Enforcing foreign judgments in Australia: a short guide

It may come as a surprise to some practitioners to learn that judgments by any nation’s courts can potentially be enforced in Australia -- regardless of whether the foreign legal system extends similar recognition to Australian judgments.

The statutory and common law pathways to enforcement

Setting aside New Zealand, which is subject to its own act (see the Trans-Tasman Proceedings Act 2010 (Cth)), there are two pathways to seek enforcement of a foreign judgment in Australia:

1. The first is under the Foreign Judgments Act 1991 (Cth), which provides a streamlined process for enforcing monetary judgments of certain courts of certain countries (such as the United Kingdom, Canada and much of the European Union), as listed in the regulations (see regs 4-5 of the Foreign Judgments Regulations 1992 (Cth) for the list).

2. The second, and less well-known mechanism, is via the common law.

While the common law pathway is more difficult, it allows the recognition and enforcement of a foreign judgments from a far broader range of countries than the statutory pathway:

• The Foreign Judgments Act 1991 (Cth) recognises money judgments by foreign courts only if the foreign country has provided for “substantial reciprocity of treatment…in relation to the enforcement in that country of money judgments given in all Australian superior [or inferior] courts” (see section 5).

• By contrast, the common law procedure is not limited by reciprocity. Conceivably, an applicant could establish a prima facie case to enforce the judgment of a North Korean court in an Australian court—although as discussed below, the respondent would probably have strong grounds for a defence.

How a plaintiff can obtain a prima facie entitlement to enforce a foreign judgment

The first step for a plaintiff seeking to enforce a foreign judgment under Australian common law is to prove certain facts about the judgment.

If they satisfy this burden, then the plaintiff gains a prima facie entitlement to enforce it in the Australian court.

It will then fall to the defendant to prove that a recognised defence applies.

To be prima facie enforceable, the foreign judgment must satisfy all four of the following conditions:

1. The foreign court must have ‘international jurisdiction’.

2. The judgment must be final and conclusive: this can include a judgment which is subject to appeal, but not an interlocutory decision.

3. The judgment must be for a fixed sum.

4. The parties in the Victorian court must be identical to those in the foreign proceeding.

What is ‘international jurisdiction’?

The first condition, ‘international jurisdiction’ means some form of jurisdiction that is recognised by the Australian court, meaning that the foreign court had either in personam or in rem jurisdiction when it made the judgment. This can occur in three ways:

1. the defendant was served with the originating process while in the foreign country;

2. the defendant submitted to the foreign jurisdiction, such as by filing an appearance or defence; or

3. the foreign judgment was for the title or possession of tangible property in the foreign country;

Practitioners whose clients have personal or business dealings in foreign countries should be particularly mindful of the risk that their or their client’s actions may result in an unwitting submission to the foreign court’s jurisdiction:

• Even if the client is only passing through a jurisdiction, such as while travelling, they may be served with originating process (see, e.g., Herman v Meallin (1891) 8 WN (NSW) 38).

• Any involvement by the client or their lawyers with the foreign court, beyond contesting its jurisdiction, is likely to amount to a submission to that jurisdiction. For example, in De Santis v Russo [2001] QSC 065, the defendant wrote to the Italian court to contest its jurisdiction, but also took issue in the letter with the merits of the plaintiff’s claim. This was enough for the Supreme Court of Queensland to hold that the Italian court had jurisdiction.

Defences that can be raised

If the plaintiff establishes the four conditions, the onus falls on the defendant to prove that a recognised defence applies. Such defences are:

1. The foreign judgment was obtained by fraud.

2. The defendant was denied natural justice in the proceedings in which the foreign judgment was obtained.

3. Enforcing the judgment in Australia would mean the enforcement of a foreign penal or revenue law, or a foreign governmental interest.

4. The recognition or enforcement of the foreign judgment would be manifestly contrary to the public policy of the forum.

The availability of these defences provides some assurance that Australian courts will not be used as vehicles for fraud, oppression or the exercise of foreign sovereign power.

However, in practical terms, proving what took place in foreign proceedings can be very difficult. Some of the difficulties that can arise include language barriers, limited or contested evidence as to how the proceedings were conducted, and issues of foreign law unfamiliar to Australian courts and legal practitioners.

For an illustration of some of these difficulties, see Suzhou Haishun Investment Management Co Ltd v Zhao [2018] VSC 110, in which the plaintiff successfully enforced the judgment of a court of the People’s Republic of China in the Supreme Court of Victoria.

Another issue which arises from the defendant’s onus is the fact that the Australian court may be required to make a politically-loaded finding about the way in which the foreign judgment was obtained, or the deficiencies of the foreign legal system at large (as in the North Korean hypothetical above).

Overall, once a plaintiff has established the prima facie enforceability of the foreign judgment, the defendant faces an uphill battle to demonstrate a reason why it ought not be enforced.

Further reading

For a more detailed guide, the two leading textbooks are Private International Law in Australia, and Nygh’s Conflict of Laws in Australia, both published by LexisNexis Butterworths.

Much credit for this article is due to Professor Richard Garnett, a co-author of the former textbook, who taught 'Cross-Border Litigation' at the University of Melbourne (one of my favourite electives).

Disclaimer

Nothing in this article is legal advice, and should not be relied upon as such. Liability limited by scheme approved under Professional Standards Legislation.