Raffaele Viscardi SRL v Quality Centre Food Services Pty Limited

ex tempore Judgment 1On 13 August 2013 Adamson J made orders pursuant to s 61 of the Foreign Judgements Act 1991 that the judgment obtained by the plaintiff against the defendant in Tribunale Di Nocera Inferiore on 20 August 2011 be registered as a judgment in the Supreme Court of NSW in the sum of €94,988.65 and made various ancillary orders. 2The evidence upon which her Honour relied was the affidavit of Mr John Izzo, who is the solicitor for the plaintiff and, amongst other things, is fluent in and fully conversant with the Italian language and also on the panel of lawyers maintained by the Italian Consulate General as having a working knowledge of Italian law. Attached to Mr Izzo's affidavit was a copy of the judgment of the Italian courts, of course in Italian, together with a translation into English which appears to bear seals verifying its character, together with other documents including a certification of interest both in Italian and in an English translation. 3Her Honour held, inter alia, as follows: "13 I am satisfied on the basis of the matters contained in the affidavit of Mr Izzo that the judgment or a duly authenticated copy of the judgment has been provided and that it has been translated and certified by a Notary Public and has been authenticated by evidence. The plaintiff has established that the whole of the judgment is sought to be registered in this Court. 14 The plaintiff has proved the matter referred to in UCPR 53.3(1)(d): namely the money amount originally payable under the judgment, the interest rate payable on that judgment and the method of its calculation. The amount for costs has also been proved. I am also satisfied of the matter in UCPR 53.3(1)(e), namely, that this Court is the appropriate Court under s 6(2)(c) of the Act. 15 I am satisfied that Mr Izzo's affidavit establishes the other matters required to be proved in UCPR 53.3, including the rate of interest and the amount of interest which has become due under the judgment up to the time of application for registration, although, as Mr Izzo submitted, the order sought is the order in the summons which has an interest calculation to 26 July 2013 and no interest is sought for the period from 26 July 2013 to 13 August 2013. 16 The plaintiff has established that it is entitled to enforce the whole of the judgment, which is a final and conclusive judgment of the Tribunale Di Nocera Inferiore." 4By notice of motion filed on 26 August 2013 the defendant seeks orders that the judgment of Adamson J be set aside pursuant to s 7 of the Foreign Judgments Act 1991, an order that enforcement of the judgment and payment of interest and costs be stayed and an order pursuant to rr 42.21 and 53.4 of the Uniform Civil Procedure Rules 2005 that the plaintiff provide security for the costs of the defendant and other ancillary orders. 5I am informed by Mr Tynan, for the defendant, that the ground upon which it is contended that the judgment should be set aside is, in substance, that her Honour erred in calculating the amount of interest since there was no admissible evidence of that sum. It is submitted that the provisions of s 174 of the Evidence Act 1995 as to evidence of foreign law had not been utilised by the plaintiff and the certificate of the expert, namely the accountant, was insufficient for the purpose of relying on her calculations for the purpose of determining the payable interest. Putting this submission in another way, there was no evidence or insufficient evidence of the qualifications of the accountant to express (by way of her calculations and references to Italian law) an admissible expert opinion. 6The defendant relies, in relation to the present application concerning only the question of security for costs, firstly upon the fact that the plaintiff company is incorporated in Italy and is not incorporated in Australia as a foreign company and has no real property assets under its name in Australia. Secondly, a report obtained from Dun & Bradstreet which makes a risk evaluation of the plaintiff is that a number of indicators show that it represents "a high risk of business failure". The rating is said to be "based on the financial strength of a business and the D&B Failure Score predicts the likelihood of a business failing within the next 12 months. Financial strength is calculated referring to the net worth or capital." Various other parameters are mentioned. Amongst other things the report shows total assets in excess of €18.5 million with current liabilities of almost €10 million. It is fair to say that the company has been trading for several years at a loss. 7Objection was taken to the admissibility of this report on the basis that it is hearsay. I admitted it into evidence, given the interlocutory nature of the present proceedings. 8Mr Tynan, for the defendant, submits that, although it is true the company's net asset position is substantial, most of that property is real estate and it is not known what is its true value, as distinct from its balance sheet value. Mr Tynan's instructing solicitors sought from the plaintiff a statement as to its financial affairs, which was refused. 9However, I do not see that there is any reasonable basis upon which I should infer that the values stated in the Dun & Bradstreet report should not be accepted at face value. As was said in Ollivaylle Pty Limited v Flottweg GMBH & Co KGAA [2007] FCA 56 by Finn J: "(12)...there is no onus on the applicant to adduce evidence of its ability to pay its debts (ie a future costs order). Nor is the issue of whether security should be ordered to be determined on the basis of whether or not that onus has been satisfied. Rather ... what is required is that there be credible testimony before the Court that there is reason to believe that the applicant will be unable to pay the respondent's costs if the respondent is successful..." In my opinion there is no credible testimony giving reason to believe that the plaintiff will be unable to pay the defendant's costs, should the defendant be successful. 10An additional issue arises from the terms of the rules. Rule 42.21 providing for security for costs is limited to applications made by a defendant in proceedings and, on the face of it, would permit the defendant to make the present application. However, r 53.4 is in the following terms: "For the purposes of proceedings under the Foreign Judgments Act 1991 of the Commonwealth, the Supreme Court may make an order under rule 42.21 otherwise than on the application of the judgment debtor." 11Though awkwardly drafted, this appears to prevent a judgment debtor, though a defendant, from making an application under r 42.21. The defendant submits that it does not have this effect. Rather, it is submitted, r 53.4 expands the provisions of r 42.21 to permit a judgment creditor to make an application for security of costs against a judgment debtor. 12Either interpretation is difficult. However, because of my view on the substantive question it is unnecessary for me to enter into this problem. 13As appears from the above the defendant has not shown that the plaintiff is relevantly impecunious. In this context I might add that the amount of costs in issue is a relatively trivial sum. The evidence of those costs, which appears from the affidavit of the defendant's solicitor, amounts to a mere assessment of an amount. The deponent does not say anything about whether the amounts are reasonable. It seems to me obvious that they have been calculated on a solicitor/client rather than a party/party basis. Furthermore, in light of the issue in the substantive proceedings as identified by Mr Tynan, the work proposed to be undertaken strikes me as a rather excessive expectation. At all events, the sum is trivial compared to the assets of the plaintiff. 14It is a general rule that "an order for security will not ordinarily be made against parties defending themselves and thus forced to litigate" although "the discretion to order security for costs is unfettered and should be exercised having regard to all the circumstances of the case without any predisposition in favour of the award of security": see generally the discussion by Beazley J (as her Honour then was) in KP Cable Investments Pty Ltd v Meltglow Pty Limited & Ors [1995] FCA 76. Her Honour pointed out that "security will only ordinarily be ordered against a party who is in substance a plaintiff and an ought not be made against parties who are defending themselves and thus forced to litigate": see 38.7. 15In this case the plaintiff has obtained a substantive judgment and seeks to execute it in this country for which purpose it has registered the judgment under the Act. The defendant is unable, of course, to relitigate the matter determined by the Italian court. 16As a practical matter, the only proceedings in this court, though instigated by registration of the judgment, are in substance those brought by the defendant to set aside the registration. I have mentioned the grounds upon which it is sought to do so. It seems to me that, for the purposes of the consideration by Adamson J of the application to register, the certification as to interest bears on its face a sufficient indication of the qualifications of the accountant and the reasons for her calculations. The mere fact that it might be necessary to refer to external documents in the nature of the specified Italian rules or ordinances does not mean that the certificate is not admissible for the purpose of the application. 17Moreover, taking a commonsense view, either a fresh calculation of interest or an expansion of the evidentiary material could be undertaken by the plaintiff and tendered in the proceedings for deregistration. A realistic assessment of the material tendered before Adamson J demonstrates, I think, that this could easily be done. 18In short, therefore, the application is based at its highest upon a technical point which is unlikely to succeed. I note moreover that it is not proposed to tender material which suggests, let alone establishes, that the calculation is mistaken. 19For these reasons the motion is dismissed. 20The defendant is to pay the plaintiff's costs.