Enforcement of judgments in Australia: overview

A Q&A guide to enforcement of judgments law in Australia.

The Q&A gives a structured overview of key practical issues concerning enforcement of judgments in this jurisdiction, including definitions and preliminary proceedings; applicable regulations/conventions; pending appeals; enforceable judgments; conditions for recognition and enforcement; proper service; public policy; provisional remedies; interest; actual enforcement; enforcing foreign judgments; enforcement proceedings; formalities; and any reform proposals.

This Q&A is part of the Enforcement of Judgments and Arbitral Awards in Commercial Matters Global Guide.

Derek Luxford, Hicksons Lawyers
Contents

Enforcement of judgments: domestic and foreign

Definitions and preliminary proceedings

1. What is the definition of judgment in your jurisdiction for the purpose of enforcement proceedings?

Domestic

Australia is a federation consisting of the Commonwealth (the federal government based in Canberra), six states and two federal territories (the Australian Capital Territory and the Northern Territory). In this chapter, the various states and territories are collectively described as the States. Each state has similar, although not identical, legislation and regulations governing the procedures for the registration and enforcement of judgments from other Australian courts that is to say from courts in the other States. This chapter focuses on the law and practice of the state of New South Wales, which is the most populous and litigious state in which Australia's largest city Sydney is situated. The relevant legislation for the enforcement of judgments in New South Wales is the:

  • Civil Procedure Act 2005 (CPA).

  • Uniform Civil Procedural Rules 2005 (UCPR).

Sitting above the State legislation is the Commonwealth Service and Execution of Process Act 1992 (SEPA) that has an overarching effect and prevails over any State legislation to the extent of any inconsistency between Commonwealth and State legislation. SEPA is the relevant legislation for the registration and enforcement of domestic judgments in Australia.

"Judgment" in relation to commercial matters includes (section 3, SEPA):

  • A judgment, decree or order given, entered or made by a court in a civil proceeding under which:

    • a sum of money is made payable; or

    • a person must do or not to do an act or thing (other than payment of money).

  • The judgment is not an order made under the proceeds of crime legislation (other than a pecuniary penalty order).

  • A sum of money is made payable as a debt due to the Crown in right of the Commonwealth or a State.

  • An order for a person to do or not to do an act or thing (other than the payment of money).

  • An order that:

    • is made by a tribunal in connection with the performance of an adjudicator function; and

    • is enforceable without an order of a court (whether or not the order made by the tribunal must be registered or filed in a court in order to be enforceable).

  • An order, decree or judgment registered in a court under the Commonwealth Foreign Judgments Act 1991 (FJA) or the Commonwealth Trans-Tasman Proceedings Act 2010 (TTPA). Whether or not the judgment, decree or order is final, this does not include a judgment, decree or order of a court of a foreign country that has been registered in a court in Australia other than under the FJA or the TTPA.

  • An order, however described, imposing a fine.

Section 3 of SEPA has additional definitions of "judgment", which are unlikely to apply in commercial matters, for example, in relation to:

  • Criminal proceedings.

  • Guardianship.

  • Care control or welfare of a child.

  • The management of property of a person with a disability.

  • The granting of probate for the administration of the estate of a deceased person.

In section 3 of the CPA, which applies to the UCPR, judgment is defined to "include any order for the payment of money, including any order for the payment of costs".

International

Under the FJA, in relation to commercial matters, "judgment" is defined as meaning a final or interlocutory judgment or order given or made by a court in civil proceedings. The FJA and its regulations list the various courts in various countries to which the FJA applies.

The FJA includes in the definition of "judgment" a foreign arbitral award that has become enforceable in the foreign country in the same way as a judgment, other than awards given by the International Centre for the Settlement of International Disputes between States and Nationals of other States.

The FJA is the only statute under which foreign judgments can be enforced subject to one exception. This exception is under the Trans-Tasman Court Proceedings and Regulatory Enforcement (Agreement) made in 2008. The agreement is given force by the TTPA. The TTPA is similar to the FJA but it makes it easier to enforce a New Zealand judgment in Australia than under the FJA and applies to some non-monetary judgments. Indeed, a New Zealand judgment in effect will have the same status for enforcement proceedings in Australia as a domestic Australian judgment.

 
2. Is it required that a judgment is final and has conclusive effect, or are decisions in preliminary/provisional/interim proceedings recognised and enforceable?

Domestic judgments

Final decisions. For the registration of interstate judgments, it is stated that "upon lodgement of a sealed copy of a judgment…the court in a State other than the place of rendition must register the judgment in the court" (section 105(1), Commonwealth Service and Execution of Process Act 1992 (SEPA)).

As the definition of "judgment" under section 3 of SEPA contains the words "whether or not the judgment, decree or order is final" in it, a judgment obtained in a state other than New South Wales (as the enforcing court) that is not final can still be registered in New South Wales. However, the New South Wales enforcement judgment loses all enforceability if the original State court (court of rendition) loses power to enforce the original judgment (section 105(5), SEPA), for example, if there has been a successful appeal in the original court.

For proceedings commenced in New South Wales (that is where a New South Wales court was the "court of rendition") the Civil Procedure Act 2005 (CPA) and the Uniform Civil Procedural Rules 2005 (UCPR) are silent about enforcement of judgments that are not "final", but logically judgments that are not "final" can be enforced in the courts of another State.

Foreign judgments

Final decisions. The Commonwealth Foreign Judgments Act 1991 (FJA) allows a party that has obtained a judgment of a superior court in a foreign country to which the FJA applies to file an application for the registration of the foreign judgment as the first step in having that judgment enforced. The foreign judgment must be final and conclusive, even if it has been given in interlocutory proceedings. A default judgment is final and conclusive even though it can be set aside on the defendant showing cause. A judgment is taken to be final and conclusive even though an appeal is pending in the foreign country or the time for appealing in that country has not yet expired (section 5(5), FJA).

As the FJA only applies to enforcement of foreign monetary judgments that are final and conclusive and only applies to judgments of "superior" courts listed in the Foreign Judgment Regulations 1992 (FJR) made under the FJA and even then only in respect of a limited number of foreign countries, it is sometimes necessary to use the common law to enforce foreign judgments. As the FJA is largely based on the common law, this chapter focuses on the enforcement under the FJA, unless there is a material difference under the common law method of enforcement. A judgment that can be varied by the court that made it is not final under common law rules. For a judgment to be final and conclusive it must be one decided on the merits of the case. The FJR set out a list of "superior" courts in other countries that constitute superior courts for the purposes of enforcement proceedings under the FJA. Amendments are made to the FJR from time to time to add or subtract appropriate foreign superior courts. The FJA also applies to certain "inferior" courts (Regulation 5, FJR). Generally, the applicable superior and inferior courts are relatively limited and broadly speaking encompass courts in countries that offer reciprocal treatment of Australian judgments. Included in this are courts in many countries of the Commonwealth of Nations (as opposed to the Australian Commonwealth), some European countries as well as some others with which Australia has close ties (including Japan, Taiwan and South Korea). Significantly, the FJA does not apply to judgments of courts of the US for historical reasons.

It is possible to enforce foreign judgments other than through the FJA by using the common law. Essentially, this involves the parties seeking to enforce the foreign judgment commencing proceedings in Australia as the plaintiff and suing on the judgment obtained in the foreign country. The same general criteria apply with common law enforcements as apply generally under the FJA, namely the judgment must:

  • Be final and conclusive.

  • Be from a court of record.

  • Involve the monetary judgment.

  • Not be capable of being set aside on grounds such as the absence of notice of the proceeding to the defendant or where its enforcement in Australia would be against Australia's public policy.

Many of those grounds have been covered (albeit in a slightly different language) under the FJA. However, enforcing a foreign judgment under the common law is a much slower and more expensive procedure than under the FJA with its simplified registration procedures.

One type of foreign judgment that can be enforced (other than under the FJA and where resort to the common law (is not necessarily available) is a judgment in rem against a ship. Although the FJA applies to in rem judgments (section 7(3) (b), FJA) a foreign judgment in rem against a ship is enforceable (section 4(2) (c), Commonwealth Admiralty Act 1988).

Preliminary/provisional proceedings. These are not enforceable as they are not "final" within the meaning of the FJA or the common law.

Applicable regulations/conventions

3. What conventions and regulations is your jurisdiction a contracting party to?

The Commonwealth Foreign Judgments Act 1991 (FJA) and the Foreign Judgment Regulations 1992 (FJR) are the relevant legislation and regulating instruments. There are no applicable conventions.

Australia is not a party to any international convention or regulatory system relevant to the enforcement of international or domestic judgments in commercial matters. There are a small number of treaties to which Australia is a party involving taxation enforcement, but these fall outside the ambit of this chapter. The enforcement of domestic and international or foreign judgments is governed solely by certain legislation and procedural rules (see Questions 1 and 2).

 
4. Will enforcement be automatically refused if service of the proceedings did not conform to any applicable requirements of international treaties/regulations?

This is inapplicable since Australia is not a party to any international treaties or regulations for the enforcement of foreign judgments.

Pending appeals

5. What is the effect of pending appeal proceedings where the decision is granted?

Domestic judgments

Except for a small number of exceptions that do not apply to commercial matters, an application for leave to appeal or an appeal as a right does not operate as a stay of the judgment under appeal, or invalidate any intermediate act or proceedings. However, the affected party (invariably the unsuccessful party in the court below) can usually seek a stay of execution from the court.

In New South Wales, the Supreme Court has inherent power to stay execution of a judgment or order in any situation where the requirement of justice demands it. The other NSW courts also can stay execution where appropriate. "Subject to the rules of court, the court may at any time and from time to time by order, stay any proceedings before it, either permanently or until a specified day" (section 67, Civil Procedure Act 2005 (CPA)). In practice, stays or partial stays are frequently granted pending the outcome of an appeal.

An applicant for the stay of execution must demonstrate an appropriate case to warrant favourable exercise of the court's discretion. The relevant principles in the exercise of that discretion include the following:

  • The onus is on the applicant to demonstrate a proper basis for a stay that is fair to all parties.

  • The mere filing of an appeal does not demonstrate an appropriate case or discharge the onus.

  • The court has a discretion involving the stay and considers the balance of convenience and the competing rights of the parties.

  • Where there is a risk that if a stay is granted the assets of the applicant will be disposed of, the court can refuse a stay.

  • Where there is a risk that the appeal would prove abortive if the appellant succeeds and a stay is not granted, courts normally exercise the discretion in favour of granting a stay.

  • The court will not generally speculate on the appellant's prospects of success, but can make some preliminary assessment about whether the appellant has an arguable case in order to exclude an appeal lodged without any real prospects of success simply to gain time.

  • As a condition of a stay the court can require payment of the whole or part of the judgment sum or the provision of security.

  • Where the court gives summary judgment to a plaintiff against the party if that party has made a cross-claim against the plaintiff, the court can stay enforcement of the judgment until determination of the cross-claim.

  • Where a court makes an order allowing for payment of a judgment debt within a specified time by installments, the judgment is stayed while the order is in force (section 107(2), CPA). Where an application for an installment order is made, the judgment is stayed until the application is determined or, if it is refused, any objection to that refusal is determined (rule 37.5, Uniform Civil Procedural Rules 2005 (UCPR)).

Foreign judgments

If there is an appeal pending in the foreign jurisdiction where the judgment was granted, the appellant can apply to the court hearing the application for registration of the foreign judgment under the Commonwealth Foreign Judgments Act 1991 (FJA) for a temporary stay of enforcement or execution of the judgment on condition, if necessary, that the appeal is pursued expeditiously (section 8, FJA). The court hearing the registration application and the application for a stay exercises its discretion on whether or not to grant the stay. Generally, in exercising that discretion, the court applies similar principles to those it would apply in exercising its discretion whether to stay an appeal from a domestic judgment.

Enforceable judgments

6. What types of judgments in commercial matters are enforceable?

Domestic judgments

For money judgments (including default judgments), a judgment debt can be enforced by any one or more of the following (section 106(1), Civil Procedure Act 2005 (CPA)):

  • A writ for the levy of property (including real property).

  • A garnishee order or a charging order.

  • A charging order (relevant to the judgments of the New South Wales Supreme Court or District Court only).

  • A judgment for possession of land (section 104, CPA).

  • A judgment for the delivery of goods (section 105, CPA).

With equitable orders such as injunctions and orders for specific performance, a party that fails to comply with an order is probably guilty of contempt of court with an ultimate consequence of imprisonment. It is not necessary to prove a specific intention to disobey the court's order for there to be contempt.

A party must be given notice of a judgment before it can be enforced.

Money judgments. The enforcement of domestic judgments is governed by Part 6 of the Commonwealth Service and Execution of Process Act 1992 (SEPA). For civil proceedings judgment is very broadly defined as any "judgment, decree or order" given by a court in civil proceedings requiring a person to pay money or do, or not do, a thing or act (section 3 (1), SEPA). Therefore, a money judgment is enforceable.

Judgments ordering or prohibiting the doing of acts/injunctions. These judgments are enforceable. These include injunctions and orders for specific performance.

Declaratory judgments. These judgments are enforceable.

Default judgments. These judgments are enforceable. Once registered, they are no longer default judgments.

Judgments made without notice (ex parte). These judgments are enforceable but only after giving notice of the judgment.

Foreign decisions granting provisional measures. By definition these are not domestic judgments.

Foreign enforcement orders/(pre-judgment) attachment orders/awards. By definition these are not domestic judgments.

Other judgments. Not applicable.

Foreign judgments

Money judgments. To be enforced in Australia, a foreign judgment must be for a sum of money (section 5(4), Commonwealth Foreign Judgments Act 1991 (FJA)). An "enforceable money judgment" (its technical term in the FJA), is defined as meaning a money judgment other than in relation to taxes or fines (section 3, FJA). There are limited exceptions where money judgments involving taxes or fines imposed in New Zealand and Papa New Guinea can be enforced in Australia. Generally, the enforcement of a foreign tax judgment is considered contrary to public policy under the common law, but as a consequence of the Closer Economic Relationship Treaty between Australia and New Zealand, the enforcement of New Zealand tax judgments is exempt from the defence of public policy. One effect of the Commonwealth Trans-Tasman Proceedings Act 2010 (TTPA) is to expand the scope of non-money judgments from New Zealand courts that can be enforced in Australia (see Question 1).

Judgments ordering or prohibiting the doing of acts/injunctions. Generally, foreign judgments ordering or prohibiting acts are not enforceable within Australia with the exception of the TTPA in relation to New Zealand judgments.

Declaratory judgments. Foreign declaratory judgments are unenforceable unless they are declaratory of a money judgment and are final and conclusive and from a superior court.

Default judgments. Default judgments of foreign courts are enforceable as long as they otherwise comply with the provisions of the FJA such as being (section 5(4)(a), FJA):

  • Enforceable money judgments.

  • From a superior court that are final and conclusive.

Judgments made without notice (ex parte). Although the FJA does not specifically refer to ex parte judgments, on the basis that these judgments are generally interlocutory, there is no reason why they would not be enforceable providing they can be described as an enforceable monetary judgment and otherwise comply with the provisions of the FJA.

Foreign decisions granting provisional measures. Generally, foreign judgments granting provisional or interim measures are not enforceable under the FJA as they are not final and conclusive unless they constitute enforceable money judgments.

Foreign enforcement orders/(pre-judgment) attachment orders. Generally, a pre-judgment attachment does not constitute a "judgment" for the purposes of the FJA and therefore is not enforceable. However, if the judgment can be described as an enforceable money judgment then in theory it must be capable of being enforced under the FJA. However, arguably by definition, a pre-judgment attachment is not final and conclusive by its very nature and so is not enforceable.

Other judgments. If the FJA does not apply to a foreign judgment (for example if it is not from a superior court in a country where the FJA and the FJR apply) then it will be open to the judgment creditor to apply for enforcement of the judgment under common law by suing in court on the foreign judgment (see Questions 1 and 2). This is a more onerous, time consuming and expensive way of enforcing a foreign judgment because of the evidentiary burden, as the relatively simple process of recognition of the foreign judgment by registration is not available as it is under the FJA. An in rem judgment can be enforced by arresting a ship to which the judgment applies under the Commonwealth Admiralty Act 1988 (see Question 2).

 
7. Are any class of judgments excluded from recognition and enforcement?

Domestic judgments

No classes of domestic judgments are specifically excluded from recognition and enforcement. The historical and jurisprudential basis for this state of affairs is that all courts give full faith and credit to the judgments of other Australian courts as a matter of common law and by inference under section 118 of the Commonwealth Constitution.

Foreign judgments

Under the Commonwealth Foreign Judgments Act 1991 (FJA), the only foreign judgments that are not capable of being registered and therefore enforceable are those that have been wholly satisfied at the date of the application for that registration or could not have been enforced in the country of the original court (section 6(6), FJA).

A foreign judgment may not be enforceable in the country of the original court if, for example, the relevant limitation period for its enforcement in the jurisdiction of the original court has expired (Society of Lloyd’s v Marich [2004] 139 FCR 560). However, the registration of a foreign judgment can be set aside (section 7(2) (a), FJA) in the following circumstances:

  • The judgment is not, or has ceased to be, a judgment to which the FJA applies (for example, the judgment was not an enforceable money judgment).

  • The judgment was registered for an amount greater than was payable under it at the date of registration.

  • The judgment was registered in contravention of the FJA.

  • The courts of the country of the original court had no jurisdiction in the circumstances of the case.

  • A judgment debtor did not receive notice of proceedings in sufficient time to enable the judgment debtor to defend the proceedings and did not appear in the original proceedings.

  • The judgment was obtained by fraud.

  • The judgment was reversed on appeal.

  • The judgment has been discharged or wholly satisfied.

  • Apart from New Zealand judgments, the judgment is for a payment of a tax and would be contrary to Australian public policy.

Conditions for recognition and enforcement

8. What are the conditions to enforce and recognise a judgment?

Domestic judgments

An application to enforce a judgment can be made by filing a notice of motion subject to certain conditions to this (rule 39.2, Uniform Civil Procedural Rules 2005 (UCPR)). If a judgment creditor wants to apply for possession of land that belongs to a judgment debtor, the leave of the court is required. There is a full list of when leave is required (for example, if a judgment creditor's entitlement under the judgment is subject to fulfilment of a condition) (rule 39.1(1), UCPR). A judgment creditor needs the court's leave if it wants to enforce a judgment that was made more than 12 years previously (section 134, Civil Procedure Act 2005 (CPA)).

In New South Wales, a writ of execution has effect for 12 months but can be renewed by the court.

Unlike with foreign judgments, there are no legislative preconditions for the registration and enforcement of domestic judgments and if one Australian court refused to enforce a registered judgment of another Australian court, this breaches section 109 of the Commonwealth Constitution.

Court/arbitral court had jurisdiction. If a court did not have jurisdiction to hear the dispute (and presumably the court had assumed jurisdiction), an affected party can appeal the judgment on the grounds that the court did not have jurisdiction. Such an appeal must be brought in the original court. For the situation during the interim, see Question 5 on pending appeals. Lack of jurisdiction is not a ground for denying enforcement of a domestic judgment.

Defendant had proper notice of the proceedings. A defendant that did not have proper notice of the proceedings can file an application to set aside the judgment, which, presumably was a default judgment. The fact that orders made by the court as part of the judgment have taken effect does not extinguish the court's powers to set aside the judgment. For an application to set aside a default judgment to be successful, there must be a genuine ground of defence. The judgment can also be set aside by consent if the parties agree that proper notice of the proceedings had not been given. Lack of notice is not a ground for opposing enforcement of a domestic judgment.

No incompatibility with public policy. Not applicable to domestic court judgments.

Reciprocity. Reciprocity is not a requirement for enforcing a domestic court judgment nor is the lack of it a reason for setting aside the judgment. However, this is a non-issue given the full faith and credit each court gives to judgments of other courts in different States.

No conflicting domestic or foreign judgment exists. The fact that there is a conflicting domestic judgment is not a basis for setting aside the registration or refusing to enforce a judgment. As Australia is a federation, it is not unusual for there to sometimes be conflicting judgments between courts of the different States. The existence of a conflicting foreign judgment is irrelevant since the courts are not bound by any foreign judgments.

Judgment/award is final as to its effects. The fact that a judgment is not final is not a basis for setting aside the registration or refusing to enforce the judgment (see Question 2).

Limitation period. If a party commences proceedings outside of the limitation period and the court provides judgment in favour of that party, an affected party is entitled to appeal that judgment presuming that it is not out of time to do so. The affected party cannot simply apply to the same court to have the judgment set aside, or apply to the enforcing court, it must appeal to a higher court (see Bailey v Marinoff [1971] 125 CLR 529).

Other conditions. An application can be made by an affected party to set aside a judgment if the judgment was:

  • Entered or made "irregularly, illegally or against good faith".

  • Obtained by fraud.

However, such an application involves an appeal from the original judgment, not an application to the enforcing court.

Foreign judgments

Court had jurisdiction. There is an exhaustive list of circumstances where registration of the foreign judgment must be set aside (section 7(2)(a), Commonwealth Foreign Judgments Act 1991 (FJA)).

The original court must have had jurisdiction in accordance with its own rules. The FJA proceeds on the basis that the foreign court had jurisdiction if any of a lengthy list of criteria is satisfied including the following:

  • The judgment debtor voluntarily submitted to the jurisdiction of the foreign court.

  • The judgment debtor was the plaintiff in, or counter-claimed in, the proceedings in the foreign court.

  • The judgment debtor was a defendant in the foreign court and had agreed in respect of the subject matter of the proceedings (before the proceedings commenced), to submit to the jurisdiction of the foreign court.

  • If the judgment debtor was a defendant in the foreign proceedings and resided in the foreign jurisdiction or had its principal place of business there.

If the judgment debtor can demonstrate that the court of the foreign country did not have jurisdiction then the court must set aside the registration of the foreign judgment. The foreign judgment must also be set aside if the:

  • Court is satisfied that the judgment is registered for an amount greater than the amount payable under it at the date of the registration.

  • Judgment was registered in contravention of the FJA, for example, that the defendant had never been served with the overseas proceedings.

  • Judgment was obtained by fraud.

  • Overseas judgment has been reversed on appeal or otherwise set aside by the courts of the foreign country.

  • Foreign judgment has been discharged or satisfied and certain other limited grounds.

In the above circumstances the court has no choice and if it is satisfied that any of these criteria apply then the registration must be set aside. In practice, it is up to the judgment debtor to bring evidence of these matters to the Australian court.

Defendant had proper notice of the proceedings. If the judgment debtor can demonstrate that it was not served with proper notice of the foreign court proceedings then registration on the foreign judgment can be set aside. The burden of proof of lack of service lies with the judgment debtor.

No incompatibility with public policy. For a foreign judgment to be enforced under the FJA, it must not be incompatible with Australian public policy. This is consistent with the position under common law where a court will not enforce a foreign judgment if it is incompatible with Australian public policy in the way that the foreign judgment is immoral or offensive to local policy. This extends to penalties and tax debts except in New Zealand judgments.

Reciprocity. Reciprocity is not a ground under the FJA or common law for enforcing a foreign judgment, nor is the lack of it a reason for setting aside or not enforcing the foreign judgment. However, the legislative basis for the FJA is reciprocity in the recognition and enforcement of judgments between Australia and certain prescribed other countries (see Question 2).

No conflicting domestic or foreign judgment exists. The existence of a conflicting domestic or foreign judgment is no basis for setting aside the registration or refusing to enforce a foreign judgment under the FJA or the common law.

Judgment is final as to its effects. It is a pre-condition to recognition and enforcement of foreign judgments that the relevant judgment is final and conclusive. This does not mean that the foreign judgment is not subject to appeal, but if an appeal is on foot in the foreign country the courts must stay the enforcement proceedings.

Limitation period. There is a six year limitation period for commencing registration and enforcement proceedings for a foreign judgment from the date of the giving of that judgment, although the court can extend the limitation period in its discretion on appropriate grounds (section 6, FJA).

 
9. What are the grounds for refusing recognition and enforcement?

Domestic judgments

Unlike the Commonwealth Foreign Judgments Act 1991 (FJA), in relation to enforcement of foreign judgments, the Commonwealth Service and Execution of Process Act 1992 (SEPA) does not lay down any jurisdictional preconditions that must be satisfied before the judgment can be registered (see Question 8). Therefore, a judgment debtor cannot complain:

  • Of a lack of jurisdiction in the international sense.

  • That the judgment is not final.

  • That the judgment offends against public policy or the jurisdiction of registration.

  • That the debt represents a revenue debt.

It is also not possible to raise an issue of fraud that has, or could have, been raised in the original proceedings. The only precondition for an enforcement is that the registered judgment must, at the time proceedings for enforcement are taken, be capable of being enforced in the court of rendition or in another court in the place of rendition (section 105(a), SEPA).

The only recourse for a judgment debtor that wishes to challenge the enforcement of a registered judgment originating in another State is to apply for a stay of proceedings (section 106(1), SEPA). A stay will only be granted until the specified time or for a specified period on condition that the applicant for the stay makes an application for relief in respect of the judgment by way of appeal, or for the setting aside or variation of the judgment, to a court that has jurisdiction to entertain these applications under the law or the place of rendition and to pursue that relief expeditiously.

The judgment debtor can apply to have the judgment arising from registration set aside or varied if the judgment of the rendering jurisdiction is set aside or varied.

Foreign judgments

Judicial proceedings (with some limited exceptions not relevant to this chapter) are adversarial. This means that the court itself does not have to consider all possibilities and instead must determine the issues in light of the pleadings and evidence raised by the parties. As far as the enforcement of foreign judgments is concerned, the plaintiff (the judgment creditor) must prove what is required under the law for the judgment to be enforced and the defendant (the judgment debtor) must prove what is necessary to be proved if it wants the foreign judgment not to be recognised, enforced or stayed. In some circumstances, the court has a discretion on what to do, and so is not necessarily bound to enforce or set aside or stay a judgment if the relevant criteria is made out. Otherwise the court must either enforce a foreign judgment or set it aside or stay it.

When proceedings are brought for enforcement of a foreign judgment, the court must satisfy itself that the applicant has provided evidence of the criteria giving rise to the entitlement to have the judgment enforced. In practice, the court can ask the applicant's lawyers some questions about the sufficiency or otherwise of the applicant's documentary evidence in support of enforcement but the court does not set about making its own enquiries. In most cases, enforcement applications are decided in chambers (that is to say without oral argument) on the written submissions of the applicant. If the court is satisfied on the basis of the evidence presented to it that it accords with the provisions of the relevant legislation (the FJA) it must either:

  • Recognise or enforce the judgment.

  • Set it aside or stay it.

The burden of compliance with the enforcement laws rests with the parties. The role of the court is to ensure that the parties comply with the provisions of the FJA not to initiate its own enquiries.

It is sometimes possible for recognition of a foreign judgment to be refused if the judgment debtor can demonstrate that the foreign court did not have jurisdiction. However, the courts are reluctant to entertain arguments that the foreign court lacked jurisdiction and tend to proceed on the basis that the foreign court had jurisdiction in personam or in rem (section 7, FJA). The FJA deems there to have been jurisdiction provided certain criteria are met (see Question 8). For judgments given in personam where the subject matter was movable property, or in an action in rem where the subject matter was movable property (for example, a ship), the foreign court is deemed to have had jurisdiction if the property in question was situated within its jurisdiction at the time of the proceedings in that court (section 3(b), FJA). If the relevant foreign judgment does not constitute either an action in personam or in rem, then the foreign court is deemed to have had jurisdiction if the jurisdiction of the foreign court is recognised by the law of that country.

Proper service

10. Does the enforcing court review service of the proceedings? Are there any conditions regarding service of the proceedings that must have been satisfied/complied with?

Domestic judgments

Due to the operation of the full faith and credit provisions (see Question 8), when the courts are asked to enforce domestic judgments they begin on the basis that there is nothing irregular about the judgment from the court that gave judgment and, therefore, they do not enquire into whether any or all of the procedural requirements of that court were met. Therefore, they will not automatically review whether the proceedings were properly served. Practically, as far as service is concerned, it will invariably be the case in all State courts that proof of service of the proceedings on the defendant must be established in the original court so that the enforcing court proceeds on the basis that that was done.

Foreign judgments

The enforcing court does not automatically review the issue of whether the original foreign proceedings were properly served on the defendant. It is up to the applicant to demonstrate there was appropriate service within the meaning of the Commonwealth Foreign Judgments Act 1991 (FJA). If the defendant challenges service in the foreign court, the Australian court determines the issue according to the concepts of service in the foreign court. The relevant foreign law includes any international treaties or conventions incorporated in the law of the foreign country and which are binding on the foreign court.

Public policy

11. Does public policy include matters of substantive law?

Domestic judgments

This is inapplicable because of the full faith and credit provisions of the Commonwealth Constitution and Commonwealth Service and Execution of Process Act 1992 (see Question 8 and 10).

Foreign judgments

There is only limited scope to challenge enforcement of a foreign judgment for alleged breach of public policy (see Question 8). The courts are not inclined to enforce foreign judgments relating to foreign taxation, fines or penal judgments, and they will not enforce a foreign judgment that is immoral or offensive to public policy. Registration of a foreign judgment can be set aside if it was obtained by fraud (section7 (2) (a), Commonwealth Foreign Judgments Act 1991). The burden of establishing that the foreign judgment was obtained by fraud is very high involving evidence of intentional and deliberate misleading of the foreign court and that evidence of the alleged fraud cannot have been available to the party advancing the argument at the time the foreign judgment was obtained.

 
12. Can the application of a law that is different to that applicable under the choice of law rules of the enforcing court be attacked on the basis of public policy?

Domestic judgments

This is not possible. However, this question does not involve the enforcement of a domestic judgment.

Foreign judgments

This is not possible. However, this question does not involve the enforcement of a foreign judgment.

 
13. In what circumstances and against which judgments has the principle of public policy generally been applied?

Domestic judgments

Not applicable.

Foreign judgments

This is only applicable in very limited circumstances (see Questions 8 and 11).

Provisional remedies

14. Is it possible to apply for provisional measures from the enforcing court pending the enforcement proceedings?

Domestic judgments

It is possible to apply for provisional orders such as a freezing order preserving assets of the judgment debtor, but the courts are reluctant to make these orders pending enforcement proceedings unless there is clear evidence that there is a real risk that the judgment debtor is dissipating or intends to dissipate its assets. A freezing order is normally obtained ex parte without notice to the judgment debtor. An applicant for such an order must provide an undertaking as to damages.

Foreign judgments

The enforcing courts (either the Federal Court of Australia (FCA) that has jurisdiction throughout Australia or the State Supreme Courts) under their various procedural rules can make freezing orders for security pending enforcement proceedings in relation to assets in both Australia and abroad. These courts exercise their discretion according to the usual principles of there being evidence of a real risk of dissipation of the defendant's assets in the same way that applies to granting freezing orders for security in respect of the registration and enforcement of domestic judgments.

The Australian courts will grant a freezing order as security in support of a prospective judgment obtained in a foreign court provided that judgment, once obtained, is capable of being recognised in Australia under the Commonwealth Foreign Judgments Act 1991 (FJA). The Australian High Court recently upheld such an order made by the West Australian Supreme Court relating to shares in an Australian company in support of proceedings in Singapore, a country whose judgments are recognised under the FJA.

Interest

15. Is the judgment creditor entitled to interest? If so, on what basis is it calculated?

Domestic judgments

In New South Wales, the court is specifically allowed to order interest to be paid on all unpaid amounts of the judgment debt (section 101, Civil Procedure Act 2005 (CPA)). Interest is calculated by way of simple interest at a rate prescribed under the CPA based on the Australian Reserve Bank's published cash rate. The current "prescribed rate" that applies from 1 July 2015 to 31 December 2015 is 8%.

Interest on an amount of a judgment that is registered from another State is payable at the same rate or rates and in respect of the same period or periods as would be applicable in the court of rendition (section 108, Commonwealth Service and Execution of Process Act 1992).

Foreign judgments

Similar provisions apply for the payment of interest on foreign judgments as apply to domestic judgments under the relevant rules of the Federal Court of Australia (FCA) and the Supreme Court of the enforcing State.

Actual enforcement

16. What is the enforcement procedure when a declaration of enforceability is granted?

Domestic judgments

A judgment debt can be enforced by means of any one or more of the following (section 106(1), Civil Procedure Act 2005 (CPA)):

  • A writ for the levy of property (including real property).

  • A garnishee order.

  • A charging order.

  • A writ for the possession of land.

  • An order for the delivery up of goods.

If the judgment debtor is a company, a judgment creditor can serve a statutory demand under the Commonwealth Corporations Act to the judgment debtor and if there is no application to set aside the statutory demand within 21 days of service, the judgment creditor can file winding up proceedings against the judgment creditor.

For individual judgment debtors, a judgment creditor can apply for a bankruptcy notice to be served on the judgment debtor and if there is no application to set aside the bankruptcy notice within 21 days after service, the judgment creditor can proceed to file a creditor's petition for a sequestration (bankruptcy) order against the individual judgment debtor.

Foreign judgments

Under the Commonwealth Foreign Judgments Act 1991 (FJA), once a foreign judgment has been recognised it can be enforced as a judgment of an Australian court that in reality will be a judgment of the Federal Court of Australia (FCA) or a State Supreme Court. The same means of enforcement apply to foreign judgments as apply to domestic judgments under the rules and procedures of these courts.

 
17. Can defendants oppose the enforcement procedure, and if so, on what grounds/defences?

Domestic judgments

There are limited grounds for opposing enforcement procedures when a judgment has been registered under Commonwealth Service and Execution of Process Act 1992 (SEPA).

The judgment debtor may be able to prove that it was not served with the various enforcement proceedings, such as a winding up petition or a bankruptcy petition. There are some circumstances where the court cannot grant the judgment creditor's request for an enforcement procedure:

  • The court can refuse to make a garnishee or charging order if it is of the opinion that such an order is inappropriate. The criteria that the court considers include the amount recoverable under the judgment debt and the smallest of the debt, wage or salary to be attached.

  • The aggregate value below which tools of trade cannot be seized and sold by the Sheriff (in relation to a writ for levy of property) in excess of a judgment AU$2,000.

  • A judgment debtor can also apply to the court for an installment order with respect to the amount owing under a judgment debt (rule 37, Uniform Civil Procedural Rules 2005). The execution of a judgment debt is stayed pending the determination of an application to pay by installment.

Foreign judgments

Since a recognised foreign judgment under the Commonwealth Foreign Judgments Act 1991 has the same effect as a domestic judgment, the foreign judgment debtor has the same limited grounds for opposing enforcement procedures.

 

Enforcing foreign judgments

Jurisdiction

18. Is the enforcing court entitled to consider the grounds on which the foreign court assumed jurisdiction (and if so, on what jurisdictional grounds can enforcement be refused)?

Only to a very limited extent (see Question 8).

 
19. If the foreign court assumed jurisdiction on the basis of an exorbitant ground of jurisdiction, can the enforcing court review the judgment on that ground?

Exorbitant ground of jurisdiction

The concept of exorbitant jurisdiction is not a concept relevant to the criteria in the Commonwealth Foreign Judgments Act 1991 (FJA).

There are only very limited grounds for a court to review the judgment on the basis of alleged exorbitant grounds of jurisdiction. An enforcing court will not accept that the foreign court had jurisdiction in the following circumstances:

  • If the subject matter of the proceedings was movable property situated outside the country of the original court, except in the case of voluntary submission to the jurisdiction of that court.

  • For actions that do not fall within the definition of either an action in personam or in rem.

  • If the bringing of the proceedings in the foreign court was contrary to an agreement between the parties that the dispute was to be settled elsewhere (for example, a judgment in foreign proceedings commenced in the face of foreign exclusive jurisdiction or arbitration agreement).

  • For the proceedings in the foreign court, the defendant did not participate.

Foreign judgments obtained in these circumstances can be set aside because the foreign court will not be recognised as having jurisdiction within the meaning of the FJA. This will also be the case if the judgment debtor is entitled to sovereign, diplomatic or consulate immunity (section 7(4), FJA). Foreign anti-trust proceedings (such as under the US Sherman Act) can be prevented from being enforced on the certificate of the Commonwealth Attorney General.

Voluntary acknowledgement

If the defendant voluntarily appeared or submitted to the foreign jurisdiction where the court otherwise did not have jurisdiction, ordinarily that will cure any defect in the lack of foreign court jurisdiction. An exception is where the person submitted to the foreign court for the purposes of protecting or obtaining the release of property seized or threatened with seizure in the proceedings (property subject to an order restraining its disposition disposal,) contests the jurisdiction of the foreign court or invites the foreign court to not exercise its jurisdiction in the proceedings (section 7(5), FJA).

Importantly, an appeal from a default judgment is a submission to the jurisdiction of the foreign court.

Enforcement proceedings

20. Is the enforcement of a foreign judgment, subject to formal proceedings or simplified procedures?

Enforcement proceedings are formal and must follow the rules of the relevant court. However, under the Commonwealth Foreign Judgments Act 1991 they are much simpler than the procedures for enforcing a judgment under common law at the registration stage. At the actual enforcement or execution stage, the same procedures apply as in the enforcement of a domestic judgment and there are no differences by virtue of the enforcement being of a foreign judgment (see Question 17).

 
21. Are applicants required to institute a new action on the judgment in the form of main proceedings instead of making an application for enforcement based on the judgment?

If the Commonwealth Foreign Judgments Act 1991 (FJA) applies, then the procedure is relatively straightforward involving the registration of the foreign judgment as a judgment of the Australian court (see Questions 1 and 2). For those judgments to which the FJA does not apply, it will be necessary to bring a fresh action under common law principles based on the judgment.

 
22. What is the general outline of enforcement proceedings?

Appointing counsel

An individual applicant for enforcement of a foreign judgment can appear in person and does not need to appoint a lawyer. However, a corporation can only appear through a lawyer.

Security for costs

An order for security for costs is discretionary in the legal system in relation to the enforcement of a domestic or foreign judgment. Generally, the courts are very reluctant to order security for costs against a personal party seeking to enforce a judgment. However, in relation to a corporate applicant seeking to enforce a judgment, the court applies the usual discretionary principles of considering whether there is any evidence that the plaintiff may not be able to meet an adverse costs order if it is unsuccessful in its application for enforcement of the judgment. The burden falls on the party wanting to obtain an order for security for costs.

Jurisdiction and venue

Under the Commonwealth Foreign Judgments Act 1991 (FJA), both the Federal Court of Australia (FCA) and the State Supreme Courts have jurisdiction to hear recognition and enforcement proceedings. If an applicant for enforcement is seeking to enforce a foreign judgment under the common law it must do so through the relevant State Supreme Court. The relevant court has jurisdiction if the judgment debtor is ordinarily resident or incorporated in that jurisdiction or if it has assets in that jurisdiction. It will also have jurisdiction if the judgment debtor appears in the enforcement proceedings, for example, to seek an order to have the foreign judgment set aside. The FCA sits in the capital city of each State and the State Supreme Courts sit in the capital city of their respective States.

Adversarial or without notice (ex parte)

Legal proceedings are adversarial, although in practice unless the judgment debtor seeks to set aside the recognition or enforcement proceedings, the application for registration or enforcement can proceed ex parte and in a relatively informal manner even in chambers as opposed to in open court (see Question 9). Service of the application for recognition needs to be served on the judgment debtor.

Timing

The time taken between filing the application for recognition and making a final order recognising the foreign judgment varies from court to court (and in the case of the FCA, as between the different state based registries of the FCA) depending on the:

  • The court's workload.

  • The extent to which the parties comply with the legislative and procedural requirements.

  • Whether or not the recognition proceedings are challenged.

There may be circumstance where an application is heard on an urgent basis, if for example, there is cogent evidence of a real risk of dissipation of assets. Straightforward recognition proceedings are normally concluded within several months of commencement of the proceedings (and sometimes sooner), but this will take longer if there is a challenge to the recognition that may involve calling evidence to support the challenge, and then this could take around six to nine months. The courts want to deal with the challenge promptly but the extent to which this can be done depends on the:

  • Degree of preparation of the parties.

  • Availability of the evidence.

  • Possibility of an appeal from a recognition order.

Fees

The court fees vary slightly between the different courts but generally the applicable fee is around AU$2,000 to AU$5,000. In some courts, it may be less especially for individuals. Filing fees are higher for corporations than individuals. Lawyers' fees are a matter of negotiation.

Appeals

A judgment for the recognition of foreign judgment can be appealed, although the strike rate of successful appeals is low.

 
23. Can the enforcing court review the foreign judgment as to its substance if all formalities were complied with and if the judgment meets all requirements?

Generally, the enforcing court does not have any power to review the foreign judgment if all the relevant procedural requirements have been complied with. In other words, the courts cannot substitute their own judgment or that of the foreign court on the merits of the case.

Formalities

24. What are the documentary requirements for enforcement?

Documentary requirements

The documentary requirements for recognition and enforcement of foreign judgments depend to some extent on the court where the enforcement procedure takes place. Although the procedures are generally the same whether the enforcement procedure is in the Federal Court of Australia (FCA) or in the State Supreme Courts, the terminology, the types of forms and minor variations of procedures and court fees can slightly vary. There is no need for a party to appoint an attorney under a power of attorney, as there is in some jurisdictions. A party must act through a lawyer although an individual can be self-represented. The appointment of a lawyer is an informal process. The application for recognition must be made within six years from the date that the foreign judgment was delivered or after any appeal is completed, whichever is the latter. In all cases, the relevant application for recognition must be supported by an affidavit setting out compliance with the relevant facts annexing copies of the relevant documents including the foreign judgment. The affidavit is usually sworn on behalf of the applicant by its lawyer based on knowledge, information and belief provided by the party to the lawyer.

Authentication

The documents that must be produced to the court in support of the application for recognition of the foreign judgment must be authenticated or certified by the relevant foreign court, in the case of other documents by a notary public or otherwise authenticated by expert evidence.

 
25. Is it required to translate the judgments into the language of the state where enforcement is requested?

Translations

If the judgment of the foreign court is not in English, it must be translated into English and be certified by a notary public or otherwise authenticated by expert evidence.

Other languages

English is the only language recognised in court documents in the courts.

Certification

The translation of the foreign judgment into English must be authenticated or certified by a notary public or by appropriate expert evidence.

 
26. What is the format of the application for a declaration of enforceability?

The format of the application depends on the procedural requirements of the court in which the application is brought. In the Federal Court of Australia (FCA), this is an application. In the State Supreme Courts, it is usually a summons.

 
27. What information must be included in the application regarding the judgment, the claim as awarded in the judgment, the facts and legal grounds of the case, and that the judgment is no longer appealable?

Judgment

The application must set out the:

  • Details of the parties.

  • Parts of the foreign judgment that are the subject of the application for recognition.

  • Amount originally owing.

  • Evidence that the court in which the application is brought is the appropriate court.

  • Evidence of the entitlement of the judgment creditor to be able to enforce the judgment.

Evidence that it is enforceable by execution in the country of the foreign court.

  • Evidence of the non-applicability of the exceptions to enforcement or grounds for compulsory setting aside of recognition of the foreign judgment (section 7, Commonwealth Foreign Judgments Act 1991) (see Question 8).

If interest is payable under the law of the country of the foreign court, details of the applicable interest must be set out including the:

  • Rate of interest.

  • Amount of interest that becomes due.

  • Daily amounts of accruing interest.

Details must be applied to legal costs if they are ordered to be paid under the law of the country of the foreign judgment.

Claim as awarded

See Question 27.

Facts and legal grounds

See Question 27.

Appeals

It is advisable to state that a foreign judgment is not under appeal.

 
28. Is it required to convert the value of the judgment into the local currency?

The currency of the foreign judgment does not have to be converted into Australian currency. However, the judgment creditor can do so if it wishes. The courts enforce the foreign judgment in a foreign currency. In practice, it is unlikely that the party will seek to convert a foreign currency judgment into Australian currency unless there has been a significant and favourable movement in the exchange rate and that party takes the view that there is unlikely to be any adverse movement in that exchange rate between the time the application for recognition is filed and the time the order recognising the judgment is made.

 

Proposals for reform

29. Are any changes to the law currently under consideration or being proposed?

There are currently no changes to the law under consideration or proposal.

 

Online resources

Australian Capital Territory Legislation and Regulations

W www.legislation.act.gov.au

Description. Official Australian Capital Territory Government website setting out the Australian Capital Territory Act, legislative instruments and bills.

Northern Territory Legislation and Regulations

W http://dcm.nt.gov.au/strong_service_delivery/supporting_government/current_northern_territory_legislation_database

Description. Official Northern Territory Government website setting out all Northern Territory legislation.

Queensland Legislation and Regulations

W www.legislation.qld.gov.au

Description. Official Queensland Government website setting out all Queensland Acts, legislative instruments and bills.

South Australia Legislation and Regulations

W www.legislation.sa.gov.au

Description. Official South Australian Government website setting out all South Australian Acts, regulations and rules, policies, proclamations and notices and bills.

Tasmania Legislation and Regulations

W www.thelaw.tas.gov.au

Description. Official Tasmanian Government website setting out all Tasmanian legislation.

Victoria Legislation and Regulations

W www.legislation.vic.gov.au

Description. Official Victorian Government website setting out all Victorian Acts, legislative instruments and parliamentary documents.

Western Australia Legislation and Regulations

W www.slp.wa.gov.au/legislation/statutes.nsf/default.html

Description. Official Western Australian Government website setting out Western Australia Acts, subsidiary legislation, legislation information and parliamentary bills.

Commonwealth Legislation and Regulations (ComLaw)

W www.comlaw.gov.au

Description. Official Australian Government website setting out all Commonwealth Acts, legislative instruments, gazettes and bills.

NSW Legislation and Regulations

W www.legislation.nsw.gov.au

Description. Official New South Wales Government website setting out all New South Wales Acts, legislative instruments and bills.



Contributor profile

Derek Luxford, Partner

Hicksons Lawyers


T +61 2939 5474
F +61 2 9264 4790
E derek.luxford@hicksons.com.au
W www.hicksons.com.au

Professional qualifications. New South Wales, Solicitor, 1976

Areas of practice. Transport; trade; energy.

Recent transactions

  • Acting for Lloyds Underwriters in a marine cargo policy coverage dispute concerning the hijacking of valuable cargo on a vessel in Indonesia.
  • Advising an Australian commodity trader in a marine cargo policy coverage dispute arising out of missing consignments of ingots shipped from Indonesia to Australia and advising the client on recovery prospects.
  • Acting for an Australian commodity trader in an international commodity arbitration in Sydney and subsequently enforcing the arbitral award in India.
  • Acting for Singapore based ship owners whose vessels were arrested in Australia in relation to maritime liens and obtaining the release of the vessels from arrest.

Languages. English, German (conversational)

Professional associations/memberships. Maritime Law Association of Australia and New Zealand; Average Adjusters Association; London Maritime Arbitrators Association supporting member; Sydney Marine Discussion Group; Institute of Chartered Shipbrokers; Chartered Institute for Logistics and Transport.

Publications.

  • The Australian chapter of "Enforcement of Judgments, Awards and Deeds in Commercial Matters", Thomson Reuters, December 2012.
  • The Australian chapter of "International Cargo Insurance" Informa, December 2012.
  • The Australian chapter of "Getting the deal through: Shipping 2016" to be published in September 2015.
  • Numerous articles over several decades on shipping, trade and commercial dispute resolution in publications such as "Lloyds List Australia" and "Maritime Risk International" and the IBA Maritime and Transport Committee Newsletter.

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