Su'a v Imex Company Ltd [2004] WSSC 6 (28 April 2004)

IN THE SUPREME COURT OF SAMOA
HELD AT APIA

IN THE MATTER of Part II of the Reciprocal Enforcement of Judgments Act 1970.

AND

IN THE MATTER of an application to register in the Supreme Court of Samoa
a Judgment of the District Court of New Zealand at Tauranga.

BETWEEN

TUIGAMALA SU’A
of Vailoa, Faleata, Businessman.
Applicant

AND

IMEX COMPANY LIMITED
of 152 Newton Road, Mount Maunganui, Merchants.
Respondent

Counsel: TRS Toailoa for applicant
R Drake for respondent

Judgment: 28 April 2004

JUDGMENT OF SAPOLU CJ

For the purposes of this judgment, I will, for convenience, refer to Tuigamala Su’a as “the applicant” and to Imex Company Ltd, a company whose address is at Mt Maunganui in New Zealand, as “the respondent.” These proceedings are concerned with an application by the applicant to set aside the registration in the Supreme Court, which was granted by Justice Vaai under Part II of the Reciprocal Enforcement of Judgments Act 1970, of a judgment obtained by the respondent in the District Court of New Zealand at Tauranga. As no issue was taken as to whether the procedure adopted by the applicant is the correct procedure, I will proceed on the basis that the respondent does not challenge that procedure.

Background

From the affidavits and other documentation placed by both parties before the Court, it is clear that at the material times the applicant who is resident in Samoa was dealing under the name “West End Co Ltd” with the respondent which is a company in New Zealand. So to the respondent, it was not dealing with the applicant as an individual but with West End Co Ltd as an incorporated company. This appears from the affidavits of Mr Popplewell which were produced by counsel for the respondent. Unbeknown to the respondent, West End Co Ltd was at the material times a non-existent entity as it had not been registered.

What happened, according to the respondent, was that between March 1996 and July 1996 the respondent entered into a number of transactions for the sale of used vehicle tyres to West End Co Ltd which was the name used by the applicant for the purpose of those transactions. Thus the nature of those transactions was one of sale of goods with the respondent as seller and West End Co Ltd as buyer. When West End Co Ltd failed to pay the full price of the tyres, the respondent as plaintiff brought civil proceedings in the District Court of Tauranga and obtained summary judgment on 12 February 1998 against West End Co Ltd as defendant which made no appearance. The total amount of the judgment including costs was NZ$70,553=73.

In July 1999, the respondent which was then represented by different local counsel filed an ex parte motion in this Court for registration under Part II of the Reciprocal Enforcement of Judgments Act 1970 of the judgment obtained by the respondent against West End Co Ltd at the District Court of Tauranga. Wilson J in this Court dealt with the motion on an inter parte basis. Counsel who was appearing for the present applicant on that occasion opposed the respondent’s motion on several grounds and sought security for costs. Two of the grounds upon which registration was opposed were, firstly, that there was no entity registered in Samoa as “West End Co Ltd” and, secondly, that the Reciprocal Enforcement of Judgments Act 1970 has not been made to apply to the judgments of the New Zealand District Court but only to the judgments of the New Zealand superior Courts of record by reason of an Order (1971) made pursuant to s.3 of the Reciprocal Enforcement of Judgements Act 1970. Wilson J on 14 September 1999 stayed proceedings on the judgment and ordered the respondent to pay security for costs of $10,000. The respondent has not complied with that order.

In October 2002, the respondent filed another ex parte motion in this Court for registration of the same judgment except that the name of West End Co Ltd as defendant had been replaced by that of the present applicant. The affidavit of Mr Popplewell filed in support of that motion shows that the present respondent had made application to the District Court of Tauranga seeking an order replacing West End Co Ltd with the present applicant as defendant. No doubt this was done because one of the grounds upon which the respondent’s motion for registration in this Court was opposed before Wilson J in 1999 was that there was no registered entity in Samoa known as West End Co Ltd. The respondent’s application to the District Court of Tauranga was granted and the present applicant’s name was substituted as defendant in place of West End Co Ltd. Judgment was accordingly entered in the District Court of Tauranga against the present applicant as defendant. It further appears from an unsealed letter dated 26 April 2002 signed by a Clerk of the High Court in New Zealand that the said judgment had been registered as a judgment of the High Court of New Zealand on 22 March 2002. All this information was apparently before Vaai J who dealt with the respondent’s second ex parte motion for registration on an ex parte basis. It is not, however, clear whether Vaai J was aware of the order that Wilson J had made in 1999 on the respondent’s first motion for registration. It is most likely Vaai J was not aware of that order. In any event, Vaai J granted the respondent’s second motion on 31 October 2002 and the judgment against the present applicant was registered in this Court even though the respondent had not complied with the order for security for costs which had been made by Wilson J. As the respondent’s second motion was ex parte and dealt with on an ex parte basis, the present applicant was not aware of it. On 19 December 2002, according to the submissions by present counsel for the respondent, notice of registration of the judgment was served on the present applicant. That notice of registration was accompanied with a notice to the applicant that he had 28 days to apply to set aside registration of the judgment. This was in accordance with r.17 of the Reciprocal Enforcement of Judgments Rules 1971.

After receipt of the notice of registration of judgment against himself on 19 December 2002, the applicant in early January 2003 instructed his present counsel who, by letter dated 9 January 2003, sought from counsel for the present respondent clarification on: (a) whether the judgment which had been registered against the applicant was the same judgment the respondent had sought to register against West End Co Ltd in 1999 but was stayed by Wilson who ordered security for costs to be paid by the respondent, and (b) whether the respondent had paid the security for costs. By letter dated 13 January 2003, counsel for the respondent replied that she would have to seek clarification from the respondent’s solicitor in Tauranga, New Zealand, as she had no prior involvement in this matter. About 16 January 2003 the 28 days period allowed for the applicant to apply to set aside registration of judgment expired. Then by letter dated 12 February 2003, counsel for the respondent advised counsel for the applicant that it was the original judgment against West End Co Ltd that had been registered against the applicant as West End Co Ltd did not exist as a legal entity. It was further advised that as the defendant in the registered judgment was the applicant and not West End Co Ltd, the order for security for costs made in 1991 when West End Co Ltd was the defendant was no longer relevant. This implies that the order for security for costs made in 1999 had not been complied with. On 25 February 2003 counsel for the applicant filed an application to set aside judgment. In July 2003 a motion for enlargement of time to file the application to set aside was also filed. This matter was finally heard on 20 August and 20 September 2003. Further submissions were required from both counsel, and counsel for the respondent filed her further submissions on 10 November 2003. Subsequently, counsel for the respondent was asked to provide a copy of the New Zealand legislation which enabled the judgment of the District Court of Tauranga to be registered in the High Court of New Zealand. Counsel for the respondent subsequently provided by affidavit r.568 of the District Courts Rules 1992 (NZ). I had expected, however, that a copy of the Rules would be provided to the Court by the respondent’s lawyer in New Zealand and not an affidavit with r.568 typed in it.

Issues

There are really three issues for determination. The first issue is whether the Court has power to enlarge the time for filing an application to set aside judgment where such an application is made after the expiry of the 28 days period allowed for an application to set aside registration of judgment to be made. The second issue is that if the Court has such power, should it be exercised in this case to enlarge the time for filing the application to set aside. The third issue is whether registration of the judgment should be set aside.

Does the Court have power to enlarge time for the application to set aside.

As already shown, the 28 days period for filing an application to set aside expired about 16 January 2003. After enquiries for clarification on 9 January 2003 from counsel for the applicant to which counsel for the respondent replied on 13 January 2003 saying that clarification would have to be sought from the respondent’s solicitor in Tauranga, that clarification was only communicated to counsel for the applicant on 12 February 2003. The application to set aside was then filed on 25 February 2003 and an application for enlargement of time was filed in July 2003.

Rule 17 of the Reciprocal Enforcement of Judgements Rules 1971, which is the relevant rule, provides as far as relevant:

“Unless the Court shall otherwise order, the period within which an application may be made to set aside the registration shall-

(a) If the judgment debtor is resident in Samoa, be 28 days.”

Naturally counsel for the respondent opposed the motion for enlargement of time. She submitted that the applicant should have filed his application to set aside registration within the 28 days allowed under r.17, and not after the expiry of that period. It was not a valid excuse for the applicant to wait for a reply from counsel for the respondent on the matters on which he had sought clarification before filing his application to set aside.

With respect to counsel for the respondent, I disagree. Rule 17 does not expressly say that an application for enlargement of time has to be made within the specified period of 28 days. Neither does it expressly say that such an application has to be made outside the 28 days period. In the absence of any words specifying when a motion for enlargement of time can be made, there is no valid reason for limiting the meaning of r.17 one way or the other. In my view, the wording of r. 17 permits an application for enlargement of time to be made at any time, that is, either within or after the expiry of the 28 days period. There is another reason for not accepting the submission by counsel for the respondent. If r.17 is to be interpreted to mean that an application for enlargement has to be made within the 28 days period, then in the ordinary run of cases, it would be pointless to apply within that period for an enlargement of time. One might as well put in an application to set aside registration instead of an application for enlargement of time. Rule 17 would also become more meaningful if it is made to apply to an application for enlargement of time made after the expiry of the period allowed to apply to set aside.

In support of the view I have taken as to the interpretation to be given to r.17, I refer to the New Zealand case of Saunders v Saunders (1994) 7 PRNZ 413 where the High Court of New Zealand had to deal, inter alia, with an application for extension of time to set aside the ex parte registration of a foreign judgment and the setting aside of that judgment. On the question of time for filing an application for extension, r 740 (3) of the High Court Rules (NZ) provides:

“The Court may, on an application made at any time while it remains competent for any party to apply to have the registration set aside, grant an extension of the period (either as originally fixed or as subsequently extended) during which an application to have the judgment set aside may be made.”

What had happened in that case was that a New Zealand Court had granted an ex parte order for registration in New Zealand of a judgement of the Family Court of Australia, when the New Zealand legislation on reciprocal enforcement of foreign judgments had not been extended to judgments of the Family Court of Australia. A copy of that order which fixed 30 days to make an application for setting aside was served on the applicant. Two and a half years passed before the applicant made application for extension of time and for setting aside the registration of the Australian judgment. In dealing with the application for extension of time, Master Hansen with regard to r. 740(3) said at p414:

“Mrs Saunders counsel has made a submission that it [r.740(3)] is clear this means the application for extension must be made within the 30 day period. Certainly on a bald reading of the words of subcl (3), there is merit in that interpretation. But the matter does not end there. It would be strange indeed if the drafters of the rules intended in a rule granting the right to apply for an extension of time to say that that can only be done within the same period in which one can make an application to set aside. As counsel for Mr Saunders properly asked, rhetorically, why would anyone bother, why would they not simply file a pro forma application to set aside?”

Master Hansen then concluded at p415 that he had the power under r.740(3) to extend the time for the application to set aside the judgment to be filed, even though that application was made more than two years after the expiry of the 30 days period specified in the notice served on Mr Saunders to apply to set aside. I have reached the same conclusion on the wording of r.17 of the Reciprocal Enforcement of Judgments Rules 1971.

Should time be enlarged to file the application to set aside

Having regard to all the circumstances, I am of the clear view that time must be enlarged to enable the applicant to file his application to set aside the registration of the judgment against him. In determining whether an enlargement or extension of time should be granted under r.17, any delay is a powerful factor to be taken into account. But it is not the only relevant factor. Another relevant and very important factor is whether refusal to grant an extension of time would lead to a miscarriage of justice.

In this case there was an interval of about five weeks between the expiry of the 28 days period specified in r.17 for filing an application for enlargement of time to set aside registration of judgment and when the application to set aside was actually filed. There was also a lapse of six months between the expiry of the said 28 days period and the actual filing of the application enlargement of time. However one gets the impression that even if the applicant had thought of filing an application for enlargement of time within the 28 days period, he would have been in a dilemma whether or not to do so. The reason is that there was uncertainty whether the judgment which had been registered against the applicant was the same judgment on which registration had been stayed and security for costs was ordered in 1999. This state of uncertainty must have hovered over the applicant until he received the advice of 12 February 2003 from counsel for the respondent in response to a request for clarification from his counsel. By that time the specified 28 days period had expired by more than three weeks. An application to set aside was then filed two weeks later and an application for enlargement of time was made six months after expiry of the 28 days period.

As I have said, in determining whether to grant the application for extension of time, delay is a powerful factor to be considered. But it is not the only relevant factor. Another relevant and very significant factor is whether a miscarriage of justice could result if enlargement of time is withheld. In my considered opinion, there will be a miscarriage of justice in this case if the application for enlargement of time is refused. The reason is that not to grant enlargement of time would mean that the judgement of the District Court of Tauranga will remain registered and be enforceable against the applicant even though such a judgement is not capable of registration, and therefore enforcement, in Samoa under the Reciprocal Enforcement of Judgments Act 1970. Accordingly, time is extended to permit the application for enlargement of time to be made. In Saunders v Saunders (1994) 7 PRNZ 413, Master Hansen in granting an application for extension of time made 2 ½ years after the specified time for making an application to set aside a foreign judgment had passed, said at p415:

"But in considering the application for extension of time, it is not only the question of delay that is to be considered. It is a powerful factor, but not the only one. Looking at the matter overall, I would consider the delay is on the fine line between justifiable and not justifiable. But there are other factors, the most important of which is whether failure to grant an extension could lead to a miscarriage of justice. Because of the views I have formed on the merits of the application to set aside the registration, I am firmly of the view that not to grant an extension of time would have that result. It would, in my view, lead to a situation where a judgment could be enforced against Mr Saunders that in the normal course of events could not be registered in terms of the Reciprocal Enforcement of Judgments Act 1934 and, accordingly I grant the application for extension of time."

Should registration of the judgment be set aside

Under s.3 of Part II of the Reciprocal Enforcement of Judgments Act 1970, the Head of State may by Order extend the application of Part II to judgments of the superior Courts of any foreign country which will extend substantial reciprocity of treatment with regard to the enforcement in that foreign country of judgments of the superior Courts of Samoa. Such an Order called An Order (1971) Under The Reciprocal Enforcement of Judgements Act 1970 was made by the Head of State extending the application of Part II of the Act to judgments of the then superior Courts of New Zealand, namely, the Judicial Committee of the Privy Council, the Court of Appeal of New Zealand and the Supreme Court of New Zealand, which is now the High Court of New Zealand. The then Magistrates Court of New Zealand, which is now the District Court of New Zealand, was not included.

What had happened in this case is that after the respondent had obtained a monetary judgment in the District Court of Tauranga against West End Co Ltd, it then applied in 1999 to have that judgment registered in Samoa under the Reciprocal Enforcement of Judgments Act 1970. Wilson J who dealt with that application stayed registration and ordered security for costs to be paid. Having failed to obtain registration of its District Court judgment, upon application by its previous counsel, the respondent then applied to the District Court of Tauranga under r.568 of the District Court Rules 1992 (NZ) to have the present applicant substituted as defendant for West End Co Ltd. That application was granted. It is not clear what happened then. But there is a certificate of judgment purported to be signed by a deputy registrar of the High Court of New Zealand with the seal of that Court affixed to it which is annexed to the affidavit of Mr Popplewell filed for the respondent in these proceedings. It is far from clear whether that means the judgment of the District Court of Tauranga had become a judgment of the High Court of New Zealand for the purpose of registration under the reciprocal enforcement of judgments legislation of a foreign country. I must say this point did trouble me.

Thus, during my recent visit to Wellington, New Zealand, less than two weeks ago, I took the trouble of making enquiries for the New Zealand legislation or rules which are relevant to the issue that has arisen from Mr Popplewell’s affidavit, which I presume was prepared by a lawyer in Tauranga. Fortunately, I was given a copy of the District Courts Act 1947 (NZ). The relevant provisions are ss.66 and 67 which deal with the removal of a judgment of the District Court into the High Court. Section 66 in particular empowers the registrar to issue a certificate of judgment. But there is nothing in s.66 or s.67 which provides that the judgment of the District Court thereby becomes a judgment of the High Court, let alone a judgment of the High Court for the purpose of registration under the reciprocal enforcement of judgments legislation of a foreign country. There is also no New Zealand case which has decided that ss.66 and 67, either read separately or together, would have that effect. The conclusion I have therefore reached is that the judgment in this case remains the judgment of the District Court of Tauranga even though the applicant has been substituted as defendant for West End Co Ltd and that judgment might have been removed into the High Court of New Zealand pursuant to the provisions of the District Courts Act 1947 (NZ). As Part II of the Samoa Reciprocal Enforcement of Judgments Act 1970 has not been extended to judgments of the District Court of New Zealand, the judgment in this case cannot be registered under the Act as a foreign judgment. Registration is accordingly set aside. That would be sufficient to dispose of this matter in favour of the applicant.

Another relevant matter raised for the applicant which would support an order to set aside registration, is the continuing failure on the part of the respondent to comply with the order for payment of security for costs. The other important matter raised for the respondent is that under r.11, the application for registration should have been accompanied by an affidavit stating: (a) the rate of exchange prevailing at the date of the foreign judgment, (b) the amount of the foreign judgment in Samoan currency, (c) the amount of any interest on the judgment under the law of the foreign country where the judgment was given, (d) the amount of interest due, and (e) the prevailing exchange rate at the time of the application for registration. An affidavit to cover those matters was only filed in the course of the present proceedings. Having said that, this Court for a number of years now has been giving judgments in foreign currency in appropriate cases. In light of this, r.11 should be reviewed.

All in all then, registration in this Court of the judgment against the applicant is set aside. Costs of $2,000 are awarded to the applicant against the respondent as the respective parties have been described in this judgment.

CHIEF JUSTICE

Solicitors:
Toailoa Law Office for applicant
Drake & Co Law Firm for respondent