Hong Pian Tee v Les Placements Germain Gauthier Inc

• Jurisdiction: Singapore
• Judge: Chao Hick Tin JA
• Judgment Date: 21 March 2002
• Neutral Citation: [2002] SGCA 17
• Docket Number: Civil Appeal No 600101 of
• Date: 21 March 2002
• Published date: 19 September 2003
• Year: 2002
• Plaintiff Counsel: Manjit Singh and Sree Govind Menon (Manjit & Partners)
• Citation: [2002] SGCA 17
• Defendant Counsel: Siva Murugaiyan and Parveen Kaur Nagpal (Colin Ng & Partners)
• Court: Court of Appeal (Singapore)
• Subject Matter: Enforcement,Whether fresh evidence of fraud exists,Whether foreign judgment challengeable on ground of fraud where allegation of fraud already adjudicated upon by foreign court,Conflict of Laws,Principles governing foreign judgments,Whether fresh evidence of fraud required,Allegation that foreign judgment obtained by fraud,Foreign judgments,Whether evidence makes a difference to verdict admitted in foreign court,Approach of local court

(delivering the grounds of judgment of the court): This was an appeal by the defendant (`Hong`) against a decision of the High Court granting summary judgment to the plaintiffs (`Les Placements`) on the latter`s claim based on a judgment obtained in Canada. Hong argued that, having raised the point that the Canadian judgment was obtained by fraud, that should suffice to preclude the judgment from being enforced in Singapore, and that the action should be allowed to go on for trial to enable Hong to establish the alleged fraud. We were not persuaded by Hong`s contention and dismissed the appeal. We now give our reasons.

Background

The facts giving rise to the action were largely as follows. Les Placements was a company incorporated in Canada. On or about 25 April 1995, it entered into a loan agreement (`the loan agreement`) with Wiraco Trading Pte Ltd (`Wiraco`), a company incorporated in Singapore, whereby Les Placements agreed to lend Wiraco a sum of C$350,000. At the time of the loan, the President of Les Placements was one Mr Germain Gauthier (`Germain`) and his son, Pierre Gauthier (`Pierre`), was a shareholder and the managing director of Wiraco. Hong`s wife was also a director of Wiraco. As a part of the loan arrangement, Hong gave a guarantee to Les Placements to ensure the repayment of the loan extended by Les Placements to Wiraco.

Under cl 12.1 of the loan agreement it was provided that the courts of the province of Quebec as well as the Supreme Court of Canada shall have the exclusive jurisdiction with respect to all disputes relating thereto.

On the due date, Wiraco defaulted in repaying the loan. Despite demands, both Wiraco and Hong failed to fulfil their repayment obligations. Thus, Les Placements commenced proceedings against Wiraco and Hong in the Superior Court of the District of Montreal, Quebec, Canada pursuant to the exclusive jurisdiction clause.

Hong disputed the jurisdiction of the Canadian court and sought a stay on the ground of forum non conveniens. That challenge was rejected. The action went on for trial and Hong alleged that he never guaranteed a loan from Les Placements to Wiraco. Instead, he claimed that the guarantee he executed related to a personal loan from Germain to Wiraco which was never effected. In the alternative, Hong contended that the arrangement was that Germain was to extend a personal loan to him and that the guarantee was for Germain`s benefit and not Les Placements. These defences were raised with a view to having the claim dismissed on the ground that there was no privity of contract between Hong and Les Placements.

The Canadian court held that in relation to the loan transaction Germain was not acting for himself but on behalf of his company, Les Placements, and that the guarantee was addressed to him as the head of Les Placements. The defences raised were therefore rejected and both Hong and Wiraco were held to be jointly and severally liable to Les Placements for C$360,645, plus interest and costs. Dissatisfied with this decision, Hong and Wiraco appealed to the Court of Appeal in Quebec but the appeal was disallowed.

As Canada was not a country gazetted under either the Reciprocal Enforcement of Commonwealth Judgments Act (Cap 264) (`RECJA`) or the Reciprocal Enforcement of Foreign Judgments Act (Cap 295) ("REFJA"), Les Placements had to commence a writ action in Singapore to enforce the Canadian judgment against Hong under common law. Thus, the present proceeding. No enforcement action was taken by Les Placements against Wiraco because the latter was in liquidation.

Following the institution of the action in Singapore, an application was made to obtain summary judgment, which led to the statement of claim being amended and re-amended and a fresh application for summary judgment made. On 4 May 2001 the senior assistant registrar granted unconditional leave to defend to Hong. On further appeal to the High Court, Les Placements successfully obtained a summary judgment from Choo Han Teck JC (see [2001] 3 SLR 418). Being dissatisfied, Hong appealed to this court.

Before Choo JC, counsel for Hong made the following arguments in so far as they were germane to this appeal. First, Les Placements was not entitled to summary judgment on the strength of the Canadian judgment unless the `underlying basis` of the foreign judgment is pleaded and tried in the Singapore courts. Second, the Canadian judgment was improperly obtained because Les Placements had fraudulently failed to disclose to the Canadian court that the guarantee of 20 March 1995 was addressed to Germain and not Les Placements. On both points, Hong failed. The court held that it was an established principle that a judgment obtained from a competent foreign jurisdiction, which was final and conclusive on the merits, was also generally conclusive in Singapore between the same parties.

Appeal

Before us, Hong reiterated the point about the Canadian judgment being obtained by fraud. He submitted that, where fraud was raised, the foreign judgment could no longer be conclusive and this was so even if the defence of fraud had been investigated into by the foreign court and rejected. Furthermore, he was entitled to have the issue of fraud re-litigated in Singapore even if there was no new material. However, he conceded that leave to defend would be refused, if it was obvious that the allegation of fraud was frivolous, citing Codd v Delap [1905] 92 LT 510. He argued that the court below should not have followed the decision in Ralli v Angullia [1917] 15 SSLR 33 .

Hong further asserted that there were fresh materials to support the allegation of fraud: the sworn statements of two witnesses (Chew Kia Lee and Yeo Seok Lee) which were prepared by Les Placements in the Canadian proceedings but were never produced before the Canadian court.

Principles governing foreign judgments

Quite apart from the arrangements under the RECJA or the REFJA, it is settled law that a foreign judgment in personam given by a foreign court of competent jurisdiction may be enforced by an action for the amount due under it so long as the foreign judgment is final and conclusive as between the same parties. The foreign judgment is conclusive as to any matter thereby adjudicated upon and cannot be impeached for any error, whether of fact or of law: Godard v Gray [1870] LR 6 QB 139. In respect of such an action, an application for summary judgment may be made on the ground that the defendant has no defence to the claim: Grant v Easton [1883] 13 QBD 302. The local court will only refrain from enforcing a foreign judgment if it is shown that the plaintiff procured it by fraud, or if its enforcement would be contrary to public policy or if the proceedings in which the judgment was obtained were opposed to natural justice: see 8(1) Halsbury`s Laws of England (4th Ed) (1996 Reissue) paras 1008-1010.

In a much earlier case, Vanquelin v Bouard [1863] 15 CBNS 341(Unreported) which was an action in England on a French judgment, Erle CJ, said:

It has been well settled that defences which might have been raised in the foreign court cannot be brought forward here for the purpose of setting aside the judgment.

The rule established in Godard v Gray (supra) was followed in the local case, Ralli v Angullia (supra), a 1917 decision of the Court of Appeal of the Straits Settlements (the predecessor of this court). One of the issues determined by the court there was that a foreign judgment was conclusive as to any matter adjudicated upon and could not be impeached for any error of fact or law in an action based on it, apart from special grounds. A defence which might have been raised in the foreign court and was not raised could not be raised in the forum of enforcement. Woodward J, who delivered the leading judgment, even suggested that the foreign judgment created a new and independent obligation distinct from the original cause of action. But he recognised that the exact nature of the obligation still remained unsettled and, in his words, `it may be there is no merger, because the original cause of action still subsists, but the obligation created by the judgment is nevertheless a new one` (at p 76).

However, there is a line of authorities starting with Abouloff v Oppenheimer & Co [1882] 10 QBD 295 which seemed to say that so long as fraud is alleged the defendant is thereby entitled to reopen the issue of fraud. This decision considerably extended the fraud exception to the conclusive rule enunciated in Godard v Gray . In Abouloff , the Court of Appeal held that a foreign judgment could be impeached for fraud even though no new evidence was produced and even though the fraud might have been, and was, alleged in the foreign proceedings. The court sought to justify its approach allowing re-opening of the fraud issue by stating that the foreign court would not have itself approved of being misled and permit a judgment so obtained to remain.

In the later case Vadala v Lawes [1890] 25 QBD 310, while the Court of Appeal recognised the problems posed as a result of the decision in Abouloff (supra), it nevertheless refused to depart from it. Lindley LJ observed (at pp 316-317): `if the fraud upon...