On 19 May 2020, Justice Rothman of the Supreme Court of New South Wales was called upon to enforce a judgment obtained in the Qingdao Intermediate People’s Court of Shandong Province, China, between Chinese nationals. The case, Bao v Qu & Tian (No 2) [2020] NSWSC 588 (Bao), considers the principles surrounding enforcement of judgments obtained overseas, especially where the Plaintiff cannot rely on the Foreign Judgments Act 1991 (Cth) (FJA).
Foreign Judgments Act
The FJA enables the judgments of Courts specified under the Foreign Judgments Regulations 1992 (Cth) (FJR) to be registered in Australian courts, provided that the judgment:
- is final and conclusive (but can be interlocutory or subject to appeal);
- has not been wholly satisfied; and
- could be enforced in the Country of original judgment.
A judgment registered under the FJA is not unassailable, and may be set aside on application of the judgment debtor if the Australian Court is satisfied, among other things, that:
- the international court had no jurisdiction to hear the case;
- the judgment debtor did not receive proper notice of the original proceedings and was not able to defend or did not appear at the hearing of the case; or
- the judgment was obtained by fraud.
Except for those three reasons, the Court is not expected to look at the substantive merits of the original judgment.
Common Law
The Court, in Bao, provided a succinct summary of the necessary prerequisites for recognition and enforcement in Australia, at [26]:
- the foreign court must have exercised proper jurisdiction;
- the foreign judgment must be final and conclusive;
- the parties to the foreign judgment must be identical to those between whom the judgment is sought to be enforced; and
- the judgment must be for a fixed, liquidated sum.
The Court also noted that the common law (consistent with the provisions of the FJA) prevents enforcement of a foreign judgment where the judgment has been wholly satisfied or where the judgment was obtained by fraud by the parties or by the foreign court: at [31]-[32]. Additionally, Rothman J noted (at [35]) that any fraud alleged must be “based on evidence not available or reasonably discoverable at the time of the foreign proceedings”.
The common law approach taken by the Court was closely aligned to the general provisions of the FJA, which should instil confidence in foreign judgment creditors seeking to enforce judgments against debtors resident in Australia that having a foreign judgment from a court not listed in the FJR will not preclude its enforcement in Australia.
