Registering a Judgment on a Judgment
An issue that had been debated in academic writings but never considered by a court before the current action, was today unanimously decided in the Court of Appeal.
Allowing the appeal, the Court held that a judgment on a judgment could not be registered for enforcement here pursuant to the Administration of Justice Act 1920 (the 1920 Act): Strategic Technologies PTE Ltd v Procurement Bureau of the Republic of China Ministry of Defence [2020] EWCA Civ 1604 David Richards, Males, Elisabeth Laing LJJ
ST obtained an award of damages in Singapore in the sum of S$10,693.00 and US $1,573.510.40 plus fixed costs of S$7,000 on 10 December 2002 (the Singapore judgment).
On 28 December 2008 ST sought a freezing order over an account held in the Cayman Islands in which MND claimed an interest (known as the Wang proceedings).
On the following day ST commenced a common law action on the Singapore judgment. The freezing order was granted on 30 December 2008 and was extended on 27 February 2009.
On 25 June 2009, on application by ST, the Grand Court of the Cayman Islands entered a default judgment in sums totally US $1,573.510.40 (plus interest) and S$10,693 (plus interest) (the Cayman judgment)
Ultimately, on 16 May 2014, as a result of further steps taken in connecting with a charging order, a Consent Order was made which acknowledged that a total of US $3,523,198.00 and S$28,240.90 was due pursuant to the Cayman judgment, inclusive of interest and costs.
On 4 April 2016, a High Court Master granted a paper application to register the Cayman judgment with permission for MND to apply to set aside.
By early 2019 ST sought to enforce the judgment against assets of the MND in London, and MND thereupon applied to set aside the Master’s order.
Thereafter, Mrs Justice Carr dismissed the application.
The judge’s essential reason for concluding that the 1920 Act permitted registration in England of a judgment on a judgment was that such a judgment was within the definition of “judgment” in section 12 of the Act:
“The expression ‘judgment’ means any judgment or order given or made by a court in any civil proceedings, whether before or after the passing of this Act, whereby any sum of money is made payable, and includes an award in proceedings on an arbitration if the award has, in pursuance of the law in force in the place where it was made, become enforceable in the same manner as a judgment given by a court in that place.”
The 1920 Act applied to both Singapore and the Cayman Islands.
The registration procedure of the 1920 Act was extended by The Foreign Judgments (Reciprocal Enforcement) Act 1933.
Section 1 of that Act was amended by the Civil Jurisdiction and Judgments Act 1982 by the insertion of a new sub-section (2A). It stated, among other things, that a judgment on a judgment was not within section 1(2) and therefore was not eligible for registration under the 1933 Act. No equivalent amendment was made to the 1920 Act.
The main effect of the 1982 Act was to incorporate the Brussels Convention, subsequently superseded by the Brussels Regulation and the Recast Brussels Regulation, into English law. That constituted a new regime for the reciprocal recognition and enforcement of judgments within the European Union.
The Court’s unanimous approach was that greater weight must be given to the purpose and scheme of the legislation rather than a literal approach.
The fundamental principle on which the 1920 Act was based was one of reciprocity.
While there were such reciprocal arrangements between the United Kingdom and the Cayman Islands (and, irrelevantly to the principle, between the United Kingdom and Singapore), to interpret the Act as permitting registration of a judgment on a judgment would unbalance that reciprocity.
It would mean that a judgment given in a state with which no such arrangements existed, and which was not even in the Commonwealth (e.g. the United States) could be registered for enforcement here by the expedient of an action to enforce that judgment in an intermediate state to which the 1920 Act did not apply (“judgment laundering”).
It was fundamental to the operation of the Act that the English court should be able to scrutinise the proceedings in the court that gave judgment on the underlying dispute in order to ensure that the conditions for registration were satisfied.
That appeared most clearly from paragraph (f) of section 9(2) which was plainly directed to the underlying cause of action (here, the cause of action in Singapore), and not the distinct but somewhat theoretical cause of action (sued on in the Cayman Islands) to enforce the obligation created by the judgment of the Singapore court.
This conclusion accorded with the consensus among those commentators who had considered the issue that it should not be possible to register a judgment on a judgment under the 1920 or 1933 Acts or their foreign equivalents.[i]
[i] Dicey, Morris & Collins (15th Edition, 2018); Briggs, Civil Jurisdiction and Judgments (6th Edition, 2015); Patchett, Recognition of Commercial Judgments and Awards in the Commonwealth (1984); an article by Professor Smart in Conflict of Laws: Enforcing a judgment on a judgment? (2007) 81 ALJ 349. See also dicta in Morgan Stanley & Co International Ltd v Pilot Investments Ltd [2006] 4 HKC 93.