Litigation

30 Nov 2011

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Enforcing Foreign Judgments in New Zealand

Wherever you are in the world, once the effort and expense of obtaining a judgment is over, the last thing you want to face is a problem enforcing it. But if the judgment is from a foreign court, and you want to enforce it in New Zealand (there might be some assets here, for instance), you have to take a few more steps to make the judgment enforceable. By itself, a foreign judgment has no direct operation in New Zealand.

Choosing the correct method of enforcement can be tricky, as much depends on the country and court from which the foreign judgment was obtained. This FYI describes the three methods of enforcement available in New Zealand (plus a fourth method for Australian judgments, which should become available in 2012), and gives an overview of the procedural steps required for each.

First method - registration under the Reciprocal Enforcement of Judgments Act 1934

The first and most simple method applies if the judgment is from the United Kingdom, or from almost all Australian courts or other (mainly Commonwealth) countries specified by Order in Council. You can register the judgment under the Reciprocal Enforcement of Judgments Act, and it then has the same force and effect as a judgment from the High Court of New Zealand.

Four prerequisites for registration must be met:

• The judgment must be final and conclusive - that is, it is not liable to be varied by the court which gave it (although it can be the subject of an appeal).
• The judgment must be for a sum of money other than taxes, a fine or a penalty.
• The judgment must be capable of execution in the country in which it was given.
• The judgment must not have been wholly satisfied.

Registration involves an application to the High Court and affidavit evidence that confirms the prerequisites are met and gives certain other information about the creditor, the debtor and the judgment. The creditor may need a letter from a bank as to the relevant exchange rate, and a letter from a lawyer in the foreign country describing any interest payable on the judgment under the foreign law.

Once registered, the judgment becomes enforceable when notice of registration has been served on the debtor, and either (a) the time for applying to set aside the registration has passed without any application being made, or (b) any application made has been disposed of. The only grounds on which the debtor can apply to set aside are prescribed by the Act, including that the foreign court did not have jurisdiction, that the judgment was obtained by fraud, that enforcement of the judgment is contrary to public policy, or that the debtor was not served in sufficient time to defend the proceedings and did not appear. The court may also set aside registration if the debtor has appealed the foreign judgment and has genuine prospects of success.

Second method - memorial of judgment under Judicature Act 1908

The second method, rarely used, involves registering a memorial of the foreign judgment in the High Court under section 56 of the Judicature Act. It is available if the judgment is from a Commonwealth country and is not otherwise enforceable under the Reciprocal Enforcement of Judgments Act. Using this method rather than the common law procedure (outlined below) has both attractions and drawbacks. On the plus side, the procedure is relatively straightforward and the debtor has the burden of showing why the judgment should not be enforced. However, unlike judgments enforceable under the Reciprocal Enforcement of Judgments Act and the common law, there is no mechanism under section 56 for obtaining an order for payment of interest: the section provides only for execution of the foreign judgment.

Third method - enforcement at common law

For all remaining foreign judgments, enforcement at common law is available. Although the procedural steps involved under this method are different to those required to register a judgment under the Reciprocal Enforcement of Judgments Act, the prerequisites for enforcement and grounds for defence are more or less the same.

In terms of procedure, enforcement at common law involves bringing a fresh set of proceedings in New Zealand which are based on the foreign judgment. To streamline the process, a creditor should also make an application for summary judgment in the New Zealand proceedings, with affidavit evidence providing certain information about the judgment, the remaining debt and any interest payable.

The debtor may try to defend the proceeding, but does not have the opportunity to reopen the whole of the case already litigated in the foreign jurisdiction. Instead, the debtor will be confined to limited grounds of defence, which are more or less co-extensive with the grounds to set aside judgments registered under the Reciprocal Enforcement of Judgments Act.

Importantly, in enforcing at common law, the creditor must show the foreign court had jurisdiction over the debtor according to the rules of New Zealand private international law. These rules are not the same rules that the foreign court applied in determining its own jurisdiction. They are also not the same rules that a New Zealand court will apply in determining its jurisdiction to hear a case with international elements. The rules are similar to the rules about jurisdiction in the Reciprocal Enforcement of Judgments Act but they are not identical to them. Essentially they require that the debtor must have been present in the foreign country when proceedings were commenced, or was a plaintiff or counterclaimed in the proceeding, or voluntarily appeared in the proceeding or agreed to submit to the court's jurisdiction before the proceeding commenced.

Australian judgments - Trans-Tasman Proceedings Act 2010

This Act provides a simplified registration process for judgments from Australian courts and tribunals. The operative sections of this Act are not yet in force; the Ministry of Justice anticipates the regime will commence some time in the first part of 2012.

A significant advantage to this regime is that (subject to specified exemptions), non-money judgments such as injunctions and orders for specific performance, or judgments imposing civil pecuniary penalties - neither of which are currently enforceable in New Zealand - may be registered.

Registration involves applying to the appropriate court to register the judgment; the registrar must then register the judgment. Once registered, the creditor has to notify the debtor within the prescribed time. Although, like the other enforcement methods, the debtor can seek to set aside registration but the grounds to set aside are strictly limited under the Act. Once registered, the Australian judgment has the same force and effect, and may give rise to the same proceedings for enforcement as if the judgment had been given by a New Zealand court.

If you'd like to know more about the Trans-Tasman Proceedings Act 2010, read our September 2010 article here. If you have a foreign judgment and would like to enforce it in New Zealand, or face enforcement of a foreign judgment here, please contact us.

Finally, if you have a New Zealand judgment that you want to enforce overseas, we can help you too. Simpson Grierson is New Zealand's only member of Lex Mundi, the world's leading association of independent law firms. Lex Mundi includes 160 law firms and over 21,000 lawyers operating in more than 100 countries worldwide. We are also a co-founder of the Pacific Rim Advisory Council, now more than 20 years old. PRAC is a strategic alliance among leading law firms throughout the world who handle substantial business in the Asia-Pacific region.

Author

Tim Stephens

Partner - Dispute Resolution

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