MR JUSTICE PEPPERALL:
- On 25 April 2018, His Honour Judge Graham Wood QC, sitting as a Judge of the High Court, ordered that judgments of the High Court of Malaya in favour of the Applicant, Tenaga Nasional Berhad ("Tenaga"), and against the Respondents, Frazer-Nash Research Limited ("Frazer-Nash") and Kamkorp Limited ("Kamkorp"), be registered in the Queen's Bench Division pursuant to s.9 of the Administration of Justice Act 1920. The effect of such order is that the Malaysian judgments can be enforced in England & Wales as if they were judgments of the English High Court.
- By an application made on 26 June 2018, the Respondents seek to set aside the judge's order. Mr Steven Barrett, who appears for the Respondents, argues that the registration of the Malaysian judgments should be set aside on three grounds:
2.1 First, that there is an appeal pending, alternatively that the Respondents are entitled and intend to appeal, to the Federal Court of Malaysia. Accordingly, he argues that registration of the foreign judgments is barred by s.9(2)(e) of the 1920 Act.
2.2 Secondly, that the Applicant's delay in bringing the application for registration amounts to an abuse of process, alternatively that I should in the exercise of the court's discretion refuse registration by reason of such delay.
2.3 Thirdly, that the Applicant was in breach of rule 74.4 of the Civil Procedure Rules 1998 by failing to exhibit a transcript of the judgment of the Court of Appeal of Malaysia.
- There was originally a fourth argument that Judge Wood QC had been misled about the Malaysian law of limitation. This argument was not pursued orally, although it is still necessary to consider briefly the limitation issues in the exercise of the court's discretion under the 1920 Act.
- Mr Richard Samuel appears for the Applicant, as he did before Judge Wood QC. He resists this application.
REGISTRATION OF JUDGMENTS UNDER THE 1920 ACT
- Section 9(1) of the Administration of Justice Act 1920 provides:
" Where a judgment has been obtained in a superior court in any part of His Majesty's dominions outside the United Kingdom to which this Part of this Act extends, the judgment creditor may apply to the High Court of England
., at any time within twelve months after the date of the judgment, or such longer period as may be allowed by the court, to have the judgment registered in the court, and on any such application the court may, if in all the circumstances of the case they think it just and convenient that the judgment should be enforced in the United Kingdom, and subject to the provisions of this section, order the judgment to be registered accordingly."
- Although the Act conjures up images of Empire, it continues to apply today to the judgments of a number of independent Commonwealth nations including Malaysia. Section 9(2) sets out six absolute bars to registration. The subsection provides:
"No judgment shall be ordered to be registered under this section if-
a) the original court acted without jurisdiction; or
b) the judgment debtor, being a person who was neither carrying on business nor ordinarily resident within the jurisdiction of the original court, did not voluntarily appear or otherwise submit or agree to submit to the jurisdiction of that court; or
c) the judgment debtor being the defendant in the proceedings, was not duly served with the process of the original court and did not appear, notwithstanding that he was ordinarily resident or was carrying on business within the jurisdiction of that court or agreed to submit to the jurisdiction of that court; or
d) the judgment was obtained by fraud; or
e) the judgment debtor satisfies the registering court either that an appeal is pending, or that he is entitled and intends to appeal, against the judgment; or
f) the judgment was in respect of a cause of action which for reasons of public policy or for some other similar reason could not have been entertained by the registering court."
- Here, it is said that s.9(2)(e) is engaged. It will therefore be necessary to consider the true construction of that provision. Even if there is no bar to registration under s.9(2), the English court is under no obligation to register the foreign judgment but rather has a discretion as to whether it is appropriate in any individual case to do so. Section 9(1) identifies two considerations:
7.1 First, the English court must consider timing. The application can be made at any time within 12 months of the date of the foreign judgment or "such longer period as may be allowed by the court."
7.2 Secondly, the court must consider whether it is "just and convenient" in all the circumstances of the case that the foreign judgment should be enforced in this jurisdiction.
BACKGROUND
The 2008 Malaysian judgments
- Tenaga is the largest electricity utility company in Malaysia. Its headquarters are in Kuala Lumpur. Frazer-Nash and Kamkorp are companies incorporated in England and Wales. They share a registered office in Surrey.
- In 1997, Tenaga and Frazer-Nash invested in a joint venture special purpose vehicle, Perusahaan Otomobil Elektric (M) Sdn Bhd ("POEM"), to exploit Frazer-Nash's proposal for the development, manufacture and sale of electric vehicles. The joint venture broke down and on 27 July 2000 the parties and others entered into three agreements:
9.1 A Share Sale Agreement under which Tenaga agreed to sell its shares in POEM to Frazer-Nash.
9.2 A Debt Restructuring Agreement under which Frazer-Nash restructured its debt to Tenaga.
9.3 A Deed of Guarantee and Indemnity under which both Respondents guaranteed various obligations under the Share Sale Agreement and the Debt Restructuring Agreement.
- Tenaga alleged default of the Respondents' obligations under these agreements. Accordingly, on 26 July 2006, the Applicant commenced proceedings against POEM and both Respondents pursuant to the Debt Restructuring Agreement and the Deed of Guarantee and Indemnity. Further, on 2 November 2007, Tenaga commenced separate proceedings against both Respondents pursuant to the Share Sale Agreement and the Deed of Guarantee and Indemnity.
- The first case came before the High Court of Malaya in Kuala Lumpur on 9 June 2008. The Respondents did not appear and judgment in default was entered against them. By the Malaysian judgments of June 2008, the Respondents were ordered to pay:
11.1 the sum of RM 15,580,000;
11.2 interest of RM 15,385,161 to 30 November 2004;
11.3 further interest on both the capital sum and the interest accrued to 30 November 2004 from that date at the rate of 13% per annum; and
11.4 costs of RM 225.
- The second case came before the Kuala Lumpur court on 8 September 2008. Again, the Respondents failed to appear and judgment was entered in default. By the September judgments, the Respondents were ordered to pay:
12.1 the sum of RM 36 million;
12.2 interest on that sum from 1 December 2004 at the rate of 8% per annum; and
12.3 costs of RM 225.
- It is common ground that these judgments have not been paid. At the date of the hearing before me, the Malaysian judgments are worth around £30 million:
13.1 While the capital sum owed under the June 2008 judgments equates to £2.8 million at current exchange rates, the interest payable on that sum is now more than £13.2 million, taking the total value of the June judgments to circa £16 million.
13.2 The capital sum owed under the September 2008 judgment equates to about £6.6 million. That is more than doubled by the effect of interest which now exceeds £7.4 million, taking the total value of the September judgments to circa £14 million.
The 2009 Settlement Agreement
- On 19 September 2007, POEM was wound up by the Shah Alam High Court upon the petition of S. Kian Send Sdn Bhd ("SKS"). The petition debt was a relatively modest RM 300,000 (approximately £55,000).
- On 22 May 2009, the parties entered into a Settlement Agreement. By the agreement, the Respondents acknowledged their debt for a sum in excess of RM 66 million. The parties agreed that in full and final settlement of the Respondents' liabilities, Frazer-Nash would pay off the debt owed to SKS, procure an order setting aside or rescinding the winding-up order and then effect a transfer of Tenaga's shareholding in POEM to Frazer-Nash.
- By clause 3.4 of the Settlement Agreement, the parties further agreed that in the event of Frazer-Nash's default, Tenaga would be "at liberty to forthwith proceed with
execution of the judgments."
- Frazer-Nash defaulted. Instead of seeking simply to execute the 2008 judgments, Tenaga sought to intervene in the Malaysian winding-up proceedings. On 12 November 2010, the Shah Alam High Court dismissed Tenaga's application. Its appeal was dismissed by the Court of Appeal of Malaysia on 19 April 2013.
The 2012 English proceedings
- Meanwhile, on 7 September 2012, Tenaga applied to the English High Court to register the June 2008 judgments. Master Cook granted the application on the papers on 10 September 2012. Registration was, however, set aside by Deputy Master Eyre at an inter partes hearing on 25 April 2013.
- The Deputy Master criticised the Applicant for seeking to register the June judgments while pursuing an appeal in Malaysia that might have allowed it to bring the 2009 settlement into effect. Further, he held that there was no good reason to allow registration more than 4 years after the date of the judgments and that there was a triable issue as to whether Tenaga had committed itself to pursuing its rights through the Malaysian winding-up proceedings thereby waiving its rights to enforce the judgments.
- Tenaga sought permission to appeal the Deputy Master's order, but subsequently withdrew its appeal.
The Malaysian declaratory claim
- In view of the Deputy Master's order, Tenaga brought fresh proceedings seeking declarations that the Respondents were in breach of the 2009 Settlement Agreement and allowing Tenaga forthwith to execute the 2008 judgments. The proceedings were brought in Malaysia in accordance with the exclusive jurisdiction provision at clause 8 of the Settlement Agreement.
- The case came before Judicial Commissioner Mohammed Firuz Bin Jaffril who, in a written judgment dated 29 August 2016, granted the first declaration but dismissed Tenaga's application for a declaration as to its right to execute the 2008 judgments. I have been provided with an English translation of the judge's decision and it appears that his reasoning in refusing to grant the second declaration was as follows:
22.1 While a fresh action to enforce the 2008 judgments would be subject to a 12-year limitation period in accordance with s.6(3) of the Malaysian Limitation Act 1953, an application for execution would be subject instead to Ord. 46 r.2(1)(a) of the Malaysian Rules of Court 2012, which provided:
"A writ of execution to enforce a judgment or order may not be issued without the leave of the Court
where six years or more have lapsed since the date of the judgment or order."
22.2 Tenaga did not intend to seek execution in Malaysia but rather the judge understood that it intended to enforce the judgments through winding-up proceedings in England and Wales. Such proceedings would not be "execution" of the judgments pursuant to Ord. 46, and accordingly the declaration sought was "meaningless."
22.3 The court would, in the exercise of its discretion, decline to make a meaningless order.
- Tenaga appealed to the Malaysian Court of Appeal. At a hearing on 5 April 2017, the appeal court allowed Tenaga's appeal and granted a declaration that it was at liberty forthwith to proceed with execution of the 2008 judgments. Such declaration was, as Mr Samuel observed in his submissions, a grant of leave pursuant to Ord. 46 r.2(1)(a) of the Malaysian Rules of Court 2012 to enforce the judgments despite the passage of more than six years.
THE 2018 REGISTRATION APPLICATION
- By an application dated 4 April 2018, Tenaga sought to register both the June and September 2008 judgments in the English High Court.
- The usual procedure in these cases is that the matter is considered and, invariably, an order is made by a master on the papers without notice to the judgment debtor. Notice of registration is served on the debtor who can then apply to set aside the registration. This two-stage procedure is expressly part of the statutory scheme: see s.9(4) of the 1920 Act. Furthermore, the two-stage approach is recognised by rr.74.3(2), 74.6 and 74.7 of the Civil Procedure Rules 1998.
- Given the complicated litigation history of this particular application, Tenaga's lawyers wisely asked that the matter be listed for oral hearing before a judge. I expressed the tentative view in the course of submissions that, upon recognising that this was not a straightforward case that could be conveniently dealt with by a master on the papers, it might have been better to have made the application on notice. Certainly, there was no breach of the rules in electing not to do so since r.74.3(2) expressly allows applications for registration to be made without notice. Furthermore, I acknowledge that both the Act and the rules allow the judgment debtor to apply to set aside registration orders. Making the initial application on notice might therefore have led to two inter partes hearings, although in such circumstances the court hearing the set-aside application could be expected to be rather stricter in its application of Tibbles v. SIG plc [2012] EWCA Civ 518, [2012] 1 WLR 2591 in order to prevent the second hearing simply traversing the same territory.
- The application came before Judge Wood QC who ordered the registration of the 2008 judgments. As I have already recorded, the Respondents now seek to set aside the judge's order.
THE PROPER APPROACH TO THIS HEARING
- Mr Samuel submits that the court should not approach this application to set aside as a complete re-hearing of the application for registration as it might where the initial order had been made simply upon the papers. Here, he observes, the order was made after a day's argument and is explained in a carefully reasoned judgment. Mr Samuel therefore argues that while the court should consider both the new facts and new arguments (whether based on old or new facts) presented by the Respondents, it should accord some deference to Judge Wood's reasoning.
- In support of his submissions, Mr Samuel referred me to Tibbles (supra), especially at [28]-[43]. Tibbles concerned an application under r.3.1(7) of the Civil Procedure Rules 1998 for an order varying or revoking the court's earlier order made at an inter partes hearing. The judgment of Rix LJ provides important guidance as to the limits of that jurisdiction and the circumstances in which the applicant should instead pursue an appeal rather than seeking a "second bite of the cherry" before a judge sitting at the same level. The case was not therefore concerned with r.23.10, which provides:
"A person who was not served with a copy of the application notice before an order was made under rule 23.9, may apply to have the order set aside or varied."
- Indeed, the authorities reviewed by Rix LJ all dealt with applications to vary or revoke orders made at inter partes hearings. They were properly described as "second bite" cases. While the position under r.23.10 was not addressed, Rix LJ cited at [28] a passage from the judgment of Patten J (as he then was) in Lloyds Investment (Scandinavia) Limited v. Ager-Hanssen [2003] EWHC 1740 (Ch) that briefly alluded to cases of non-disclosure on applications for an injunction as an example of where the court had been misled. As Mr Samuel observed, such situation typically arises where an injunction is obtained at a without notice hearing. Nevertheless, Patten J was expressly considering the jurisdiction under r.3.1(7) and his observation that it is not open to a party "to reargue [the] application by relying on submissions and evidence which were available to him at the time of the earlier hearing, but which, for whatever reason, he or his legal representatives chose not to deploy" is not apposite to an application under r.23.10.
- In my judgment, the principles enunciated in Tibbles are not engaged in applications under r.23.10, or indeed under the bespoke provision to like effect in r.74.7. The hearing before me was the first opportunity for the Respondents to present their evidence and to make their arguments and accordingly I will consider such evidence and arguments without restriction. Having done so, and if there is no absolute bar to registration under s.9(2), I consider that the discretion at the heart of s.9(1) is for me to exercise afresh.
THE EVIDENCE
- The Applicant filed witness statements from its English lawyers, Emma Jane Barnfield and Daniel Banks, in support of its application before Judge Wood QC. The Respondents filed a statement dated 26 June 2018 from their Group Director of Operations, William Tet Hin Chia, in support of their application to set aside registration. Among other matters, Mr Chia dealt with the Respondents' intention to appeal the decision of the Malaysian Court of Appeal to the Federal Court. He said, at paragraphs 18-19 of his June statement:
"18. Given the concerns regarding limitation and the lack of written reason from the Court of Appeal in Malaysia, the Companies have felt it is necessary to institute an appeal to the Federal Court. I exhibit hereto a letter from the instructed lawyers for the Companies, Liza Khan Chambers of Kuala Lumpur. That letter addresses the two judgments of 2008, but the Companies have also given instructions to appeal the Court of Appeal decision of 2017.
19. I anticipate issuing within weeks and that the appeal will be live before any hearing at the High Court of England and Wales occurs and thus I ask the court to consider that section 9(2)(e) of the Administration of Justice Act 1920 has been met."
- This evidence was answered by a statement from the Applicant's Malaysian lawyer, Azlan bin Sulaiman, dated 12 July 2018. There the evidence rested until the week of the hearing before me. By a further statement dated 23 October 2018, Mr Chia confirmed that appeal papers had been lodged with the Federal Court at 2.17pm local time on Monday 22 October 2018. The statement exhibited the Notice of Motion lodged with the Federal Court in both Malay and English. The fresh evidence was sent to the Applicant's solicitors by e-mail at 09:57 on Wednesday 24 October 2018, just 26 hours before this application was called on for hearing.
- Mr Samuel objects to the admissibility of Mr Chia's new statement. He observes that it was filed and served less than two clear days before the hearing in breach of PD 23A, paras 6.11 & 6.13. Accordingly, he argues that the Respondents need to seek relief from sanctions pursuant to r.3.9 of the Civil Procedure Rules 1998 thereby engaging the well-known jurisprudence in Denton v. TH White Ltd [2014] EWCA Civ 906; [2014] 1 W.L.R. 3296.
- In my judgment, r.3.9 is not engaged since the Practice Direction does not impose a sanction for non-compliance with paras 6.11 & 6.13. There is, however, another simple reason to allow the Respondents to rely on Mr Chia's latest statement without considering the caselaw under r.3.9. This is not a case in which the Respondents have filed very late evidence in order to deal with developments that happened some weeks or months ago. This is updating evidence that could only be filed once the new event, namely the lodging of the appeal papers in Kuala Lumpur, had happened. One inevitably raises a sceptical eyebrow that the timing appears to have been driven by the need to persuade an English judge that there was a pending appeal in Malaysia, but that is not a reason for shutting out evidence of this fresh development. Furthermore, there has been no suggestion by Mr Samuel that the Applicant is unable to deal with the late evidence or that it needs an adjournment in order to do so. Accordingly, the Respondents may rely on the late statement.
THE APPEAL POINT
- The only evidence of Malaysian appellate procedural law before me is set out in Mr Sulaiman's statement. He says, at paragraphs 12-13 of his statement:
"12. In order to [appeal], they must seek and obtain the permission of the Federal Court under s.96 of the 1964 Act and in particular meet one of the two criteria for appeals there set out: (1) a point of general principle or (2) a point of construction of the Constitution. Plainly, an appeal from the decision of the Court of Appeal in this case does not meet either of those criteria.
13. Further, pursuant to section 97(1) of the 1964 Act, the Respondents were obliged to seek leave to appeal to the Federal Court within one month from the date on which the decision by the Court of Appeal was given: i.e. by 5 May 2017. They did not do so. The Respondents must now apply to the Federal Court for an extension of time for permission to appeal and provide reasons as to why they have not done so for over a year since time expired for doing so."
- Helpfully, Mr Sulaiman exhibited an extract from the Malaysian Courts of Judicature Act 1964. Section 96 of the Act provides that an appeal lies from the Court of Appeal to the Federal Court with the leave of the Federal Court:
"(a) from any judgment or order of the Court of Appeal in respect of any civil cause or matter decided by the High Court in the exercise of its original jurisdiction involving a question of general principle decided for the first time or a question of importance upon which further argument and a decision of the Federal Court would be to public advantage; or
(b) from any decision as to the effect of any provision of the Constitution including the validity of any written law relating to any such provision."
- Section 97 provides that any application for leave to appeal to the Federal Court should be made to the Federal Court "within one month from the date on which the decision appealed against was given, or within such further time as may be allowed by the Court."
- Accordingly, there are two barriers to the proposed appeal:
39.1 First, the Respondents must seek and obtain permission to appeal out of time pursuant to s.97.
39.2 Secondly, the Respondents must obtain leave to appeal. Since the Notice of Motion does not argue that the appeal would raise a constitutional point, they must show that the appeal either involves a novel question of general principle or a question of importance on which there would be some public advantage in having a decision of the Federal Court.
- Mr Barrett's primary submission is that there is therefore a "pending" appeal, alternatively evidence that the Respondents are "entitled and intend" to appeal. Accordingly, he submits that the English court is prohibited by s.9(2)(e) of the 1920 Act from ordering registration.
- Mr Samuel takes three points in response:
41.1 First, s.9(2)(e) is not engaged since the proposed appeal is not against the 2008 judgments.
41.2 Secondly, no appeal is pending, but only applications for an extension of time and for leave to appeal.
41.3 Thirdly, until the Federal Court rules on those applications, it cannot be said that the Respondents are "entitled" to appeal.
Which judgment?
- It is clear that the word "judgment" in s.9(2)(e) is a reference to the judgment that is the subject of the registration application. Accordingly, since there is no appeal against the 2008 judgments, but only an intended appeal against the Malaysian Court of Appeal's declaration that such judgments can be enforced, Mr Samuel is right to contend that s.9(2)(e) is not engaged. Accordingly, it is not strictly necessary to consider the sub-section further. Nevertheless, having heard full argument and lest I am wrong as to the application of the sub-section to the proposed appeal to the Federal Court, I shall consider the second and third points.
Pending appeal
- I am told that there is no authority under the 1920 Act on the question of when an appeal is pending. Without the benefit of any authority, I would be inclined to construe a pending appeal as one that is awaiting judgment. Here, all that is awaiting judgment are applications for an extension of time and for leave to appeal.
- There is, however, some authority on the expression in a different legislative context. Rule 10.24(2) of the Insolvency Rules 2016 provides:
"If the petition is brought in relation to a judgment debt, or a sum ordered by any court to be paid, the court may stay or dismiss the petition on the ground that an appeal is pending from the judgment or order, or that execution of the judgment has been stayed." (my emphasis)
- Considering the predecessor to this rule in Rehman v. Boardman [2004] EWHC 505 (Ch), Lewison J, as he then was, said at [19]:
"Nor in my judgment is there any appeal pending against the judgment of Her Honour Judge Faber; all that has happened so far is that Mr Rehman has applied for permission to appeal out of time and for permission to appeal. Until such time as the Court of Appeal decides to extend time for the application and to grant permission to appeal there cannot, in my judgment, be said to be any appeal pending."
- Chief Registrar Briggs applied this approach to the current version of the rule in Barker v. Baxendale-Walker [2018] EWHC 1681 (Ch).
- In both Rehman and Barker, the court considered the earlier case of Parkin v. Westminster City Council [2001] B.P.I.R. 1156 in which Arden J, as she then was, considered the merits of an appeal for which permission had not then been given in order to decide the question of a stay. It was, however, evident from the headnote that the Court of Appeal had ordered a so-called rolled-up hearing in which it would hear both the application for permission to appeal and, if granted, the substantive appeal in one hearing. Accordingly, on the facts of that case, the permission application was not separate from the substantive appeal.
- Mr Barrett submitted that I should distinguish Rehman and Barker because of the different legislative context. He submitted that in the insolvency context, public policy might favour a construction that limited the circumstances in which the debtor could seek a stay or dismissal of the petition. Here, he argued, public policy required the court to respect the appellate processes of foreign courts and to decline to register judgments until appeal rights had been exhausted.
- Mr Barrett is right to submit that the 1920 Act requires the English court to respect and accord proper deference to the judicial processes of the relevant foreign state. Such objective can, however, be achieved by considering possible appeal rights both under the second limb of s.9(2)(e) and, more generally, when exercising the court's discretion under s.9(1). It is not, therefore, either necessary or appropriate to construe the requirement that an appeal is "pending" other than in accordance with the clear words of the Act.
- Mr Barrett further argues, by reference to the Parkin case, that it might be that the Malaysian Federal Court will direct that the issue of the extension of time and the application for leave to appeal should be listed together with the substantive appeal. I certainly am not competent to say whether such procedure is either possible or likely under Malaysian law, but the suggestion was pure speculation on the part of counsel. There is no evidence before me that the Federal Court will deal with matters in that way. Such lacuna tells against the Respondents since the first limb of s.9(2)(e) is only engaged where "the judgment debtor satisfies the registering court
that an appeal is pending."
- For these reasons, I am not satisfied on the evidence before me that there is an appeal is pending, even if an appeal against the 2017 decision of the Court of Appeal would otherwise qualify under the sub-section.
Entitled and intends
- There is clear evidence before me that the Respondents "intend" to appeal. "Entitlement" is more difficult. This limb is obviously engaged in a jurisdiction in which a party can appeal as of right. Provided that the registering court is satisfied that such a litigant intends to appeal and that any appeal would be in time, then it could be said that he or she is both entitled and intends to appeal.
- Where, however, there is a requirement for permission to appeal, it is less obvious that there is a subsisting "entitlement" to appeal. There is certainly an entitlement to seek permission, but not, unless and until such permission is granted, to appeal. Mr Barrett responds that such a construction is too strict. He again points to the public policy of respect for the foreign court's procedures and argues that the availability of registration of judgments should not vary depending upon whether the foreign jurisdiction has a system of requiring permission to appeal.
- In my judgment, there is no entitlement to appeal within the meaning of s.9(2)(e) where the judgment debtor still needs to obtain permission to pursue the appeal. If, however, I am wrong, then it cannot sensibly be said that such entitlement subsists for ever. Where, as here, the foreign jurisdiction imposes a time limit which has elapsed such that the intended appeal can only be pursued with permission to appeal out of time, then it cannot sensibly be said that the judgment debtor is "entitled" to appeal until he or she has first overcome the time point.
ABUSE OF PROCESS
- The application for registration of these judgments was made on 4 April 2018, almost ten years after the 2008 judgments were first entered. At first blush, this is an extraordinarily long time. Mr Barrett argues that such delay should be fatal to registration for two reasons:
55.1 First, he argues that the delay in this case is so long that it amounts to an abuse of process and the court should therefore strike out the registration application.
55.2 Secondly, even if the application is not struck out, he argues that I should nevertheless set aside registration in the exercise of my discretion under s.9(1).
- I shall first deal with the abuse argument. I deal with delay in the exercise of my discretion under s.9(1) separately below.
The law
- By r.3.4(2)(b) of the Civil Procedure Rules 1998, the court may strike out a statement of case if it appears to the court that it is "an abuse of the court's process or otherwise likely to obstruct the just disposal of the proceedings." Both counsel agreed that it is appropriate to consider the jurisprudence under r.3.4(2)(b) even though technically the application notice in this case is not a statement of case as defined by the rules.
- The editors of the White Book (2018) correctly observe, at para. 3.4.3.5 that:
"Delay, even a long delay, cannot by itself be categorised as an abuse of process without there being some additional factor which transforms the delay into an abuse."
- The principles to be considered were helpfully set out by Neuberger J, as he then was, in the unreported case of Annodeus Entertainment Ltd v. Gibson (2000) and repeated by Jonathan Parker J in Audergon v. La Baguette Ltd [2002] CP Rep 27, at [51], and more recently, by Barling J in Wearn v. HNH International Holdings Ltd [2014] EWHC 3452 (Ch), at [72]:
"First, a claimant has and always has had a duty to get on with proceedings and is liable to sanctions if he does not.
Secondly, this duty was taken more seriously under the RSC even before the CPR came into effect: see Arbuthnot Latham v. Trafalgar Holdings [1998] 1 WLR 1426
Thirdly, following the coming into effect of the CPR, keeping to time limits laid down by the CPR or by the court itself is accorded more importance than it was previously, see per Lord Woolf in Biguzzi v. Rank Leisure plc [1999] 1 WLR 1926 at 1932G. One sees that principle reflected also in the observations of Lord Lloyd of Berwick in UCB Corporate Services Ltd v. Halifax SW Ltd (unreported 6 December 1999 at paragraph 17).
Fourthly, under the old law a claim could normally only be dismissed for want of prosecution where the plaintiff's default or delay had been intentional and contumelious, or where he had been guilty of inordinate and inexcusable delay, giving rise to a substantial risk that a fair trial would not be possible, or to serious prejudice to the defendant (see Birkett v. James [1978] A.C. 297).
Fifthly, the court is now prepared to dismiss a claim for delay even if neither of Lord Diplock's two requirements as laid down in Birkett v. James
is satisfied (see Biguzzi v. Rank Leisure plc at 1932G).
Sixthly, the duty of a claimant to pursue an action expeditiously and in accordance with the rules is all the more important when the claimant has already had significant benefit at the expense of the defendant from the action for instance, in this case the benefit of the search order. This is perhaps even more true where the claimant has and continues to have, the benefit of a continuing interlocutory injunction to the defendant's disadvantage, which injunction is to run to trial
.
Seventhly, the CPR enable the court to adopt a more flexible approach. The previous "all or nothing" extremes of either dismissing the claim for delay or permitting it to continue are now merely the two ends of a spectrum. The court has other sanctions at its disposal which it can and, in appropriate cases, should impose, rather than adopting one of the two extreme positions
.
Eighthly, in light of general principle and the overriding objective (see CPR r.1.1(2)) the sanction, if any, to be invoked by the court to deal with a particular case of delay should be proportionate. To dismiss a claim where the claimant appears to stand a reasonable chance of success and of recovering substantial damages is a strong thing to do. Particularly so bearing in mind Article 6(1) of the [ECHR]
Ninthly, it appears to me that it is normally relevant to consider the following factors. First, the length of the delay; secondly, any excuses put forward for the delay; thirdly, the degree to which the claimant has failed to observe the rules of court or any court order; fourthly, the prejudice caused to the defendant by the delay; fifthly, the effect of the delay on trial; sixthly, the effect of the delay on other litigants and other proceedings; seventhly, the extent, if any, to which the defendant can be said to have contributed to the delay; eighthly, the conduct of the claimant and the defendant in relation to the action; ninthly, other special factors of relevance in the particular case."
The delay
- Mr Barrett submits that consideration of the delay in this case should start in 2000 when the causes of action first accrued. I disagree. The delay that I am concerned with is the delay in seeking registration of the judgments. I therefore leave out of account delay permitted by the Malaysian law of limitation and during the initial proceedings that led to the 2008 judgments.
- I turn then to analyse the ten years that have passed since these judgments were first entered in Malaysia:
61.1 2008 to 22 May 2009:
a) The judgments were entered on 9 June and 8 September 2008. Rather than move directly to enforcement, the parties instead negotiated a Settlement Agreement which was concluded on 22 May 2009. By clause 3.4 of the agreement, the Respondents expressly acknowledged their indebtedness to the Applicant. Mr Samuel contends that the legal effect of such acknowledgment was, pursuant to s.26(2) of the Malaysian Limitation Act 1953, to start time running afresh for any action to enforce the judgments. Accordingly, he argues, the combined effect of ss.6(3) and 26(2) of the 1953 Act is that any action to enforce the judgments could be issued as late as May 2021.
b) Mr Samuel's submission is logical and appears to be in accordance with a natural reading of the provisions of the 1953 Act. It is, however, dangerous without evidence on the point to start applying foreign legislation, however familiar it may look to an English judge. Here, I have no evidence as to the proper application of s.26(2) to acknowledgments of liability under a Malaysian judgment. There is evidence from Mr Sulaiman as to his understanding that s.6(3) applies to actions upon judgments, but he adds that he knows of no Malaysian case upon the provision.
c) In any event, no criticism can be made of the Applicant in circumstances where the parties negotiated and ultimately settled their dispute.
61.2 22 May 2009 to 30 June 2009: The essence of the Settlement Agreement was that the Respondents would by 30 June 2009 settle the petition debt and cause the petition to be withdrawn or dismissed and thereafter effect the share transfer. The judgments were essentially relegated to security interests. Accordingly, the Applicant could not reasonably seek to enforce the judgments during this period.
61.3 1 July 2009 to 11 May 2010:
a) Mr Samuel accepted that, in principle, the Applicant could be criticised for its delay during this period up until the date of its intervention in the winding-up proceedings. He argued, however, that the evidence showed that throughout this period the Respondents sought and were granted their creditor's forbearance in their default under the Settlement Agreement.
b) In the course of his submissions, Mr Samuel took the court through the correspondence, and indeed through Mr Chai's evidence to Deputy Master Eyre in 2012/3. In my judgment, such evidence clearly shows that the Respondents repeatedly sought extensions of time to comply with their obligations under the 2009 settlement. Judge Wood QC was right to characterise this period, at paragraph 26 of his judgment, as one in which the Applicant showed a "considerable degree of forbearance." I do not hold it against the Applicant.
61.4 11 May 2010 to 7 September 2012:
a) On 11 May 2010, the Applicant sought to intervene in the Malaysian winding-up proceedings. Such attempt failed and its subsequent appeal to the Malaysian Court of Appeal was dismissed on 19 April 2013.
b) Hindsight shows the Applicant's intervention to have been misjudged. Again, it is dangerous for an English judge to reach a conclusion as to the reasonableness of the attempted intervention under Malaysian law. In the absence of evidence on the point, I am persuaded that I should assume in the Respondents' favour that the intervention was not reasonable and that the consequent delay in enforcement during this period can be laid at the Applicant's door.
c) The Applicant issued its first application for registration on 7 September 2012 and accordingly the period of culpable delay is 29 months.
61.5 7 September 2012 to 25 April 2013:
a) The Applicant's first registration proceedings ran from issue on 7 September 2012 to the hearing before Deputy Master Eyre on 25 April 2013. While the Applicant only then attempted to register the June 2008 judgments, nothing turns on that point since it is clear that it would have been equally unsuccessful in maintaining registration of the September judgments.
b) No delay during this period can be criticised.
61.6 26 April 2013 to 4 May 2014:
a) The Applicant first launched an appeal against the deputy master's decision which was not abandoned until 15 November 2013. The abortive appeal proceedings therefore added over 6 months' delay. Again, in the absence of evidence explaining the Applicant's approach at this point, I am persuaded that I should hold this further period against Tenaga.
b) The Applicant then had to prepare proceedings in Malaysia.
61.7 5 May 2014 to 5 April 2017: During this period, the Applicant pursued proceedings in the Shah Alam High Court and, thereafter, the Malaysian Court of Appeal. There was a false start in that the proceedings issued in May 2014 were withdrawn on 19 June 2015 following problems with service before fresh proceedings were issued one week later. Mr Banks explains the difficulties in his witness statement. While there is not much detail, I am persuaded that I should not count that period of delay against the Applicant.
61.8 5 April 2017 to 4 April 2018:
a) Mr Samuel realistically accepts that the court might also criticise the Applicant for its further delay between the conclusion of the Malaysian appellate proceedings on 5 April 2017 and the issue of this application on 4 April 2018. It is noteworthy that care was taken to re-apply for registration just before the anniversary of the Court of Appeal hearing. Indeed, Mr Samuel refers in his submissions to the usual one-year rule under s.9(1) of the 1920 Act. As, however, he properly conceded in argument, that period is not in play since the 12 months had long since run from the dates of the 2008 judgments.
b) As to this final 12-month period, Mr Samuel points to the fact that it would have been premature to have made any application in this jurisdiction until at least one month had expired lest the Respondents sought leave to appeal to the Federal Court. Thereafter, he relies on the legal and factual complexity of the case, the need for fresh English lawyers to get up to speed and the need to have the Applicant's ducks in a row from the moment that the application was made.
c) There is something in each of these points. Nevertheless, I do not consider that they properly explain the final period of delay. In my judgment, the Applicant reasonably could and should have made this application in the latter half of 2017 bearing in mind the age of these judgments.
- Taking matters in the round, I am therefore satisfied that while there are reasonable explanations for much of the time that has elapsed since 2008, the Applicant was nevertheless guilty of some periods of inordinate and inexcusable delay.
The Respondents' approach to delay
- There is, however, a tension between the Respondents' partially justified criticisms of delay and their own approach to matters:
63.1 First, the Respondents negotiated and agreed a Settlement Agreement in May 2009. That is not a matter of criticism, but they cannot be heard to complain of the delay caused by the negotiation and operation of the settlement.
63.2 Secondly, in 2009/10 the Respondents repeatedly sought additional time and the Applicant's forbearance in respect of their obligations under the Settlement Agreement.
63.3 Thirdly, the Respondents resisted registration in 2012/3 in part on the basis that the application was premature since there remained issues to be determined in Malaysia.
63.4 Fourthly, the Respondents successfully resisted registration before Deputy Master Eyre on the basis of triable issues on which they ultimately lost in the Malaysian Court of Appeal in April 2017. In making that observation, I acknowledge of course that the Respondents now seek to challenge the decision of the Court of Appeal, although they have thus far failed to prosecute their intended appeal with any sense of urgency.
63.5 Fifthly, relying on their intended appeal, the Respondents even now argue that registration is premature.
Prejudice
- There is no real evidence of any prejudice flowing from the Applicant's delay in this matter. All that is said by Mr Chia is that the delay has "had serious consequences in terms of legal costs and places [the Respondents] at a material disadvantage." No attempt is made to explain how the Respondents have been disadvantaged by their creditor's failure to enforce these judgments more efficiently. Further, as Mr Samuel observed, the usual prejudice that might be suffered by a litigant facing a stale claim at trial, namely in the unavailability of witnesses or the fading of memories, is simply not present in these registration proceedings.
Conclusions on abuse
- For these reasons, while I accept that the Applicant has been guilty of some inordinate and inexcusable delay in seeking registration of these judgments, looking at matters in the round, bearing in mind the Respondents' own approach to these judgments and in the absence of any proper evidence of prejudice caused by such periods of delay, I decline to strike out this application.
PART 74
- The final point taken by the Respondents can be dealt with more swiftly. Rule 74.4(1) of the Civil Procedure Rules 1998 provides:
"An application for registration of a judgment under 1920 Act
must be supported by written evidence exhibiting-
(a) the judgment or a verified or certified or otherwise authenticated copy of it; and
(b) where the judgment is not in English, a translation of it into English certified by a notary public or other qualified person; or
(c) accompanied by written evidence confirming that the translation is accurate."
- Clearly, the judgment required by the rule is that which the Applicant seeks to register. The four default judgments from June and September 2008 are before the court in both their original Malay and in certified English translations. There has accordingly been compliance with the rule and there was no obligation to provide a note of the ex tempore judgment given by the Court of Appeal on 5 April 2017. In any event, the Respondents were represented by counsel at that hearing and are in just as good a position as the Applicant to place a note of the judgment before me, or to have obtained an official transcript if that were thought to be necessary.
- All that we have from the Malaysian Court of Appeal is the order; the important part of which declared that the Applicant was "at liberty to forthwith proceed with execution of the judgments" against the Respondents. Mr Barrett asserted that the judgment, alternatively expert evidence on Malaysian law, might be useful since it might assist in showing what was meant by "forthwith." Did it, for example, mean that the Applicant was only entitled to execute the judgments provided that it acted with expedition?
- In my judgment, the natural reading of the order was, as Mr Samuel submitted, that it was permissive. What was being granted was permission pursuant to Ord.46 r.2(1)(a) of the Malaysian Rules of Court 2012 to enforce the judgments by writ of execution notwithstanding the passage of time. "Forthwith" appears to have meant without further impediment. If the Respondents wished to argue that some other meaning should be put upon the order, whether as a matter of Malaysian law or because of some failure in the translation or something that was said by the appeal court then it was incumbent upon them to put in some evidence to make good such submission. In the absence of such contrary evidence, I see no reason to go behind the plain language of the order.
DISPOSAL
- For the reasons set out in this judgment:
70.1 s.9(2)(e) is not engaged and does not therefore bar registration;
70.2 these registration proceedings will not be struck out for abuse; and
70.3 the Applicant complied with r.74.4(1).
- Nevertheless, I must finally consider whether time should have been extended for registration and whether it was just and convenient to allow these 2008 judgments to be registered and therefore enforced as if they were judgments of the English High Court.
Extension of time
- As to the time point:
72.1 The starting point is that the 1920 Act only allows applications for registration to be made as of right during a period of 12 months. Any extension of time is a matter of judicial discretion.
72.2 While the total period of delay in this case is unusually long, there are good reasons for much of that period. (See paragraph 61 above.)
72.3 There are periods of culpable delay, albeit that these fall to be balanced against the Respondents' own approach to registration of these judgments and earlier requests for more time and complaints of premature action.
72.4 There is no proper evidence of prejudice.
72.5 As recently as 5 April 2017, the Malaysian Court of Appeal expressly declared that these judgments could be enforced. Since it is clear that the Malaysian courts were well aware of the Applicant's intention to enforce the judgments in England and Wales, this court should respect the Malaysian court's ruling that the judgments could still be enforced in April 2017 notwithstanding the failure to enforce during the first six years after they were entered.
72.6 While there is some danger in seeking to construe foreign statutes, it does appear that a fresh action to enforce the judgments would not be statute barred under s.6(3) of the 1953 Act until at least June 2020 and possibly May 2021. Registration of such fresh judgments could therefore quite properly be sought in 2021/2.
- Taking all of these matters into account, Judge Wood QC was, in my judgment, right to allow these proceedings to have been brought more than 12 months after the original judgments were entered.
Just and convenient
- Finally, I consider whether it was "just and convenient" to allow enforcement. In my judgment, considerations of comity require the English court to lean in favour of enforcing a foreign judgment within the first 12 months or such longer period as may be allowed where none of the bars under s.9(2) prohibit registration. In this case, these significant judgments remain unsatisfied and, as already recounted, in April 2017 the Malaysian Court of Appeal declared that they remain enforceable. Further, the Respondents are English companies against whom it is, no doubt, convenient to enforce the judgments in this jurisdiction.
- It is at this stage that the court can and should take into account the possibility of an appeal falling short of a pending appeal, or appeal rights, that would operate as an absolute bar pursuant to s.9(2)(e). I have therefore given anxious consideration as to whether I should either set aside registration in view of the proposed appeal lodged with the Federal Court a few days before this hearing, or adjourn matters pending the decision of that court.
- The possibility of an agreed adjournment was canvassed in the correspondence shortly before the hearing, but neither the Applicant nor the Respondents invited me to take that course. In my judgment, it would in those circumstances have been wrong to have adjourned the matter of my motion given the protracted procedural history of this case in both England and Malaysia and in view of the Respondents' submission that the proceedings should be struck out for abuse arising from the delay to date.
- For a number of reasons, I consider that it would be wrong to set aside registration on the basis of the proposed appeal:
77.1 First, as explained above, it is not an appeal against the 2008 judgments themselves, but in respect of the declaratory relief granted by the Malaysian Court of Appeal as to the enforceability of such judgments.
77.2 Secondly, the proposed appeal cannot be brought as of right, but the Respondents must first obtain permission to appeal significantly out of time.
77.3 Thirdly, there is no proper evidence before me to indicate that the Respondents will be able to satisfy the Federal Court that the appeal raises either a novel question of general principle or a question of importance on which there would be some public advantage in having a decision of the Federal Court.
77.4 Fourthly, the timing of the lodging of the Notice of Motion appears to have more to do with the need to persuade me to set aside registration than with the usual timetable of Malaysian appellate proceedings.
- Accordingly, it is in my judgment just and convenient to enforce the 2008 judgments in this jurisdiction provided that some safeguard can be put in place to deal with the possibility that the Federal Court decides to entertain a further appeal. I therefore dismiss the application to set aside registration.
STAY
- To an English judge's eye, the current application to extend time for appealing to the Federal Court appears to be thin. Equally, there is no material before me from which I can conclude that the Respondents are likely to overcome the high hurdle placed on appeals to the Federal Court. These are, however, matters for the Federal Court and not me. Further, it would cause some embarrassment if the English High Court were to allow enforcement in this jurisdiction while the Federal Court decided to entertain the intended appeal. I shall therefore stay enforcement of these judgments pending the decision of the Federal Court on the current applications and, in the event that the Federal Court grants leave to appeal out of time, until the conclusion of such appeal proceedings.
