Jones v Krok

• Jurisdiction: South Africa
• Citation: 1995 (1) SA 677 (A)

Jones v Krok
1995 (1) SA 677 (A)

1995 (1) SA p677

Citation	1995 (1) SA 677 (A)
Case No	721/92
Court	Appellate Division
Judge	Corbett CJ, van Heerden JA, Kumleben JA, Nienaber JA and Olivier AJA
Heard	May 16, 1994
Judgment	November 29, 1994

Flynote : Sleutelwoorde B

Appeal — In what cases — Against refusal of provisional sentence on foreign judgment — If foreign judgment lacks finality required for it to be enforced, it is not a liquid document — If provisional sentence refused on this ground, summons to be regarded as bad and proceedings at an end — C In such event judgment or order dismissing action having finality necessary to qualify it as judgment or order as opposed to a ruling — Requirements that it be definitive of rights of parties and having effect of disposing of at least a substantial portion of relief claimed clearly satisfied — Order refusing provisional sentence appealable, provided leave granted. D

Practice — Judgments and orders — Foreign judgments — Enforcement of — Foreign judgment not directly enforceable, but constitutes cause of action — South African Court will enforce such cause of action provided that court which pronounced judgment had jurisdiction to entertain case according to principles recognised by South African law with reference to E jurisdiction of foreign courts; that judgment is final and conclusive in its effect and has not become superannuated; that recognition and enforcement of judgment by South African Court not contrary to public policy; that judgment not obtained by fraudulent means; that judgment not for enforcement of penal or revenue law of foreign State; and that F enforcement not precluded by provisions of Protection of Businesses Act 99 of 1978 — Apart from aforegoing, South African Court will not go into merits of case adjudicated by foreign court and will not attempt to review or set aside its findings of fact and of law.

Practice — Judgments and orders — G Foreign judgments — Enforcement of — Where foreign judgment subject to appeal — General principles and rules to be applied by South African Courts in proceedings for enforcement enumerated.

Headnote : Kopnota

H The present position in South African law is that a foreign judgment is not directly enforceable, but constitutes a cause of action and will be enforced by South African Courts provided (i) that the court which pronounced the judgment had jurisdiction to entertain the case according to the principles recognised by South African law with reference to the jurisdiction of foreign courts (sometimes referred to as 'international jurisdiction or competence'); (ii) that the judgment is final and conclusive in its effect and has not become superannuated; (iii) that the I recognition and enforcement of the judgment by South African Courts would not be contrary to public policy; (iv) that the judgment was not obtained by fraudulent means; (v) that the judgment does not involve the enforcement of a penal or revenue law of the foreign State; and (vi) that enforcement of the judgment is not precluded by the provisions of the Protection of Businesses Act 99 of 1978, as amended. Apart from the aforegoing, South African Courts will not go into the merits of the case adjudicated upon by the foreign court and will not attempt to review or J set aside its findings of fact or law. (At 685B-E.)

1995 (1) SA p678

A The general principles and rules which South African Courts should apply in regard to proceedings for the enforcement of a foreign judgment which is subject to appeal, are as follows:

(1) The fact that the judgment is subject to appeal or even that an appeal is pending in the foreign jurisdiction does not affect the finality of the judgment, provided that in all other respects it is final and conclusive.

B (2) Where, however, it is shown that the judgment is subject to such an appeal or that such an appeal is pending, the Court in South Africa which is asked to enforce the judgment enjoys a discretion and, in the exercise thereof, may, instead of giving judgment in favour of the plaintiff, stay the proceedings pending the final determination of the appeal or appeals in the foreign jurisdiction.

(3) Although the onus of proving that a foreign judgment is final and conclusive rests on the party seeking to enforce it, it seems that where this onus is discharged, it is up to the defendant to place C before the Court the facts relating to the impending appeal and such other relevant facts as may persuade the Court to exercise its discretion in favour of granting a stay of proceedings.

(4) In exercising this discretion the Court may take into account all relevant circumstances, including (but not confined to) whether an appeal is actually pending, the consequences to the defendant if judgment be given in favour of the plaintiff and thereafter (possibly after the judgment has been satisfied) the appeal succeeds in the D foreign jurisdiction and whether the defendant is pursuing the right of appeal genuinely and with due diligence. As a rule, however, the Court will refuse to assess the merits and demerits of the appeal and its prospects of success in the foreign court. (At 692A/B-G/H.)

The appellant had applied in a Provincial Division for provisional E sentence against the respondent on a foreign judgment. In terms of that judgment, which had been delivered by a Superior Court of the State of California ('the US Court'), the respondent had been ordered to pay the appellant 'compensatory damages' of US$13 670 987 and to pay her 'punitive or exemplary' damages of US$12 000 000 for breach of an alleged joint venture agreement. The case had been heard before a Judge and jury. In pursuance of an appeal as of right, the respondent had lodged an appeal to the Court of Appeal of the State of California, Second Appellate District F ('the US Court of Appeal') against the 'entirety' of the judgment and orders granted against him. This appeal was still pending both when the appellant had brought her application in the Provincial Division and when she sought leave in the Appellate Division for leave to appeal against the Court a quo's refusal of provisional sentence. Provisional sentence had been refused on the grounds that (a) while the appeal was still pending in the US Court of Appeal, the judgment of the US Court was not a final one; (b) the award of punitive damages was contrary to public policy and a G foreign order for such damages would not be enforced by South African Courts; and (c) the award of compensatory damages rested 'upon the same foundation' as the award of punitive damages and would thus not be enforced. The Court had also refused to postpone the action pending the outcome of the appeal.

The application for leave to appeal was opposed on the grounds that the Court a quo's refusal of provisional sentence was a non-appealable ruling. H The Court held as follows: If, as the Court a quo had held, a foreign judgment lacked the finality required in order for it to be enforced by our Courts, then it was not a liquid document; and where provisional sentence was refused on the ground of lack of liquidity, then the summons had to be regarded as bad and the proceedings at an end. If the provisional sentence proceedings were at an end, then the judgment or order dismissing the action had to be regarded as having the finality necessary to qualify as a judgment or order, as opposed to a ruling. The Court found, further, that the other requirements for appealability had I been satisfied. (At 688H-J.)

As to the merits of the appeal, the Court summarised the position as follows: the foreign judgment dealt finally with the dispute between the parties; having given judgment, the US Court had no power, pending the appeal, to set aside, alter or reconsider its judgment; and, pending the appeal, the judgment could be enforced in California. The Court concluded that, in those circumstances, the foreign judgment was final and J conclusive in terms of South African law, notwithstanding the fact that the

1995 (1) SA p679

A Californian judgment had not given rise to res judicata. (At 695I-696A/B.) The Court a quo was accordingly held to have erred in refusing provisional sentence on the grounds that the judgment had not been final and conclusive. (At 696C.)

As to the Court a quo's refusal of provisional sentence on the grounds that the award of 'compensatory' damages by the foreign Court had been 'arbitrary' and that it would be contrary to public policy to enforce it, the Court held that there had been no valid basis for such findings and, in any event, that such findings seemed to have involved entering into the B merits of the case adjudicated upon by the US Court, which was not permissible. It concluded that public policy afforded no ground for denying the appellant relief in respect of the amount of US$13 670 987. (At 696F-G.)

The appeal was accordingly allowed and the application for provisional sentence was stayed pending the final determination of the appeal to the US Court of Appeal and the exhaustion of any further right of appeal by C either party. (At 697E-F/G.)

The decision in the Transvaal Provincial Division in Jones v Krok reversed.

Case Information

Appeal from a decision in the Transvaal Provincial Division (Roux J). The facts and the nature of the issues appear from the judgment of Corbett CJ.

P P Delport SC (with him R du Plessis) for the appellant referred to the following authorities: Hollard v Taylor (1885) 2 SAR 68; Lipman and Herman D v Kohler (1888) 5 SC 420; Rogers v Baumann 1903 TH 236; Scorgie v Munnich 1912 EDL 422; Joffe v Salmon 1904 TS 317 at 318, 319; Dougherty v Dougherty 1907 TH 1; Taylor v Hollard (1886) SC 78 at 80; Greathead v Greathead 1946 TPD 404 at 408; Coluflandres Ltd v Scandia Industrial Products Ltd 1969 (3) SA 551 (R) at...