LFDB v SM

LFDB v SM - [2015] FCA 725 - FCA 2015 case summary — Zoe

[10]

REASONS FOR JUDGMENT 1 By originating applications filed on 25 March 2015, the applicants seek orders pursuant to s 72 of the Trans-Tasman Proceedings Act 2010 (Cth) ("Trans-Tasman Proceedings Act") setting aside the registration of two freezing orders made by the High Court of New Zealand ("NZ High Court") which have been registered in this Court. 2 The first order was made on 5 February 2015 and was registered in this Court on about 11 February 2015 ("February freezing orders"). 3 The second order was made on 11 March 2015 and was registered in this Court on 12 March 2015 ("March freezing orders"). 4 A third set of freezing orders was made by the High Court of New Zealand on 3 June 2015 and registered in this Court on 4 June 2015 ("June freezing orders"). 5 On 11 June 2015, the applicants filed an amending originating application seeking an order setting aside the registration of the third freezing orders. 6 Section 72 of the Trans-Tasman Proceedings Act provides: (1) An Australian court in which an NZ judgment is registered must, on application by a liable person under subsection (2), set aside the registration of the judgment if: (a) the court is satisfied that enforcement of the judgment would be contrary to public policy in Australia; or (b) the judgment was registered in contravention of this Act; or (c) both of the following subparagraphs apply: (i) the judgment was given in a proceeding the subject matter of which was immovable property, or was given in a proceeding in rem the subject matter of which was movable property; (ii) that property was, at the time of the proceeding in the original court or tribunal, not situated in New Zealand. (2) The liable person's application must be made within: (a) 30 working days of the Australian court after the day the liable person was given notice of registration under section 73; or (b) if, before or after that period, the liable person applies to the Australian court for a longer period--any longer period the Australian court considers appropriate. (3) The Australian court must not set aside the registration otherwise than in accordance with this section. 7 It is not disputed that each of the freezing orders is a "NZ judgment" within the meaning of the Trans-Tasman Proceedings Act. Further, it is accepted that each of the applicants is a "liable person" within the meaning of s 72. 8 The applications were made within the time stipulated by s 72(2)(a). 9 The primary issues for determination are: (1) Whether s 72(1)(a) applies to the freezing orders, because enforcement of the judgments would be contrary to public policy in Australia; and (2) Whether s 72(1)(b) applies to the freezing orders, because the freezing orders were registered in contravention of the Trans-Tasman Proceedings Act by reason of the fact that the orders are not "registrable NZ judgments" within the meaning of the Act. 10 An additional issue is whether s 72(1)(c) applies to the freezing orders, because the orders were given in proceedings in rem the subject matter of which was movable property, and that property was, at the time of the proceeding in the original court, not situated in New Zealand.

[16]

August 2013 "unless" order 32 On 29 August 2013, Ellis J made the following order ("August 2013 "unless" order"): If [LFDB] does not pay to [SM's] solicitors by 5:00pm on Monday, 9 September 2013 (New Zealand time) the sum of $24,435.08 plus interest accrued due at 5% per annum from 10 May 2013 to date of payment: (a) [LFDB] shall be debarred from taking any further part in the proceedings presently before this Court;… 33 This was the second "unless" order made against the first applicant. Ellis J gave the following reasons for the order: Although [the first applicant] consistently avers that he has no money: [a] He was able positively to respond to the unless orders made against him on 19 September 2012; [b] Those unless orders also arose from his refusal to meet a costs award against him; [c] He has, within the last month, chosen to instruct new solicitors and a Wellington barrister to pursue an appeal from Priestley J's May 2012 decision; [d] He has (by his own admission) found the money to fund this; [e] His disclosure of corroborative detail in relation to his financial affairs remains desultory and partial at best. 34 In reasons given on 22 November 2013, her Honour said concerning the August 2013 "unless" order: The unless order in question was made principally because of my view that SM's preparation for the trial in February was being unduly and unfairly prejudiced by her comparative lack of access to funds (a considerable proportion of which is said by her to constitute relationship property). The relevant background included the fact that SM had not at that point received the benefit of the interim distribution of relationship property ordered by me back in May of this year. The effect of LFDB's failure to meet the costs awards, in circumstances where I had formed the view that he had the means to do so, was therefore particularly acute. 35 On 9 September 2013, the first applicant filed an application to stay execution of the August 2013 "unless" order. 36 By notice of appeal dated 10 September 2013, the first applicant appealed from the August 2013 "unless" order. 37 On 25 September 2013, the first applicant applied to the NZ Court of Appeal to reinstate his appeal from the interim distribution orders and for an order staying the sale of property at Devonport in New Zealand. 38 On 27 September 2013, the NZ Court of Appeal dismissed with costs the first applicant's application for a stay pending the proposed appeal from the interim distribution orders. The NZ Court of Appeal's reasons (at [4]) noted that the first applicant did not pay the interim distribution as directed: LFDB v SM [2013] NZCA 456. 39 Also on 27 September 2013, the first applicant filed a memorandum in the NZ High Court stating that: (1) He resiled from his previous position that the costs the subject of the August 2013 "unless" order could be met out of the proceeds of the sale of the Devonport property; (2) He intended to apply for leave to appeal out of time from the interim distribution orders; and (3) He resiled from his consent to the sale of the Devonport property, scheduled to take place that day, and would be seeking a stay of the sale orders. 40 On 3 October 2013, the first applicant's counsel filed a further memorandum in the High Court stating that the first applicant had instructed him: (1) To abandon the application for leave to appeal out of time from the interim distribution decision; (2) To reinstate the proposal that the costs order be met out of the sale proceeds of the Davenport property; (3) That the first applicant was now "in a financial position to meet the costs awards that were the subject of the unless orders, provided he could do so under a staggered payment arrangement (essentially $5000 a month)". 41 On 11 October 2013, the NZ Court of Appeal dismissed an application by the first applicant for an extension of time to appeal from the NZ High Court's jurisdiction orders: LFDB v SM [2013] NZCA 481. At [14], the Court stated: In the absence of an explanation for his delay, we can only assume that [LFDB]'s application for an extension of time is a deliberate attempt to frustrate the progress of [SM]'s proceeding to trial. We are satisfied that this step followed a discernible pattern of obstructing the determination of [SM]'s claim. 42 The NZ Court of Appeal ordered the first applicant to pay the costs of the extension of time application on an indemnity basis. 43 On 14 October 2013, Ellis J refused an application by the first applicant for an extension of time for complying with the August 2013 "unless" order, and noted that the first applicant was "debarred": SM v LFDB [2013] NZHC 2670. At [6] of her reasons, Ellis J noted that the first applicant had: (a) Filed four appeal proceedings, two of which he duplicated and abandoned. In doing so, he attempted to "cancel" consent orders made at his request; (b) Made three applications to stay court orders, one of which he withdrew then duplicated; (c) Made four applications for extensions of time, one of which he withdrew; (d) Made, "withdrew" then "reinstated" his proposal to meet costs awards from the Davenport property's sale proceeds. 44 At [15], her Honour noted that the respondent had not yet received the benefit of any interim distribution. 45 On 17 October 2013, the first applicant paid the amount specified in the August 2013 "unless" order. 46 On 22 November 2013, Ellis J discharged the August 2013 "unless" order: SM v LFDB [2013] NZHC 3105. At [3] of her Honour's reasons, Ellis J noted that if the first applicant's application for a discharge of that order were granted, he could participate in the trial of the proceeding then scheduled for February 2014. At [7], her Honour also noted that the Davenport property had sold and that the respondent would receive the interim distribution from the proceeds of sale. At [15], her Honour said: …I have an overriding concern that if [LFDB] is not permitted to participate in the February hearing there is a risk that SM will only face further and more protracted litigation. It would, I think, be open to LFDB to apply to have any default or formal proof judgment set aside both on substantive grounds and on the grounds of his debarment. 47 On 18 December 2013, the respondent filed a notice of appeal from Ellis J's 22 November 2013 decision. 48 On 12 March 2014, the first applicant abandoned his appeal from the August 2013 "unless" order.

[17]

July 2014: NZ Court of Appeal reinstatement of August 2013 "unless" order 49 On 14 July 2014, the NZ Court of Appeal allowed the respondent's appeal from Ellis J's 22 November 2013 decision and made an order reinstating the order debarring the respondent from taking any further part in the proceeding: SM v LFDB [2014] NZCA 326; [2014] 3 NZLR 494. The Court of Appeal said that the first applicant had "deliberately flouted" the August 2013 "unless" order. At [32], the Court of Appeal noted that the first applicant's legal representative accepted that the August 2013 "unless" order was properly made. At [33], the NZ Court of Appeal said: The breach was contumacious. [LFDB] had the money to pay the costs. On 9 September 2013 he transferred AUD35,000 from an Australian into a New Zealand bank account, and then used these monies to fund his own legal representation, presumably including making the various applications and appeals he launched unsuccessfully following the second unless order. Ellis J was surely right to observe that [LFDB] continued to play "some protracted game of 'chicken' with the Court". 50 The NZ Court of Appeal concluded that Ellis J had misunderstood the ramifications of the first applicant remaining unbarred, saying (at [36]): Without the benefit of any information from the parties about the likely nature and scope of a trial proceeding without the [LFDB's] participation, Ellis J considered the task faced by the Court would be "extremely difficult". At our request, counsel provided this Court with an outline of the shape of a formal proof hearing. This satisfies us that the Judge's assessment was incorrect. Further, [SM], through her counsel, had applied (albeit unnecessarily) for [LFDB] to be debarred. In doing that, she had plainly assessed that a successful application would not prejudice her in advancing the litigation. While Ellis J accepted that the prejudice to [LFDB] from the debarment was "self inflicted", she was obviously concerned about it. The answer to this concern is …the prejudice to [LFDB] carries much less weight than the prejudice to the administration of justice generally, and to [SM] specifically, resulting from [LFDB's] flouting of the second unless order. He very well knew the ramifications of what he deliberately did. He brought any prejudice down upon himself. 51 On 6 October 2014, a further order for costs of approximately $52,000 was made against the first applicant. According to reasons given by the Supreme Court of New Zealand ("NZ Supreme Court") in December 2014, the first applicant had become aware of the costs order on 20 October 2014, although the order was served on him on 2 December 2014. He was then required to pay within 10 working days. 52 On 20 November 2014, the NZ Supreme Court dismissed the first applicant's application to stay execution of the NZ Court of Appeal's July 2014 decision: LFDB v SM [2014] NZSC 168. By this time, the first applicant had been given leave to appeal to the NZ Supreme Court from the July 2014 decision. A bench of five members of the NZ Supreme Court said: [3] Unless a stay is granted, the respondent will continue to take steps in anticipation of the formal proof hearing. [LFDB's] contention is that there is a risk that, if he is successful in his appeal, steps taken by the respondent, and perhaps by the courts, which are based on the Court of Appeal's judgment, will have to be undone at cost to [LFDB] and to the judicial system. Court orders may also be made against him, in his absence, that may cause him prejudice. [4] This is not, however, a case in which the appeal will be made nugatory if a stay is refused. Nor, in our view, will [LFDB's] position be significantly prejudiced in those circumstances if this appeal succeeds. Overall, the reasons given for taking steps to protect [LFDB's] position, in case he is successful in the appeal, do not outweigh [SM's] right to act in accordance with the judgment of the Court of Appeal unless and until it is set aside.

[18]

December 2014: NZ Supreme Court revocation of leave to appeal 53 On 5 December 2014, the NZ Supreme Court commenced the hearing of the first applicant's appeal from the July 2014 decision. The Court's reasons (LFDB v SM [2014] NZSC 197) record that it was informed of the 6 October 2014 costs order soon after the commencement of the hearing. The reasons also record: [14] Counsel [for LFDB] said that $20,000 of the sum involved had been paid and [LFDB] proposed to pay the remainder in three equal monthly instalments. Counsel said that [LFDB's] position, which had been communicated to [SM], was that he did not have the financial means to pay the outstanding costs order within the period ordered by the Court and would not do so. These circumstances were previously unknown to this Court. [LFDB] took this stance despite this Court having granted him leave to appeal so that he could seek to have Ellis J's judgment reinstated, and Ellis J's warning in that judgment that "if there is any further obstruction or default by him there will be no further chances". [15] The Court advised counsel at the hearing of its concern that the information before the Court indicated that [LFDB's] attitude to the outstanding costs order continued to be that of a recalcitrant and unreasonable litigant. The Court invited counsel to address the Court on why, in these circumstances, the Court should not revoke leave to appeal on the basis that the point of principle in the appeal should await determination in a more suitable case. Counsel for both parties were heard on that matter. [16] Mr Smith took advantage of a short adjournment to take further instructions from [LFDB]. Counsel then indicated that [LFDB] would make arrangements to pay the outstanding costs in full the same day and proposed that the Court not withdraw leave on the condition that [LFDB] would file within a week confirmation of payment in full…. 54 The NZ Supreme Court revoked the grant of leave to appeal from the July 2014 decision, giving the following reasons (LFDB v SM [2014] NZSC 197): [25] When the Court granted leave to appeal it was appreciated that [LFDB] had demonstrated a defiant attitude to past orders and that the trial Judge was concerned at the prospect of this conduct causing continuing prejudice to the respondent. But the Court also understood that he had paid what was due on outstanding costs orders, and saw the case as suitable for addressing the issues we have mentioned. [26] The further information we received at the hearing made clear that [LFDB's] ongoing conduct of the litigation was such that it would inevitably create more continuing problems for the respondent and the courts than we had appreciated at the time leave was granted. In light of that information, the Court has formed the view that the manner in which [LFDB] has continued to conduct the proceeding is oppressive. It is clear the court system is being abused. [27] [LFDB's] offer to make payment of the ordered costs in response to the indication at the hearing that the Court would consider withdrawing leave does not persuade us otherwise. It came too late. Plainly he has always had the means to comply with the unless orders in issue. [LFDB] is gaming the court system. It is intolerable for [SM] to be faced with this and inappropriate for the Court to countenance such abuse of its process. 55 According to the applicants' submissions, the balance of the costs payable by the 6 October 2014 costs order were paid on 11 December 2014 and interest on the costs was paid on 19 December 2014.

[19]

January freezing orders 56 On 27 January 2015, the NZ High Court made freezing orders against the first applicant and "any company or trust associated with [LFDB]" including the second, third and fifth applicants. The orders were relevantly in the following terms: B. Subject to paragraph 5, restraining [LFDB] and any company or trust associated with him, including [DBA(AU)], [DBA(NZ)]and any trustee of The [DBP Trust] or the [LDB Trust], and any employee, lawyer, agent, relative, spouse or de factor partner of [LFDB] and/or any company or trust associated with [LFDB], from removing any of the assets located in or outside New Zealand, and/or disposing of, dealing with or otherwise diminishing the value of the assets in which [LFDB] has an interest whether legal, beneficial or vested, contingent or otherwise, whether the assets are in or outside New Zealand, pending further order of the Court or until 10:00am on Thursday, 5 February 2015 unless this order is continued or renewed by or on that date in the Duty Judge list. … 5. This order does not prohibit the making of payments: (a) To [SM] pursuant to a court order; (b) Of mortgages accrued due to the date of this order in respect of the properties; (c) In the ordinary course of business, including business expenses made in good faith; (d) For [LFDB's] ordinary and reasonable living expenses of up to NZ$1,000 per week or as otherwise agreed in writing by the [respondent] or her solicitors; or (e) For [LFDB's] legal costs in relation to this order on a Category 2B basis under Schedule 3 of the High Court Rules. 6. This order shall not affect any person outside New Zealand until, and only to the extent that it is declared enforceable by a court of the relevant country unless the person is: (a) A person to whom this order is addressed, or an officer of that person, or an agent appointed by power of attorney of that person; or (b) A person who: (i) Has been given written notice of this order at that person's residence or place of business within New Zealand; and (ii) Is able to prevent acts or omissions outside the jurisdiction of this Court that constitute, or assist, a breach of this order. 7. This order does not prevent any third party from complying with what it reasonably believes to be the third party's obligations, contractual or otherwise, under the laws of the country in which any of the assets located outside New Zealand are situated, or any orders of the courts of that country (provided that reasonable notice of any application for such an order is given to [SM's] solicitors), or under the proper law of any contract between the third party and [LFDB]. 8. You may apply to the Court by interlocutory application to discharge or vary the order. If you apply, you must give [SM] notice of not less than 48 hours. 9. An undertaking as to damages as given by [SM] is appended marked "A". 57 The undertaking as to damages was in the following terms: I, [SM], of Auckland…, undertake that, in the event that I am found liable by this court for any actual damages sustained by the defendant as a result of the freezing orders made upon my application dated 22 January 2015 in these proceedings, I shall meet those damages from the full and final payment of my share of the relationship property to be divided in these proceedings. 58 On 3 February 2015, the first applicant "on behalf of himself and associated companies and trusts" applied to the NZ High Court for orders "varying or discharging the Freezing Orders dated 27 January 2015". One of the grounds of the application was that the orders "cover assets outside scope of the [respondent]'s claim including immoveable property and third party entities outside of New Zealand". 59 On 5 February 2015, Courtney J of the NZ High Court declined to hear the application (because the first applicant was debarred from the proceeding) and ordered the first applicant to pay the costs of the application.

[20]

February freezing orders 60 Courtney J made the February freezing orders. The terms of the orders were, relevantly: B. Subject to paragraph 5, restraining [LFDB] and any company or trust associated with him, including [DBA(AU)], [DBA(NZ) and The [DBP Trust] or the [LDB Trust], and any partner, officer (including any director), employee, trustee, lawyer, agent, relative, spouse or de facto partner of, and any other person acting on instructions from or with the encouragement of or in any other way for [LFDB] and/or any company or trust associated with [LFDB], from removing any of the assets located in or outside New Zealand, and/or disposing of, dealing with or otherwise diminishing the value of (including by the encumbering, borrowing, lending, gifting, sale or purchase of property; incorporation of a company; settlement of a trust; or opening of a bank account) the assets in which [LFDB] has any interest legal, beneficial or vested, contingent or otherwise, whether the assets are in or outside New Zealand, pending further order of the Court or until 5:00pm on Monday, 16 March 2015 unless this order is continued or renewed by or on that date. … D. Subject to paragraph 5, freezing all bank accounts in [LFDB's] sole or joint name or otherwise to his credit (including any monies held on trust by any lawyer or other agent) and/or otherwise associated with [LFDB] including any bank account held for any company or trust associated with [LFDB] (including any bank account held with ANZ Bank New Zealand Limited, Australia and New Zealand Banking Group Limited, Police & Nurses Limited, Wells Fargo Bank, NA, and Westpac Banking Corporation or other financial institution). E. Directing [LFDB] and any company or trust associated with him, and any partner, officer (including any director), employee, trustee, lawyer, agent, relative, spouse or de facto partner of, and any other person acting on instructions from or with the encouragement of or in any other way for [LFDB], and any bank or other financial institution holding any bank account in [LFDB's] name or otherwise to his credit (including any monies held on trust by any lawyer or other agent) and/or otherwise associated with [LFDB] including any bank account held for any company or trust associated with [LFDB] (including any bank account held with ANZ Bank New Zealand Limited, Australia and New Zealand Banking Group Limited, Police & Nurses Limited, Wells Fargo Bank, NA, and Westpac Banking Corporation) to provide to [SM] within 24 hours and at [LFDB's] expense any information and documents that [SM] requests as to the ownership, status, value, acquisition, disposition and location of the assets including bank and credit card statements. … 5. This order does not prohibit the making of payments as and when approved in writing by [SM] or her solicitors: (a) To [SM] pursuant to a court order; (b) Of mortgages accrued due to 27 January 2015 in respect of the properties; (c) In the ordinary and proper course of business, including bona fide business expenses made in good faith; or (d) For [LFDB's] ordinary and reasonable living expenses of up a total of NZ$1,000 per week. 6. This order shall not affect any person outside New Zealand until, and only to the extent that it is declared enforceable or is enforced by a court in a country or state that has jurisdiction over that person or any of that person's assets unless the person is: (a) A person to whom this order is addressed, or an officer, employee or agent of that person, or an agent appointed by a power of attorney of that person; or (b) A person (including any bank or financial institution) who: (i) Has been given written notice of this order at that person's residence or place of business within New Zealand; and (ii) Is able to prevent acts or omissions outside the jurisdiction of this Court that constitute, or assist, a breach of this order. 7. This order does not prevent any third party from complying with what it reasonably believes to be the third party's bona fide and properly incurred legal obligations, contractual or otherwise, under the laws of the country in which any of the assets located outside New Zealand are situated, or any orders of the courts of that country (provided that reasonable notice of any application for such an order is given to [SM's] solicitors), or under the proper law of any contract between the third party and [LFDB]. 8. Any person (other than [LFDB]) who is detrimentally affected by this order may apply to the Court by interlocutory application to discharge or vary this order upon three clear working days' notice to [SM]. 9. An undertaking as to damages as given by [SM] is appended marked "A". 61 The undertaking as to damages referred to in paragraph 9 of the February freezing orders was the same undertaking annexed to the 27 January 2015 orders, set out at [57] above. 62 On 18 February 2015, DBA(NZ) applied to the NZ High Court for orders varying or discharging the February freezing orders. According to the evidence before this Court, the application was accompanied by an unsworn affidavit of LPDB. Paragraph 12 of the unsworn affidavit states: The company does not know the basis which the freezing Order was made against it. In particular, the company does not know why it is being alleged that it holds property in which [LFDB] has a beneficial interest. It has not been able to obtain a copy of the documents filed in the court for the application for the Freezing Order. Once these documents are obtained the company wish to file further evidence in support of this application. 63 On 20 February 2015, Ellis J published a minute in which she directed the Registry to make available to counsel for DBA(NZ): (a) The documentation filed in support of the application for the freezing and restraining orders; and (b) The decisions granting those orders. 64 Later the same day, Ellis J published a further minute in which she stated that counsel for DBA(NZ) could not have access to this material. Her Honour listed the matter for argument on 23 February 2015. 65 On 23 February 2015, Ellis J published a minute in which she invited counsel for DBA(NZ) to propose a variation to the freezing order. 66 On 24 February 2015, the second applicant filed a memorandum in the NZ High Court which stated relevantly: [2] In the Minute of Ellis J dated 23 February 2015 her Honour at [10] asked counsel to advise whether the applicant company wished to pursue the application based on prejudice on 10 am on the 25th of February 2015. [3] Counsel can advise that the applicant company does not require the hearing at that time in the circumstances that it is currently attempting to work with the solicitor for [SM] in getting payments approved in terms of the freezing order. 67 By order dated 27 February 2015, Ellis J ordered that the first applicant be arrested for his disobedience of the February freezing orders. I was informed from the Bar table that the arrest warrant remains outstanding. 68 On 2 March 2015, the first applicant filed a memorandum in the NZ High Court requesting that the arrest order be suspended until 9 am on 5 March 2015. 69 On 3 March 2015, Ellis J issued a minute stating relevantly: For the avoidance of doubt, the arrest order remains in force pending further order of the Court. Given that it appears that [LFDB] has neither the financial ability nor the intention to visit New Zealand at present that should not present any immediate difficulty. The bases for the order are quite clear, namely [LFDB's] complete failure thus far to comply with freezing order 4E, which was unequivocal in its terms and properly served upon him. There is no information on the Court file that could alter or affect those matters.

[26]

Statutory framework 83 Section 65 of the Trans-Tasman Proceedings Act provides: (1) A registrable NZ judgment cannot be enforced in Australia if it is not registered in an Australian court under section 68. Note: A registrable NZ judgment cannot be enforced in Australia otherwise than in accordance with this Part. (2) Provisions of an NZ judgment that, because of section 71, could be registered in an Australian court under section 68 cannot be enforced in Australia if they are not so registered 84 Section 66 is entitled "Meaning of registrable NZ judgment". It provides relevantly: (1) A judgment is a registrable NZ judgment if: (a) the judgment is a final and conclusive judgment that is given in a civil proceeding by a New Zealand court; or … (2) However, a judgment is not a registrable NZ judgment if it wholly or partly: (a) relates to an excluded matter; or (b) is a non-money judgment of a kind prescribed by the regulations; or … (i) is an order that, if contravened by a person to whom it is directed, will make the person liable to conviction for an offence in the place where it was made; or (j) relates to a matter of a kind prescribed by the regulations. (3) For the purposes of subsection (1), a judgment is to be treated as final and conclusive even if: (a) a person may appeal against it in a New Zealand court or tribunal; or (b) an appeal against it in a New Zealand court or tribunal has not been finally determined…. 85 Section 68 provides: (1) An Australian court must, on application under section 67, register a registrable NZ judgment in that court in accordance with this Part. (2) Once registered, the judgment remains registered unless the registration is set aside under section 72. 86 By s 4, "NZ judgment" means a judgment given by a New Zealand court or tribunal. 87 Section 4 also defines "judgment" of a court or tribunal to mean a judgment, award, decree or order of the court or tribunal, whether or not it: (a) is given in a primary proceeding or an interlocutory proceeding; or (b) is a money judgment or a non-money judgment.

[28]

Applicants' submissions 89 Counsel for the applicants, Mr Herzfeld, contended that each of the relevant freezing orders is not a "registrable NZ judgment" within the meaning of s 66(1)(a) because it is not a "final and conclusive judgment". Mr Herzfeld made the following submissions: (1) Freezing orders are interlocutory. In The Siskina [1979] AC 210 at 253, Lord Diplock summarised the position as follows: A Mareva injunction is interlocutory, not final; it is ancillary to a substantive pecuniary claim for debt or damages; it is designed to prevent the judgment against a foreign defendant for a sum of money being a mere brutum fulmen. (2) The fact that the definition of "judgment" includes judgments given in interlocutory proceedings does not mean that all judgments given in interlocutory proceedings are final and conclusive. Example of final and conclusive orders made in interlocutory proceedings are a fine for contempt and a fixed costs order in an interlocutory hearing in connection with principal proceedings payable forthwith; (3) Freezing orders are able to be varied or discharged by application to the NZ High Court; (4) The lack of finality of a freezing order is demonstrated by the observation in Dicey and Morris that the only reason that foreign interlocutory freezing orders are enforceable under European regulations is because within Europe "there is no requirement that the judgment be 'final and conclusive'": Collins L (ed, Dicey, Morris and Collins on the Conflict of Laws (14th ed, Sweet & Maxwell, 2006) p 652; (5) In the case of the relevant freezing orders, their lack of finality is underscored by the fact that they have already expired and been replaced; (6) The extrinsic material relevant to the Act does not suggest that it was an object to displace the well-established meaning of "final and conclusive". Mr Herzfeld noted that common law principles applying to the meaning of "final and conclusive" were applied in Bank Polska Kasa Opieki Spolka Akcyjna v Opara [2010] QSC 93; (2010) 238 FLR 309, in interpreting the Foreign Judgments Act 1991 (Cth) ("Foreign Judgments Act"). The key test of finality is whether the foreign tribunal treats the judgment as res judicata of the particular issues between the parties to the litigation: Schnabel v Lui [2002] NSWSC 15; (2002) 56 NSWLR 119 at [77]. The freezing orders fail that test. The words "final and conclusive" have the same meaning in the Trans-Tasman Proceedings Act as those words in the Foreign Judgments Act. (7) The Trans-Tasman Proceedings Act provides a procedure for trans-Tasman enforcement of freezing orders by s 25 of the Act. 90 Mr Herzfeld also referred to leading texts supporting his construction. In particular, he noted that Mortensen R, Garnett R and Keyes M, Private International Law in Australia (3rd ed, LexisNexis Butterworths, 2015) p 149 states that registration of a judgment under the Foreign Judgments Act "will be refused if it is not final and conclusive according to …common law principles…". Davies M, Bell A and Brereton P, Nygh's Conflict of Laws in Australia (9th ed, LexisNexis Butterworths, 2014) p 940 also refers to the common law requirement that the judgment must be "final and conclusive" in discussing this requirement under the Foreign Judgments Act.

[30]

Consideration 94 I accept the applicants' submission that the words "final and conclusive" in s 66 of the Trans-Tasman Proceedings Act should be interpreted in accordance with common law principles about enforcement of foreign judgments identified above, and in accordance with the interpretation of those words as they appear in the Foreign Judgments Act identified in Bank Polska Kasa Opieki Spolka Akcyjna v Opara [2010] QSC 93; (2010) 238 FLR 309. I accept that there is nothing in the language of the Trans-Tasman Proceedings Act or the extrinsic material which indicates that any other interpretation should be adopted. None of the matters identified on behalf of the respondent support a different approach. 95 In my view, the provisional nature of the freezing orders is plain on their face: they are expressed to have been made on the basis that the respondent has "a good arguable case on accrued and prospective causes of action…that is justiciable in the Court"; they are expressed to operate for a limited time "unless this order is continued or renewed by or on that date"; and they are accompanied by an undertaking as to damages given by the respondent "in the event that [she] is found liable…for any actual damages sustained by the [first applicant] as a result of the freezing orders made upon my application dated 22 January 2015". 96 It follows, in my view, that the freezing orders are not "final and conclusive" within the meaning of s 66 of the Trans-Tasman Proceeding Act. 97 This conclusion is supported by the statement of Lord Diplock in The Siskina, quoted above at [86]. To similar effect, in Carl Zeiss Stiftung v Rayner & Keeler Ltd [1970] Ch 506 at 538-9 Buckley J said: Many interlocutory orders, such, for instance, as an interim injunction limited to take effect only until judgment or further order, clearly involve no final decision of any issue between the parties either expressly or, since they depend only upon a prima facie case being made, out, by implication. 98 This passage from Carl Zeiss was applied by Kirby P in Linprint Pty Ltd v Hexham Textiles Pty Ltd (1991) 23 NSWLR 508 in the following passage (at 518): It may be understood that if a judgment, on its face, is contingent or provisional, it will not have that element of finality which it is the purpose of the law of res judicata to defend. But where the judgment is on its face final, the mere fact that a party has a privilege to apply to have that judgment set aside cannot convert it to a contingent or provisional judgment forever flawed and incapable of giving rise to res judicata. 99 It is also supported by Handley KR, Spencer Bower and Handley: The Doctrine of Res Judicata (4th ed, LexisNexis 2009), which states, at [5.13] and [5.32], an interlocutory injunction or an interim order for the preservation of property does not decide any question finally, not even whether there should be an interlocutory injunction, or its terms. 100 The ex parte nature of the orders provides a further basis for concluding that the orders were not final and conclusive. In WEA Records Ltd v Visions Channel 4 Ltd [1983] 1 WLR 721 at 727, Donaldson MR (Dunn and Purchas LJJ agreeing) said: …ex parte orders are essentially provisional in nature. They are made by the judge on the basis of evidence and submissions emanating from one side only. Despite the fact that the applicant is under a duty to make full disclosure of all relevant information in his possession, whether or not it assists his application, this is no basis for making a definitive order and every judge knows this. He expects at a later stage to be given an opportunity to review his provisional order in the light of evidence and argument adduced by the other side and, in so doing, he is not hearing an appeal from himself and in no way feels inhibited from discharging or varying his original order. 101 Concerning the particular submissions of the respondent: (a) While it is clear that a judgment given in an interlocutory proceeding may be registrable (by reason of the meaning of "judgment" as defined in s 4), s 66 makes no reference to "interlocutory judgments", and explicitly imposes the additional requirement that the judgment be "final and conclusive" to fall within the meaning of a "registrable NZ judgment"; (b) The passage from the Second Reading Speech and the Explanatory Memorandum for the Trans-Tasman Proceedings Bill 2009 (Cth) do not tend to indicate that a freezing order is "final and conclusive" within the meaning of s 66; (c) In my view, the first applicant's lack of an entitlement to contest the freezing orders (a disability not shared by the other applicants) does not detract from the provisional and non-final nature of the orders which arises from the fact that the orders, on their face, are in aid of the jurisdiction of the NZ High Court and are designed to prevent the frustration of the judicial process, rather than to resolve finally and conclusively any particular issue between the parties; (d) The respondent's submissions do not attempt to explain in what sense the freezing orders are final and conclusive, or what issue was finally and conclusively determined by the orders.

[31]

Order that, if contravened, will make person liable to conviction for an offence 102 The applicants argue that the relevant freezing orders are not registrable judgments by reason of s 66(2)(i) of the Trans-Tasman Proceedings Act, which provides that a judgment will not be a registrable NZ judgment if it is an order that, if contravened by a person to whom it is directed, will make the person liable to conviction for an offence in the place where it was made. 103 The applicants contend that failure by the first applicant to comply with the freezing orders will expose him to punishment for contempt: see, for example, Yang v Chen (No 5) [2011] NZHC 1492. That is an offence in New Zealand, punishable by imprisonment: Siemer v Solicitor-General [2010] 3 NZLR 767. 104 The respondent contends that s 66(2)(i) is not directed to this circumstance: it is directed to cases in which a direct penalty flows from non-compliance with the relevant order. She submitted that it is completely unremarkable that failure to comply with an order may amount to a contempt. If any order, breach of which would amount to contempt, was excluded from the meaning of "registrable NZ judgment", the objectives of the Act would be circumvented in a "quite extraordinary way". The respondent did not identify any example of an order that would fall within the meaning of s 66(2)(i). 105 I accept the applicants' submission that the words "liable" contemplate the prospect of a further process necessary to establish the conviction. This interpretation is consistent with the ordinary natural meaning of "liable" as explained by Williams J in O'Keefe v Calwell [1949] HCA 6; (1949) 77 CLR 261 at 295: The ordinary natural grammatical meaning of a person being liable to some penalty or prohibition is that the event has occurred which will enable the penalty or prohibition to be enforced, but that it still lies within the discretion of some authorized person to decide whether or not to proceed with the enforcement. Cf. James v Young (1884) 27 Ch D 652; In re Loftus-Otway; Otway v Otway (1895) 2 Ch 235. The word "liable" is sometimes used in the sense of exposure to liability, but this is not the ordinary natural grammatical meaning of the word. It would require a context to give the word this meaning. 106 Accordingly, I would also conclude that the freezing orders are not registrable judgments by reason of s 66(2)(i).

[33]

Applicants' submissions 107 Mr Herzfeld contended that, to enforce a foreign judgment involving a gross denial of procedural fairness is contrary to public policy, citing Jenton Overseas Investment Pty Ltd v Townsing [2008] VSC 470; (2008) 21 VR 241. In Jenton, Whelan J set out applicable legal principles and referred to the following passage from the judgment of Kirby P in Bouton v Labiche (1994) 33 NSWLR 225 at 234: The interests of comity are not served if the courts of the common law are too eager to criticise the standards of the courts and tribunals of another jurisdiction or too reluctant to recognise their order, which are, and remain, valid by the law of the domicile ... Nevertheless, the courts of the common law ... have reserved to themselves the right to refuse to recognise decrees and orders of foreign courts and tribunals ... where: (a) the order impugned offends against local ideas of substantial justice ... (b) the decree or order has been obtained in the foreign court or tribunal contrary to the requirements of procedural fairness or natural justice ... ." 108 Mr Herzfeld referred to Adams v Cape Industries Plc [1990] 1 Ch 433 at 558, where the UK Court of Appeal derived the requirements of natural justice for the purposes of enforcement of a foreign judgment from the principles stated in Pemberton v Hughes [1899] 1 Ch 781, especially in the following statement by Lindley MR: If a judgment is pronounced by a foreign court over persons within its jurisdiction and in a matter with which it is competent to deal, English courts never investigate the propriety of the proceedings in the foreign court, unless they offend against English views of substantial justice. Where no substantial justice, according to English notions, is offended, all that English courts look to is the finality of the judgment and the jurisdiction of the court, in this sense and to this extent - namely, its competence to entertain the sort of case which it did deal with, and its competence to require the defendant to appear before it. If the court had jurisdiction in this sense and to this extent, the courts of this country never inquire whether the jurisdiction has been properly or improperly exercised, provided always that no substantial injustice, according to English notions, has been committed. 109 The applicants argued that the freezing orders involved a gross denial of procedural fairness to the first applicant, because he was not permitted to contest or otherwise make submissions in relation to those orders by reason of his debarring. They complained that this denial of procedural fairness had significant adverse consequences, particularly in that the respondent's undertaking as to damages on which the order is founded was said to be "manifestly defective" because the respondent is only required to pay damages from the proceeds of the NZ proceeding, and because it does not protect the applicants other than the first applicant. 110 The applicants emphasised the severity of the "unless" order by contrasting the position of the first applicant with the more favourable position of a party in contempt, whose preclusion from participation in proceedings lasts only so long as the party has not purged his contempt. Further, it was said that a party in contempt is not precluded from appearing on an application to purge the contempt or to set aside the order breach of which has put the party in contempt; nor does it stop the party from defending the action itself: Eady D and Smith ATH, Arlidge, Eady and Smith on Contempt (4th ed, Sweet & Maxwell, 2011) p 1023. 111 The applicants contended that their position was supported by the reasons of Heydon J in International Finance Trust Co Ltd v NSW Crime Commission [2009] HCA 49; (2009) 240 CLR 319. In that case, the High Court concluded that s 10 of the Criminal Assets Recovery Act 1990 (NSW) was invalid. His Honour said, relevantly: 155. If there is no procedure by which the person subject to a s 10(2) restraining order made ex parte may approach the Court to have it set aside once that person has learnt of the order, the effect of s 10 is to compel the Supreme Court of New South Wales to engage in activity which is repugnant to the judicial process in a fundamental degree. 156. The element which is repugnant is not the grant of a power to make restraining orders ex parte. That is a very well-known aspect of Australian judicial process in relation to injunctions, although the power should only be exercised in exceptional or special cases, where there is some special hazard or cause of urgency. A risk of dissipation of assets in such a fashion as to frustrate the objects of the law can be in that category. 157. Nor is the element which is repugnant the creation of a duty on the Court to make the order, if the conditions in s 10(3) are satisfied. That too is a well-known aspect of Australian judicial process. 158. Nor is the element which is repugnant to be found in the failure of the legislation to give the Court power to consider whether the circumstances are sufficiently extreme to justify a grant of ex parte relief or whether the order, if made, should be limited so as to last only for a short time. That is because that failure will cause little injustice if a wrongly made order is only made for a short time or can be dissolved speedily. 159. The repugnance arises if the legislation ensures that there is no facility for the Court to entertain an application to dissolve an ex parte restraining order once the defendant has received notice of its grant pursuant to s 11(2). 112 Hayne, Crennan and Kiefel JJ dissented, concluding that a right to seek a discharge of the order was implied. However, they noted at [130]: The general rule that a judgment or order that has been formally recorded cannot be reconsidered except by processes of appeal has long been recognised to be subject to some qualifications. In particular, it is a rule that does not apply to an order made ex parte. As Griffith CJ rightly said, in Owners of SS Kalibia v Wilson [[1910] HCA 77; (1910) 11 CLR 689 at 694]: "when a judicial order has been obtained ex parte the party affected by it may apply for its discharge. This is an elementary rule of justice, of the application of which familiar instances are afforded by writs of ca re and ex parte injunctions." And it is, therefore, unsurprising that rules of court, including the Uniform Civil Procedure Rules 2005 (NSW) ("the UCPR"), provide expressly for applications of that kind in cases where a judgment or order given or made in the absence of a party has been entered. But as the UCPR also recognise the power of the Supreme Court of New South Wales to set aside judgments or orders made ex parte is not derived only from the Rules; it is a power necessarily implied as a part of the power of the Court to proceed ex parte. That is, as Griffith CJ put the point, it is ""an elementary rule of justice". 113 The applicants also complained that they were denied access to the documents relevant to the making of the freezing orders. 114 Finally, the applicants complained that the relevant freezing orders are "incongruous" given that they extend to dealings with property held by Priestley J to be beyond the jurisdiction of the NZ High Court.

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