Recently a judgment was given in the Court of Appeal of the Supreme Court of Western Australia that seems to suggest that the provisions of the Malaysian National Land Code 1965 can be evaded and bypassed by a foreign court if it gives a judgment in personam and then decrees the transfer of the Malaysian property consequent to that judgment. The parties involved would then be required to sign the requisite transfer form in Australia and the property transferred in Malaysia without recourse to the High Court of Malaya and the need to enforce a foreign judgment. It is a judgment that can have grave consequences. The case of Singh v Singh [2009] WASCA 53 concerned a commercial dispute between two brothers. The appellant consequently became bankrupt. Although the Trustee in Bankruptcy had already investigated the transactions and decided that there were no grounds to proceed further, the respondent was seeking to declare that the transfer of the Malaysian property was fraudulently done to defeat the claims of the creditors. There was also a prior trust deed made in Malaysia, witnessed by a Malaysian lawyer, which gave the beneficial interest in the property to a third party. The appellant and other defendants filed conditional appearances challenging the jurisdiction of the Australian courts. It was submitted by the appellant (who appeared in person and argued the case against a Queen’s Counsel and a solicitor representing the respondent) that:
1. The title to the immovable property could be acquired, passed, and lost only according to the lex rei sitae (i.e. Malaysian land law).
2. There was no evidence to justify the inference that, by the comity of nations, the jurisdiction to determine the right over the immovable property had been allowed by Malaysia to Australia. An Australian Court could therefore not pass judgment on Malaysian law or direct the transfer of a Malaysian property.
3. An Australian court was the forum non conveniens as it was clearly the inappropriate forum in that:
3.1. It involved immovable property situated in Malaysia and only the High Court of Malaya had the jurisdiction, under section 340(2) and 417 of the Malaysian National Land Code 1965, to determine if the transfer of property to the registered proprietors was fraudulent and to make any relevant orders relating to the property.
3.2. The Writ of Summons in Australia was brought under section 89(1) of the Property Law Act 1969 (WA), which had no extra-territorial jurisdiction to apply in Malaysia or to override the express provisions of section 340 of the Malaysian National Land Code 1965.
3.3. The continuation of the proceedings in Australia would be vexatious and oppressive to the Appellant as there was no chance that the respondent could enforce the order, decree and judgment made by an Australian court in Malaysia.
4. It was submitted by the appellant that the Reciprocal Enforcement of Judgments Act 1958 (Revised 1972) did not apply as Australia is not a country granted reciprocal rights under Schedule 1 of the Act. It however did reflect the common law of Malaysia. Pullin JA, delivering the judgment of the Court of Appeal of the Supreme Court of Western Australia, decided that:
4.1. It was clear from section 5(2)(a)(iv) of the Reciprocal Enforcement of Judgments Act 1958 (Revised 1972) that according to the legislation there is no reason why the judgment of a Western Australian court would not be recognised in Malaysia if the judgment of the Western Australian court is a judgment in personam and the judgment debtor was resident in this State when the proceedings were instituted.
4.2. In coming to that conclusion the Court of Appeal of the Supreme Court of Western Australia ignored the next provision, i.e. section 5(2)(b), which basically provides that even in the case of an in personam judgment a Western Australian court shall not be deemed to have jurisdiction if it involved immovable property not situated in Western Australia.
4.3. Also ignored by the Court of Appeal of the Supreme Court of Western Australia was section 5(3) which also basically states that the Western Australian Supreme Court shall not be deemed to have jurisdiction if the subject matter of the proceedings was immovable property outside Australia.
5. Comity of Nations.
The Court of Appeal of the Supreme Court of Western Australia ignored the rule on the comity of nations, which provides that the courts of the adjudicating state would recognise the legitimate laws of other states, in the expectation that the other states would in turn also recognise the laws of the adjudicating state when the need arises. It is recognised as a courteous sentiment that is used to explain one country's motives for recognising legal rights acquired in another.
6. Malaysian National Land Code versus Property Law Act of Western Australia
6.1. The respondent was seeking a declaration that the transfer of the Malaysian property was with intent to defraud creditors within the meaning of section 89(1) of the Property Law Act 1969 of Western Australia and the appellant argued that the Malaysian National Land Code 1965 that grants indefeasibility of title governs transactions and dealings involving land in Malaysia and not section 89(1) of the Property Law Act 1969 of Western Australia which had no extra-territorial jurisdiction to apply in Malaysia.
6.2. The appellant further argued that the registered owner of a property can only be divested of the property by directions given to the Registrar of Titles by the High Court of Malaya under section 417 of the Code.
6.3. The Court of Appeal of the Supreme Court of Western Australia however concluded that section 89(1) of the Property Law Act 1969 of Western Australia had extra-territorial jurisdiction as it confers a right on certain persons to avoid fraudulent dispositions of property carried out with fraudulent intent and that right extended to immovable property out of the jurisdiction.
7. Enforcement of a Western Australian Judgment in Malaysia
The appellant submitted that any judgment obtained in Australia in relation to the transfer of land in Malaysia would be brutum fulmen (an empty judgment) and would render the proceedings futile. While the Court of Appeal of the Supreme Court of Western Australia accepted the respondent’s admission that any judgment obtained in the Supreme Court of Western Australia could not be registered in Malaysia, it concluded that parties could be coerced into signing the necessary transfer form and the transfer taken to Malaysia and registered in the Malaysian Office of Titles. There would be no need to enforce the judgment in Malaysia. It effectively seeks to evade and bypass the Malaysian National Land Code 1965 and the authority of the High Court of Malaya.
8. Doctrine of Renvoi
The appellant also pointed out that it was important to note that the doctrine of renvoi, which normally has very limited application in private international law, nevertheless does apply in relation to questions of title or succession to immovable property located in another country. Under the doctrine, the court would look at the private international law of the country where the immovable property is situated and apply the law the other country would apply. The rationale for this doctrine is that it was important to decide a case just as it would be decided under the lex situs because any inconsistent judgment would be of questionable validity. Unfortunately, the Court of Appeal of the Supreme Court of Western Australia made no reference to or mention of the doctrine of renvoi that obviously needed to be considered.
Conclusion
Judgments regarding immovable property located in a foreign jurisdiction, as foreign judgments, have no validity and they are non est so far as the area outside the jurisdiction of the adjudicating court is concerned, if they do not conform to the principles of private international law. Such judgments are an absolute nullity in the international sense.
In making the ruling, the Court of Appeal of the Supreme Court of Western Australia did not consider at all the provisions of the Malaysian National Land Code 1965 and the numerous Malaysian cases that have ruled on the relevant provisions of the Code. The ruling of the Court of Appeal of the Supreme Court of Western Australia that it can decree a transfer of the property and it can bypass the provisions of the Malaysian National Land Code 1965 is audacious and an affront to the sovereignty of Malaysian law, against the comity of nations and does not comply with established private international law principles.
* For a full discussion of this topic see: Khaira, Hardial Singh, Enforcement of Foreign Judgments over Immovable Property in Malaysia [2007] 1 QLR 34.
1. The title to the immovable property could be acquired, passed, and lost only according to the lex rei sitae (i.e. Malaysian land law).
2. There was no evidence to justify the inference that, by the comity of nations, the jurisdiction to determine the right over the immovable property had been allowed by Malaysia to Australia. An Australian Court could therefore not pass judgment on Malaysian law or direct the transfer of a Malaysian property.
3. An Australian court was the forum non conveniens as it was clearly the inappropriate forum in that:
3.1. It involved immovable property situated in Malaysia and only the High Court of Malaya had the jurisdiction, under section 340(2) and 417 of the Malaysian National Land Code 1965, to determine if the transfer of property to the registered proprietors was fraudulent and to make any relevant orders relating to the property.
3.2. The Writ of Summons in Australia was brought under section 89(1) of the Property Law Act 1969 (WA), which had no extra-territorial jurisdiction to apply in Malaysia or to override the express provisions of section 340 of the Malaysian National Land Code 1965.
3.3. The continuation of the proceedings in Australia would be vexatious and oppressive to the Appellant as there was no chance that the respondent could enforce the order, decree and judgment made by an Australian court in Malaysia.
4. It was submitted by the appellant that the Reciprocal Enforcement of Judgments Act 1958 (Revised 1972) did not apply as Australia is not a country granted reciprocal rights under Schedule 1 of the Act. It however did reflect the common law of Malaysia. Pullin JA, delivering the judgment of the Court of Appeal of the Supreme Court of Western Australia, decided that:
4.1. It was clear from section 5(2)(a)(iv) of the Reciprocal Enforcement of Judgments Act 1958 (Revised 1972) that according to the legislation there is no reason why the judgment of a Western Australian court would not be recognised in Malaysia if the judgment of the Western Australian court is a judgment in personam and the judgment debtor was resident in this State when the proceedings were instituted.
4.2. In coming to that conclusion the Court of Appeal of the Supreme Court of Western Australia ignored the next provision, i.e. section 5(2)(b), which basically provides that even in the case of an in personam judgment a Western Australian court shall not be deemed to have jurisdiction if it involved immovable property not situated in Western Australia.
4.3. Also ignored by the Court of Appeal of the Supreme Court of Western Australia was section 5(3) which also basically states that the Western Australian Supreme Court shall not be deemed to have jurisdiction if the subject matter of the proceedings was immovable property outside Australia.
5. Comity of Nations.
The Court of Appeal of the Supreme Court of Western Australia ignored the rule on the comity of nations, which provides that the courts of the adjudicating state would recognise the legitimate laws of other states, in the expectation that the other states would in turn also recognise the laws of the adjudicating state when the need arises. It is recognised as a courteous sentiment that is used to explain one country's motives for recognising legal rights acquired in another.
6. Malaysian National Land Code versus Property Law Act of Western Australia
6.1. The respondent was seeking a declaration that the transfer of the Malaysian property was with intent to defraud creditors within the meaning of section 89(1) of the Property Law Act 1969 of Western Australia and the appellant argued that the Malaysian National Land Code 1965 that grants indefeasibility of title governs transactions and dealings involving land in Malaysia and not section 89(1) of the Property Law Act 1969 of Western Australia which had no extra-territorial jurisdiction to apply in Malaysia.
6.2. The appellant further argued that the registered owner of a property can only be divested of the property by directions given to the Registrar of Titles by the High Court of Malaya under section 417 of the Code.
6.3. The Court of Appeal of the Supreme Court of Western Australia however concluded that section 89(1) of the Property Law Act 1969 of Western Australia had extra-territorial jurisdiction as it confers a right on certain persons to avoid fraudulent dispositions of property carried out with fraudulent intent and that right extended to immovable property out of the jurisdiction.
7. Enforcement of a Western Australian Judgment in Malaysia
The appellant submitted that any judgment obtained in Australia in relation to the transfer of land in Malaysia would be brutum fulmen (an empty judgment) and would render the proceedings futile. While the Court of Appeal of the Supreme Court of Western Australia accepted the respondent’s admission that any judgment obtained in the Supreme Court of Western Australia could not be registered in Malaysia, it concluded that parties could be coerced into signing the necessary transfer form and the transfer taken to Malaysia and registered in the Malaysian Office of Titles. There would be no need to enforce the judgment in Malaysia. It effectively seeks to evade and bypass the Malaysian National Land Code 1965 and the authority of the High Court of Malaya.
8. Doctrine of Renvoi
The appellant also pointed out that it was important to note that the doctrine of renvoi, which normally has very limited application in private international law, nevertheless does apply in relation to questions of title or succession to immovable property located in another country. Under the doctrine, the court would look at the private international law of the country where the immovable property is situated and apply the law the other country would apply. The rationale for this doctrine is that it was important to decide a case just as it would be decided under the lex situs because any inconsistent judgment would be of questionable validity. Unfortunately, the Court of Appeal of the Supreme Court of Western Australia made no reference to or mention of the doctrine of renvoi that obviously needed to be considered.
Conclusion
Judgments regarding immovable property located in a foreign jurisdiction, as foreign judgments, have no validity and they are non est so far as the area outside the jurisdiction of the adjudicating court is concerned, if they do not conform to the principles of private international law. Such judgments are an absolute nullity in the international sense.
In making the ruling, the Court of Appeal of the Supreme Court of Western Australia did not consider at all the provisions of the Malaysian National Land Code 1965 and the numerous Malaysian cases that have ruled on the relevant provisions of the Code. The ruling of the Court of Appeal of the Supreme Court of Western Australia that it can decree a transfer of the property and it can bypass the provisions of the Malaysian National Land Code 1965 is audacious and an affront to the sovereignty of Malaysian law, against the comity of nations and does not comply with established private international law principles.
* For a full discussion of this topic see: Khaira, Hardial Singh, Enforcement of Foreign Judgments over Immovable Property in Malaysia [2007] 1 QLR 34.
No comments:
Post a Comment