Australia and New Zealand Banking Group Limited v Marks
[2013] QSC 186
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- Unreported Judgment
- Appeal Determined - Special Leave Refused (HCA)
- Australia and New Zealand Banking Group Limited v Marks[2013] QSC 186
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Australia and New Zealand Banking Group Limited v Marks[2013] QSC 186
Australia and New Zealand Banking Group Limited v Marks[2013] QSC 186
SUPREME COURT OF QUEENSLAND
CITATION: | Australia and New Zealand Banking Group Limited v Marks [2013] QSC 186 |
PARTIES: | AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED ACN 005 357 522 |
FILE NO: | BS2252 of 2013 |
DIVISION: | Trial Division |
PROCEEDING: | Application to set aside registration of judgment |
DELIVERED ON: | 24 July 2013 |
DELIVERED AT: | Brisbane |
HEARING DATE: | 16 July 2013 |
JUDGE: | Mullins J |
ORDER: | 1.The application filed on 16 May 2013 is dismissed. 2.The respondent must pay the applicant’s costs of the application to be assessed. |
CATCHWORDS: | PRIVATE INTERNATIONAL LAW – RECOGNITION, EFFECT AND ENFORCEMENT OF FOREIGN JUDGMENTS – UNDER LEGISLATION – ENFORCEMENT OF FOREIGN JUDGMENTS – REGISTRATION – SETTING ASIDE – where guarantor of a loan made by the Singapore branch of the bank mortgaged land in Queensland to secure the loan – where the loan was in default – where a clause of the guarantee provided that the guarantee was to be governed by the laws of Singapore and the guarantor irrevocably submitted to the non-exclusive jurisdiction of the courts of Singapore or any other court as the bank may elect – where the bank obtained judgment against the guarantor for the debt in the High Court of Singapore – where the bank also commenced proceedings in the Supreme Court of Queensland to recover possession of the mortgaged land – where the bank had the Singapore judgment against the guarantor registered in the Supreme Court of Queensland under the Foreign Judgments Act 1991 (Cth) – where the guarantor applies to set aside the registration of the foreign judgment – whether the courts of Singapore had no jurisdiction in the circumstances of the case – whether the guarantor had voluntarily submitted to the jurisdiction of the High Court of Singapore Foreign Judgments Act 1991 (Cth), s 7 Land Title Act 1994 (Qld), s 78 Uniform Civil Procedure Rules 1999 (Qld), r 947L de Santis v Russo [2002] 2 Qd R 230, considered Francis Travel Marketing Pty Ltd v Virgin Atlantic Airways Ltd (1996) 39 NSWLR 160, considered |
COUNSEL: | J W Peden for the applicant |
SOLICITORS: | Gadens Lawyers for the applicant |
- In this proceeding Daubney J on 22 March 2013 ordered that the judgment of the High Court of the Republic of Singapore dated 27 December 2012 whereby it was ordered that the respondent pay AUD$11,102,778.56 to the applicant (the Singapore judgment) be registered under Part 2 of the Foreign Judgments Act 1991 (Cth) (the Act). The order also provided that the respondent may within 28 days of personal service of the order apply to have the registration set aside.
- The respondent filed an application in compliance with r 947L of the Uniform Civil Procedure Rules 1999 seeking the setting aside of the registration of the foreign judgment pursuant to s 7(2)(iv) of the Act that the courts of Singapore had no jurisdiction in the circumstances of the case. That application is opposed by the applicant.
History of the dealings between the parties
- The applicant, operating through its Singapore branch, agreed in December 2007 to advance to Telesto Investments Limited (Telesto) the sum of AUD$15m under a facility agreement of which a substantial portion was to be used to fund the construction of a dwelling at Sovereign Islands on the Gold Coast in Queensland where the land was registered in the name of the respondent. The funding was secured by a first registered mortgage over the land and personal guarantees from the respondent and her husband Mr Tyne. The funds were advanced and the mortgage registered over the land.
- Clause 22 of the guarantee executed by the respondent provides:
“This Guarantee is governed by, and shall be construed in accordance with, the laws of Singapore. The Guarantor irrevocably submits to the non-exclusive jurisdiction of the courts of Singapore or of any other court as the Bank may elect, waives any objections on the ground of venue or forum non conveniens or any similar grounds and consents to service of process by mail or in any other manner permitted by the relevant law.”
- Repayment of the funds was not made in accordance with the terms of the facility agreement and the guarantees and the applicant commenced proceedings in Singapore on 8 September 2011 against each of Telesto, the respondent and Mr Tyne in respect of the sum claimed of AUD$11,747,558.58. The writ of summons and the statement of claim in these proceedings were served on the respondent in Queensland on or about 25 January 2012. No appearances were entered by Telesto, Mr Tyne and the respondent and judgments by default were obtained in the Singapore court against them, with the judgment against the respondent being given on 29 February 2012 (the first Singapore judgment).
- On 19 September 2011 the applicant commenced proceeding 8313 of 2011 in this Court (the land proceeding) against the respondent seeking recovery of possession of the land as mortgagee on the basis of default made by the respondent under the mortgage which arose because Telesto was in default under the facility agreement and the respondent was in default under the guarantee. The default was in respect of the same debt that was the subject of the Singapore proceedings, but the relief claimed against the plaintiff in the land proceeding was limited to recovery of possession of the land. The claim and the statement of claim in the land proceeding were served on the respondent in early November 2011.
- On 9 May 2012 Daubney J ordered that the first Singapore judgment against the respondent be registered under Part 2 of the Act. The respondent’s application to set aside that judgment was dismissed by Applegarth J on 1 August 2012. In the reasons Applegarth J expressly found that the Singapore court did have jurisdiction, as the applicant had elected to submit its money claim to the court in Singapore, as the guarantee provided it might.
- The respondent filed an application in the High Court of Singapore seeking an order that the first Singapore judgment be set aside. Before that application was heard, the applicant applied for summary judgment in the land proceeding against the respondent. On 12 October 2012 Dalton J gave judgment in favour of the applicant against the respondent in the land proceeding on both the claim and the counterclaim. Dalton J concluded in the reasons for judgment (exhibit 1) that the default judgment in the Singapore proceedings against the respondent was a complete answer to the summary judgment application on the basis of res judicata in respect of the issue of whether the money sought by the applicant under the guarantee was owing by the respondent. Because of the pending application by the respondent in the Singapore proceedings to set aside the default judgment, Dalton J also considered the merits of the defences raised by the respondent to resist the summary judgment application and concluded that they did not have any real prospects of success. The respondent filed an appeal against those orders.
- The respondent was successful in obtaining an order from a registrar on 30 October 2012 setting aside the first Singapore judgment conditional on the respondent entering an appearance in the Singapore proceedings and filing a defence within specified times. A memorandum of appearance was filed by the respondent in the Singapore proceedings on 30 October 2012. The respondent’s defence and counterclaim were filed in those proceedings on 12 November 2012.
- The respondent applied again to set aside the registration under the Act of the first Singapore judgment and Douglas J did so on 13 November 2012, as the first Singapore judgment had been set aside.
- The applicant appealed in Singapore against the setting aside of the first Singapore judgment and was successful in that appeal on 27 December 2012 in obtaining the Singapore judgment, in that the first Singapore judgment was reinstated, but varied to the sum of AUD$11,102,778.56, and the respondent’s memorandum of appearance was struck out. The respondent has not appealed the Singapore judgment.
- In April 2003 the respective solicitors for the applicant and the respondent signed and filed in the Court of Appeal a memorandum of agreement to the dismissal of the respondent’s appeal in the land proceeding by consent with no order as to costs.
The respondent’s submissions
- The respondent’s affidavit in support of the application stated that she had never been a resident or had a place of business in Singapore, never been served with any process whilst in Singapore, never entered an appearance before any court in Singapore that was not subsequently set aside by that court, and never otherwise submitted to the jurisdiction of any court in Singapore.
- The respondent’s bald statement that she had not submitted to the jurisdiction of any court in Singapore is the issue that has to be decided on this application and is not advanced by its mere assertion.
- In summary, the respondent submits that the Singapore Court had no jurisdiction over her, according to the private international law of Queensland, on the basis of the proper construction of clause 22 of the guarantee. The respondent submits that on its proper construction, clause 22 of the guarantee deemed the respondent to have submitted to any jurisdiction the applicant might elect in lieu of Singapore and that the applicant made an irrevocable election to bring proceedings in Queensland upon serving the respondent with the land proceeding before she was served with the Singapore proceedings.
- The respondent relies on the principles of construction applicable to guarantees and jurisdiction clauses and submits that the approach of the applicant in maintaining its right to bring both the Singapore proceedings and the land proceeding fosters the possibility of inconsistent curial determinations and is denied by the plain wording of the clause.
- The respondent submits that the Singapore proceedings and the land proceeding involve the same (or substantially the same) controversy, as the issue in each proceeding is the existence and quantum of the debt claimed by the applicant under the guarantee. It is submitted that there is an abuse of process by the applicant choosing to pursue its debt in the courts of Singapore, when the applicant was required to prove that issue in the land proceeding.
- The respondent’s lengthy written submission refers to many cases to support her approach to the construction and application of clause 22 of the guarantee, including the oft-quoted passage from the judgment of Gleeson CJ in construing an arbitration clause in Francis Travel Marketing Pty Ltd v Virgin Atlantic Airways Ltd (1996) 39 NSWLR 160 at 165:
“When the parties to a commercial contract agree, at the time of making the contract, and before any disputes have yet arisen, to refer to arbitration any dispute or difference arising out of the agreement, their agreement should not be construed narrowly. They are unlikely to have intended that different disputes should be resolved before different tribunals, or that the appropriate tribunal should be determined by fine shades of difference in the legal character of individual issues, or by the ingenuity of lawyers in developing points of argument.”
The construction of clause 22
- Unlike an arbitration clause or a clause in a contract pursuant to which parties agree upon the exclusive jurisdiction of a court or tribunal to resolve any dispute under the contract, clause 22 of the guarantee is not concerned with restricting the applicant’s choice of forum, but with facilitating the applicant’s choice by deeming the respondent’s submission to the non-exclusive jurisdiction of the courts of Singapore or of any other court as the applicant may elect. The use of the word “or” is not disjunctive in the sense of limiting the applicant’s choice of forum to the Singapore or other court, as that is not the purpose of the clause and otherwise it denies any content to the description of the jurisdiction of the courts of Singapore as “non-exclusive”. The authorities relied on by the respondent about construing arbitration clauses or exclusive jurisdiction clauses are not relevant to the construction of clause 22.
- The proper construction of clause 22 of the guarantee is that the respondent submits to the jurisdiction of the courts of Singapore (if that is where the applicant brings proceedings) or any other court in which the applicant may elect to bring proceedings on the guarantee, but the election is not in respect of either the courts of Singapore or other courts, but refers to whichever courts the applicant elects to bring proceedings against the respondent on the guarantee.
- The respondent’s submission that the Singapore proceedings and the land proceeding involve the same (or substantially the same) controversy is not the correct characterisation of the respective proceedings. The Singapore proceedings were for a debt claim and the Singapore judgment was given in respect of an action in personam. The relief sought by the applicant in the land proceeding was limited to the recovery of possession of the subject land.
- The right of a mortgagee to seek recovery of possession of mortgaged land on default being made by the mortgagor under the registered mortgage is conferred by s 78(2)(c) of the Land Title Act 1994 (Qld). Although the existence of the debt owed by the respondent to the applicant secured by the mortgage is a constituent fact that was proved in the land proceeding, in order to prove the default under the mortgage, the subject matter of the applicant’s cause of action for recovery of possession of the subject land was immovable property situated outside Singapore. Pursuant to s 7(4)(a) of the Act, the Singapore Court would not have had jurisdiction for the applicant’s claim for recovery of possession of the mortgaged land.
- The respondent’s concern about inconsistent curial determinations or abuse of process, as a result of the applicant choosing to prove its debt in the High Court of Singapore and to bring the land proceeding in Queensland is misplaced. Reference to Dalton J’s approach in the summary judgment application shows how the principle of res judicata in relation to the issue of the debt applies to prevent any inconsistency. It cannot be an abuse of process for the applicant to bring the land proceeding in Queensland where the Singapore Court does not have jurisdiction. It would be nonsensical to construe clause 22 of the guarantee to deny effect to the respondent’s submission to the jurisdiction of the Courts of Singapore, because the applicant had brought the land proceeding in Queensland where the land was situated.
Should the registration of the Singapore judgment be set aside?
- In considering an application under s 7(2)(a)(iv) of the Act, consideration must be given to the circumstances set out in s 7(3)(a) of the Act in which the foreign court is taken to have jurisdiction in the case of a judgment given in an action in personam for the purposes of s 7(2)(a)(iv) of the Act. The applicant relies on sub-paragraphs (i) and (iii) which provide:
“(i)if the judgment debtor voluntarily submitted to the jurisdiction of the original court; or ...
(ii)if the judgment debtor was a defendant in the original court and had agreed, in respect of the subject matter of the proceedings, before the proceedings commenced, to submit to the jurisdiction of that court or of the courts of the country of that court;”
- The question of whether the Singapore Court had jurisdiction must be determined according to the jurisdictional rules of Queensland: de Santis v Russo [2002] 2 Qd R 230 at [9].
- Unlike the appellant in de Santis who unsuccessfully attempted to participate in proceedings in the foreign court, the memorandum of appearance and defence and counterclaim filed by the respondent in the Singapore proceedings were for contesting the applicant’s money claim in debt based on the respondent’s guarantee. The respondent was not merely contesting the jurisdiction of the High Court of Singapore to decide the applicant’s claim: cf 7(5) of the Act.
- The steps taken by the respondent in the Singapore proceedings enliven the application of s 7(3)(a)(i) of the Act. In addition, the proper construction of clause 22 of the guarantee enlivens the application of s 7(3)(a)(iii) of the Act.
- Although I accept that I am not bound to follow Applegarth J’s conclusion about the jurisdiction of the Singapore Courts, I have reached the same conclusion based on the terms of the guarantee and what the respondent did in the Singapore proceedings to submit to the jurisdiction, as a matter of fact.
- I am unpersuaded by the respondent that the registration of the Singapore judgment should be set aside.
Orders
- The applicant is successful in resisting the respondent’s application to set aside the registration of the Singapore judgment. In its written submissions, the respondent sought costs, if the application were dismissed. There is no reason why costs should not follow the event.
- It follows that the orders will be:
- The application filed on 16 May 2013 is dismissed.
- The respondent must pay the applicant’s costs of the application to be assessed.