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High Court of New Zealand Decisions |
IN THE HIGH COURT OF NEW ZEALAND
AUCKLAND REGISTRY
CIV 2008-404-3725
UNDER the Reciprocal Enforcement of Judgments
Act 1934
BETWEEN SEAN MORGAN
Judgment Creditor
AND BRIERLEY HOLDINGS LIMITED
Judgment Debtor
Hearing: 8 June 2009
Counsel: G D Wadsworth and S F Learmonth for Judgment Creditor
J A Knight and
M H McRandle for Judgment Debtor
Judgment: 1 September 2009
JUDGMENT OF HEATH J
This judgment
was delivered by me on 1 September 2009 at 3.30pm pursuant to Rule 11.5 of the High
Court
Rules
Registrar/Deputy Registrar
Solicitors:
Kennedy's, PO Box 3158, Auckland
Chapman Tripp,
PO Box 993, Wellington
MORGAN V BRIERLEY HOLDINGS LIMITED HC AK CIV 2008-404-3725 1 September 2009
Introduction
[1] Mr
Morgan seeks an order registering two judgments given in his favour by
the Supreme Court of New South Wales. Brierley
Holdings Ltd, the alleged
judgment debtor, opposes the application.
[2] On 5 October 1998, Mr Morgan was employed by Union Shipping
(New
Zealand) Ltd (Union Shipping NZ) as a seaman. He was working on a coal barge at
the Port Kembla Coal Terminal, in New South
Wales. Coal was being unloaded
from the barge, through the use of a mechanical conveyor belt. Mr Morgan was
physically injured when
the conveyor belt malfunctioned. His arm became caught in
the conveyor belt rollers, causing severe injury.
[3] The law on personal
injury claims in New South Wales and New Zealand is
very different. In New Zealand, there is a no fault compensation regime created
by
statute. In New South Wales, juries continue to hear personal injury claims and, if
successful, award damages.
The proceedings
in New South Wales
[4] Mr Morgan brought a personal injury claim in the Supreme Court of New
South Wales, to recover damages
for alleged negligence by the employer. Union
Shipping NZ (a company registered in New Zealand) protested the jurisdiction of the
New South Wales Courts.
[5] The protest was based on two grounds:
a) the applicable law was that of New Zealand;
and
b) New Zealand was the most appropriate forum.
On the first of those grounds, Union Shipping NZ contended that
Mr Morgan's
remedies were limited to those available under the New Zealand accident
compensation scheme.
[6] Union Shipping
NZ's protest to jurisdiction was heard by Sperling J, in
March 2001. In a judgment given on 4 May 2001, the Judge held that the law
of
New South Wales applied and that the Supreme Court of New South Wales was the
most appropriate forum to determine Mr Morgan's
claims.
[7] Union Shipping NZ appealed to the Court of Appeal of New South Wales.
The appeal was dismissed on 14 June 2002.
[8] After the Court of Appeal's decision, Union Shipping NZ elected to take no
steps in the substantive proceeding. Not
having contested the merits of the
proceeding, Union Shipping NZ has never submitted to the jurisdiction of the New
South Wales Courts.
[9] On 21 January 2003, the Supreme Court entered judgment, by default,
against Union Shipping NZ. Judgment was entered for
both damages and costs, to
be assessed.
[10] On 28 July 2003, the Supreme Court ordered that Union Shipping Group Ltd
be substituted
as the defendant in the proceeding, in the place of Union Shipping NZ.
Union Shipping Group Ltd had been formed as a result of an
amalgamation of nine
different companies, including Union Shipping NZ, under Part 13 of our Companies
Act 1993.
[11] On 20 September
2004, leave was granted to Mr Morgan to proceed against
Union Shipping Group Ltd and to enforce the Supreme Court costs order against
Union Shipping
Group Ltd, as if the judgments had been entered against that
company.
[12] On 11 October 2005, the Supreme Court appointed
a costs assessor to
determine the party and party costs to which Mr Morgan was entitled in the
substantive proceeding.
[13]
Mr Morgan's claim for damages was assessed at $AUD1,344,046. On 9
March 2006, the Supreme Court ordered Union Shipping Group Ltd
to pay that sum,
plus the assessed costs. Some costs, in relation to the first instance and appellate
processes, have been fixed.
They total $AUD61,428.19.
[14] On 28 February 2007, subsequent to the entry of judgment, Union Shipping
Group Ltd amalgamated
with two other companies, to become Brierley Holdings
Ltd. Mr Morgan contends that Brierley Holdings has become the judgment debtor,
even though no formal orders in that regard have been made in the New South Wales
Courts.
Why is registration opposed?
[15]
Brierley Holdings opposes the application on three broad bases:
a) First, there is no evidence that the judgments
would be enforceable
against Brierley Holdings, as a matter of New South Wales Law.
b) Second, it
contends that, notwithstanding the "protest" judgments, the
Supreme Court of New South Wales lacked jurisdiction
to hear and
determine the personal injury claim.
c) Third, it would be contrary to New Zealand public
policy to register a
foreign judgment against a New Zealand employer arising out of a
personal
injury by accident, when the employee has received some
recompense for the same injury under the New Zealand accident
compensation scheme.
The factual relevance of the accident compensation claim
[16] At the time that Mr Morgan
was employed by Union Shipping NZ, he lived
with his family in Brisbane. Occasionally, he would travel to New Zealand to visit
his
wider family and friends. Immediately after the accident, Mr Morgan remained
in Australia, receiving medical treatment in both Wollongong
and Brisbane.
[17] In December 1998, Mr Morgan returned to New Zealand and was treated at
Nelson Hospital. He continued to live
in Nelson while he recuperated, returning to
Brisbane in March 1999.
[18] Between March 1999 and March 2000, with the exception
of three or four
visits to New Zealand for medical treatment, Mr Morgan remained in Brisbane.
Between March and July 2000, he moved
back to New Zealand to have surgery to
remove a metal plate from his arm. Since July 2000, Mr Morgan has lived in
Queensland with
his family.
[19] At the time of the accident Mr Morgan was a member of the New Zealand
Seafarers' Union. As part of the Collective
Employment Agreement between that
Union and Union Shipping NZ, provision was made for an employee to be entitled to
benefits provided
by the Accident Rehabilitation and Compensation Insurance Act
1992, the accident compensation statute in force at the time of Mr
Morgan's injury.
[20] Although Mr Morgan received accident compensation payments while in
New Zealand, it has always been understood
that he would reimburse the
Corporation from any successful personal injury claim brought in New South Wales.
The extent of compensation
requiring reimbursement is relatively high:
compensation for inability to work resulted in payment of $NZD210,419.12 between
August
1999 and late 2005. Mr Morgan also received treatment and rehabilitation
costs of $NZD33,487.89.
[21] During the course of the
hearing on 8 June 2009, Mr Knight, for Brierley
Holdings, withdrew the opposition based on the allegation of "windfall" recovery
on
the grounds that Mr Morgan was required to reimburse the Corporation out of any
recovery from the Australian litigation.
Registration
of foreign judgments
[22] Mr Morgan's application is made under s 4(1) of the Reciprocal Enforcement
of Judgments Act 1934 (the Act). It is accepted that
s 4 applies to a judgment
entered in New South Wales.
[23] Section 4(1) provides:
4 Application for, and effect of,
registration of judgment
(1) A person, being a judgment creditor under a judgment to which this
Part of this Act applies,
may apply to the High Court at any time within 6
years after the date of the judgment, or, where there have been proceedings
by way of appeal against the judgment, after the date of the last judgment
given in those proceedings, to have the
judgment registered in the High
Court, and on any such application the said Court shall, subject to proof of
the prescribed
matters and to the other provisions of this Act, order the
judgment to be registered:
Provided that a judgment shall
not 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.
...
[24] Ordinarily, registration of a foreign
judgment is ordered on proof of formal
requirements. Once registered, a judgment debtor may apply to the High Court to
have registration
set aside. In this case, for reasons of efficiency, the parties have
agreed to argue, on the application to register, issues that
would ordinarily be
addressed on an application to set aside registration. As to the appropriate
procedure, see generally,
Laws NZ, Conflict of Laws: Jurisdiction and Foreign
Judgments, at paras 47-53 (inclusive).
[25] Section 6 of the Act sets out
the grounds on which a judgment debtor may
apply to set aside a registered judgment. Section 6(1)(b) and (e) is relevant to the
present
application:
6 Cases in which registered judgments must, or may, be set aside
(1) On an application in that
behalf duly made by any party against whom
a registered judgment may be enforced, the registration of the judgment shall
be set aside if the High Court is satisfied--
...
(b) That the Courts of the country of the original Court
had no jurisdiction
in the circumstances of the case; or
...
(e) That the enforcement of the judgment,
not being a judgment of a
superior Court or an inferior Court of Australia under which Australian tax is
payable, would
be contrary to public policy in New Zealand; or
....
[26] Section 6(3) of the Act provides a list of circumstances in
which a foreign
Court is deemed to have jurisdiction:
(3) For the purposes of this section the Courts of the country of the
original
Court shall, subject to the provisions of subsection (4) of this section, be
deemed to have had jurisdiction--
(a) In the case of a judgment given in an action in personam--
(i) If the judgment debtor, being a defendant
in the original Court,
submitted to the jurisdiction of that Court by voluntarily appearing
in
the proceedings otherwise than for the purpose of protecting, or
obtaining the release of, property seized, or threatened
with seizure,
in the proceedings or of contesting the jurisdiction of that Court; or
(ii) If the
judgment debtor was plaintiff in, or counterclaimed in,
the proceedings in the original Court; or
(iii) If the judgment debtor, being a defendant in the original
Court, had before the commencement of the
proceedings agreed, in
respect of the subject-matter of the proceedings, to submit to the
jurisdiction
of that Court or of the Courts of the country of that
Court; or
(iv) If the judgment debtor, being
a defendant in the original Court,
was at the time when the proceedings were instituted resident in, or
being a body
corporate had its principal place of business in, the
country of that Court; or
(v) If the judgment
debtor, being a defendant in the original Court,
had an office or place of business in the country of that Court
and
the proceedings in that Court were in respect of a transaction
effected through or at that
office or place:
(vi) If Australian tax is payable under the judgment:
(b) In the case of a judgment
given in an action of which the subject-matter
was immovable property or in an action in rem of which the subject-matter
was movable property, if the property in question was at the time of the
proceedings in the original Court situate in
the country of that Court:
(c) In the case of a judgment given in an action other than any such action
as is mentioned
in paragraph (a) or paragraph (b) of this subsection, if the
jurisdiction of the original Court is recognised by the law of
the registering
Court.
[27] Notwithstanding the concurrent jurisdictional findings of the Supreme Court
and Court of Appeal
of New South Wales, Brierley Holdings contends that
jurisdiction did not exist (at least for the purposes of registration of the
judgments in
New Zealand) because none of the circumstances set out in s 6(3) apply.
Is Brierley Holdings the "judgment debtor"?
[28] The first question is whether Brierley Holdings is the party against which
proceedings under the Act should be taken. As
mentioned in para [10] above, Union
Shipping Group Ltd and two other companies amalgamated on 28 February 1997 to
form Brierley Holdings.
[29] Part 13 of the Companies Act 1993 governs the amalgamation procedure.
Section 219 provides:
219 Amalgamations
Two or more companies may amalgamate, and continue as one company,
which may be one of the amalgamating companies, or
may be a new
company.
[30] After amalgamation has been completed, the Registrar of Companies issues a
certification of
incorporation in respect of the amalgamated company. A certificate,
to that effect, has been issued in respect of the amalgamation
that led to the
incorporation of Brierley Holdings, as an amalgamated company.
[31] The effect of a certificate of amalgamation
is set out in s 225 of the
Companies Act. Relevantly, for the purposes of this case:
225 Effect of certificate of amalgamation
On the date shown in a certificate of amalgamation,--
(a) The amalgamation is effective; 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
.... (my emphasis)
[32] The combined effect of s 225(e), (f) and (g)
means, in my view, that Brierley
Holdings became the "judgment debtor" upon the issue of the certificate of
amalgamation. The effects
are not limited to debts incurred or judgments entered in
New Zealand.
[33] There is no reason why, as a matter of New Zealand
law, the amalgamated
company should be in any better position, in relation to its potential liability to
another, merely because
a formal order has not been made in a foreign proceeding to
substitute the amalgamated company's name as a defendant.
[34] I
hold that Brierley Holdings is the judgment debtor, for the purposes of this
application.
Jurisdiction
[35] The central question
is whether it is necessary to meet at least one of the
criteria in s 6(3) to obtain an order registering a foreign judgment. To put the point
another way, does s 6(3) represent an exhaustive
list of circumstances in which the
jurisdiction of the foreign Court is accepted for registration purposes?
[36] I am satisfied
that the judgment obtained in New South Wales does not fall
within any of the criteria set out in s 6(3)(a). Although Mr Wadsworth,
for Mr
Morgan, submitted that s 6(3)(a)(v) applied, I hold it does not. There is no evidence
that Union Shipping NZ had an "office
or place of business" in New South Wales,
through which a transaction to which the proceeding relates was effected. The
transitory
presence of a vessel owned by a ship-owning company in foreign waters
cannot be enough to amount to that company having "an office
or place of business"
in the foreign jurisdiction.
[37] Section 6(1)(c) makes it clear that a judgment of a foreign Court ought
not to
be registered in New Zealand if "in the circumstances of the case", "the original
Court had no jurisdiction". Section
6(3) specifies circumstances in which the
original Court will be deemed to have had jurisdiction.
[38] In Gordon Pacific Developments
Pty Ltd v Conlon [1993] 3 NZLR 760 (HC),
Henry J considered a similar question, in the context of an application to enforce a
judgment given in the District Court at
Southport, in Queensland. The report
suggests that the defendant elected to take no steps rather than to protest
the
Queenland Court's jurisdiction.
[39] Henry J followed the approach taken in Sharps Commercials Ltd v Gas
Turbines Ltd [1956] NZLR 819 (SC) and Société Co-operative Sidmetal v Titan
International Ltd [1966] 1 QB 828 (QBD). Having paraphrased observations made
by McGregor and Widgery JJ respectively, in those cases, Henry J continued, at 765:
If the provisions of s 6(3)(a) concerning judgments in personam were not
intended to be exhaustive, there would be
no need for its detailed provisions,
which largely but not entirely incorporate the common law. The exhaustive
nature
of the provisions of both paras (a) and (b) is also made clear by para
(c), which in contrast refers in general terms to a
jurisdiction which is
recognised by New Zealand law. If some other basis of recognition
additional to those specified
in paras (a) and (b) were to qualify under those
heads, then an appropriate provision would have been included.
The
intention of s 6(3) is clear. Jurisdiction in respect of judgments in
personam is recognised under and only under para (a);
in respect of
judgments where the subject-matter is immovable property or movable
property in the case of an action
in rem there is recognition under para (b): in
actions not under either para (a) or para (b) jurisdiction must be recognised
by the existing law. It is a comprehensive provision. It is common ground
that the present judgments do not meet
any of the criteria set out in s 6(3)(a),
and accordingly the jurisdiction of the Queensland District Court cannot be
recognised under that head.
[40] Henry J also concluded that there was no general principle of comity which
could avail a plaintiff
in the circumstances before him. That proposition is amply
supported by the authorities, for example Adams v Cape Industries Plc
[1990] 2
WLR 765 (Ch D and CA).
[41] During the course of the hearing, I expressed concerns about whether the
prior authorities had dealt specifically
with the particular problem that had emerged
in this case. In particular, I discerned that there were no other authorities that had
considered whether full argument on a contested protest to jurisdiction application
would make any difference to the outcome of a
registration application. I invited
counsel to confer on this issue and to provide further submissions in writing, should
they wish
to do so. Both counsel, subsequently, filed helpful further submissions.
[42] The authorities to which Mr Knight has now referred
me demonstrate clearly
that his argument is correct. Not only are the authorities consistent on the need for
s 6(3) to be interpreted
in an exhaustive fashion, but there has been no criticism of
that approach in any of the leading texts on conflict of laws.
[43]
The fundamental proposition is that, in determining its own jurisdiction, the
foreign Court applies its own conflict of laws' rules,
which may or may not be the
same as others applied in New Zealand. The position was put most strongly by
Staughton LJ, in Jet Holdings
Inc v Patel [1989] 2 All ER 648 (CA) at 652:
Where the objection to enforcement is based on jurisdiction, that is r 43, it is
to my mind plain that
the foreign court's decision on its own jurisdiction is
neither conclusive nor relevant. If the foreign court had no jurisdiction
in the
eyes of English law, any conclusion it may have reached as to its own
jurisdiction is of no value. To put it
bluntly, if not vulgarly, the foreign court
cannot haul itself up by its own bootstraps.
[44] Having regard to the increase
in trade between Australia and New Zealand,
even since Gordon Pacific Developments Pty Ltd v Conlon was decided, I retain
reservations
about the appropriateness of this approach, particularly when there is
likely to be little difference between conflicts of laws principles
applied in Australia
and New Zealand and a considered judgment has been given by an Australian Court,
after hearing full argument.
[45] However, my concerns have been assuaged by a recent Treaty entered into
between Australia and New Zealand, whereby a wider
jurisdiction to register
judgments given on each side of the Tasman will be conferred: Trans-Tasman Court
Proceedings and Regulatory
Enforcement Treaty. It is clear from a Working Group
report of December 2006 that led to that Treaty, that the type of problem that
has
arisen in this case was seen as a reason to extend recognition of mutual judgments in
the two jurisdictions.
[46] It follows
that Mr Morgan's application must fail.
Public policy
[47] It is unnecessary to deal with this issue in detail, having regard
to my findings
on the s 6(3) point. I express a view briefly, in case the jurisdiction point were taken
on appeal.
[48] In
my view, it would not have been contrary to public policy to allow Mr
Morgan to register his judgment. He was injured within the
jurisdiction of the New
South Wales Courts and it was open to him to proceed in that jurisdiction.
[49] It is clear that the
Accident Compensation Corporation was aware of the issue
of proceedings in New South Wales and that arrangements were made for
reimbursement
should damages have been successfully obtained.
Result
[50] For the reasons given, the application is dismissed.
[51]
Costs are awarded in favour of Brierley Holdings on a 2B basis, together with
reasonable disbursements. Both costs and disbursements
shall be fixed by the
Registrar. I do not certify for second counsel.
___________________________
P R Heath J
Delivered at 3.30pm on 1 September 2009
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