|Renee Lal (left). file pic|
IV-2011-404-5601  NZHC 1264
BETWEEN ELAINE CATHARINA BELL Plaintiff
AND RAINA LAL First Defendant
AND RENEE DEVINA SINA LAL Second Defendant
Hearing: 23 April 2012
Counsel: E St John for the Plaintiff
R Hollyman and K Simcock for the Defendants
Judgment: 7 June 2012
JUDGMENT OF WOODHOUSE J
This judgment was delivered by me on 7 June 2012 at 4:30 p.m. pursuant to r 11.5 of the High Court Rules 1985.
Mr E St John, Barrister, Auckland
Mr R Hollyman, Barrister, Auckland
Mr S Palmer, Palmer & Associates Ltd, Solicitors, Auckland
Mr T Mullins, LeeSalmonLong, Solicitors, Auckland
BELL V LAL HC AK CIV-2011-404-5601 [7 June 2012]
 The plaintiff claims that the defendants are indebted to her in a sum of
$430,000 plus interest as the balance owing on a loan to the defendants of $500,000. The plaintiff obtained leave under r 6.28 of the High Court Rules to serve the proceeding on the defendants in Fiji. The defendants have appeared under protest to the jurisdiction of the New Zealand court. The defendants have now applied under rr 5.49 and 6.29 for an order dismissing or staying the proceeding.
Rules and principles
 Rule 6.29(2) provides:
If service of process has been effected out of New Zealand under rule 6.28, and the court's jurisdiction is protested under rule 5.49, and it is claimed that leave was wrongly granted under rule 6.28, the court must dismiss the proceeding unless the party effecting service establishes that in the light of the evidence now before the court leave was correctly granted.
 What this means, in practical terms, is that the application for leave, which originally proceeded without notice, is to be determined afresh in the light of all further evidence and submissions for both parties.
 The matters that are to be determined afresh are those set out in r 6.28. Rule
6.28(4) is as follows:
An application for leave under this rule must be supported by an affidavit stating any facts or matters related to the desirability of the court assuming jurisdiction under rule 6.29, including the place or country in which the person to be served is or possibly may be found, and whether or not the person to be served is a New Zealand citizen.
In broad terms, this imposes a duty of full disclosure of the matters referred to. Although there were some submissions as to the adequacy of disclosure by the plaintiff on the without notice application for leave to serve in Fiji, I am satisfied that no material issue arises in this regard.
 The principal enquiry arises under r 6.28(5), which is as follows:
The court may grant an application for leave if the applicant establishes that—
(a) the claim has a real and substantial connection with New Zealand;
(b) there is a serious issue to be tried on the merits; and
(c) New Zealand is the appropriate forum for the trial; and
(d) any other relevant circumstances support an assumption of jurisdiction.
 Underpinning the ultimate issue as to whether the New Zealand court should exercise jurisdiction over persons who do not live in New Zealand is the principle that the court does not lightly exercise its discretion to assume such jurisdiction. This is a principle of long standing.1 The High Court Rules applying in this case were amended with effect from 1 February 2009. In Poynter v Commerce Commission2 the Supreme Court confirmed that this principle continues to apply, notwithstanding the recasting of the Rules.3
 This interlocutory application is to be determined, in the usual way, on affidavits for the parties without cross-examination. There are two affidavits from the plaintiff, another affidavit on behalf of the plaintiff, two affidavits from the first defendant, and one from the second defendant. Because there has been no cross- examination, findings of fact on some matters of relevance are necessarily provisional. However, having regard to the affidavit evidence as a whole, some reasonably firm conclusions can be reached on some matters of present relevance.
 There was also some evidence on matters which may have relevance in the substantive proceeding but which are of marginal relevance on the present application. Generally these matters are left to one side, without noting them. I have also left to one side matters which in my judgment clearly have no relevance, together with statements in affidavits which amount to submission rather than
contentions of fact.
1 Société Générale de Paris v Dreyfus Bros (1885) 29 Ch D 239 at 243; Kuwait Asia Bank v National
Mutual Life Nominees Ltd (No 2)  2 NZLR 50 (CA) at 54.
2 Poynter v Commerce Commission  NZSC 38;  3 NZLR 300 at .
3 See also the discussion in Wing Hung Printing Co. Ltd v Saito Offshore Pty Ltd  NZCA 502;  1 NZLR 754 at -.
 I infer that the plaintiff is a New Zealand citizen, or at least a person who is permanently resident in New Zealand. In early 2007 she was working for a company called New Zealand Home Loans.
 The first defendant is a Fijian citizen, but in early 2007 was living and working in Auckland. She is qualified and admitted as a barrister and solicitor in Fiji.
 The second defendant is a Fijian citizen. She too is qualified and admitted as a barrister and solicitor in Fiji.
 The plaintiff and first defendant met in Auckland in early 2007. In March
2007 the plaintiff lent the first defendant $420,000 for three months at an interest rate of 16% per annum for three months. There was no formal documentation. The loan was repaid on or before the three months.
 In September 2007 an agreement was made between the plaintiff and both defendants for the plaintiff to lend both defendants NZ$500,000. The failure of the defendants to repay this loan, in full, is the subject matter of the proceeding.
 The terms of the loan were negotiated over a number of days up to 10
September 2007. Most of the documentary evidence about the negotiations and the conclusion of the agreement is contained in emails. Most of the emails are between the plaintiff and the first and second defendants and between a consultant at New Zealand Home Loans, acting on behalf of the plaintiff, and the first and second defendants. However, it is apparent from the emails that there were some telephone communications between the plaintiff and the first defendant.
 In an email on 7 September 2007 the first defendant, for herself and the second defendant, set out loan terms the defendants were seeking and said: “We have all documentation prepared and ready to go so please advise on whether the above is acceptable”. The first defendant said that she could fax the documents and courier the originals and then said: “Alternatively I will be returning to Auckland next
Friday and can bring them then”. It appears that “next Friday” would have been
Friday, 14 September 2007.
 There was a further email from the first defendant to the plaintiff on 10
September at 9:42 am. There must have been some preceding discussion, or written communication, not put in evidence, because the defendants agreed to some modified terms. In relation to telephone discussions I note that the plaintiff and the first defendant both exchanged telephone numbers by email. In the 10 September email the first defendant recorded that one of the things agreed to was “personal guarantees from both Renee and myself” and she said that she had faxed these to the consultant at New Zealand Home Loans.
 There was a further email on 10 September, at 11:45 am. This was to the plaintiff from the second defendant on behalf of both defendants. The subject matter is “Final agreement”. The content is as follows:
Further to your discussion with Raina this morning we are please [sic] to confirm our agreement as follows:
Loan Amount : $500,000 NZD Interest: 24% per annum Term: 3 months
Security: Caveat over 7 Awarua Crescent, Orakei (we will
cover your solicitor’s costs for this)
Personal Guarantees by both Raina & Renee Lal
Interest to be capitalized for the first 3 months. If a further term of 3 months is required the first 3 months of capitalized interest will be paid and interest will be paid monthly thereafter. Please provide your account details in due course.
Thanking you for all your assistance to date.
Looking forward to a long working relationship with you. Regards
Raina & Renee Lal
 The loan amount of NZ$500,000 is the sum that had been the subject of the negotiations from the outset. The interest rate had been in issue, with the defendants originally proposing 20%. The caveat over 7 Awarua Crescent, Orakei, had been
offered by the defendants from the outset. The second defendant is the registered proprietor of this property. There is further email correspondence from the defendants referring to this as a form of security. The request for the plaintiff’s account details would appear to follow from an earlier email from the defendants recording that interest was to be paid monthly into the plaintiff’s nominated account. I am satisfied that this email, containing the defendants’ agreement to terms, records the defendants’ acceptance of terms proposed by the plaintiff. An agreement was made at this point. I am further satisfied from this evidence that the contract was made in New Zealand.4
 It appears from the emails that at this time both defendants were in Fiji at least up to 10 September 2007. However, it also appears that at this time the first defendant’s residence was Auckland. I come to this conclusion having regard to the matters discussed in the next three paragraphs.
 The documents signed by the defendants (a separate one for each defendant, and described as a “guarantee”) have been put in evidence. Although described as guarantees, they are in their terms simple acknowledgements of debt from each of the defendants to the plaintiff. The terms and format of each document are as follows:
The Lender has agreed to lend to the Borrower who has promised to pay back the sum of NZ$500,000.00 (Five Hundred Thousand Dollars) cash together with interest at the rate of 24% per annum.
The Borrower shall pay the sum borrowed within 6 (six) months from the date of execution. In default the whole sum to be payable UPON DEMAND by the Lender.
 The documents record that each defendant signed the document at Suva on 7 September 2007. Signatures have been witnessed by a Commissioner for Oaths. The document signed by the first defendant records that her address at that date was 413/83 Halsey Street, Viaduct Harbour, Auckland, New Zealand. The address recorded in the document signed by the second defendant records an address in Suva. I am satisfied that the “personal guarantees” that the first defendant said had (4 See Burrows, Finn & Todd Law of Contract in New Zealand (3rd ed, LexisNexis, Wellington, 2007) at p 57, para 3.4 and p 65, para 3.4.7(b). been sent by fax to the plaintiff ’s loan consultant are these documents. It is sufficiently clear from the evidence that these documents were prepared by the defendants, both of whom are lawyers, or on their behalf. I am satisfied from this that at the date the agreement was made the first defendant was resident in Auckland. This is confirmed, if confirmation is required, by the email from the first defendant on 7 September in which she said she was returning to Auckland “next Friday” (see  above). In the context this meant returning to the place where she was then residing from Fiji, which she was simply visiting.
 Copies of the “guarantees” were produced by the plaintiff, as an annexure to her principal affidavit. The first defendant says in her first affidavit:
20. In support of her application Elaine [the plaintiff] has exhibited guarantee documents apparently executed in Fiji and subject to Fijian law. One is signed by me. I do not recall signing it, although the signature appears to be mine. At any hearing, I would ask the plaintiff to produce the original of these documents and the Commissioner for Oaths who has signed them.
The second defendant, in her affidavit, says essentially the same thing:
6. … The signature appears to be mine but I do not recall signing it. At any hearing, I would ask the plaintiff to produce the original of this document and the Commissioner for Oaths who has signed it.
Having regard to the conclusions recorded above as to the origin of the documents, I
regard this evidence as disingenuous, at the least
 The defendants advised that the loan was sought for a property investment in Fiji. At the request of the defendants the loan was to be advanced in three tranches to bank accounts in three different jurisdictions. An email from the second defendant to the plaintiff on 10 September contained the defendants’ directions in this regard.
(a) “$150,000FJD for value today to (approximately NZD$133,842.51)”
to a Lloyds TSB account in the Isle of Man.
(b) “$100,000FJD for value today to (approximately NZD$89,211.05)” to
an ANZ bank account in Auckland.
(c) “Balance of the money (approximately NZD$276,946.44)” to an ANZ Bank account in Suva, being the trust account of Jamnadas & Associates.
 The loan was advanced in three tranches on 10 September 2007, subject to some reasonably small adjustments in the New Zealand dollar amounts for the first two tranches. The requested payment to the bank account in the Isle of Man could not be made in Fijian dollars. By agreement it was made in US dollars.
 The plaintiff says that the defendants have repaid a total of NZ$70,000 being one sum of NZ$30,000 in December 2007 and four payments of NZ$10,000 each in January, February, March and April 2008. The first defendant says that she made these payments in cash from “my funds in Fiji”. The evidence as it stands establishes that all of these payments were made in New Zealand dollars and made in New Zealand.
 The first defendant says:
I do not accept the repayment sum Elaine states and believe that I have made more repayments than she has listed. By my calculations I estimate that I have cash repayments totalling more than $70,000.
However, she does not state the amount that she contends has been repaid.
 There is a body of evidence, mainly copies of emails, relating to steps taken by the plaintiff from September 2008 to secure repayment, with responses from the defendants. The general tenor of the responses from the defendants through to around October 2009, when this correspondence appears to have ceased, is that the debt and interest would be repaid but the defendants were experiencing various difficulties. Advice from the defendants includes the following:
(a) On 16 September 2008 the plaintiff emailed the first defendant requesting repayment of the principal of NZ$500,000 and eight months interest. The first defendant’s responded on the same day and said: “I am arranging full repayment of the funds for both principal and interest for December 2008.”
(b) Email 6 October 2008; first defendant to the plaintiff:
… I am unable to be in Auckland in October but have made arrangements to be there for the repayment of the principal and interest in December. However, if you need the money urgently I can TT it to your account but as you know this is not the most desirable method of payment.
(c) Email 15 December 2008; first defendant to the plaintiff. This email records the following points of relevance to the question of jurisdiction: (1) a debt of NZ$580,000 was acknowledged; (2) payment in full was promised as soon as possible; (3) payment was to be made to the plaintiff in New Zealand; and (4) the difficulty in effecting payment was getting approval from the Fijian Reserve Bank.
(d) Email 20 January 2009; first defendant to the plaintiff, in response to an enquiry of the previous day from the plaintiff. The first defendant said that approval from the Fijian Reserve Bank was expected “soon” and “The caveat is in place for your security”.
(e) Email 6 April 2009; second defendant to the plaintiff:
I note your sentiments.
However, I require legal advise [sic] on this dealing. I have sent the information through to my solicitor in Auckland. I have followed up with him to give me a response so that I may respond to you. As soon as I have heard from him I will contact you as I am keen to bring this matter to a close.
(f) Email 17 April 2009; first defendant to the plaintiff:
I trust that you have been following the recent events in Fiji with regards to the political instability and civil unrest. The bottom line is that we are now under a military dictatorship and have just had our currency devalued by 20%. As a result, we are not in a position to give you a clear indication of a solution at this time.
(g) Email 23 April 2009; first defendant to the plaintiff following a pressing email from the plaintiff:
Everything discussed was dependent on a stable economy in Fiji including the funds I expected to be paid to New Zealand after may [sic].
We effectively have just had another[r] coup and up until yesterday were without an executive, a judiciary etc. I cannot begin to express how this affects us financially in terms of the currency devaluation and the limits on remittances. This was not something I foresaw. I do not have a clear position on a solution at this time but assure you I am doing everything in my ability to bring this to a close.
I request your continued patience at this EXTREMELY DIFFICULT TIME. Once things have stabilized and I have a clear solution I will call you. In the meantime, it serves neither of our purposes to be adversarial or antagonistic in order to reach a solution. I trust my position is clarified.
(h) Email 2 June 2009; first defendant to the plaintiff:
I write you this email as an update on the situation here in Fiji. Unfortunately, the situation with both the judiciary, the Reserve Bank and the financial sector remains unchanged. In reality, it is likely we will have a further currency devaluation and a complete moratorium on remittances overseas.
(i) Email 3 June 2009; first defendant to the plaintiff:
As previously discussed, you have a caveat for security over our family in Orakei [sic]. ... The property in Orakei is owned by my sister Renee who will not consent to a 2nd mortgage. I have previously outlined this to you. There is nothing more I can do in this respect.
We have sought advice from our lawyer in Auckland, and the only suggestion he has come up with is that we give you a property in Fiji in settlement of the debt. Please let us have your views on this as this is the only imminent solution available.
In the meantime, I will continue to apply myself in finding a solution. I appreciate your understanding of this matter at this hugely trying time.
(j) The final email along these lines was one of 9 October 2009 from the first defendant to the plaintiff.
 It appears that the plaintiff subsequently instructed a lawyer in Fiji to take steps on her behalf. The second defendant says that she received a call from a Suva lawyer “in late 2010 or mid-2011”, stating that he had been instructed to act for the plaintiff in relation to a loan. The second defendant says that she expected, following this discussion, to be served with proceedings issued in Fiji, but nothing occurred.
 The proceeding in this court was issued on 8 September 2011. The plaintiff sought summary judgment. The hearing date allocated for the summary judgment was 16 February 2012. The day before the hearing the first defendant filed her appearance protesting jurisdiction. She had been served in Fiji on 9 December 2011. The second defendant was subsequently served and filed her protest to jurisdiction.
 The Auckland property provided by the defendants as security is registered in the name of the second defendant. Title is subject to a mortgage. There have been defaults under this mortgage, with default notices issued by the mortgagee.
 The plaintiff has established that the original leave to serve the proceeding on the defendants in Fiji was correctly granted. My reasons follow and with reference to the matters set out in paragraphs (a) to (c) of r 6.28(5).
 The claim has a clear and substantial connection with New Zealand. I am satisfied, on the evidence presently available, that the proper law of the contract is the law of New Zealand. There was no express agreement as to the applicable law. In the Conflict of Laws chapter in the Laws of New Zealand, at para 118, there is a list of 11 factors identified in decisions of New Zealand and English courts for determining the proper law when there is no express choice. Six factors favour New Zealand law as the proper law: New Zealand is the place where the contract was made; New Zealand is the place where the contract is to be performed; part of the subject matter of the contract (the security) is real property in New Zealand; payment is to be made in New Zealand dollars; there is a connection with a previous transaction fully conducted in New Zealand; on the basis of the defendants’ case the
contract may be void or voidable under the Fiji Money Lenders Act, but there is no argument to similar effect under New Zealand law. Of the remaining five factors, three are neutral and two have no application. In addition, the defendants sought legal advice on the contract from a lawyer in New Zealand.
 The individual factors listed in respect of the proper law of the contract separately establish that the claim has a clear and substantial connection with New Zealand. In addition: the loan was designated in New Zealand dollars; it was repayable in New Zealand dollars; part of the loan was paid into a bank account in New Zealand; the real property provided as security is owned by the second defendant; and, on the evidence presently available, the first defendant was living in New Zealand when the contract was made.
 There is a serious issue to be tried on the merits. Having regard to the email correspondence set out above there is in fact a serious question as to whether the defendants have any defence. The defendants admitted liability and made numerous promises to repay the loan. The defendants now contend that the loan was subject to the Fiji Money Lenders Act. This contention was made more recently; that is to say, well after the correspondence up to October 2009 during which there were express acknowledgements of liability and numbers of promises of payment. These were express acknowledgements from Fijian lawyers. The relevance of the Fiji Money Lenders Act is further discussed below.
 The next question is whether New Zealand is the appropriate forum for the trial. Mr Hollyman, for the defendants, referred to the discussion of this topic by Lord Goff in Spiliada Maritime Corp v Cansulex Ltd: The Spiliada.5 Lord Goff noted that, although the topic is often referred to by the Latin tags forum non conveniens or forum conveniens, the question is not one of convenience, but of the suitability or appropriateness of the relevant jurisdiction. This is in fact reflected in the rule itself which refers to “the appropriate forum”. The principles outlined by Lord Goff are summarised in McGechan on Procedure.6 Having regard to the principles summarised there, and allowing for the fact that in cases such as the 5 Spiliada Maritime Corp v Cansulex Ltd: The Spiliada  AC 460,  3 All ER 843 (HL) at
6 McGechan on Procedure (looseleaf ed, Brookers) at HR6.29.05. present the onus is on the plaintiff to establish that New Zealand is the appropriate forum (the onus being on the other party in cases such as The Spiliada), I am satisfied that New Zealand is the appropriate forum for the trial, rather than Fiji (Fiji being the only alternative proposed). In the interests of all parties and the ends of justice this claim may be tried more suitably in the New Zealand High Court. The plaintiff, for reasons already discussed, has founded a jurisdiction as of right in accordance with New Zealand law. Questions of comparative cost and convenience may marginally favour the defendants, because there are two defendants and only one plaintiff, but I do not regard this as a matter of particular weight in this case. The court in Fiji is not “clearly more appropriate for the trial” (the fourth factor from The Spiliada noted in McGechan).
 There are some further considerations. The defendants say they wish to call witnesses resident in Fiji. I am doubtful as to the stated need for this. The only issue raised by the defendants is the tentative question from each as to whether they signed the “guarantee”. I have already recorded my conclusion that this is, at best, disingenuous. There is the question as to the possible application of the Fiji Money Lenders Act. If the contract is entirely governed by the law of New Zealand, the Fiji Money Lenders Act may have no application at all. In any event, the questions that may arise in this regard do not make New Zealand an inappropriate forum for the trial. Questions as to the applicability of foreign statutes and, if they apply, their interpretation, readily arise in, and are determined in, New Zealand courts. The fact that the first and second defendants are domiciled in Fiji does not in this case, and perhaps does not generally, make New Zealand an inappropriate forum compared with Fiji.
 Another factor indicating that a court in Fiji would not be an appropriate forum – not in the interests of all of the parties and the ends of justice – is evidence suggesting that there could be some difficulties for the plaintiff in seeking to conduct court proceedings in Fiji or, if proceedings are successfully brought, in enforcing a judgment to secure payment to the plaintiff in New Zealand. Some of the emails from the defendants themselves indicate that there could be some difficulties for the plaintiff in proceeding in Fiji or in securing payment following judgment. There is further evidence, produced in an affidavit for the plaintiff, arising from a report by The Law Society Charity, a society established by the Law Society of England and Wales. This is a report dated January 2012. For reasons set out in the report, there are conclusions including the following: the rule of law no longer operates in Fiji; the independence of the judiciary cannot be relied on; Government controls and restrictions make it virtually impossible for an independent legal profession to function appropriately. This court expresses no conclusions as to the accuracy of this report. It would not be appropriate to do so. In addition, the report is not concerned in any direct way with private proceedings between individuals for the enforcement of contracts. These matters are nevertheless relevant on the question as to the appropriate forum and support the conclusion that the plaintiff has established that New Zealand is the appropriate forum for this proceeding.
 New Zealand is also an appropriate forum because of the security over land in New Zealand. The proceeding has not been issued to enforce the security. However, if the plaintiff succeeds, the contract will have been sustained and the plaintiff will be entitled to enforce what the defendants expressly referred to as security over the land in New Zealand. On the face of the contract, including the “guarantee” drafted by the defendants, the plaintiff is entitled to proceed with an action in New Zealand as the first step to enforce the security in New Zealand granted by the defendants. Proceeding with the first step through the court in Fiji makes the Fijian court an inappropriate forum for this further reason.
 Paragraph (d) of r 6.28(5) refers to any other relevant circumstances which may support an assumption of jurisdiction by the New Zealand court. It is unnecessary to discuss any additional factors which might come under this heading.
 There are the following orders:
(a) The defendants’ applications under rr 5.49 and 6.29 are dismissed and their appearances under protest to jurisdiction are set aside.
(b) If the defendants, or either of them, wish to oppose the plaintiff’s application for summary judgment, a notice of opposition and any affidavit setting out the defence is to be filed and served on or before Friday, 22 June 2012. For the purpose of complying with this order, copies of signed documents, including sworn affidavits, may be filed to comply with the timetable provided the originals are filed promptly after 22 June 2012.
(c) If the defendants, or either of them, wish to file a statement of defence, the statement of defence is to be filed and served by 22 June 2012.
(d) Any affidavit in reply, pursuant to r 12.11, by or on behalf of the plaintiff, is to be filed and served by 29 June 2012.
(e) The application for summary judgment will be heard on 3 July 2012 at 10:00 am.
 If the plaintiff wishes to proceed with her application for a freezing order, as sought in the without notice application dated 19 March 2012, or otherwise, such an application is to proceed on notice and the following further orders apply:
(a) The plaintiff’s application and all supporting documents are to be filed and served by Wednesday, 13 June 2012.
(b) Any notice of opposition and supporting affidavits for the defendants are to be filed and served by 22 June 2012. Copies of signed documents, including sworn affidavits, may be filed to comply with the timetable provided the originals are filed promptly after 22 June 2012.
(c) Any affidavits in reply for the plaintiff are to be filed and served by 29 June 2012.
(d) The application for the freezing order will be heard in conjunction with the application for summary judgment on 3 July 2012 at 10:00 am.
 The plaintiff is entitled to costs on a 2B basis on the defendants’ applications under rr 5.49 and 6.20 together with costs on the appearance on 16 February 2012 in support of the summary judgment application. Costs are to be on a 2B basis. Questions of all other costs are reserved.