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Reef Pacific Trading Ltd v Reef Pacific (Sydney) Ltd [1994] SBCA 2; CA-CAC 001 of 1994 (21 June 1994)

SOLOMON ISLANDS COURT OF APPEAL
CIVIL JURISDICTION

CIV. APP. (CA) 1 OF 1994

BETWEEN:

REEF PACIFIC TRADING LIMITED 1st Appellant
WOLFGANG MEINERS 2nd Appellant
JOAN MARIE MEINERS 3rd Appellant
DAVINIA PHILIP 4th Appellant
DANNY PHILIP 5th Appellant

AND:

REEF PACIFIC (SYDNEY) PTY LIMITED 1st Respondent
ROSA PRICE 2nd Respondent
GRAEME PRICE 3rd Respondent

Connolly P.

Delivered the day of 1994

Connolly, P. On 3 September 1993 Palmer J. refused to set aside a writ of fieri facias which the respondents had obtained for execution of the judgment of Muria C.J. It was alleged to have been obtained by fraud but it became apparent that the alleged fraud went to the judgment in the action. Security for costs had been ordered, doubtless because he plaintiffs were out of the jurisdiction. It now appears that while application to a bank for an appropriate guarantee had been made and was being processed it had not in fact been approved although the registrar had accepted the documents which he saw as complying with the order. Palmer J. however declined to find fraud in this connection. There was therefore no basis on which the judgment of 23 April 1992 could be denied its full force and effect and thus no basis on which the writ of execution to enforce it could be set aside.

Then on 27 January 1994 an application was made by the appellants to Palmer J. to set aside the judgment of 23 April 1992 under O.29 r. 12 of the High Court (Civil Procedure) Rules 1964. The appellants sought, after this long interval of time, to show a defence on the merits in a variety of ways. The first contention was that the corporate plaintiff in the action, the respondent Reef Pacific (Sydney) Pty. Limited, had not been in existence on 24 January 1991 when the contract sued on was allegedly made between it and the appellant, Reef Pacific Trading Limited. On the evidence, Palmer J. found that the respondent company was duly registered in New South Wales on 3 December 1990 under the name Lawnbit Pty. Limited. The fact that its name was subsequently changed could not, of course, mean that it was not in existence at the relevant date. It was also sought to show that the directors who had affixed the common seal to the contract were not then directors. However, his Lordship was not satisfied that this was made out. A related submission, that one of the directors, not being in Solomon Islands on 24 January 1991, had not attested the affixation of the seal on that date but at some later date, was dismissed by Palmer J. as immaterial, all formalities for the due execution of the contract under the corporate seal by the company in question having obviously been completed when the action was brought on it. A further ground was that it had been "fraudulently represented that the agreement was a draft agreement" and that it had then been "fraudulently altered". The contention was that the agreement had been conditional only and was not to be binding on the appellants until approved by their solicitors in Townsville. As to this, Palmer J. found on the evidence before him that no triable issue was raised having regard to the terms of the agreement and the form in which it was expressed and executed. Finally, it was contended that the appellant Wolfgang Meiners' signature to minutes of 22 January 1991 had been forged. He had however signed the contract of 24 January 1991 and his Lordship rightly concluded that even if the allegation were true, it could afford no defence to the action. Two additional grounds should be mentioned. The contract had not been stamped and the question of security for costs, which had been agitated before Palmer J. in the application which led to his decision on 3 September 1993, was again raised. His Lordship rightly declined to treat either circumstance as giving rise to a defence on the merits and the application under 0.29 r. 12 was therefore dismissed.

The final step in this long saga in the High Court was an application to Muria C.J. to set aside the judgment of Palmer J. delivered on 27 January 1994. Essentially, as the submission on behalf of the appellants plainly state, the argument before Muria C.J. was that the judgment of Palmer J. had been procured by fraud, trickery and deceit amounting to an abuse of the process of the court thereby attracting the inherent jurisdiction of the court to set aside judgments so obtained. This application was dismissed on 18 March 1994. In approaching the correctness of this last mentioned order which is the subject of an appeal to the Court of Appeal, an elementary principle must be borne in mind. Appeal is a creature of statute. Courts of coordinate jurisdiction do not sit on appeal from each other to determine whether the decision sought to be impugned was correctly given. When it is sought to attack a judgment by any process other than appeal to a higher court with jurisdiction to entertain an appeal on the ground that the judgment in question is erroneous, the applicant must, of necessity, rely upon matter which was not before the court which gave the judgment. It is not a question then of the judgment being wrong on he material before he court which gave it. It must be shown that the judgment was procured by fraud upon that court or some other form of abuse of process, but an allegation of fraud by one party against another which is litigated before a court unsuccessfully is not an allegation of fraud upon the court. The application to Muria C.J. was simply an attempt to re-litigate the case which was presented to Palmer J. It was rightly rejected by the learned Chief Justice on the authority of Reichel v. McGrath (1899) 14 App. Cas. 665.

When a party unsuccessfully sets up fraud he cannot, by way of attacking the decision which rejected his claim, apply to set the decision aside on the ground of the same fraud. That allegation has been litigated. In Kerr, Fraud and Mistake (7th ed.) p. 417 the well-known statement from the Duchess of Kingston's Case (1776) 2 Smith L.C. (13th ed.) at p. 651 is set out - "Fraud is an extrinsic collateral act which vitiates the most solemn proceedings of courts of justices." It is then said that in applying this rule "it matters not whether the judgment impugned has been pronounced by an inferior or by the highest court in the realm but in all cases it is competent for every court to treat as a nullity any judgment which can be clearly shown to have been obtained by manifest fraud, discovered after the judgment:

In Wentworth v. Rogers (No. 5), Kirby P. at p. 538 said, with the concurrence of Hope and Samuels JJ.A., after emphasising that particulars of the fraud claimed must be exactly given and the allegations strictly proved, went on:

"Secondly, it must be shown, by the party asserting that a judgment was procured by fraud, that there has been a new discovery of something material, in the sense that fresh facts have been found which, by themselves or in combination with previously known facts, would provide a reason for setting aside the judgment: see Lord Selbourne LC in Boswell v. Coaks (No.2) (1894) 6 R 167 at 170, 174; 86 LT 365, at 366, 368; Cabassi v. Vila [1940] HCA 41; (1940) 64 CLR 130 at 147; McDonald v. McDonald [1965] HCA 45; (1965) 113 CLR 529 at 533; Everett v. Ribbands (1946) 175 LT 143 at 145, 146; Birch v. Birch [1902] UKLawRpPro 9; [1902] P 130 at 136, 137-138; Ronald v. Harper [1913] VicLawRp 54; [1913] VLR 311 at 318. This rule has an ancient lineage: see eg, Shedden v. Patrick (1854) 1 Macq 535 at 615, 622; Halbury's Laws of England, 4th ed., vol 26, par 560 at 285. It is based upon a number of grounds. There is a public interest in finality of litigation. Parties ought not, by proceeding to impugn a judgment, to be permitted to relitigate matters which were the subject of the earlier proceedings which gave rise to the judgment. Especially should they not be so permitted, if they move on nothing more than the evidence upon which they have previously failed."

In Boughen v. Abel [1987] 1 Qd.R. 138 I had occasion, sitting as a judge of the Supreme Court of Queensland consider this type of problem. At p. 140 I cited a passage from the judgment of Herring C.J. in McHarg v. Woods Radio Pty Ltd [1948] VicLawRp 38; [1948] V.L.R. 496 at p. 498:

"In considering actions of this kind the Courts have naturally been pressed by the necessity in the public interest of putting some limit to litigation. And they have refused to allow such actions to proceed, unless satisfied that there was a reasonable probability of the fraud alleged being established. Thus when an application is made to stay proceedings, the burden is not on the defendant, as in an ordinary action, to show that the action is frivolous or vexatious or some other reason for staying it. The very fact that what the plaintiff seeks is to set aside a judgment binding upon him, is sufficient to place the onus upon him of showing that he has reasonable prospects of success. And to satisfy this onus the plaintiff must produce evidence of facts discovered since the judgment complained of , which raise a reasonable probability of the action succeeding - Birch v. Birch [1902] UKLawRpPro 9; [1902] P. 130 at pp. 135-6.

The question is:

"Has there been a new discovery of something material in this sense, that it would be a reason for setting aside the judgment if it were established by proof?"

I went on:

"The question thus formulated is in the language of Lord Selborne in Boswell v. Coaks (1894) 86 L.T. 365 n at 366.

The report of Boswell v. coaks is printed as a note to the decision in Birch v. Birch (1902) 86 L.T. 364. In that case Williams J. observed - 'And I think that the court ought to treat as frivolous and vexatious any cause of action in support of which the plaintiff does not produce evidence of facts discovered since the judgment which raise a reasonable probability of the action succeeding.' And Cozens-Hardy L.J., with whom Stirling L.J. agreed, after referring to Lord Selborne's speech said - 'It is the duty of the court to receive evidence pro and con as is material to the question whether there really has been, since the former judgment, a new discovery of something material to disturb the former judgment.' See also the report of Birch v. Birch in the law Reports [1902] UKLawRpPro 9; [1902] P. 130."

The fraud, trickery and deceit set up by the appellants against the decision of Muria C.J. of 18 March 1994 was the same as they have consistently attempted to prove from the beginning, namely the bringing of the original action on a non-existent contract, it not having been approved by their Townsville solicitors. The allegation was made in the defence which was held insufficient by the Learned Chief Justice on 23 April 1992. Whatever merit there may be in that case, the appellant's only remedy was to appeal against that judgment or apply under O.29 r. 12 to set it aside. The first remedy was never availed of and the second was unsuccessful after a careful hearing before Palmer J. The present appeal is against the judgment of Muria C.J. of 18 March 1994 which, quite rightly, refused the appellants the right to re-litigate an unsuccessful application under O.29 r. 12. No question of fraud upon the court was involved in this decision of Muria C.J. and it is plain both on the face of the notice of appeal and from the argument submitted for the appellants that it really seeks, out of time, to set aside the judgments of 23 April 1992 and 27 January 1994. This being the substance of the appeal, it is out of time by more than two years, in the course of which numerous transactions have been carried through which it would seek to reverse. It is superficially in time in the sense that it appeals against the most recent judgment being that of Muria C.J. of 18 March 1994, but the reversal of that decision would not achieve the result which the appellants actually seek and it is, as I have already said, plainly correct. No doubt it is brought in the form in which it is to avoid appealing directly against a decision which is now more than two years old. If it did so, the appellants would have to seek an extension of time of that magnitude to enable the appeal to be brought. This however is the substance of the appeal and on the analysis of the facts which I have made it is, in the words of Williams L.J. in Birch v. Birch, supra, frivolous and vexatious.

In all the circumstances, I order, pursuant to s. 19(g) of the Court of Appeal Act, that the notice of appeal be struck out.

(P.D. Connolly P.)