Mariala Estates Ltd v Athanasi & Ors

LOWER COURT Supreme Court JURISDICTION : LOWER COURT 12299/99 FILE NUMBER(S) : LOWER COURT Registrar Jupp JUDICIAL OFFICER :

COUNSEL : Mr G F Cohen (Plantiff) Mercuri & Co (Plaintiff) SOLICITORS : N/A (Defendants) CATCHWORDS : Registration of foreign judgment - Cyprus - Review of Registrar's decision Supreme Court Rules LEGISLATION CITED : Administration of Justice Act 1924 (NSW) Foreign Judgments (Reciprocal Enforcement) Act (NSW) Administration of Justice Bill Beaufort Air-Sea Equipment Pty Ltd v Emhart Australia Pty Ltd (NSWSC unreported, Master Malpass, 18 December 1992) Westpac Banking Corporation v Abemond Pty Ltd & Westpac Banking Corporation v Cameron (NSWSC unreported, Santow J, 3 November 1994) Modern Woodcraft Pty Ltd v Nett (NSWSC unreported, Young J, 7 March 1997) McKelvey v Meagher (1906) 4 CLR 265 CASES CITED : Oceanic Sunline Special Shipping Co Inc v Fay (1988) 165 CLR 197 Voth v Manildra Flour Mills Pty Ltd (1990) 171 CLR 538 CRA Ltd v Cigna Insurance Australia Ltd (1996-97) 189 CLR 345 Goliath Portland Cement Co Ltd v Bengtell & Anor (1994) 33 NSWLR 414 Spiliada Maritime Corp v Cansulex Ltd [1987] AC 460 DECISION : (1) The decision of Registrar Jupp in relation to the judgment of 8 October 1998 is upheld; (2) I decline to register the judgment dated 15 December 1995 of the District Court of Limassol, Cyprus in action No 5999/95 between Mariala Construction Co Ltd renamed to Mariala Estates Ltd of Limassol, (the applicant) and Eleni Antoni Kappou and Antonis Kappou, (the respondents).

13 IN THE SUPREME COURT OF NEW SOUTH WALES COMMON LAW DIVISION

12299/99 - MARIALA ESTATES LTD v Marius KostA Athanasi & ORS Judgment (Registration of foreign judgment - Cyprus; Review Registrar's decision)

1 MASTER: By notice of motion filed 4 October 2001 the plaintiff seeks an order pursuant to Part 61 r 3 of the Supreme Court Rules (SCR) that the decision of Registrar Jupp of 24 August 2001 be reviewed. The plaintiff relied on the affidavit of Frank Mercuri sworn 21 September 1999. The Registrar declined to register two foreign judgments in this court. Review 2 There are several cases that are authority on the consideration that ought to be given on review. They are Beaufort Air-Sea Equipment Pty Ltd v Emhart Australia Pty Ltd (NSWSC unreported, Master Malpass, 18 December 1992); Westpac Banking Corporation v Abemond Pty Ltd and Westpac Banking Corporation v Cameron (NSWSC unreported, Santow J, 3 November 1994) and Modern Woodcraft Pty Ltd v Nett (NSWSC unreported, Young J, 7 March 1997).

3 From these decisions, the approach I should take is that I should inform myself of all the material before the Registrar at the time when he made the orders. I can consider the fresh evidence which the plaintiff has put on and which has not been objected to by the defendants. I can allow fresh evidence to be tendered. I should also make my own decision based on the material before me and having heard legal argument.

4 A short history of the proceedings is as follows. (1) On 15 December 1995 A Vladimiron District Judge of the District Court in Limassol Cyprus in action No 5999/95 between Mariala Construction Co Ltd renamed to Mariala Estates Ltd of Limassol, (the applicant) and Eleni Antoni Kappaou and Antonis Kappou, (the respondents) ordered that the respondents deliver possession of "the building concerned with numbers 12-14 which is located at Mariala Center at Georgiou A' Ambelakion, P Yermasoyias in Limassol known under the trading name Hollywood Coctail Bar" [Cocktail]. On 1 March 1996 the applicants obtained possession of the premises. The court also ordered that the respondents pay to the applicants CYP. 7.000. - with interest at 6% from 15 December 1995 until final settlement; the respondents pay to the applications CYP. 11.75 cents expenses for issue of judgment plus legal fees to be assessed by the Registrar of the District Court of Limassol; and CY. 3.500. - monthly from 1 September 1995 as mesne profits and or otherwise until possession of the building and or until rental of the buildings. As at 13 September 1999 the exchange rate was $A171,673.28 plus interest (the first judgment).

(2) On 8 October 1998 the President of the Rent Control Board - Paphos in the Limassol District Cyprus in action No E242/96 between Mariala Construction Co Ltd renamed to Mariala Estates Ltd of Limassol, (the applicant) and Marias Kosta Athanasi and Takis Athanasi (the respondents) ordered that the respondents give "vacant and free possession of the building complex at Georgiou A' Ambelakion, P Yermasoyias in Limassol known under the trading name Hollywood Coctail Bar" [Cocktail]. The court also ordered that the respondents pay to the application CY.3.500. - per month as from 15 January 1997 till delivery of vacant possession of the shops. All amounts adjudged bear legal interest 8% as from 30 December 1996. The legal fees were adjudged in favour of applicants to be assessed by the registrar. Legal fees have been assessed to the amount of CY4,166.50 cents plus CY332,28 cents VAT plus 8% interest as from 8 October 1998 (the second judgment).

(3) On 22 September 1999 the plaintiff by application sought that the judgment dated 15 December 1995 where it was ordered that the respondents deliver possession of "the building concerned with numbers 12-14 which is located at Mariala Center at Georgiou A' P Yermasoyias in Limassol known under the trading name Hollywood Coctail Bar" [Cocktail] and the judgment dated 8 October 1998 by which it was adjudged that Marias Kosta Athanasi and Takis Athanasi pay money to Mariala Estates Ltd be registered under Part ii of the Administration of Justice Act 1924. On 21 February 2000 the matter came before Registrar Irwin who required that evidence be formally tendered and directed that appropriate affidavit evidence be delivered to his chambers.

(4) By letter dated 14 March 2000 an affidavit of Alfredos Koutsios sworn 1 March 2000 was delivered to the Registrar's chambers.

(5) On 5 April 2000 in response to a further request from Registrar Irwin, Mr Geoffrey F Cohen of Counsel made further submissions. No action was taken for over 12 months. (6) On 11 July 2001 the court wrote to the solicitor, stating that pursuant to Part 32A the court will, of its own motion, dismiss these proceedings upon the expiration of 28 days from the date of this letter unless a party satisfies the court that special circumstances exist.

(7) On 3 August 2001 the solicitors wrote to the principal Registrar informing her that the plaintiff was awaiting order of the Court."

(8) On 24 August 2001 Registrar Jupp replied to the solicitor's letter. It relevantly reads:

"I have considered the matter further and have determined that I will not register the judgment issued by the Regional Court of Limassol, Cyprus, filed on 22 September 1999. I am not satisfied that you are seeking to register a judgment from a superior Court of Cyprus."

Cyprus 5 As a starting point, between 1571 until 1878 Cyprus was annexed to the Ottoman Empire. Under the 1878 Cyprus Convention, Britain assumed administration of the island, which remained formally part of the Ottoman Empire until 1914 when Britain annexed Cyprus, after the Ottoman Empire entered the First World War on the side of Germany. In 1923 under the Treaty of Lausanne, Turkey renounced any claim to Cyprus. In 1925 Cyprus was declared a Crown colony. According to the Zurich-London Treaty, Cyprus became an independent republic on 16 August 1960. Hence, up until 1960 Cyprus was regarded as one of His Majesty's dominions. Cyprus is a member of the United Nations, the Council of Europe and the Commonwealth as well as the Non-Aligned Movement. According to the Treaty, Britain retains two Sovereign Bases, in Cyprus (158.5 sq km) at Dhekelia and Akrotiri-Episkopi. These bases are located near Limassol. Limassol is located in the area controlled by the Cyprus government (the Greek area). Courts in Cyprus 6 The Supreme court of Cyprus adjudicates on all maters of constitutionality of legislation referred to it by the President of the Republic or arising in any judicial proceedings, including complaints that any law or decision of the House of Representatives or the budget is discriminatory; also on matters of conflict or contrast of power or competence between state organs and questions of interpretation of the Constitution in cases of ambiguity. The Supreme court is the final Appellate court in the Republic and has jurisdiction to hear and determine appeals in civil and criminal cases from the Assize court, District courts, as well as appeals from decision of its own judges when sitting alone in the exercise of original and revisional jurisdiction of the Supreme court.

7 There is a District court for each district. The District court exercises original criminal and civil jurisdiction. The extent of the jurisdiction varies with the composition of the bench. In civil matters a District court composed of not less than two judges has unlimited jurisdiction. A president or a senior district judge of a District court sitting alone has jurisdiction up to C£10.000 and a district judge sitting alone up to C£5.000 and is also empowered to deal with any action for the recovery or possession of any immovable property (and certain other specified matters connected therewith) when the title of such property is not in dispute, irrespective of the value of the property involved; provided that a president of a District court or a senior district judge sitting alone shall have jurisdiction to hear and determine any action in relation to negligence as well as in relation to compensation for the compulsory acquisition and requisition of immovable property, irrespective of the amount in dispute, unless such president or senior district judge is of the opinion that it should be heard and determined by a Full court consisting of not more than three judges. (see http//www.pio.gov.cy/gov/judiciary.htm) The Administration of Justice Act 1924 8 Section 3(1) of the Administration of Justice Act 1924 (NSW) defines judgment as:

"any judgment or order given or made by a court in any civil proceedings, whether before or after the passing of this Act, whereby any sum of money is made payable, and includes an award in proceedings on an arbitration (other than a foreign award enforceable by virtue of Part VII of the Commercial Arbitration Act, 1984) if the award has, in pursuance of the law in force in the place where it was made, become enforceable in the same manner as a judgment given by a court in that place."

9 In 1973 the Foreign Judgments (Reciprocal Enforcement) Act (NSW) came into force. To a large extent it replaced the Administration of Justice Act. However the Foreign Judgments (Reciprocal Enforcement) Act only applies to countries named in the schedule specified in that Act (the latter schedule). If the country does not appear in the latter schedule the earlier 1924 Act still applies. Cyprus does not appear in the schedule to the 1973 Act but does appear in the schedule to the 1924 Act. Therefore the 1924 Act is the applicable law.

10 The relevant portion of s 5 of the Administration of Justice Act 1924 states: "Enforcement in New South Wales of judgments obtained in superior courts of other British dominions

5 (1) Where a judgment has been obtained in a superior court in any part of His Majesty's dominions with respect to which this Part applies, the judgment creditor may apply to the Supreme Court at any time within twelve months after the date of the judgment or such longer period as may be allowed by the court, to have the judgment registered in the court, and on any such application the court may, if in all the circumstances of the case the court thinks it is just and convenient that the judgment should be enforced in New South Wales, and subject to the provisions of this section, order the judgment to be registered accordingly.

(2) No judgment shall be ordered to be registered under this section if - (a) the original court acted without jurisdiction; or

(b) the judgment debtor, being a person who was neither carrying on business nor ordinarily resident within the jurisdiction of the original court, did not voluntarily appear or otherwise submit or agree to submit to the jurisdiction of that court; or

(c) the judgment debtor, being the defendant in the proceedings, was not duly served with the process of the original court and did not appear, notwithstanding that the judgment debtor was ordinarily resident or was carrying on business within the jurisdiction of that court or agreed to submit to the jurisdiction of that court; or

(e) the judgment debtor satisfies the Supreme Court either that an appeal is pending or that the judgment debtor is entitled and intends to appeal against the judgment; or

(f) the judgment was in respect of a cause of action which for reasons of public policy or for some other similar reason could not have been entertained by the Supreme Court.

(5) …" 11 The first judgment dated 15 December 1995 was not lodged in this court until 22 September 1999, just under four years from the date of judgment and just under three years outside the 12 month period referred to in s 5(1). The court can allow a longer period in which to register the judgment. By affidavit dated 1 March 2001 Alfredos Koutsios advocate of Limassol, Cyprus swore that because "the matter of stale judgments is dealt by our procedure Rules Law Cap12. order 40 rule 8, which provides that judgment over 6 years old is stale and in order to be executed a court order should be granted. In our cause the case in hand is less than 6 years and no question of stale at this arises". The judgment dated 8 October 1998 was lodged in this court on 22 September 1999 within the 12 month period referred to in s 5(1). There is no impediment as stipulated in s 5(2) to either judgment to prevent them from being registered.

12 However as previously stated, the Registrar determined that he would not register the judgment issued by the Regional court of Limassol. In any event the Registrar overlooked whether the earlier judgment of 15 December 1995 should be registered. The issue is whether judgments are of a superior court of any part of His Majesty's dominions.

13 The plaintiff's counsel submitted that the Act does not define a "superior court in any part of His Majesty's dominions". Consideration should then be given, not to the meaning of "superior court" in the sense of its distinction from an "inferior court" within the Australian courts system, nor to the meaning of "superior court of record", but to the meaning of "superior court in any part of His Majesty's dominions" insofar as it appropriate to do so in the context and intent of the Act.

14 The plaintiff referred to the second reading speech of the Administration of Justice Bill where Mr Bavin, the then Attorney General on 3 December 1924, said that it was obviously desirable that when judgments were obtained in one part of the Empire, against persons in other parts of the Empire, there should be a simple and inexpensive method of enforcing them. Under this part of the bill, wherever a citizen of New South Wales had obtained a judgment, against a person in England that judgment could by a very simple process be registered in England and enforced. The bill introduces very simple methods which would apply not only to Great Britain but also to other parts of the British Empire which have adopted similar measures. His Honourable Boyce referred to three main points, firstly, the bill contained reference to judgment in other parts of the Empire; secondly, that without this legislation if you got judgment against a man in New South Wales and he got away to England you could not register the judgment in England; and thirdly, you would have to sue him again in England. That is to say, you have to sue twice. This bill remedied the position because it was only right that within the Empire all judgment in one Imperial court should be registered in another Imperial court, and should be binding with certain safeguards provided in the bill.

15 The plaintiff referred to the High Court decision of McKelvey v Meagher (1906) 4 CLR 265. In McKelvey the meaning of the term "a judge of a superior court in [another part of her majesty's dominion]" was considered as it appeared in the Fugitive Offenders Act, 1881. Section 3(1) of that Act provides that where a warrant has been issued in one part of her majesty's dominions for the apprehension of a fugitive from that part, any of the following authorities in another part of her majesty's dominions in or on the way to which the fugitive is or is suspected to be. That is to say, judge of a superior court is such part.

16 In McKelvey Griffiths CJ said at 280 that in s 3 the expression "Judge of a superior court in such part" is used, and in s 4 "a magistrate of any part of Her Majesty's dominions." In his opinion, whenever either of these expressions is used it means a person who, in the place where the fugitive is found, has authority to exercise the function of a judge or magistrate as the case may be. 17 O'Conner J (at 292) said that he was of the opinion that the Supreme Court of Victoria was right in holding that a "Judge of a superior court" is a Judge exercising jurisdiction in the part where the fugitive was apprehended. The plaintiff submitted that it is only incumbent upon this court to be satisfied that a Judge exercised jurisdiction in a part noted in the Act as then being a part of His Majesty's dominions, for the judgment of such Judge to be a judgment of a "superior court in any part of His Majesty's dominions" for the purposes of the Act.

18 If the McKelvey approach is adopted, then the judge of a Superior Court means a person who in the place where the property is located has firstly, the authority to make an order for possession (and ancillary orders); and secondly, has exercised that function of judge or magistrate as the case may be. In 1995 these powers were exercised by the District Court Judge who had the power and authority to make such an order for possession of property. In 1998 these powers were exercised by the President of the Rent Control Court of Limassol who likewise had the power and authority to make orders for possession of property. It is my view that both of these judgments are judgments of a superior court in a part of Her Majesty's dominions to which the Act applies. Just and convenient 19 I turn to consider whether it is in all the circumstances just and convenient. While Oceanic Sunline Special Shipping Co Inc v Fay (1988) 165 CLR 197 determines the principle to be applied when determining whether a stay of proceedings or a dismissal of proceedings should be granted, the principle is equally applicable to the registration of foreign judgments. In Oceanic the facts were that the respondent, a resident of Queensland, sued the appellant in the Supreme Court of New South Wales for negligence in respect of personal injuries sustained whilst he was a passenger on a tourist ship in Greek waters. The appellant was a company incorporated in Greece and was the owner and operator of the ship, which was registered in Greece. Its port of both departure and destination was also in Greece. The respondent initially sued the appellant in New York where the action had been stayed on the ground of forum non conveniens. The respondent then obtained leave from the Supreme Court of New South Wales to serve his writ outside the jurisdiction on the basis that he had suffered injury within New South Wales, as the contract of carriage was entered into in that State. The majority held that the primary judge's refusal to grant a stay and dismiss the action on the ground of forum non conveniens should stand. 20 At 247-248 Deane J stated: "…it is possible to identify in summary form what I see as the modern content of the traditional principles governing the power of a court in this country to order that proceedings which have been regularly instituted within jurisdiction should be dismissed or stayed on inappropriate forum grounds. That power is a discretionary one in the sense that its exercise involves a subjective balancing process in which the relevant factors will vary and which both the questions of the comparative weight to be given to the particular factors in the circumstances of a particular case and the decision whether the power should be exercised are matters for individual judgment and, to a significant extent, matters of impression. The power should only be exercised in a clear case and the onus lies upon the defendant to satisfy the local court in which the particular proceedings have been instituted that it is so inappropriate a forum for their determination that their continuation would be oppressive and vexatious to him. Ordinarily, a defendant will be unable to discharge that onus unless he can identify some appropriate foreign tribunal to whose jurisdiction the defendant is amenable and which would entertain the particular proceedings at the suit of the plaintiff. Otherwise, that onus will ordinarily be discharged by a defendant who applies promptly for a stay or a dismissal if he persuades the local court that, having regard to the circumstances of the particular case and the availability of the foreign tribunal, it is clearly an inappropriate forum for the determination of the dispute between the parties.…Admittedly, that approach to the 'vexatious' and 'oppressive' test is less stringent and less rigid than would have been accepted in the nineteenth century. Under it, the applicable test pursuant to traditional principles can, in the ordinary case, properly be seen as the "inappropriate forum" test. It cannot, however, properly be seen as the "more appropriate forum" test since the mere fact that a tribunal in some other country would be a more appropriate forum for the particular proceeding does not necessarily mean that the local court is clearly an inappropriate one."

21 The majority of the High Court in Voth v Manildra Flour Mills Pty Ltd (1990) 171 CLR 538 (per Mason CJ, Deane, Dawson and Gaudron JJ at 564) accepted the clearly inappropriate forum test outlined by Deane J in Oceanic - see also CRA Ltd v Cigna Insurance Australia Ltd (1996-97) 189 CLR 345 at 390 and 400-401).

22 In Voth the facts were that the respondents were a company incorporated and resident in New South Wales who sued an accountant, a citizen of the United States of America practising in Missouri, in the Supreme Court of New South Wales for damages for professional negligence. The company had sold products to a related company in the United States which became obliged to pay it interest. Under United States tax law the New South Wales company was liable to pay income tax on the interest and the related company was obliged to deduct and withhold the tax. The related company did not make the required deductions as a result of which it had to pay penalty interest to the United State revenue. The New South Wales company claimed that it was liable to reimburse the related company for the penalty interest and that it had paid more Australian tax than it would have paid if the withholding tax had been paid on time. The company contended that the accountant had acted without due care in failing to draw the attention of the related company, for which he acted, and of the New South Wales company, to the withholding tax requirement. Their Honours held that the act on which the company relied for its cause of action was committed in Missouri, and thus the tort, if there were one, was committed in Missouri. Accordingly, even if the matter were to be litigated in Australia, the accountant would be liable only if he were liable under the law of Missouri. The action was stayed on the basis that New South Wales was clearly the inappropriate forum to permit the action to proceed.

23 However the "clearly inappropriate forum" test has not been without criticism. In Goliath Portland Cement Co Ltd v Bengtell & Anor (1994) 33 NSWLR 414 at 431, it was stated that while being bound by Voth and Oceanic that his own preference was for the adoption in Australia of the principle in Spiliada Maritime Corp v Cansulex Ltd [1987] AC 460, ie., the "more appropriate forum" test. This is because the test adopted by the High Court was more favourable to the maintenance of an asserted jurisdiction.

24 The test is a discretionary one. The defendants now reside in Victoria. The plaintiff resides in New South Wales. The defendants carry on business in the State of Victoria. The plaintiffs carry on business and reside in Cyprus. It would appear that the contract was made in Cyprus. The plaintiff's solicitor's practice is located in New South Wales. The plaintiff's solicitor's office is the only nexus with the State of New South Wales. It is my view that the New South Wales Supreme Court is not the correct forum. None of the parties are located within New South Wales. If the forum non conveniens test is too strict I still cannot see that it is just and convenient to register the judgment here.

25 Additionally, no explanation has been given by the plaintiff for the delay in seeking to register the 1995 judgment in this court. For these reasons, it is my view that it is not just and convenient that the judgments be registered in this court. The decision of Registrar Jupp in relation to the judgment of 8 October 1998 is upheld but for different reasons to those given by the learned registrar. I would also decline to register the judgment of 15 December 1995 for the same reasons given in relation to the 8 October 1998 judgment. 26 The orders I make are:

(1) The decision of Registrar Jupp in relation to the judgment of 8 October 1998 is upheld.

(2) I decline to register the judgment dated 15 December 1995 of the District Court of Limassol, Cyprus in action No 5999/95 between Mariala Construction Co Ltd renamed to Mariala Estates Ltd of Limassol, (the applicant) and Eleni Antoni Kappou and Antonis Kappou, (the respondents). **********

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