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Enforcing foreign judgments

09 April 2021

#Dispute Resolution & Litigation

Enforcing foreign judgments

In collaboration with Law Exchange International, in particular Canadian law firm Loopstra Nixon, we address below various questions relating to the enforcement of foreign judgments.

Is your country party to any bilateral or multilateral treaties for the reciprocal recognition of foreign judgments?

Australia has entered into bilateral treaties with both the United Kingdom and New Zealand, but is not a party to any multilateral treaties for the reciprocal recognition of foreign judgments.

Bilateral treaties

As to the United Kingdom, the Reciprocal Recognition and Enforcement of Judgments in Civil and Commercial Matters 19941 provides for the mutual recognition of civil and commercial judgments involving the payment of money, except judgments concerning taxes or other charges, or an order requiring the payment of maintenance.

As to New Zealand, the Agreement between the Government of Australia and the Government of New Zealand on Trans-Tasman Court Proceedings (Trans-Tasman Agreement) provides for the mutual recognition of a range of civil judgments, except those concerned with, among other things, probate and the administration of estates, guardianship and the welfare of a child. The Trans-Tasman Agreement also provides that a foreign judgment cannot be enforced if it is contrary to domestic public policy. The Trans-Tasman Proceedings Act 2010 (Cth) (TTPA) and Trans-Tasman Proceedings Regulation 2012 (Cth) (TTPR) give effect to the Trans-Tasman Agreement and provide for the registration of New Zealand judgments in Australia.

Multilateral Treaties

Australia is not a signatory to any multilateral treaties for the reciprocal recognition of foreign judgments, such as the Hague Convention on Recognition and Enforcement of Foreign Judgments in Civil and Commercial Matters 1971.2

For countries and jurisdictions where there is no applicable treaty, what is the source of the law with respect to the recognition of foreign judgments?

Where a treaty is not applicable, the recognition of foreign judgments may still be available pursuant to statute or the common law. 

Statute

The Foreign Judgments Act 1991 (Cth) (FJ Act) and the Foreign Judgments Regulations 1992 (Cth) (FJ Regulations) are the primary statutory sources of law governing the recognition and enforceability of foreign judgments in Australia. The FJ Act and FJ Regulations apply where there is substantial reciprocity of treatment in relation to the enforcement of judgments between Australia and the relevant foreign jurisdiction.3 Where substantial reciprocity is established, a party may register a foreign judgment relating to money orders in civil proceedings or civil compensation orders in criminal proceedings made by one of the foreign courts specified in the FJ Regulations.4 Notable countries not covered by this statutory framework include the United States, Russia and China. Once registered, a foreign judgment has the same force and effect as if it were originally given by the court of registration.

Common Law

Where treaty and statutory sources of law are unavailable (i.e. because the country is not a party to a treaty with Australia and the country is not covered by the FJ Regulations), a plaintiff may rely on common law principles to seek to enforce a foreign judgment to recover the debt owed by a defendant. An alternative course of action available to a plaintiff who is a party to a foreign judgment in its favour is to commence new proceedings in Australia relying on the original cause of action determined in the foreign proceedings. The foreign judgment may then give rise to an issue estoppel and prevent the defendant from asserting any defences, other than fraud, that were available in the foreign proceedings.5 Similarly, a foreign judgment may be relied upon to raise the doctrine of Res Judicata to defend a claim on the basis that it has already been determined by a foreign court and therefore may not be pursued further by the same parties in Australia.6

What is the limitation period for the enforcement of a foreign judgment?

Different limitation periods apply depending on whether reliance is being placed on common law or statutory principles to seek the enforcement of a foreign judgment.

Statute

Pursuant to both the FJ Act and TTPA, a plaintiff must apply to register a foreign judgment within 6 years after the date of the judgment; or, where the judgment has been appealed, within 6 years of the date of the last judgment registered in the proceedings.7

Common Law

An action on a foreign judgment at common law is limited by statute enacted in the various state and territory limitation acts. As a result of the disparate statutory regimes, different limitation periods apply in each jurisdiction. In New South Wales, Queensland, the Northern Territory, Tasmania and the Australian Capital Territory, the limitation period is twelve years from the date at which the judgment first becomes enforceable under the laws of the foreign jurisdiction.8 In South Australia and Victoria, a longer period of fifteen years applies from the same date.9 In Western Australia, the Limitation Act 2005 (WA) does not stipulate a specific limitation period for actions enforcing a judgment. Consequently, the limitation period that applies is the general six year limitation period that commences from the time the cause of action arises in Australia, which is the date the foreign judgment is given.10

Which remedies ordered by a foreign court are enforceable in your jurisdiction?

Are there any types of foreign judgment that are not capable of recognition or enforcement within your country or jurisdiction?

Not all foreign judgments are registrable and therefore enforceable pursuant to statute or enforceable at common law. The remedies that are enforceable vary depending on the source of law being exercised.

Statute

Section 5(6) of the FJ Act provides for the registration of non-money judgments in countries designated by the FJ Regulations, however the courts have not yet exercised this power. Accordingly, to date, the FJ Act has only been applied to monetary judgments in civil proceedings, as well as civil compensation orders in criminal proceedings. Injunctions and declaratory orders are not registrable and therefore cannot be enforced.11 Not all money judgments are registrable, including those relating to tax or penalties (except judgments arising out of tax matters heard before a New Zealand or Papua New Guinean court).12

The TTPA applies to a broader range of judgments, which are  listed in section 66(1), including final and conclusive judgments in civil proceedings; judgments in criminal proceedings requiring the payment of compensation, damages or reparations; and New Zealand market proceeding judgments.13 The TTPA does not apply, however, to a number of excluded judgments provided in section 66(2); including non-money judgments of a kind specified in the TTPR, orders relating to probate or the administration of estates and the welfare of children. Injunctions are similarly not registrable under the TTPA.

Common Law

At common law, foreign judgments against a person for a liquidated sum and some foreign judgments in relation to the title or possession of property are enforceable, provided certain substantive requirements are met, including a requirement that the judgment was made by a competent court with jurisdiction to determine the matter before it. As is the case under statutory sources of law, injunctive relief and orders relating to taxes or penalties are not enforceable at common law.14

What are the substantive and procedural requirements for recognition of a foreign judgment?

Will the enforcing court examine whether the foreign court had personal jurisdiction over the defendant or jurisdiction over the subject matter of the dispute?

The substantive and procedural requirements for recognition of a foreign judgment vary depending on whether common law or statutory principles are being applied. They also vary further according to the statutory regime being considered.

Statute

FJ Act

In terms of the substantive requirements, a foreign judgment must satisfy four elements to be registrable in Australia pursuant to the FJ Act. Specifically, the decision must:

  1. be a monetary judgment;
  2. be final and conclusive;
  3. be enforceable in the foreign court in which the judgment was given; and
  4. not have been discharged or wholly satisfied.

With regard to procedural requirements, applications to register a foreign judgment under the FJ Act require the applicant to file an originating application together with a copy of the foreign judgment certified by the original court. The foreign judgment must also be authenticated by an affidavit accompanied by a certified translation if the judgment is not in English.15 Registration applications are to be made to the Supreme Court of a state or territory.

TTPA

A New Zealand judgment must comply with four substantive requirements to be registrable under the TTPA. Namely, the judgment must: 16

  1. be handed down by a New Zealand court or tribunal
  2. be final and conclusive
  3. be given in civil or certain specified criminal proceedings, and not expressly excluded by the TTPA
  4. require a person to pay money or perform or refrain from doing an act.

As to procedural requirements, a registration application of a New Zealand judgment must be made to a superior Australian court or an inferior Australian court with the power to grant the relief awarded in the New Zealand judgment.17 Further, a sealed, certified or authenticated copy of the foreign judgment must accompany the registration application.18 The TTPA and TTPR also set out various procedural requirements with respect to the particular forms that the applicant is to file.

Common Law

At common law, the party applying for recognition of a foreign judgment must comply with the following four substantive requirements:19

  1. the foreign court must have exercised an ‘international’ jurisdiction recognised by Australian courts
  2. the judgment must be final and conclusive
  3. the parties must be identical (i.e. the same as those in the foreign judgment)
  4. the judgment must be for a fixed, monetary amount (subject to exceptions).

As to procedural requirements, a plaintiff seeking to enforce a foreign judgment at common law may bring an application to recover a debt owed. The process is more onerous than the system of registration enshrined in the TTPA and FJ Act.

Jurisdictional Considerations

Under statute and at common law, Australian courts will consider whether the foreign court had jurisdiction over both the subject matter of and parties to the dispute.

Under statute, section 7(3) of the FJ Act stipulates the circumstances in which a foreign court will be taken to have jurisdiction. The circumstances include where the relevant party voluntarily submitted to the foreign jurisdiction and resided in the foreign jurisdiction at the time proceedings were initiated. For foreign judgments involving property, the foreign court will be held to have properly exercised its jurisdiction where the property was situated within the foreign jurisdiction at the time of the proceedings.

The TTPA does not require the Australian court to consider whether the New Zealand court had personal jurisdiction when registering a New Zealand judgment. However, an Australian court may be required to consider whether a New Zealand court had jurisdiction over property if an application to set aside a registered New Zealand judgment relating to the possession of, or title over, property is made. This is because section 72(1)(c) of the TTPA recognises that a basis for setting aside a registered New Zealand judgment is that it concerned property which, at the time of the New Zealand proceedings, was not situated in New Zealand.

At common law, Australian courts will consider whether the foreign court had jurisdiction pursuant to principles of private international law, rather than the foreign court’s rules. Accordingly, jurisdiction over a person will be established by the person’s presence in the foreign jurisdiction; by the person being domiciled, or exercising rights of citizenship, in the foreign country at the time the originating process is served; or through the person’s voluntary submission to the foreign court’s jurisdiction. For foreign judgments involving title over, or possession of, property, jurisdiction will be established if the property was situated within the foreign jurisdiction at the time of the proceedings.

What defences can a defendant raise to challenge the recognition or enforcement of a foreign judgment?

Is there a requirement that the judicial proceedings where the judgment was entered correspond to due process in your jurisdiction and, if so, how is that requirement evaluated?

Under statute, a defendant can seek to have a registered judgment set aside on one of a number of grounds. At common law, a defendant can raise one of four defences in enforcement proceedings.

Statue

In the statutory process of registration, once a sealed copy of a foreign judgment is lodged with the court registry, the judgment is registered and can be enforced. A defendant can challenge recognition of the judgment by seeking to have the registration set aside. Under the FJ Act, the relevant grounds for setting aside a registered foreign judgment include: 20

  • the judgment was acquired by fraud
  • the judgment has been discharged, or wholly satisfied
  • the judgment was registered for a greater amount that the amount payable as at the date of registration
  • the judgment was registered in contravention of the FJ Act
  • the foreign court did not have jurisdiction
  • the judgment ceased to be or is not, a judgment applicable under the FJ Act
  • the defendant in the proceedings in the original court and did not receive sufficient notice of the proceedings to enable them to defend the proceedings and did not appear
  • the party bringing the application to register the judgments does not have the right to do so under the original judgment
  • the judgment was subsequently reversed or set aside by the original court
  • the judgment’s enforceability would be contrary to public policy; or
  • the matter in the original court was settled in another court prior the original court’s judgment.

Under the TTPA, a defendant has 30 days from the notice of registration to set aside a registered New Zealand judgment on one of the following grounds:21

  • the judgment was registered in contravention of the TTPA
  • the enforcement of the judgment would be contrary to public policy
  • the proceeding concerned property not situated in Australia and
    • the subject matter related to immovable property; or
    • it was given against moveable property.

Common Law

At common law, there are four defences available to a defendant against whom a foreign judgment is enforced. These are:

  1. the foreign judgment was obtained by fraud22
  2. the foreign judgment was contrary to public policy23
  3. the foreign court acted contrary to natural justice
  4. the foreign judgment is penal or a judgment for a revenue debt.24

Requirement of Due Process

There is a requirement of due process. Australian courts will consider whether due process was afforded to a defendant when determining whether to enforce a foreign judgment. The Australian courts apply a minimum standard of due process, which requires the defendant to have received notice of the proceedings, been allowed a reasonable opportunity to respond to the allegations made against them and that the case be decided by an unbiased and impartial decision maker.

What will the court do if the foreign judgment sought to be enforced conflicts with another judgment involving the same parties and the judgment comes from (i) the country in which the foreign judgment is sought to be enforced; and/or (ii) another country than the enforcing country where the same substantive dispute was heard on the merits?

As to (i), Australian courts may set aside a registered foreign judgment where the matter in dispute in the foreign proceedings has been the subject of an earlier final and conclusive judgment by a court with jurisdiction over the matter.25

As to (ii), Australian courts have not determined how to deal with inconsistent foreign judgments relating to the same matter. In these circumstances, the Australian courts look to judgments from other Commonwealth countries for guidance, which suggest that the first in time judgment prevails.26

What will the court do if the parties had an enforceable agreement to use alternative dispute resolution or a forum selection clause and the defendant argues that this requirement was not followed by the party now seeking to enforce?

In these circumstances, the Australian court will consider if the foreign court had jurisdiction to hear the matter in determining whether to set aside the registered foreign judgment under statute or enforce the foreign judgment at common law. The onus would be on the defendant to challenge the jurisdiction of the foreign court.

Is a foreign arbitration award treated the same way as a judgment from a foreign court?

Yes, they can be. Australia has enacted the International Arbitration Act 1974 (Cth) (Arbitration Act), which gives effect to the United Nations Convention on the Recognition and Enforcement of Arbitration Awards 1958 (New York Convention) and the UNCITRAL Model Law on International Commercial Arbitration 1985. Pursuant to Part II of the Arbitration Act, foreign arbitration awards made in New York Convention countries are readily enforceable and will be treated as if they were a judgment of an Australian court, provided the formal requirements of the Arbitration Act are met and no grounds of refusal are available.27 The award will be enforced and a party will have access to all of the remedies that are available when seeking to enforce court judgments.

The formal requirements of the Arbitration Act relate to the production of certified copies of the arbitral award and agreement pursuant to which the award was made.28 The reasons for refusal are stated in section 8 of the Arbitration Act and primarily concern the conduct and fairness of the arbitration, and the independence and impartiality of the arbitrator.29 Enforcement of an arbitral award will also be refused if it is ‘contrary to public policy,’ which will be the case where the award is affected by fraud or corruption or a breach of the rules of natural justice.30

Is there a right to appeal a judgment recognising or enforcing a foreign judgment?

Yes, irrespective of whether the decision to recognise the foreign judgment was made pursuant to statute or common law. A successful appeal requires the appellant to show that the Australian judge made an error of law that warrants the overturning of the original decision. Appeals are made to the state or territory’s intermediate appellate court (for example, the NSW Court of Appeal) and the appeal judges’ determination will involve both questions of law and fact. 

Once a foreign judgment is recognised, what is the process for enforcing the foreign judgment?

Following a successful application, a foreign judgment is recognised as though it were made by the Australian court itself, and the plaintiff will have access to all of the remedies that are available when seeking to enforce Australian court judgments.31 The enforcement mechanisms that are available to a successful plaintiff vary between the Australian state and territory jurisdictions.32 Typically, a successful plaintiff may make an enforcement application to the court for an order against Australian assets. This can include a writ for the levy of property, writs for the seizure and sale of property, garnishee orders and charging orders.33

References

1 Commonwealth of Australia, Agreement between the Government of Australia and the Government of the United Kingdom of Great Britain and Northern Ireland providing for the Reciprocal Recognition and Enforcement of Judgments in Civil and Commercial Matters (Canberra, 23 August 1990) Entry into force: 1 September 1994 (No. 27).
2 Hague Convention on Recognition and Enforcement of Foreign Judgments in Civil and Commercial Matters (concluded 1 February 1971).
3 Foreign Judgments Act 1991 (Cth) s 5(1); 3.
4 See Foreign Judgements Regulations 1992 (Cth) regs 4 and 5, Schedule ‘Superior Courts.’
5 See Paul Le Gay Bereton, ‘(A) Recognition and Use of Foreign Judgments Apart from Statute,’ Halsbury’s Laws of Australia (11 January 2016).
6 See Kim Pham, ‘Enforcement of Non-Monetary Foreign Judgments in Australia’ (2008) 30 Sydney Law Review 663.
7 Foreign Judgements Act 1992 (Cth) s 6(1); Trans-Tasman Proceedings Act 2010 (Cth) s 67(5)(c).
8 Limitation Act 1969 (NSW) s 17; Limitations of Actions Act 1974 (QLD) s 10(4)-(4A); Limitation Act 1974 (Tas) s 4(4); Limitation Act 1985 (ACT) s 14 and Limitation Act (NT) s 15.
9 Limitation of Actions Act 1958 (Vic) s 5(4); Limitation of Actions Act 1936 (SA) s 34.
10 Limitation Act 2005 (WA) s 13.
11 See ‘Registering inter-jurisdictional and foreign judgments,’ Thomson Reuters Practical Law Dispute Resolution.
12 Foreign Judgements Act 1992 (Cth) s 3(2).
13 Trans-Tasman Proceedings Act 2010 (Cth) s 66(1).
14 See Bridget Kennedy, ‘(c) Jurisdiction under International law,’ Halsbury’s Laws of Australia (3 January 2018) and ‘Registering inter-jurisdictional and foreign judgments,’ Thomson Reuters Practical Law.
15 Chief Justice J L B Allsop, ‘Foreign Judgments Practice Note (GPN-FRGN) General Practice Note’ (25 October 2016).
16 Trans-Tasman Proceedings Act 2010 (Cth) s 66.
17 Ibid s 67.
18 Above n 15 CJ Allsop.
19 Bao v Qu; Tian (No 2) [2020] NSWSC 588 [26]; Benefit Strategies Group Inc v Prider (205) 91 SASR 544 [18].
20 Foreign Judgements Act 1992 (Cth) s 7(2)(a)(i)-(xi).
21 Trans-Tasman Proceedings Act 2010 (Cth) s 72.
22 Larnach v Alleyene (1862) 1 W & W (E) 342.
23 Re Macartney [1921] 1 Ch 522.
24 Schnabel v Lui [2002] NSWSC 15.
25 Foreign Judgements Act 1992 (Cth) s 7(2)(b); Vervaeke v Smith [1983] AC 145.
26 Showlag v Mansour [1995] 1 AC 431.
27 See also: Derek Luxford (Hicksons Lawyers), ‘Enforcement of arbitral awards in Australia: overview’, Thomson Reuters Practical Law (Country Q&A, 1 September 2015).
28 See in particular: International Arbitration Act 1974 (Cth) ss 9(1)(a)-(b); 9(3).
29 See also Lee Carroll, Kanaga Dharmananda and Leon Firios, ‘(4) Enforcement of Award in Arbitration’, Halsbury’s Laws of Australia (13 January 2020).
30 International Arbitration Act 1974 (Cth) s 8(7A)(a)-(b).
31 Trans-Tasman Proceedings Act 2010 (Cth)s 74(1); Foreign Judgements Act 1992 (Cth) s 6(7)(a).
32 For example, Civil Procedure Act 2005 (NSW) s 106.
33 Ibid ss (1)(a)-(c); (2)(a)-(e).


Authors:
Loopstra Nixon & Holding Redlich

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