasons) the land in question is of courts not 'under the Transfer of Land Act' so s 6(a) of the Act is irrelevant, but the evidence of Hardial Singh is that under Malaysian law, fraud will also make defeasible the title of a registered proprietor of Malaysian Torrens system land.

Property

1. The  meaning of this word has been left until last because it is in relation to it that the most significant issues arise.  The word 'property' is defined in s 7 of the Act to 'include real and personal property and any estate or interest therein and any thing or chose in action'.  Thus there is no geographical limitation imposed by the definition.  It may be noted that this definition does not contain words which were used in the definition of property in the Bankruptcy Act 1966 (Cth) which define 'property' to include real or personal property of every description situate in Australia 'or elsewhere'. So the question arises as to whether the word 'property' mean property anywhere in the world or only property in Western Australia.

2. A State Parliament may legislate extra-territorially if it expressly, or by clear implication, states that it is doing so.  It may do so if there is some connection between the subject matter of the legislation and the State and once there is sufficient connection, it is for the legislature to decide how far it will go.  See the authorities referred to in Director of Public Prosecution v Hafner [2004] WASC 32; (2004) 28 WAR 486 [42]. There is a presumption that legislation does not have extra‑territorial effect (see Hafner [42]) but it is important to note that the presumption applies is in order to construe legislation so as not to breach international law or principles of international comity. See Polites v Commonwealth (1945) 70 CLR 60, 69; Barcello v Electrolitic Zinc Co of Australasia Ltd (1932) 48 CLR 391, 421 (Dixon J) and Australian Securities Commission v Bank Leumi le Israel (1995) 134 ALR 101, 123. Usually the presumption that legislation does not operate territorially will be rebutted by explicit language stating Parliament's intention that the legislation should have extra territorial effect. See Australian Securities Commission v Bank Leumi le Israel, 123 and see Hafner for an example of legislation containing explicit language.  However, the presumption can be rebutted even without explicit language.  See Bank Leumi, 123 and Re North Broken Hill Holding Ltd (1986) 10 ACLR 270, 281 ‑ 282 (Fullagar J).

3. The appellant placed reliance on Re Doyle; Ex parte Brien v Doyle (1993) 41 FCR 40. In that case Burchett J considered the meaning of the word 'property' in s 120(1) of the Bankruptcy Act 1966 (Cth) which provided that certain settlements of property were void as against the Trustee in Bankruptcy, if the settlor became a bankrupt and settlement came into operation after, or within two years before the commencement of the bankruptcy. There was a wide definition of property in s 5(1) of the Bankruptcy Act as including real or personal property of every description situate in Australia 'or elsewhere'.  Burchett J held that this was not itself a solution to the conflict of law questions arising and he held, particularly referring to what Dixon J said in Barcello's case and Federal Bank of Australia Ltd v White (1895) 21 VLR 451 said at 54:

   Whatever the effect of a sequestration order upon the immoveable property of a bankrupt in a foreign country, it would be a very long step into the area under the control of that country's laws for the Australian Parliament to provide that the Australian Trustee in Bankruptcy might avoid the title of a third party upon whom foreign land had been settled at some earlier date by a person who subsequently became bankrupt.  Such a third party may have obtained a title valid under the lex situs.  The rule of our private international law is that it for the lex situs to determine the capacity of a person to deal with real estate and the effectiveness of any conveyance. 

4. At 55, Burchett J said:

   The terms of s 120 are consistent with the idea that the section should be subject to some territorial limitations.  Not only is it concerned with the rights of third parties who may have received property with no suspicion of any impending bankruptcy; its very language ties it to the domestic law.  There would be difficulty in translating the language into the legal setting of a foreign country which does not have the same legal history - where settlements and accrual of property in right of a spouse may be mysterious concepts. 

5. His Honour concluded at 56, that s 120 'must be limited to exclude a settlement of a foreign immoveable made under foreign law'.  His Honour then said that even if he had reached a conclusion that s 120 was sufficiently broad to embrace the settlement in that case (concerning residential property in Germany) a further problem would remain and that was the Mocambique rule. 

6. In my opinion, Re Doyle does not compel this court to conclude that because s 89 contains the word 'property' the operation of the section is confined to property within Western Australia.

7. Doyle's case is distinguishable because s 120(1) of the Bankruptcy Act 1966 (Cth) by force of the provision itself, stated that certain settlements of property were void. The section is not concerned with fraudulent dispositions of property. Section 89 of the Property Law Act 1969 (WA) confers a right on certain persons to avoid fraudulent dispositions of property carried out with fraudulent intent. Clearly there must be some territorial limitation. Thus, to take an extreme example, it may be assumed that it does not confer a right on a person in China to avoid a transaction carried out in China between two other Chinese nationals resident in China concerning a property in Russia. However, the section has no extraterritorial operation insofar as it confers a right on a person resident in Western Australia to avoid the disposition of property by acts performed in the State by a person resident in the State. Parliament does not legislate extraterritorially if it legislates concerning fraudulent conduct (occurring in the State) by a person resident within the State.

1. It may be inferred that by conferring a right on a person to avoid a fraudulent alienation of property, Parliament intended that right to be conferred in a way which would correspond with the right a person had under the Elizabethan statute and under the common law before that.  That right extended to immoveable property out of the jurisdiction.

2. The reasons above lead to the conclusion that it is clearly arguable that the court has jurisdiction to deal with the respondent's claims and that the master was correct to so hold.  Even though a court has jurisdiction, it does not follow that it will exercise it.  This leads on to the question about whether the master should have ordered a stay of the proceedings.

Forum non conveniens

1. The onus lay on the appellant to satisfy the court that the Supreme Court was a clearly inappropriate forum.  This will be the case if the continuation of proceedings would be seriously and unfairly burdensome, prejudicial or damaging or vexatious to him: Oceanic Sun Lines Special Shipping Co Inc v Fay (1988) 165 CLR 197, 247 ‑ 248; Voth v Manildra Flour Mills Pty Ltd (1990) 171 CLR 538, 564 and Regie National Des Usines Renault SA v Zhang [24].  See also Puttick v Tenon [2008] HCA 54; (2008) 250 ALR 582 [38]. (The Puttick decision was handed down by the High Court after this court reserved its decision.  The parties were given leave to file written submissions about the case which have been received and considered.)  A court is not an inappropriate forum merely because another is more appropriate.  See Regie [24].

2. What is relevant in deciding the issue of forum will vary from case to case, but any significant connection between the forum selected, the subject matter of the action and the parties, such as domicile, places of business, place where the transaction occurred or the subject matter of the suit, is relevant in deciding whether the chosen forum was or was not clearly inappropriate. 

3. As mentioned above, the respondent accepts that the present position is that the legal title to the Malaysian property is held by the appellant's wife and daughter.  What he seeks is in personam relief which will act upon the appellant's wife and daughter in Western Australia.

4. Relevant factors are that the respondent, the appellant, and the appellant's wife and daughter are resident in Western Australia, the process of alienation began with the execution of a transfer in Western Australia by the appellant and his wife and daughter, and that the relevant legislation is Western Australian legislation.  The claimed interest of Jaspal Singh concerns the claim by a person who lives outside of Western Australia, but he may be joined as a party in the Western Australian proceedings.  As mentioned above, there appears to be no difference between the relevant Torrens title law in Western Australia and in Malaysia.  In the light of all those points, it cannot be said that the continuation of proceedings in Western Australia would be oppressive and vexatious to the appellant.  It is only necessary to add an additional point which was made by Deane J in Oceanic Sun Lines (248).  He said, speaking of the onus which a defendant  has to discharge before the court will exercise its discretion to order a stay on the grounds of forum non conveniens:

   Ordinarily, a defendant will be unable to discharge that onus unless he can identify some appropriate foreign tribunal to whose jurisdiction the defendant is amenable and which would entertain the particular proceedings at the suit of the plaintiff.

5. The appellant did not seek to demonstrate that a Malaysian court would entertain the current proceedings. 

Disposal of the grounds of appeal

1. It remains only to formally dispose of the grounds of appeal in the light of the reasons given above. 

Grounds 1 and 2

1. It is true that the master did not repeat the appellant's detailed submissions, but save for one aspect, the master did deal with the principal issues, namely where the court could make any orders which might affect the Malaysian property, and the issue regarding whether the Supreme Court was forum non conveniens.  The aspect that the master did not deal with was the evidence that Jaspal Singh claimed an interest in the Malaysian property if the respondent had avoided the alienation.  That issue was dealt with in submissions in this court and so all issues have been fully explored on this appeal.  So although ground 1 has been made out to the extent mentioned there has been no miscarriage of justice.  This is because the issue not discussed by the master does not avail the appellant.  As to ground 2, the master's statement that the only 'real' question was whether the fact that the property the subject of the transfer executed in Western Australia was in Malaysia was sufficient to 'bring these proceedings to an end', was simply an expression used to indicate that it was the only point requiring close consideration in view of the master's conclusion that submissions that the Supreme Court was forum non conveniens were without any merit.  Ground 2 should be dismissed.

Grounds 3 and 4

1. The master correctly stated that the Mocambique rule as a broad statement of principle, represents the law in Australia at present. The master was also correct to say that there are 'exceptions' to the rule. The master was further correct to state that 'jurisdiction may be exercised in respect of a person within the jurisdiction who owes a personal obligation capable of being enforced in the jurisdiction' [9].

1. The appellant submits that the master erred in referring to Couzens v Negri [1981] VR 824 because it was distinguishable. It is true that Couzens v Negri is distinguishable on the facts because it concerned the existence of a trust and there is no trust claimed by the respondent in this case.  However, Couzens v Negri is relevant as demonstrating that there are exceptions to the Mocambique rule. 

2. Ground 4 should therefore be dismissed.

3. In ground 3 the appellant submits that if fraud is established on the part of the appellant, his wife and daughter, the court could not enforce personal obligations upon them, to remedy the fraud.  That submission cannot be sustained for the reasons given above.  Thus grounds 3 and 4 must be dismissed.

Ground 6

1. Ground 6 contends that a judgment of the Supreme Court would be 'brutum fulmen' (meaning literally 'an empty threat') and futile because the Supreme Court judgment would not be recognised in Malaysia.  As mentioned this assumes that steps would be taken by the respondent to enforce the judgment in Malaysia, which at the moment he sees no need for because decrees would compel the appellant's wife and daughter to personally take action in this State to reverse the conveyance by executing an appropriate transfer.  Ground 6 must be dismissed.

Ground 5

1. Ground 5, alleging that the Supreme Court was forum non conveniens must be dismissed for the reasons set out above.

2. NEWNES AJA:  I agree with Pullin JA.