Supreme Court New South Wales Medium Neutral Citation: Kingston Securities Ltd v Lee [2024] NSWSC 402 Hearing dates: 15 April 2024 Date of orders: 17 April 2024 Decision date: 17 April 2024 Jurisdiction: Equity Before: Hammerschlag CJ in Eq Decision: (1) Pursuant to section 7(2)(a)(v) of the Foreign Judgments Act 1991 (Cth) the judgment of the Court entered on 16 November 2023 in favour of the plaintiff against the defendant for $10,960,277.74 set aside. (2) Plaintiff's Notice of Motion filed 31 March 2024 dismissed. Catchwords: PRIVATE INTERNATIONAL LAW – Foreign Judgments Act 1991 (Cth) s 7(2)(a)(v) – Section requires the Court to set the registration of a foreign judgment aside where the judgment debtor did not receive notice of the proceedings in sufficient time to enable him to defend the proceedings and he did not appear - Application to set aside registration of a judgment of the High Court of the Hong Kong Special Administrative Region, Court of First Instance – Where defendant did not receive notice of the Hong Kong proceedings until after judgment was given – Where defendant did not appear in the Hong Kong Court to defend the judgment – Where defendant moved the Hong Kong Court to set aside its judgment before making the application to this Court – Whether by doing so defendant appeared (or did not not appear) within the meaning of the section – HELD defendant did not appear – Registration of the foreign judgment set aside CIVIL PROCEDURE – Application by plaintiff for monies paid by consent order into Court by defendant to be paid by the Court into the Hong Kong Court – Alternatively to be kept in Court pending determination of a proposed claim in the Court by plaintiff against defendant – HELD application refused on various grounds including that the monies were paid into Court under a consent order to abide orders of this Court, not orders of the Hong Kong Court, and defendant's entitlement to have the registered judgment set aside is not susceptible to the condition that monies stay in Court pending plaintiff's proposed proceedings Legislation Cited: Foreign Judgments Act 1991 (Cth) Uniform Civil Procedure Rules 2005 (NSW) Cases Cited: Attorney-General (Canada) v Hallet & Carey Ltd [1952] AC 427 Bank Polska Kasa Opieki Spolka Akcyjna v Richard Zbigniew Opara & Anor [2010] QSC 93 Barclays Bank Limited v Piacun (1983) 2 Qd R 476 Corporate Affairs Commission (NSW) v Yuill (1991) 172 CLR 319 Greylag Goose Leasing 1410 Designated Activity Company v P.T. Garuda Indonesia Ltd (2023) 111 NSWLR 550 Nyunt v First Property Holdings Pte Ltd [2022] NSWCA 249 Category: Principal judgment Parties: Kingston Securities Limited (Plaintiff) Wilson Lee (Defendant) Representation: Counsel: D Pritchard SC and C Harris (Plaintiff) N Kidd SC (Defendant) Solicitors: Somerville Legal (Plaintiff) Lawside Lawyers (Defendant) File Number(s): 2023/00357721 Publication restriction: Nil JUDGMENT 1. HIS HONOUR: This contest turns on a narrow, but arguably not insignificant, question of the proper construction of s 7(2)(a)(v) of the Foreign Judgments Act 1991 (Cth) (the Act). 2. References below to sections are to sections of the Act. background 1. The Act (s 6) makes provision for a judgment creditor to apply for the registration by the Federal Court of Australia or the Supreme Court of a State or Territory of a judgment of a designated foreign court of a designated foreign country. One such Court is the High Court of the Hong Kong Special Administrative Region, Court of First Instance (the Hong Kong Court). One effect of registration is to give the registered judgment the same force or effect as if it had originally been given in Court in which it is registered. 2. Section 7(2)(a)(v) provides: 7 Setting aside a registered judgment … (2) Where a judgment debtor duly applies to have the registration of the judgment set aside, the court: (a) must set the registration of that judgment aside if it is satisfied: … (v) that the judgment debtor, being the defendant in the proceedings in the original court, did not (whether or not process had been duly served on the judgment debtor in accordance with the law of the country of the original court) receive notice of those proceedings in sufficient time to enable the judgment debtor to defend the proceedings and did not appear… 1. The defendant, Mr Wilson Lee, has lived in Australia since 1 April 2023, having been naturalised in 1989. He lived in Hong Kong sporadically from 2017 to 2019 but since late 2019 he has not been there or had a home or address there. 2. The defendant is the sole director and shareholder of a company called Noah Global Group Holding Limited (the Company). 3. The plaintiff is a member of the Hong Kong Stock Exchange and engages, amongst others, in securities dealing, brokerage and margin financing services. 4. In September 2018, the Company opened a margin securities trading account with the plaintiff, for which purpose it executed a Margin Client's Agreement. The defendant guaranteed the Company's obligations under that agreement. 5. On 16 June 2023, the plaintiff commenced proceedings (the Hong Kong proceedings) in the Hong Kong Court against the defendant by Writ of Summons, claiming an amount allegedly outstanding on the account and guaranteed by the defendant. The Summons was served, in accordance with Hong Kong rules, by posting it to the defendant's last known address in Hong Kong. 6. The defendant did not receive notice of the Hong Kong proceedings until 16 November 2023, in circumstances which are described later. 7. On 10 July 2023, the defendant, having not given notice of intention to defend the Hong Kong proceedings, the plaintiff applied to the Hong Kong Court for final judgment against him. 8. On 16 October 2023, the Hong Kong Court gave final judgment for the plaintiff against the defendant for: 1. HK$52,585,691.57 as on 15 June 2023; 2. The interest calculated on the said sum of HK$52,585,691.57 at the rate of 12% p.a. from 16 June 2023 to 30 July 2023, 12.125% p.a. from 31 July 2023 to 16 October 2023 and thereafter at judgment rate until payment; and 3. Fixed costs of HK$11,045; (the Hong Kong Judgment). 1. The defendant maintains that he has a defence. It is not necessary for present purposes to delve into that subject. 2. On 7 November 2023, the plaintiff made an application to this Court under the Act, by Summons, for judgment for $10,203,285 together with interest and costs. The Summons was given a return date before the Equity Registrar on 28 November 2023. 3. However, on 16 November 2023, the plaintiff having apparently become aware that the defendant had sold, or was in the process of selling, valuable real property in this State, moved the Court, as a matter of urgency, for the registration of the Hong Kong Judgment. Robb J made the following orders: 1. Pursuant to s.6(1) of the Foreign Judgments Act, 1991 (Cth) (the "Act"), that the judgment obtained by the plaintiff against the defendant in High Court of the Hong Kong Special Administrative Region Court of First Instance Action No. 932 of 2023 be registered as a judgment of the Supreme Court of New South Wales in the sum of AUS$10,960,277.74. 2. The period within which an application may be made under s.7 of the Act to have the registration of the judgment set aside is 28 days after service on the defendant of the notice of registration. 3. The judgment, interest and costs may be enforced to the full extent. 4. The defendant pay the plaintiff's costs of the application for registration. 5. These orders be entered forthwith. 1. In addition to ordering registration of the Hong Kong Judgment, Robb J gave the plaintiff leave to file a Notice of Motion seeking asset preservation orders. The matter was made returnable on 21 November 2023 before the Duty Judge, Lindsay J. 2. On the evening of 16 November 2023, upon service on him of affidavits which had been read in the proceedings in this Court, the defendant first became aware of the Hong Kong proceedings and the proceedings in this Court. 3. At the hearing on 21 November 2023, the plaintiff was represented by counsel and the defendant by a solicitor. By consent, His Honour made orders including the following: 3. ORDER that upon and from the settlement of the sale of the property known as 24 Victoria Road, Bellevue Hill, Folio Identifiers 5/23041 and X/411996 (the Bellevue Hill Property), the defendant pay into Court to abide the orders of the Court the sum of $10,960,277.74. … 5. ORDER that the defendant file and serve no later than 11 December 2023 any notice of motion he proposes to file for a stay of enforcement of the judgment (NSW Judgment) entered on 16 November 2023. 6. ORDER that any such notice of motion be made returnable before the Registrar on 13 December 2023 at 9.30am. 1. On 30 November 2023, the defendant paid the amount of $10,960,277.74 into this Court, where it currently stands. This amount was the equivalent of HK$52,585,691.57. 2. On 4 December 2023, there was filed in the Hong Kong Court on behalf of the defendant, an instrument entitled Notice to Act, which I take to be the equivalent of a notice of appearance in this Court. [1] 3. On 8 December 2023, the defendant sued out of the Hong Kong Court a Summons seeking an order setting aside the Hong Kong Judgment. He also sued out a Summons seeking a stay of the Hong Kong Judgment pending the outcome of his application to set it aside. 4. On 11 December 2023, the defendant filed a Notice of Motion for an order that the judgment of this Court entered on 16 November 2023 in favour of the plaintiff against him for $10,960,277.74 be set aside. In the alternative, he sought a stay of the judgment pending his application in the Hong Kong Court to set the judgment of that Court aside. 5. The defendant's application before the Hong Kong Court was heard by a Master of that Court on 18 March 2024. The written submissions of the parties and the transcript of the proceedings before the Master are in evidence. The Master made the following orders: 1. The Final Judgment be set aside on condition that the defendant do pay HK$52,585,691.57 into the Court within 28 days from the date hereof 2. Upon the defendant's compliance with paragraph (1) hereinabove, the plaintiff do file a statement of claim within 28 days thereafter 3. The defendant do file a defence and counterclaim (if any) within 28 days thereafter 4. Should the defendant be able to meet the condition state in paragraph (1) hereinabove, the defendant's costs of the 1st summons will be in the cause; if not, costs be to the plaintiff 5. Execution of the Final Judgment be stayed pending compliance with paragraph (1) hereinabove 6. Should the defendant be able to meet the condition stated in paragraph (1) hereinabove, the defendant's costs of the 2nd summons will be in the cause; if not, costs be to the plaintiff 1. I was informed from the bar table that the condition in order 1 (the condition) of the Master's orders would not be met. Perhaps this is unsurprising given that the defendant has already paid the full amount of the plaintiff's claim into Court once. 2. On 25 March 2024, Williams J listed the defendant's motion before me to be heard on 11 April 2024. By consent that date was vacated and any extant motions in the matter were fixed to be heard on 15 April 2024. 3. On 31 March 2024, the plaintiff filed a Notice of Motion seeking an order that the monies standing in Court be paid out of this Court and into the Hong Kong Court in satisfaction of the condition. In the alternative, the Notice of Motion seeks an order that in the event that the registered judgment is set aside, it be on terms that the plaintiff commence and thereafter expeditiously prosecute proceedings in this Court against the defendant, and that pending those proceedings the monies paid into Court remain in Court. 4. I heard the two motions together, evidence in one being evidence in the other. 5. I will deal with the defendant's motion first. the defendant's motion 1. It is not in issue that the defendant received no notice of the Hong Kong proceedings until 16 November 2023, well after judgment had been given by the Hong Kong Court against him. 2. Section 7(2)(a)(v) requires the Court to set aside the registration of the Hong Kong Judgment if it is satisfied both that the defendant did not receive notice of the Hong Kong proceedings in sufficient time to enable him to defend the proceedings and that he did not appear. 3. The sole issue which divides the parties is whether, on the proper construction of the section, the requirement that the defendant did not appear has been satisfied. 4. The plaintiff's sole contention is that the section requires the assessment of whether the judgment debtor appeared or not, to be made when the judgment debtor applies to have the registration of the judgment set aside. If by then, the judgment debtor has appeared in the proceedings in which the judgment was given, it cannot be said that he did not appear (or conversely, it must be said that he did appear). 5. The plaintiff argues that by the time the defendant applied to have the registration of the Hong Kong Judgment set aside (11 December 2023), he had appeared before the Hong Kong Court because he had both filed his Notice to Act and had sued out his Summons seeking the setting aside of the Hong Kong Judgment. 6. The plaintiff argues that the policy behind the section is to make sure that the judgment debtor had an opportunity to appear and defend the claim against him. It argues that the defendant had that opportunity by making his application in Hong Kong to set aside the Hong Kong Judgment. The plaintiff argues that the words "did not appear" are not directed exclusively to a point of time before judgment in the foreign court is given against the defendant. 7. There was no debate about the approach the Court is required to take in construing the section. 8. In Corporate Affairs Commission (NSW) v Yuill (1991) 172 CLR 319 at 346 (Yuill), McHugh J cited, with approval, Lord Radcliffe's statement in Attorney-General (Canada) v Hallet & Carey Ltd [1952] AC 427, 449 that "the paramount rule remains that every statute is to be expounded according to its manifest or expressed intention." His Honour went on to say at that: The first step in the process of statutory construction is the ascertainment of the ordinary grammatical meaning of the legislative provision in question. However, ascertaining the ordinary grammatical meaning of a legislative provision is only the first step in the process of statutory construction, for the object of that process is to ascertain the meaning which Parliament intended. The grammatical meaning of a provision is not always the meaning which Parliament intended the statute to have. For the purpose of ascertaining the statutory or legal meaning of an enactment, it is necessary to take into account various rules of construction which Parliament is presumed to have intended to be used to ascertain the meaning of its legislation. The application of these rules often results in the statutory or legal meaning being different from the grammatical meaning of an enactment. Thus, it is a rule of construction that the purpose of the legislation must be taken into account in determining the statutory meaning of one of its provisions. The application of this rule may have the effect of modifying the grammatical meaning of the provision. Likewise, it is a rule of construction that, in the absence of a clear contrary indication, legislation is not to be interpreted as abolishing basic common law rights and privileges. The application of this rule may require the reading down of the literal meaning of general words in an enactment. 1. In Yuill, at 331, Dawson J observed that "[i]n determining the intention of the legislature, that is to say, the intention which is revealed by the words used by the legislature, it is permissible to look to the general purpose or object of the legislation"; see too Brennan J at 332; Gaudron J at 339-340 and Greylag Goose Leasing 1410 Designated Activity Company v P.T. Garuda Indonesia Ltd (2023) 111 NSWLR 550 at [14] and following and the authorities cited there. 2. I reject the plaintiff's contention. 3. The plain meaning of the words "did not appear", immediately preceded by the word "and" after the words "did not…receive notice of those proceedings in sufficient time to enable the judgment debtor to defend the proceedings", is that he did not appear to defend the proceedings which culminated in the judgment. The words have no application to any appearance after judgment. 4. So much was expressly held by the Full Court of the Supreme Court of Queensland in Barclays Bank Limited v Piacun (1983) 2 Qd R 476 at 479, 35-40 (Barclays Bank) where Connolly J said of the section that "the defendant must receive notice of the proceedings in sufficient time to enable him to have resisted the making of the judgment". 5. Macrossan J came to the same conclusion, holding at 482, 38-42 that: [The] language…is obviously designed to bolster the right of a judgment debtor to make local resistance to the enforcement of a foreign judgment in cases where he did not have a fully adequate opportunity to oppose the suit which has led to the foreign judgment. 1. Douglas J agreed with the reasons of both Connolly and Macrossan JJ. 2. The plaintiff argues that support for its construction is to be found in the following statement by Macrossan J in Barclays Bank at 482, 1-10: It might be thought that the ordinary meaning of the words "the defendant in the proceedings in the original Court did not … receive notice of those proceedings in sufficient time to enable him to defend the proceedings and did not appear" would not cover the case of a defendant who received notice of those proceedings only after final judgment had been entered but who arguably had sufficient time to enable him to move in the original Court to set aside the judgment there obtained in default of his appearance. One may wonder whether anything compels the ordinary meaning to be departed from. (emphasis added) 1. It contends that His Honour was conveying a view that the ordinary meaning of the words cover the case of a defendant who received notice of the proceedings only after final judgment had been entered and who arguably had sufficient time to enable him to move in the original Court to set aside the judgment obtained in default of his appearance, and that His Honour was questioning whether there should be a departure from that ordinary meaning. 2. I reject this contention. His Honour was saying the opposite of what the plaintiff contends he said. His Honour was saying that the ordinary meaning of the words did not cover an appearance after final judgment in an endeavour to set it aside and questioned whether there was any reason to depart from that ordinary meaning. That this is so, is confirmed by what His Honour found were the effect of the words and the conclusion to which His Honour came. His Honour did not depart from the ordinary meaning but adhered to it. 3. A similar conclusion was reached by McMurdo J in Bank Polska Kasa Opieki Spolka Akcyjna v Zbigniew Opara [2010] QSC 93 at [46]. See too Nyunt v First Property Holdings Pte Ltd [2022] NSWCA 249 at [100] and following. 4. The plaintiff argues that in moving the Hong Kong Court, the defendant in effect exercised an election inconsistent with his right to have the registration of the Hong Kong Judgment set aside by this Court and that the defendant cannot "have his cake and eat it as well". 5. I reject this submission. The two rights are not inconsistent, and a judgment debtor is not put to any election of the kind contended for. The Act operates according to its tenor. The submission is a variation of the submission that the words "did not appear" can relate to a point in time after judgment is given. If they could, then an appearance in foreign proceedings before the application under the Act to set the registration aside, might have meant that he did not not appear, with the consequence that he would not have satisfied the requirements of s 7(2)(a)(v). But the words cannot, and do not, so relate. 6. It is to be observed, as Connolly J said in Barclays Bank at 479, 17-18 that "[a] defendant before judgment has an absolute right to defend. A defendant after judgment is in the discretion of the Court." There is a significant and qualitative difference between the two situations. It is demonstrated in this case by the imposition on the defendant of the condition. 7. The opportunity given by the section to defend is precisely that. It is not an opportunity to mount a rearguard action against a judgment already given. 8. To uphold the plaintiff's contention would be inimical to, rather than serve, the policy identified by the plaintiff. the plaintiff's motion 1. The plaintiff's motion can be disposed of briefly. 2. As to the claim for an order that the money in Court be paid into the Hong Kong Court, it appears to proceed on the footing that the condition imposed an obligation on the defendant to pay money into the Hong Kong Court. But it did not. It was the defendant's choice whether to meet the condition or not. The consequence of not meeting the condition is that the Hong Kong Judgment has not been set aside. 3. Additionally, the monies were paid into Court under a consent order, to abide the orders of this Court, not the Hong Kong Court. 4. Rule 41.11 of the Uniform Civil Procedure Rules 2005 (NSW) (UCPR): 41.11 Authority of recipient (cf SCR Part 50, rule 7) Subject to these rules, funds in court may not be paid out of court except to the party entitled or (on the party's written authority or by order of the court) to the party's solicitor. 1. Payment to the Hong Kong Court would be contrary to the rule and would result in the Court losing control of what ultimately is to happen to the funds. 2. Although, it is not necessary to decide the point, I also consider there to be real doubt whether the Court has jurisdiction to make such an order. The order sought is not in the nature of an injunction requiring the defendant to do or to refrain from doing something, but an order that the Court do something. 3. As to the second leg of the motion, I decline to make such an order. The money is already in Court and UCPR 41.11 applies. There is currently no application by the defendant to have the money released. The defendant's entitlement to have the registered judgment set aside is unconditional under the Act. It is not appropriate, or indeed permissible, to impose a condition such as that which the motion seeks, in the alternative. Conclusion 1. I make the following orders: 1. Pursuant to section 7(2)(a)(v) of the Foreign Judgments Act 1991 (Cth) the judgment of the Court entered on 16 November 2023 in favour of the plaintiff against the defendant for $10,960,277.74 is set aside. 2. The plaintiff's Notice of Motion filed 31 March 2024 is dismissed. 1. I provisionally order the plaintiff to pay the defendant's costs of, and incidental to, his application to set aside the judgment entered on 16 November 2023 and his costs of the plaintiff's Notice of Motion filed 31 March 2024. This order will solidify on 24 April 2024 unless either party has notified the other party and my Associate in writing that some other order is sought, identifying the order and stating brief reasons why it is sought. If such notice is given, the provisional order will be discharged, and I will give directions for the determination of costs. 2. The exhibits may be returned. ********** Endnote 1. Uniform Civil Procedure Rules 2005 (NSW) pt 6, r. 6.9(1). 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