Recognition under the common law
In our previous post, we examined the process for recognising foreign judgments in Australia under the Foreign Judgments Act 1991 (Cth) (Act). While this is the easiest way to get a foreign judgment registered in Australia, it is only available for certain judgments.
For judgments that are not registrable under the Act, a judgment creditor must have the judgment recognised under the common law. In this post, we examine that process and the positions of the judgment creditor (the person enforcing the judgment) and the judgment debtor (the person against whom the judgment is being enforced).
Commencement of proceedings: how and where?Proceedings for enforcement of a foreign judgment are commenced in the same way as any other Australian court proceeding. If a judgment debtor is not personally enforcing the award then an Australian lawyer must be retained to act on their behalf.
The proceeding can be commenced in any court of any State/Territory, or the Federal Court (which has registries in each State/Territory). The court that is chosen depends on:
- the amount that is sought (most courts have monetary jurisdictional limits, which means that they can only decide matters up to a certain value)
- the location of assets that can be used to satisfy the judgment, and
- whether the foreign judgment is to be used for some purpose other than to satisfy the money owing (e.g. for use in a bankruptcy or winding up proceeding).
Unlike registration, a proceeding under the common law cannot be instituted in the absence of the other party. As such, the proceeding must be served on the judgment creditor. There are special requirements if a person is to be served outside of Australia.
What does the judgment creditor need to prove?To successfully recognise a judgment, it is necessary to prove four matters:
- the parties are the same parties as in the foreign judgment: This would appear to exclude enforcement against a subsidiary or holding company of the judgment debtor, although that issue has not been specifically considered. As with registration, it is possible for an assignee of the foreign judgment to enforce it
- the judgment is for a fixed debt: This is no different to the requirement for a ‘money judgment’ under the Act
- the foreign judgment is final and conclusive: As under the Act, a foreign judgment is final even if it can it is subject to an actual or potential appeal, and
- the foreign court validly exercised jurisdiction over the judgment debtor: This might occur if the judgment debtor:
- was present in the foreign court’s jurisdiction when he/she was served with the initiating process (even if only temporarily)
- was domiciled or ordinarily resident in the foreign court’s jurisdiction, or
- voluntarily submitted to the foreign court’s jurisdiction, either by prior agreement (e.g. a jurisdiction clause in a contract) or by a voluntary appearance in the Court (but an appearance to contest the court’s jurisdiction is not sufficient to show the court exercised jurisdiction over the person).
An application to enforce a foreign judgment must be made within a designated time limit, which varies amongst the States and Territories. It is important to act quickly as the time limit could be as short as 12 months.
Can a judgment debtor oppose enforcement?A judgment debtor can oppose enforcement on a number of grounds which include that:
- the judgment was obtained by fraud
- the foreign court acted contrary to natural justice, and
- the foreign judgment is estopped by an earlier inconsistent local judgment.
What happens if the judgment creditor is successful?If the judgment creditor proves the four matters above, and there are no grounds on which the judgment debtor can successful oppose registration, the Australian court will make a judgment in the same terms of the foreign judgment (i.e. it will order the judgment debtor to pay the judgment creditor the amount awarded in the foreign judgment). This judgment can then be enforced in the same way as any other judgment of the court.
In our next post we will look at some of the options available to a judgment creditor to satisfy the amount owing under the foreign judgment.