Allardyce Lumber Company Limited and Ors v Quarter Enterprises Pty Limited and Anor

This is not a case where what is suggested is that there has been a denial of natural justice in the sense that there was no notice given or no opportunity to participate in the hearing. It is worth noting, however, that even where that is the basis for the public policy ground the task of the applicant in persuading the court not to enforce the foreign order is a difficult one, as exemplified by the judgment of Einstein J in Norsemeter Holdings AS v Boele (No 1). What is submitted here is that the public policy ground is enlivened because there has been substantial injustice.

I accept that substantial injustice, either because of the existence of a repugnant law or because of a repugnant application of the law in a particular case, may invoke the public policy ground. But it will only do so where the offence to public policy is fundamental and of a high order. For the public policy ground to be invoked in this context enforcement must offend some principle of Australian public policy so sacrosanct as to require its maintenance at all costs." 157I am entirely unpersuaded that the Applicants have demonstrated that the enforcement of the judgment would be contrary to public policy. 158The judgment of Goldsborough J of 20 May 2009 arose in circumstances where the Applicants had not prosecuted the retrial of the matter following the orders of the Court of Appeal. The orders of the Court of Appeal had provided the opportunity to the Applicants to prove their case following a hearing on the merits, unattended by the numerous errors which had infected the judgment of Brown J. Having been presented with that opportunity, the Applicants did not prosecute the retrial. 159Thereafter, the Court of Appeal, on 22 July 2009, dismissed an appeal from the judgment of Goldsborough J after a hearing at which Mr King, for the Applicants, had an opportunity to contend (without success) that Goldsborough J had fallen into error. 160It has not been demonstrated that it would be contrary to public policy for the Respondents to enforce the judgment made by Goldsborough J. 161I reject this ground relied upon by the Applicants.

Ground Based Upon s.7(2)(b) FJ Act - The Matter in Dispute in the Proceedings had Before the Date in Judgment in the Original Court Been the Subject of a Final and Conclusive Judgment by a Court Having Jurisdiction in the Matter

Submissions of the Parties 162Mr King developed an argument, by reference to procedural provisions in Solomon Islands which he contended gave rise to this ground for setting aside the registration of the judgment. The submission, developed in writing, contended that Goldsborough J, sitting in the High Court on 20 May 2009, had no authority to tax and to make orders in respect of costs of the Court of Appeal or to award costs of the original trial. 163Mr Assaf submitted that the argument of the Applicants did not demonstrate a basis for the relief sought and that the argument itself was misconceived. Decision 164I am entirely unpersuaded that the Applicants have demonstrated that the registration of the judgment of Goldsborough J of 20 May 2009 ought be set aside because the matter in dispute had been the subject of a final and conclusive judgment already by that time. 165The judgment of Goldsborough J demonstrated that the parties were represented before his Honour, including Mr Hayes appearing for the Applicants, and with the whole question of costs (including assessment) being the subject of determination, without objection, by Goldsborough J. It has not been demonstrated that this course was not available to Goldsborough J because of any earlier judgment of a Court in Solomon Islands. 166I reject this ground of the Applicants.

Discretionary Considerations

Submissions of the Parties

167Mr King submitted that this Court should exercise any relevant discretion in favour of the Applicants. He pointed to what was said to be the unsatisfactory nature of the first decision of the Court of Appeal and the second decision of the Court of Appeal. He submitted that the Applicants had been "treated harshly and unjustly by the Solomon Islands courts". 168Mr Assaf submitted that an entirely contrary view should be adopted with respect to the hearings by various courts in Solomon Islands, culminating in Quarter failing to prosecute its case at the retrial. Decision 169I am entirely unpersuaded that the discretionary considerations relied upon by Mr King have been demonstrated in this case. Quarter and Mr Gibbs undertook what became protracted litigation in the Courts of Solomon Islands, with the first-instance judgment in their favour being resoundingly and emphatically overturned by a Court of Appeal presided over by eminent Judges. The conclusions expressed by the Court of Appeal demonstrated that the first-instance judgment was profoundly flawed. It was not possible, the Court of Appeal said, to save "something from the wreck" (see [145] above). 170The orders of the Court of Appeal allowed Quarter the opportunity to prove its case at a retrial, with findings of fact and law to be made by the presiding trial Judge by reference to evidence adduced at the retrial. If the Applicants wished to contend that different factual findings should be made concerning the events of 21 February 1997, there would have been an unfettered opportunity to present evidence and arguments in that respect at the retrial. 171However, Quarter did not prosecute its claim in a manner which was open to it. Goldsborough J made orders and the second Court of Appeal heard and dismissed an appeal from that judgment. 172In my respectful view, the Courts of Solomon Islands (at least after the first trial) have discharged their duties in a manner which does not warrant the criticisms which the Applicants direct to them. 173The Applicants' approach to this application brings to mind the observations of Gleeson CJ, Gummow, Hayne and Heydon JJ in D'Orta-Ekenaike v Victoria Legal Aid [2005] HCA 12; 223 CLR 1 at 18 [37]: "Parties who fail in litigation, whatever its subject, may well consider the result of that litigation to be wrong, even unjust. Seldom will a party have contested litigation without believing, or at least hoping, that it will be resolved in that party's favour. If that party does not succeed, an explanation for failure may be sought in what are perceived to be the failures of others - the judge, the witnesses, advocates - anyone other than the party whose case has been rejected." 174It is the regrettable fact that strongly contested civil litigation may lead to an outcome which leaves the losing party dissatisfied and financially worse off. That this is the outcome here does not provide a proper and reasonable foundation for the Applicants to avoid their responsibilities under the relevant judgment. 175None of this, it seems to me, assists the Applicants in the exercise of any discretion relevant to the Court's present function.

Application to Reopen Proceedings Following the Court Reserving Judgment

176I have mentioned earlier in this judgment the fact that, after judgment was reserved on 6 July 2011, the Applicants filed a Notice of Motion, without prior contact with my Chambers, seeking to reopen the hearing. I directed that written submissions be filed with respect to that application. In due course, I indicated that I refused the application and would give reasons for that decision in my final judgment. What follows constitutes my reasons for this conclusion. 177The principles to be applied on a reopening application were summarised helpfully by Garling J in Gaskin v Ollerenshaw [2010] NSWSC 788 at [13]-[23]. I apply those principles to this application. The Court has a discretion whether to grant leave to reopen, with the overriding purpose in s.56 Civil Procedure Act 2005 to facilitate the just, quick and cheap resolution of the real issues in the proceedings being kept firmly in mind. It is necessary to consider whether it is in the interests of justice to grant the application. 178The Applicants' Notice of Motion sought leave to reopen the hearing to admit a further affidavit of Ronald Harry Gibbs sworn 22 July 2011 or, alternatively, seeking a direction that the Respondents be required to admit certain facts as contained in a letter of Hayes Partners dated 14 July 2011. 179By the time this Notice of Motion had been filed, the Applicants had had more than ample opportunity to develop arguments and adduce evidence at the hearing before Davies J on 19 July 2010, in which they chose to participate, and in particular, at the hearing before me which extended over three sitting days between 30 June 2011 and 6 July 2011. 180It is necessary to keep in mind that the present application is an application to set aside the registration of a judgment under the FJ Act. The judgment relates to a costs order made in civil proceedings. 181If the Applicants wished to take the steps sought to be achieved as set out in the affidavit of Mr Gibbs sworn 22 July 2011, there was every opportunity to do so at the three-day hearing in this Court which concluded on 6 July 2011. 182To the extent that one part of the application may seek to overcome the inability of Mr King to explain, in the course of his reply (T103-106, 6 July 2011), why the appeal books before the first Court of Appeal (23 volumes) ought be admitted in evidence before me, I observe that Mr King did not seek leave to take further steps in this regard before the hearing concluded on 6 July 2011. To the extent that Mr King articulated the purpose of the tender of the 23 volumes, he said the purpose was to "ensure that, if your Honour is in any doubt about any submission put or otherwise, your Honour is able to make an inquiry" (T106.18, 6 July 2011). This unappealing purpose did not warrant the wholesale tender of multiple appeal books. 183However, the affidavit of Mr Gibbs went far beyond that. Accompanying the affidavit were more than 300 pages of assorted documents. The affidavit itself and the accompanying documents raised further factual matters which, if the application was allowed, would have involved a further hearing, with prejudice being experienced by the Respondents. 184Like other affidavits of Mr Gibbs read at the hearing before me, much of this affidavit was argumentative in content, mixing submissions with factual elements. 185Significantly, no explanation was proffered by the Applicants in the material in support of the Notice of Motion as to why this application was not made prior to or at the hearing itself. 186To reopen the hearing in the circumstances which presented themselves would be entirely contrary to the provisions contained in s.56ff Civil Procedure Act 2005 and the principles expressed in Aon Risk Services Australia Limited v Australian National University at 186-187 [17], 188-189 [23]. 187By the conclusion of the hearing on 6 July 2011, a substantial discretionary indulgence had already been extended to the Applicants by the provision of time over three sitting days to allow the hearing of their application. In my view, no basis was demonstrated for yet another phase of the hearing in this matter which has already occupied different courts in different countries now on several occasions. 188I accepted the submission of the Respondents that the reopening application ought be declined and that the alternative form of relief, namely a requirement that the Respondents admit facts, ought not be the subject of any order by the Court. 189I observe, in any event, that I do not consider that the material sought to be relied upon would have materially assisted the Applicants on any of the grounds relied upon. 190It was for these reasons that I declined the application to reopen this hearing.

Conclusion

191I have rejected the Applicants' grounds in support of the application to set aside registration of the judgment under s.7 FJ Act. I will make an order that the Applicants' Notice of Motion filed 27 September 2010 be dismissed. 192In addition, I will make an order dismissing the Applicants' Notice of Motion filed 22 July 2011. 193At the conclusion of the hearing, I was requested to provide an opportunity to the parties to make submissions as to costs in light of my judgment, when delivered. 194The ordinary rule is that costs should follow the event, so that an order would ordinarily be made that the Applicants should pay the Respondents' costs of the hearing of the application determined by me. Mr Assaf foreshadowed that an application will be made for a special costs order on an indemnity basis. I will hear the parties on that application if it is pressed. 195I make the following orders: (a)the Applicants' Notice of Motion filed 27 September 2010 is dismissed; (b)the Applicants' Notice of Motion filed 22 July 2011 is dismissed; (c)I will hear the parties on the question of costs.

DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 07 May 2012

We reach this conclusion with some regret, for it has grave and far-reaching implications for the fate of the appeal. If Mr Gibbs was prepared on one occasion to support his evidence by falsifying a note, there is reason to suspect he might have been prepared to do so on other occasions too. [senior counsel for the Respondents] took us to further examples that he claimed exhibited features similar to the file note of 21 February 1997. One was a file note dated 20 September 1996 in which Gibbs states that Beverley was 'pushing for an answer' to his fax of 15 September. In fact, it appears that the answer had already been supplied on 17 September 1996, which casts suspicion on the authenticity of the file note of 20 September 1996. Then there is a note of a meeting with Beverley held on 31 December 1999 (or it may have been 30 December 1999) in which Gibbs records his having given Beverley a letter dated 22 December addressed to him and Minchin. When called for, and produced by the plaintiff at the trial, the letter ex 22 turned out to be the original, with Gibbs's original signature on it. Plainly, the original letter cannot have been sent as claimed in the file note.

We do not think it is necessary on this appeal to reach a final conclusion about these matters of fact. Suffice to say that they raise serious questions about the correctness of the trial Judge's decision to accept the reliability of Mr Gibbs's evidence by reason of the support for it his Lordship thought it gained from documentary material in the form of file notes. We have thought it right to express ourselves cautiously on this matter because we now see no feasible alternative to the process of sending this action back for retrial." 134Their Lordships then referred to authority, concerning appellate review of credibility findings before continuing at [41]: "Considered by these standards, and despite the traditional reluctance of appellate courts to interfere when confronted by factual findings resting on credit, we are persuaded that in this case the trial judge's assessment of the credit worthiness of Mr RH Gibbs is falsified by an indisputable fact; that is to say, the witness's erroneous claim concerning the presence of Mr Wilkie at the meeting on 21 February 1997. The impact of that error cannot be confined to the specific event or conversation to which the particular file note dated 21 February 1997 relates. His Lordship's acceptance of Gibbs's general practice of making file notes carries by implication the further finding that in the Judge's view they were contemporaneous and accurate. Otherwise they would have been worthless as aids to determining credibility. His conclusions on the matter flowed through not only to other file notes, but to Gibbs's evidence generally. Conversely, it helped to determine his Lordship's overall preference for his evidence over against that of Beverley. The case is therefore one in which the relevant credibility finding is, within the meaning of the authorities referred to, one that is contradicted by an 'incontrovertible fact'; or that was arrived through 'disregard of a material fact'; or is 'falsified' by a fact that is 'indisputable'. The delay of 18 months in giving judgment in this case is another factor that weighs against unquestioning acceptance of credibility findings on this appeal. See the discussion of the English and Australian authorities in Expectation Ply Ltd v PRD Realty Pty Ltd (2004) 140 FCR 17, at 32-35." 135Mr King's submission in support of this fraud ground fluctuated to a considerable extent. 136Mr King's written submission contended that counsel appearing for the present Respondents before the Court of Appeal of Solomon Islands intentionally misled that Court, by making submissions by reference to documents which counsel knew to be false. The submissions relate to documents including file notes of Mr Gibbs about which the Court of Appeal made findings. 137In the course of oral submissions, Mr King was invited to identify with precision, the fraud alleged and against whom the allegation was made (T39-40, 30 June 2011). In later submissions, he appeared to submit that it was sufficient if a submission put to the Court of Appeal had misled that Court (T51, 53, 30 June 2011). Mr King drew back from an allegation of actual fraud (T83-85, 5 July 2011). In reply, Mr King appeared to contend that it was sufficient if the Court of Appeal was led to a wrong conclusion as a result of submissions put by the Respondents' then counsel (T112-113, 6 July 2011). 138The terms of s.7(2)(a)(iv)n FJ Act, even on the United Kingdom approach, requires the Applicants to demonstrate that the "judgment was obtained by fraud". Making a submission to a court which is said to be wrong is clearly not enough. 139It was acknowledged ultimately by Mr King, that certain facsimiles and reports, which were said to be significant to this topic, were in the possession of the present Applicants at all relevant times (T67-68, 71, 5 July 2011; T115-116, 6 July 2011). If the principles in Keele v Findley were to be applied, this would be the end of the matter. Clearly, the Applicants had available to them at the time of the trial before Brown J and the appeal before the Court of Appeal, the documents which they now contend were not regarded as significant at the time. 140The Applicants seek to criticise steps taken by the Respondents' lawyers during the discovery process, as a means of demonstrating that the Court of Appeal came to be misled. 141The impugned submissions were made before the Court of Appeal when Mr King was appearing for the present Applicants. Mr King had appeared at first instance at the lengthy trial before Brown J. Accordingly, Mr King and those instructing him, had an intricate knowledge of the subject matter of the submissions. One of the functions of counsel is to make submissions which rebut what has been submitted for the other party. If the submissions made to the Court of Appeal by counsel for the present Respondents were said to be erroneous, counsel for the Applicants had ample opportunity to respond to them. 142In my view, the argument which has been sought to be erected by the Applicants in support of the fraud ground is redolent of the "inexact proofs, indefinite testimony, or indirect inferences" of which Dixon J spoke in Briginshaw v Briginshaw at 362. The submission was based upon a tenuous and strained factual argument, accompanied by a submission which did not grapple with the requirement (on the United Kingdom cases) of intentional and deliberate misleading of the Court, in a way which leads to a finding that the relevant "judgment was obtained by fraud". 143In my view, the Applicants have demonstrated nothing more than the prospect that a further argument could have been advanced on Quarter's behalf at the hearing of the appeal. The material relied upon does not demonstrate that the Court of Appeal was misled intentionally or fraudulently by anyone on behalf of the Respondents. 144In my view, the Applicants have fallen very far short of establishing fraud in this case. 145In any event, it is necessary to bear in mind that the Court of Appeal identified a litany of legal and factual errors on the part of the trial Judge. So much is made clear from an examination of paragraphs [10], [11], [12], [17], [20], [21], [22] and [24] of the judgment of the Court of Appeal. The strength of the conclusions of the Court of Appeal may be illustrated by language used by their Lordships in the following extract at [42]: "It follows that the appeals of each of the three appellant defendants must be allowed and the judgments against them set aside. Because we have in mind that, in the case of at least two of the defendants, re-trials must be ordered, we have been cautious in stating our own views on contentious issues of fact that will fall for determination by another Judge in the future. We would have preferred, if possible, to have saved something from the wreck. But the influence of credibility on the Judge's findings generally and on his perceptions of the case as a whole are too far-reaching to admit of a half-way house, if any were legally possible. As well in this context, we feel unable to part from this matter without some comment on the quality of the reasons for judgment on which the decision is based. In all, they extend over some 90 pages of typescript. They are, we regret to say, so replete with unnecessary and confusing repetitions, lengthy extracts from the transcript, obscurities of language, and grammatical and other solecisms, as to leave the meaning unclear and in some places incomprehensible. There are also inconsistencies in some findings that are nowhere resolved. The result is to raise the suspicion that the reasons may have been dictated sporadically at intervals over the period of 18 months since trial, and then delivered without first being read through and edited or corrected and fully integrated as a whole. Identifiable mistakes of fact and law are so numerous as to raise the question whether, even apart from the issue of credibility, the judgment could have been allowed to stand." 146The Court of Appeal then observed (at [43]) that "our conclusions to this effect make it unnecessary and undesirable that we should comment at length on some of the other principal issues at the trial". Given that the matter was to be remitted for retrial, the Court of Appeal did not proceed to make detailed findings in other areas. 147What this demonstrates is that the particular finding which is sought to be impugned by the Applicants was but one of many areas which the Court of Appeal considered warranted appellate intervention. In these circumstances, even if the contentions advanced on their behalf by Mr King had any traction in the one area which is challenged in this Court (and they do not), it is very difficult for the Applicants to demonstrate that the judgment of the Court of Appeal was obtained by fraud. 148Mr King acknowledged that this ground involved the contention that the judgment of Goldsborough J on 20 May 2009 was obtained by fraud because the costs order related back to the judgment of the Court of Appeal upon which he had concentrated in argument. I am not at all convinced that this indirect route is open when the challenge is directed to the judgment of Goldsborough J of 20 May 2009. However, I have approached this ground upon the basis that this course is open to the Applicants, with the ground failing on the merits. 149It has not been demonstrated that the Court of Appeal was intentionally misled into making a finding adverse to Quarter. 150To the extent that the fraud ground relies as well upon what is said to be the "mulcting without power" of funds lodged as security for costs for a retrial in partial satisfaction of the costs order made by Goldsborough J, I am entirely unpersuaded that any irregularity has been demonstrated in that respect, let alone factual matters which would lead to a finding of fraud.

Ground Based on s.7(2)(a)(xi) FJ Act - That the Enforcement of the Judgment Would be Contrary to Public Policy

Submissions of the Parties 151Mr King submitted that the orders made by Goldsborough J on 20 May 2009 were contrary to public policy. Reliance was placed upon the factual matters advanced in support of the fraud ground, leading to the contention that a substantial miscarriage of justice had occurred. 152Mr King relied as well upon the inability of his instructing solicitor, Mr Hayes, to obtain local legal representation in Solomon Islands for the purpose of the retrial. 153Mr Assaf submitted that there had been no miscarriage of justice and there was no public policy reason why the registration of the judgment should be set aside. He submitted that it had not been demonstrated that enforcement of the judgment would be contrary to public policy. Reliance was placed upon the judgment of Tamberlin J in Stern v National Australia Bank [1999] FCA 1421 at [138]-[143]. Mr Assaf submitted that there was no evidence of questions of moral and ethical policy, fairness of procedure and illegality of a fundamental nature (or at all), of a type which Tamberlin J identified as being pertinent to the public policy ground. 154Mr Assaf submitted that the Applicants had overlooked a fundamental and incontrovertible fact - the reason why Goldsborough J had dismissed the proceedings was because of Quarter's own inaction in prosecuting its claim. He submitted that it cannot be contrary to public policy for a court to dismiss a claim for want of prosecution, and to make a costs order against the prosecuting party, in circumstances where: (a)Quarter had repeatedly failed to comply with court directions and orders; (b)Quarter was not prepared to provide security for costs more than seven days prior to any retrial; (c)Quarter had had the opportunity and benefit of a lengthy hearing before Brown J, a five-day hearing before the Court of Appeal in 2008, a four-day hearing before Goldsborough J in December 2008, a one-day hearing before the Court of Appeal in July 2009 and a one-day hearing before Davies J in this Court in 2010; (d)on each of these occasions, the Applicants were legally represented. Decision 155The concept of public policy in the FJ Act derives from common law principles concerning the recognition and enforcement of foreign judgments and, as such, it has been said that these common law principles provide assistance in construing this aspect of the Act: Jenton Overseas Investment Pty Limited v Townsing [2008] VSC 470; 21 VR 241 at 242-243 [6] ("Jenton"); Davies, Bell and Brereton, "Nygh's Conflict of Laws in Australia", above, at [41.16]. 156After consideration of relevant decisions, including Stern v National Australia Bank, Whelan J said in Jenton at 246-247 [20]-[22]: "[20] It seems to me that the authorities reveal that the courts are slow to invoke public policy as a ground for refusing recognition or enforcement of a foreign judgment. There are few instances in which a foreign judgment has not been recognised or enforced on this ground. There are good reasons for this. There are, as Kirby P puts it, the 'interests of comity' to maintain. The respect and recognition of other sovereign states' institutions is important. This is especially so when acting under the Foreign Judgments Act where the registration and enforcement procedures apply on the basis that there is 'substantial reciprocity of treatment' for Australian judgments in the foreign forum. There is also a need for caution because of the inherent volatility of the notion of 'public policy'. As Atkinson J points out in De Santis v Russo, 'what is contrary to public policy in one era might not be considered contrary to public policy in another'.