Zabusky v Virgtel Limited

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SUPREME COURT OF QUEENSLAND

CITATION:

Zabusky & Ors v Virgtel Limited [2022] QCA 223

PARTIES:

HARVEY ZABUSKY
(first appellant)
EREZ ZABUSKY
(second appellant)
D A WERBER LIMITED (RC 261285)
(third appellant)
v
VIRGTEL LIMITED (IBC 311178)
(respondent)

FILE NO/S:

Appeal No 4975 of 2022
SC No 8849 of 2020

DIVISION:

Court of Appeal

PROCEEDING:

General Civil Appeal

ORIGINATING COURT:


Supreme Court at Brisbane – [2022] QSC 46 (Bowskill CJ)

DELIVERED ON:

11 November 2022

DELIVERED AT:

Brisbane

HEARING DATE:

5 September 2022

JUDGES:

Mullins P and Bradley and Cooper JJ

ORDERS:

1.   The application filed 15 August 2022 is refused.

2.   The application filed 25 August 2022 is refused.

3.   The appeal is dismissed.

4.   The appellants pay the respondent’s costs of and incidental to the appeal.

CATCHWORDS:

PROCEDURE – CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS – where the appellants’ proceeding to enforce an order issued by the Federal High Court of Nigeria against the respondent is permanently stayed, in circumstances where the court found the respondent had no assets in Queensland and Queensland is a clearly inappropriate forum –  where the appellants were ordered to pay the respondent’s costs of the proceeding and the application for a stay – where the appellants applied before the learned primary judge for an order lifting the stay on the basis that the respondent now has assets in the jurisdiction, namely the benefit of the costs orders – where the learned primary judge found that the costs orders were not an asset of the respondent in Queensland such as to justify lifting the stay – whether the costs orders are a new fact entitling the appellants to be relieved from the stay or a proper ground for lifting the stay

Uniform Civil Procedure Rules 1999 (Qld), r 668, r 668(1)(a), r 668(3)(b), r 766(1)(c), r 776(2)

Australian Workers Union v Bowen (1946) 72 CLR 575; [1946] HCA 24, cited
Barclays Bank Ltd v Quistclose Investments Ltd [1970] AC 567, cited
Cooper v Williams [1963] 2 QB 567, cited
Frith v Schubert [2010] QSC 444, cited
Virgtel Ltd & Ors v Zabusky & Ors [2021] QSC 284, cited

COUNSEL:

H Zabusky (sol) for the appellants
S S Monks for the respondent

SOLICITORS:

Kenmore Mediation and Law Centre for the appellants
James Conomos Lawyers for the respondent

  1. MULLINS P:  I agree with Bradley J.

  2. BRADLEY J:  The appellants’ claim to register and enforce a foreign judgment against the respondent is permanently stayed.  This appeal challenges the learned primary judge’s decision to refuse to lift the stay.

  3. There are three appellants.  The first is a director of the third appellant, and is now solicitor.  The second is his son.  The third is a company incorporated in the Federal Republic of Nigeria.  The respondent is a company incorporated in the Virgin Islands, a British Overseas Territory.

  4. In August 2020, the appellants applied to register or enforce an order issued by the Federal High Court of Nigeria (the foreign…

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Details
Case
[2022] QCA 223
Decision Date

CaseChat Overview and Summary

In the matter of Zabusky v Virgtel Limited, the appellants sought to enforce an order issued by the Federal High Court of Nigeria against the respondent. The Queensland Supreme Court had previously permanently stayed the appellants' proceeding to enforce the foreign judgment, finding Queensland to be a clearly inappropriate forum due to the respondent's lack of assets in the state. The appellants were further ordered to pay the respondent's costs of the proceeding and the stay application. Subsequently, the appellants applied to lift the stay, arguing that the costs orders constituted new assets in Queensland, warranting reconsideration. The primary judge denied the application, and the appeal against this decision ensued.

The primary legal issue before the court was whether the costs orders constituted a new fact or a proper ground for lifting the stay, as per the Uniform Civil Procedure Rules 1999 (Qld). The appellants contended that the costs orders, as assets in Queensland, justified lifting the stay. However, the court found that the costs orders did not alter the inappropriateness of Queensland as a forum for enforcing the foreign judgment, nor did they transform the court into an appropriate jurisdiction. The costs orders were a consequence of the appellants' vexatious and oppressive conduct in initiating the proceeding in an unsuitable forum, and did not entitle the appellants to relief from the stay.

The court held that the costs orders were not an asset of the respondent in Queensland and did not provide a proper ground for lifting the stay. The court's discretion to order costs usually followed the event, and in this case, the likely consequence of the respondent's success in the stay application was that the appellants would be ordered to pay the respondent's costs. The making of the costs orders did not change the position of the appellants or the inappropriateness of Queensland as a forum for enforcement of the foreign judgment. Consequently, the appeal was dismissed, and the appellants were ordered to pay the respondent's costs of and incidental to the appeal.

The court's decision underscores the importance of the finality of litigation and the role of costs orders as a consequence of vexatious litigation. The costs orders did not constitute a new fact or a proper ground for lifting the stay, as they did not transform the court into an appropriate jurisdiction for enforcement of the foreign judgment. The court's discretion to order costs is exercised in light of the parties' conduct, and in this case, the appellants' misconduct warranted the imposition of costs, which did not entitle them to relief from the stay.

Orders

Orders of the court

1. The application filed 15 August 2022 is refused.

2. The application filed 25 August 2022 is refused.

3. The appeal is dismissed.

4. The appellants pay the respondent’s costs of and incidental to the appeal.

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

In the circumstances, I would refuse the appellants leave to rely on the additional volume.Fresh evidence The appellants also sought leave to adduce fresh evidence,[33] being copies of the following documents: (a)Notice of Appeal in CA 3947/13 filed on 2 May 2013 (an appeal from the decision of Daubney J made on 4 April 2013);(b)A letter from HLB Den Hartog Accountants & Consultants to the respondent’s solicitor dated 10 September 2013, enclosing a notarised copy of the death certificate of Hendrik van Leeuwen dated 10 September 2013 and a notarised extract Certificate of Succession for Mr van Leeuwen’s estate dated 4 September 2013;(c)Amended applicant’s application in appeal CA 3947/13 dated 17 September 2013;(d)An English translation of Beheer NV financial statements for the calendar year 2021, filed with the Netherlands Chamber of Commerce (KVK) on 8 March 2022; and(e)An English translation of a search of KVK for Stichting Administratiekantoor Dompteur (Stichting) noting “No financial statements available.”[33]The application, under r 766(1)(c), was filed on 25 August 2022. All of the fresh evidence identified by the appellants relates to matters that occurred before the primary judge made the orders on 7 April 2022. In the ordinary case where fresh evidence has come to the notice of an unsuccessful party after a trial or hearing, the general rule is well settled.[34] The party seeking to adduce the fresh evidence must show it could not have been obtained with reasonable diligence for use at the hearing below, that the evidence is likely to have an important influence on the result of the appeal, though it need not be decisive, and that the evidence must be apparently credible.[35][34]Commonwealth Bank of Australia v Quade (1991) 178 CLR 134 (Mason CJ, Deane, Dawson, Toohey and Gaudron JJ), citing Orr v Holmes (1948) 76 CLR 632 (Dixon J), Wollongong Corporation v Cowan (1955) 93 CLR 435, 444 (Dixon CJ). Applied in Mackellar Mining Equipment Pty Ltd v Thornton (2019) 367 ALR 171, [60]-[62] (Sofronoff P).[35]Ladd v Marshall [1954] 1 WLR 1489, 1491 (Denning LJ). There is an important public policy interest in the finality of litigation.[36] That interest is upheld by a proper application of the general rule.[36]See, e.g., Colston v McMullen [2011] QCA 164, [10] (Martin J).The 2013 documents The first appellant was a respondent in appeal CA 3947/13. Both the notice of appeal and the amended application in the appeal are endorsed with an intention to serve them on him. According to Mr Zabusky, the HLB Den Hartog letter was exhibited to an affidavit filed on 11 March 2013 in CA 3947/13. This evidence was available to the appellants many years before the hearing below. Mr Zabusky offered no explanation as to why the appellants did not rely on these 2013 documents before the primary judge, or indeed before Crow J. In written submissions, Mr Zabusky sought to use the documents to challenge the evidence of Mr Peeters and Mr Simonet on the basis they did not give evidence that an heir of the late Mr van Leeuwen “consented or was even informed about the purported trust”. If Mr Zabusky were permitted to adduce this evidence, then in fairness the respondent should be entitled to adduce evidence about the heir.

Decision

Reasons for decision

In August 2020, the appellants applied to register or enforce an order issued by the Federal High Court of Nigeria (the foreign judgment). The foreign judgment directed the respondent to pay special damages to the third appellant and costs to the third appellant’s lawyers.[1][1]The first appellant alleges that all the parties in the Federal High Court of Nigeria proceeding, including the third appellant’s lawyers, assigned their interest in the foreign judgment to the first appellant. In February 2021, after a hearing before Crow J, the court permanently stayed the appellants’ proceeding (the stay). His Honour found Queensland was a clearly inappropriate forum because the respondent had no assets in the State.[2] Later that month, Crow J ordered the appellants to pay the respondent’s costs of the proceeding and its costs of the stay application (the costs orders). There was no appeal from the stay or the costs orders.[2]Zabusky & Ors v Virgtel Limited [2021] QSC 17. In February 2022, the appellants asked the court to lift the stay. After a hearing and further written submissions in March 2022, the primary judge refused the request and published reasons in April 2022. The appeal is from that refusal.Do the costs orders justify lifting the stay? The principal issue in the appeal is whether the costs orders are a new fact entitling the appellants to be relieved from the stay[3] or a proper ground for lifting the stay.[4][3]Uniform Civil Procedure Rules 1999 (Qld), rr 668(1)(a) and (3)(b).[4]In Cooper v Williams [1963] 2 QB 567 CA, 581, Lord Denning MR framed the question before the court as whether there are proper grounds for removing the stay. In their written submissions below, the appellants put their case this way:“Since the [costs] orders were made [on] 22 February 2021, [the respondent] has had two costs orders in its favour … [The respondent] therefore now has two assets in Queensland. The basis on which the stay was ordered has disappeared, there is no longer a reason why the proceeding should remain stayed.… there has been a material change in circumstance. The change in circumstance is the consequence of [the respondent] applying for costs.” At the hearing below, the appellants’ counsel confirmed their position, submitting:“So the issue for today, your Honour, is as simple as that. Whereas before Justice Crow, my side of the case couldn’t persuade his Honour that there was an asset within the jurisdiction and hence [the respondent] was vexed by the proceeding, now there are two. There are two substantial assets. And those ---HER HONOUR: The costs orders?MR DE JERSEY: Correct, your Honour. And those two substantial assets are the consequence of a decision that was made by the other side of the case. … had they decided, for instance, not to apply for costs, the copybook would be clear, there would be no assets and this application could not be made.”[5][5]AR 1397 line 44 - 1398 line 7. The primary judge rejected the appellants’ case that the costs orders were an asset of the respondent in Queensland that entitled the appellants to be relieved of the stay or a proper ground for doing so.Consideration of the principal issue

Ratio Decidendi

Legal Principle Established

The primary judge rejected the appellants’ case that the costs orders were an asset of the respondent in Queensland that entitled the appellants to be relieved of the stay or a proper ground for doing so.Consideration of the principal issue The court has a discretionary power to order the payment of costs.[6] Usually, costs follow the event. The likely consequence of the respondent succeeding in the stay application was that the appellants would be ordered to pay the respondent’s costs.[6]Civil Proceedings Act 2011 (Qld), s 15. The costs orders were a consequence of the appellants starting a proceeding in this court, which was a clearly inappropriate forum. The effect of this finding by Crow J is that the appellant’s conduct was unjustifiably oppressive and vexatious, and constituted an abuse of process.[7] The appellants’ misconduct was not cured by them being ordered to provide the respondent with a partial costs indemnity for the consequences of that misconduct.[7]Voth v Manildra Flour Mills Pty Ltd (1990) 171 CLR 538, 555-556 and 564-565 (Mason CJ, Deane, Dawson and Gaudron JJ), citing Oceanic Sun Line Special Shipping Co Inc v Fay (1988) 165 CLR 197, 247-248 (Deane J); Walton v Gardiner (1993) 177 CLR 378, 393 (Mason CJ, Deane and Dawson JJ). The granting of a permanent stay has been described as “a measure of last resort” to be ordered “where there is no other way to protect the integrity of the system of justice administered by the court”. See: Victoria International Container Terminal Ltd v Lunt (2021) 271 CLR 132, 141-142 [20]-[21] (Kiefel CJ, Gageler, Keane and Gordon JJ), citing with apparent approval Strickland (a pseudonym) v Director of Public Prosecutions (Cth) (2018) 266 CLR 325, 409 [248] and 415 [264] (Edelman J), 373 [115] (Gageler J), and 408 [244] (Gaudron J). The making of the costs orders did not change the position of the appellants. It did not transform this court into a forum that was no longer clearly inappropriate for enforcement of the foreign judgment. The appellants’ submission - that “on any view” of the costs orders “it could no longer be said that Queensland was a ‘clearly inappropriate forum’” - should therefore be rejected. The appeal should be dismissed. The appellants’ grounds of appeal focus on whether the respondent is entitled to the benefit of any sum that might be paid in the future by the appellants (or on their behalf) to satisfy the costs orders. The respondent’s written submissions engaged with the appellants’ grounds. In this, they reflect the parties’ evidence and submissions before the primary judge. For the reasons at [11] to [15] above, the appeal should be dismissed. This is so whether the respondent is entitled to the benefit of any sum that might be paid to satisfy the costs orders or is not entitled. It is possible to deal with each of the appeal grounds briefly, to explain why they fail in any event.Ground 1 First, the appellants say the primary judge erred in finding the costs orders were not an asset of the respondent in Queensland and in failing to “consider or find” the costs orders were the respondent’s assets in the State. The appellants submitted the costs orders were a chose in action, and so were property in this State.