Sywak v Sywak - [2009] NSWSC 1393

No judgment structure available for this case.

CITATION: Sywak v Sywak [2009] NSWSC 1393

HEARING DATE(S): 3 December 2009

JUDGMENT DATE :
18 December 2009

JUDGMENT OF: Schmidt J

CATCHWORDS: PROCEDURE - judgments and orders - amending, varying and setting aside - setting aside the registration of a foreign judgment - whether there is a discretion to extend time to apply to have registration of judgment set aside - construction of s 6(5) of the Foreign Judgments Act 1991 (Cth) - application to extend time granted - registration set aside - costs

LEGISLATION CITED: Acts Interpretation Act 1901 (Cth)
Foreign Judgments Act 1991 (Cth)
Supreme Court Rules 1970
Uniform Civil Procedure Rules 2005

CATEGORY: Procedural and other rulings

CASES CITED: Brisbane South Regional Health Authority v Taylor [1996] HCA 25; (1996) 186 CLR 541 at 546
Karam v ANZ Banking Group [2003] NSWSC 866
Ramanathan v Naidu [2007] NSWSC 693

PARTIES: Plaintiff - Helen Sywak
Defendant - Simon Sywak

FILE NUMBER(S): SC 11139 of 2009

COUNSEL: Plaintiff - Mr K Metlej, solicitor
Defendant - Mr D Ash, counsel

SOLICITORS: Plaintiff - Craddock Murray Neumann Lawyers
Defendant - Horowitz & Bilinsky

- 13 -

IN THE SUPREME COURT
OF NEW SOUTH WALES
COMMON LAW DIVISION

SCHMIDT J

Friday, 18 December 2009

11139/09 SYWAK v SYWAK

JUDGMENT

1 HER HONOUR: By a notice of motion filed in November 2009, the defendant Simon Sywak seeks orders under s 6(5) and s 7(2)(a)(x) of the Foreign Judgments Act 1991 (Cth) ('the Act'), firstly extending the time within which an application to set aside the registration of a UK judgment may be made and secondly, setting that registration aside. The issue lying between the parties turns on the proper construction of that legislation.

2 There is no dispute about the facts. The UK Brighton County Court gave judgment against Mr Sywak in November 2008, in the sum of £84,328.69. On 7 April 2009, this Court ordered the registration of that judgment in accordance with s 6 of the Act, the amount specified being $191,008.74. That sum was calculated in accordance with the provision made in s 6 for the calculation of the judgment debt in an equivalent amount in Australian currency, on the ‘conversion day’, namely the second business day before the day on which the application for registration was made (s 6(11)(b)).

3 On 29 May 2009, notice of the registration was served on Mr Sywak. On 9 June, he made an application to have the registration set aside, within the time specified in s 6(5) for the making of such an application. On 20 August that application was dismissed by consent.

4 On 2 September 2009 a bankruptcy notice claiming $191,008.74 was served on Mr Sywak. A creditor's petition was presented in October. On 20 November 2009, Mr Sywak paid £94,309.51 into Mrs Sywak’s bank account in the UK. There is no issue between the parties that this payment satisfied the Brighton County Court’s judgment. On 23 November, Mr Sywak filed the motion seeking that the registration of the UK judgment now be set aside by this Court.

5 Mrs Sywak opposes such an order being made. It is not in issue that as the result of currency movements since the conversion day, the payment made in the UK is not sufficient to satisfy the judgment registered in Australia in Australian dollars. It is also common ground that this is a separate debt from the debt arising under the UK judgment. Mrs Sywak claims that she was entitled to apply the payment made to the debt flowing from the Australian registration, with the result that while she accepts that the UK judgment has been satisfied by the payment, there is still over $20,000 due in respect of the Australian judgment, which she is entitled to pursue in the bankruptcy proceedings which she has brought against Mr Sywak.

6 Mr Sywak’s case is that the UK judgment having been satisfied, his application that the Australian registration of that judgment be set aside, should be granted, s 7 of the Act making mandatory proven in that regard. That section relevantly provides:

7 Setting aside a registered judgment

(1) A party against whom a registered judgment is enforceable, or would be enforceable but for an order under section 8, may seek to have the registration of the judgment set aside by duly applying to the court in which the judgment was registered, or (where applicable) a court in which the judgment was registered under Part 6 of the Service and Execution of Process Act 1992, to have the registration of the judgment set aside.

(a) must set the registration of that judgment aside if it is satisfied:

...

(x) that the judgment has been wholly satisfied; or

...

(b) may set the registration of the judgment aside if it is satisfied that the matter in dispute in the proceedings in the original court had before the date of the judgment in the original court been the subject of a final and conclusive judgment by a court having jurisdiction in the matter.

...

7 It is common ground between the parties that before the Court can entertain the application, Mr Sywak must seek and be granted leave under s 6(5) of the Act, for an extension of time within which his application to set aside the registration of the UK judgment might be brought, the application being outside the time fixed by s 6(4). Section 6 relevantly provides in this respect:

6 Application for, and effect of, registration of foreign judgments

(a) the date of the judgment; or

to have the judgment registered in the court.

(a) if the judgment is a money judgment and was given in proceedings in which a matter for determination arises under the Commerce Act 1986 of New Zealand (other than proceedings in which a matter for determination arises under section 36A, 98H or 99A of that Act)—the Federal Court of Australia or the Supreme Court of a State or Territory; or

(b) if the judgment is not a money judgment and was given in such proceedings—the Federal Court of Australia; or

(3) Subject to this Act and to proof of the matters prescribed by the applicable Rules of Court, if an application is made under this section, the Supreme Court of a State or Territory or the Federal Court of Australia is to order the judgment to be registered.

(4) The court’s order must state the period within which an application may be made under section 7 to have the registration of the judgment set aside.

(5) The court may, by order, extend the period within which such an application may be made.

...

8 The dispute lying between the parties is whether the Court has power to entertain Mr Sywak’s application for extension of time. On its face s 6(5) appears to grant an unfettered discretion in this respect. A power to grant an extension of time is usually regarded to be a discretionary power (See for example Brisbane South Regional Health Authority v Taylor [1996] HCA 25; (1996) 186 CLR 541 at 546.) That is also consistent with s 33(2A) of the Acts Interpretation Act 1901 (Cth), which provides:

33 Exercise of powers and duties

...

9 For Mrs Sywak it is argued nevertheless, that the section may not be so understood. Two matters are principally relied on to advance that argument.

10 The first, flowing from a decision given by Registrar Bradford in Ramanathan v Naidu [2007] NSWSC 693. There the Registrar referred to the relevant provisions of the then Supreme Court Rules 1970, which applied to the application. Part 59A Rule 8 provided:

8 Setting aside registration

(1) The Court may, before the expiry of time fixed by an order for registration or by an order under this subrule as the time within which the judgment debtor may file the notice of a motion for an order setting aside the registration, extend the time so fixed.

(2) Subject to subrule (3), the Court may, on motion by the judgment debtor, make an order setting aside the registration.

(3) Notice of motion for the order must be filed within the time fixed under section 6 (4) of the subject Act or under subrule (1).

11 As the Registrar observed at [10] of his decision, the effect of that Rule was that an application for extension of time to set aside the registration of a judgment could only be brought within the fourteen day period there specified in the order of registration.

12 The Uniform Civil Procedure Rules 2005 makes different provision, now providing in Rule 53.7:

53.7 Setting aside registration

(cf SCR Part 59A, rule 8)

13 On its face the limitation which appeared in the earlier Rule has been removed by Rule 53.7. That Rule is now expressed by reference to the provision made s 6(5). Nothing in the current Rule on its face imposes any fetter on the discretion granted by s 6(5) of the Act. As was argued for Mr Sywak, this supports the construction which he urges, namely that the Court has a discretion to grant him the extension which he seeks.

14 Against him it is argued that the drafters of the Rule could not have intended such a radical alteration to this scheme. The Act has always been understood as providing for the limitation reflected in the old Rule and the adoption of different language in the new Rule, cannot have been intended to have achieved the granting of an unfettered discretion of the kind for which Mr Sywak contends.

15 No authority supporting such a view was referred to. There is obvious difficulty with the argument. As a general rule, delegated legislation may not be used to ascertain the intention of Parliament. (See the discussion in Pearce and Geddes, Statutory Interpretation in Australia, 6^th Ed (2006) at [3.14].) The question lying between the parties in this case is the proper construction of Federal legislation. Provisions made in a former Rule of a State court made pursuant to State legislation, cannot be a basis upon which the meaning of such Federal legislation may be determined. The old Rule it appears, provided for a limitation on the discretion seemingly granted by s 6(5) of the Act, in terms not contained in the section itself and not readily apparent as flowing from any other provision of the legislation. A Rule of a State court cannot so cut down a discretion granted by the Federal legislature. The wording of the new Rules, eliminating the limitation, simply results in the Rules now reflecting the words of the statute itself, as perhaps the Rule always ought to have done.

16 The argument, also, it seemed to me, failed to pay attention to the requirements of s 15AA of the Acts Interpretation Act, which requires that a construction promoting the purpose of the Act be preferred over one that does not. In the case of this Act, its purpose is not difficult to discern. It provides the mechanisms whereby a reciprocal scheme of enforcement of judgments is given effect by Australian courts. That in such a scheme, there is a mechanism provided whereby the registration of a foreign judgment in Australia might be set aside, once the overseas judgment has been satisfied, is hardly surprising. Indeed, it would be surprising if there were no such mechanism.

17 On Mrs Sywak’s approach, once a foreign judgment has been registered under the Act in Australia, that registration may not be set aside, if the foreign judgment is satisfied in the country in which the judgment was given, after the period initially specified by the Australian Court which registered the foreign judgment, for making an application to set aside the registration. In this case, a period of 14 days after registration was specified in that order. That such a short period for making an application to set aside the registration would be specified in the order, is consistent with the provisions made in s 6(10) of the Act, which provides:

(b) where such an application has been made, until after the application has been finally determined."

18 Obviously a judgment debtor must have an opportunity to set aside registration and during that time s 6(10) precludes the judgment creditor from enforcing the judgment. If no application is made to set aside the registration, a creditor is then free to enforce the judgment in Australia.

19 That a foreign judgment might nevertheless, subsequently be satisfied by the debtor in the foreign jurisdiction is a possibility which the Act expressly contemplates. Section 7(2)(x) then mandatorily provides that registration in Australia must be set aside. That is an understandable mechanism, given that what brought the application for registration to the Australian court, the debtor's failure to satisfy the foreign judgment, having been addressed.

20 That in those circumstances, an extension of time to file an application to set aside the registration is also contemplated by the Act, is in the face of the provision made in s 6(10) not surprising. To the contrary, it appears to be a necessary part of the scheme. Why would Australia any longer wish to concern itself with the enforcement of a foreign judgment, once it has been satisfied in the country in which the judgment was given? If the construction for which Mrs Sywak contends were correct, it is difficult to see what work s 7(2)(x) would have to do, in this statutory scheme. It would appear to operate only if the foreign judgment were satisfied within the time fixed by the order registering the judgment, for making the application to set the judgment aside. That seems unlikely to have been intended, given that the Act also contemplates that an application for extension of time to set aside the registration may be granted and that it provides that if the foreign judgment is satisfied, registration must be set aside.

21 While it is sometimes difficult to discern the purpose of legislation, or a particular statutory provision, that is not this case. Here, the apparent unfettered discretion to grant an extension of time within which to make an application to set aside the registration of a foreign judgment, appears consistent with the purpose of the statutory scheme, namely to permit enforcement of certain overseas judgments in Australia, which have not been satisfied in the country in which the judgment was given. This is not a case where one must strain to find a meaning for words used in s 6(5), but rather where a party seeks to read into a seemingly unambiguous provision, words of limitation not contained in the provision itself, which do not sit comfortably with the statutory scheme. Once the foreign judgment is satisfied, the reason for its registration disappears. That is, undoubtedly, why s 7 requires that its registration must be set aside once the foreign judgment is wholly satisfied. Permitting an extension of time to make such an application when a foreign judgment is satisfied after the period specified in s 6(4) is consistent with what s 7 requires. The provision made in s 6(10), halting enforcement proceedings during such a period, is also consistent with a scheme which does not contemplate Australian enforcement of a foreign judgment which has been wholly satisfied.

22 The second argument advanced for Mrs Sywak to support the view that the apparent discretion provided by s 6(5) is not available to be exercised, rested on the provision made in s 6(10), earlier set out.

23 It could not have been intended, it was argued, that the time for setting aside a registration of a foreign judgment could be extended, unless the time for making an application for extension was made within the time fixed for such an application in the original order of registration. To permit the extension of time to a point in time after the judgment creditor had taken steps to enforce the registered judgment, could not have been intended, because such an extension would, it was argued, have unintended consequences for enforcement proceedings already underway, when the application for extension of time was made, namely to disqualify the creditor from continuing to enforce the judgment.

24 That, it seems to me, is also an argument which may not be accepted. If a judgment is registered, a creditor is entitled to enforce it, but plainly a debtor is also entitled to pay the underlying debt, the foreign judgment which was registered in Australia. If enforcement proceedings have been taken in Australia and subsequently the registration of the foreign judgment in Australia is set aside, because the foreign judgment has been wholly satisfied, the result that enforcement proceedings commenced in Australia, may thereafter not be pursued, is not surprising. That is merely reflective of the fact that what originally brought the parties before the Australian Court has been satisfied. Indeed, it might be thought that the enforcement proceedings had been effective, resulting in the foreign judgment being satisfied. That s 6(10) contemplates that in such a situation, a foreign judgment having been satisfied and an Australian Court granting an extension of time to make an application to set the registration of that judgment aside, that there will be an impact on the enforcement proceedings undertaken in Australia, is also not surprising. After all, if the foreign judgment debt has been satisfied, there is no longer any purpose in enforcement of the Australian judgment being pursued. The situation would be no different if an Australian judgment debt were being pursued in enforcement proceedings in Australia. Satisfaction of the debt would naturally bring the enforcement proceedings to an end - there being nothing left to enforce.

25 Granting an application to give an extension of time for the making of an application for an order setting aside the registration of the foreign judgment, would only result from the exercise of the Court’s discretion, an exercise governed by the requirement that the Court do justice between the parties. There seems nothing untoward or unexpected, in the legislature granting an Australian Court such a discretion, in circumstances where a foreign judgment has been satisfied and providing that while such an application is being considered, that enforcement proceedings not be further pursued. While setting aside the registration of a foreign judgment would have an obvious impact on the continued pursuit of the enforcement proceedings, there is no suggestion in the legislation, that this would affect what had occurred in such proceedings to the time at which the registration was set aside.

26 It follows, that the better view as to the proper construction of the section is that contended for on behalf of Mr Sywak. Section 6(5) gives a discretion to grant an extension of time for an application to set aside the UK judgment. Should that discretion be exercised in this case?

27 For Mrs Sywak it was argued that it should not. It was submitted that there were two judgment debts that operated concurrently. Mr Sywak had made a payment in the UK, but had not indicated that it was a payment made in respect of the UK judgment. It was a matter for Mrs Sywak to determine which debt the payment would be directed to. The fact that the application of the debt to the Australian judgment, given current exchange rates, had the result that there was still $20,000 owing in respect of the Australian judgment, was merely argued to be the result of the operation of the Act, which fixed the amount of the Australian judgment by a calculation undertaken as at the conversion date. That statutory exercise having been undertaken, Mrs Sywak should be entitled to pursue what remained outstanding in relation to the registration of the judgment in Australia, notwithstanding that the UK judgment had been satisfied.

28 I am unable to accept that argument. Mrs Sywak obtained a judgment in a UK Court. As she was entitled to do, she registered that judgment in Australia and sought to enforce it here. The result has been that as Mr Sywak was entitled to do, he has paid all that he owed under the UK judgment, by a payment made in UK pounds deposited into Mrs Sywak's UK bank account. Mrs Sywak accepts that nothing remains outstanding in respect of the UK judgment, it has been wholly satisfied, notwithstanding her intention to pursue payment of what she regards to be outstanding under the Australian judgment debt. That has arisen not as the result of anything which either Mr or Mrs Sywak have done. It is merely the consequence of currency fluctuations, since the conversion date.

29 There was an issue between the parties as to whether at common law, Mrs Sywak had the right of election which she claims to have made, in the particular circumstances. Reference was made to Karam v ANZ Banking Group [2003] NSWSC 866 where it was observed at [17]:

is the true inference to be drawn from all of the circumstances of the case that the debtor paid the monies generally on account, leaving the creditor to apply them as he saw fit, or is the true inference to be that he paid them on account of specific portions of the debt for the purposes and with a view to wipe these out of the debt

at the time of payment

30 In this case, the circumstances clearly lead to the inference that Mr Sywak intended to pay the UK judgment debt. In any event, in my view, it is unjust to refuse to grant the extension of time to set aside the registration of the UK judgment, in these circumstances. Section 7 of the Act contemplates that once the foreign judgment is wholly satisfied, its registration will be set aside. The only reason that Mrs Sywak opposes that course here, is in order to obtain a $20,000 windfall benefit flowing from changes in exchange rates since the registration of the UK judgment. I am satisfied that justice does not permit an exercise of discretion in Mrs Sywak's favour in those circumstances. It would result in Mr Sywak being required to pay $20,000 more than he was ordered to pay by the UK Court. By registration of the UK judgment, Mrs Sywak was seeking its payment. That is what she has achieved. Mr Sywak having met his obligations in respect of the UK judgment, he ought not, as a matter of justice, to be required to pay a further $20,000, merely as the consequence of what has happened with exchange rates, since the judgment was registered in Australia.

31 This legislation concerns itself with the registration of a foreign judgment which the parties agree has now been wholly satisfied. Justice requires that the UK judgment having been wholly satisfied, its registration must be set aside, as s 7 expressly contemplates.

Orders

32 For the reasons given, I order that:

1. The application to extend time to make an application to set aside the registration of the judgement be granted.

2. Registration of the UK Court's judgment be set aside as from today's date.

33 Costs would ordinarily follow the event. If the parties are unable to agree on the appropriate costs order, they should approach.

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Citations

Sywak v Sywak [2009] NSWSC 1393

Cases Citing This Decision

0

Cases Cited

3

Statutory Material Cited

4

Brisbane South Regional Health Authority v Taylor [1996] HCA 25

Ramanathan v Naidu [2007] NSWSC 693

CITATION:	Sywak v Sywak [2009] NSWSC 1393
HEARING DATE(S):	3 December 2009
JUDGMENT DATE :	18 December 2009
JUDGMENT OF:	Schmidt J
CATCHWORDS:	PROCEDURE - judgments and orders - amending, varying and setting aside - setting aside the registration of a foreign judgment - whether there is a discretion to extend time to apply to have registration of judgment set aside - construction of s 6(5) of the Foreign Judgments Act 1991 (Cth) - application to extend time granted - registration set aside - costs
LEGISLATION CITED:	Acts Interpretation Act 1901 (Cth) Foreign Judgments Act 1991 (Cth) Supreme Court Rules 1970 Uniform Civil Procedure Rules 2005
CATEGORY:	Procedural and other rulings
CASES CITED:	Brisbane South Regional Health Authority v Taylor [1996] HCA 25; (1996) 186 CLR 541 at 546 Karam v ANZ Banking Group [2003] NSWSC 866 Ramanathan v Naidu [2007] NSWSC 693
PARTIES:	Plaintiff - Helen Sywak Defendant - Simon Sywak
FILE NUMBER(S):	SC 11139 of 2009
COUNSEL:	Plaintiff - Mr K Metlej, solicitor Defendant - Mr D Ash, counsel
SOLICITORS:	Plaintiff - Craddock Murray Neumann Lawyers Defendant - Horowitz & Bilinsky