Bellezza Club Japan Company Ltd v Matsumura Akihiko

• Jurisdiction: Singapore
• Judgment Date: 23 March 2010
• Date: 23 March 2010
• Docket Number: Suit No 173 of 2009 (Registrar's Appeal No 264 of 2009)
• Court: High Court (Singapore)

Bellezza Club Japan Co Ltd

Plaintiff

and

Matsumura Akihiko and others

Defendant

[2010] SGHC 94

Belinda Ang Saw Ean J

Suit No 173 of 2009 (Registrar's Appeal No 264 of 2009)

High Court

Civil Procedure—Foreign judgments—Summary judgment—Plaintiff granted foreign judgment—First defendant brought separate action against plaintiff in foreign court—Third party named in foreign judgment filed notice of set-off against plaintiff in foreign jurisdiction—Whether counterclaim in foreign action constituted right to set-off in Singapore thereby entitling defendant to unconditional leave to defend foreign judgment—Whether set-off filed by third party in foreign jurisdiction entitled defendant to reduce judgment sum of foreign judgment being enforced in Singapore—

Conflict of Laws—Foreign judgments—Enforcement—Arguments raised before foreign courts that guarantees in question were fraudulent or against public order, morals or fair and equitable principles of law—Whether issues raised and argued before foreign court and decided by foreign court could be raised again in Singapore—

Conflict of Laws—Foreign judgments—Enforcement—Provision in foreign law allowed for application of retrial of action on specific grounds after judgment had been granted—Whether existence of such provision rendered foreign judgment inconclusive and not final for purpose of enforcement in Singapore

The plaintiff applied for summary judgment against the first defendant to enforce a foreign judgment (‘the Tokyo judgment’). The plaintiff had already obtained partial satisfaction of the judgment sum in Japan and was seeking to enforce the outstanding sum and interest against the first defendant here in Singapore. The Tokyo judgment was handed down by the Tokyo District Court after a full trial on the merits (‘the first Tokyo litigation’) and upheld on appeal by the Tokyo High Court and subsequently upheld by the Supreme Court of Japan on further appeal. The assistant registrar below granted the plaintiff summary judgment for the Tokyo judgment to be enforced in Singapore. The first defendant then appealed against the assistant registrar's decision. Before the plaintiff brought this action in Singapore, two other suits were commenced in Japan by the plaintiff and the first defendant against each other (collectively, ‘the Japanese suits’). The Japanese suits were still pending in Japan when this appeal was heard.

The first defendant argued that the Tokyo judgment could not be enforced in Singapore because it was inconclusive and not final. The reason he gave was that if the Japanese suits were decided in his favour, he would then be able to apply for a re-trial pursuant to the grounds in Art 338 of the Code of Civil Procedure of Japan and have the Tokyo judgment set aside. Additionally, the first defendant also raised the argument that it was against the public policy of Singapore to enforce the Tokyo judgment because it was founded on transactions and guarantees that were in violation of the laws in Japan even though that issue had already been heard and determined by the Japanese courts.

In resisting the summary judgment, the first defendant also raised the argument that his claim against the plaintiff in one of the Japanese suits constituted an equitable set-off here in Singapore against the plaintiff that entitled him unconditional leave to defend. According to the first defendant, his claim against the plaintiff in Japan was based on a right of advance reimbursement from the plaintiff under Japanese law. The first defendant finally argued that, in any event, if summary judgment were granted to the plaintiff, the judgment sum ought to be reduced because a party named in the Tokyo judgment had filed a notice of set-off against the plaintiff in Japan and this, the first defendant claimed, would result in a reduction of his liability towards the plaintiff.

Held, dismissing the appeal:

(1) Foreign judgments in personammight be enforced at common law by a claim in proceedings in Singapore if the foreign judgment was a money judgment of a court of competent jurisdiction, and that the judgment pronounced by the foreign court was final and conclusive as between the parties. There were three recognised exceptions to the general rule on enforcement of a foreign judgment at common law: fraud, public policy reasons and breach of natural justice. Where an allegation of fraud had already been raised, argued, and adjudicated upon by a foreign court, the foreign judgment might be challenged here in Singapore on the ground of fraud only if the fresh evidence that had come to light could not have been uncovered with reasonable diligence at the time of the trial and the quality of the evidence was of such a nature as to affect the outcome of the hearing: at [10], [11] and [12].

(2) The Tokyo judgment was final and conclusive because it wasres judicata between the parties, having disposed of the original cause of action on the merits and being binding and enforceable in Japan until set aside. The option of applying for a re-trial was speculative as it depended upon a successful outcome for the first defendant in one of the Japanese suits, and also upon there being grounds for him to rely on to apply for a re-trial: at [22], [26] and [27].

(3) Enforcement of the Tokyo judgment was not against the public policy of Singapore. The question of whether the transactions and guarantees in the first Tokyo litigation were against the public order, morals, or fair and equitable principles of law in Japan was decided in favour of the plaintiff after it had already been raised and argued before the Japanese courts: at [29].

(4) The first defendant did not raise any triable issue by way of equitable set-off because there was no evidence before the court to support the first defendant's claim that he had a right of advance reimbursement against the plaintiff under Japanese law. Furthermore, a counterclaim pending in foreign proceedings would not entitle the first defendant to unconditional leave to defend because it did not fall within any of the three exceptions to the general rule on enforcement of a foreign judgment at common law: at [31].

(5) The first defendant was not entitled to reduce the judgment sum on the basis that there was a set-off between the plaintiff and a non-party to the action. Any such set-off between them was wholly distinct and separate from the plaintiff's action against the first defendant and was additionally not a recognised exception per se to an action to enforce a foreign judgment: at [33].

Carl Zeiss Stiftung v Rayner & Keeler Ltd (No 2) [1967] 1 AC 853 (refd)

Gustave Nouvion v Freeman (1889) 15 App Cas 1 (distd)

Hawley & Hazel Chemical Co (S) Pte Ltd v Szu Ming Trading Pte Ltd [2008] SGHC 13 (distd)

Hong Pian Tee v Les Placements Germain Gauthier Inc [2002] 1 SLR (R) 515; [2002] 2 SLR 81 (folld)

Schnabel v Lui [2002] NSWSC 15 (refd)

United Overseas Ltd v Peter Robinson Ltd (trading as Top Shop) CA Transcript 91/0297 (26 March 1991) (distd)

Vanquelin v Bouard (1863) 15 CB (NS) 341; 143 ER 817 (folld)

Code of Civil Procedure (Act No 109 of June 26, 1996) (Japan) Arts 338, 338 (1)

Alma Yong and Amelia Ang (Lee & Lee) for the plaintiff

Nanda Kumar and Zheng Sicong (Rajah & Tann LLP) for the first defendant.

Belinda Ang Saw Ean J

1 This action was brought to enforce a foreign judgment. On 9 July 2009, the plaintiff, Bellezza Club Japan Co Ltd, successfully obtained summary judgment on its claim to enforce the judgment the plaintiff had obtained in the Tokyo District Court on 11 July 2006 against the first defendant, Akihiko Matsumura (‘D1’), which said judgment was upheld on appeal to the Tokyo High Court on 26 December 2007, and on further appeal to the Supreme Court of Japan on 18 July 2008. On 6 October 2009, D1's appeal against the 9 July 2009 order of the Assistant Registrar, Ms Ang Ching Pin (‘AR Ang’), was dismissed. D1 has since appealed against my decision.

Background

2 The plaintiff is a company registered in Japan. At all material times, the plaintiff's shares were equally held by two companies, Tosho Corporation KK (‘Tosho’) and Brother Sales Ltd (‘Brother Sales’).

3 Between 12 February 1991 and 15 August 1994, the plaintiff extended three loans to Tosho and another two loans to a company affiliated to Tosho and KK Micro Device. During this period, D1 was a representative director and president of both the plaintiff and Tosho. The second and third defendants are the brothers of D1 and they held the post of director of Tosho at different times.

4 The plaintiff started an action in the Tokyo District Court against the defendants and three others as guarantors of the abovementioned loans (‘the first Tokyo litigation’). The Tokyo District Court allowed the claims and gave judgment for the plaintiff on 11 July 2006, holding that D1 was jointly and severally liable with three others for a total sum of ¥1,217,139,001 with interest (‘the Tokyo judgment’). It is common ground that the Tokyo judgment was handed down after a full trial on its merits. D1's appeal to the Tokyo High Court was dismissed on 26 December 2007. His further appeal from the Tokyo High Court to the Supreme Court of Japan was also dismissed on 18 July 2008. It is not disputed that there are no further avenues of appeal in Japan against the Tokyo judgment. The debate here focussed on the question of a re-trial as distinct from the notion of an appeal. A further point to note is that the plaintiff has recovered part of the judgment sum and interest. This action was brought to enforce the Tokyo judgment for the outstanding judgment sum and interest. The application for summary judgment was filed only against D1 and not the other defendants.

5 Before the plaintiff brought this action in Singapore, two other actions were commenced in Japan. One of the actions was started by D1 in the Nagoya District Court on 3 August...