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[2016] ZAKZDHC 49
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Elan Boulevard (Pty) Limited v Mahomed (12451/2014) [2016] ZAKZDHC 49 (7 November 2016)
IN
THE HIGH COURT OF SOUTH AFRICA
KWAZULU-NATAL
LOCAL DIVISION, DURBAN
CASE
NO: 12451/2014
In
the matter between:
ELAN
BOULEVARD (PTY)
LIMITED
APPLICANT
and
T
MAHOMED RESPONDENT
JUDGMENT
Delivered
on: MONDAY, 07 NOVEMBER 2016
OLSEN
J
[1]
This application concerns the recognition and enforcement of a
judgment handed down in favour of the applicant (as plaintiff)
against the respondent (as defendant) by the District Court of
Queensland, Southport, Australia. The applicant is Elan
Boulevard
(Proprietary) Limited, an Australian company. The
respondent, Ms T Mahomed, is a resident of Durban.
[2]
A foreign judgment sounding in money cannot without more be enforced
in South Africa. Save for a judgment which can be
brought
within the Enforcement of Foreign Civil Judgments Act, 32 of 1988
(which cannot be done in this case) such a foreign judgment
must
first be recognised for enforcement in this country by order of a
South African court.
[3]
The requirements which must be met to sanction the enforcement in
this country of a foreign judgment sounding in money may be
summarised briefly as follows.
(a)
The foreign court must have had
what South African law would regard as international jurisdiction or
competence, which exists:
(i)
when the defendant was
domiciled or resident within the foreign State in which the foreign
court exercised jurisdiction at the time
of commencement of the
foreign proceedings; or
(ii)
when the defendant submitted to
the jurisdiction of the foreign court.
(b)
The judgment sought to be
enforced must have become final and conclusive, and must not have
become superannuated.
(c)
The recognition and enforcement
of the foreign judgment must not be contrary to public policy.
(d)
The judgment must not have been
obtained by fraudulent means.
(e)
The judgment must not involve
the enforcement of a penal or revenue law of the foreign State.
(f)
The enforcement of the judgment
must not be precluded by the Protection of Businesses Act, 99 of
1978.
As
to the aforegoing, see
Jones v Krok
[1994] ZASCA 177
;
1995 (1) SA 677
(A) at
685B-D;
Purser v Sales; Purser and Another v Sales and Another
[2000] ZASCA 135
;
2001 (3) SA 445
(SCA) paras 11-12; and
Government of the
Republic of Zimbabwe v Fick
2013 (5) SA 325
(CC) para 38.
If these requirements are met, “our Courts will not go into the
merits of the case adjudicated upon by
the foreign court and will not
attempt to review or set aside its findings of fact or law”.
(
Jones v Krok
at 685D-E, referring to
Joffe v Salmon
1904 TS 317
at 319 where Innes CJ observed that it is a clear rule of
our law that when a question has been settled finally by a competent
foreign court the local court will not go into the merits of the
case.)
[4]
The judgment in issue in this case was granted in favour of the
applicant against the respondent on 30 July 2014. It was
for
payment of a sum of Aus$714 217.19, which amount included interest
calculated up to 30 July 2014 in an amount of Aus$404 810.79.
According to the certificate of judgment the amount bears interest
from the date of judgment at 8.5% per annum. The court
also
dismissed a counterclaim which the respondent had made and ordered
the respondent to pay the applicant’s costs.
The
applicant seeks an order recognising the judgment in its favour, and,
the Australian order as to costs aside, an order enforcing
the
judgment.
[5]
The papers in this matter contain a mass of material. (They run
to some 800 pages.) Unfortunately the respondent’s
opposing papers advance some extravagant defences to the applicant’s
claim to be entitled to enforce its judgment; but fortunately
counsel
who argued the matter for the respondent confined the case to the
issues of jurisdiction, public policy and the alleged
employment of
fraudulent means in order to secure the judgment. (As will be
seen, the latter two of these issues overlap
somewhat.) Some of
the defences not pressed by counsel are said to rest on our
Constitution. The respondent cites her
right to privacy, her
right to property (alleging that granting the present application
will allow a process of execution which
will amount to an arbitrary
deprivation of property), and her right of access to court and a fair
hearing; and she asserts that
if the applicant is entitled to relief
in this application at common law, then the common law must be
developed in an unspecified
manner in order to avoid that outcome and
achieve consistency with the Constitution. There is no need to
deal with these
matters. But as to the harmony between the
Constitution and our law relating to the enforcement of foreign
judgments, paragraphs
54 to 57 of the judgment in
Government of
Republic of Zimbabwe v Fick
are instructive.
[6]
An account of the facts is necessary in order to deal with the bases
upon which the respondent resists the application.
(a)
On 9 December 2007 the
respondent and her husband left South Africa for Brisbane, Australia,
to attend a family wedding. A
number of families attending that
wedding became excited about the prospect of buying a unit in a
proposed development known as
“3113 Surfers Paradise
Boulevard”. The respondent attended a presentation and,
together with her husband, at
the least expressed an interest in
purchasing such a unit.
(b)
The proposed standard form
contract documents for such a purchase were not at that stage yet
ready. According to the respondent
she was informed that a
deposit of 10% of the proposed purchase price was required by the
applicant (as seller of the development
of which the proposed unit
formed a part) in order to secure a right to purchase. On the
applicant’s case such a deposit
(which amounted to Aus$103 500)
was payable only as an obligation under the contract of sale which,
according to the applicant,
was actually subsequently concluded.
Aus$64 000 was paid to the applicant’s lawyers on 9 January
2008 before the respondent
left Australia on 12 January 2008, still
not having signed the proposed sale contract. Neither had she
signed an associated
contract which was for the provision of a
furniture package for installation in the unit upon its completion.
(c)
On 21 January 2008 the
applicant’s selling agents forwarded the contracts and
associated documents required for the transaction
to R Sabdia and
Associates of Robertson, Queensland, a firm of solicitors who had
been appointed by the respondent to assist her.
This was done
under cover of a letter which gave instructions as to the execution
of the two contracts (one for the unit and one
for the furniture) and
the associated documents apparently required by Australian law.
According to how these documents were
dated they were signed in
Australia on 23 January 2008 and 4 February 2008. The
respondent’s name appears where her
signature was required, and
her initials where those were required. Her solicitor, Mr
Sabdia, returned the documents to the
applicant’s agent,
whereafter, upon signature by the applicant, the applicant regarded
the two contracts as binding.
(d)
The respondent says that
“sometime in 2008”, as a result of a communication from
Mr Sabdia, she learnt that he was in
possession of copies of the
signed binding contracts. She learnt that they had been
witnessed by her sister. Her affidavit
is replete with
expressions of “shock” at this revelation. The
respondent’s coyness about disclosing when it
is that she
learnt of this allegedly shocking disclosure, and of the fact that
her sister had witnessed her signature, is disturbing.
This is
especially so because she has not produced any affidavit from Mr
Sabdia explaining how unsigned documents which were received
in his
office (as the respondent’s agent) left his office duly signed,
on the face of it by the respondent, when she was
in fact in South
Africa at the time. That in turn is all the more disturbing
because of the respondent’s allegation
(which is not accepted
by the applicant, although it cannot have any direct knowledge of the
truth of it) that she had not authorised
anybody to sign in her name
and on her behalf, something which would have been permitted
according to law in Queensland.
However, in the view I take of
this matter, nothing turns on these misgivings about this aspect of
the factual matrix.
(e)
According to the respondent,
being concerned (allegedly on the advice of Mr Sabdia) that her
sister could get into trouble with
the Australian authorities for
having falsely witnessed the signature, the respondent asked Mr
Sabdia to go ahead and attempt to
obtain finance to meet her
obligations in terms of the contract.
(f)
The final instalment of the
deposit required by the contract was eventually paid on 12 June 2008
after the respondent (through Mr
Sabdia) had made four requests for
an extension of time. (The balance of the deposit ought to have
been paid on 25 February
2008, the contract having recorded what had
been paid before the contract signature date.)
(g)
Clause 50 of the contract of
sale gave the applicant a right of first refusal in the event that
the respondent wished to sell her
unit or her interest in the unit.
In March 2010 Mr Sabdia sent a letter to the applicant’s
attorneys offering to sell
the unit back to the applicant for the
price at which it had been sold to the respondent. That offer
was declined.
(h)
The unit was put in a condition
to be transferred in October 2010. That meant that the balance
of the purchase price had to
be paid. Notice of this was
furnished, but the respondent failed to pay. Four extensions of
time to pay were sought
by her. After more than one notice
demanding performance, the applicant eventually terminated both
contracts on 16 June 2011.
(i)
A summons issued out of the
Queensland court by the applicant was served upon the respondent in
South Africa in May 2012.
In it the applicant claimed damages
for breach of both contracts, including interest on the various
amounts in question at the
rate of 15% per annum, as provided for in
those contracts. In her first plea the respondent admitted that
the written documents
upon which she was sued were valid binding
contracts. Later she amended her plea withdrawing that
admission, and expressly
denying that either she or anyone authorised
by her to sign on her behalf, had signed the contract documents.
She counterclaimed,
seeking to have her deposit repaid, relying on
the same contention. It was accordingly some four years after
the signed agreements
were returned to the applicant that it learned
for the first time that the respondent repudiated the contracts upon
the basis that
they had not been signed by her, or on her behalf;
this despite her prior conduct consistent only with the validity of
the contract
documents.
(j)
Early in 2014 the case was set
down to run for three days commencing 30 July 2014. It appears
that more than one attempt was
made in advance of that date to get
the court to delay the trial. It would not. On 30 July
2014 counsel appeared on
behalf of the respondent to move and argue
an application for an adjournment upon the basis that the respondent
had been unable
to get to Australia in time for the trial. The
learned Judge was not impressed with her application and dismissed
it.
Counsel withdrew, his brief having been confined to the
application for an adjournment.
(k)
The learned Judge then required
the applicant to establish the matters upon proof of which its claim
rested. That was done
and judgment was entered for the
applicant against the respondent as set out earlier in this judgment.
INTERNATIONAL
JURISDICTION OR COMPETENCE
[7]
The contracts upon which the respondent was sued in Queensland
contained clauses under which she submitted to the jurisdiction
of
the courts of Queensland. As I understand her answering
affidavit, the respondent’s challenge to the contention
that
the Queensland court had international jurisdiction or competence
went along the following lines.
(a)
Her signature to the contracts
was a forgery.
(b)
If this court accepts her
allegation that her signature was forged, then there was no
submission to the jurisdiction of the foreign
court.
(c)
This court must accept her
allegation that her signature was forged as the applicant is unable
successfully to contradict that proposition,
these being motion
proceedings.
(d)
Accordingly, as she was neither
resident nor domiciled in Australia when the foreign proceedings
commenced, the Queensland court
cannot be regarded as having had
international jurisdiction or competence.
[8]
The respondent accordingly asks this court to re-examine the issue of
the allegedly forged signatures, not to overturn the findings
made by
the foreign court, but to reach a decision on the question as to
whether that court had international competence.
That this is a
feasible request seems apparent from the judgment in
Society of
Lloyd’s v Price; Society of Lloyd’s v Lee
2006 (5) SA
393
(SCA), para 35 and the cases cited in fn35. However in that
case the court went on to observe in para 41 that the “validity
of a submission to jurisdiction agreement should be tested with
reference to the proper law of the contract in question.”
The court observed further that there is authority for the
proposition that the applicable law is that “which would govern
the contract or any term thereof if it were valid.”
Whether those propositions would have any bearing on the decision
in
this case was not argued before me. However I do not believe
that I need concern myself with the question, because in
my view the
respondent’s argument misses the real point.
[9]
Whilst it is so that in her amended plea the respondent asserted that
the buyer’s signatures on the contract documents
were not hers,
nor those of someone authorised by her, she did not plead that the
Queensland court lacked jurisdiction over her
for that reason.
(She raised no plea as to the jurisdiction of the court at all,
domestic or international.) On a plain
reading of the
respondent’s plea the issue between her and the applicant, as
to whether the buyer’s signatures brought
about the existence
of binding contracts, was submitted by her for decision by the
Queensland court. At the very least she
acquiesced in the
applicant’s claim to have the issue tried in Queensland. (See
Du Preez v Philip-King
1963 (1) SA 801
(W) at 803B-C.)
[10]
Furthermore, and most importantly, the respondent’s
counterclaim constituted an indisputable submission to the
jurisdiction
of the Queensland court. She asked the court to
find that there were no contracts (for want of signature by her or on
her
behalf), and on that ground to grant judgment in her favour for
return of the deposit she had paid. Counsel for the respondent
conceded that he was unable to advance any argument against the
proposition that the making of the counterclaim puts it beyond
question that the respondent submitted to the jurisdiction of the
court in Queensland.
PUBLIC
POLICY AND THE EMPLOYMENT OF FRAUDULENT MEANS TO SECURE A JUDGMENT
[11]
In order to succeed in its action in Queensland, the applicant had to
establish to the satisfaction of the Judge that the contracts
upon
which it relied had indeed been concluded. The respondent’s
admission of that fact having been withdrawn, the
learned Judge
considered the circumstances in which the signed agreements had been
returned to the selling agent, and the conduct
of the respondent
thereafter and up to the time when she delivered her amended plea
some four years after the contract dates, and
found it proved that
the contracts were entered into. In making that finding the
learned Judge impliedly rejected the proposition
that the contracts
were false documents (false in the sense that they were products of
forgery). That finding justified the
dismissal of the
counterclaim and, upon being satisfied of the other elements of the
applicant’s case, the grant of the judgment
now sought to be
enforced.
[12]
Before this court the respondent contends that she is entitled to
raise the question of the alleged forgery again, arguing
that the
enforcement of the Queensland judgment in South Africa would be
against public policy because it was based on forged documents;
and
asking that a finding should be made that the judgment in Queensland
was, because of the forgery, “obtained by fraudulent
means”.
The respondent contends that these conclusions can be reached
because, on the papers before me, she has testified
that the
signatures were forged; and because the applicant is unable
successfully to contradict that evidence in motion proceedings.
[13]
In my view, whatever else may be said to gainsay the propositions
advanced by the respondent, the position is that the question
as to
whether the contracts were false documents was submitted for the
decision of the Queensland court, and decided by it.
On the
authorities already mentioned this court has no business re-opening
that issue.
[14]
The learned author C F Forsyth (
Private International Law
, 5ed
at 463) draws a distinction between extrinsic and intrinsic fraud.
Extrinsic fraud occurs during the trial. It
may be a case of
forgery, perjury or suppression of material documents. A
touchstone of the classification is that it concerns
fraud of a kind
“as would allow a South African court to set aside its own
judgment if apprised of the true position”.
A judgment
obtained in that fashion will not be recognised. Intrinsic
fraud is fraud that has been raised before and rejected
by an
internationally competent court. The local court, according to
the learned author, must in that case refuse to go into
the matter.
I am in respectful agreement with that analysis.
[15]
Putting Professor Forsyth’s views aside, and assuming that
intrinsic fraud can be raised in these proceedings (a proposition
I
do not endorse), what would disqualify a foreign judgment from
recognition is that it was “obtained by fraudulent means”;
which to my mind means that the fault with regard to the fraud, or
responsibility for its employment, must lie with the party who
secured the judgment. In the answering affidavit in these
proceedings the respondent presents her case upon the basis that
the
applicant was responsible for the alleged forgery. She ignores
altogether the fact that the documents she provided illustrate
that
if her signature was indeed forged (i.e. placed upon the documents
with fraudulent intent) then it happened while those documents
were
in the possession of her own solicitor. In his heads of
argument placed before the court in Queensland, counsel for
the
applicant conceded that it appears correct that the signatures and
initials of the buyer were not placed on the documents by
the
respondent herself. His primary argument was accordingly to the
effect that, given the respondent’s conduct from
January 2008,
which evidenced her acceptance of the validity of the contracts, the
signatures to the documents must have been placed
there by someone
authorised thereto, a submission which the Queensland court
accepted. If I were permitted to re-examine
and reconsider that
finding made by the Queensland court, I would be hard pressed to find
any fault in the reasoning it followed
in concluding that the
contracts were valid and binding. Accordingly, on the
respondent’s own version, it was ultimately
her false
representations to the effect that she regarded the contracts as
valid which generated the judgment against her.
[16]
Counsel for the respondent has also argued that the enforcement of
the judgment would be contrary to public policy because
the larger
portion of the ultimate award is an interest component. However
he did not go so far as to say that the award
was one of punitive or
exemplary damages which, by our law, might be regarded as contrary to
public policy. (See
Jones v Krok
at 696
.
)
[17]
An examination of the record and the manner in which the interest
portion of the judgment was calculated reveals that the device
of
interest was employed in order to determine fair compensation to the
applicant for the losses it suffered as a result of the
respondent’s
breach of contract. (This method is not unknown in our law.
See
Ethekwini Municipality v Verulam Medicentre (Pty) Limited
[2006] 3 All SA 325
(SCA) para 15.) This portion of the
compensation was calculated at the stipulated rate (15% per annum)
on:
(a)
the full purchase prices from
when they were due to have been paid to the date upon which the
contracts were cancelled;
(b)
the full purchase prices less
the forfeited deposit from then until the unit was resold; and
(c)
the difference between the
original contract prices (less the deposit) and what was
achieved upon re-sale (that difference
being some Aus$310 000)
up to the date of judgment.
The
course of the history of the transaction, long largely because of the
respondent’s own misconduct, explains how the applicant’s
losses mounted up as they did. In my view a contention that the
outcome is contrary to public policy has no foundation.
CONCLUSION
[18]
There having been no other objections to the proposition that the
Australian judgment is enforceable in South Africa, I conclude
that
the application must succeed. In those circumstances the
following order is made.
1.
The judgment handed down in
favour of the applicant (as plaintiff) against the respondent (as
defendant) by the District Court of
Queensland, Southport, Australia
under case number SD83/2012 on 30 July 2014 is recognised and
enforceable in South Africa.
2.
Consequently, the respondent is
ordered to pay the applicant:
(a)
Aus$714 217.19;
(b)
interest on the sum of Aus$714
217.19 from 30 July 2014 to date of payment at the rate of 8.5% per
annum;
(c)
the costs of this application.
___________________
OLSEN
J
Date
of Hearing:
MONDAY, 24
OCTOBER 2016
Date
of Judgment: :
MONDAY, 07 NOVEMBER 2016
For
the Applicant :
MR MJ FITZGERALD SC
Instructed by:
WERKSMAN ATTORNEYS
APPLICANT’S
ATTORNEYS
155 5
th
Street Sandown, Sandton
(Tel.: 011 535
8209)
(Ref.: Mr R
Wakefield/HICK 28020.1)
c/o COX YEATS
ATTORNEYS
21 Richefond
Circle, Ridgeside Office Park
Umhlanga Ridge
Durban
(Tel : 031 –
536 8500)
(Ref.: Mr A Clark /
Ms L Mairte / ps/ 09 W620 003)
For
the Respondent :
MR A POTGIETER SC with MR H GANI
Instructed by:
SHABEER JOOSAB ATTORNEYS
RESPONDENT’S
ATTORNEYS
Suite 1, Ground
Floor
582 Ridge Road
Overport
Durban
(Tel.: 031 –
207 8337)
(Ref.: Mr Joosab /
Taazmin Mahomed)