Babtain & Ors v Felaifel & Ors [2010] QSC 63

SUPREME COURT OF QUEENSLAND CITATION: Babtain & Ors v Felaifel & Ors [2010] QSC 63 PARTIES: OMAR ALI BABTAIN (First plaintiff/Applicant) and KHALID BIN NASSER BIN ABDULLA AL MISNAD (Second plaintiff/Applicant) v ADEL JASSIM FELAIFEL (First defendant/Respondent) and ANNE CHERIE WINDSOR (Second defendant) and AL HEJRA PTY LTD ACN 097 843 242 (Third defendant) and HEJRA (NO 545) PTY LTD ACN 099 608 714 (Fourth defendant) and GEORGE (NO 171) PTY LTD ACN 099 272 107 and 100 EAGLE STREET PTY LTD AND 099 272 198 (Fifth defendant) and AC WINDSOR PTY LTD ACN 099 315 554 (Sixth defendant) and BRISBAH PTY LTD ACN 097 958 873 (Seventh defendant) FILE NO/S: BS5153 of 2002 DIVISION: Civil PROCEEDING: Application ORIGINATING COURT: Supreme Court DELIVERED ON: 10 March 2010 DELIVERED AT: Brisbane HEARING DATE: 5 March 2010 JUDGE: A Lyons J ORDER: -- 1 of 10 -- 2 CATCHWORDS: PROCEDURE – MISCELLAENEOUS PROCEDURAL MATTERS – DECLARATIONS – Whether it is appropriate for the court to make a declaration about the meaning of correspondence - Whether the utility of a declaration would be taken into account in subsequent proceedings. PROCEDURE – SUPREME COURT PROCEDURE – QUEENSLAND – PROCEDURE UNDER RULES OF COURT – DISCONTINUANCE – Whether a party has legal entitlement to file a notice of discontinuance in a proceeding subsequent to judgment being entered. Bass v Permanent Trustee Co Ltd (1991) 198 CLR 334 Camilla Cotton v Granadex (1976) 2 Lloyd’s Reps 10 Edinburgh Laboratories (Australia) Pty Ltd v Lantigen (England) Ltd 1995 IPR 499 Prince PLC v Prince Sports Group Inc [1998] 25 FSR 21 Allstate Life Insurance Co v Australia and New Zealand Banking Group Ltd (No 6) (1996) 64 FCR 79. Uniform Civil Procedure Rules 1999 (Qld) rr 304, 658, 667. Supreme Court Act 1995 (Qld) s 128. COUNSEL: M M Stewart SC and M H Hindman for the applicants M P Amarena for the respondent SOLICITORS: R J Winter for the applicants Broadley Rees Hogan for the respondent A LYONS J: [1] By this amended application, the first and second plaintiffs are applying to the court for orders pursuant to r 658 of the Uniform Civil Procedure Rules 1999 (Qld) (UCPR), s 128 of the Supreme Court Act 1995 (Qld) or the inherent jurisdiction of the court for a declaration that “as at 17 January 2004 and subsequently, the applicants had no present legal entitlement pursuant to the UCPR or otherwise to file a notice of discontinuance in this proceeding 6153/02”. [2] The applicants seek to have the court grant the declaration so that it can be used in litigation which has been on foot in Bahrain since 2006. Whilst other relief was initially sought, this is not currently being pursued in this application. Background [3] A summary of the historical events is required in order to understand the present application. [4] On 4 July 2002 the applicants commenced proceeding 6153/02 in the Supreme Court of Queensland. [5] On 13 September 2002 Messrs Jassim Misnad and Almana commenced proceeding 8477/02 against various parties including the respondent also in the Supreme Court of Queensland. -- 2 of 10 -- 3 [6] On 1 October 2002 the applicants (with others) and the respondent (with others) entered into a head of agreement to resolve both proceedings. [7] On 4 February 2003 judgment was entered against the respondents (and others) in an amount exceeding $35m as the respondent (and others) had not complied with the heads of agreement. [8] Between February and June 2003 enforcement action was taken by the applicants to enforce the judgment entered on 4 February 2003. Available assets to enforce the judgment against in Australia were then exhausted. [9] On 17 January 2004 a notarised agreement (referred to as the Doha Agreement) was entered into between the applicants (and others) and the respondent to quantify/compromise the balance of the judgment sums then remaining outstanding. The respondent agreed to pay a further $6,000,000 by four instalments. This agreement contained a number of stipulations including clause 5. The agreement is in Arabic and there is disagreement as to the precise translation of this clause and what the clause required the applicants to do in respect of the legal proceedings in the Supreme Court of Queensland. The most recent translation is in the following terms. 1 “Fifth: All lawsuits, lodged by the First Party against the Second Party, his partners, directors, and companies present in Australia, and the lawsuit against Ann Sherry Windsor in Australia, in addition to the Bahraini lawsuits; to be revoked upon signing this agreement.” (my emphasis). [10] Exhibit 3 in these proceedings sets out the various different translations of clause 5 which includes the following: • All lawsuits shall “be withdrawn”. 2 • An “obligation to pre-empt all lawsuits”. 3 • An obligation to “cancel the cases”. 4 • “A practical stopping of these procedures”. 5 [11] Two payments were subsequently made by the respondent. The balance was not paid and it is now claimed that the amount outstanding with interest, is approximately $11m. [12] Immediately after the signing of the Doha Agreement the applicants stopped all enforcement action in respect of the Queensland judgment and it is claimed that on 27 March 2006 Misnad and Babtain signed a consent in Bahrain to the setting aside of the February 2003 judgment. 1 Exhibit 1, Affidavit of Ben Holt sworn 2 March 2010, translation by University of Queensland. 2 Exhibit 1, Affidavit of Omar Babtain sworn 28 January 2010, translation by Absolute Translations dated 13 February 2009. 3 Exhibit 4, Affidavit of Omar Babtain sworn 28 January 2010, the judgment of the Bahraini Court at first instance. 4 Exhibit 6, Affidavit of Omar Babtain sworn 28 January 2010, judgment of the High Appellate Civil Court II 27 January 2009. 5 Exhibit 7, Affidavit of Omar Babtain sworn 28 January 2010, judgment of the High Appellate Court II 26 October 2009. -- 3 of 10 -- 4 [13] In 2006 the applicants commenced proceedings in Bahrain for enforcement of payment of the judgment sum remaining outstanding. [14] Between 2006 and 2008 the respondent also commenced proceedings in Bahrain to prevent enforcement of the Doha Agreement alleging that the applicants had not complied with the terms of the agreement. Orders were sought that the Doha Agreement to be declared void and that all moneys be returned. [15] Whilst the respondent’s proceeding succeeded at first instance, the applicants successfully appealed. The respondent’s appeal to the highest appellate court in Bahrain was dismissed on 30 April 2008 and the validity of the Doha Agreement was upheld and the matter was remitted to the Execution Court to enforce payment. [16] Between 20 May 2008 and 26 October 2009 the respondent commenced a second proceeding in Bahrain, alleging that the applicants have not complied with the terms of the Doha Agreement. In those proceedings orders were also sought for the Doha Agreement to be declared void and that all moneys paid be returned. The essential argument by the respondent in those proceedings is that the applicants have not satisfied their obligation to withdraw all lawsuits initiated by them against the respondent in both Australia and Bahrain. [17] In this second Bahrain proceeding to determine whether the applicants had complied with clause 5, the respondent relied upon the letter obtained from the Supreme Court of Queensland Registry, dated 15 August 2008. [18] The respondent’s second proceeding succeeded at first instance on 27 January 2009. [19] The applicants unsuccessfully appealed on 26 October 2009. [20] The applicants’ appeal to the highest appellate court in Bahrain is yet to be determined. [21] In late 2009 or early 2010 the respondent commenced a third proceeding in Bahrain, seeking return of all moneys (and equivalent in property transfers) paid to the applicants pursuant to the Doha Agreement to him. The applicants’ response is due on 27 March 2010. The current application [22] The issue in the current proceedings has essentially arisen during the course of the second Bahrain proceedings. The applicants submit that in those Bahrain proceedings the respondent is using correspondence secured from the Registry of the Queensland Supreme Court, which the applicants contend is ambiguous and capable of misleading the Bahrain Court as to the state of this proceeding. The applicants contend that as the Bahraini Court relied on the Registry letter it is appropriate that a declaration is obtained as to the meaning of the letter. [23] The Registry correspondence, dated 15 August 2008 and signed by the Acting Senior Registrar, is as follows: “Query regarding Adel Jassim Felaifel and Anne Windsor In my capacity as Acting Registrar of the Supreme Court of Queensland, I have undertaken a search of the Queensland Courts database and wish to advise the following -- 4 of 10 -- 5 1. That Supreme Court proceedings No 6153/02 brought by Omar Ali Babtain and Kahlid Bin Nasser Bin Abdulla Al Misnad against Adel Jassim Felaifel, Anne Windsor, Al Hejira Pty Ltd (ACN 097 843 242), Hejira (No. 545) Pty Ltd (ACN 099 608 714) and George (No. 171) Pty Ltd (ACN 099 272 170) and 100 Eagle Street Pty Ltd (ACN 099 272 198) has not been discontinued by way of Final Order/Judgment nor has a Notice of Discontinuance been filed. 2. That Supreme Court proceedings No. 8477/02 between Jassim Abdulla Al Misnad and Saud Almana and Adel Jassim Felaifel, Ann Cherie Windsor, Al Hejira Pty Ltd (ACN 097 843 242), Hejira (No. 545) Pty Ltd (ACN 099 608 714), George (No. 171) Pty Ltd (ACN 099 272 170), 100 Eagle Street Pty Ltd (ACN -00 272 198), AC Windsor Pty Ltd (ACN 099 315 554), Brisbah Pty Ltd (ACN 097 958 873) and Al Masser Real Estate Investment Company has not been discontinued by way of Final Order/Judgment nor has a Notice of Discontinuance been filed. I confirm that the above proceedings are the only matters currently Listed in the Supreme and District Courts of Queensland against Adel Felaifel and Anne Windsor. If you have any queries, please do not hesitate to contact me on (07) 3247 3390. Yours sincerely A/Senior Registrar” The applicants’ arguments [24] The applicants argue that the declaration sought is a declaration of right which is permitted by s 128 of the Supreme Court Act 1995. [25] The applicants argue that the status of proceeding 6153/02 has been that on 4 February 2003 judgment was entered against the respondent in favour of the applicants and enforcement steps have been taken. The applicants therefore argue that the judgment was a decision that brought that action to a conclusion. Accordingly, the effect of the judgment was that the cause of action sued upon merged in the judgment with the result that the rights created by the judgment took the place of the cause of action. The applicants submit that after a judgment has been entered the general rule is that there is no jurisdiction to review, vary or set it aside. The applicants argue that because the action was concluded by a judgment, the procedure for discontinuance of a proceeding dealt with in Pt 3 of Ch 9 of the UCPR is not appropriate. [26] The applicants argue that whilst a plaintiff may discontinue only with the court’s leave or consent of the other parties after a defence has been served pursuant to r 304(2) of the UCPR, the discontinuance rules are not applicable to a proceeding in which judgment has been entered. Rather, the applicants state that the appropriate steps which should be taken after which a judgment has been entered are: -- 5 of 10 -- 6 (a) applying to have the judgment set aside pursuant to r 667(2)(a) of the UCPR; and (b) then applying for leave to discontinue the proceeding pursuant to r 304(3) of the UCPR. [27] Accordingly, the applicants state that the ability to make those applications is different to being able to present an entitlement to file a notice of discontinuance in the proceedings. The applicants therefore seek a declaration in those terms. The applicants essentially argue that such a declaration sought is necessary and appropriate in order to clarify the terms of the letter of 15 August 2008. The utility of the declaration sought [28] It is agreed that in the second Bahrain proceedings the respondent seeks to obtain orders that the settlement agreement, known as the Doha Agreement, be nullified. To support such an outcome, the respondent alleges that the applicants have not satisfied their obligation as set out in the settlement agreement to withdraw all law suits initiated by them against the respondent in both Australia and Bahrain. That obligation is said to arise from that settlement agreement and is clearly a matter which will be determined in those Bahrain proceedings. [29] The applicants allege that the letter from the Registry is being used in the Bahrain proceedings as evidence of a failure of the applicants to satisfy their contractual obligations. The essential argument of the applicants is that the Registry letter is ambiguous and capable of being misleading because one of the meanings it conveys is that, as at 17 January 2004, the applicants had a present legal entitlement pursuant to the UCPR or otherwise, to file a notice of discontinuance in proceeding 6153/02. In essence, the applicants say that is not the true position. [30] The applicants concede that the true position is a matter about which evidence could be led in the Bahrain courts. However, the applicants argue that this court is the appropriate forum in which to obtain a declaration concerning the UCPR, as well as in relation to communications from the Registry. The applicants also state that the parties are before the court in relation to this limited issue only, and that the resolution of this issue can be achieved quickly and conveniently at limited cost and with limited delays. The applicants also argue that the resolution of this limited issue would bind the parties and narrow the issues in the Bahrain proceedings. Accordingly, any evidence which could be adduced would be weighed up against the Registry letter and the evidence from this court would be seen as independent. [31] Whilst other orders were sought in the initial application filed on 22 December, the only relief currently sought is the relief as to the declaration. [32] The applicants rely on the decision in Bass v Permanent Trustee Co Ltd6 to argue that there is utility in the declaration. In the joint judgment of Gleeson CJ, Gaudron, Gummow, Hayne and Callinan JJ it was stated that: 7 “It cannot be doubted that in many cases the formulation of specific questions to be tried separately from and in advance of other issues will assist in the more efficient resolution of the matters in issue. 6 (1991) 198 CLR 334. 7 At 357-357. -- 6 of 10 -- 7 However, that will be so only if the questions are capable of final answer and are capable of being answered in accordance with the judicial process. Preliminary questions may be questions of law, questions of mixed law and fact or questions of fact. Some questions of law can be decided without any reference to the facts. Others may proceed by reference to assumed facts, as on demurrer or some other challenge to the pleadings. In those cases, the judicial process is brought to bear to give a final answer on the question of law involved. Findings of fact are made later, if that is necessary. Where a preliminary question is a pure question of fact that, too, can be answered finally in accordance with the judicial process if the parties are given an opportunity to present their evidence and, also, to challenge the evidence led against them.” [33] The applicants argue that there is no inflexible rule in relation to declarations and relies on the decisions in Edinburgh Laboratories (Australia) Pty Ltd v Lantigen (England) Ltd 8 and Camilla Cotton v Granadex. 9 In Edinburgh Laboratories Young J held that the question as to whether a declaration should be given was essentially whether the declaration would serve any “useful purpose”. In Camilla Cotton where proceedings were also pending in Switzerland, the House of Lords stated that whilst there was a prima facie case for arguing that similar English proceedings might be oppressive, the question of oppression had to be understood in the light of the court’s inherent jurisdiction and that: “In order to decide whether it is, the Court has to weigh all the circumstances and decide according to a judicial discretion. It must consider the nature of the relief sought, the propriety of seeking that relief in an English Court, bearing in mind that, in principle, English Courts are open to all, and the utility of the proceedings to the plaintiff weighed against any disadvantage to the defendant.” Should the declaration be made? [34] It is clear that the court has a power to grant the declaration sought but that the particular circumstances of the case must be carefully considered before such a declaration is made. 10 In my view, in the circumstances of this case the application for a declaration should be refused. [35] Having considered the judgment of the High Court in Bass v Permanent Trustee, 11 of particular concern in the present case is the absence of an agreed factual basis on which the declaration is sought to be made. In Bass v Permanent Trustee the judgment of the High Court made it very clear that there is a need for a declaration to be based on facts “found or agreed”: “What those facts are is not stated, nor can they be identified with any precision. They may be all or some only of the facts. What facts are determinative of the legal issue involved in the question is left open. Such a result can not assist the efficient administration of 8 1995 IPR 499. 9 (1976) 2 Lloyd’s Reps 10. 10 Prince PLC v Prince Sports Group Inc [1998] 25 FSR 21. 11 (1991) 198 CLR 334 -- 7 of 10 -- 8 justice. It does not finally resolve the dispute or quell the controversy. Nor does it constitute a step that will in the course of the proceedings necessarily dictate the result of those proceedings. Since the relevant facts are not identified and the existence of some of them is apparently in dispute, the answers given by the Full Court may be of no use at all to the parties and may even mislead them as to their rights.” [36] In the present case, I note in particular that the applicants seek a declaration that “as at 17 January 2004 and subsequently, the applicants had no present legal entitlement pursuant to the UCPR or otherwise to file a notice of discontinuance in this proceeding 6153/02”. (my emphasis) [37] As previously outlined the applicants’ most recent translation of clause 5 refers to the requirement that all lawsuits be “revoked”. The most recent determination by High Appellate Court II on 26 October 2009, however, refers to this clause as requiring the applicants to “cancel” all lawsuits in Australia. Clearly then, there is still a significant factual dispute as to the translation of clause 5. [38] In my view, a declaration which simply answers the narrow question posed by the applicants which relates only to whether there is a present entitlement to file a notice of discontinuance pursuant to r 658 UCPR could in fact mislead the Bahrain court which is looking at a larger issue. This is particularly so in light of r 667(2) which provides that a court may set aside a final judgment. In my view, giving a declaration as to one aspect of the UCPR which is clearly incomplete in terms of the issue which is raised in the Bahrain proceedings, does not assist that court. [39] The Bahrain proceedings clearly relate to obligations which arose under the Doha Agreement, whereby the judgment entered in Australia was compromised. Clause 3 of that Agreement provides as follows: “Third: In case the Second party did not adhere to paying the abovementioned sum (Items a, b, c and d) on their due dates, the initial sum of 6,500,000 Australian dollars (1,823,295.00 Bahraini dinars) in addition to interest of 10% [counted] till the date of payment, shall be returned, with deducting whatever paid by the Second Party.” [40] It is clear therefore that the Doha Agreement created new and binding obligations on both the applicants and the respondent. The dispute in the Bahrain courts relates to whether the parties in fact fulfilled their obligations under that agreement. [41] I consider that the letter of the Registrar dated 15 August 2008 is factually correct. It clearly gives an accurate indication of the status of the two proceedings and indicates that each proceeding, namely 6153/02 and 8477/02, “has not been discontinued by way of Final Order/Judgment nor has a Notice of Discontinuance been filed”. The letter does not seek to give a legal opinion as to what that means. The question as to what the legal ramifications are in relation to the current status of the proceedings is a matter which is appropriately left for expert evidence in the Bahraini courts and would involve expert evidence as to the law in Queensland and how a party could fulfil its obligation whether that obligation was an obligation to “cancel”, “revoke”, “withdraw”, “practically stop”, “pre-empt” or “discontinue” the lawsuits in Queensland. -- 8 of 10 -- 9 [42] I agree with the respondent’s submission that the applicants had the opportunity in the Court in Bahrain, which they in fact exercised to make submissions in clarification of the letter. The applicants could also have called evidence from an expert in Queensland and Australian law to submit the applicants did not have a present entitlement to file a Notice of Discontinuance in this proceeding, but did not do so. [43] It would seem clear from a reading of the decision of the High Appellate Court II12 that it was indeed submitted to that court that it was a final judgment which had been entered in Queensland. On my reading of the decision however this does not appear to have altered the court’s view as to the obligations of the applicants under the Doha Agreement. The Bahrain Court’s decision specified that the obligation was on the applicants to satisfy the court that they had adhered to their obligations under the agreement. The decision stated that the applicants, had in fact, failed to do so for a number of reasons. A reading of the decision indicates that the applicants relied on a document, signed on 27 March 2006, which was apparently a “consent” to set aside the judgment but that the Bahrain Court was not satisfied the applicants had satisfied the onus on them to establish they had fulfilled their obligations. This is apparent from a reading of the decision: 13 “The appellant’s argument that the appellee fulfilled his obligations, as they stated that the appellant did not pay the determined amounts, the case subject on time, this is incorrect, where it is proved form (sic) the perusal of the settlement agreement that the appellee is committed to pay four instalment which he paid the first two instalment as mentioned in his defense while the third instalment to be paid on 20/12/2005. It is proved that the appellants provided evidence to their adherence to their obligation as per the said agreement to cancel all the cases raised in Australia, under the documents dated on 27/03/2006. Suppose they are correct, it is still later than the date when the third instalment becomes due as the appellee’s commitment to pay the determined installment as per the settlement agreement is a commitment against the opponents commitment to cancel all the case raised in Australia, therefore the appellee has the right after he has paid first two instalment as long as the appellants failed to adhere to their obligations, that is to cancel all the cases raised against the appellee in Australia.” [44] Neither am I satisfied from a reading of the Bahrain Court’s decision that the applicants have established that the Bahrain Court was heavily influenced by the Registrar’s letter of 15 August 2008. I agree with the respondent’s submission that a consideration of the Registrar’s letter did not form part of the “ratio decendi” of that Court’s decision on the matter. [45] Furthermore, as the applicants themselves argue, the utility of the declaration needs to be considered. I am not, in fact, satisfied that such a declaration would have any utility. The utility of the declaration is in dispute between the parties. Madhi Jawad Barni, the advocate for the applicants in the Bahrain proceedings argues that such a declaration “is admissible in the Bahrain proceedings at this stage under Article 229 12 Exhibit 7 to Omar Babtain sworn 28 January 2010. 13 Affidavit of Omar Babtain sworn 28 January 2010. -- 9 of 10 -- 10 and intends to run the case on that basis”. 14 The respondent denies the utility of the declaration and submits that a declaration, even if made, would not be taken into account by the Court of Cassation, which is the court hearing the appeal, as it does not involve a matter of law. [46] In this regard, I have placed particular reliance on the affidavit of a Bahrain lawyer, Ahmed Mohammed Omer, sworn 2 March 2010 and filed by leave. Whilst I will uphold the applicants’ objections to paragraphs 17, 18, 19 20 and 21 of Mr Omer’s affidavit, essentially on the basis of irrelevant opinion, I otherwise rely on that affidavit in relation to his identification in general terms of the meaning and effect of the relevant law in Bahrain. It is clear that the existence, nature and scope of the rules and principles of law in a foreign jurisdiction are issues of fact to be determined by the judge. It is the effect of the application of those rules and principles to a particular case which is objectionable. In the present case Mr Omer’s evidence essentially relates to the nature and scope of the law in general terms and not the facts of this particular case. 15 To the extent that it relates to how that law does apply to the facts of this case I will not rely on it. [47] In particular, it is clear that Mr Omer swears that he is independent of all the parties in the Bahrain proceedings and that he has read the duties required of an expert under the UCPR. It is his view that: “Appeal to the Court of Cassation is only permitted on matters of law. No fresh evidence or new facts are received by the Court of Cassation in its determination of an appeal. Under the law of Bahrain, however, a party may, by way of seeking a revision of the judgment of the High Appellate Civil Court II place, subject to certain time constraints, certain limited types of evidence before that Court. This is governed by Article 229 of the Code of Civil Procedure..” [48] A copy of Article 229 has been provided and it would seem clear that a revision on the basis of Article 229 requires circumstances akin to “cheating”, or involving “faked documents”, or circumstances where crucial documents have been “concealed” or that there are two contradicting judgments passed by the same court involving the same parties and the same issues. In my view a declaration in the terms sought may not meet the conditions of Article 229 and may not be considered in any event. [49] In the circumstances of this case, therefore, it is clear that there is a very real question as to the utility of a declaration by this Court, even if it is made. [50] In my view therefore, given the uncertainty as to the factual matters, the capacity for a narrow declaration to mislead the Bahraini Court as well as the fact that such a declaration may serve no useful purpose I consider that a declaration in the terms sought is not appropriate. The application for the declaration should therefore be dismissed. [51] I will hear from Counsel as to the form of the order and as to Costs. 14 Affidavit of RJB Winter sworn 5 March 2010. 15 Allstate Life Insurance Co v Australia and New Zealand Banking Group Ltd (No 6) (1996) 64 FCR 79. -- 10 of 10 --