Trainor Asia Ltd v Calverley
[2007] WADC 124
•30 JULY 2007
TRAINOR ASIA LTD -v- CALVERLEY [2007] WADC 124
| DISTRICT COURT OF WESTERN AUSTRALIA | Citation No: | [2007] WADC 124 | |
| Case No: | CIV:1423/2005 | 18 JUNE 2007 | |
| Coram: | PRINCIPAL REGISTRAR GETHING | 30/07/07 | |
| PERTH | |||
| 23 | Judgment Part: | 1 of 1 | |
| Result: | Summary judgment awarded | ||
| PDF Version |
| Parties: | TRAINOR ASIA LTD BARRY JAMES CALVERLEY |
Catchwords: | Summary judgment Foreign judgment Whether obtained by fraud |
Legislation: | Nil |
Case References: | Abouloff v Oppenheimer & Co (1882) 10 QBD 295 ANZ Banking Group Ltd v Cawood [1987] 1 Qd R 131 Bank of Western Australia v Stein [2005] WASC 43 Benefit Strategies Group Inc v Prider (2005) 91 SASR 544 Close v Arnot; unreported, Supreme Court of NSW, Matter 10107/96, 21 November 1997 De Santis v Russo [2000] QSC 065 Dey v Victorian Railways Commissioners (1949) 78 CLR 62 DMS Shipping & Trading Co Ltd v Lionheart Asia Ltd [1996] 2 Qd R 20 Ellis v M'Henry (1871) LR6CP 228 FAI General Insurance Co Ltd v Southern Cross Exploration NL (1988) 165 CLR 268 Fancourt v Mercantile Credits Ltd (1983) 154 CLR 87 Gallo v Dawson (1990) 64 ALJR 458 Godard v Gray (1870) LR6QB 139 Grant v Easton (1883) 13 QBD 302 Hazart Pty Ltd v Rademaker (1993) 11 WAR 26 Hospitals Contribution Fund of Australia v Hunt (1982) 44 ALR 365 Israel Discount Bank of New York v Hadjipateras [1983] 3 All ER 129 Jacka Nominees Pty Ltd (In liq) v Edwards Karwacki Smith & Co Pty Ltd; unreported; SCt of WA; Library No BC9200989; 12 October 1992 Keele v Findley (1990) 21 NSWLR 444 Miliangos v George Frank (Textiles) Ltd [1976] AC 443 Morgan v Pallister [2004] WASC 188 National Australia Bank Ltd v Firewood Processors Pty Ltd [2003] WASC 88 Norman v Norman (No 2) (1968) 12 FLR 39 Norsemeter Holding AS v Boele (No 1) [2002] NSWSC 370 Nouvion v Freeman (1889) 15 App Cas 1 Re Monroe Schneider Associates (Inc) v Barry Lee Schneider (1992) 37 FCR 234 Schnabel v Lui [2002] NSWSC 15 Svirskis v Gibson [1977] 2 NZLR 4 Vadala v Lawes (1890) 25 QBD 310 Water Authority of WA v AIL Holdings Pty Ltd (No 2) (1992) 10 WAR 233 Webster v Lampard (1993) 177 CLR 598 Wentworth v Rogers (No 5) (1986) 6 NSWLR 534 Wigan v Edwards (1973) 47 ALJR 586 Yoon v Young Dung Song (2000) 158 FLR 295 |
JURISDICTION : DISTRICT COURT OF WESTERN AUSTRALIA
- IN CHAMBERS
- Plaintiff
AND
BARRY JAMES CALVERLEY
Defendant
Catchwords:
Summary judgment - Foreign judgment - Whether obtained by fraud
Legislation:
Nil
Result:
Summary judgment awarded
(Page 2)
Representation:
Counsel:
Plaintiff : Mr N Gentilli
Defendant : Mr T R Stephenson
Solicitors:
Plaintiff : Jackson McDonald
Defendant : Cameron Eastwood
Case(s) referred to in judgment(s):
Abouloff v Oppenheimer & Co (1882) 10 QBD 295
ANZ Banking Group Ltd v Cawood [1987] 1 Qd R 131
Bank of Western Australia v Stein [2005] WASC 43
Benefit Strategies Group Inc v Prider (2005) 91 SASR 544
Close v Arnot; unreported, Supreme Court of NSW, Matter 10107/96, 21 November 1997
De Santis v Russo [2000] QSC 065
Dey v Victorian Railways Commissioners (1949) 78 CLR 62
DMS Shipping & Trading Co Ltd v Lionheart Asia Ltd [1996] 2 Qd R 20
Ellis v M'Henry (1871) LR 6 CP 228
FAI General Insurance Co Ltd v Southern Cross Exploration NL (1988) 165 CLR 268
Fancourt v Mercantile Credits Ltd (1983) 154 CLR 87
Gallo v Dawson (1990) 64 ALJR 458
Godard v Gray (1870) LR 6 QB 139
Grant v Easton (1883) 13 QBD 302
Hazart Pty Ltd v Rademaker (1993) 11 WAR 26
Hospitals Contribution Fund of Australia v Hunt (1982) 44 ALR 365
Israel Discount Bank of New York v Hadjipateras [1983] 3 All ER 129
Jacka Nominees Pty Ltd (In liq) v Edwards Karwacki Smith & Co Pty Ltd; unreported; SCt of WA; Library No BC9200989; 12 October 1992
Keele v Findley (1990) 21 NSWLR 444
Miliangos v George Frank (Textiles) Ltd [1976] AC 443
Morgan v Pallister [2004] WASC 188
National Australia Bank Ltd v Firewood Processors Pty Ltd [2003] WASC 88
Norman v Norman (No 2) (1968) 12 FLR 39
Norsemeter Holding AS v Boele (No 1) [2002] NSWSC 370
(Page 3)
Nouvion v Freeman (1889) 15 App Cas 1
Re Monroe Schneider Associates (Inc) v Barry Lee Schneider (1992) 37 FCR 234
Schnabel v Lui [2002] NSWSC 15
Svirskis v Gibson [1977] 2 NZLR 4
Vadala v Lawes (1890) 25 QBD 310
Webster v Lampard (1993) 177 CLR 598
Wentworth v Rogers (No 5) (1986) 6 NSWLR 534
Yoon v Young Dung Song (2000) 158 FLR 295
(Page 4)
1 PRINCIPAL REGISTRAR GETHING: By application dated 25 May 2007 the plaintiff has sought summary judgment. It seeks to enforce a judgment against the defendant issued by the Oslo District Court of Norway. The plaintiff has also sought to amend its statement of claim as set out in a Minute of Proposed Amended Statement of Claim dated 25 May 2007 ("Plaintiff's Minute"). The Plaintiff's Minute records unsuccessful appeals against the first instance decision in Norway, and adds a claim for additional costs arising out of the appeals. The plaintiff requires leave in relation to both applications as they are out of time, and also seeks to have the action removed from the Court's inactive list.
2 The defendant resists the summary judgment application on the basis that there is an arguable case that the judgment was obtained by fraud. It is well established that an Australian court will not enforce a foreign judgment obtained by fraud. The defendant alleges that the plaintiff falsely claimed that the contract was longer than was agreed and falsely claimed damages to which it was not entitled.
3 By application filed 23 October 2006, the defendant sought to amend his defence to plead that the judgment was obtained by fraud and provide full particulars. This application came on before me for hearing at the same time as the summary judgment application. The appropriate way for me to proceed is to determine the summary judgment application first. However, for the purposes of the summary judgment application, I have assumed that the defence will be amended in the terms of a later minute of amended defence, filed 19 April 2007 ("Defendant's Minute"). That is, I have analysed the defendant's case at its strongest.
4 The plaintiff relies on two affidavits sworn by employees of its solicitors, John Louden sworn 23 January 2006 ("Louden affidavit") and David Winch sworn 23 May 2007 ("Winch affidavit"). The defendant relies on an affidavit of his solicitor, Cameron Eastwood, sworn 25 January 2006 ("First Eastwood affidavit"), a second affidavit of Mr Eastwood, sworn 11 June 2007 ("Second Eastwood affidavit") and an affidavit sworn by the defendant personally on 12 June 2007 ("Calverley affidavit").
5 At the conclusion of oral argument, I formed the view the one option I had to give serious consideration to was whether to give the defendant leave to defend conditional upon payment of all or part of the claim into Court. Accordingly, and consistent with authorities such as Hazart Pty Ltd v Rademaker (1993) 11 WAR 26, at 31 - 32, I gave the
(Page 5)
- defendant an opportunity to put on affidavit material as to his financial position to enable a determination to be made as to whether such a condition would be impossible for the defendant to meet. The defendant filed an affidavit sworn 11 July 2007. In response, the plaintiff filed a second affidavit of Mr Winch (dated 18 July 2007) and an affidavit of a principal of the plaintiff's solicitors, Mr Gentilli (dated 18 July 2007).
6 The issues for determination are as follows:
Whether leave should be granted to make the applications out of time
Whether the plaintiff's claim is made out
The principles on which a court may decline to enforce a foreign judgment on the basis that it was obtained by fraud
Whether there was fraud in relation to the length of the contract
Whether there was fraud in relation to the damages claimed
Whether the defendant should have leave to defend
Whether the plaintiff should have leave to amend its statement of claim
The appropriate orders
Leave to apply out of time
7 The defendant filed a conditional appearance on 24 October 2005. It was declared unconditional on 27 January 2006. After the defendant filed his first defence on 8 February 2006, nothing occurred in the action for a number of months. The plaintiff failed to enter the action for trial in accordance with the District Court Rules 2005 and, consequently, on 24 June 2006 the case became inactive. The defendant filed his application for leave to amend on 23 October 2006. The plaintiff filed its application for summary judgment on 25 May 2007.
8 Mr Winch in his affidavit sets out the reasons for the delays by the plaintiff in making its applications. Essentially, the plaintiff was waiting for the defendant's appeals in the Norwegian courts to be finalised. At that time, the defence included the plea that the judgment of the Olso District Court of Norway was not final and conclusive.
(Page 6)
9 The policy rationale for the time limit is set out in the judgment of Master Adams in Jacka Nominees Pty Ltd (In liq) v Edwards Karwacki Smith & Co Pty Ltd; unreported; SCt of WA; Library No BC9200989; 12 October 1992 in the following terms:
"Summary judgment applications can involve a good deal of preparation and a substantial volume of affidavit evidence. The time limit reflects the policy of the rules requiring summary judgment applications to be brought at an early stage of the proceedings before too much expense has been incurred."
10 The discretion to extend time is given for the sole purpose of enabling the court to do justice between the parties: Gallo v Dawson (1990) 64 ALJR 458 at 459; FAI General Insurance Co Ltd v Southern Cross Exploration NL(1988) 165 CLR 268, at 283-4; Bank of Western Australia v Stein [2005] WASC 43, at par [53].
11 In this case, given the defence, it was reasonable for the plaintiff to have deferred making its summary judgment application while the defendant was moving through the appeals process in Norway. The case was essentially on hold during this time. I am satisfied that it is appropriate to grant the plaintiff leave to make an application for summary judgment pursuant to O 14 r 1 and leave amend its defence pursuant to O 21 r 3.
12 I am also satisfied that it is appropriate to remove the action from the inactive list and extend the entry for trial milestone to allow the present applications to be heard and determined and, if leave to defend is allowed, time for the case to be properly prepared.
The plaintiff's claim
13 The basic legal principles regarding summary judgment applications are summarised in the judgment of Pullin J in Morgan v Pallister[2004] WASC 188in the following terms (at par 4):
"The plaintiff carries the burden of persuading the court that the claim is a good one, that there is no defence to it, that leave to defend should not be granted, and that judgment should be given for the plaintiff. The party showing cause against the application assumes an evidentiary burden but the overall legal burden of persuasion remains on the applicant. The power to order summary judgment should be exercised with great care and should never be exercised unless it is clear that there is no
(Page 7)
- real question to be tried. It is clear however, that the procedure is not confined to cases which are immediately plain and obvious and the fact that a transaction is intricate does not disentitle the plaintiff to relief in a clear case. It was never intended that when the facts are in dispute, an action should be disposed of summarily. If a defendant's affidavit reveals inconsistencies which might in a trial persuade a court not to believe the defendant's evidence, this will not necessarily lead to judgment for the plaintiff. It is not necessary to cite authority for these propositions."
14 Where there are disputed facts, and in the absence of cross-examination, the application is to be determined on the basis that the defendant's version of the facts, assuming that it is not inherently incredible, would ultimately be accepted at the trial of the action: Webster v Lampard(1993) 177 CLR 598 at 608 per Mason CJ, Deane J and Dawson J. In the same case, the members of the High Court had previously commented that the "issue before the learned Master on the application for summary judgment was … whether the material demonstrated that the action should not be permitted to go to trial in the ordinary course because it was apparent that it must fail" (at 602).
15 Judgments from Danish court are not able to be enforced under the Foreign Judgments Act 1991 (Cth), so the plaintiff must rely on the position at common law.
16 Courts in Australian recognise and accept that foreign judgments can be sued upon at common law provided that they are satisfied that the judgment was regularly obtained by a court of competent jurisdiction: Benefit Strategies Group Inc v Prider (2005) 91 SASR 544, at 559; Grant v Spaanderman;unreported decision of Master Ng, Library No 8932, 21 June 1991. The foreign judgment is treated as creating a debt which the plaintiff may enforce: Nouvion v Freeman(1889) 15 App Cas 1 at 8;Grant v Easton(1883) 13 QBD 302 at 303.
17 At common law, a foreign judgment may be enforced if three conditions are met:
(a) the foreign court had jurisdiction to make the judgment under its own law;
(b) the judgment was final and conclusive; and
(c) the judgment was for a fixed amount.
(Page 8)
18 Nouvion v Freeman(1889) 15 App Cas 1 at 9 - 10, 12, 17; Grant, at 8 - 11. (See generally: Skyes, E I and Pryles, M C, Private International Law, 113ff (3rd ed 1991, Law Book)).
19 The onus is on the party seeking to rely on the judgment to satisfy the court that these prerequisites are met: Grant, at 8. However, the defendant did not argue that any of the preconditions necessary to enforce the judgment were absent.
20 The decision was made by the Oslo District Court of Norway. The reason for the litigation being commenced in Norway appears to be that the main shareholder of the plaintiff has its head office in Norway (Louden affidavit, p 5). In the contract between the parties, if the parties fail to agree another court in which to litigate a dispute, the Norwegian legal system and courts are to be used (Winch affidavit, p 52). The defendant voluntarily appeared in the action entered an appearance in the action: Norsemeter Holding AS v Boele (No 1)[2002] NSWSC 370; Israel Discount Bank of New York v Hadjipateras [1983] 3 All ER 129, at 132, 135, 136. The defendant also participated in an application for rehearing and two appeals. In the course of the appeal decisions, there was a discussion of the adequacy of notice on the defendant. This issue did not lead to the judgment being set aside on the appeal. I am satisfied that the judgment was given by a court of competent jurisdiction under the law of Denmark.
21 Judgment was given in the present case in essence when the defendant failed to file a defence. It was open to the defendant to have argued the whole merits of the case. The fact that the judgment was in the nature of a default judgment does not disqualify it from being enforced in Australia: Grant, p 11; Schnabel v Lui [2002] NSWSC 15, at [135], [152] - [153]. The decision giving judgment was affirmed on appeal by the Borgarting Court of Appeal and the Interlocutory Appeals Committee of the Supreme Court of Norway (Winch affidavit, p 2 - 5). I am satisfied that it was final and conclusive.
22 The judgment was for a fixed amount.
23 Mr Winch in his affidavit deposes that in his belief the defendant has no defence to the action, complying with O 14 r 2. In the words of Pullin J quoted above, I am satisfied that the plaintiff's claim is a good one.
(Page 9)
Principles - foreign judgments obtained by fraud
24 An Australian court may decline to enforce a foreign judgment that was fraudulently obtained: Benefit Strategies, at 556. The onus of proving fraud will lie with the defendant at trial. To resist a summary judgment application, the defendant must produce evidence raising a triable issue in relation to fraud: Benefit Strategies, at 556.
25 The starting point is that, with some caveats, the principles governing the refusal to enforce a foreign judgment on the ground of fraud are the same as those governing the setting aside of a domestic judgment for fraud: Benefit Strategies, at 558 - 559; Keele v Findley (1990) 21 NSWLR 444, at 449, 458. Both decisions just cited affirmed the following statement of the principles relating to domestic judgments set out by Kirby P (with whom Hope and Samuels JJA agreed) in Wentworth v Rogers (No 5)(1986) 6 NSWLR 534, at 538 - 539:
"First, the essence of the action is fraud. As in all actions based on fraud, particulars of the fraud claimed must be exactly given and the allegations must be established by the strict proof which such a charge requires: Jonesco v Beard [1930] AC 298 at 301; McHarg v Woods Radio Pty Ltd (at 497).
Secondly, it must be shown, by the partly asserting that a judgment was procured by fraud, that there has been a new discovery of something material, in the sense that fresh facts have been found which, by themselves or in combination with previously known facts, would provide a reason for setting aside the judgment: see Lord Selbourne LC in Boswell v Coaks (No 2) (1894) 6 R 167 at 170, 174; 86 LT 365 at 366, 368; Cabassi v Vila (1940) 64 CLR 130 at 147; McDonald v McDonald (1965) 113 CLR 529 at 533; Everett v Ribbands (1946) 175 LT 143 at 145, 146; Birch v Birch [1902] P 130 at 136, 137 - 138; Ronald v Harper [1913] VLR 311 at 318. This rule has an ancient lineage: see, eg, Shedden v Patrick (1854) 1 Macq 535 at 615, 622; Halsbury's Laws of England, 4th ed, vol 26, par 560 at 285. It is based upon a number of grounds. There is a public interest in finality of litigation. Parties ought not, by proceeding to impugn a judgment, to be permitted to relitigate matters which were the subject of the earlier proceedings which gave rise to the judgment. Especially should they not be so permitted, if they move on nothing more than the evidence upon which they have previously failed.
(Page 10)
- If they have evidence of fraud which may taint a judgment of the courts, they should not collude in such a consequence by refraining from raising their objection at the trial, thereby keeping the complaint in reserve. It is their responsibility to ensure that the taint of fraud is avoided and the integrity of the court's process preserved.
Thirdly, mere suspicion of fraud, raised by fresh facts later discovered, will not be sufficient to secure relief: Birch v Birch (at 136, 139); McHarg v Woods Radio Pty Ltd (at 498); Ronald v Harper (at 318). The claimant must establish that the new facts are so evidenced and so material that it is reasonably probable that the action will succeed. This rule is founded squarely in the public interest in finality of public litigation and in upholding judgments duly entered at the termination of proceedings in the courts.
Fourthly, although perjury by the successful party or a witness or witnesses may, if later discovered, warrant the setting aside of a judgment on the ground that it was procured by fraud, and although there may be exceptional cases where such proof of perjury could suffice, without more, to warrant relief of this kind, the mere allegation, or even the proof, of perjury, will not normally be sufficient to attract such drastic and exceptional relief as the setting aside of a judgment: Cabassi v Vila (at 147, 148); Baker v Wadsworth (1898) 67 LJQB 301; Everett v Ribbands (at 145, 146). The other requirements must be fulfilled. In hard fought litigation, it is not at all uncommon for there to be a conflict of testimony which has to be resolved by a judge or jury. In many cases of contradictory evidence, one party must be mistaken. He or she may even be deceiving the court. The unsuccessful party in the litigation will often consider that failure in the litigation has been procured by false evidence on the part of the opponent and the witnesses called by the opponent. If every case in which such an opinion was held gave rise to proceedings of this kind, the courts would be even more burdened with the review of first instance decisions than they are. For this reason, and in defence of finality of judgments, a more stringent requirement than alleged perjury alone is required.
Fifthly, it must be shown by admissible evidence that the successful party was responsible for the fraud which taints the
(Page 11)
- judgment under challenge. The evidence in support of the charge ought to be extrinsic: cf Perry v Meddowcroft (1846) 10 Beav 122 at 13 - 139; 50 ER 529 at 534, 535. It is not sufficient to show that an agent of the successful party was convicted of giving perjured evidence in the former proceeding, the result of which it is sought to impeach. It must be shown that the agent, in so acting, was in concert with the party who derived the benefit of the judgment: Ronald v Harper (at 318); Sheddon v Patrick (at 643).
Sixthly, the burden of establishing the components necessary to warrant the drastic step of setting aside a judgment, allegedly affected by fraud or other relevant taint, lies on the party impugning the judgment. It is for that party to establish the fraud and to do so clearly. In summary, he or she must establish that the case is based on newly discovered facts; that the facts are material and such as to make it reasonably probable that the case will succeed; that they go beyond mere allegations of perjury on the part of witnesses at the trial; and that the opposing party who took advantage of the judgment is shown, by admissible evidence, to have been responsible for the fraud in such a way as to render it inequitable that such party should take the benefit of the judgment."
26 The caveat is that there is that there is conflicting authority on points two and four. The balance of the authorities supports the view that in relation to foreign judgments:
(a) it is not necessary to show that the fraud is based on fresh evidence found since the original judgment; and
(b) it is sufficient to show that the foreign court was induced by fraud to come to a wrong decision by evidence which was false.
- Benefit Strategies, 558 - 559; De Santis v Russo[2000] QSC 065, at par 16; Yoon v Young Dung Song (2000) 158 FLR 295, at 298 - 300; Re Monroe Schneider Associates (Inc) v Barry Lee Schneider (1992) 37 FCR 234, at 241; Norman v Norman (No 2) (1968) 12 FLR 39, at 47; Close v Arnot;unreported, Supreme Court of NSW, Matter 10107/96, 21 November 1997. These decisions follow the line of authority going back to Abouloff v Oppenheimer & Co (1882) 10 QBD 295 and Vadala v Lawes (1890) 25 QBD 310.
(Page 12)
27 To the contrary is the decision of Rogers CJ Comm D in Keele. Rogers CJ Comm D declined to follow the decisions in Oppenheimerand Vadala, instead holding that same rules should apply to setting aside judgments for fraud in domestic and foreign decisions. There was thus a requirement for a new discovery of something material, or fresh evidence, showing fraud. On the facts of the case the before the Court, the plaintiff sought to enforce a judgment of a United States court. The defendants had sought to resist enforcement of the judgment the ground that false evidence given at the trial of the action. It was common ground that the defendant could not satisfy the test laid down in Wentworth.His Honour awarded summary judgment to the plaintiff.
28 Notwithstanding the intellectual force of the decision in Keele, the balance of the authority supports the view that the decisions in Oppenheimer and Vadala represent the law in Australian. In any event, for the purposes of a summary judgment application, it is appropriate that I resolve any conflict in the authorities or possible development in the law in favour of the defendant: Hospitals Contribution Fund of Australia v Hunt (1982) 44 ALR 365 at 373. It is thus not necessary for the defendant to show that the fraud is based on fresh evidence found since the original judgment. On the other hand, it is sufficient to show that the foreign court was induced by fraud to come to a wrong decision by evidence which was false.
29 However, fraud must still be established. It is not sufficient for the defendant to raise a matter of defence which was raised or could have been raised in the foreign proceedings, even though it would have been a complete answer to the claim: Ellis v M'Henry (1871) LR 6 CP 228, at 238 - 239. Nor is it sufficient for the defendant to assert that it was erroneous on the merits through a mistake of fact or law: Godard v Gray(1870) LR 6 QB 139, at 150; Norsemeter Holdings AS v Pieter Boele [No 1] [2002] NSWSC 370, at par 14.
30 The defendant raised two areas in which he says the judgment is impugned by fraud:
(a) the plaintiff had falsely claimed that the defendant had orally agreed to an extension of the a one contract for a further year; and
(b) the plaintiff claimed losses it did not suffer.
31 Each of these is dealt with in turn.
(Page 13)
Fraudulent claim - length of the contract
32 In order to consider the defendant's defence, it is necessary to go behind the judgment into the merits of the plaintiff's claim in the Norwegian courts. The writ of summons filed in the Oslo District Court ("Oslo Writ") contains a narrative of the plaintiff's claim, together with key supporting documents. The Olso Writ is annexed to the Louden affidavit.
33 The plaintiff is a company incorporated in Hong Kong. It conducts business as a service company providing personnel with expertise in technical, management, safety and consultancy services to its customers, most of who operate in the oil and petrochemical industry.
34 On 17 October 2000, the defendant signed a one year employment contract. The contract involved him working 28 days on and 28 days off at a site in China for a client of the plaintiff, Arco China Inc ("Acro"). Acro is associated with BP, and is sometimes referred to as "BP" in the material from the proceedings in Norway.
35 The defendant worked the first 28 day rotation. He was due to start the second 28 day rotation on 7 December 2000. On 3 December 2000 he sent an email to his contact at the plaintiff advising that he would not be returning to work in China for Arco.
36 The plaintiff describes in the Olso Writ how their officers tried to get the defendant to return to work given its commitments to Acro. This was to no avail. The plaintiff goes on to say that it was not possible for it to find a replacement for the defendant. It continues:
"… the problems his absence caused for BP resulted in that [sic] BP withdrew from further cooperation with Trainor Asia in regards to the Nan Shan-base and the HSE project (HSE= Health, Safety & Environment)."
37 The plaintiff alleges the defendant terminated the contract and claimed the financial loss it says it suffered as a result of the termination.
38 The defendant's position in relation to the length of the contract is set out in particular (a) of the particulars to par 4 of the Minute. As particular (c) is also relevant, it is convenient to quote the entirety of the particulars:
"(a) In its claim to the Oslo District Court (the Claim) the Plaintiff claimed that its contract with the Defendant was to last for two years, and, sought and obtained
- damages for a period of two years. In fact the written contract between the Plaintiff and the Defendant was for a term of 12 months with no extensions unless mutually agreed by the Plaintiff and the Defendant. At the trial of the Claim the Plaintiff falsely claimed that the Defendant had orally agreed to an extension of the term of this agreement from one year to two years (the First False claim). The First False claim was not pleaded in the Writ of Summons by which the Claim was commenced.
- (b) Further, the Plaintiff employed the Defendant together with several other persons to provide services as safety officers which services the Plaintiff was, in turn, obliged by contract to provide to Arco China Inc (Arco). It is averred by the Defendant that, notwithstanding the termination of the Defendant's contract in October 2000, the Plaintiff continued to provide the said services to Arco and was paid for those services until 2001, at which time, Arco was taken over by China National Oil Co and the Plaintiff's contract was terminated (the Defendant does not know until the delivery of answers to interrogatories and discovery of documents when this occurred). Notwithstanding the continued payment by Arco for the services to the Plaintiff, and, the cessation of the Arco contract as stated above, the Plaintiff claimed and was awarded damages in the Oslo District Court for the period from December 2000 until some time in 2002 when it had suffered no such loss and had no such entitlement (the Second False claim).
(c) The Defendant does not know, until the delivery of answers to interrogatories and discovery of documents, precisely what evidence was given to the Oslo District Court in support of the First False claim, or, the Second False claim, but, avers that some of the evidence in support of the same was false, or further, or, in the alternative, that the Plaintiff omitted to inform the Oslo District Court of the true position, and, thereby perpetrated a fraud on the Oslo District Court in order to obtain the said judgment against the Defendant."
(Page 15)
39 The written contract between the plaintiff and the defendant is annexed to the Winch affidavit. The relevant term dealing with the contract period is:
"The contract period will commence 17th October 2000, and expire 16th October. This contract may "roll over" for a further period of one year from the expiry date under the same conditions if mutual agreement is made by Both COMPANY and EMPLOYEE."
40 This position is repeated in the work order between Arco and the plaintiff in relation to the defendant. In that document, also annexed to the Winch affidavit, the period of employment is described as "approximately one year". I am satisfied that there is a triable issue that the written contract between the plaintiff and defendant was for a term of 12 months with no extension unless mutually agreed, as particularised above.
41 The defendant deposes that he did not agree to any extension of the contract between him and the plaintiff (Calverley affidavit, par 2). This version of the fact must be accepted for present purposes.
42 However, the plaintiff does not actually allege that the contract between the plaintiff and the defendant was ever extended beyond 12 months. In the Olso Writ the plaintiff annexes the work order between Arco and it, and makes the following comment (p 2):
"As evident [from the work order], the duration of the contract was approximately one year, which is in line with BP's general guidelines for contract of this type. However, Trainor Asia was orally ensured [sic] that a renewal could be expected at the end of this time period so that the actual duration of the contract would be a minimum of two years".
43 In argument before me, counsel for the defendant submitted that the reference to the duration of the contract was ambiguous as to whether it was that between the plaintiff and Acro or that between the plaintiff and the defendant. I do not agree. In context, the above quote refers to the work order between the plaintiff and Acro, such that the reference to the oral assurance of a renewal was from Arco to the plaintiff. It was not from the defendant to the plaintiff. Any residual doubt on this issue is removed from the way in which the plaintiff sets out is claim for damages in the Olso Writ, as follows (p 4 and 5):
(Page 16)
- "Financial loss
Trainor Asia's agreed day rate for Calverley was USD 580, cf. attachment 3 above. The rotation was, as mentioned above, fixed so that Calverley would alternate with another contractor, half the year on and half the year off. He would thereby have a total of 182.5 work days during the agreed contract period. The agreed day rate would cover taxes to the Chinese authorities and other costs for Calverley.
Evidence: Copy of spreadsheet, not dated. (Attachment 10).
Evidence: Copy of hours worked, dated October 30, 2000. (Attachment 11).
Evidence: Copy of hours worked, dated 10 November, 2000. (Attachment 12).
In accordance with the agreed rates, Trainor Asia had a net income of Calverley's engagement of USD 160 per day. As Calverley had worked 25 days, Trainor Asia has a loss of income for 157 days, which amounts to a loss of USD 25,120.
As mentioned above, Trainor Asia and BP had a reciprocal understanding that the contract would apply for a minimum of two years. This results in a further loss for a whole year amounting to USD 29,313."
44 Counsel for the defendant also drew the Court's attention to a letter from the defendant's solicitors dated 21 November 2006, which is annexed to the Second Eastwood affidavit. On p 2 of this letter, the following appears:
"The first paragraph of the particulars claims that our client's contract with BP Arco was for a period of 12 months, whereas damages have been claimed for a period of 2 years. It is evident from pages 5 and 7 of annexure "JAL-1" [the Oslo Writ] to the affidavit of John Alexander Louden sworn 23 January 2006 that our client submitted to the Court that the contract in respect of your client was for an initial period of 12 months, but an oral agreement was reached (as was commonplace) whereby the contract would be extended to a minimum of 2 years."
(Page 17)
45 In the hearing before me, counsel for the defendant submitted that this paragraph is in effect an admission that the plaintiff has submitted before the Oslo District Court that the defendant had orally agreed to an extension of the contract. I do not read it that way. The author does not say to the defendant's solicitors that the "contract with your client" was orally extended. It says to the defendant's solicitors that the contract "in respect of your client" was orally extended. I read this as a reference to the contract between the plaintiff and Acro. In any event, all the author is doing is interpreting the Oslo Writ. The author is not purporting to add an independent commentary on the proceedings.
46 The Plaintiff's position is thus that:
(a) the contracts between the plaintiff and both the defendant and Arco were for 1 year:
(b) it expected that the contract between it and Arco would be continued for a second year;
(c) the actions of the defendant led to the contract with Acro being terminated; and
(d) it claims lost profits for both the balance of the year contract and the additional year it expected to receive.
47 There is nothing in the Olso Writ or any of the subsequent judgments (which are annexed to the Louden and Winch affidavits) in which the plaintiff asserts that the defendant had orally agreed to an extension of the agreement from 1 to 2 years. Nor is there any evidence whatsoever that at the trial of the action in Norway, the plaintiff claimed – either falsely or otherwise - that the defendant had orally agreed to an extension of the term of this agreement from 1 year to 2 years.
48 The defendant was represented in the proceedings in Norway, including an application for a rehearing of the decision granting the judgment and two appeals. He thus had extensive access to the materials before the courts in Norway. If there was any evidence in this material supporting the allegation raised in particular (a), it was incumbent on him to place it before this court. Any affidavit sworn by a defendant in opposition to an application for summary judgment should condescend to particulars and should so far as possible deal with the plaintiff's claim and state clearly what the defence is and what facts are relied upon as supporting it: National Australia Bank Ltd v Firewood Processors Pty Ltd[2003] WASC 88 at par 10. In this context, I place little weight on the statement in the defendant's particulars that he will
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- provide further information upon completion of the discovery and inspection process.
49 The defendant has not produced any evidence raising a triable issue in relation to this claim.
Fraudulent claim - Losses claimed
50 The defendant claims that the plaintiff claimed losses to which it had no entitlement. In essence, the defendant alleges that:
(a) notwithstanding the termination of the defendant's contract at the end of 2000, the plaintiff continued to provide services to Arco;
(b) this continued until some time in 2001 when Acro was taken over by the China National Oil Co; and
(c) because of (a) and (b) the plaintiff did not actually suffer the loss of profits claimed against the defendant.
51 On this issue, the defendant deposes as follows (Calverley affidavit, par 6):
"As far as I am aware I was never replaced by the Plaintiff at the work-site. I believe that a different arrangement was entered into between the Plaintiff and the head contractor such that the Plaintiff thereafter only had to supply one workman rotating with an employee of Arco. The precise details of this arrangement were not know to me at the time when the matter was heard by the District Court, and, they will not be known to me until after discovery and answers to interrogatories by the Plaintiff. I believe that if the new arrangement was consensual and in substitution for the plaintiff's other rights, the plaintiff could not claim from me any losses past the date of that agreement relating to the failure to provide services which is was no longer obliged to provide. Based on all the information available to date, it would appear that the plaintiff did not inform the Olso Court of this new arrangement when seeking judgment against me."
52 The defendant does not say that the plaintiff continued to provide services to Arco though another person. Rather, he says that the plaintiff only provided one person. The plaintiff only claimed damages in relation to lost profits for one employee – see the extract from the Olso Writ quoted in par 43 above. Accepting for present purposes that the
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- defendant's evidence would be the evidence at trial, it does not identify any false claim made in the Olso Writ. Rather, it is quite consistent with the claim in the Oslo Writ. If the plaintiff entered into a different arrangement with Acro because of the defendant's absence at short notice (as the defendant deposes it did), then it would be consistent for the plaintiff to seek the lost profits from the different arrangement from the defendant.
53 I am not satisfied that the defendant has produced evidence raising a triable issue in relation to the profits claimed. In this regard, the defendant must do more than raise an issue that the Norwegian courts made a mistake or law or fact in relation to the calculation of the damages. Nor is it sufficient to for the defendant to submit that an Australian would not have awarded damages in the same way. The triable issue must be that the foreign court was induced by fraud to come to a wrong decision by evidence which was false. There is no evidence of any such fraud.
54 In any event, even if particular (b) was proven factually, it would be not be sufficient to establish fraud. All that is alleged is that, due to the plaintiff not being on site, there was a revised contractual arrangement between the plaintiff and Acro. The existence and effect of any arrangement may well have been an issue at the trial in Norway had the matter proceeded to trial. There may well have been conflicting evidence and contrary legal submissions. The fact that one party's evidence and legal assertions are not accepted at trial does not of itself lead to the conclusion the foreign court was induced by fraud to come to a wrong decision by evidence which was false. If this were the case, then the losing party in every foreign judgment could resist enforcement on the ground of fraud.
Should the defendant have leave to defend
55 It is well established that the power to order summary judgment should be exercised with great care and should never be exercised unless it is clear that there is no real question to be tried: Fancourt v Mercantile Credits Ltd (1983) 154 CLR 87 at 99. Or put slightly differently, a case must be very clear to justify the summary intervention of the Court to prevent a party submitting his case for determination in the appointed manner by the Court. Once it appears that there is a real question to be determined, whether of fact or law, and that the rights of parties depend upon it, it is not competent for the Court to dismiss the action as frivolous or vexatious and an abuse of process: Dey v Victorian Railways Commissioners (1949) 78 CLR 62 at 91. Further, great care must be
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- exercised to ensure that under the guise of achieving expeditious finality, a plaintiff is not improperly deprived of his opportunity for the trial of his care in the appointed manner by the Court: General Steel Industries Inc v Commissioner for Railways (supra).
56 There a residual discretion in O 14 r 3 for the Court to decline to order summary judgment where "there ought for some other reason to be a trial". However, if a defendant has adequate notice of the nature of the evidence likely to be given by the plaintiff yet did not avail himself of the opportunity of contradicting it, he may have difficulty persuading a court to exercise its discretion in his favour: Svirskis v Gibson[1977] 2 NZLR 4, at 10.
57 The defendant was given clear notice of the issues in the Olso Writ, including the issues relating to the length of the contracts and the amount of damages claimed.
58 In his notice of intention to defend (annexed to the Louden affidavit), the defendant, though his Norwegian solicitors, made the following points:
(a) the plaintiff did not submit any evidence that they had tried to replace the defendant and failed;
(b) the plaintiff had not produced any evidence that the defendant's absence lead to BP's resignation from any further cooperation with the plaintiff;
(c) the defendant contested the plaintiff's description of the financial loss.
59 Thus, the issues raised in the defendant's particulars would have been squarely in issue had the action proceeded to trial in Norway. There is no evidence before the Court as to why the defendant did not continue to contest the proceedings in Norway until the first instance decision was given.
60 I have also given consideration to whether the case ought to proceed so that the defendant can gain discovery and interrogate as set out in particular (c). The answer to this is that I am not satisfied on the material before me that there are any triable issues that could be proven if the defendant was given the opportunity to gain discovery and interrogate.
61 The defendant ought not to have unconditional leave to defend.
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62 There remains the question of whether or not there should be any conditions imposed on the grant of leave to the defendant to defend the action. In this regard, Rules of the Supreme Court O 14, r 4(3) provides that the Court may grant leave to defend "either unconditionally or on such terms as to giving security or time or motive trial or otherwise as it thinks". In Hazart Anderson J with whom Malcolm CJ and Scott J agreed, stated the following about the grant of conditional leave to defend (at 31 - 32):
"In my experience of the practice in this Court, when the Court concludes that the bona fides of a defence and/or counterclaim are in doubt, the Court will usually require that the defendant provide some security. This is to ensure that a defence that appears to be very weak on its merits is at least being put forward in good faith. Unless the court was prepared to take this step in appropriate cases, injustice often would be done to plaintiffs pursuing good causes of action against debtors claim for time. When the plaintiff's claim appears clear cut, as, for example, in the case of the sale and delivery of goods for an agreed price, and the Court is left in real doubt about the defendant's good faith (although not able to say for certain there is no triable issue) it is not unusual for the Court to order, as a condition of leave to defend, that the full amount of the claim be secured. This will usually be by payment into court. If to do so would impose hardship on the defendant, the court may order that less than the full amount be paid in." (See also DMS Shipping & Trading Co Ltd v Lionheart Asia Ltd [1996] 2 Qd R 20, at 23).
63 In this case, the defendant's defence is not in any sense shadowy or lacking in bona fides. It is simply one which does not raise an arguable defence.
64 This case is similar to the decision of Master Ng in Grant. In that case, the plaintiffs sued on a judgment from the Circuit Court of Michigan. The defendants failed to appear or defend the action. The plaintiffs were awarded summary judgment. The key issue was whether the judgment was final and conclusive. The judgment was for a liquidated sum with a reservation to later deal with the question of unliquidated damages. The Learned Master held that the court could grant judgment in relation to part of a claim, and that the judgment for the liquidated damages was final and conclusive. The Learned Master
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- commented that: "If the defendants chose to leave the United States of America in the face of this action, they must suffer the consequences".
65 The plaintiff is entitled to judgment.
Leave to amend
66 The plaintiff seeks to amend statement of claim in two respects:
(a) to refer to the unsuccessful appeal decisions in Norway; and
(b) to claim the costs of the unsuccessful appeal decisions, as set by those courts.
67 Each appeal decision occurred in 2006, after the filing of the writ on 29 June 2005. The issue that arises is whether the plaintiff is able to amend to refer to facts occurring after the issue of the writ.
68 In submissions filed on 24 July 2007, the plaintiff conceded that the claims for costs arising out of the appeals were causes of action accruing after the issue of the writ. These causes of action may not be included without the consent of the defendant. In submissions dated 27 July 2007 the defendant makes it clear that he does not give this consent.
Orders
69 To give effect to the judgment set out above, orders should be made along the following lines:
(a) the action be restored to the active list and the entry for trial milestone reset to 31 July 2007;
(b) the plaintiff have leave to bring the application dated 25 May 2007;
(c) the application in so far as it relates to amending the statement of claim should be dismissed;
(d) there be judgment for the plaintiff.
70 The judgment is sought in United States dollars and Norwegian krona. There is no impediment to a plaintiff seeking judgment in a foreign currency, at least where that is justified by the cause of action in question. This can occur where the proper law of the contract is the law of another country or where a contract specifically provides for a loan and repayment in foreign currency: Miliangos v George Frank (Textiles)
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- Ltd [1976] AC 443, at 463, 467, 497, 500 - 501; ANZ Banking Group Ltd v Cawood [1987] 1 Qd R 131, at 134.
71 It is then a question of discretion whether the judgment is expressed in foreign currency or whether there is a rider to the order allowing payment of the equivalent amount in Australian dollars at the time of payment or the issue of enforcement proceedings in Australia: Miliangos, at 463, 467-470, 497 - 498, 501 - 502; Carwood, at 134. My preliminary view is that the judgment should at this stage be expressed in Australian dollars to facilitate enforcement. However, I will hear from counsel in relation to this issue.
72 I will also hear from counsel on the precise form of the orders and costs.
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