Australia and New Zealand Banking Group Ltd v Ali [1994] FJHC 29; Hbc0051d.92s (29 March 1994)

IN THE HIGH COURT OF FIJI
At Suva
Civil Jurisdiction

CIVIL ACTION NO. HBC0051 OF 1992

Between:

AUSTRALIA AND NEW ZEALAND
BANKING GROUP LIMITED
Plaintiff

- and -

MICHAEL HAMID ALI
Defendant

Mr. V. Kapadia for the Plaintiff
Mr. A. Seru for the Defendant

RULING

On the 20th of February 1992 the plaintiff bank issued a Writ of Summons claiming a liquidated sum of money which it averred was due and owing by the defendant as at the 30th of January 1992 and being monies lent and advanced to the defendant. On the 22nd of June 1992 in the absence of any Statement of Defence default judgment was entered.

On the 8th of October 1992 the defendant applied by an inter partes summons for an order setting aside the default judgment with leave to the defendant to defend the claim. No proposed Statement of Defence was annexed to the defendants' affidavit in support but in any event the defendant deposed:

"2. THAT the (plaintiff's) Writ was issued in February 1992 against me although the Plaintiff in the same cause of action had obtained judgment against me in an action instituted against me in Australia in 1990."

In an affidavit filed on the 2nd of March 1993 by a manager of the plaintiff bank however the manager deposed inter alia in paragraph 3:

"3. ... Therefore I further advise that no judgment was obtained against the defendant by the plaintiff in relation to this debt at any time."

In view of the apparent conflict in the affidavits the defendant was ordered to file a further affidavit by Scott J. and this was duly filed on the 13th of September 1993. In it the defendant deposed that he made a special trip to Sydney to obtain the relevant court documents which he annexed to his affidavit.

The Court documents indicate that the plaintiff bank obtained in the Local Court at North Sydney in Plaint No. 10375 of 1989, a default judgment for the total sum of $9,973.44 (inclusive of interest and costs). Brief particulars of the claim were expressed as being:

"Money lent by the plaintiff to the defendant pursuant to an agreement dated 4 March 85."

On the basis of the affidavits and annexures learned counsel for the defendant wrote in his written submissions:

"... that the earlier decision dated 12th April 1990 at the North Sydney Court prevented the plaintiff from pursuing the later action in the High Court of Fiji. This view it is submitted is supported by the principle of res judicata."

Learned counsel for the plaintiff bank however on the other hand states:

"8. ... the principle of estoppel per rem judicata has no application in the present action as the judgment in North Sydney has not been satisfied. Kohnke v. Karger [1951] ALL E.R. 179."

I can deal quite shortly with the authority of Kohnke v. Karger (ibid). In the first place it is correctly cited in Halsbury's Laws of England Vol. 8 at para. 738 as authority for the following proposition, namely:

"Where there are separate causes of action against different defendants in respect of the same damage then, subject to the rule against double satisfaction, a satisfied foreign judgment obtained against one defendant is not a bar to proceedings against other defendants."

If I may say so the authority does not support the above-quoted proposition of counsel for the plaintiff bank.

Furthermore the case is easily distinguished from the present on its facts. There the plaintiff was injured in France in a collision between a motor car, owned and driven by an English resident in which she was a passenger, and a lorry owned and driven by a French man. She sued the French driver in France and obtained damages and later sued the English driver in England in respect of the same cause of action and for the same damage.

In the English proceedings Lynskey J. in rejecting the defendant's plea of 'res judicata' said at p.677 (ibid):

"The present plaintiff, not unnaturally, brought her claim in France against the lorry driver and his employers in which country they resided and where their assets were, and she brought her claim against the present defendant in this country where he resided and no doubt his assets are. In my view, there is nothing in principle which prevents her adopting this course, and her election of one tribunal to deal with her claim against the lorry driver and his employers, even when she obtains judgment which is satisfied, will not avail the present defendant except to the extent that her damages have been in part satisfied by the money recovered from the lorry driver and his employers."

Quite simply the plaintiff in Kohnke's case had two separate and distinct 'causes of action' against two separate and distinct defendants.

Furthermore I cannot accept the proposition that mere non-payment of a judgment debt renders the judgment incapable of supporting a plea of 'res judicata'. Indeed the law on this particular aspect has been well-settled since King v. Hoare [1844] 67 R.R. 694 in which it was decided:

"A judgment (without satisfaction) recovered against one of two joint debtors is a bar to an action against the other.

And is pleadable in bar and not in abatement."

Baron Parke explained the principle thus when he said at p.702:

"If there be a breach of contract, or wrong done, or any other cause of action by one against another, and judgment be recovered in a Court of record, the judgment is a bar to the original cause of action, because it is thereby reduced to a certainty, and the object of the suit attained, so far as it can be at that stage; and it would be useless and vexatious to subject the defendant to another suit for the purpose of obtaining the same result. Hence the legal maxim, 'transit in rem judicatam' - the cause of action is changed into matter of record, which is of a higher nature, and the inferior remedy is merged in the higher. This appears to be equally true where there is but one cause of action whether it be against a single person or many. The judgment of a Court of record changes the nature of that cause of action, and prevents its being the subject of another suit, and the cause of action, being single, cannot afterwards be divided into two. Thus it has been held, that if two commit a joint fort, the judgment against one is, of itself without execution, a sufficient bar to an action against the other for the same cause."

I turn then to the submissions of learned counsel for the defendant raising the plea of 'res judicata' which was explained by Lord Reid in Carl Zeiss Stiftung v. Rayner & Keeler Ltd. (No. 2) [1967] 1 A.C. 853 when he said at p.909:

"There is a vast amount of authority on estoppel per rem judicatam.

'The object of the rule of res judicata is always put upon two grounds - the one public policy that it is the interest of the State that there should be an end of litigation, and the other, the Lordship on the individual, that he should be vexed twice for the same cause' (per Lord Blackburn in Lockyer v. Freeman)

And the general principle is clear that the earlier judgment relied on must have been a final judgment, and that there must be identity of parties and of subject matter in the former and in the present litigation."

In the present proceedings there is not the slightest doubt that there is an "identity of parties" not only in names but also in their respective capacities. Certainly nothing has been deposed or submitted which would undermine such a finding.

Equally, although the amounts claimed in the 2 actions are not "identical", both seek to recover 'money lent' and advanced by the plaintiff bank to the defendant and despite the denial by the manager of the plaintiff bank of any judgment having been obtained against the defendant, I note that the plaintiff bank did seek the services of a Melbourne-based debt collection agency for which services it admits charging the defendant's account.

Furthermore as of 7th March 1989 (the date when the Australian proceedings were issued) the defendant's outstanding debit balance in his account with the plaintiff bank stood at a figure slightly in excess of Fiji dollars $8,922.13 and there has been no denial that the Australian proceedings were instituted for a separate or different debt owed by the defendant as could have been easily deposed by the plaintiff bank if any existed. I hold therefore that there is a sufficient "identity in the subject-matter" of the 2 proceedings.

This only leaves the question of the 'finality' of the default judgment obtained in the North Sydney Local Court. Again no issue has been taken on this aspect but having carefully considered the matter I am satisfied that the defendant's plea of 'res judicata' ought to be sustained.

In Kok Hoong v. Leong Chaong Kweng Mines Ltd. [1964] A.C. 993 Viscount Radcliffe delivering the judgment of the Privy Council said at p.1010:

"... In their view there is no doubt that by the law of England, which is the law applicable for this purpose, a default judgment is capable of giving rise to an estoppel per rem judicatam. The question is not whether there can be such an estoppel, but rather what the judgment prayed in aid should be treated as concluding and for what conclusion it is to stand."

Later in rejecting as an unduly narrow reading of what a 'default judgment' stands for, their lordships said at p.1013:

"What, then, must the default judgment to be taken to have decided in this earlier action? As a decree it adjudges in terms no more than that the appellant is entitled to recover from the respondent a fixed sum of dollars, interest and costs, and it was argued on this appeal that the judgment cannot estop from nothing more than a denial of that bare fact ... Their lordships, however, do not think that, where as here the plaint upon which the judgment has been obtained is itself upon and so forms part of the record, there is any valid ground for refusing to notice what case it is that a plaintiff has set up in order to found the order that he claims."

In the context of the present action that would be to say that the estoppel would extend not only to the amount for which default judgment was entered but also to the 'cause of action' namely for money lent and advanced to the defendant by the plaintiff bank.

This is clearly contemplated in the opinion of Vaughan Williams J. in In re South American and Mexican Company ex parte Bank of England [1894] UKLawRpCh 184; [1895] 1 Ch. 37 when he said at p.45:

"It has always been the law that a judgment by consent or by default raises an estoppel in just the same way as a judgment after the Court has exercised a judicial discretion in the matter. The basis of the estoppel is that, when parties have once litigated a matter, it is in the interest of the estate that litigation should come to an end; and ... an estoppel is raised as to all the matters in respect of which an estoppel would have been raised by judgment if the case had been fought out to the bitter end."

I am of course mindful that since the Australian proceedings, interest on the defendant's debt with the plaintiff bank continues to accumulate making the debt substantially larger than what it was when the Australian proceedings were first taken out, but that is not a valid reason for allowing the plaintiff bank to re-litigate the entire sum owing under both the foreign 'judgment debt' plus the accrued interest and costs to date.

As was said by Julf J. in Taylor v. Hollard [1902] UKLawRpKQB 17; [1902] 1 K.B. 676 in rejecting an action which sought to recover the unpaid balance of a judgment debt (which one might have thought was a valid claim) said at p.681:

"What he wants to do is to take from the foreign Court the judgment which that Court gave for the whole cause of action, and treat it as part payment and sue for the residue here. To do this would be to approbate and reprobate, or, in more homely language, to blow hot and cold, which neither law nor common sense will allow."

Accordingly the defendant's 'plea in bar' is upheld and the plaintiff bank's action is dismissed with costs to be taxed if not agreed. Needless to say the default judgment entered in this action must be and is hereby set aside.

(D.V. Fatiaki)
JUDGE

At Suva,
29th March, 1994.

HBC0051D.92S