In The Matter of an Application by Timothy Mathew O’Dwyer trading as O’Dwyer & Bradley Solicitors of Brisbane, Australia v Arnold Theodorus Derks (2007) N3226

• Jurisdiction: Papua New Guinea
• Date: 14 June 2007
• Citation: (2007) N3226
• Docket Number: OS NO 750 OF 2005
• Court: National Court
• Year: 2007

Full Title: OS NO 750 OF 2005; In The Matter of an Application by Timothy Mathew O’Dwyer trading as O’Dwyer & Bradley Solicitors of Brisbane, Australia v Arnold Theodorus Derks (2007) N3226

National Court: Manuhu, J

Judgment Delivered: 14 June 2007

RULING

JUDGMENT—Reciprocal enforcement—Setting aside—Grounds—Natural justice—Insufficient notice—Public policy—Equitable fraud.

EVIDENCE—Reciprocal enforcement—Setting aside—Fraud—Standard of proof.

WORDS AND PHRASES—Fraud—Equitable fraud—Definitions—Distinctions.

Cases cited in the judgment:

Papua New Guinea cases

Ambrose Vakinap v Thaddeus Kambanei (2004) N3094; Bexhill Funding Group Limited v Basumel Limited (2006) N3092; Francis Kalyk, Anthony John Deegan, and Bruce William Hansen v Atlas Corporation Pty ltd (1998) N1760; Odata Limited v Ambusa Corporate Oil Mill Limited & National Provident Fund Board of Trustees (2001) N2016; Pinpar Developer Pty Ltd v TL Timber Development Pty Ltd (2006) N3075; PNG Ready Mixed Concrete v Pty Ltd v The Independent State of Papua New Guinea [1981] PNGLR 396; Steamships Trading Co Ltd v Garamut Enterprises Ltd (2000) N1959; Stenhurst Pty Ltd v Golding International Pty Ltd (1995) N1377; The Papua Club Inc v Nusaum Holdings Limited (No. 2) (2004) N2603.

Overseas Cases:

Assets Company Ltd v Mere Roihi and Others [1905] AC 176; De Santis v Russo (2001) QSC 65; Derry v Peek (1889) 14 App. Cas. 337; Fender v St John Mildway [1938] AC 1; Le Lievre v Gould [1893] 1 QB 491; Norton v Lord Ashburton [1914] AC 932; Stern v National Australia Bank [1999] FCA 1421; Vervaeke v Smith [1983] AC 145.

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1. MANUHU, J.: Introduction: This is an application by Arnold Theodorus Derks (Derks) pursuant to s5 (1) of the Reciprocal Enforcement of Judgments Act (Act) to set aside the registration of a foreign judgment obtained against him in Queensland by Timothy Mathew O’Dwyer (O’Dwyer).

2. Derks also seeks consequential orders that O’Dwyer, by his lawyers Warner Shand Lawyers, of Lae, provide to his lawyers copies of all documents relied on by O’Dwyer to authorise his service on Derks (while in Papua New Guinea) of all filed documents, orders or judgement issuing out of the Queensland Supreme Court.

Background

3. Derks, a permanent resident of Lae, was the Defendant in proceedings commenced in the Supreme Court of Queensland (Statement of Claim No. 2480 of 2005, filed on 29 March 2005). O’Dwyer’s claim was for legal services (costs and outlays) rendered to Derks for work done when O’Dwyer acted for Derks in a matrimonial proceeding. Derks did not file a notice of intention to defend and defence in the Queensland Supreme Court proceeding. On 9 May 2005, judgment was entered by default against Derks in the sum of AUD246,033.07 inclusive of interest and costs. On 11 August 2005, the National Court in Lae (in proceedings OS No. 750 of 2005) registered the foreign judgment. The registration has prompted Derks to make this application on the following grounds:

(a) that the ex parte hearing of the registration proceeding was in breach of natural justice and especially in breach of s59 of the Constitution,

(b) that Derks although having notice of Queensland Supreme Court proceeding did not have sufficient time to defend the proceeding,

(c) that enforcement of the judgment would be contrary to public policy,

(d) that the judgment was obtained by equitable fraud and should be set aside.

The issues

4. The issues are apparent from the grounds raised. They are as follows:

• whether the ex parte hearing of the registration proceeding is in breach of natural justice and especially in breach of s59 of the Constitution?

• whether Derks although having notice of Queensland Supreme Court proceeding did not have sufficient time to defend the proceeding?

• whether the enforcement of the judgment would be contrary to public policy?

• whether registration of a foreign judgment could be set aside on the basis of equitable fraud?

5. But it is necessary, at the outset, to appreciate the mandatory aspect of s5 (1) of the Act.

The mandatory force of s5 (1) of the Act

6. s5 (1) of the Act is mandatory and not merely permissive. It provides:

“(1) On application duly made by any party against whom a registered judgment may be enforced, the registration of the judgment—

(a) shall be set aside if the registering court is satisfied that ….”

7. By the use of the word “shall”, registration of a foreign judgment should be set aside upon a finding of a ground specified under s5 (1) of the Act. The discretion to set aside is only found in s6 of the Act, which is presently irrelevant to the grounds in question.

8. Thus, in this case, Derks only needs to discharge the onus on him to prove or demonstrate, with the support of credible evidence or proper legal principles, the existence of a ground. Whether the foreign judgment is set aside depends on Derks discharging the onus bestowed upon him.

Applicability of natural justice - s59 of the Constitution

9. This ground is not sourced from s5 (1) of the Act but from the Constitution. s59 of the Constitution adopts the common law principle of natural justice which minimum requirement is the duty to act fairly and, in principle, to be seen to act fairly.

10. Derks’ complaint is that the ex parte hearing of the registration proceeding offends s59 of the Constitution and the principles of natural justice. Consequently, the registration should be set aside.

11. The duty to act fairly and be seen to act fairly under s59 of the Constitution is the source of most procedural laws, rules and regulations. In the case of Ambrose Vakinap v Thaddeus Kambanei (2004) N3094, for instance, it was held that because the Constitution is supreme, a legislation which does not adopt the common law principles of natural justice, which is entrusted in s59 of the Constitution, must observe the rules of natural justice, the minimum requirement of which, is to act fairly or be seen to act fairly.

12. Consistently, under s4 of the Act, Rules of Court may be made in respect of proceeding for registration and setting aside of registration of foreign judgments. The relevant Rules of Court are...