The Society of Lloyd's v Marich
[2004] FCA 1502
•22 NOVEMBER 2004
FEDERAL COURT OF AUSTRALIA
The Society of Lloyd’s v Marich [2004] FCA 1502
BANKRUPTCY – s 244 of Bankruptcy Act 1966 – deceased estate – administration of estate upon petition by creditor – based on a judgment registered under the Foreign Judgments Act 1991 (Cth) – proceedings may be taken on registered foreign judgment as if it is a judgment of the relevant Australian court entered on the date of registration.
Bankruptcy Act 1966 (Cth) ss 156, 244 Part XI
Foreign Judgments Act 1991 (Cth) s 6
Limitation Act 1980 (UK) s 24
Judiciary Act1903 (Cth) ss 39, 39B, 79, 80
Re a Judgment Debtor [1939] Ch 601 cited
Re McGilvray (1986) 66 ALR 181 cited
Wagner v Laubscher Bros [1970] 2 QB 313 cited
Official Receiver of the State of Israel v Raveh (2001) 24 WAR 53 cited
Nygh and Davies Conflict of Laws in Australia (7th Ed) referred to
IN THE MATTER OF THE ESTATE OF THE LATE PETER GEORGE MARICH THE SOCIETY OF LLOYD’S v ROBERT GEORGE MARICH AS EXECUTOR OF THE ESTATE OF THE LATE PETER GEORGE MARICH
NSD 1307 of 2004ALLSOP J
22 NOVEMBER 2004
SYDNEY
IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
NSD 1307 of 2004
BETWEEN:
THE SOCIETY OF LLOYD’S
APPLICANTAND:
ROBERT GEORGE MARICH AS EXECUTOR OF THE ESTATE OF THE LATE PETER GEORGE MARICH
RESPONDENTJUDGE:
ALLSOP J
DATE OF ORDER:
22 NOVEMBER 2004
WHERE MADE:
SYDNEY
THE COURT ORDERS THAT:
1.Pursuant to s 244 of the Bankruptcy Act 1966 (Cth) the estate of the late Peter George Marich who died on 16 October 2003 be administered under Part XI of the Bankruptcy Act 1966 (Cth).
2.Christopher John Palmer be appointed as trustee of the said estate for administration under Part XI of the Bankruptcy Act 1966 (Cth).
3.The matter stand over to a date to be fixed for any argument as to, and orders concerning, costs.
Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
NSD 1307 of 2004
BETWEEN:
THE SOCIETY OF LLOYD’S
APPLICANTAND:
ROBERT GEORGE MARICH AS EXECUTOR OF THE ESTATE OF THE LATE PETER GEORGE MARICH
RESPONDENT
JUDGE:
ALLSOP J
DATE:
22 NOVEMBER 2004
PLACE:
SYDNEY
REASONS FOR JUDGMENT
This is an application by the Society of Lloyd’s (“Lloyd’s”) for an order under s 244 of the Bankruptcy Act 1966 (Cth) (the “Act”) for the administration in bankruptcy of the estate of the late Peter George Marich (the “Deceased”).
On 9 September 1986 the Deceased and Lloyd’s executed a contract entitled “General Undertaking” which obliged the Deceased, amongst other things, to comply with Byelaws governing the conduct of Lloyd’s. The contract was expressed to be subject to English law. There was an exclusive English jurisdiction clause. The following provision also appeared:
[E]ach party hereto … irrevocably agrees that a judgment in any Proceedings brought in the English courts shall be conclusive and binding upon each party and may be enforced in the courts of any other jurisdiction.
The upheaval in the insurance market in Lloyd’s in the 1980s and 1990s is notorious. A response of the market was to incorporate a run-off vehicle, known as Equitas, to which names such as the Deceased were obliged by the Byelaws to pay premiums. The Deceased refused to do so. On 11 March 1998, Lloyd’s obtained in the High Court of Justice in England summary judgment against the Deceased, and when registered in the Supreme Court of New South Wales on 10 March 2004 (see below), the order was that he pay to Lloyd’s a sum of £483,348.68 plus interest of £233,071.65. There was no dispute but that the English judgment became enforceable on 11 March 1998.
By s 24 of the Limitation Act 1980 (UK) the English judgment was not enforceable, and an action would not be brought upon it, after six years from 11 March 1998.
Before being admitted to Manly hospital, where he died, the Deceased resided in Seaforth in New South Wales. No steps had by the time of the death of the Deceased been taken by Lloyd’s to enforce the English judgment.
On 9 March 2004 the Supreme Court of New South Wales made orders, at the request of Lloyd’s as plaintiff, granting Robert George Marich letters of administration of the Deceased’s estate for a limited time and for the limited purpose of representing the estate in any proceedings to be filed in that court seeking registration of the English judgment under s 6 of the Foreign Judgments Act 1991 (Cth) and in respect of any related step. This order was superseded by the grant of probate to Mr Marich (the “Executor”) on 3 August 2004.
On 10 March 2004 (one day before the sixth anniversary of the order for summary judgment: vide s 24 of the Limitation Act 1980 (UK)) the Supreme Court of New South Wales made the following orders:
1.The judgment dated 11 March 1998 of the High Court of Justice by which it was adjudged that Peter Marich pay money to The Society of Lloyd’s be registered under Part 2 of the Foreign Judgments Act 1991 of the Commonwealth for:
(a) the sum of £483,348.68;
(b) interest in the sum of £233,071.65;
(c) the costs of and incidental to the application for this order and of registration of the judgment in the sum of $2,146.50.
2.Robert George Marich as Administrator of the estate of the late Peter George Marich may, within 14 days after service upon him of notice of registration, apply to set aside the registration.
3.The judgment may be enforced to the full extent of the terms that are to be registered.
4.The judgment may also be enforced for the interest and costs for which judgment is registered.
The Executor was joined to both the above proceedings in the Supreme Court.
No steps have been taken to set aside the registered judgment.
On 3 August 2004, the Executor (as a member of a group of litigants) made an application in the Commercial Court in London in proceedings numbered 1996 Folio No 2089 for permission to amend the Defence and Cross-Claim in those proceedings. The Claimant in the proceedings is Lloyd’s. The Cross-Claim makes serious allegations about representations made to the Deceased and the other Cross-Claimants to induce the Deceased and others to become names at Lloyd’s. The application to amend is to be heard in early 2005. No evidence was led before me as to the facts underlying the Cross-Claim.
Notice was given on behalf of the Executor to oppose the petition. Various grounds were raised. Ultimately, only two were pressed, they being:
(a)that the petition was statute barred, or
(b)as a matter of discretion the petition should be dismissed or adjourned until after the amendment application in respect of the Defence and Cross-Claim in England early next year.
Proof of all formal matters in s 244(12) of the Act and the Federal Court Rules was given satisfactorily. There was no submission to the contrary. There was also proof that the estate is insolvent, unless the English Cross-Claim bears fruit in a sum some hundreds of thousands of dollars in excess of the liability to Lloyd’s. That is, the estate appears to be insolvent, leaving to one side the judgment debt to Lloyd’s.
Turning to the matters argued, I will deal with the statue barred argument first. Ms Wong, who appeared for the Executor, submitted that English law applied, as the substantive law governing the underlying contractual obligations and the English judgment. Thus, she submitted, s 24 of the Limitation Act 1980 (UK) meant that the petition which was presented on 6 September 2004 was out of time. She characterised the provisions of the Foreign Judgments Act 1991 (Cth) as “procedural”. Thus, she said, relying on recent High Court authority concerning the proper law governing foreign wrongs and actions, the substantive law must be that of England.
Registration of foreign judgments, including foreign arbitration awards, is governed by the Foreign Judgments Act. The procedures and difficulties involved in enforcement of foreign judgments at common law and the previous State and Territory regimes need not be considered: see Nygh and Davies Conflict of Laws in Australia (7th Ed) chs 9 and 10.
There is no doubt that the English judgment was capable of registration under the Foreign Judgments Act. The judgment creditor, Lloyd’s, was entitled to register the judgment in the Federal Court of Australia or the Supreme Court of a State or Territory. It registered it in the Supreme Court of New South Wales. Section 6(6) would have prevented registration had Lloyd’s applied two days after it did. Section 6(6) relevantly states:
(6) A judgment is not to be registered if at the date of the application:
…
(b) it could not be enforced in the country of the original court.Section 24 of the Limitation Act 1980 (UK) meant that the English judgment could not have been enforced in England after 11 March 2004, and so an application after 11 March 2004 in Australia would have been refused.
Section 6(7) of the Foreign Judgments Act provides as follows:
Subject to sections 7 and 14:
(a)a registered judgment has, for the purposes of enforcement, the same force and effect; and
(b)proceedings may be taken on a registered judgment; and
(c)the amount for which a judgment is registered carries interest; and
(d)the registering court has the same control over the enforcement of a registered judgment;as if the judgment had been originally given in the court in which it is registered and entered on the date of registration.
Sections 7 and 14 are not relevant.
Section 6(7)(a) is not relevant. The word “enforcement” is defined in s 3(1) as meaning:
…
(b)where there is an amount of money payable under the judgment, enforcement by execution.
Thus, the contents of the words “the same force and effect” are not directly relevant.
However, s 6(7)(b) applies. There was no dispute about the petition being proceedings being taken on the (registered) judgment.
What the balance of s 6(7) does is create a statutory construct on a basis different from the fact – “as if”. Section 6(7) undoubtedly gives a permission which can be characterised as procedural. Proceedings may be brought, by the permission given by s 6(7)(b), on the registered judgment, as if the judgment, that is the English judgment, had been originally given in the Supreme Court of New South Wales and entered on 10 March 2004.
By the terms of s 6(7) there is no role to play for the original cause of action, for the English judgment as an English judgment, or for the law governing either in England. A statute of the Commonwealth Parliament provides a permission to commence the bankruptcy proceedings on the statutorily ordained basis that the English judgment is, for the purposes of the permission so to proceed, a judgment of the Supreme Court of New South Wales, entered on the date of registration.
Steps taken in a court (whether a federal court or a State court) under s 6(7) are taken in the exercise of federal jurisdiction. Any such proceedings involve a matter arising under a law of the Commonwealth Parliament: ss 76(ii) and 77 of the Constitution; and see also ss 39 and 39B(1A)(c) of the Judiciary Act1903 (Cth) for State courts and the Federal Court of Australia, respectively. The laws governing the exercise of that jurisdiction and the adjudication thereunder of the rights of the parties (the Constitution (including covering clauses), legislation (including delegated legislation) of the Commonwealth Parliament, laws of the State in which the jurisdiction is being exercised which are picked up as surrogate federal laws if the provisions of s 79 of the Judiciary Act are satisfied, and the common law in (and of) Australia as modified by the matters referred to in, and if there is otherwise satisfaction of the provisions of, s 80 of the Judiciary Act - see generally Australian Law Reform Commission Report No 92 The Judicial Power of the Commonwealth Part G chs 30 to 34) may make relevant a foreign statute such as s 24 of the Limitation Act 1980 (UK), by, for instance, a relevant rule of private international law in the common law in (and of) Australia. Here, however, no law governing the exercise of federal jurisdiction and the adjudication thereunder of the rights of the parties makes English law applicable. The Foreign Judgments Act is clear. The English judgment provides the foundation, once registered, for proceedings to be brought on the registered judgment as if the English judgment were originally a judgment in the relevant Australian court and entered on the date of registration: see generally Nygh and Davies op cit pp 207-9; Re a Judgment Debtor [1939] Ch 601; Re McGilvray (1986) 66 ALR 181; Wagner v Laubscher Bros [1970] 2 QB 313; Official Receiver of the State of Israel v Raveh (2001) 24 WAR 53, 59-60 at [26] and [27]. Here, the English judgment was registered in the Supreme Court of New South Wales. Proceedings have been brought, as permitted by s 6(7), on the statutory construct that there is a judgment of the latter court entered on 10 March 2004. These proceedings have been heard in the New South Wales District Registry of this Court. There is no basis for the application of a limitation period by reference to English law. There was no suggestion that any other limitation legislation provided an argument for the respondent.
The first ground of opposition fails.
There is no sufficient discretionary basis to refuse to make an order under s 244. There is a debt; it is, for the purposes of the petition, a judgment debt (created by the terms of the Foreign Judgments Act) of the New South Wales Supreme Court entered on 10 March 2004. The application in England, the prospects of success of which (even if leave is granted) I have no evidence, concerns underlying rights of the parties governed by English law. Here there is a Commonwealth statute which permits the application on a basis distinct from the underlying rights and from the English judgment: that is on the basis of (as if) a Supreme Court judgment: cf Raveh at [26] and [27]. Further, the Deceased contractually agreed to enforcement overseas of any judgment in England (see [2] above). The word “enforcement” in this contractual context is wide enough to encompass steps of the kind being taken here.
Even leaving aside the contractual provision referred to at [2] above, I see no basis to interfere with or suspend rights flowing from the registered judgment here.
Mr Christopher John Palmer, a registered trustee within the meaning of s 5 of the Act, has signed a Consent to Act as Trustee pursuant to s 156A of the Bankruptcy Act which has been filed with the Official Receiver.
I will hear the parties on costs.
The orders of the Court will be:
1.That pursuant to s 244 of the Bankruptcy Act 1966 (Cth) the estate of the late Peter George Marich who died on 16 October 2003 be administered under Part XI of the Bankruptcy Act 1966 (Cth).
2.That Christopher John Palmer be appointed as trustee of the said estate for administration under Part XI of the Bankruptcy Act 1966 (Cth).
3.That the matter stand over to a date to be fixed for any argument as to, and orders concerning costs.
I certify that the preceding twenty-nine (29) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Allsop. Associate:
Dated: 22 November 2004
Counsel for the Applicant: Mr J B Conomy with Mr S B Docker Solicitor for the Applicant: Holman Webb Counsel for the Respondent: Ms T Wong Solicitor for the Respondent: Clayton Utz Date of Hearing: 10 November 2004 Date of Judgment: 22 November 2004
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