Singh v Singh [No 2]

[2010] WASC 12

JURISDICTION     :   SUPREME COURT OF WESTERN AUSTRALIA

IN CIVIL

CITATION:   SINGH -v- SINGH [No 2] [2010] WASC 12

CORAM:   MURPHY J

HEARD:   25 JANUARY 2010

DELIVERED          :   27 JANUARY 2010

FILE NO/S:   CIV 1677 of 2004

BETWEEN:   SARDUL SINGH

Plaintiff

AND

MAN MAHAN SINGH
Defendant

Catchwords:

Equitable interest claimed in foreign property - Interlocutory injunction - Jurisdiction to grant injunction concerning foreign property - Concurrent caveat - In personam relief - Person within jurisdiction

Legislation:

Property Law Act 1969 (WA), s 89
Rules of the Supreme Court 1971 (WA), O 52A

Result:

Limited interlocutory injunction granted, on terms

Category:    B

Representation:

Counsel:

Plaintiff:     Mr E Carlose

Defendant:     In person

Solicitors:

Plaintiff:     Eapon Carlose

Defendant:     In person

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

Australian Broadcasting Corporation v Lenah Game Meats Pty Ltd [2001] HCA 63; (2001) 208 CLR 199

Australian Broadcasting Corporation v O'Neil [2006] HCA 46; (2006) 227 CLR 57

CSR Ltd v Cigna Insurance Australia Ltd [1997] HCA 33; (1997) 189 CLR 345

J & H Just (Holdings) Pty Ltd v Bank of New South Wales [1971] HCA 57; (1971) 125 CLR 546

National Mutual Holdings Pty Ltd v Sentry Corporation (1989) 22 FCR 209

Neilson v Overseas Projects Corporation of Victoria Ltd [2005] HCA 54; (2005) 223 CLR 331

Re Clunies‑Ross; Ex parte Totterdell (1987) 72 ALR 241

Singh v Singh [2006] WASC 182

Singh v Singh [2009] WASCA 53; (2009) 253 ALR 575

Walsh v Alexander [1913] HCA 24; (1913) 16 CLR 293

Webb v Webb [1991] 1 WLR 1410

Webb v Webb [1994] QB 696

1. MURPHY J:  The plaintiff applied on 25 January 2010 for an interlocutory injunction to restrain the defendant until final determination of these proceedings, or further order, from selling, encumbering or otherwise disposing of certain property in Malaysia of which the defendant became the registered proprietor in 1991 and remains so (the property).  The plaintiff and defendant are brothers.  They both live in Australia.

2. The defendant appeared on this application in person.  He relied on an affidavit sworn by him on 22 January 2010.  I granted an injunction on 25 January 2010.  These are my reasons. 

3. The plaintiff's claim for final relief in these proceedings is, relevantly, a claim for a declaration that the property is held on trust for the plaintiff, and an injunction requiring the defendant to do all things and execute all documents necessary to cause the property to be conveyed to the plaintiff absolutely.  Although the property is in Malaysia, the plaintiff seeks in personam relief, and does not seek remedies in rem:  Singh v Singh [2009] WASCA 53; (2009) 253 ALR 575, 583, 594 (Singh v Singh [2009]); Re Clunies‑Ross; Ex parte Totterdell (1987) 72 ALR 241, 246; Webb v Webb [1991] 1 WLR 1410, 1418 ‑ 1419, and on appeal Webb v Webb [1994] QB 696, 716 ‑ 717.

4. The plaintiff's claim for final relief is principally based on a deed of declaration of trust, allegedly executed by the defendant in favour of the plaintiff on 22 June 2001 (the Trust Deed).  The defendant, in a defence filed 26 August 2004, by his then solicitors, denies having executed the Trust Deed, and alleges that the document relied on by the plaintiff is a forgery.  There is no pleaded issue of foreign law in this action.  

5. The defendant became bankrupt and ceased to be legally represented in early 2006, around which time he filed an appearance in person.

6. This action originally went to trial and was heard on 29 March 2006 by Simmonds J.  The defendant did not appear at the trial, and the plaintiff obtained final relief.  That judgment was subsequently set aside by his Honour on the application of the defendant:  Singh v Singh [2006] WASC 182.

7. This action has, again, been listed for hearing, this time on 24 March 2010.  There has been no amendment to the defence filed 26 August 2004. 

8. The plaintiff's claim for an interlocutory injunction is put on the basis that the plaintiff seeks to protect his alleged equitable interest in the property which the court may enforce by final judgment, and to preserve the status quo pending the determination of his rights:  Australian Broadcasting Corporation v Lenah Game Meats Pty Ltd [2001] HCA 63; (2001) 208 CLR 199, [9] ‑ [12], [15], [60], [91], [95]. Whilst there was no claim for Mareva relief, or a freezing order under O 52A of the Rules of the Supreme Court1971 (WA), an interlocutory application of this nature, in these circumstances, in my view, also raises considerations similar to those invoked where the court is concerned to protect its own processes, so that any final relief is not rendered nugatory: Australian Broadcasting Corporation v Lenah [62]; Re Clunies‑Ross; Ex parte Totterdell (245 ‑ 246).

9. In order to succeed in this application for an interlocutory injunction, the plaintiff submitted that he needed to establish a prima facie case, that damages would not be adequate compensation, and that the balance of convenience favoured the grant of the injunction:  Australian Broadcasting Corporation v Lenah [13].

10. Before considering those issues, some further background, as appears from the affidavit in support, should be recorded. 

11. In 2001, the plaintiff lodged a caveat over the property.  I infer from the evidence that Malaysia has a system of registration similar to Torrens title in Australia.  There was no submission or evidence to the effect that Malaysian law relating to caveats or registration of interests is any different from Australian law, and I assume, for the purpose of this application, that there is no difference:  Neilson v Overseas Projects Corporation of Victoria Ltd [2005] HCA 54; (2005) 223 CLR 331 [16], [45], [116], [125].

12. In 2002, the plaintiff commenced proceedings against the defendant in the District Court of Western Australia, action CIV 5 of 2002.  The nature of the claim made in that action is not apparent, although there is no suggestion that the claim is somehow related to the property. 

13. On 6 February 2002, the plaintiff's Malaysian solicitors wrote to the defendant, alleging that the defendant held the property on trust pursuant to the Trust Deed, and demanding that the defendant transfer the property to the plaintiff.  On 8 April 2002, the defendant responded.  He said that he was the absolute owner of the property and that the property was not held on trust for the plaintiff.  He also asked to be provided with a copy of the alleged Trust Deed. 

14. In September 2003, the defendant transferred another property, of which he was the registered proprietor in Malaysia, described in the papers as the 'No 2' property, to his wife and daughter.  The defendant's wife is the sister of Mr Jaspal Singh (the brother‑in‑law).  There is a dispute about the purpose for which the defendant transferred the No 2 property.  The plaintiff has annexed to his affidavit an extract of a transcript of evidence given by the defendant in the Federal Court on 5 December 2006 in relation to his bankruptcy.  The effect of the evidence is that the No 2 property was transferred by the defendant to his wife and his daughter pursuant to a direction by the brother‑in‑law, in satisfaction of a debt owed to the brother‑in‑law.  The alleged debt owed to the brother‑in‑law is said to be the subject of an instrument between the defendant and the brother‑in‑law, ex facie dated 14 July 1999, described as a 'trust deed' in which the debt is recorded, and by which the defendant agreed to hold both the No 2 property, and the property the subject of these proceedings, on trust for the brother‑in‑law (the 1999 instrument).  In the 'defendant's affidavit in reply' in the Malaysian Court (referred to in [20] below), the defendant deposed that the 1999 instrument was '[s]ecurity for' the money he borrowed from the brother‑in‑law.  The plaintiff's affidavit also contains a transcript of evidence given by the defendant to Simmonds J on 15 June 2006 to the effect that the defendant understood that the 1999 instrument acted as a charge on the two properties and that once the debt was repaid, the brother‑in‑law would cease to have any beneficial interest in them.

15. The defendant's testimony in the Federal Court indicates that the brother‑in‑law has, in effect, been repaid the debt by the transfer of the No 2 property, and that nothing further is owed to the brother‑in‑law, although in this court on 15 June 2006, his evidence before Simmonds J was that an amount was still owed. 

16. The plaintiff contends that the 1999 instrument is fraudulent and was not executed until 2005. The plaintiff has alleged that the No 2 property was transferred with an intent to defraud creditors within the meaning of s 89(1) of the Property Law Act 1969 (WA), in respect of which the plaintiff has commenced proceedings in this court in CIV 1264 of 2006. The defendant applied to have those proceedings summarily dismissed on the basis that this court lacked jurisdiction, or, if jurisdiction existed, that it should not be exercised. That application failed: Singh v Singh [2009].

17. The plaintiff asserts, in his affidavit in support of this application, that the defendant and his wife also transferred their family home to their eldest daughter in July 2003, and, at some unidentified time, the defendant disposed of 'his shares' in a 'restaurant business'. The plaintiff has commenced other proceedings in this court, CIV 1009 of 2005, under s 89 of the Property Law Act, in respect of those alleged transfers. 

18. On 29 October 2004, the plaintiff obtained judgment in the District Court in CIV 5 of 2002 in the sum of approximately $173,000. The judgment remains unsatisfied. As I understand it, in his actions under s 89 of the Property Law Act, the plaintiff contends that the assets were transferred in 2003 to avoid them being available to satisfy any judgment in the District Court. 

19. As I have previously mentioned, in March 2006, Simmonds J made orders in favour of the plaintiff for final relief at the uncontested hearing, which orders his Honour subsequently set aside. Since then, the plaintiff has applied, unsuccessfully, to consolidate the s 89 Property Law Act proceedings with this action.  The plaintiff deposes that in respect of CIV 1264 of 2006, concerning the No 2 property, an application for judgment in default of defence has been listed for hearing on 22 March 2010.

20. In July 2008, the defendant applied to the Malaysian court to remove the caveat over the property.  The defendant, in his affidavit of 22 January 2010, swore that he was 'instructed by' the brother‑in‑law to remove the caveat and oppose any extension of it.    The full nature of the debate and the issues before the court in Malaysia are not in evidence.  The plaintiff has, however, annexed what is said to be a translated copy of the 'defendant's affidavit in reply'.  Although it appears that the defendant was the applicant to remove the caveat in Malaysia, he is, nevertheless, described as the 'defendant' in those proceedings.  By that affidavit, the defendant has deposed that the Trust Deed relied on by the plaintiff is a forgery, and that the original has not been produced and is said, by the plaintiff, to have been lost by his solicitors in Malaysia, and that the person described as the witness to the execution of the Trust Deed, a Mr Timothy Goddard, was a previous employee of the plaintiff in the plaintiff's accounting practice.  He also deposed that he was 'still holding the property on trust' for the brother‑in‑law. 

21. The defendant also said in his 'affidavit in reply':

    22.I have been advised that the Court of Appeal of the Western Australia [sic] Supreme Court has erroneously concluded that a registered owner of a Malaysian property can be ordered to transfer land and once the necessary transfer form has been signed in Australia the transfer and title can simply be taken to the [sic] Malaysia and registered in the Malaysian Office of Titles in accordance with Malaysian law and that a judgment of the Supreme Court will then not have to be enforced in Malaysia.  This procedure would bypass the authority of the High Court of Malaya to make an order affecting the Malaysian property in Malaysia under section 417 of the National Land Code 1965.

    23.I verily believe that the Plaintiff will use the judgment of the Court of Appeal of the Western Australia [sic] Supreme Court to now defraud the Malaysian courts; the Registrar of Titles and me, by obtaining a judgment against me in an Australian court and using it in the manner set out in paragraph 17 of this affidavit above.

    24.I have now been advised by my Malaysian solicitors to withdraw my appearance and not subject myself further to the jurisdiction of the Australian courts in relation to any land located in Malaysia as only the Malaysian High Court have [sic] jurisdiction in such matters. Accordingly, I have withdrawn my appearance from all these cases.

22. The defendant was discharged from bankruptcy in February 2009.  As noted earlier, these proceedings are listed for hearing on 24 March 2010.

23. The Malaysian court's decision on whether to remove the caveat is expected to be handed down on 29 January 2010.  The plaintiff says that, particularly if the caveat is lifted, he anticipates that the defendant will dispose of the property and cause the plaintiff irreparable damage.

24. I now return to the three issues mentioned earlier:  namely, the existence of a prima facie case; whether damages would be an adequate remedy; and the balance of convenience. 

25. As regards a prima facie case, the plaintiff relies on his affidavit in support, sworn 11 January 2010, and affidavits of himself and Mr Goddard sworn 4 June and 27 July 2004 respectively.  The latter affidavits depose to the deponents' knowledge of, and involvement in, the defendant's execution of the Trust Deed, in Australia.  The defendant denies that he executed the Trust Deed and he also contends, in effect, that any equitable interest held by the plaintiff in the property would be extinguished or postponed to that of the brother‑in‑law as a result of the 1999 instrument (although no such matter is pleaded in the defence, nor, I note, was it suggested by the defendant in response to the plaintiff's letter of demand in 2002).   

26. Notwithstanding the defendant's contentions, the plaintiff has established a prima facie case for interlocutory relief in the sense required:  Australian Broadcasting Corporation v O'Neil [2006] HCA 46; (2006) 227 CLR 57, [65], [71].

27. Secondly, as relief is being claimed in equity's exclusive jurisdiction, there is no need to show that damages would provide an adequate remedy.

28. Finally, in my view, the balance of convenience favours the grant of an injunction.  The following considerations are relevant in this regard. 

29. First, I infer that there is a risk that the defendant will attempt to dispose of or deal with the property the subject of these proceedings prior to trial.  The application in Malaysia to lift the caveat on the 'instruction' of the brother‑in‑law provides some basis for inferring that the defendant wishes to be rid of the statutory injunction forbidding dealing because of an intention to transfer the title to the brother‑in‑law or otherwise deal with the property.  There is no sworn evidence to the contrary.

30. Secondly, although the caveat currently on foot prevents the registration of interests affecting the property, it does not affect the creation of unregistered or equitable interests.  Whilst any subsequent unregistered interests may well likely, although not necessarily in all circumstances, be postponed to the plaintiff's interests in terms of priority, the potential for priority disputes to arise is a factor of at least some weight.  (As to priorities generally, see Meagher RP, Heydon JD & Leeming MJ, Meagher, Gummow & Lehane's Equity: Doctrines & Remedies (4th ed, 2002) [8‑030] ‑ [8‑090]).  Moreover, as the defendant had contended in correspondence with the plaintiff's solicitor, a caveat is a statutory injunction, and is directed to the Registrar responsible for titles.  In this regard, see J & H Just (Holdings) Pty Ltd v Bank of New South Wales [1971] HCA 57; (1971) 125 CLR 546, 552. It is not an injunction directed to the registered proprietor. Lodging a caveat does not prevent the caveator contemporaneously seeking injunctive or other equitable relief. The caveat does not give a party relief as comprehensive or direct as gained by the jurisdiction in personam to protect his interest: Walsh v Alexander [1913] HCA 24; (1913) 16 CLR 293, 304, 306. Accordingly, I do not accept the defendant's submission that the injunction ought not be granted because the plaintiff 'cannot "have his cake and eat it as well"'.

31. Thirdly, the injunction will be of limited duration, as the action will be heard in March this year.

32. Fourthly, there is no evidence that the grant of an interlocutory injunction for a limited period would cause hardship to the defendant.  Further, the plaintiff has filed the usual undertaking as to damages.

33. Fifthly, in considering the apparent strength of the plaintiff's case, it appears to me that the plaintiff's prospects of success at trial for final relief are strengthened by the defendant's apparent intention, in effect, not to defend the substantive action (see [21] above).  I also take into account the defendant's evidence in the Federal Court, the effect of which is that any security interest in the property in favour of the brother‑in‑law has likely been discharged, and the absence, in this application, of an explanation of the apparent inconsistent earlier evidence given to Simmonds J that an amount was still owing.

34. Finally, although not raised by the defendant, I have given consideration to whether notions of international comity might be thought to apply to require the dismissal of interlocutory relief in this court if the Malaysian court were to discharge the caveat.  It appears to me that such considerations assume no real significance on this application.  One reason is that the Malaysian court has not, at this stage, discharged the caveat, so that the point is currently somewhat hypothetical.  Another, and related reason, is that in these circumstances any assessment of whether and to what extent international comity considerations might intrude ought be informed by a proper understanding of the issues, bases and reasons upon which the Malaysian Court acts, which will not be known until the delivery of judgment in Malaysia.  Further, this court is currently, properly seized of the matter.  If the defendant were to dispose of or deal with the property upon removal of the caveat by the Malaysian court, the administration of justice by this court would be hindered, and the integrity of this action would be undermined:  cf National Mutual Holdings Pty Ltd v Sentry Corporation (1989) 22 FCR 209, 230 ‑ 233; CSR Ltd v Cigna Insurance Australia Ltd [1997] HCA 33; (1997) 189 CLR 345, 391 ‑ 392 - cases concerning anti‑suit injunctions where, prima facie, comity considerations would be expected to be of a higher order than here.

35. For these reasons, in my view, interlocutory relief is appropriately granted in this case, subject to two qualifications.  First, in the circumstances, the interlocutory injunction should be until 4.00 pm of the day of trial, 24 March 2010, rather than until the final determination of the matter; the application can be renewed on the day of trial.  Secondly, given that there is some evidence that the brother‑in‑law may have an equitable interest in the property, he should be given early notice of the interlocutory relief ordered and the papers in the application, and (with the parties) be given liberty to apply.