PT Bayan Resources TBK v BCBC Singapore Pte Ltd: Foreign Judgments: Anticipated Judgment [2015] HCA 36

In PT Bayan Resources TBK v BCBC Singapore Pte Ltd & Ors [2015] HCA 36, the High Court of Australia has today (14 October 2015) unanimously dismissed an appeal from the Court of Appeal of the Supreme Court of WA, holding that it is within the inherent power of the Supreme Court of WA to make a “freezing order” in relation to an anticipated judgment of a foreign court which, when delivered, would be registrable by order of the Supreme Court under the Foreign Judgments Act 1991 (Cth) (the FJ Act).

Background

The case is a matter on appeal from a decision of the Court of Appeal of the Supreme Court of Western Australia in PT Bayan Resources TBK v BCBC Singapore Pte Ltd [2014] WASCA 178 (25 September 2014).

PT Bayan Resources, the appellant (Bayan), is a company incorporated in Indonesia and the first respondent, BCBC Singapore Pte Ltd (BCBC), is a company incorporated in Singapore. The case arose from a contractual dispute between the companies for a monetary judgment in the High Court of Singapore (the HCS). BCBC commenced proceedings against Bayan alleging breach of contract and no judgment has been obtained from the HCS. The cause of action being litigated by BCBC against Bayan in the HCS could not be litigated in Western Australia. However, before commencing proceedings in the HCS, BCBC obtained interim freezing orders in the Supreme Court of WA pursuant to Rules of the Supreme Court 1971 (WA) (the Rules) Order 52A with the effect of restraining Bayan from transferring its Australian shares.

Trial in Western Australia

At trial in, BCBC Singapore Pte Ltd v PT Bayan Resources TBK [No 3] [2013] WASC 239 (26 June 2013), Justice Le Miere made an order for the continuation of the freezing order over Bayan's Australian assets holding that Order 52A of the Rules was supported by the Supreme Court's inherent jurisdiction under the Supreme Court Act 1935 (WA) and the Supreme Court's rule making powers conferred on it by the FJ Act which provides a framework for the registration and enforcement in Australia of certain foreign judgments and empowers the Supreme Courts’ of the States and Territories to make rules of court prescribing matters necessary or convenient for carrying out or giving effect to the FJ Act.

Appeal to the Court of Appeal

On appeal in PT Bayan Resources TBK v BCBC Singapore Pte Ltd [2014] WASCA 178 (25 September 2014), the key issue was whether Order 52A of the Rules was beyond the statutory powers granted to the Supreme Court under the FJ Act or its inherent jurisdiction under the Supreme Court Act 1935 (WA).

For Bayan, it was argued that the WA Supreme Court did not have inherent or statutory power under Order 52A of the Rules to make a freezing order as no substantive proceedings had been or were to be commenced in the Supreme Court and no judgment had been made in the foreign proceedings. In addition, Bayan also argued that the existence of such power would be inconsistent with the FJ Act for the purposes of the Commonwealth Constitution section 109 which provides that when,

The WA Court of Appeal unanimously held that the Rules were valid insofar as they empower the Court to freeze local assets ahead of a possible foreign judgment. The Court held that Order 52A of the Rules is not inconsistent with the FJ Act as it did not prescribe the processes or requirements for the enforcement of foreign judgments.

Nature of Appeal to the High Court

On 23 October 2014, Bayan filed for special leave to appeal to the High Court, which was granted on 13 March 2015. Bayan then filed a Notice of a Constitutional Matter in the High Court on 26 March 2015 with the result that the Attorneys General of the Commonwealth, Victoria and Queensland are intervening in the appeal.

The key appeal grounds were that:

• the WA Court of Appeal erred when it held that Order 52A of the Rules, to the extent it authorised the Supreme Court of WA to make a freezing order in relation to a prospective foreign judgment to which Part 2 of the FJ Act extends; and
• where no substantive proceedings, apart from the application for the freezing order, have been or are to be commenced in the Supreme Court, and there is no judgment in the foreign proceedings:

(a) is within the inherent jurisdiction of the Supreme Court; and

(b) is not inconsistent with the FJ Act for the purposes of section 109 of the Commonwealth Constitution; and

(c) further to (a) and (b) above, is not ultra vires section 17 of the FJ Act and section 167(1)(a) of the Supreme Court Act 1935 (WA).

 The High Court Decision

On appeal to the High Court, Bayan accepted that “. . . the findings of the primary judge established a factual foundation for the continuation of the freezing order in accordance with the criteria set out in O 52A r 5 of the Rules”. However, Banyan contended that the Supreme Court lacked the power to make a freezing order in accordance with those criteria.

The High Court has held in a unanimous decision that “. . . the power to make a freezing order in relation to an anticipated judgment of a foreign court, which when delivered would be registrable by order of the Supreme Court under the FJ Act, is within the inherent power of the Supreme Court".

The High Court held the reason for its decision as being “. . . because the making of the freezing order is to protect a process of registration and enforcement in the Supreme Court which is in prospect of being invoked”. The Court determined that the criteria set out in O 52A r 5 of the Rules are appropriately tailored to the exercise of that inherent power. At paragraph 78, the judgment states:

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• PT Bayan Resources TBK v BCBC Singapore Pte Ltd [2015] HCA 36 (14 October 2015)
• PT Bayan Resources TBK v BCBC Singapore Pte Ltd [2014] WASCA 178 (25 September 2014)
• BCBC Singapore Pte Ltd v PT Bayan Resources TBK [No 3] [2013] WASC 239 (26 June 2013)
• Foreign Judgments Act 1991 and Commonwealth Constitution as reported in the TimeBase LawOne Service