MORGAN STANLEY & CO INTERNATIONAL LTD v. PILOT LEAD INVESTMENTS LTD

HCMP2523/2005

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO. 2523 OF 2005

---------------------------

---------------------------

---------------------------

-----------------------

D E C I S I O N

-----------------------

1. This is an appeal from the Registrar’s order dated 8 February 2006 refusing the Judgment Creditor’s application to register under the Foreign Judgments (Reciprocal Enforcement) Ordinance, Cap. 319 (“FJREO”) a judgment that it obtained in Singapore.

2. The background facts may be summarized as follows.

BACKGROUND FACTS

3. The Judgment Creditor is a company incorporated under the laws of England and Wales.  It is a licensed securities dealer and investment adviser with the English Financial Services Authority.

4. The Judgment Debtor is a company incorporated in BVI, carrying on business of a personal investment holding company.

5. On 22 December 2004, the Judgment Creditor obtained a default judgment against the Judgment Debtor in the High Court of England for the sum of £547,773.07 (“the English Judgment”).

6. The Judgment Creditor then registered the English Judgment in Singapore on 15 February 2005 (“the Singapore Order”) under its Reciprocal Enforcement of Commonwealth Judgments Act (“the Singaporean Act”).  By virtue of the Singapore Order, the English Judgment is registered as a judgment of the High Court of the Republic of Singapore pursuant to the Singaporean Act.

7. The Judgment Creditor has been unable to recover the judgment sum in Singapore.  However, during the course of oral examination conducted there, it came to know that the Judgment Debtor has assets in Hong Kong.  It then sought enforcement here.

8. Generally speaking, a judgment creditor may seek to enforce a foreign judgment for payment of a monetary sum in Hong Kong in two ways.  The first is to have it registered under FJREO or the Judgments (Facilities for Enforcement) Ordinance, Cap. 9, where applicable.  Alternatively, he may enforce it at common law by commencing an action.

9. After 1 July 1997, the United Kingdom no longer accords reciprocal enforcement to Hong Kong judgments.  By virtue of section 2A(2)(B) of the Interpretation and General Clauses Ordinance, Cap. 1[1], UK judgments are no longer registrable under the Judgments (Facilities for Enforcement) Ordinance.  They can only be enforced at common law : see Hong Kong Civil Procedure 2006, Vol. 2 para. F4/3/2 at p. 396.  On the other hand, Singapore is a country to which the provisions of FJREO have been extended : see section 3(1) of FJREO and Part 2, First Schedule to the Foreign Judgments (Reciprocal Enforcement) Order.  A judgment given by a superior court of Singapore can therefore be registered under FJREO.

10. The Judgment Creditor thus made an ex-parte application on 17 November 2005 to have the Singapore Order registered under FJREO.  However, that application was refused by the Registrar on 8 February 2006.  The Judgment Creditor now appeals.

DISCUSSION

11. It is, I believe, useful to begin with a brief synopsis of the statutory regime of FJREO.

12. For the purposes of FJREO, “judgment” means a judgment or order given or made by a court in any civil proceedings but does not include a judgment which by virtue of the Foreign Judgments (Restriction on recognition and Enforcement) Ordinance, Cap. 46 cannot be recognized or enforced in Hong Kong; and “judgment creditor” means the person in whose favour the judgment was given : section 2(1).

13. In order to be capable of being registered under FJREO, a foreign judgment must satisfy the following prerequisites :

(1)	It must come from a superior court of a designated country : section 3(2).
(2)	It must be final and conclusive as between the parties thereto[2] : section 3(2)(a).
(3)	There is payable thereunder a sum of money, not being a sum payable in respect of taxes or other charges of a like nature or in respect of a fine or other penalty : section 3(2)(b).
(4)	It is given after the coming into operation of the order directing that the provisions of FJREO shall extend to that foreign country : section 3(2)(c).

14. Where these prerequisites are satisfied, the judgment creditor may then apply within six years after the date of judgment to have the judgment registered in the Court of First Instance.  On any such application the court shall, subject to the proof of the prescribed matters[3] and to the other provisions of FJREO, order the judgment be registered : section 4(1).  However, a judgment shall not be registered if at the date of the application, it has been wholly satisfied or it could not be enforced by execution in the country of the original court : see the proviso to section 4(1).

15. A registered judgment may be set aside under section 6.  Subject to those setting aside provisions, a registered judgment shall, for the purposes of execution, be of the same effect as if the judgment had been given in the Court of First Instance and entered on the day of registration : section 4(2)(a).

16. I now turn to the present application and examine if each of the four prerequisites that I have identified in paragraph 13 above has been satisfied.

(1) Judgment of a superior court of the designated country

17. The Singaporean Order must be a judgment within the meaning of section 2(1) of FJREO and must also be one given by a superior court of Singapore.  On the evidence before me, it is plainly an order made by a superior court of Singapore (High Court) in civil proceedings.  It therefore falls within the meaning of a judgment of a superior court of a designated country for the purposes of section 3(2) of FJREO.

(2) Final and conclusive

18. The Singaporean Order must be final and conclusive between the parties.  The test of finality is the treatment of the judgment by the foreign tribunal as a res judicata : see Dicey & Morris on the Conflict of Laws, 13^th Edn, Vol. 1, para. 14-021 at pp. 476-477.  However, the Judgment Creditor has adduced no evidence that under the law of Singapore, the Singaporean Order is final and conclusive between the parties.  On the evidence before me, no stay on the Singaporean Order had been granted.  No application to set aside the registration had been made.  Indeed, the deadline for setting aside (10 April 2005) had long expired.  But that is not sufficient proof that the Singaporean Order is final and conclusive by the law of Singapore for the purposes of section 3(2)(a) of FJREO.  Accordingly, I am not satisfied that this prerequisite is met.

(3) A sum payable under the Singaporean Order

19. It would appear that the effect of the registration of the English Judgment under the Singaporean Act is to render it for purposes of execution of the same force and effect as if it were a judgment of the High Court of Singapore as from the date of registration[4].  Plainly, a sum of money, namely, the judgment debt arising from the English Judgment converted to Singaporean currency is payable under the Singaporean Order.  This prerequisite is met.

(4) When the Singaporean Order was made

20. The Singaporean Order was clearly made after the coming into operation of the order directing that the provisions of FJREO shall extend to Singapore.  This prerequisite is also met.

(5) Registration of the Singaporean Order

21. For the reason stated in paragraph 18 above, I rule that on the evidence before me, the Singaporean Order is not a judgment to which the provisions of FJREO apply.  It follows that the Judgment Creditor is not entitled to have it registered under section 4(1) of FJREO.

22. The above is sufficient to dispose of the present appeal.  However, in case that I am wrong on the conclusion in paragraph 21 above and to anticipate the possibility that the Judgment Creditor makes a fresh application supported with the requisite evidence on finality, I wish to go on to deal with the question of registrability of the Singaporean Order on the assumption that all the prerequisites for registration under FJREO are fully met.

23. In refusing the present application, the learned Registrar agreed with the following view expressed by the authors in an article in the book entitled “Enforcement of Foreign Judgments Worldwide”, 2^nd Edn, at p. 43 :

“It would thus appear that if judgment is obtained in country A (to which the provisions of the Ordinance have not been extended), and pursuant to an agreement between country A and country B for reciprocal registration, the judgment is registered in country B, even if country B is a country to which the provisions of the Ordinance have been extended, registration of country B’s judgment (pursuant to the Ordinance) may be set aside.  In short, it appears that it is not the purpose of the Ordinance to provide for the registration of ‘secondhand judgments’.”

24. With respect, I disagree.  In my view, FJREO does not draw any distinction between : (a) a monetary judgment made by a superior court of a designated country and (b) a judgment made by that superior court in proceedings founded on a judgment of a court in another country and having as their objective the enforcement of that judgment.  Once the prerequisites for registration are fully met, both judgment (a) and (b) made by that superior court may be registered.  And upon the proof of those prescribed matters under section 4(1) and Order 71, rule 3 the Rules of the High Court, and subject to other provisions of FJREO, the court shall order the judgment be registered.

25. My interpretation of FJREO is supportable by the legislative history of the English Foreign Judgments (Reciprocal Enforcement) Act 1933, on which FJREO was modeled.  Before 1982, the 1933 Act contained provisions similar to those of FJREO.  However a new section 2A was added to the 1933 Act by the Civil Jurisdiction and Judgments Act 1982.  Under section 2A(c), the 1933 Act does not apply to a judgment of a recognized court which is a judgment given by that court in proceedings founded on a judgment of a court in another country and having as their objective the enforcement of that judgment.  In Clarke v. Fennoscandia Ltd [2004] SC 197 (Scottish Outer House), Lord Kingarth observed at para. 31 that :

“… section 2A(c)… was no doubt added, as many commentators have concluded, to avoid the ‘laundering’ of judgments obtained in countries to which the 1933 Act did not apply, ie to prevent a party from obtaining a decree conform in respect of a ‘foreign’ judgment in a country to which the Act did apply and thereafter seeking enforcement by formal registration procedures under the Act in a country or countries which would not themselves otherwise contemplate the recognition of the ‘foreign’ judgment in question.”

26. This dicta suggests that prior to the introduction of section 2A, the so-called “laundering” of foreign judgments was permissible under the 1933 Act.  Then section 2A was introduced to stop this undesirable practice.  In the absence of any provision similar to section 2A, this practice of “laundering” foreign judgments, however undesirable it may be, is permissible under FJREO.

27. Accordingly, had the Singaporean Order fully met the prerequisites for registration, I would have ruled that the court should register it under FJREO and allowed the appeal.

CONCLUSION

28. For the above reasons, I will dismiss the appeal, but without prejudice to any fresh application by the Judgment Creditor to register the Singaporean Order, if so desired.