Exit Distraction Free Reading Mode
- Unreported Judgment
- Appeal Determined (QCA)
Seeto Kui (Holdings) Limited v Chow QCA 112
Seeto Kui (Holdings) Limited v Chow  QCA 112
SEETO KUI (HOLDINGS) LIMITED
Appeal No 7735 of 2015
SC No 4027 of 2012
Court of Appeal
General Civil Appeal
Supreme Court at Brisbane –  QSC 193
29 April 2016
9 March 2016
Gotterson and Philip McMurdo JJA and Boddice J
Separate reasons for judgment of each member of the Court, each concurring as to the orders made
APPEAL AND NEW TRIAL – GENERAL PRINCIPLES – INTERFERENCE WITH DISCRETION OF COURT BELOW – IN GENERAL – GENERAL PRINCIPLES – where appellant sought registration of foreign judgment in Australia – where respondent satisfied judgment debts before the application was heard – where the appellant sought its costs of the application – where the appellant required leave to apply for its costs, as more than two years had passed since a step had been taken in the proceeding – where primary judge declined to grant the appellant leave to proceed – whether the primary judge’s decision was affected by an error of law – whether the appellant should be granted leave to proceed – whether the appellant should be granted its costs of the application for registration and application for leave to proceed
Mace v Murray (1955) 92 CLR 370;  HCA 2, applied
Tyler v Custom Credit Corporation Ltd  QCA 178, applied
N Ferrett with B Le Plastrier for the appellant
M M Varitimos QC for the respondent
Turner Freeman for the appellant
Birch & Co for the respondent
 GOTTERSON JA: I agree with the orders proposed by Boddice J and with the reasons given by his Honour.
 PHILIP McMURDO JA: I agree with Boddice J.
 BODDICE J: On 9 July 2015, the primary judge dismissed the appellant’s application for a declaration that the appellant had taken a step in the proceeding and did not require leave to proceed pursuant to r 389 of the Uniform Civil Procedure Rules 1999 (Qld) (“UCPR”) or, alternatively, for an order that the appellant be granted such leave. The primary judge also dismissed the appellant’s application for an order that the respondent pay the appellant’s costs of the proceeding.
 In dismissing the applications, the primary judge found that the appellant had not taken a step in the proceeding in the last two years, and had not explained the delay in prosecuting the proceeding. The primary judge declined, in the exercise of his discretion, to grant the appellant leave to take a further step in the proceeding.
 The appellant appeals that decision. The appellant does not challenge the finding that the appellant had not taken a step in the proceeding and therefore required leave to proceed. At issue is whether the primary judge erred in refusing the appellant leave to take a further step in the proceeding. It is accepted that if the appellant succeeds on the appeal, this Court should determine the appellant’s application for the costs of the proceeding.
 The appellant was incorporated and registered as a company in Papua New Guinea on 14 August 1972. In March 2005, an application was successfully made to amalgamate the appellant and four other companies registered in Papua New Guinea. Relevantly, two of those companies were Mainland Plumbing Supplies (N.G.) Ltd (“Mainland”), which had been incorporated and registered in Papua New Guinea on 2 March 1970, and Ardrossan Investments Limited (“Ardrossan”), which had been incorporated and registered in Papua New Guinea on 30 April 1984.
 Pursuant to that application, the appellant became the amalgamated company. A certificate of amalgamation to that effect was given on 15 March 2005. It certified that the amalgamation took effect on 31 March 2005. After amalgamation, the register of companies recorded both Mainland and Ardrossan as amalgamated. However, neither Mainland nor Ardrossan was removed from the register.
 By originating application filed 4 May 2012, the appellant sought the registration of default judgments which had been entered against the respondent in Papua New Guinea. The registration, sought pursuant to the Foreign Judgments Act 1991 (“the Act”), related to four separate default judgments entered against the respondent in proceedings in Papua New Guinea on 17 July 2009.
 The judgment debts were all incurred after the date the amalgamation took effect, as a consequence of the supply of goods to the respondent. In the case of two of the judgment debts, those goods were supplied under the name of Ardrossan. The other goods were supplied in the name of Mainland and in the name of the appellant.
 Two of the default judgments related to claims commenced in the name of Ardrossan, trading as Bowmans-Lae. The other default judgments related to claims commenced in the name of Mainland and in the appellant’s name. In each case the statement of claim pleaded that the named plaintiff was a corporate entity capable of suing in that name. Each of the judgments entered by default was entered in the name of the specified plaintiff.
 The originating application, filed 4 May 2012, was adjourned on six occasions between 6 June 2012 and 2 November 2012 and again on 18 January 2013. Each adjournment arose as a consequence of the respondent wishing to make application to the National Court in Papua New Guinea to set aside each of the default judgments. Those applications to set aside the default judgments were ultimately unsuccessful. Shortly thereafter, on 23 May 2013, the respondent paid each of the amounts the subject of the default judgments.
 When the application came before the primary judge the only issue remaining for determination in the originating application was costs. The appellant had filed an application seeking its costs of the originating application on 19 February 2015. However, as no step had been taken in the proceeding for more than two years, it was necessary for the appellant to first obtain leave, pursuant to r 389 of the UCPR. An application for leave was filed by the appellant on 12 March 2015.
 The primary judge found that as the appellant was not the successful named plaintiff in three of the four default judgments, it did not satisfy the definition of “judgment creditor” in s 3 of the Act. Whilst the appellant was the amalgamated company of Mainland and Ardrossan, neither Mainland nor Ardrossan had been removed from the register and the supplies in question had occurred after amalgamation. The primary judge found the appellant would have failed in its application to register those judgments and could not have obtained an order for costs in those matters.
 The primary judge found, in respect of the remaining judgment in the appellant’s name, that there could now be no successful application for registration as that judgment had been satisfied in full in May 2013. Further, there was no explanation for considerable delay in pursuing the costs of the application after payment of the judgments. The primary judge observed the respondent was entitled to assume that if she paid the default judgments that would be the end of the matter.
 The primary judge concluded that the appellant had not demonstrated grounds for being given leave to take a further step in the proceeding. The application for leave to proceed was dismissed, as was the application for costs.
 The Act contains a procedure for the registration in this Court of judgments obtained in the Courts of applicable foreign countries, of which Papua New Guinea is one. A requirement for such registration is that the applicant be a “judgment creditor”.
 Section 3 of the Act defines judgment creditor as:
“judgment creditor, in relation to a judgment, means the person in whose favour the judgment was given, (whether or not a sum of money is payable under the judgment) and includes a person in whom the rights under the judgment have become vested by succession, assignment or otherwise.”
 The registration of companies in Papua New Guinea is controlled by the provisions of the Companies Act 1997 (PNG) (“the 1997 Act”). Relevantly, it provides that a company is a legal entity in its own right, which continues in existence until it is removed from the register.
 Part XIV of the 1997 Act contains a procedure for the amalgamation of companies. By that procedure, two or more companies may amalgamate “and continue as one company”. Section 238 of the 1997 Act provides:
“On the date shown in a certificate of amalgamation –
(a)the amalgamation is effective; and
(b)where it is the same as a name of one of the amalgamating companies, the amalgamated company has the name specified in the amalgamation proposal; and
(c)the Registrar shall remove the amalgamating companies, other than the amalgamated company, from the register, and otherwise give effect to the amalgamation; and
(d)the amalgamated company succeeds to all the property, rights, powers, and privileges of each of the amalgamating companies; and
(e)the amalgamated company succeeds to all the liabilities and obligations of each of the amalgamating companies; and
(f)proceedings pending by, or against, an amalgamating company may be continued by, or against, the amalgamated company; and
(g)a conviction, ruling, order or judgment in favour of, or against, an amalgamating company may be enforced by, or against, the amalgamated company; and
(h)any provisions of the amalgamation proposal that provide for the conversion of shares or rights of shareholders in the amalgamating companies have effect according to their tenor.”
 The appellant submits the primary judge erred in concluding that the appellant was not a “judgment creditor” in respect of the default judgments entered in the name of Ardrossan and Mainland. The definition of judgment creditor in s 3 of the Act included the appellant. The fact that the services were supplied after amalgamation and that judgment was obtained after amalgamation did not prevent enforcement or recovery of the judgment amount in the name of the amalgamated company.
 The appellant submits the primary judge also erred in finding that the appellant could not register the judgment in its name after the outstanding debts had been paid in May 2013. The appellant was entitled to seek the costs of that application, notwithstanding satisfaction of any underlying debt.
 Finally, the appellant submits the primary judge erred in finding there was lengthy delay which was, in the most part, unexplained. Upon the outstanding debts being paid by the respondent, the appellant had advised the respondent it intended to seek the costs of the originating application. The appellant had thereafter taken significant steps to assess those costs. The affidavit material before the primary judge explained the delay in completion of those steps and provided a satisfactory explanation for why the costs application did not proceed prior to February 2015.
 The respondent submits the primary judge correctly concluded that there was no satisfactory explanation for the appellant’s delay in pursuing the costs of the application. That conclusion was open to the primary judge, in the exercise of his discretion. No error had been shown in the primary judge’s conclusion.
 The respondent submits the primary judge correctly found that the appellant was not a judgment creditor in respect of three of the four judgments the subject of the application and that the appellant would not have been able to register the sole judgment in its name after payment of the debt in May 2013.
 Whilst there was a certificate of amalgamation, neither Mainland nor Ardrossan were deregistered. Each continued to trade in its own name after amalgamation. The goods were supplied in that name. The proceedings for recovery of debts outstanding were instituted in that name. The appellant had conceded the default judgments had been entered regularly in that name.
 Section 238 of the 1997 Act could not assist the appellant. That section deals with rights which existed at the time of amalgamation. It does not deal with rights created after amalgamation, in the names of companies which have not been deregistered subsequent to amalgamation.
 The respondent submits the primary judge also correctly found there was a lack of a satisfactory explanation for the delay in pursuing the costs of the application between May 2013 and March 2015. The appellant could have simply applied for its costs to be assessed. Instead, the appellant chose to incur considerable extra costs in attempts to assess the costs of the application. These steps were unnecessary and contrary to the implied undertakings under the UCPR.
 Section 238 of the 1997 Act specifically provides that on the date shown in the certificate of amalgamation, the amalgamation is effective. Accordingly, from 31 March 2005 Mainland and Ardrossan became amalgamated with the appellant, and continued as one company, the amalgamated company. The amalgamated company is the appellant. The company searches after that date support that conclusion.
 Whilst the Registrar did not, as required by s 238(c) of that Act, remove Mainland and Ardrossan from the register, the failure to do so did not have the effect of Mainland and Ardrossan continuing as separate legal entities. The amalgamation is effective, pursuant to s 238 of the Act, whether or not such removal has taken place. Section 16 of the 1997 Act cannot over-ride the specific effects of ss 232 and 238(a) of the 1997 Act.
 The consequence of this conclusion is that whilst the respondent was supplied goods under the names of Mainland and Ardrossan, those goods were provided by the appellant as the amalgamated company. As the provider of those goods, the appellant was entitled to recover the price of those goods. Whilst proceedings were irregularly commenced in the name of Mainland and Ardrossan, the appellant was a judgment creditor within the meaning of s 3 of the Act. The appellant was a person in whom the rights under the judgment were otherwise vested. The primary judge erred in concluding the appellant was not a “judgment creditor” within the meaning of the Act.
 The primary judge also erred in concluding that the incapacity of the appellant to register the judgment in its name was relevant to whether leave to proceed should be granted. By the time of the application before the primary judge, the only remaining issue on the originating application was the costs of that proceeding. Costs remained a relevant issue, even if the underlying judgment had been paid in full after the filing of the originating application.
 The primary judge’s conclusions in respect of whether the appellant was a “judgment creditor”, and whether it could register the remaining judgment, were significant determining factors in the ultimate conclusion that the application for leave to proceed be dismissed. As those findings were errors of law, it is necessary to determine afresh whether the application for leave to proceed ought to have been granted in all of the circumstances.
 A determination of this question requires consideration of the whole of the circumstances. The factors identified by Atkinson J in Tyler v Custom Credit Corporation Ltd are relevant to this issue, although they must be considered in the context that the only remaining issue in the proceeding was costs. This context is also relevant when considering the effect of delay on the administration of justice.
 In considering all of the circumstances, it is relevant that the originating application for registration of the judgment debts had been brought in a timely manner and at a time when each of the judgment debts remained outstanding. Payment of those judgment debts only occurred after a protracted delay and unsuccessful attempts to set aside each of the judgment debts in Papua New Guinea. Against that background, it cannot be said the proceeding had poor prospects or was the subject of inappropriate initial delay.
 It is the case that there was substantial delay between payment of the judgment debts and the filing of the application for costs. However, that delay is explained in affidavit material. Importantly, shortly after payment of the judgment debts the appellant specifically advised the respondent that it intended to pursue the costs of the application and requested payment of those costs, failing which, the appellant would apply to the court for a fixed costs order. The appellant expressly advised the respondent that that course would require the appellant to support the application with affidavit material.
 Having regard to the protracted nature of the unsuccessful attempts to set aside the default judgments, it was not unreasonable for the appellant to adopt a course which allowed for the fixing of an order for costs. Much of the delay thereafter was as a consequence of the obtaining of information to support an application for a fixed costs order. The affidavit material supplied by the appellant in support of the application for costs provided a satisfactory explanation for the delay in bringing that application. Further, it cannot be said the appellant’s delay impacted adversely on the administration of justice generally.
 The remaining relevant factor is any prejudice to the respondent as a consequence of the delay. There was no specific prejudice identified by the respondent. However, a relevant factor is that the respondent, having met the judgment debt, is entitled to move on with life. The bringing of an application for payment of the costs of an application to register the judgment debt a significant period after payment of that judgment debt interfered with that entitlement.
 That entitlement must be viewed in context. The respondent was on notice that the costs of the application to register the judgment debts would be pursued by the appellant. That notice was given promptly. It contained a specific warning of the intention to seek a fixed costs order and of the need to obtain evidence in support of such an order.
 A consideration of all of those circumstances favours a conclusion that the appellant, having properly brought an application for registration of judgment debts which ultimately could not be pursued because of payment of those judgment debts a substantial time after the bringing of the application, is entitled to recover the costs of that application. Whilst the bringing of the costs application was attended by delay, there is a satisfactory explanation for that delay. There is no material prejudice to the respondent, who was on notice of the intention to pursue those costs.
 The circumstances as a whole justify the exercise of a discretion ordering the respondent pay the appellant’s costs of the originating application to register the default judgments, and of the application for costs, each to be assessed on a standard basis.
 The application for leave to proceed is in a different category. The appellant was required to bring that application. It involves seeking the indulgence of the court. There is no reason why the respondent should pay the costs of that application. The appellant should pay the respondent’s costs of that application.
 The appellant has succeeded in the appeal. The respondent should pay the appellant’s costs of the appeal.
 I would order:
1.the appeal be allowed;
2.the orders below be set aside;
3.the application for leave to proceed be allowed;
4.the respondent pay the appellant’s costs of the appeal, to be assessed on a standard basis;
5.the respondent pay the appellant’s costs of the originating application filed 4 May 2012 and of the application for costs filed 19 February 2015, both to be assessed on a standard basis;
6.the appellant pay the respondent’s costs of the application for leave to proceed, filed 12 March 2015, to be assessed on a standard basis.
 Companies Act 1997 (PNG), s 16.
 Companies Act 1997 (PNG), s 232.
 Mace v Murray (1955) 92 CLR 370 at 378.
  QCA 178 at .
 See, generally, Aon Risk Services Australia v Australian National University (2009) 239 CLR 175; Merritt v Hughes  QSC 100 at .
 Letter Turner Freeman dated 4 June 2013; AB 661-663.
- Published Case Name:
Seeto Kui (Holdings) Limited v Chow
- Shortened Case Name:
Seeto Kui (Holdings) Limited v Chow
 QCA 112
Gotterson JA, McMurdo JA, Boddice J
29 Apr 2016