KR & C Co Ltd v Soon Ok Hwang [2021] NSWSC 164

Supreme Court New South Wales

Medium Neutral Citation: KR & C Co Ltd v Soon Ok Hwang [2021] NSWSC 164 Hearing dates: 25 February 2021 Date of orders: 25 February 2021 Decision date: 25 February 2021 Jurisdiction: Common Law Before: Campbell J Decision: Orders made allowing an extension of time to apply to set aside the registration of an overseas judgment Catchwords: PRACTICE AND PROCEDURE – Application for extension of time to file application setting aside judgment of South Korean Court under s 6 of the Foreign Judgments Act – Where judgment debtor did not seek order setting aside judgment in time – Where judgment debtor instead sought orders for security of costs for application to set aside registration – Extension of time granted Legislation Cited: Foreign Judgments Act 1991 (Cth) Uniform Civil Procedure Rules 2005 (NSW) Cases Cited: N/A Texts Cited: N/A Category: Procedural rulings Parties: KR & C Co Ltd (Plaintiff) Soon Ok Hwang (Defendant) Representation: Counsel: M Harris (Plaintiff) P Berg (Defendant)

Solicitors: H&H Lawyers (Plaintiff) Cambridge Lawyers (Defendant) File Number(s): 2020/00267016 Publication restriction: Nil

EX TEMPORE Judgment - revised 1. The present application arises under the Foreign Judgments Act 1991 (Cth) and Part 53 of the Uniform Civil Procedure Rules 2005 (NSW). The factual background is not without its complexity, but of immediate concern is that the plaintiff in this Court, a corporation carrying on business in the Republic of Korea, obtained the registration of judgment given in its favour in the Seoul Central District Court on 26 November 2019. That judgment was registered in this Court on 8 December 2020. As I explain below, an appeal by the judgment debtor to the Supreme Court of Korea was dismissed. 2. From the evidence that has been read before me the cause of action of the Korean corporation related to it being the holder of certain promissory notes of the judgment debtor which it obtained in 1997. They fell due in 1998. The principal judgment sum for 20,000,000 Korean Won ("KRW"). The judgment entered in this court, by way of registration, is for that sum and for a sum of KRW 102,821,844.42 by way of interest, apparently running from 1998. I observe that the interest exceeds the principal by a factor of five. From the minute of the judgment signed by an assistant registrar the interest has been apportioned as pre-21 April 2001 and post-21 April 2001. I will come back to the facts in more detail. 3. There is no dispute that notice of the registration of the judgment was given in accordance with the requirements of the rules, or that the notice, in compliance with the terms of the Federal legislation, informed the judgment debtor, the defendant, of the following matters: first, that the judgment may be enforced to the full extent of its terms; and, secondly, that the defendant may within 21 days after service of the notice file a notice of motion to set aside the registration and stay the enforcement of the judgment. As I have said, that notice complies with the requirements of s 6(2) of the Commonwealth Act. 4. The solicitor for the defendant, with appropriate promptitude, filed a notice of appearance on 17 December 2020 and on 18 December filed a notice of motion. Now, I will say, curiously, the motion did not seek an order setting aside the judgment. Rather, the prayers for relief in substance sought, first, security for the defendant's costs of making an application to set aside the judgment; secondly, an assertion that proceedings were stayed until the motion for security was determined; and, thirdly, in substance an extension of time for bringing a motion to set aside registration to five days after determination of the application for security. The motion was supported by a brief affidavit of the defendant's solicitor. 5. The matter came before the Registrar on 17 February 2021 when both parties were represented, and having heard from them the Registrar decided that only the third prayer should be referred to the duty judge. It is perhaps apposite to set that out in full now. It is in these terms: "[t]he time for the plaintiff to file notice of motion to set aside the registration is extended until five working days after the motion seeking security for costs as determined". I do not have the benefit of the Registrar's reason, nor are they either necessary or appropriate. I can only assume that, in view of the strong resistance of the plaintiff, and I use that expression with no disrespect, the Registrar considered that the third prayer should be determined first because if that relief was refused the other matters would be of no practical consequence. 1. It is clear that in terms the third prayer did not ask for an extension of time to bring an application to set aside the registration. However, in argument before me today Ms Harris of counsel, who appears for the plaintiff, and Mr Berg of counsel, who appears for the defendant, have been content to treat it in substance as such. So have I. 2. From the evidence, bearing in mind this is a limited interlocutory application, the facts are probably that proceedings were taken in the Seoul Central District Court as early as the year 2000 and that judgment was obtained in a larger sum than the principal sum registered in this Court in about April 2001 together with interest. It also seems likely that it can be established that the defendant had no actual notice of those proceedings as she may already have been resident in this country. But that is less clear. Pre-judgment interest was awarded together with interest on the judgment. In Korea, it seems, post-judgment interest was running, at that time at least, at the rate of about 25% per annum. No step appears to have been taken to enforce that first judgment either in Korea or here in Australia. 3. The plaintiff took further proceedings in the Seoul Central District Court in 2011. It seems that the doctrinal equivalent to the doctrine of res judicata recognised here, if there is one, permitted that to be done in the courts of the Republic of Korea. And it seems that the purpose of taking those proceedings, on the evidence before me, was to abandon part of the claim for which judgment had been given in 2001, and obtain judgment for a smaller sum, being that sum of KRW 20 million I have referred to. 4. It is common ground, for present purposes, that those proceedings, or the initiating process, were not served on the defendant personally, and nor was any notice given of the date of hearing. That seems to be because, from the affidavit of the plaintiff's solicitor, annexing translations of an appeal judgment that I will refer to in a moment, Korean law permitted service by way of "public notice". It does not seem to require actual personal service in the same way as Australian law. In any event, it is common ground, as I have said, that the defendant had no actual notice of those second proceedings. And it is on the judgment in those second proceedings, taken 13 years after the cause of action accrued, that the judgment registered here indirectly rests. 5. The defendant apparently obtained notice of the judgment against her in or about 2018 and appealed from the judgment. A decision was given in the Seoul Central District Court by the 12th Civil Affairs Bench on 26 November 2019 dismissing the appeal with costs. On my reading of the translation of the judgment, the appeal was by way of rehearing and Korean law permitted the appeal to be brought because time is taken to run only from the date when the defendant received actual notice of the judgment. I also accept, if I may say so, Ms Harris's argument that the judgment does seem to ventilate the merits of the defendant's defence and in the event adversely to her. 6. A further appeal was initiated the Supreme Court of Korea, and once again the defendant was unsuccessful. It does seem again, so far as I can tell for present purposes from the material before me, that that appeal may have also involved a ventilation of the merits of the defendant's claim. It does not appear that Mr Hong, the plaintiff's solicitor, has annexed the translation of any Supreme Court judgment to his affidavit. He has provided a translation of what might be said to be a printout of the record of the various steps that were taken. There is no doubt that the appeal to the Supreme Court was initiated and full submissions by the lawyers for the parties exchanged. Although an entry for 9 April 2020 states "appeal dismissed as no hearing proceeded". 7. Those facts are important for a number of reasons. The first reason is that under s 6 of the Commonwealth Act there is a time limit within which a foreign judgment may be registered of six years after the date of the judgment, or "where there have been proceedings by way of appeal against the judgment, the date of the last judgment in those proceedings": s 6(1)(b). It is clear that by the time registration was sought in Australia both the 2001 and 2011 judgments would have been out of time. 8. Under s 6(4) the Australian court which registers the judgment is to state the period within which an application may be made under s 7 to have the registration of the judgment set aside, and by s 6(5) the court may by order extend the period within which such an application may be made. Section 7(2) sets out the grounds on which the registration of a judgment may be set aside. Sub-paragraph (xi) of para (a) of s-s (2) sets out this ground: "[t]hat the enforcement of the judgment...would be contrary to public policy". 9. I will return to the application. Mr Berg points out that the notice of motion filed on 18 December 2020 was within the time fixed by the court for bringing an application to set aside the registration. He explained, without objection, that the reason why an application to set aside the registration was not made in that notice of motion was because the defendant's legal advisers took the view that it was more appropriate to deal with the question of security for costs of the application before dealing with the application to set aside registration. 10. It seems to me that, although one can see some logic in that approach, the better part of discretion would have been to include the application to set aside the registration in the motion even if, as happened here, there was an application to sever the relief for such separate hearings as may be appropriate. What is quite clear, however, from the terms of prayer 3 of the notice of motion is that within the time limited for making an application the defendant made it abundantly clear that she intended to apply to set aside the registration of the judgment and that she would be seeking an extension of time in that regard after the motion for security was dealt with. 11. So far as the ground for relief, as I have said, Mr Berg relies upon the "contrary to the public policy" ground set out in s 7(2) of the Commonwealth Act and he relies upon the consideration that his client was denied natural justice in the circumstances in which the original judgment was obtained. 12. Ms Harris of counsel argues that time should not be extended. She submits that the explanation given is not satisfactory, and I infer that she suggests that it is illogical, and that, in any event, it would be inutile to grant an extension of time because the application to set aside registration is bound to fail. 13. In making that second argument, she points out that when one looks at what seems to be the judgment in the first appeal to the Seoul Central District Court, there was a full ventilation of the merits of the defendant's proposed defences and that the court found them to be "baseless". I certainly accept, from my reading of the translation of the judgment for today's limited purposes, that that seems to be the correct. She submits that on that basis, whatever difficulties there may have been with the first instance judgments, the defendant had the opportunity to contest the plaintiff's claim according to Korean law and was unsuccessful. She submits that the prospects of the defendant succeeding on the ground propounded are unrealistic to the point of hopelessness. 14. There is force in Ms Harris' argument on the face of the evidence. However, as I discussed with her in arguendo, it does seem that given the long delay in the matter, which long delay seems to be a matter for which the plaintiff rather than the defendant is responsible, the interest which is part of the judgment registered here in New South Wales exceeds the judgment by a factor of five, as I have already said. Had the judgment of 2001 stood, it could not have been registered under the Commonwealth Act in 2020 because it would have been long out of time. Likewise, had the judgment in 2011 stood, it, too, would have been out of time by 2020 under the Commonwealth Act. It is only because the defendant sought to have those judgments, entered without actual service and without notice of the hearing date, overturned on appeal that the plaintiff was able to bring itself within time under the legislation and seek registration for which would otherwise have been stale judgments. 15. To my way of thinking it is also relevant to the question of whether the ground propounded for setting aside the judgment is fairly arguable to consider that had the judgment been a judgment of an Australian court there would have been a limitation period of 12 years on its enforcement. Had the judgment been made in 2001 no definitive steps taken to enforce it until 2020, those steps would have been bound to fail as being because the judgment then would have been stale. Under Australian law it would have been impossible to "refresh" the judgment, as it were, by bringing second proceedings in 2011 on the same cause of action even if the effect of those proceedings was to abandon part of the previous claim. 16. The consideration that notwithstanding that up until about 2018 or 2019 the defendant had no notice of the proceedings that interest should be part of the judgment, to the extent that it is, is also a factor which may tell in the defendant's favour. I stress at this point in time I am merely assessing whether the defendant's claim to have the judgment registration set aside is fairly arguable. In my view it is fairly arguable, although I could not on the materials available to me put it any higher than that. 17. Although the explanation for not making a frank application to set aside the registration on 18 December 2020 is a little curious, I am not of the view that that should be sheeted home to the defendant herself. The lawyers made a tactical decision which was not irrational, and, as I have said, they made it clear, however, that it was intended to apply to set aside the registration. 18. Looking at what the interests of justice between the parties requires in this case, I am of the view that I should extend time to allow the defendant to apply to set aside the registration of the judgment. 19. These are my orders: 1. Under s 6 of the Foreign Judgments Act 1991 (Cth) extend the time for the defendant to apply to set aside the registration of the judgment by notice of motion to the close of business on 2 March 2021. 2. The defendant is to file and serve any further evidence upon which she intends to rely in support of her application by close of business on 2 March 2021. 3. The plaintiff may file and serve any further evidence upon which it intends to rely by close of business on 5 March 2021. 4. List the matter for directions before the Registrar at 9 am on 8 March 2021. 5. The costs of this application are the parties' costs in the cause.