Westpac Banking Corporation v Palaniappan [No 4]
[2018] WASC 143
•10 MAY 2018
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS
CITATION: WESTPAC BANKING CORPORATION -v- PALANIAPPAN [No 4] [2018] WASC 143
CORAM: MASTER SANDERSON
HEARD: 12 APRIL 2018
DELIVERED : 10 MAY 2018
FILE NO/S: CIV 1307 of 2014
BETWEEN: WESTPAC BANKING CORPORATION
Plaintiff
AND
KASI PALANIAPPAN
Defendant
Catchwords:
Practice and procedure - Application for leave to serve examination summons out of the jurisdiction - Applicable principles
Legislation:
Civil Judgments Enforcement Act 2004 (WA)
Rules of the Supreme Court 1971 (WA)
Result:
Leave granted
Category: A
Representation:
Counsel:
| Plaintiff | : | Mr S K Dharmananda SC & Mr A J Papamatheos |
| Defendant | : | Mr S Penglis |
Solicitors:
| Plaintiff | : | Lavan Legal |
| Defendant | : | Bennett + Co |
Case(s) referred to in decision(s):
Titan Enterprises (Qld) Pty Ltd v Cross [2016] FCA 890
Union Bank of Finland Ltd v Lelakis [1997] 1 WLR 590
MASTER SANDERSON:
By chamber summons filed 22 November 2017 the plaintiff sought leave to serve a means inquiry summons issued pursuant to the Civil Judgments Enforcement Act 2004 (WA) (the Act) out of the jurisdiction. The chamber summons also sought a suite of further orders which were effectively orders for substituted service. At the commencement of this hearing counsel for the plaintiff indicated he did not intend to pursue the substituted service orders. So the crisp issue for determination is whether in all the circumstances leave to serve the means inquiry summons out of the jurisdiction ought be granted.
The relevant background facts can be shortly stated. What follows is a summary largely taken from the written submissions filed on behalf of the plaintiff. The judgment debtor has an outstanding judgment against him in the sum of $15,184,801.75 (excluding interest and costs). Interest is accruing at the judgment rate of $2,496.09 a day from 18 December 2014 until payment. As at the date of the hearing of this application the judgment debt was over $18 million. The judgment was for a sum due and owing under a guarantee given by the judgment debtor dated 9 July 2008. The guarantee is an agreement with a choice of law and forum clause that selected Western Australian law and courts. The guarantee was security for a property development near Mandurah by an Australian company of which the judgment debtor was, and still is, a director and shareholder.
The judgment debtor entered an unconditional appearance in the proceedings on 14 March 2014, filed a defence, gave discovery, filed a defence and counterclaim, filed a further amended defence and counterclaim, took no issue as to jurisdiction and contested the matter on its merits at a summary judgment hearing. Judgment was entered on 18 December 2014. An appeal to the Court of Appeal was dismissed on 29 April 2016 and a special leave application to the High Court was abandoned.
The judgment creditor has exercised its statutory right under the Act to apply for a means inquiry of the judgment debtor so it may subsequently seek enforcement orders for the judgment. The court has ordered a means enquiry as required by s 27(4) of the Act. The means inquiry is under way. Registrar Boyle started hearing the means enquiry on 4 December 2017. Business associates and former solicitors of the judgment debtor had variously complied with the summons, appeared and given testimony and produced documents.
Through his local lawyers on record in these proceedings the defendant has refused to accept service and to comply and attend the ongoing inquiry into his financial capacity. Despite all of the above, the judgment debtor asserts, for a number of reasons, this court should withhold orders allowing for service out of the jurisdiction.
The plaintiff's application was brought under O 10 r 7 of the Rules of the Supreme Court 1971 (WA). There was no dispute between the parties that this 'pigeon hole' was available in this case. The real question between the parties was whether, in the exercise of the discretion, leave should be refused. In its written submissions the plaintiff maintained that it had a 'prima facie entitlement' for leave to serve out of the jurisdiction. That submission was based on the jurisdictional provisions of the guarantee. Reliance was also placed on the decision in Union Bank of Finland Ltd v Lelakis [1997] 1 WLR 590. Whether or not it is correct to say that a jurisdictional choice clause in a contract gives a party a prima facie right to serve out of the jurisdiction which the other party must answer is perhaps an open question. At the very least, however, it must be a factor taken into account in the exercise of the discretion and it must necessarily be a factor in favour of the party seeking leave.
At this point it is worth setting out the actual mechanics of how the Act works in circumstances such as apply here. Section 29(3) of the Act requires that the summons to a means inquiry must be served personally. Regulation 78 provides that if a document is required to be served under the Act it is to be served in accordance with div 2 or 4 of pt 6 of the Act. Under reg 88 the document may be served personally on an individual by either leaving the document with the individual or, if the individual does not accept the document, putting it down in his or her presence and advising him or her of the nature of the document.
By reg 93 a person to be served with a document under the Act may consent in writing to the document being served on or given to the person by email or fax at an email address or fax number specified in writing by the person. By reg 94, if a person has provided an email address under reg 93, the person may be served with or given a document by sending the document by email to that address. Regulation 95 is to a similar effect for service by facsimile.
By reg 83 the court may, if it is for any reason impractical to serve or give a document in the manner set out in the Act, order that instead of using such manner such steps be taken as specified in the order for the purpose of bringing the document to the notice of the person served. The court may, under reg 86(2), if it is satisfied that notice of the document has come to a person's knowledge and there are special circumstances, order that a document that has not been duly served on or given to the person is to be taken to have been duly served or given.
There appears to be no Australian case dealing with circumstances in which a means inquiry summons (or its equivalent in other jurisdictions) is to be served out of the jurisdiction. Counsel for the defendant relied on a number of decisions dealing with subpoenas. While these cases may assist, they are not, for obvious reasons, directly relevant. That said, counsel for the defendant did draw from the decision of Edelman J in Titan Enterprises (Qld) Pty Ltd v Cross [2016] FCA 890 two principles which are relevant. First, his Honour noted that the discretion to issue an international subpoena would not usually be exercised if other reasonable avenues had not been exhausted. Second, his Honour noted that compliance with international law and comity were extremely important considerations relevant not only to the court's power to grant leave but in the exercise of its discretion.
Essentially, the defendant argued there were three reasons why the discretion should not be exercised in the plaintiff's favour. First, it was said there were other means available to achieve the same end. Essentially, what was said was the plaintiff could issue proceedings in Malaysia. If the defendant entered an appearance to those proceedings, the plaintiff could then seek summary judgment. If summary judgment was obtained, the plaintiff could then use enforcement procedures available in Malaysia. That, it was submitted, was the better course to follow. The procedure proposed was outlined in evidence provided by Thoo Yee Huan affirmed 29 January 2018.
For its part, the plaintiff accepted such a course would be possible. But it was counsel's submission that did not affect in any way the plaintiff's right to pursue other means available in this jurisdiction. It was submitted in support of this proposition that the defendant had both, in the terms of the guarantee and by his actions over many years, submitted to the jurisdiction of the Supreme Court of Western Australia. That being so, there was no reason why enforcement procedures available in this court ought not be exercised. Any difficulties which the plaintiff experienced as a consequence of the defendant being resident outside the jurisdiction were matters for the plaintiff to deal with in due course.
Second, it was submitted that the service of the means inquiry summons, even if it could be effected, was futile. There was no mechanism in Malaysia which would allow for enforcement of the requirement under the Act that the defendant attend a hearing. The plaintiff's response to that was the same as its response to the first point. That is to say the plaintiff said that whatever difficulties it may encounter were a matter for the future and should not in and of themselves provide a ground for refusing the order.
Finally, counsel for the defendant submitted that an enforcement procedure under the Act was really a new proceeding and should not form part of the previous action. Counsel referred to the old enforcement writs - a writ of fieri facias or a writ of venditio exponas or some other writ of enforcement. Counsel submitted that as the Act had done away with these old forms of enforcement and provided the regime separate and distinct from the processes of the court, it was not appropriate to grant leave within these proceedings.
That is a novel argument. Since the introduction of the Act it has been common practice for the enforcement of a judgment to be conducted under the rubric of the action in which judgment was given. That approach seems to me to be both sound and reasonable. Upon the issue of a writ a plaintiff is seeking the assistance of the court to obtain a certain outcome. To obtain a judgment is one thing; it is enforcing the judgment which is of real importance. Judgments are not given in a vacuum but they are, rather, a means to an end. I see no basis in logic or in law why separate proceedings need to be issued to enforce a judgment.
In the end, the exercise of discretion here is a balancing act. On the one hand, the plaintiff is able to point to a contract where the defendant has consented to the jurisdiction of the courts of Western Australia. He has then participated in litigation and fully exercised all rights open to him. He has made no attempt to meet his obligations under the judgment. Rather, he is attempting to step away from his contractual responsibilities. Facilitating that course can hardly be in the interests of justice.
Against that is the practical difficulty of achieving anything by the service of this summons outside the jurisdiction. The alternative of issuing proceedings in Malaysia and using the Republic's laws to advance the claim against the defendant would, on the face of it, appear to be a more practical option.
On balance, I am satisfied the plaintiff's arguments carry the day. While I am conscious of the difficulties the plaintiff may encounter in practice, they are matters for the plaintiff. In circumstances such as this, where up to this date the defendant has elected to play the game according to the rules applying in this State, it would be unfair to the plaintiff to now deny them the opportunity to serve outside the jurisdiction. Furthermore, I am not satisfied there is any procedural irregularity which would warrant the refusal of leave.
For these reasons, I am satisfied orders largely in terms of par 1 of the chamber summons ought be made. I will hear the parties as to the precise form of orders and as to costs.
I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.
DG
ASSOCIATE TO MASTER SANDERSON10 MAY 2018
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