Enforcing a foreign judgment in Australia where the judgment is not registrable under the Foreign Judgments Act 1991

28 August 2014 Topics: Banking and financial services, Insolvency and restructuring, Litigation and dispute resolution

Whether your foreign judgment can be enforced in Australia will depend on the type of judgment and the country where the judgment is obtained.

The Foreign Judgments Act 1991 (Cth) (FJA) enables foreign judgments from prescribed courts in specified countries to be registered under the FJA in Australia.

If the foreign judgment is not registrable under the FJA, there may be a bilateral treaty that allows the judgment to be enforced.

For example, Australia is a party to the treaty for the Reciprocal Recognition and Enforcement of Judgments in Civil and Commercial Matters 1994 with the United Kingdom and to the Trans-Tasman Proceedings Act 2010 with New Zealand.

Australia is not a party to the Hague Convention on Recognition of Foreign Judgments in Civil and Commercial Matters 1971.

Where the judgment is not registrable under the FJA and there is no treaty, you will need to rely upon the common law to enforce your money judgment (order for the payment of money) in Australia .

Equity may however assist in the enforcement of equitable relief granted in a foreign court without requiring as a prerequisite that the foreign order be made a judgment of the Australian court.

Examples of equity assisting a foreign court include the appointment of a receiver to pursue the enforcement of rights determined by the foreign court and the making of orders by the Australian court for an accounting to be conducted in relation to the use made of assets and profits received.

Common law

Under the common law the judgment must be for the payment of money and the person seeking to enforce the foreign judgment has the onus of establishing:

  1. The parties are the same parties as in the foreign judgment.
  2. The judgment is for a fixed debt – a definite sum of money.
  3. The foreign judgment is final and conclusive – that is, it is determinative of the rights and obligations of the parties.
  4. The foreign court had and validly exercised jurisdiction over the defendant and the defendant submitted to the foreign jurisdiction.

Is the foreign judgment final and conclusive?

The key test of finality is whether the foreign court treats the judgment as res judicata between the parties to the litigation. However, the fact that the foreign judgment may be susceptible to being set aside does not mean that the judgment is not final and conclusive. A default judgment is, in most circumstances, considered to be enforceable as a final and conclusive judgment. The fact that the judgment may be subject to appeal or even that appellate proceedings are pending, does not affect the finality of the judgment.

Jurisdiction of the foreign court over the defendant

Whether a foreign court had jurisdiction will be determined by the Australian court, not the foreign court. The test for jurisdiction is ‘international jurisdiction’. It is not sufficient for the foreign court to have jurisdiction over the defendant under its own rules.

At common law the foreign court must have had jurisdiction by the defendant’s presence or submission to the jurisdiction.

A foreign court is not taken to have had jurisdiction over the defendant to give judgment merely because the defendant:

  1. entered an appearance in the foreign court; or
  2. participated in the proceedings only to an extent necessary to:
  •  protect or obtain the release of property seized or threatened with seizure in the proceedings;
  • protect or obtain the release of property subject to an order restraining its disposition or disposal;
  • contest the jurisdiction of the foreign court; or
  • invite the court in its discretion not to exercise its jurisdiction in the proceedings.

Recent cases

Some recent cases have considered whether a foreign court had and validly exercised jurisdiction over the defendant.

La Jolla Cove Investments

In La Jolla Cove Investments v Go Connect Limited [2014] NSWSC 988, the defendant defaulted under a funding agreement and proceedings were instituted in California. The defendant filed a defence and counter claim in which he accepted that the Californian Court had jurisdiction. Under a settlement agreement the defendant agreed that the plaintiff could apply for judgment if the defendant failed to comply with the terms of the settlement agreement.

The defendant defaulted and the plaintiff obtained judgment in the Californian Court. The Australian Court held that the defendant accepted the jurisdiction of the Californian Court by its acceptance in the court documents and the terms of the settlement agreement.

Mr Wong

In Wong v Jani-King Franchising, Inc [2014] QCA 76, Mr Wong had been sued in a Dallas Court for damages for fraudulent representation relating to an agreement. Mr Wong was a nonresident of Texas and he contended that the Dallas Court did not have jurisdiction.

Mr Wong filed a ‘special appearance’ in the Dallas proceedings objecting to jurisdiction.

The plaintiff in the Dallas proceedings sought to join an additional defendant, which was opposed by Mr Wong for procedural and substantive reasons. Mr Wong’s objection went beyond the ‘special appearance’.

Mr Wong did not seek any determination of his ‘special appearance’. The Dallas proceedings went to trial and he did not appear. The trial Court in Dallas found that Mr Wong had notice of the trial and that by failing to request and obtain a hearing on his ‘special appearance’ he had waived his ‘special appearance’ and submitted to the jurisdiction.

In the Australian proceedings Mr Wong argued that he had not submitted to the jurisdiction of the Dallas Court.

After considering the applicable law in Texas, the Australian Court held that Mr Wong had submitted to the jurisdiction of the Dallas Court when he opposed the joinder of the additional defendant, which was part of the proceedings unrelated to the issues raised in the ‘special appearance’. It demonstrated that Mr Wong had engaged with the Texas Court and that he went beyond ‘merely’ entering an appearance to contest the jurisdiction of the Court.

Implications for creditors seeking to enforce foreign judgments

Not surprisingly, a judgment debtor will try to rely upon technical legal arguments to prevent a foreign judgment being enforced in their home jurisdiction.

One of the hurdles a judgment creditor will need to overcome is proving that the foreign court had jurisdiction over the defendant and that the jurisdiction was validly exercised.

The court in Australia will require evidence regarding the foreign law that applied to the case and the procedures that were followed in the foreign court. What actually occurred in the foreign court proceedings will be relevant.

If you would like more information about these issues, please contact Graham Roberts on 61 7 3231 2404.



Contact Us

This publication is for information only and is not legal advice. You should obtain advice that is specific to your circumstances and not rely on this publication as legal advice. If there are any issues you would like us to advise you on arising from this publication, please let us know.