De Santis v Russo [2001] QSC 65

SUPREME COURT OF QUEENSLAND CITATION: De Santis v Russo [2001] QSC 065 PARTIES: MIRELLA DE SANTIS (applicant) v MARIA RUSSO (respondent) FILE NO/S: 0048/98 DIVISION: Trial Division at Brisbane PROCEEDING: Application ORIGINATING COURT: Supreme Court at Brisbane DELIVERED ON: 12 March 2001 DELIVERED AT: Brisbane HEARING DATE: 7 November 2000 JUDGE: Atkinson J ORDER: Application dismissed CATCHWORDS: PRACTICE – REGISTRATION OF FOREIGN JUDGMENT – Application to set aside registration of foreign judgment –whether foreign court had jurisdiction – whether judgment obtained by fraud – whether judgment contrary to public policy – Foreign Judgments Act 1991(Cth), ss 6 and 7 Family Law Act 1975 (Cth), s 4 Foreign Judgments Act 1991 (Cth) ss 3(1), 6 and 7 Service and Execution of Process Act 1992 (Cth), Pt 6 Supreme Court (Foreign Judgments) Rules 1993, r 4(1)(b). Abouloff v Oppenheimer & Co. (1882) 10 QBD 295, followed Aksionairnoye Obschestro A.M. Luther v James Sagor & Co [1921] 3 KB 532, followed Attorney-General (United Kingdom) v Heinemann Publishers Australia Pty Ltd (1988) 165 CLR 30, considered Bertuch v Lynch (1998) FLC ¶ 92 –796, considered Close v Arnot NSWSC No10107 of 1996, 21 November 1997, considered Cook v Cook (1986) 162 CLR 376, considered Cosgrove v Johns [2000] QCA 157, CA No 453 of 1998, 5 May 2000, followed -- 1 of 10 -- 2 Emanuel v Symon [1998] 1 KB 302, considered Hunt v BP Exploration Co (Libya) Ltd (1980) 144 CLR 565, followed In the Marriage of Smith [1984] 9 FamLR 675, considered Lepre v Lepre [1965] P 52, followed Loucks v Standard Oil Co of New York (1918) 224 NY 99, considered Morf-Zinggeler v Morf [1999] WASC 10, SC No 11 of 1998, 27 April 1999, considered Owens Bank Ltd v Bracco (1992) 2 WLR 621, followed Pennoyer v Neff 95 US 714, 24 L Ed 565, followed. Rejfek v McElroy (1965) 112 CLR 517, followed Re Macartney [1921] 1 Ch 522, not followed Re Monroe Schneider Associates (Inc) v Barry Lee Schneider (1992) 37 FCR 234, followed Skene v Dale [1990] VR 605, considered Stern v National Australia Bank [1999] FCA 1421, followed Tobin v Tobin (1999) FLC ¶ 92 – 848, considered Williams & Glyn’s Bank v Astro Dinamico [1984] 1 WLR 438, followed Vervaeke v Smith [1983] AC 145 at 164, considered Von Wyl v Engeler [1998] 3 NZLR 416, followed Yoon v Song [2000] NSWSC 1147, SC No 10737 of 1998, 8 December 2000, considered COUNSEL: SJ Lee for Applicant SOLICITORS: Ellison Moschella & Co for Applicant Nicholsons Solicitors for Respondent [1] ATKINSON J: This is an application pursuant to the Foreign Judgments Act 1991 (Cth) (“the FJ Act”) to set aside the registration of a judgment ordered by Fryberg J on 12 January 1998. [2] The application was made by Mirella De Santis who is the widow of Giulio De Santis. Giulio De Santis emigrated to Australia from Italy on 3 March 1961 after legally separating from his first wife Maria Russo. He and his first wife had a daughter, Carla. On 15 March 1968, having divorced his first wife, Mr De Santis married Mirella Pasé who had also emigrated to Australia from Italy. There were two children of the marriage. [3] On 30 August 1984, Ms Russo commenced an action against Mr De Santis for child support expenses for their daughter, Carla. However shortly thereafter, on 15 September 1984, Mr De Santis died and the proceedings against him were halted. On 25 June 1985, Ms Russo then brought proceedings in Italy against Mr De Santis’s heirs. Judgment was given for L1,300,000 after the non-appearance of the heirs on 13 May 1989. There is no evidence that Mrs De Santis had any notice of these proceedings. -- 2 of 10 -- 3 [4] On 14 June 1990, Maria Russo appealed the decision of the Italian court to the Italian Court of Appeal in Rome (La Corte di Appello di Roma). By a letter dated 8 June 1990, Mirella De Santis, who was Mr De Santis’s heir, had been advised by the Italian consulate of an application in the Court of Appeal. This advice was served on her by certified mail. On 24 July 1990, Mrs De Santis consulted a solicitor in Melbourne and on 22 August 1990, those solicitors sent a letter by registered mail to the Court of Appeal including a declaration as to the facts of Mr De Santis’s estate and an explanation of why Mrs De Santis was unable to appear in the matter. Mrs De Santis deposed in that action that Mr De Santis left no assets apart from jointly owned assets. At that time her solicitors knew that there was a pre-trial hearing due on 20 June 1991. On 20 May 1994, judgment was given in the Court of Appeal in Rome1 against Mirella Pasé as heir to Giulio De Santis for L20,000,000 plus interest and costs. The reasons for judgment explain that articles 147-148 of the Civil Code provide for an obligation on a parent to support his or her children and that a parent who has solely supported a child may sue the other for reimbursement. Such a right inheres against the heirs of the estate of a parent who is deceased. [5] As mentioned earlier, on 12 January 1998, Fryberg J ordered registration in this Court of the judgment of the Court of Appeal in Rome. Such an application was made, as it is entitled to be, ex parte.2 In his order, Fryberg J provided that the respondent have twenty-eight days after service of the order to apply to set it aside. The order was not served until 19 September 2000 and on 16 October 2000, Mirella De Santis applied to have the registration of the judgment set aside. [6] The order registering the judgment of the Court of Appeal in Rome was made under s 6 of the FJ Act. Section 7(1) of the FJ Act provides that a party against whom a registered judgment would be enforceable may seek to have the registration of the judgment set aside. Section 7(2)(a) of the FJ Act provides for circumstances in which the court must set aside registration of the judgment if an application is made by the judgment debtor. [7] The applicant argued that the registration of the judgment should be set aside because the Italian court had no jurisdiction, the Italian judgment was obtained by fraud and was contrary to public policy. Jurisdiction [8] The first ground relied upon by the applicant is found in s 7(2)(a)(iv) of the FJ Act: “that the courts of the country of the original court had no jurisdiction in the circumstances of the case”. Whether the courts of the country of the original court had jurisdiction depends in part on the classification of the action, with different rules applying to actions in personam, actions in rem, or actions other than actions in personam or in rem. In 1 Appeal no.1729 of 1994 2 Supreme Court (Foreign Judgments) Rules 1993 r 4(1)(b). -- 3 of 10 -- 4 this case, the subject matter of the action was a money judgment so it is not an action in rem in the sense referred to in s 7(3)(b) of the FJ Act 1991.3 [9] Whether or not the matter is an action in personam is governed by the definition of “action in personam” found in s 3(1) of the FJ Act which provides that an: “action in personam does not include a matrimonial cause or proceedings in connection with: (a) matrimonial matters; or (b) the administration of the estates of deceased persons; or (c) bankruptcy or insolvency; or (d) the winding up of companies; or (e) mental health; or (f) the guardianship of infants.” The reasons of the Court of Appeal of Rome reveal that the case concerned the obligation of a parent to support a child and to reimburse the other parent who had undertaken the sole support of the child and the liabilities of the heirs of the first parent. It is a proceeding relating to the maintenance of children rather than a matrimonial cause4 or proceedings in connection with matrimonial matters or the guardianship of infants or the administration of the estates of deceased persons. It does not therefore fall within any of the categories excepted by the definition from an action in personam. It is an action in personam being an action against a person rather than proceedings against specific property.5 [10] This view is consistent with that taken by the Supreme Court of New South Wales in Close v Arnot,6 which concerned the question of maintenance of children of a first marriage. In that case when considering whether the foreign court, the Supreme Court of the State of New York, had jurisdiction over the question of the maintenance of children who lived in the United States by a father who lived in Australia, Graham AJ referred7 to circumstances in which a common law court would hold that it would enforce a judgment obtained in an action in personam.8 3 When the judgment was given in an action of which the subject matter was immoveable property or in an action in which the subject matter was moveable property if the property in question was, at the time of the proceedings in the original court, situated in the country of that court. 4 Family Law Act 1975 (Cth) s 4 5 Pennoyer v Neff 95 US 714, 24 L Ed 565. 6 NSWSC No 10107 of 1996, 21 November 1997. 7 (supra) at 10. 8 See also Morf-Zinggeler v Morf [1999] WASC 10, No 11 of 1998, 27 April 1999. -- 4 of 10 -- 5 The judgment proceeds on the correct assumption that such an action is an action in personam. [11] The common law rules as to jurisdiction of a foreign court were set out by Buckley LJ in Emanuel v Symon.9 Section 7(3)(a)(i) of the FJ Act gives effect to one of those rules. It provides that the courts of the country of the original court will be taken to have had jurisdiction in the case of an action in personam if the judgment debtor voluntarily submitted to the jurisdiction of the original court. Subsection 7(5) of the FJ Act provides that: “For the purposes of subparagraph (3)(a)(i), a person does not voluntarily submit to the jurisdiction of a court by: (a) entering an appearance in proceedings in the court; or (b) participating in proceedings in the court only to such extent as is necessary; for the purpose only of one or more of the following: (c) protecting, or obtaining the release of: (i) property seized, or threatened with seizure, in the proceedings; or (ii) property subject to an order restraining its disposition or disposal; (d) contesting the jurisdiction of the court; (e) inviting the court in its discretion not to exercise its jurisdiction in the proceedings.” [12] In this case, the applicant knew of the matter to be heard in the Court of Appeal in Rome, was served with the “document of appeal” and was given the time, date and place to appear with sufficient notice to enable her to do so. She replied to that notice by a registered letter to the inquiry judge at the Court of Appeal, declaring that she disputed the jurisdiction of the Italian court and also making other submissions as to why the court should not make an order against her. In making submissions which went to the merits,10 the applicant voluntarily submitted to the jurisdiction of the Italian court and her appearance was not limited for the purposes set out in subparagraph 7(5)(c), (d) or (e) of the FJ Act. Accordingly the Court of Appeal in Rome is deemed to have had jurisdiction in this matter. [13] There could in the circumstances be no failure to afford natural justice. The service of notice of appeal gave Mrs De Santis the opportunity to respond to it. She made submissions as to the merits and so the quantum of the judgment that may be 9 [1908] 1 KB 302 at 309. 10 cf Williams & Glyn’s Bank v Astro Dinamico [1984] 1 WLR 438 at 443; Von Wyl v Engeler [1998] 3 NZLR 416; Dicey v Morris, The Conflict of Laws 11th edition pp 441-444. -- 5 of 10 -- 6 registered is not, as was submitted by the applicant, limited to the difference between the amount of the judgment awarded on appeal and the amount awarded at first instance. Fraud [14] Secondly, the applicant submits that the judgment in the Court of Appeal was obtained by fraud and that the court must set aside the registration of the judgment pursuant to s 7(2)(vi) of the FJ Act. The applicant alleged that the judgment in the Italian Court of Appeal demonstrated that Ms Russo and Mr De Santis’s daughter Carla, who was the subject of the application for maintenance, gave perjured evidence. The basis of this submission was the finding by the Court of Appeal that Mr De Santis “had reached a comfortable financial position.” This was based, as the Court found, on the following evidence: “The daughter Carla herself, having travelled to find her father, stated that he managed a well-known restaurant in Melbourne, with three cooks and 12 waiters, and that he had begun construction on a real estate complex (made up of a restaurant, motel and discotheque), and was living in a luxurious house.”11 [15] In these proceedings, the applicant swore that at the time of her husband’s death, they owned a “small modest house” at 148 Hastings Road, Frankston in Victoria and that he had no other assets. She said the house was subject to 3 registered mortgages, a first mortgage of approximately $35,000.00, a second mortgage of $12,000.00 to the ANZ Bank and a third mortgage securing an overdraft loan of $40,000.00 to the National Australia Bank. The first mortgage was a home loan and the second and third mortgages secured loans for the restaurant business which Mr De Santis operated in partnership. Mrs De Santis swore that the restaurant burnt down three years before her husband’s death and that the business went into receivership. She became sole owner of the house on the death of her husband because of their joint tenancy. She repaid the loans secured by the mortgages. She said that while her husband did manage a restaurant, he had not to the best of her knowledge begun construction on a real estate complex. She said that her husband was not wealthy at the time of his death. [16] While the facts deposed to by Mrs De Santis differ from the facts found by the Italian Court of Appeal, the question is whether this is sufficient to warrant a finding that the judgment was obtained by fraud. It is accepted in Australian courts that, in respect of foreign judgments, it is not necessary to show that fresh evidence has been found since the original judgment.12 It is sufficient to show that the foreign court was misled into coming to a wrong decision by evidence which was false.13 In order for this court to find fraud, however, the proof “should be clear and cogent such as to induce, on a balance of probabilities, an actual persuasion of the 11 Judgment of Italian Court of Appeal (supra) at 6 12 cf Owens Bank Ltd v Bracco (1992) 2 WLR 621 at 626 – 627 cited in Re Monroe Schneider Associates (Inc) v Barry Lee Schneider (1992) 37 FCR 234 at 240 13 Abouloff v Oppenheimer & Co. (1882) 10 QB 295; see the discussion of that case by Dunford J in Yoon v Song [2000] NSWSC 1147, 8 December 2000, at 5 -- 6 of 10 -- 7 mind as to the existence of the fraud.”14 Carla De Santis’s evidence was of what she observed or was told when she visited Australia. At that time she said her father managed a restaurant, was living in a luxurious house and had begun construction of a real estate complex. Mrs De Santis herself conceded that her husband managed a restaurant. Whether or not a house is luxurious or modest is a conclusion drawn on the basis of one’s background and expectations. It is hardly in this instance a difference capable of giving rise to a finding of fraud. Mrs De Santis denies that her husband had commenced construction of a real estate complex but that does not inevitably mean that he had not or that he did not tell his daughter that he had. Such a difference does not provide clear and cogent evidence that Carla was lying and that therefore the judgment was obtained by fraud.15 This ground cannot be sustained. Public policy [17] Further, the applicant submitted that it is contrary to public policy to recognise the judgment. Section 7(2)(a)(xi) of the FJ Act provides that the court must set aside the judgment if “the enforcement of the judgment . . . would be contrary to public policy.” The applicant said that the enforcement of the judgment would be contrary to public policy because the judgment of the Court of Appeal gives effect to Italian law as to the maintenance of children which differs in a number of significant ways from the law as to the maintenance of children in Australia. The applicant argued that the following aspects of Italian law are contrary to public policy: (a) Italian law recognises claims for restitution of past expenses incurred by way of maintenance of a child; (b) child maintenance orders can be made under Italian law against the estate of a parent after the parent’s death; (c) Italian law imposes personal liability on an heir for the maintenance obligations of the deceased (as opposed to liability in a representative capacity); (d) the liability imposed on the heir is not limited to the value of any assets which have been inherited by the heir: (e) the liability extends beyond the minority of the child. [18] Certainly these aspects of Italian law are different to Australian law16 but much more must be shown than that the applicable legal rules are different. Different jurisdictions within Australia, let alone in foreign countries, adopt different solutions to similar problems without suffering the ignominy of being described as contrary to public policy. The relevant Australian law has itself undergone 14 Rejfek v McElroy (1965) 112 CLR 517 at 521; Cosgrove v Johns [2000] QCA 157, CA No 453 of 1998, 5 May 2000, at 7 per Thomas JA. 15 See Close v Arnot (supra) at 13-14. 16 See for example Skene v Dale [1990] VR 605 at 609 – 613; In the Marriage of Smith [1984] 9 FamLR 675 at 685 -- 7 of 10 -- 8 significant change during the course of the twentieth century.17 Cardozo J sagely observed in Loucks v Standard Oil Co of New York:18 “We are not so provincial as to say that every solution of a problem is wrong because we deal with it otherwise at home . . . . The courts are not free to refuse to enforce a foreign right at the pleasure of the judges, to suit the individual notion of expediency or fairness. They do not close their doors unless help would violate some fundamental principle of justice, some prevalent conception of good morals, some deep rooted tradition of the common weal.”19 [19] I agree with the observation of Tamberlin J in Stern v National Australia Bank20 that: “The thread running through the authorities is that the extent to which the enforcement of the foreign judgment is contrary to public policy must be of a high order to establish a defence. A number of the cases involve questions of moral and ethical policy; fairness of procedure, and illegality, of a fundamental nature.” The courts are slow to invoke such a policy.21 [20] What is contrary to public policy in one era might not be considered contrary to public policy in another era where views of morals or what is publicly acceptable may have changed. An example is seen in Re Macartney,22 where Astley J held of a Maltese judgment that: “. . . .its recognition is contrary to public policy, because the general recognition of the permanent rights of illegitimate children and their spinster mothers as recognised in Malta is contrary to the established policy of this country, especially having regard to the fact that the child’s interest is not confined to minority.” The suggestion that a child whose parents were not married should have “permanent rights” against the child’s father is certainly no longer against public policy. On the contrary, it is viewed as contrary to public policy for a parent to attempt to contract out of liability for maintenance of his or her children.23 The decision in Re Macartney, which has some facts in common with the present case, has never been followed or cited with approval in any case in Australia although it 17 See for example, Tobin v Tobin (1999) FLC ¶ 92 – 848 at [28] – [36] 18 (1918) 224 NY 99 at 111. 19 See also Vervaeke v Smith [1983] AC 145 at 164 20 [1999] FCA 1421 at [143]. 21 Vervaeke v Smith (supra) at 164 22 [1921] 1 Ch 522 at 527 23 Bertuch v Lynch (1998) FLC ¶ 92 – 796 at 7 -- 8 of 10 -- 9 was cited by Nygh in Conflict of Laws in Australia.24 It has also been criticised by the learned authors of Dicey and Morris The Conflict of Laws.25 I am not bound by it26 and do not find it persuasive. [21] The learned author, P.B. Carter,27 has analysed those circumstances in which public policy will be invoked: 1. If the content of a rule of otherwise applicable foreign law is unacceptably repugnant. An example might be found in a rule permitting contracts for the sale of slaves; 2. If the court would be required to act in a way which would jeopardise national interests. An Australian example is found in Attorney-General (United Kingdom) v Heinemann Publishers Australia Pty Ltd;28 3. Where enforcement of a foreign judgment would lead to an unacceptably unjust result in the particular case. [22] Applying the criteria set out by Tamberlin J in Stern v National Australia Bank,29 it is not possible to say that the decision in the instant case so offends the essential principles of justice and morality that its registration should be set aside.30 Neither should registration of the judgment be set aside in the exercise of the Court’s discretion on the grounds that it would lead to an unacceptably unjust result.31 Other Matters [23] The applicant further argues that the Supreme Court of Queensland is not the appropriate court in which to register the judgment, since the judgment debtor is resident in Victoria and there are no assets in Queensland. The applicant also submits that the time that has elapsed since the liability arose suggests that the court should exercise a discretion not to register the judgment or should set aside that registration. However, s 6(1) of the FJ Act sets out when and where a court may register a judgment. It provides: “A judgment creditor under a judgment to which this Part applies may apply to the appropriate court at any time within 6 years after: 24 6th Ed at p 157 25 11th Ed at pp 472 – 473 26 Cook v Cook (1986) 162 CLR 376 at 390 27 “The Role of Public Policy in English Private International Law” (1993) 42 ICLQ 1 28 (1988) 165 CLR 30 at 49 - 52 29 (Supra) 30 Aksionairnoye Obschestro A.M. Luther v James Sagor & Co [1921] 3 KB 532 at 558 - 559 31 cf Lepre v Lepre [1965] P 52 at 64 -- 9 of 10 -- 10 (a) the date of the judgment; or (b) where there have been proceedings by way of appeal against the judgment, the date of the last judgment in those proceedings; to have the judgment registered in the court.” Section 6(2)(a) of the FJ Act provides that, for the purposes of s 6(1), the appropriate court is the Supreme Court of a State or Territory. The application for registration was within 6 years of the date of the judgment appealed. If the Act and relevant rules are complied with, the judgment must be registered. Section 6(8) of the FJ Act then provides that the judgment once registered is registrable in the Supreme Court of any other State.32 There is no requirement for any connection between the judgment debtor and the State in which the judgment is registered.33 [24] There is no reason therefore to exercise a discretion on these grounds to set aside the judgment. Nor is there any reason relating to jurisdiction, fraud or public policy why the registration of the judgment should be set aside. The application is dismissed. 32 Service and Execution of Process Act 1992 (Cth) Pt 6 33 Hunt v BP Exploration Co (Libya) Ltd (1980) 144 CLR 565 at 569 -- 10 of 10 --