Mudajaya Corporations Berhad v Keng - [2019] NZHC 1693

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2019-404-281

[2019] NZHC 1693

IN THE MATTER of the Reciprocal Enforcement of Judgments Act 1934

IN THE MATTER

of a Judgment of the High Court of Malaya at Shah Alam, Malaysia

BETWEEN

MUDAJAYA CORPORATIONS BERHAD

Applicant

AND

MICHAEL CHUA KHIAN KENG

First Respondent

TAN KAH LUAN

Second Respondent

CRUX INTERNATINAL LIMITED
Non-Party/Third Respondent

MIKE MOTORSPORT LIMITED
Fourth Respondent

MIKE RACING LIMITED

Fifth Respondent

Hearing: On the papers

Counsel:

BD Gray QC, MHL Morrison, HMZ Ford and J Zwi for applicant RJ Hollyman QC and AJB Holmes for first to fifth respondents

Judgment:

18 July 2019

JUDGMENT OF FITZGERALD J

[On application for leave to appeal]

This judgment was delivered by me on 18 July 2019 at 4pm, pursuant to Rule 11.5 of the High Court Rules.

Registrar/Deputy Registrar ……………………………….. Date………………………….

Mudajaya Corporations Berhad v Chua [2019] NZHC 1693 [18 July 2019]

Introduction and background

[1] On 21 June 2019, I delivered a judgment in these proceedings granting the respondents’ application to rescind freezing and other orders made against them in February 2019 on a without notice basis (my Substantive Judgment).1 Save for the matter discussed at [3] below, I was satisfied there was a proper basis for the freezing orders to continue.

[2] The applicant’s underlying claim to which the freezing orders relate is an impending application to register in New Zealand a default judgment obtained by it in Malaysia. The application for rescission of the freezing orders required me to determine, among other matters, whether the applicant has a good arguable case for registration, and whether the applicant would successfully resist any application to set aside registration.

[3] The one aspect of the applicant’s claim on which I did not consider it had a good arguable case was whether the applicant could successfully defend an application to set aside registration of the Malaysian default judgment on the basis of s 6(1)(c) of the Reciprocal Enforcement of Judgments Act 1934 (the Act). Section 6(1)(c) requires the Court to set aside registration of a foreign judgment if the defendant to the foreign proceedings did not have notice of the proceedings in sufficient time to enable him or her to defend them and did not appear. I held that as a matter of law, s 6(1)(c) requires a defendant to have actual notice of the foreign proceedings (after they have been commenced and prior to judgment). I found that on the evidence before the Court on the application to rescind the freezing orders, there was not a tenable argument that the defendants to the Malaysian proceedings had such notice. I noted that while a (1996) High Court decision and a number of overseas courts (predominantly in Australia) have concluded s 6(1)(c) requires actual notice, it has not received any appellate court attention in this jurisdiction.

[4] The applicant submits I erred in coming to the conclusions I did on s 6(1)(c) of the Act,…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2019] NZHC 1693
Decision Date: 18 July 2019

CaseChat Overview and Summary

The High Court of New Zealand considered an application for leave to appeal a decision regarding the enforcement of a foreign judgment in the case of Mudajaya Corporations Berhad v Keng. The applicant sought to enforce a Malaysian default judgment in New Zealand. The respondents argued that the Malaysian proceedings lacked sufficient notice, thus challenging the enforceability of the judgment under section 6(1)(c) of the Reciprocal Enforcement of Judgments Act 1934. The Court initially found that the respondents did not receive adequate notice, which led to the rescission of the freezing orders. The applicant sought leave to appeal this specific finding, arguing that it was both factual and legal in nature.

The court examined the criteria for granting leave to appeal an interlocutory order, including the likelihood of success, potential prejudice to the applicant, and the significance of the issue at hand. The court recognised that while the appeal might have low prospects of success, it was not frivolous or vexatious. The appeal was deemed potentially dispositive, particularly because of the urgency of the underlying freezing orders. The court also considered the broader importance of clarifying the notice requirements under the Act, given New Zealand's increasing international engagements.

After weighing these factors, the court concluded that the appeal was sufficiently meritorious and significant to warrant granting leave. The court acknowledged the potential for further delay and costs to the respondents but noted that these matters were more appropriately addressed in a stay application. The court granted the applicant's application for leave to appeal and directed that costs should follow the event on an A 2B basis. The parties were encouraged to agree on costs, with an option to file cost memoranda if necessary.

Orders