Ocean Star Resort Pty Ltd v David Hokyoon Kwon & Anor

Judgment 1In this matter I gave my principal judgment on 11 April 2012: Ocean Star Resort Pty Ltd v David Hokyoon Kwon & Anor [2012] NSWSC 318. This second judgment concerns three issues arising out of the findings in my principal judgment: first, what currency, either Australian Dollars or Korean Won, should be the currency of the judgment; secondly, whether Ocean Star should receive interest up to judgment; and thirdly, if Ocean Star should receive interest up to judgment, which interest rates, Australian or Korean interest rates, are the appropriate interest rates for the calculation of that interest. 2In my principal judgment, I directed the parties to bring in short minutes of order to give effect to my reasons: at [181]-[182]. But, Ocean Star and Soft Star were unable to comply with the Court's direction and now seek competing orders, reflecting their different contentions on these three issues that continue to divide them. 3Persons, matters and things referred to in this judgment are described in the same way as they are in my principal judgment. This judgment should be read together with my principal judgment.

Question 1 - The Currency of the Judgment 4In my principal judgment, I found that Ocean Star is able to claim all the monies paid under the June 2004 agreement back upon the abandonment and abrogation of that agreement: at [179]. 5In my principal judgment, I found that KRW 2.45 billon had been paid by Ocean Star to Soft Star over four payments: KRW 300 million on 24 June 2004, KRW 1 billion on 27 February 2004, KRW 150 million on 28 April 2004 and 1 billion on 15 July 2004: at [49]. The amount of KRW 1 billion on 15 July 2004 was the first assignment fee instalment, but was in fact paid in Australia dollars, in the precise amount of AUD 710,227.00, on 30 July 2004: at [145] (Exhibit D). 6Ocean Star seeks an order that judgment should be for AUD 2,736,323.66 (being the AUD amount of KWN 2.45 billion at the exchange rate as at 1 January 2009). Soft Star seeks an order that judgment should be for KRW 2.45 billion. 7Reflecting existing legal principle, the parties agree that the Court has a power to express an order in a foreign currency: Miliangos v George Frank (Textiles) Ltd [1976] AC 443; Mitsui OSK Lines Ltd v The Ship 'Mineral Transporter' [1983] 2 NSWLR 564 at 569 per Yeldem J; Maschinenfabrik Augsburg-Nurenburg Aktiengesellschaft v Altikar Pty Ltd [1984] 3 NSWLR 152 at 153 per Rogers J; Brown Boveri (Australia) Pty Ltd v Baltic Shipping Co (1989) 15 NSWLR 448 at 463-464 per Kirby P, 471-472 per Hope JA, McHugh JA agreeing at 472; and State Bank of NSW v Swiss Bank Corporation (1995) 39 NSWLR 350 at 360-361 per Priestley, Handley and Sheller JJA. But the parties contest whether that power should be exercised in this case. 8Ocean Star, which seeks the entry of judgment in Australian dollars, says that the governing principle for present purposes, is that set out by Einstein J in Norsemeter Holdings AS v Pieter Bolele (No. 3) [2002] NSWSC 390. In Norsemeter Holdings AS v Pieter Bolele (No. 3), Einstein J held "the governing principle is that a judgment should be expressed in foreign currency, if such an order is sought by the claimant and that currency is the currency in which the claimant's loss was felt or which most truly expresses its loss": Norsemeter Holdings AS v Pieter Bolele (No. 3), [7]. Einstein J's governing principle expresses the dual requirements: (i) that the claimant seek judgment in the foreign currency, and (ii) that the foreign currency is the currency in which the claimant's loss was felt or which most truly expresses the claimant's loss. 9In Brown Boveri (Australia) Pty Ltd v Baltic Shipping Co Kirby P noted a requirement similar to the first requirement set out by Einstein J in Norsemeter Holdings AS v Pieter Bolele (No. 3), that: "Each country is entitled to expect that, special provision apart, a debt for civil wrong will be settled in the currency of that country, at least if a party entitled to sue there so claims. The currency of Australia is Australian dollars. The respondent has lawfully sued it in the Supreme Court of this State of Australia claiming a judgment expressed in that currency. There is nothing to require it to accept payment in pounds sterling in this country": at 464. 10Ocean Star submits that the currency of the judgment should be Australian dollars, because it sought payment in Australian Dollars in both the Statement of Claim and in the Amended Statement of Claim and that Soft Star has at no time taken issue with its claim for payment in Australian dollars. 11But Einstein J's first requirement of the governing principle set out above does not seem to have been applied in other cases. Mr Young of Counsel for Ocean Star directed the Court's attention to Placer (PNG) Pty Ltd v Dyno Nobel Asia Pacific Ltd (Formerly Dyno Wesfarmers Ltd) [2000] NSWSC 142. In Placer (PNG) Pty Ltd v Dyno Nobel Asia Pacific Ltd (Formerly Dyno Wesfarmers Ltd) Hunter J quoted the submissions of the claimant insurance company which appeared to restate the first requirement set out by Einstein J in the terms: "judgment calculated in a foreign currency will only be awarded where the plaintiff seeks it": [44]. Mr Young acknowledged that it was not clear that Hunter J was deciding the case on the basis that a foreign currency will only be awarded where the plaintiff seeks the award in the foreign currency or whether Hunter J simply thought that the foreign currency was inappropriate in the circumstances of the case. 12But Mr Ogborne, counsel for Soft Star, says that the first requirement of Einstein J's governing principle is not the law. Mr Ogborne directed the Court's attention to Brown Boveri (Australia) Pty Ltd v Baltic Shipping Co. In Brown Boveri (Australia) Pty Ltd v Baltic Shipping Co, the Court of Appeal of the Supreme Court of New South Wales found that "the court's duty is to express a judgment in the currency which best expresses the loss of the party which has sued": at 464 per Kirby P, Hope and McHugh JJA agreeing at 471 and 472; see also Rogers J's observation that "the Court's judgment ought to be in the currency that best expresses the plaintiffs loss" in Maschinenfabrik Augsburg-Nurenburg Aktiengesellschaft v Altikar Pty Ltd, at 153. Further, Mr Ogborne emphasised that in Brown Boveri (Australia) Pty Ltd v Baltic Shipping Co, although the plaintiff had not sought an award in Australian dollars, the Court nevertheless undertook consideration to determine the proper currency of the judgment. There was no suggestion that simply because the plaintiff had not sought an award in a foreign currency that the Court could dispose of the case on that basis. 13But without needing to decide the correctness or otherwise of Einstein J's first requirement the Court of Appeal's general description of the task in Brown Boveri (Australia) Pty Ltd v Baltic Shipping Co seems to govern my decision. I can award a judgment in Korean Won, even though Ocean Star has not asked for judgment in that currency. 14Ocean Star submits that Einstein J's second requirement of the governing principle in Norsemeter Holdings AS v Pieter Bolele (No. 3) is also satisfied here and warrants the entry of judgment wholly in Australian dollars. Ocean Star says that Australian Dollars is the appropriate currency for judgment because: both Ocean Star and Soft Star are Australian companies with Australian addresses; both Ocean Star and Soft Star retained Australian lawyers to negotiate the lease agreement; the dispute has been litigated in Australian Courts; the dispute was brought about by the Australian Government's prohibition of casino operations on Christmas Island; the June 2004 agreement that gives rise to the dispute is in relation to property within Australian territory; and the potential, said to be disclosed by the evidence, that enforcement of a debt against Soft Star is necessary (and that enforcement of a debt in Australian Dollars is less complex than enforcement of a debt in Korean won). 15In reply Soft Star says that because the principal judgment finds that Ocean Star is entitled to recover monies paid under the June 2004 agreement, on the basis of abandonment and abrogation, that the monies paid under the June 2004 agreement are recoverable based on the principles of restitution and not as contractual damages, such that the question of the proper currency of the judgments must be considered within the framework of the principles of restitution. Soft Star says that such consideration leads to the conclusion that the proper currency for the judgment is Korean Won. 16In a claim for an award of restitution, the law is concerned with the defendant's benefit rather than on the plaintiff's expense: BP Exploration Co (Libya) Ltd v Hunt (No. 2) [1982] 1 All ER 925 at 969 per Goff J. 17In BP Exploration Co (Libya) Ltd v Hunt (No. 2) Goff J noted that ordinarily, judgment will be in the currency of the plaintiff's loss: BP Exploration Co (Libya) Ltd v Hunt (No. 2), 969. However, Goff J distinguishes between a claim for damages and an award of restitution: BP Exploration Co (Libya) Ltd v Hunt (No. 2), 969. Goff J there states: "In such cases the law is concerned with restitution in respect of the benefit obtained by the defendant. The award is therefore related to that benefit. The plaintiff's expense is a prerequisite of his claim; but it does not limit or control the award of restitution. In assessing an award of restitution, it is the defendant's benefit that has to be identified, in order that restitution may be ordered in respect of that benefit. Accordingly, in selecting (where necessary) the currency for the award, attention must be concentrated on the defendant's benefit rather than on the plaintiff's expense": BP Exploration Co (Libya) Ltd v Hunt (No. 2), at 969. 18Applying the approach of the House of Lords in Eleftherotria v Despina R [1979] 1 All ER 421, Goff J proceeds "the general principle is that the award of restitution should be made in the currency in which the defendant's benefit can be most fairly and appropriately valued. Such a principle is, of course, broad enough to embrace all claims in restitution, including the comparatively simple case I have already referred to where the benefit takes the form of a payment of money": BP Exploration Co (Libya) Ltd v Hunt (No. 2), at 970. These principles are applicable here. 19The return of moneys paid under the abandoned and abrogated June 2004 agreement is restitutionary. The benefit obtained by Soft Star was the payment of about KRW 2.45 billon, but more exactly being KRW 1.45 billion and AUD 710,277.00. Applying the principles stated by Goff J in BP Exploration Co (Libya) Ltd v Hunt (No. 2), the restitution of the monies paid by Ocean Star to Soft Star requires, in my view, the return of Soft Star's benefit to Ocean Star, being the two payments of KRW 1.45 billion and AUD 710,277.00 in those respective currencies. 20But does the mix of Australian Dollars and Korean Won, which constitutes the precise benefit obtained by Soft Star, create a difficulty for the determination of the currency of judgment? Mr Ogborne submitted that, in the context of a mix of currencies, because the contract provided for payment in Korean Won and because Korean Won represented the majority currency in the dual currency-mix of Australian Dollars and Korean Won paid to Soft Star, the currency of the judgment should just be Korean Won. 21But mixed currency judgments are sometimes awarded. For example in Norsemeter Holdings AS v Pieter Bolele (No. 3) itself Einstein J ordered that the judgment be paid in a mix of Swedish Kroner and Norwegian Kroner: Norsemeter Holdings AS v Pieter Bolele (No. 3), at [23]. The award here is restitutionary and related to the benefit obtained by Soft Star. So it is appropriate that the currency of the judgment reflect that Soft Star obtained that benefit in a mix of Australian Dollars and Korean Won.