A judgment made by a foreign court does not automatically operate in Australia. There are two different regimes for enforcing a foreign judgment in Australia: (1) under the Foreign Judgments Act 1991 (Cth), and (2) bringing an action under common law. Which of the two regimes applies depends upon which foreign court made the judgment.
The Foreign Judgments Act
The Foreign Judgments Act provides a streamlined method for registering and enforcing foreign judgments in Australia. The judgment creditor makes an application to the Federal Court of Australia or a Supreme Court of a state or territory. That court must register the judgment, subject to the exceptions discussed below.
The Foreign Judgments Act applies only to judgments made by specified foreign courts. The act applies to judgments of the Hong Kong Court of Final Appeal and the Hong Kong High Court (consisting of the Court of Appeal and the Court of First Instance). It does not currently apply to judgments from other courts of the People’s Republic of China.
Only certain judgments may be registered under the Foreign Judgments Act. The judgment must generally be a “money judgment”, which means a judgment for which money is payable. Judgments for payments of foreign tax or monetary penalties cannot be registered. The judgment must be a final or interlocutory judgment made by a court in either a civil proceeding or for civil compensation in criminal proceedings.
A party must apply to an Australian court to have the judgment registered within six years of the date of the foreign judgment. The Australian court may extend the time for registering judgments in some circumstances.
A judgment debtor can apply to the Australian court to set aside the registration of the judgment. There are a number of grounds upon which the registration must be set aside by the court, including:
- the foreign court did not have jurisdiction over the defendant (for example, the defendant was not present or did not submit to the jurisdiction);
- the amount of the registered judgment exceeds the amount of the foreign judgment;
- the foreign judgment has been discharged or satisfied;
- the foreign judgment was obtained by fraud; and
- the foreign judgment has been reversed on appeal or set aside in the foreign country.
Once the judgment is registered with an Australian court, it has the same effect and force as if it were a judgment made by that court. This means that the registered judgment may be enforced by any of the methods available under the law of the place of registration. For example, the judgment may be enforced against assets the judgment debtor holds in Australia, or may be the basis for a winding up or bankruptcy proceedings. Interest will accrue on the amount for which the judgment is registered from the date of registration.
Where a foreign court is not covered by the Foreign Judgments Act, the judgment creditor can only enforce the foreign judgment in Australia through an application under common law to an Australian court. Judgments from courts of the PRC (aside from the Hong Kong courts mentioned above) can only be enforced in Australia through this process.
The judgment creditor can bring a new claim in an Australian court for recovery of the amount of the judgment debt. The judgment creditor can rely on the foreign judgment as imposing an obligation on the judgment debtor to pay the amount of the judgment. The matters decided in the foreign court do not need to bere-litigated or re-examined.
Alternatively, the judgment creditor can bring a new claim in an Australian court based on the original cause of action, and rely on the foreign judgment as estopping (preventing) the defendant from raising any defence (except fraud) which was raised, or could have been raised, in the foreign proceeding.
If successful, the Australian Court will give judgment in favour of the judgment creditor, which can be enforced in Australia. Where the judgment creditor is successful, the court will usually make an order for their costs of the enforcement proceeding.
As with the enforcement of judgments under the Foreign Judgments Act, only certain foreign judgments are enforceable under common law. The judgment must be for a fixed amount of money, or a readily calculable amount of money. Judgments for payment of foreign tax or monetary penalties cannot be enforced. The judgment must be final and conclusive.
Under the common law process, in most Australian Courts the judgment creditor must show that the Australian court has jurisdiction over the enforcement claim. This step is not required under the Foreign Judgments Act.
The defences to enforcement of a foreign judgment under common law are similar to the defences available under the Foreign Judgments Act. A judgment debtor may have a defence to the enforcement of a foreign judgment in the following circumstances:
- the foreign court did not have jurisdiction over the defendant (for example, the defendant was not a resident or carrying on business in the jurisdiction, or was not served with originating process in the foreign jurisdiction);
- the foreign judgment was obtained by fraud;
- the defendant was denied natural justice in the foreign proceedings (for example, it was not able to present its case to the foreign court); or
- the enforcement of the foreign judgment would be contrary to Australian public policy.
Legislation and court rules which set time limits for commencing proceedings to enforce foreign judgments under common law vary across Australian states and courts. For example, in Victoria, a party must commence proceedings to enforce a judgment within 15 years of the judgment being made. However, the Rules of the Supreme Court of Victoria require leave of the court to enforce a judgment where six years or more have elapsed since the judgment was made.
Michael Sheng is a partner in the Shanghai office and Alexandra Folie is a senior associate in the Melbourne office of Blake Dawson
Blake Dawson Shanghai office
1168 Nanjing Road West
Tel: 86 21 5100 1796
Fax: 86 21 5292 5161