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[2015] QSC 193
Supreme Court of Queensland
2015-07-09
Martin J
Original judgment source is linked above.
[1] The applicant ("Seeto Kui") seeks an order that the respondent ("Ms Chow") pay its costs relating to Seeto Kui's application to register four judgments, obtained in Papua New Guinea, under the Foreign Judgments Act 1991 (Cth) ("the Act").
[2] Ms Chow opposes the application on two bases:
- (a) No step in the proceeding had been taken for over two years before making this application. Leave was not obtained and should not be granted.
- (b) Seeto Kui was not entitled to obtain registration with respect to three of the four judgments for which registration was sought and had lost the right to register the fourth.
[3] On 17 July 2009, four separate default judgments were entered against Ms Chow in the National Court of Justice, Papua New Guinea. The judgment creditors in those matters were:
Ardrossan Investments Limited trading as Bowmans - Lae
Ardrossan Investments Limited trading as Bowmans - Lae
[4] Ms Chow was sued on the basis that she was a guarantor for a number of companies which had obtained goods from the various plaintiffs.
[5] On 4 May 2012, Seeto Kui commenced proceedings in this court seeking orders that the default judgments be registered under the Act. Registration was postponed due to actions taken by Ms Chow in the National Court in Papua New Guinea to set aside the default judgments. On 15 March 2013, the National Court dismissed Ms Chow's application to set aside the default judgments. A stay of execution of those orders was granted so that further argument could be heard. Final orders discharging the stay were entered on 24 May 2013. The amount of each default judgment was paid no later than 23 May 2013.
Has a step been taken in the proceedings in the last two years?
[6] When this matter came on for hearing, Ms Chow raised the issue of no step having been taken for over two years. Seeto Kui was granted an adjournment for one week to meet that argument. On the adjourned hearing, Seeto Kui was given leave to file a new application in which it sought:
- (a) a declaration that it had taken a step in the proceedings in the last two years and that leave was not required to take a further step; or
- (b) an order that leave be granted to take a further step.
[7] Rule 389(2) of the Uniform Civil Procedure Rules 1999 ("UCPR") provides:
"If no step has been taken in a proceeding for 2 years from the time the last step was taken, a new step may not be taken without the order of the court, which may be made either with or without notice."
[8] Whether a particular action constitutes a "step" in a proceeding has been the subject of much attention. In Artahs Pty Ltd v Gall Standfield & Smith (A Firm)[1] McMurdo P said that "...to be a step under r 389 it must, consistent with that word's ordinary meaning, progress the action towards a conclusion". Her Honour agreed with Peter Lyons J that it was not necessary for the step to be something required by the UCPR. Seeto Kui submitted that the payment by Ms Chow of each of the default judgments was a step in the proceedings in Queensland.
[9] In Artahs, Peter Lyons J examined some of the authorities which have dealt with the proper classification of things done by parties and whether they amount to a step in the proceedings. He said:
"[45] The expression, a step in the proceedings, has been equated to the expression, a proceeding in an action. Neither expression is to be given an unduly narrow meaning, though much that is done by the parties in the course of litigation will not amount to a step in the action.
[46] In Ives & Barker v Willans, (Ives & Barker) Lindley LJ considered that "... a step in the proceedings means something in the nature of an application to the Court ...". However, the court held that a letter requesting delivery of a statement of claim was not a step in the proceedings. In Spincer v Watts, the court considered that a proceeding in the action was a proceeding taken with the view of continuing the litigation; but not an action (such as the payment of money into court; nor the acceptance of money paid into court) taken with the intention of bringing the litigation to an end. In Brighton Marine Palace and Pier Ltd v Woodhouse, (Brighton Marine Palace and Pier Ltd) it was held that an agreement to extend the time for delivering a defence was not a step in the action; though an application to the court for an extension of time to do so would have been a step.
[47] In Zalinoff v Hammond, the filing of affidavits in opposition to an application for the appointment of a receiver, in an action for the dissolution of a partnership, was held not to be a step in the proceedings. In Vickers, Sons & Maxim Ltd v Coventry Ordnance Works Ltd, an amendment to a statement of claim was held to be a proceeding in the action. In Mundy, a letter calling for compliance with an order for delivery of an affidavit of documents was held not to be a proceeding in the action. In Kanyilmaz v Nominal Defendant (Queensland), it was accepted that the provision of a supplementary affidavit of documents was a step in the proceedings. In Porzuczek v Toowoomba District Health Services, it was held that the delivery of a medical report was a step in the action; but the later delivery of a further report, not accepted because it was said that leave was required under r 389, was not. In Wright v Ansett Transport Industries Limited, it was held that the provision of copies of disclosed documents was a step in the action; although in Citicorp Australia Limited v Metropolitan Public Abattoir Board, (Citicorp Australia) it was held that the inspection of copies of documents, produced earlier, by the solicitor in the solicitor's office, was not itself a step in the action (it was accepted that the decision in Wright was correct). In Smiley v Watson, it was held that obtaining a document by way of proceedings for non-party disclosure was not a step in the proceeding, by analogy with the taking of a statement of evidence from a non-party.
[48] The reference to "a step required by the rules" in statements identifying a step in the action may be traced back to the statement of Maugham J in Mundy. I have already pointed out that the statement was not intended as a definition. Although this description has been used to determine whether a particular action was a proceeding in the action, it seems to me that under r 389, an event may be a step in the action, notwithstanding that it is not required by the rules. For example, the filing and service of a reply (or, for that matter, a subsequent pleading) is not required by the rules; but it seems to me that this would amount to a step in the action. Moreover, r 389(3) shows that an application on which an order is made is a step in the proceeding. This provision may reflect an awareness of what was said in Ives & Barker, and Brighton Marine Palace and Pier Ltd, referred to earlier." (emphasis added, citations omitted)
[10] A similar examination was conducted by Porter J in Coad v Dimmick.[2] He said:
"[32] As to what is a step in a proceeding, it is a little difficult to discern a definitive test which has universal application, although the general thrust of the various statements is plain enough. In my view there is clear room for the proposition that an activity may be a step even though it has not in fact carried the action forward, provided that it is done with that intention. Obviously, at the very least, an activity must have the capacity to carry the action forward. Phrases used in the authorities, and which are suggestive of that approach, include:
[33] In B C Cairns, Australian Civil Procedure, 9th ed (2011) at 111 [2.150], the author says, in apparent reliance on the Citicorp case, that "[t]o be a step the act must carry the proceeding forward, it must be something intended to continue the litigation. Acts done only in preparation of a party's case do not qualify as steps." [Emphasis added.] Mr O'Farrell, both in the written outline and in oral argument, took the same approach and accepted the proposition that intention was an aspect of the test. I do not, however, suggest that on the basis of mere purpose or intention alone, an activity would amount to a step in a proceeding.
[34] I take the view that the activity must be one which is at least capable of carrying the action forward and one which is done with that intention. This accords with the authorities to which I have just referred. In particular, it accords with the proposition that a dismissed application may nevertheless advance an action towards judgment; see Burns v Korff (above) at 208, endorsed by Underwood J in Argo." (emphasis added, citations omitted)
[11] Both Peter Lyons J and Porter J refer to Spincer v Watts[3] That case was concerned with the construction of O XXVI., r 1 of the Rules of the Supreme Court 1883 (UK) which provided that the plaintiff may, at any time after the receipt of the defendant's defence, "...before taking any other proceeding in the action (save any interlocutory action), by notice in writing, wholly discontinue his action against all or any of the defendants...".[4]
[12] In that case there was an action by the holder against the acceptor and the drawer of a bill of exchange. The acceptor paid money into court in satisfaction of the claim but the drawer delivered a defence denying liability, and set up a counterclaim. The holder, after receipt of the defence, paid into court the amount of the counterclaim, and took out of court the amount paid in by the acceptor, and then gave the drawer a notice of discontinuance. It was argued that, as the plaintiff had taken out the money that was paid into court and paid into court the amount claimed on the counterclaim, it was then too late to give a notice of discontinuance because those actions constituted a "proceeding in the action". Both Lindley LJ and Lopes LJ disagreed with that submission. Lindley LJ said that a "proceeding in the action" occurs when a party takes "...any proceeding with the view of continuing the litigation with the person against whom the proceeding is taken".[5] Lopes LJ referred to the rule and said:
"I think the rule intended a proceeding which is to have the effect of continuing the action - not a proceeding which has the effect of putting an end to the action." [6]
[13] The payment by Ms Chow of the judgments brought the matters in Papua New Guinea to an end.
[14] Section 6(6) of the Act provides that a judgment is not to be registered if the judgment has been wholly satisfied or could not be enforced in the country of the original court. As Keane JA pointed out in Ellis v Dariush-Far:[7]
"The determination of the issue whether the judgment debt has been satisfied or is unenforceable is clearly a matter for the court required to decide whether or not to register the judgment. The occasion for that decision is necessarily the date of the determination whether the judgment debt has been satisfied or is unenforceable. It would do scant justice to the legislature to attribute to it the intention that a court should register a judgment which had been satisfied or had become unenforceable at the date when the court makes the decision to register the judgment merely because, at the time when the application was filed, the judgment was unpaid and enforceable." [8]
[15] The parties agreed, not surprisingly, that the application to register could not proceed as the judgment debts had been paid. The actions of Ms Chow in paying the judgment debts did not have the character of advancing the proceedings in Queensland but, rather, of bringing them to an end. On the authorities I have referred to above, the payment of the judgments in Papua New Guinea cannot be regarded as a step in the proceedings.
[16] Seeto Kui points to four other matters which it says amounted to a step in the proceedings.
[17] First, there was the engagement of a cost assessor who apparently prepared an assessment.
[18] Secondly, a lengthy affidavit was prepared in 2014. It responded to matters raised in correspondence from Ms Chow in respect of the proceedings in Papua New Guinea and was, it was argued, necessary in order to demonstrate the nature of the matters being considered.
[19] Thirdly, Seeto Kui relies upon a "without prejudice" letter from the solicitors for Ms Chow of 14 June 2013. This was a letter, in response to another "without prejudice" letter, which was concerned with responding to an offer made by Seeto Kui. It does no more than point out some inconsistencies in the approach taken by Seeto Kui in its calculations and questions how so much could have been expended by way of costs in the absence of any substantial work having been done.
[20] Fourthly, the applicant relies on two letters of May and June 2013, in which each party made offers which were unaccepted.
[21] The engagement of the cost assessor and the preparation of an affidavit fall within that category of events described by McPherson SPJ in Citicorp Australia Limited v Metropolitan Public Abattoir Board[9] where his Honour said:
"I am, however, unable to accept that acts done in the recesses of a solicitor's office partake of the character of a proceeding simply because they may, from the standpoint of the party for whom that solicitor is acting, be supposed to carry the action forward. That is particularly so where the act in question has, so far as the other or the court is aware, no readily discernible impact on the progress of the action."[10]
[22] As for the unaccepted offers and the "without prejudice" letter of 14 June 2013, they are, for these purposes like an unaccepted repudiation of a contract, that is, "a thing writ in water and of no value to anybody...".[11]
[23] It follows, then, that no step has been taken in the proceedings for a period of more than two years before this application for costs was brought. Seeto Kui needs leave to proceed.
[24] The factors which might be considered in deciding whether or not to grant leave were listed by Atkinson J in Tyler v Custom Credit Corp Ltd.[12] She said:
"[2] When the Court is considering whether or not to dismiss an action for want of prosecution or whether to give leave to proceed under Uniform Civil Procedure Rules ("UCPR") r 389, there are a number of factors that the Court will take into account in determining whether the interests of justice require a case to be dismissed. These include:
(1) how long ago the events alleged in the statement of claim occurred and what delay there was before the litigation was commenced;
(2) how long ago the litigation was commenced or causes of action were added;
(3) what prospects the plaintiff has of success in the action;
(4) whether or not there has been disobedience of Court orders or directions;
(5) whether or not the litigation has been characterised by periods of delay;
(6) whether the delay is attributable to the plaintiff, the defendant or both the plaintiff and the defendant;
(7) whether or not the impecuniosity of the plaintiff has been responsible for the pace of the litigation and whether the defendant is responsible for the plaintiff's impecuniosity;
(8) whether the litigation between the parties would be concluded by the striking out of the plaintiff's claim;
(10) whether or not the delay has been caused by the plaintiff's lawyers being dilatory. Such dilatoriness will not necessarily be sheeted home to the client but it may be. Delay for which an applicant for leave to proceed is responsible is regarded as more difficult to explain than delay by his or her legal advisers;
(11) whether there is a satisfactory explanation for the delay; and
(12) whether or not the delay has resulted in prejudice to the defendant leading to an inability to ensure a fair trial.
The court's discretion is, however, not fettered by rigid rules but should take into account all of the relevant circumstances of the particular case including the consideration that ordinary members of the community are entitled to get on with their lives and plan their affairs without having the continuing threat of litigation and its consequences hanging over them." (citations omitted).
[25] In this application, the most important of these factors is the prospects of success the applicant had. Although this application seeks an order for costs, the underlying judgments for which registration had been sought must be examined.
[26] The obvious problem for Seeto Kui is that it was not the successful plaintiff in three of four matters in which default judgment was obtained. A preliminary requirement for the registration of any foreign judgment is that the applicant must be the judgment creditor - see s 6 of the Act.
[27] "Judgment creditor" is defined in s 3 of the Act in this way:
"judgment creditor, in relation to a judgment, means the person in whose favour the judgment was given, (whether or not a sum of money is payable under the judgment) and includes a person in whom the rights under the judgment have become vested by succession, assignment or otherwise."
[28] Of the four default judgments, Ardrossan is the judgment creditor in two matters and Mainland Plumbing is for a third. Seeto Kui seeks to explain its predicament in this way. It says that there was an amalgamation of Ardrossan, Mainland Plumbing, Seeto Kui and two other companies in March 2005. The applicant in this matter is the amalgamated company. According to s 238 of the Companies Act 1997 (PNG) the effect of amalgamation is:
"On the date shown in a certificate of amalgamation-
(b) where it is the same as a name of one of the amalgamating companies, the amalgamated company has the name specified in the amalgamation proposal; and
(c) the Registrar shall remove the amalgamating companies, other than the amalgamated company, from the register, and otherwise give effect to the amalgamation; and
(d) the amalgamated company succeeds to all the property, rights, powers, and privileges of each of the amalgamating companies; and
(e) the amalgamated company succeeds to all the liabilities and obligations of each of the amalgamating companies; and
(f) proceedings pending by, or against, an amalgamating company may be continued by, or against, the amalgamated company; and
(g) a conviction, ruling, order, or judgment in favour of, or against, an amalgamating company may be enforced by, or against, the amalgamated company; and
(h) any provisions of the amalgamation proposal that provide for the conversion of shares or rights of shareholders in the amalgamating companies have effect according to their tenor." [13] (emphasis added)
[29] Both parties accepted that, notwithstanding the command in s 238(c) to the Registrar to remove the amalgamating companies from the register, this did not happen.
[30] Mr Le Plastrier argued that s 238 conferred on Seeto Kui all the rights and liabilities of Ardrossan and Mainland Plumbing. So much can be accepted, but, the ordinary principles of interpretation would confine that endowment to those rights and liabilities which existed at the time of amalgamation.
[31] The applicant's own material shows that the claims by Ardrossan and Mainland Plumbing concerned supplies made after amalgamation.
[32] The Ardrossan claims were for the supply of materials from September 2008 to March 2009 in one claim, and for a period of eleven days in December 2008 in the other. Mainland Plumbing's Statement of Claim asserts an indebtedness for the supply of materials from September 2008 to January 2009. Thus, on the applicant's own material it asserts that Ardrossan and Mainland Plumbing were still operating more than three years after the amalgamation. Further, these claims by Ardrossan and Mainland are supported by the affidavit of Ms Janson, the applicant's lawyer in Papua New Guinea. There is nothing to suggest that the rights claimed by either Ardrossan or Mainland Plumbing, which became secured by the default judgments, vested in Seeto Kui at any time.
[33] In summary, Seeto Kui is not the person in whose favour three of the four judgments were given and the rights in those judgments have not vested in Seeto Kui. It follows, then:
- (a) that Seeto Kui is not a judgment creditor in those matters,
- (b) it would have failed in its application to register those three judgments, and
- (c) it could not have obtained an order for costs in those matters.
[34] The remaining judgment which Seeto Kui would have been entitled to register was for an amount of K32,252.72, which is the equivalent of approximately $A15,000.
[35] The respondent raises the question of whether the applicant could have registered the remaining judgment in light of the payment by Ms Chow of the judgment debts. The originating application was filed on 4 May 2012. That application was adjourned on at least seven separate occasions. The default judgments were satisfied in full in May 2013 and Ms Chow made a offer to settle the applicant's costs for $5,000. As I have already found, no step in the proceeding was taken by Seeto Kui until it sought to relist this matter on 19 February 2015.
"A judgment is not to be registered if at the date of the application:
(a) it has been wholly satisfied; or
(b) it could not be enforced in the country of the original court."
[37] As I have noted above, in Ellis v Dariush-Far, Keane JA (with whom Williams JA and Daubney J agreed) held that "the date of the application" in s 6(6) of the Act is the date on which an application for registration is heard and determined. It follows, then, that no application could have been successful after May 2013 as there was no judgment to register. The material relied upon by Seeto Kui in its application for costs does not demonstrate what costs, if any, were incurred by it (and it alone) in the period from the filing of the originating application until the payment of the default judgments.
[38] There has been considerable delay in this matter. The application to register the judgments was not made until nearly three years after the default judgments had been entered. The delay which ensued from about July 2012 to April 2013 is explicable by the actions taken by Ms Chow in Papua New Guinea to set aside the default judgments, and to obtain a stay of execution. That stay was not vacated until May 2013. At that point, Seeto Kui could have moved to register its solitary judgment, but the amount of the judgment was satisfied by no later than 23 May 2013. The activity of Seeto Kui from that point on was very limited and, although some of the blame was cast upon the applicant's lawyers in Papua New Guinea, the delay in bringing the matter to court was lengthy and, in the most part, unexplained.
[39] The matters which are of most importance in deciding whether or not leave should be given are:
- (a) the inevitable inability to register the judgments in the names of Ardrossan and Mainland Plumbing;
- (b) the incapacity to register the judgment in favour of Seeto Kui after May 2013; and
- (c) the unsatisfactory explanation for delay between May 2013 and February this year.
[40] The work done by Seeto Kui between May 2013 and February this year consisted mostly of attempts to quantify the costs but which, in turn, has only led to a substantial increase in the costs.
[41] Ms Chow was entitled to assume that if she paid the default judgments that that would be the end of the matter. As Atkinson J observed in _Tyler, "..._members of the community are entitled to get on with their lives and plan their affairs without having the continuing threat of litigation and its consequences hanging over them". This is a case in which that is of importance.
[11] Howard v Pickford Tool Co Limited [1951] 1 KB 417 at 421.
[14] Tyler v Custom Credit Corp Ltd above, 12 at [2].
Seeto Kui (Holdings) Ltd
Chow [2015] QSC 193
[36] Section 6(6) of the Act provides:
[42] The applicant has not demonstrated that it should have leave.
[43] I dismiss the application for leave to proceed. It follows that the application for a costs order must also be dismissed.