MONETARY JUDGMENTS
THE ENFORCEMENT OF CHINESE MONETARY JUDGMENTS BY AUSTRALIAN COURTS MARK GIDDINGS, SENIOR ASSOCIATE, AND LIBBEE COULTER, CLERK, LIPMAN KARAS
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n a world where business is conducted internationally and law firms operate within a global market, the resolution of commercial disputes often requires steps in more than one jurisdiction. One facet of this is the recognition and enforcement of foreign judgments by Australian courts. In a number of recent decisions, Australian courts have considered the requisite approach to enforcing judgments obtained in the People’s Republic of China (China). As well as stating the applicable legal principles, these decisions have considered specific issues that arise with respect to Chinese laws and procedures.
COMMON LAW REQUIREMENTS AND EXCEPTIONS TO ENFORCEMENT Foreign judgments can be enforced in Australia either at common law or pursuant to the statutory regime in the Foreign Judgments Act 1991 (Cth). The statutory regime applies where a country is designated a “jurisdiction of substantial reciprocity” under Schedule 1 of the Foreign Judgments Regulations 1992 (Cth). As China has not been designated a jurisdiction of substantial reciprocity, a plaintiff seeking to have a Chinese judgment enforced in Australia must do so via the common law procedure. To have a foreign judgment enforced at common law, the following matters must be established; • the foreign court had jurisdictional competence; • the judgment was final; • the parties to the judgment of the foreign court and to the enforcement
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proceedings are identical; and • the judgment was for a fixed sum.1 The party seeking to enforce the judgment bears the burden of establishing these matters, although in some circumstances particular matters may be presumed if they are not contested.2 Notwithstanding the satisfaction of the above matters, an Australian court may still refuse to enforce a foreign judgment in certain circumstances, such as where: • granting enforcement would be contrary to Australian public policy, including judgments obtained by improper means such as duress or undue influence; • the foreign judgment has already been wholly satisfied; • the foreign judgment was obtained by fraud (including equitable fraud) of the parties or the foreign court; • the foreign judgment is penal or a judgment for a revenue debt; or • enforcement would amount to a denial of natural justice or an abuse of process.3 A plaintiff seeking to enforce a foreign judgment can rely on the judgment as creating an estoppel precluding the defendant from raising any defence that was or could have been raised in the foreign proceedings.4 LIU V MA [2017] VSC 810 In Liu the plaintiff obtained judgment in China for money due for repayment of a loan. In considering whether to recognise the judgment, the Victorian Supreme Court observed that the most important requirement is that the foreign court had jurisdiction. The term “jurisdiction”
does not refer to the jurisdiction of the foreign court under its own rules, but “international jurisdiction”, which means a competence that is recognised under Australian conflict of law rules. Relevant circumstances establishing such a competence include where the defendant is a subject of the foreign country, was resident in the foreign country when the action began, or has submitted to the forum by taking steps there in the character of a plaintiff, by voluntarily appearing or through a jurisdiction clause in a contract. Where the basis of jurisdiction is the defendant’s connection to the foreign country, the connection needs to be sufficiently ‘active’. The Victorian Supreme Court found that the defendants were subjects with a sufficiently active connection because they were natural born Chinese citizens holding Chinese passports, had been married in China and had substantial financial affairs or activities there. Accordingly, the court granted the application and recognised the judgment. SUZHOU HAISHUN INVESTMENT MANAGEMENT CO LTD V ZHAO [2019] VSC 110 In Suzhou Haishun the plaintiff obtained judgment for the recovery of money lent to the defendant under three separate loan agreements. The plaintiff applied to have the judgment enforced by the Victorian Supreme Court. Cameron J held that jurisdictional competence was established by clauses in the loan agreements submitting the parties to the jurisdiction of the Suzhou Court in China. However, the defendant argued that the judgment
