Kalyk v Atlas Corporation Pty Ltd [1998] PGNC 76; N1760 (31 July 1998)

Unreported National Court Decisions

N1760

PAPUA NEW GUINEA

[NATIONAL COURT OF JUSTICE]

OS N0. 559 OF 1998
BETWEEN
FRANCIS KALYK, ANTHONY JOHN DEEGAN &
BRUCE WILLIAM HANSEN
PLAINTIFFS
AND
ATLAS CORPORATION PTY LTD
DEFENDANT

Kapi DCJ
27 May 1998
31 July 1998

APPLICATION TO SET ASIDE JUDGEMENT UNDER RECIPROCAL ENFORCEMENT OF JUDGEMENTS ACT (CAP. 50) - consideration of meaning of “..appearing in the proceedings..”, s5 (2). Meaning of public policy, s 5 (a) (v).

Counsel

W Neill for the plaintiffs

R Thompson for the defendant

31 July 1998

KAPI DCJ: This is an application by the defendant to set aside the registration of a judgement obtained in the Supreme Court of New South Wales. The application is made under s 5 of Reciprocal Enforcement of Judgements Act (Cap.50) (hereinafter referred to as “the Act”). Counsel for the defendant relies on two grounds (a) that Supreme Court of New South Wales did not have jurisdiction in the matter (b) that the registration of the judgement in Papua New Guinea is against public policy.

It is necessary to set out the circumstances giving rise to this application. Francis Gary Kalyk, Anthony John Deegan and Bruce William Hansen (hereinafter referred to as “the Plaintiffs) are solicitors trading under the name Kalyk Hansen & Deegan in New South Wales It appears that the defendant had several claims against the Independent State of Papua New Guinea regarding road-works in Papua New Guinea. Apparently, several of these claims were dealt with by the Arbitrator and awards made in respect of them. The remaining claims were adjourned to be dealt with at a later date.

It was in relation to the arbitration of the remaining claims that the managing director of the defendant company entered into negotiations to retain Mr Kalyk as its lawyer. Mr Kalyk offered his professional services as a lawyer at the rate of AU$160.00 per hour on the basis of 8 hours a day. The managing director of the defendant company agreed to retain Mr Kalyk on the above terms and performed legal work for the defendant in connection with the said arbitration.

The plaintiffs, between 10^th June 1988 and 21^st November 1988, rendered bills totalling AU$91,569.24. The defendant paid a total of AU$47,000.00. The balance owing is AU$44,569.24. The circumstances surrounding the non-payment of the balance of the costs is set out in letters written by the managing director of the defendant company to Mr Kalyk (Annexures “G1” and “G2” in the affidavit of Mr Gunter H Trinka sworn 16^th February 1998). It is not necessary to set out the details here. The balance has not been paid.

The plaintiffs commenced proceedings in New South Wales to recover the balance of fees in proceedings No. 1205 of 1990 in the Supreme Court of New South Wales. The lawyer for the defendant sought leave to file notice of objection to jurisdiction but this was refused by the Court. The Court, however, transferred the matter to the District Court in NSW.

In the District Court, the defendant filed a motion objecting to jurisdiction. This motion was dealt with by Judge Mahoney and on 25^th November 1991 he ruled that even though the contract was formed in Papua New Guinea, the material part of the contract, namely, the payment for the services was to be performed within the State of New South Wales. He concluded that this attracted the jurisdiction of the Court and dismissed the motion.

However, the Court summarily dismissed the action on a different ground. He ruled that Mr Kalyk could not succeed in the action on the basis that he had conceded that he had not rendered a taxed bill of costs. The District Court said in its ruling:

“In all of the circumstances it seems to me, although it might be harder to identify with particularity than the mere saying of it, that this Court does have a jurisdiction to adjudicate and that, although the notice of objection to jurisdiction does not specifically nominate the point, clearly the jurisdiction cannot be invoked by Kalyk because of his failure to comply with the statute either in Papua New Guinea or in New South Wales or in both.

In all the circumstances it seems to me that the appropriate order to be made is that these proceedings should be struck out and that Kalyk should be given the opportunity on another day, if he sees fit, to tax his bill of costs and then proceed against Atlas on the basis of a statement of claim that has a chance of succeeding.”

The action was dismissed with costs to the defendant.

The plaintiffs then subsequently instituted further proceedings in the Supreme Court of New South Wales in action no. 010453/93. Once again the defendant contested the jurisdiction of the Court. The Court in dealing with this issue ruled:

“On 2 February 1995, Master Malpass found that there had been a voluntary submission to jurisdiction by the defendant and declined to stay the proceedings. I have not seen Master Malpass judgement but I have the computer records of this Court as to what happened before the Master. As the Master has determined that there was a voluntary submission by the defendant to the jurisdiction of the Court and there has been no appeal against that order; it stands.”

The defendant did not appear at the trial and allowed the matter to proceed in absence. The Court found that the plaintiffs rendered an itemised bill of costs and judgement was entered for the plaintiffs in the sum of AU$100,268.14 with costs.

The defendant subsequently applied and registered the judgement under s 3 of the Act. The application before me is to set aside the registration.

JURISDICTION

Counsel for the defendant submits that the Supreme Court of New South Wales has no jurisdiction to adjudicate in the matter on the grounds that the cause of action arose out of an agreement for work to be performed in PNG concerning an arbitration between a PNG company and the PNG Government over road-works in PNG with arbitration conducted in PNG. Counsel submits that consideration for work done was to be paid in PNG but in Australian dollars. In the circumstances, counsel submits that no Court in New South Wales would have any jurisdiction.

Further, counsel for the defendant submits that at all times the defendant contested the jurisdiction of the Supreme Court of New South Wales. She relied on Stenhurst Pty Ltd v Golding International Pty Ltd (Unreported judgement of the National Court dated 30^th October 1995, N1377 a decision of Andrew J).

Counsel for the plaintiffs on the other hand submits that the defendant submitted to the jurisdiction of the Supreme Court of NSW and therefore the Court is deemed to have had jurisdiction in the matter.

This requires an examination of the relevant provisions of the Act. Section 5 in so far as it is relevant provides as follows:

“5. ;ټ Cases ises in whic which registered judgements shall, or may be set aside

(1) &ـ On an a an applicaplication duly made by any pagainom a registered judgement may be enforced, the rehe registrgistration of the judgement:

(a) &ـ shalsetalset aif taif the registerintering coug court is satisfied that:

(i) ҈& .60; ...

.

(ii) 䃘&#1he courts of thef the country of the original court hart had no d no jurisdiction in the circumstances of the case; or”.

(ii60;&##160;; ....

(iv) & .....

(v

(v) ҈& ....

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(vi) ټ ....

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(b) ;ټ ............

(2) Subject to Subsection (3), for the purpof thition ourts of the co of the original court shall hall be deemed to have had jurisdiction:

(a)&>(a) e tha mf t in an action tion in n in persopersonam:

(i) &##160;; i60the the judgemudgement debtor, being a defendant in the origcourtmittethe jictiothe court by voluntoluntarilyarily appe appearingaring in t in the proceedings otherwise than for the purposes of:

(A) &#160tecting, oa obtaining ning the release of, property seized, or threatened with seizure, in the proceedings; or

(B) &ـ&#1ontesthe jurisdirisdiction of the court; or

(ii) &##10;&<<&#160 .....”Stenhurst Pty Ltd v Golding International Pty Ltd (supra) involved a default judgement in the original court. The case does not discuss the meaning of the words in question. I interpret the words “appearing” to mean personal appearance or by a legal representative in the proceedings. If the legislature had intended a meaning to cover filing of pleadings as an act of submission it would have used words to give effect to this intention. I find that the word “appearing in the proceedings” can only relate to personal appearance or by legal representative in the proceedings.

The relevant proceedings is the second cause of action filed in the Supreme Court of NSW in 1993. Counsel for the defendant relies on the fact that the defendant contested the jurisdiction of the Court and when the Court ruled against its application, it withdrew and took no further part in the proceedings.

Counsel for the plaintiff relies on a number of factors from which I should conclude that the defendant has submitted to the jurisdiction of the Supreme Court of NSW.

On the 10^th March 1993, solicitors for the defendant in Sydney filed a notice of motion seeking several orders in the proceedings. The orders sought included an application contesting the jurisdiction of the Court but significantly seeking orders related to the merits of the cause of action.

On the 14^th May 1993 the defendant by its lawyers consented to orders which were intended to further deal with the matter in Court as follows:

“1. &##160;isse s ines in thesethese proceedings be defined by pleadings.

2. The Plafntifle fid sanve arve a Statement of Claim on or before 28^th30;&#160  ; The Deft file file and serd serve a defence on or about 18^th June 1993.

4. ټ&# Taintiaintiile arle arve any affidavits on or before 2 July 1993.

5. &160; #160; &##160 Lib; Liberty to either partapprohe Registrar to specifically fix the Defendantnt’s217;s and Plaintiff’s motion for hearing.

....”

efend8217;yers filed an amen amended notice of motion on 20^{th Jup> July 1993 and in September 1993 filed a further notice of motion and affidavits.}

Significantly the defendant’s lawyers requested the plaintiffs’ lawyers in a letter dated 17^th August 1994 instructing them to consent to vacation of the date of the hearing of the defendant’s notice of motion.

It also appears that the defendant’s lawyers appeared before the Deputy Registrar on 10^th November 1994 with regard to directions in the matter.

On the 13^th February 1995 the defendant’s lawyers filed a defence in this matter.

I conclude from these facts that the defendant by its lawyers appeared in the proceedings on several occasions. The solicitors subsequently ceased to act for the defendant. This did not affect the fact that the defendant had already submitted to the jurisdiction of the Court. The fact that the defendant failed to appear again in the proceedings and ultimately at the trial is irrelevant. The matter simply proceeded in its absence. I dismiss this ground.

PUBLIC POLICY

The ground relied upon is set out in s 5 (1) (a) (v) of the Act which provides that the registration of a judgement may be set aside if “the enforcement of the judgement would be contrary to public policy..” The Act does not define what is public policy. This is a vague and an uncertain term. See the cases discussed in Fender v St. John-Mildway [1938] AC 1 per Lord Atkin.

In the present case, the Court is directed to have regard to public policy in setting aside a registration of a foreign judgement. The Courts have developed various precedents where public policy has been invoked. It is not necessary to discuss the different circumstances. Lord Atkin sets out the guiding principles as to whether “harm to the public is substantially incontestable..”. Lord Wright expressed the test: “what are the definite propositions as to what interest of the State or what injury is supposed to be involved.”

Counsel for the defendant submits that it would be contrary to public policy for this judgement to remain registered because it would avoid the requirements of PNG law in three ways. First, if the plaintiff had sued in Papua New Guinea, the defendant would have availed itself of various rights such as it would be entitled to receive a bill of costs in the required form. Secondly, the defendant would have required the plaintiff to have the bill of costs taxed. Thirdly the defendant would be entitled to challenge the fees on the basis that the plaintiff was not a holder of a practising certificate to practice law at the relevant time. Fourthly the defendant would be entitled to set aside the terms of the agreement.

Counsel submits that by instituting the action in New South Wales, he deprived the defendant of all these rights given by PNG law. These submissions would have considerable force if it can be shown that the law applicable to payment of fees to lawyers are different in NSW and the action was commenced in NSW with the ulterior motive of gaining an advantage over the rights of the defendant under Papua New Guinea law.

It is clear from the judgement of Judge Mahoney of the District Court in NSW that law with respect to claim for professional fees as a lawyer are no different in both jurisdictions. The defendant may raise the same rights both in Papua New Guinea or in NSW. In fact the defendant raised these very issues in a defence filed in the action in the Supreme Court of NSW. These matters were not considered by the Court in the end because the defendant failed to pursue them in Court. The law in PNG is no different. If the defendant did not appear in an action commenced in PNG an order would be made against its interest in the same manner. In both jurisdictions a party has a right of appeal to a higher court.

I should also indicate that our civil procedure in the National Court Rules is very much based on the New South Wales rules. In these circumstances it cannot be said that a registration of a judgement of the Supreme Court o f NSW is injurious or harmful to the defendant.

Further, counsel for the defendant raises another matter, namely, that the plaintiff practised law in Papua New Guinea without a practising certificate. Under the Lawyers Act a person who practises as a lawyer without any certificate is guilty of an offence. In this regard the evidence shows that the plaintiff was only granted a certificate on 28^th November 1988 for the period ending 31^st December 1988. Counsel submits that this entitled him to practise for a period of just over a month. Counsel submits that Mr Kalyk practised law without a certificate for the most part of the period when he represented the defendant. Counsel submits that this is an offence in accordance with s Lawyers Act. Admittedly this might be a relevant matter for a taxing officer or court to take into account in considering whether a person who is not admitted to practice is allowed any costs at the rates applicable to lawyers. Counsel therefore submits that the judgement registered is based on fees charged by lawyers and it would be contrary to public policy to allow the plaintiff to benefit from such a judgement. This is an argument the defendant could have raised in the action in NSW. The defendant had every opportunity to raise these issues in Court. He filed a defence and then failed to argue these matters in Court. I am not satisfied that the law in NSW is different in this regard. I am therefore not satisfied in these circumstances that the registration of the judgement is against public policy.

I therefore dismiss the application to set aside the registration of the judgement in this matter.

Lawyers for the Plaintiffs: BLAKE DAWSON WALDRON

Lawyers for the Defendant: YOUNG AND WILLIAMS