New South Wales Court of Appeal CITATION : Boele v Norsemeter Holding AS [2002] NSWCA 363 FILE NUMBER(S) : CA 40476/02 HEARING DATE(S) : 3 and 4 October 2002 JUDGMENT DATE : 13 November 2002 PARTIES : Pieter Boele - Appellant Norsemeter Holding AS - Respondent JUDGMENT OF : Handley JA at 1; Beazley JA at 2; Giles JA at 3 LOWER COURT JURISDICTION : Supreme Court - Equity Division LOWER COURT ED 50173/01 FILE NUMBER(S) : LOWER COURT Einstein J JUDICIAL OFFICER : COUNSEL : A W Street SC & F A Rogers - Appellant Dr A S Bell - Respondent SOLICITORS : Hogan Geikie Poole - Appellant Gadens - Respondent CATCHWORDS : Action on foreign judgment - defendant aware of foreign trial in which he was successful but not aware of appeal reversing the result - application for summary judgment in action on foreign judgment - question of defendant submitting to jurisdiction of appellate court - question of natural justice in relation to appellate proceedings - whether arguable case on either question - whether defendant set up "mode of notification" as to appellate proceedings such that notice to former foreign lawyers satisfied requirements of natural justice - whether foreign procedure established whereby notice to foreign lawyers was sufficient - held arguable case that did not receive natural justice - summary judgment not available. D Brockley Cabinet Co Ltd v Pears (1972) 20 FLR 333; Copin v Adamson (1874) LR 9 Exch 345 (Court of Exchequer); (1875) 45 LJNS 15 (Court of Appeal); Damberg v Damberg (2001) 52 NSWLR 492; Re Dooney (1993) 2 Qd R 362; Esso China Inc v Chan Wing Mou [1999] VSC 294; CASES CITED: Igra v Igra (1951) P 404; Jeannot v Fuerst (1909) 25 TLR 424; Lazard Brothers & Co v Midland Bank Ltd (1933) AC 289; Sultan of Johore v Abubakar Tunku Aris Bendahar (1952) AC 318; The Sussex Peerage Case (1844) 11 Cl & Fin 85; (1844) 8 ER 1034); Terrell v Terrell (1971) VR 155; Vallee v Dumerg (1849) 4 Ex 290; 154 ER 1221. DECISION : (1) Grant leave to appeal and direct notice of appeal be filed within 7 days; (2) Appeal allowed; (3) Set aside order 1 made by Einstein J on 1 May 2002; (4) Plaintiff's notice of motion filed on 23 November 2001 dismissed with costs; (5) Appellant pay respondent's costs of the application for leave to appeal and the appeal, and have a certificate under the Suitors Fund Act if qualified. IN THE SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL CA 40476/02 ED 50173/01 HANDLEY JA BEAZLEY JA GILES JA Wednesday 13 November 2002 BOELE v NORSEMETER HOLDING AS Judgment 1 HANDLEY JA: I agree with Giles JA. 2 BEAZLEY JA: I agree with Giles JA. 3 GILES JA: Norsemeter Holding AS ("Norsemeter") obtained a judgment against Mr Pieter Boele in the Borgarting Court of Appeals in Norway. In proceedings in the Supreme Court of New South Wales it sued on the transaction underlying that judgment and on the judgment itself. It successfully moved for summary judgment in its claim on the foreign judgment. This was an application for leave to appeal from the summary judgment. Full argument was heard on the application, so that if leave to appeal were granted the appeal could immediately be determined. 4 Although technically interlocutory, the order for summary judgment effectively concluded the proceedings. The judgment against Mr Boele, in Swedish Kroner and Norwegian Kroner, is for a large amount, of the order of $2,500,000. Norsemeter did not oppose leave to appeal, and leave to appeal should be granted. Facts 5 The evidence was by affidavits of a representative of Norsemeter's Australian solicitors, an affidavit of Mr Boele, and the tender of some additional documents. There was no cross-examination. The facts as set out below are as evidenced and found in the motion for summary judgment. If addressed more fully at a trial, they may be differently found. 6 Mrs Eva Graflind, Mr Fredrick Graflind and Mr Boele were the shareholders in the Swedish company Airport Surface Friction Tester AB ("ASFT"). In May 1998 the shareholders agreed to sell their shares to Norsemeter. The agreement included a provision - "This contract is governed by Norwegian law. The parties agree to Oslo byrett (Oslo City Court) as the legal venue" 7 Dispute arose in relation to the sale of the shares. In December 1998 Norsemeter brought proceedings against the shareholders in the Oslo City Court, claiming compensation from the shareholders for breach of contract. 8 Mr Boele, who at all material times lived in Australia, joined in engaging Advokatfirman Vinge KB ("Vinge"), Swedish lawyers, and Thommessen Krefting Greve Lund AS ("TKGL"), Norwegian lawyers, to act for the shareholders. He gave a power of attorney to Vinge which authorised the appointment of a sub-attorney, pursuant to which Vinge appointed TKGL. The copy of the power of attorney in evidence was not fully legible. It relevantly gave authority "to bring and conduct actions before courts", "to accept service of notices and other communications, but not writs", and "to represent the interests (?) of [Mr Boele] in all other respects to Norsemeter A/S … or other (illegible) concerned regarding (untranslated Swedish and the name of ASFT)". 9 In March 1999 a defence was filed in the proceedings on behalf of Mr Boele and the other shareholders, and in April 1999 a cross-claim was filed in the proceedings on their behalves claiming compensation from Norsemeter for breach of contract. 10 In May and October 1999 the proceedings were heard in the Oslo City Court. Mr Boele and the other shareholders were represented at the hearing in May by Mr Gerhard Holm of TKGL and Mr Krister Azelius of Vinge and at the hearing in October by Mr Holm. 11 After the hearings had concluded Mr Boele was told that "the case was a success". In the belief that the proceedings were finalised, although in fact before judgment was given by the Oslo City Court, at the end of January 2000 he terminated for his part his engagement of Vinge and TKGL by "cancelling" his power of attorney "in relation to ASFT AB and the Norsemeter case". The communication of the cancellation included, "Any action to be taken will be assessed on a case by case basis. Approval can only follow, by fully informing me of the facts". 12 Mr Holm wrote to Mr Boele in early February 2000 saying that he (Mr Holm) nonetheless "did not exclude myself as your representative in the writ submittet to the Court to day [sic]". This referred to an ancillary "arrest" matter in the Oslo City Court in the nature of Mareva relief. The communication concluded - "As stated to your lawyer and mr Graflind, I believe that a more thorough discussion should take place between yourself, mr Graflind, mr Azelius and myself when we (hopefully in a near future) received the ruling of the court [sic]". In reply, Mr Boele authorised Mr Holm to continue to represent him "to have the arrest removed", but on conditions including that "I need to know what is going on … before you undertake any action". 13 Following through the arrest matter, in May 2000 Mr Holm wrote to Mr Boele saying that "the arrest decision has been lifted, however this ruling is not yet valid/binding since it may be appealed"; Mr Holm said that he would check whether an appeal had been received. A few days later someone else from TKGL wrote to Mr Boele saying that an appeal had not yet been received. The evidence went no further. 14 Returning to February 2000, in the middle of that month the Oslo City Court gave judgment on the claim and the counter claim, in both respects in favour of the shareholders. There was no evidence that this, as distinct from the earlier information that "the case was a success", was communicated to Mr Boele. 15 Late in February 2000 Norsemeter filed a notice of appeal against the judgment of the Oslo City Court in the Borgarting Court of Appeals. There was no express evidence of service of the notice of appeal upon Vinge, TKGL, or the lawyers of those firms. 16 In March 2000 Mr Holm filed a notice of cross-appeal in the Borgarting Court of Appeals, purportedly on behalf of Mr Boele together with the other shareholders. 17 The appeal and cross-appeal were heard in April-May 2001, with Mr Holm purporting to represent Mr Boele together with the other shareholders. There was no evidence that either Norsemeter or the Borgarting Court of Appeals was told of Mr Boele's termination, subject to particular instructions and the arrest matter, of his engagement of the lawyers, and at one point in the summary judgment hearing counsel for Mr Boele conceded that neither was told. 18 In June 2001 the Borgarting Court of Appeals gave judgment upholding Norsemeter's appeal and dismissing the cross-appeal. It gave judgment against Mr Boele and the other shareholders, being the judgment on which Norsemeter sued in the proceedings in this Court. 19 In July 2001 an appeal was lodged, purportedly on behalf of Mr Boele together with the other shareholders, to the Norwegian Supreme Court. Leave to appeal was refused. 20 None of the events in the five preceding paragraphs was known to Mr Boele. He was first aware of the Norwegian appellate proceedings and the judgment of the Borgarting Court of Appeals when served with documents for the proceedings in this Court in November 2001. (It is a little curious. One would think that any question of continuation of the arrest decision after mid-February 2000 could only arise in the context of an appeal from the substantive decision of the Oslo City court, and that in representing Mr Boele to have the arrest removed Mr Holm would have told him of the substantive decision and the appeal. However, for present purposes it must be taken that this did not occur.) Discussion 21 The essential issues were whether Mr Boele had submitted to the jurisdiction of the Borgarting Court of Appeals and, if he had, whether he was not afforded natural justice in the exercise of that jurisdiction. 22 There is no doubt that Mr Boele submitted to the jurisdiction of the Oslo City Court. He probably did so by the provision in the share sale agreement, but in any event he did so when he joined in filing a defence and a cross-claim through the Swedish and Norwegian lawyers. 23 Norsemeter said that Mr Boele thereby submitted to the jurisdiction of any court exercising appellate jurisdiction from the Oslo City Court in the Norwegian curial hierarchy, referring to Sultan of Johore v Abubakar Tunku Aris Bendahar (1952) AC 318 at 341. Mr Boele replied that Sultan of Johore v Abubakar Tunku Aris Bendahar was confined to legislation which deemed the first instance proceedings to continue, and that in any event the Borgarting Court of Appeals heard the appeal de novo so that there were new proceedings rather than a continuation of the proceedings in the Oslo City Court. I do not find Mr Boele's reply persuasive, and doubt that he has an arguable case against submission to the jurisdiction of the Borgarting Court of Appeals. It is not necessary to express a concluded view. 24 It is a defence to an action on a foreign judgment that the defendant was not afforded natural justice in the foreign proceedings. In Nygh and Davies, Conflict of Laws in Australia, 7th ed (2002) p 194 it is said - "The requirement of natural justice relates to the procedure of the foreign court. Traditionally it is seen as imposing two requirements: (1) each party must have had the opportunity of presenting his or her case before an impartial tribunal, and (2) each party must have been given due notice of the proceedings." 25 It was not suggested that Mr Boele was not afforded natural justice in relation to the proceedings in the Oslo City Court. The question is whether he was afforded natural justice in relation to the appeal to the Borgarting Court of Appeals. 26 It can be inferred that Mr Boele knew that there could be an appeal from the judgment of the Oslo City Court - he was told of the possibility of an appeal in relation to the arrest matter. But, on the facts found for the purposes of the summary judgment application, he did not know that Norsemeter had appealed from the substantive decision of the Oslo City Court, or anything of the appeal and cross-appeal. Mr Holm purported to represent Mr Boele in the appeal and cross-appeal, but without his authority and unknown to Mr Boele. It can be said with some force, therefore, that Mr Boele was not afforded natural justice in relation to the appeal to the Borgarting Court of Appeals. 27 Norsemeter referred to decisions to the effect that once a defendant has due notice of proceedings, and in particular once a defendant has participated in them, the defendant cannot decline or cease to participate and thereby say that he was denied natural justice. None of the cases (Brockley Cabinet Co Ltd v Pears (1972) 20 FLR 333, Re Dooney (1993) 2 Qd R 362 and Esso China Inc v Chan Wing Mou [1999] VSC 294) involved proceedings wholly unknown to the defendant. If Mr Boele had terminated the authority of the Swedish and Norwegian lawyers in relation to the proceedings in the Oslo City Court, he could not then have said that he had not been afforded natural justice in relation to the proceedings in that Court. The appeal is a different matter, and these cases are of assistance only if it be determined that Mr Boele had due notice of the appeal. 28 In determining whether due notice has been given regard will be had to the notice provisions of the foreign court: for example, notification not by personal service but in accordance with the rules of the foreign court may be held to be consistent with affording natural justice even if not in accord with notice provisions of the forum (see Jeannot v Fuerst (1909) 25 TLR 424; Igra v Igra (1951) P 404; Terrell v Terrell (1971) VR 155). 29 Norsemeter said that Mr Boele had been afforded natural justice because he had set up a "mode of notification" which had been followed in respect of the appeal, and so could not rely on lack of actual knowledge of the appeal. Its argument rested in part upon the regard to be had to Norwegian law and procedure as to notice. 30 The expression "mode of notification" was taken from Vallee v Dumerge (1849) 4 Ex 290; 154 ER 1221. The plaintiff sued on a French judgment holding the defendant liable as shareholder in a company. The defendant pleaded that he had not been served and had no knowledge of the French proceedings. By his replication the plaintiff said that in accordance with French law the defendant had elected for a French domicile at which he could be served with proceedings relating to his shareholding and that he had been served at that domicile. It was held on a demurrer that the replication answered the plea, and that - " … it is not contrary to natural justice that a man who has agreed to receive a particular mode of notification of legal proceedings should be bound by a judgment in which that particular mode of notification has been followed, even though he may not have had actual notice of them." 31 See also, on a similar replication, Copin v Adamson (1874) LR 9 Exch 345 (Court of Exchequer); (1875) 45 LJ NS 15 (Court of Appeal). 32 The mode of notification on which Norsemeter relied was notice to the lawyers, more specifically to Mr Holm. Had Mr Boele set up that mode of notification, and was it followed? 33 Norsemeter relied in part on s 49 of the Norwegian Civil Procedure Act 1915–08-13 No. 6. According to one translation in evidence, s 49 provided - "An authority ad litem, ie a brief to counsel may be revoked at any time. Nevertheless, as regards the court and the opposing party, a revocation can only take effect when it has been announced to them. In the event that the party dies, becomes the subject of bankruptcy or liquidation proceedings, or loses or acquires the legal capacity to act, it is not a consequence that the authority ad litem, ie the brief to counsel, ceases to exist." According to another translation in evidence, s 49 provided - "An authority to act in a matter may at any time be withdrawn. For the Court and the opposing party such withdrawal comes into effect only at the point in time when it is communicated to them. The authority is not revoked by reason of the party's death, liquidation, or loss or acquisition of legal capacity." 34 Mr Boele said that the evidence of s 49 was inadmissible unless tendered and expounded through a person qualified to give expert evidence of Norwegian law, referring to statements such as those in The Sussex Peerage Case (1844) 11 Cl & Fin 85 at 115; (1844) 8 ER 1034 at 1046 and Lazard Brothers & Co v Midland Bank Ltd (1933) AC 289 at 298. Norsemeter responded that s 174 of the Evidence Act 1995 permitted the adduction of evidence of the Norwegian statute. I doubt that the requirements of a basis of admissibility in s 174 were met, since one affidavit simply annexed a translation of s 49 and the other affidavit simply annexed s 49 as an extract plus a translation. It is not necessary to decide; I am content to assume in favour of Norsemeter proper admission of the evidence of s 49. 35 Norsemeter more particularly relied on a letter from one of the judges of the Borgarting Court of Appeals, addressed apparently to a lawyer for Norsemeter. The letter had been tendered by Mr Boele. It read - "I refer to your letter of 5 March 2002. Section 47 of the Norwegian Civil Procedure Act 13 August 1915 states that: Pursuant to a general authority ad litem for the case, the representative ad litem may: 1. bring and accept actions and cross-actions, accept intervention suits, approve and waive submissions and take all other steps in legal proceedings relating to the conduct of the case before the relevant instance; 2. give notice of appeals against interlocutory orders and decisions; 3. accept any litigation costs awarded to his client. An advocate's deemed to have the authority he asserts to take all procedural steps for the furthering of the case, in order to have enforced a decision by the court and to receive what his client is entitled to. Pursuant to the general authority ad litem vested in a representative ad litem according to section 47 of the Civil Procedure Act, the representative is considered as authorised to act on behalf of his client, and to make such legal dispositions as are stated in the regulation. The representative ad litem is deemed to have such authority unless it is clearly stated that his authority is limited. This implies that the court cannot require that the representative ad litem present a power of attorney that shows that he can act on behalf of his client in the case. It also lies within the authority ad litem to receive services and notices, as for example summons to court hearings. Summons to court hearings are sent by the court to the representative ad litem, and it is the responsibility of the representative to inform his client of the time for the court hearing. The court does not check whether the representative has summoned his client. In the current case, Advocate Gerhard Holm acted as the representative ad litem for Pieter Boele, Eva Ulrike Graflind and Fredrik Graflind. Advocate Gerhard Holm is considered to have had a general authority ad litem, of section 47 of the Civil Procedure Act. Accordingly, the court has related to Mr Holm as the representative ad litem for, amongst others, Pieter Boele, in the case. Whether Mr Holm was in actual fact entitled to act on behalf of Mr Boele is unknown to the Court of Appeals." 36 Norsemeter argued that the lis, the matter or the case in ss 49 and 47 was the whole of the dispute between the parties, any appeal as well as the first instance proceedings. It said that the letter showed that Mr Boele's termination of his engagement of Vinge and TKGL was by Norwegian law of no effect, because it was irrelevant that Mr Holm may in fact not have had authority to act on behalf of Mr Boele and so far as the Borgarting Court of Appeals was concerned Mr Boele was bound by the result in the appeal and the cross-appeal although he had not authorised Mr Holm as his representative. By the engagement ultimately of Mr Holm, it said, Mr Boele had set up a mode of notification which, unless Norsemeter and the court was told of the termination of the engagement, could be followed in respect of the appeal, and Mr Boele could not rely on lack of actual knowledge of the appeal. 37 Courts in New South Wales generally do not require legal representatives to prove their retainer. An opposite party can challenge the retainer, but in the absence of challenge a solicitor who goes on the record and a barrister or solicitor who appears is generally taken to act with the party's authority. It is a different thing, however, if it becomes known that the legal representative was acting without authority, and that the party does not know anything of the proceedings. 38 It is by no means clear that the letter says more than that, in similar manner, the Borgarting Court of Appeals would take Mr Holm to have been acting with Mr Boele's authority. I do not think that there can be found in the letter, with the confidence required for summary judgment, the irrelevance of lack of authority in fact which is necessary for Norsemeter's argument. More important, neither ss 49 and 47 nor the letter clearly goes beyond Mr Holm's authority in relation to proceedings at one level of the curial hierarchy. When the translations of ss 49 and 47 refer to a lis, a matter or a case they do not necessarily go beyond the one curial level, and s 47's references to interlocutory appeals and enforcement suggest that it does not extend to a substantive appeal. 39 I do not think that ss 49 and 47 and the letter establish, to the level necessary for summary judgment, either that according to Norwegian law and procedure Mr Holm remained as an effective recipient of notice of the appeal or that he was given due notice of the appeal. Mr Holm had knowledge of the appeal, but there was no evidence of how notice of the appeal was given or to whom and in particular of whether according to Norwegian law and procedure the manner in which that was done was due notice sufficient to operate against Mr Boele. As I have indicated, it is by no means clear that the letter says more than that, unless the matter was raised, the Borgarting Court of Appeals would not be concerned to investigate Mr Holm's authority. 40 Norsemeter referred to the presumption that foreign law is the same as the law of the forum. It is not necessary to consider the reach of the presumption, extensively discussed in Damberg v Damberg (2001) 52 NSWLR 492. It is particularly difficult to presume that a foreign court's procedural law is the same as the law of the forum, indeed the forum's courts may not have uniform procedural laws. Norsemeter pointed out that an appeal to or within the Supreme Court of New South Wales generally permits service at the address for service in the proceedings from which the appeal is brought (Supreme Court Rules Pt 9 r 8; Pt 51 r 3(1), although it was otherwise prior to 1996). Taking that as the most favourable position for Norsemeter, however, there was no evidence that there was such a thing as an address for service in the proceedings in the Oslo City Court, or that there was service at any such address, and no basis for the presumption to operate was made out. The result 41 In my opinion, on the evidence in the application for summary judgment Mr Boele had an arguable case that he was not afforded natural justice in relation to the appeal to the Borgarting Court of Appeals, and summary judgment should not have been granted. 42 I propose orders - 1. Grant leave to appeal and direct that the notice of appeal be filed within 7 days. 2. Appeal allowed. 3. Set aside order 1 made by Einstein J on 1 May 2002. 4. Plaintiff's notice of motion filed on 23 November 2001 dismissed with costs. 5. Appellant pay respondent's costs of the application for leave to appeal and the appeal, and have a certificate under the Suitors Fund Act if qualified. ********* DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.