Enforcing Foreign Judgments in Australia
It has never been easier to conduct business internationally but when things go wrong, the question of which jurisdiction is most appropriate to determine a dispute is often hard fought.
Once a judgment is obtained, how to enforce that in a foreign country can be a complex process with a variety of approaches taken in different jurisdictions around the world.
We look at below, how a judgment in a foreign country can be applied and enforced in Australia.
Enforcing Foreign Judgments in Australia
In Australia, a foreign judgment can be enforced by statute if it is registered in accordance with Part 2 of the Foreign Judgments Act 1991 (Cth) (“the Act”).
However, this Act is based upon the principles of reciprocity with their only currently being 25 countries (and some limited by certain Courts within those countries) explicitly listed in the regulations meaning that those judgments can be registered pursuant to the Act and enforced in Australia. Such countries include, some provinces in Canada, the UK, Singapore, France, Fiji and Poland however, notably major trading partners such as China and the USA are not included. Further there are limitations on the types of judgments that can be registered and therefore enforced within Australia.
The Trans-Tasman Proceedings Act 2010 also provides that certain judgments can be recognised and enforced from New Zealand.
Australia is a party to a bilateral treaty with the United Kingdom known as the Reciprocal Recognition and Enforcement of Judgments in Civil and Commercial Matters 1994.
In 2019 the Hague Convention on the Recognition and Enforcement of Foreign Judgments in Civil or Commercial Matters was adopted. This Convention creates an internationally recognised base standard for the recognition and enforcement of judgments between those contracting states however, Australia is yet to accede to it.
An alternative avenue to the enforcement of foreign judgments for those countries and courts that do not fall under the Act or where there is no international agreement, is pursuant to Australian common law.
The common law test provides four well-established conditions that must be satisfied as follows:
- 1) Recognised jurisdiction - the foreign court must have had jurisdiction over the Defendant at the time when the jurisdiction of the foreign court was invoked (ie. the Defendant voluntarily appeared or was a resident/present in the country at the time that they were served with the originating process).
It is generally sufficient if the Defendant is personally served with the originating process while physically present in the foreign jurisdiction, even if that presence was only temporary. Although, a defence may be available to the Defendant if their presence in the country was induced by fraud or concealed for the sole purpose of serving them with the originating process.
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.
- 2) The judgment must be final and conclusive - The foreign judgment must be determinative of the rights and obligations of the parties.
The key test of finality is whether the foreign court treats the judgment as res judicata meaning the matter has been decided between the parties to the litigation.
The fact that a final order may subsequently be varied in the event of the default of a party carrying out its terms or that a proceeding may be appealed, may not affect the finality of the order.
- 3) The identity of the parties - The parties to the foreign judgment must be the same as the parties to the enforcement proceedings in Australia.
- 4) The judgment must be for a fixed debt or a definite sum of money - the Court may enforce foreign judgments that are for a fixed, or readily calculable, sum of money.
A foreign judgment for the payment of a sum of money that is subject to the deduction of an as yet unascertained amount for costs cannot be enforced at common law. Injunctions (or other judgments or orders requiring or prohibiting the doing of certain acts) and declaratory judgments or orders are not registerable or enforceable in Australia.
The onus of establishing the existence of the four well-established conditions rests upon the party seeking to rely on the foreign judgment and if satisfied, a judgment will be enforceable under Australian common law.
Exceptions to the Common Law four well-established tests
A defence may be available to a Defendant who can establish and prove that the judgment was obtained by fraud, that the judgment is contrary to Australian public policy or that the foreign Court acted contrary to natural justice.
Procedure for Recognising a Foreign Judgment Under Common Law
The appropriate court for registering a foreign judgment is the Supreme Court of any Australian State or Territory.
The Court considering such an application would require evidence of the foreign law applied to the proceeding and the procedures that were followed in the foreign Court. The application must be filed within 6 years of the date of the judgment or, where there have been proceedings by way of appeal, from the date of the last judgment.
A registered foreign judgment has the same force and effect and may be enforced in the same way as if it were a judgment of the court of registration in Australia. On any such application, you may also be entitled to both:
- The reasonable costs and expenses of, and incidental to, obtaining the lodging the copy of the judgment; and
- The costs and expenses reasonably incurred in attempting to execute the judgment in the court of rendition or in another state of territory.
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, such as:
- Writ or warrant for seizure and sale of property / real property;
- Writ or warrant of possession of land;
- Orders for attachment of debts or earnings;
- Charging orders against securities (e.g. shareholdings) held beneficially by the Defendant; and
- as the basis for bankruptcy / liquidation (i.e. bankruptcy or statutory demand and wind up proceedings).
If you require any legal advice regarding foreign judgments or the enforcement of a foreign judgment in Australia, please contact our Commercial and Disputes Lawyers on +61 3 9822 8588 or via email here.