07 June 2022
18 min read
#Dispute Resolution & Litigation
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As a member of LawExchange International (LEI), we joined 12 other member firms in contributing to LEI's inaugural Guide to Enforcing Foreign Judgments. This publication provides a general overview of the law respecting enforcing foreign judgments in multiple jurisdictions across the globe.
In the Australian chapter, we look at:
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 1994 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.
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. 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. 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.
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.
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 six years after the date of the judgment or, where the judgment has been appealed, within six years of the date of the last judgment registered in the proceedings.
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. In South Australia and Victoria, a longer period of fifteen years applies from the same date. 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.
Not all foreign judgments are registrable and therefore enforceable pursuant to statute or 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 from 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. 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).
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. 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 and 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 are enforceable, provided that 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.
Foreign judgments in rem relating to title to, or possession of, immovable and movable property are also enforceable in Australia, provided the property was located in the jurisdiction of the foreign court at the time of the foreign court’s proceedings, the judgment is final and conclusive, and the judgment was not affected by fraud or contrary to public policy or natural justice.
In addition to the above, it should be noted that case law in England and other common law countries suggests that it may be possible to enforce, whether in equity or common law, a foreign judgment in personam regarding contractual rights to either movable or intangible property (particularly choses in action or shares) located in Australia, in circumstances where the foreign court had personal jurisdiction over the affected parties (because the parties submitted to the foreign court’s jurisdiction, for example): see Pattni v Ali [2006] UKPC 51 at [27]. The validity of this position has been considered in secondary commentary, but it is unclear whether it is accepted in Australia.
As is the case under statutory sources of law, injunctive relief and orders relating to taxes or penalties are not enforceable at common law.
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:
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. Registration applications are to be made to the Supreme Court of a state or territory.
Statute
TTPA
A New Zealand judgment must comply with four substantive requirements to be registrable under the TTPA. Namely, the judgment must:
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. Further, a sealed, certified or authenticated copy of the foreign judgment must accompany the registration application. 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:
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.
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.
Statute
The FJ Act sets out the appropriate court to register the foreign judgment, depending on the type of judgment. In the Federal Court of Australia, a copy of the foreign judgment certified by the original court must be lodged with the court registry. Depending on the rules for each state and territory Supreme Court, a verified, certified, or otherwise duly authenticated copy of the judgment is required.
Under the TTPA, the application for registration depends on the type of court. A sealed, certified or otherwise authenticated copy is required to be filed in hard copy. Once this occurs, the judgment is considered “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 that:
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:
Common law
At common law, there are four defences available to a defendant against whom a foreign judgment is enforced. These are that:
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, the defendant to have been allowed a reasonable opportunity to respond to the allegations made against them and the case to have been decided by an unbiased and impartial decision maker.
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.
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.
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.
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 that the formal requirements of the Arbitration Act are met and no grounds of refusal are available. 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. 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. 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 by a breach of the rules of natural justice.
Yes, there is a right to appeal, 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.
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. The enforcement mechanisms that are available to a successful plaintiff vary between the Australian state and territory jurisdictions. 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.
Authors: Greg Wrobel
Disclaimer
The information in this article is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavour to provide accurate and timely information, we do not guarantee that the information in this article is accurate at the date it is received or that it will continue to be accurate in the future.
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