Case of the Day: Mercator Property Consultants v. Sumampow

The case of the day is Mercator Property Consultants Pty. Ltd. v. Sumampow (Cal. Ct. App. 2012). Mercator is a property development investment company in Perth. It owned 10% of the Christmas Islands Resort Company, which as the name suggests built resorts on Christmas Island, an Australian territory. Robby Sumampow, an Indonesian national, acquired the remaining 90% of the stock, and contracted with Mercator for the purchase of its shares. The deal fell through. Mercator obtained a judgment for more than $5 million against Sumampow in the courts of Western Australia. In 2005, the Supreme Court of Western Australia affirmed the judgment (with modifications).

From 1990, Sumampow has the record title to a house in Beverly Hills and a condominium unit on Wiltshire Boulevard in Los Angeles. Mercator sought recognition and enforcement of the Western Australian judgment in California for purposes of satisfying the judgment out of Sumampow’s properties there. Sumampow, in a motion to dismiss for lack of personal jurisdiction, asserted that he had transferred the properties to his children in 2007, and that he had no property in California. Mercator opposed the motion and also amended its complaint to assert a claim for a fraudulent transfer. (There was an issue in the case about whether the children were necessary parties who should have been joined, but I don’t discuss it here).

At trial, one of the children, Iefenn Sumampow, testified that she had met with her parents and a “notary in Indonesia in April 2007, and that her father, for estate planning purposes, had signed a “transfer deed” at the meeting transferring the Beverly Hills property to her without consideration. The notary retained the original documents. The other child, Ievan Sumampow, testified similarly with regard to the Wiltshire Boulevard property. The trial judge did not credit their testimony, finding they had “significant credibility issues.” The only documentary evidence of the transfers were unsigned documents labeled “Bequest Agreement”, which were never recorded in the appropriate registry of deeds in California.

The trial judge entered judgment for Mercator, recognizing and enforcing the Australian judgment. On appeal, raised two issues of interest: first, did the court fail to consider whether the transfer of property was valid under Indonesian law? Second, did the court err in recognizing the Australian judgment?

Sumampow argued that the judge had erred by excluding his expert on Indonesian law, former Indonesian Supreme Court Justice Yahya Harahap, who was to have testified about “Indonesian culture and Indonesian family and general civil laws” and “property transfers, change of ownership, assets in accordance with Indonesian laws.” The judge rightly rejected this testimony, in my view, on the grounds that alienation of real estate is governed by the law of the place where the land is situated. Indonesian law is really irrelevant. 1

Sumampow also argue that the judge erred by recognizing the Australian judgment. He claimed Mercator should have called an expert witness to opine that the judgment was final and conclusive under Australian law. But in California (according to the court), the courts take judicial notice of foreign law, so this point lacked merit. 2

Notes:

  1. It seems to me that things might be different if the transfer of property were testamentary, since I think it likely that California law would honor a foreign will that affected the ownership of land in California.
  2. Compare Rule 44.1 of the Federal Rules of Federal Procedure, which treats questions of foreign law as questions of law, not fact.

About Ted Folkman

Ted Folkman is a shareholder with Murphy & King, a Boston law firm, where he has a complex business litigation practice. He is the author of International Judicial Assistance (MCLE 2d ed. 2016), a nuts-and-bolts guide to international judicial assistance issues, and of the chapter on service of process in the ABA's forthcoming treatise on International Aspects of US Litigation, and he is the publisher of Letters Blogatory, the Web's first blog devoted to international judicial assistance, which the ABA recognized as one of the best 100 legal blogs in 2012, 2014, and 2015.

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