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Airborne Engines Ltd v Heli Niugini Ltd 1-12438 [2019] PGNC 252; N8055 (16 August 2019)

N8055

PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]

WS 331 of 2018 (COMM)

BETWEEN:
AIRBORNE ENGINES
LIMITED
Plaintiff

AND:
HELI NIUGINI LIMITED
1-12438
Defendant

Waigani: Hartshorn J
2019: 16^th August

Application to dismiss this proceeding

Cases Cited:
Papua New Guinea Cases

Kerry Lerro v. Stagg &Ors (2006) N3050
Mt Hagen Urban Local Level Government v. Sek No. 15 (2009) SC1007
O.M. Holdings Ltd v. Noki Minimbi (2013) N6783
Siu v. Wasime Land Group Incorporated (2011) SC1107
Takori v.Yagari & Ors (2008) SC905

Overseas Cases

Hubbuck & Sons, Ltd v. Wilkinson, Heywood & Clarke Ltd [1898] UKLawRpKQB 176; [1899] 1 Q.B. 86
Rubin and Anor v. Euro finance SA and Ors [2012] UKSC 46

Counsel:

Mr. S. Nutley, for the Plaintiff
Mr. I.R. Shepherd, for the Defendant

16^th August, 2019

1. HARTSHORN J: This is a decision on a contested application to dismiss this proceeding pursuant to Order 12 Rule 40(1) (a), (b) or (c) National Court Rules.
   

Background

2. The plaintiff pleads that it sued the defendant in the Supreme Court of British Columbia, Canada and obtained a default judgment against the defendant on 31^st May 2017. On 22^nd August 2017 the said Court ordered that the defendant pay to the plaintiff the total sum of CAN $341,089.11 together with the plaintiff’s certain costs.
   
3. The plaintiff further pleads that despite demand the defendant has failed and refused to pay the judgment debt and the plaintiff claims CAN $341,089.11 or its Papua New Guinea Kina equivalent.
   

This application

4. The defendant submits that this proceeding should be dismissed as:
   
   1. the defendant did not appear or submit to the laws of the Courts in British Columbia;
      
   2. the relevant National Court Rules must be followed for registration of a judgment which may be enforced under the provisions of the Reciprocal Enforcement of Judgements Act;
      
   100. if the judgment is unable to be so registered, a foreign judgment for a liquidated demand creates a debt between the parties. Proceedings may be commenced at common law in some circumstances but cannot be enforced where the judgment relied on was obtained in default of appearance;
        
   4. the judgment is either unenforceable in Papua New Guinea or registration is required first pursuant to the National Court Rules. There is no evidence of such registration.
      
5. The plaintiff submits that the application to dismiss should be refused as:
   
   1. a judgment from a British Columbia Court is not a judgment from a prescribed court within a prescribed jurisdiction and so the Reciprocal Enforcement of Judgements Act does not apply;
      
   2. the plaintiff does not seek to enforce the British Columbia judgment, but to present the judgment in evidence. The defendant was served with the British Columbia proceeding and the default judgment was properly obtained in the jurisdiction.
      

Law

Order 12 Rule 40National Court Rules

6. In regard to Order 12 Rule 40 National Court Rules upon which the defendant relies, there are numerous authorities in respect of the principles to be considered. I make reference to the following cases: Kerry Lerro v. Stagg &Ors (2006) N3050, Takori v.Yagari & Ors (2008) SC905, Mt Hagen Urban Local Level Government v. Sek No. 15 (2009) SC1007 and Siu v. Wasime Land Group Incorporated (2011) SC1107. The Court in Mount Hagen v. Sek (supra) in paragraphs 27 to 30 conveniently sets out the requirements of Order 12 Rule 40 (1) (a), (b) and (c) as follows:
   

“27. The terms “vexatious”, “frivolous”, “abuse of the process of the Court” and “reasonable cause of action” under O.12 r.40 of the National Court Rules have been judicially considered, defined and expounded in a number of decisions in both the National and Supreme Courts. These cases include Ronny Wabia v. BP Exploration Co. Limited & 2 Others [1998] PNGLR 8 (N1697); PNG Forest Products Pty Ltd and Another v. The State and Genia [1992] PNGLR 85; Gabriel Apio Irafawe v. Yauwe Riyong (1996) N1915; Eliakim Laki and 167 Others v. Maurice Alulaku and Others (2002) N2001; Kiee Toap v. The Independent State of Papua New Guinea & Another (2004) N2766; Kerry Lerro trading as Hulu Hara Investments Limited v. Philip Stagg, Valentine Kambori& The State (2006) N3050; Philip Takori& Others v. Simon Yagari& 2 Others (2008) SC 905. These cases say the same thing.

28. The law with regard to an application for dismissal of proceedings based on O.12 r.40 is settled in our jurisdiction. We note that the principles are succinctly set out in Kerry Lerro’s case (supra) and which has more recently been approved and applied by the Supreme Court in Philip Takori’s case (supra).

29. The phrase ‘disclosing a reasonable cause of action’ consists of two parts; cause of action and form of action. A cause of action is defined as a legal right or form of action known to law whereby a plaintiff in a statement of claim must plead all necessary facts and legal elements or ingredients to establish or prove his claim. The principles stated by these cases can be summarized as follows:

(i) A plaintiff or claimant should not be driven from the judgment seat in a summary manner and that the Court should be cautious and slow in exercising its discretionary power.

(ii) The Court has an inherent jurisdiction to protect and safeguard its processes from abuse.

(iii) The purpose of O.12 r.40, is to give the Court power to terminate actions or claims which are plainly frivolous or vexatious or untenable.

(iv) A frivolous claim is one that is characterized as a claim that is plainly and obviously untenable, that cannot possibly succeed and bound to fail if it proceeds to trial.

(v) A vexatious claim is one that is said to be a sham and cannot succeed where it seeks to merely harass the opposing party and put that party to unnecessary trouble and expense in defending or proving the claim.

30. In an application under O.12 r.40 of the NCR, the Court may dismiss a proceeding or action where it is satisfied that the pleading in the statement of claim is seriously wanting where a necessary fact or legal element has not been pleaded.”

7. Further, notwithstanding all of the various judicial pronouncements since, the position is succinctly summarised in Hubbuck & Sons Ltd v. Wilkinson, Heywood & Clarke, Ltd [1898] UKLawRpKQB 176; [1899] 1 Q.B. 86. At 90-91 the Court of Appeal said:

“The second and more summary procedure is only appropriate to cases which are plain and obvious, so that any master or judge can say at once that the statement of claim as it stands, is insufficient, even if proved, to entitle the plaintiff to what he asks.”

Consideration

8. The plaintiff has conceded that the Reciprocal Enforcements of Judgements Act does not apply in this instance as the Supreme Court of British Columbia is not a prescribed court within a prescribed jurisdiction under that Act.
9. The plaintiff submits that a director of the defendant had been personally served with the originating process in the British Columbia proceeding. Default judgment was entered in that proceeding in the absence of the defendant properly entering an appearance in defence. From the evidence, the director, Mr. Parameswaran Antharaman, was personally served at an address in Queensland, Australia.
10. The plaintiff submits that the present proceeding is filed, presenting into evidence the judgment of the Supreme Court of British Columbia, properly obtained in that jurisdiction. The material puts into evidence the details of the claim in the absence of a defence, after these matters were put to the defendant. The plaintiff seeks to obtain judgment against the defendant for the claim, which the plaintiff submits has already manifested itself in the default judgement in British Columbia, in this court.
11. The defendant submits that the defendant did not make an appearance in the British Columbia proceeding and did not submit to the jurisdiction of the Courts of British Columbia. The British Columbia judgment cannot be relied upon as it was obtained in default of an appearance by the defendant. A foreign court has no jurisdiction unless the defendant in the foreign proceeding had voluntarily appeared in court, it is submitted.
12. In Bullen & Leake, 12^th edition 1142-1143, cited by the defendant, it is stated:

“Foreign judgement by default. Where a person is sued in this country on a judgment against him in a foreign country for default of appearance, he may plead that the foreign court had no jurisdiction in respect of the subject-matter of the suit or of the parties (Ferguson v. Mahon [1839] EngR 91; (1839) 11 Ad. & E. 179);”

13. In O.M. Holdings Ltd v. Noki Minimbi (2013) N6783, I referred to the United Kingdom Supreme Court decision in Rubin and Anor v. Euro finance SA and Ors [2012] UKSC 46 in considering whether there had been a submission to jurisdiction. The decision considers in detail the common law concerning the enforcement of foreign judgments. The decision of the United Kingdom Supreme Court, the former House of Lords, is persuasive in this jurisdiction.
14. The following passage of Lord Collins, with whom Lord Walker and Lord Sumption agreed at [6]–[10], although lengthy, is worthy of reproduction:

“6. Under the common law a court of a foreign country has jurisdiction to give a judgment in personam where (among other cases) the judgment debtor was present in the foreign country when the proceedings were instituted, or submitted to the jurisdiction of a foreign court by voluntarily appearing in the proceedings. In the case of the 1933 Act the foreign court is deemed to have jurisdiction where the judgment debtor submitted to the jurisdiction by voluntarily appearing in the proceedings otherwise than for the purpose (inter alia) of contesting the jurisdiction; or where the judgment debtor was resident at the time when the proceedings were instituted, or being a body corporate has an office or place of business there: section 4(2)(a)(i),(iv).

The Dicey Rule

7. The general principle has been referred to on these appeals, by reference to the common law rule set out in Dicey, Morris & Collins, Conflict of Laws (14^th edition, 2006), as “Dicey’s Rule 36.” This was only by way of shorthand, because the rules in the 1933 Act are not quite identical, and in any event has been purely for convenience, because the Rule has no standing beyond the case law and common law which it seeks to re-state. What was Rule 36 now appears (incorporating some changes which are not material in this appeal) as Rule 43 in the new 15^th edition, and I shall refer to it as “the Dicey Rule.” So far as relevant, Rule 43 (Dicey, Morris and Collins, Conflict of Laws, 15^thed, 2012,para 14R-054) states:

“a court of a foreign country outside the United Kingdom has jurisdiction to give a judgment in personam capable of enforcement or recognition as against the person against whom it was given in the following cases:

First Case? If the person against whom the judgment was given was, at the time the proceedings were instituted, present in the foreign country.

Second Case? If the person against whom the judgment was given was claimant, or counterclaimed, in the proceedings in the foreign court.

Third Case? If the person against whom the judgment was given submitted to the jurisdiction of the court by voluntarily appearing in the proceedings.

Fourth Case? If the person against whom the judgment was given had before the commencement of the proceedings agreed, in respect of the subject matter of the proceedings, to submit to the jurisdiction of a court or of the courts of that country.”

8. .......

9. The theoretical basis for the enforcement of foreign judgments at common law is that they are enforced on the basis of a principle that where a court of competent jurisdiction has adjudicated a certain sum to be due from one person to another, a legal obligation arises to pay that sum, on which an action of debt to enforce the judgment may be maintained: Williams v Jones (1845) 13 M & W 628, 633 per Parke B; Godard v Gray (1870) LR 6 QB 139, 147, per Blackburn J; Adams v Cape Industries plc [1990] Ch 433, 513; Owens Bank Ltd v. Bracco [1992] 2 AC 443, 484, per Lord Bridge of Harwich. As Blackburn J said in Godard v Gray, this was based on the mode of pleading an action on a foreign judgment in debt, and not merely as evidence of the obligation to pay the underlying liability: LR6 QB 139, 150. But this is a purely theoretical and historical basis for the enforcement of foreign judgments at common law. It does not apply to enforcement under statute, and makes no practical difference to the analysis, nor, in my judgment, to the issues on these appeals.

10. Consequently, if the judgments in issue on the appeals are regarded as judgments in personam within the Dicey Rule, then they will only be enforced in England at common law if the judgment debtors were present (or if the 1933 Act applies, resident) in the foreign country when the proceedings were commenced or if they submitted to its jurisdiction.”

15. Then at [159] Lord Collins said:
    

“159. The general rule in the ordinary case in England is that the party alleged to have submitted to the jurisdiction of the English court must have “taken some step which is only necessary or only useful if” an objection to jurisdiction “has been actually waived, or if the objection has never been entertained at all”: Williams & Glyn’s Bank plc v Astro Dinamico Compania Naviera SA [1984] 1 WLR 438, 444 (HL) approving Rein v. Stein (1892) 66 LT 469, 471 (Cave J).”

16. In this instance it is not in issue that the British Columbia judgment is a judgment in personam. There is no evidence that the defendant was present in British Columbia when those proceedings were instituted, or that it has submitted to the jurisdiction of British Columbia by voluntarily appearing in those proceedings. The British Columbia default judgment is therefore not enforceable in Papua New Guinea. The evidence of that judgment, if accepted, would not lead to it being able to be enforced in this court. Consequently, I am satisfied that the plaintiff’s claim falls within the parameters of Order 12 Rule 40 National Court Rules. The defendant has properly made out that it is entitled to the relief which it seeks.
    

Orders

17. The court orders that:
    
    1. This proceeding is dismissed;
       
    2. The plaintiff shall pay the defendant’s costs of and incidental to this proceeding including the costs of this application;
       
    100. The time for entry of these orders is abridged to the time of settlement by the Registrar which shall take place forthwith.

__________________________________________________________________
Fiocco& Nutley: Lawyers for the Plaintiff
Ashurst Lawyers: Lawyers for the Defendant