Disclaimer: The contents of this article are my musings and opinion. They do not constitute legal advice and are not meant to be acted upon as such. For legal advice please contact a lawyer.
After years of litigation and court attendances you finally have a judgment in your favour. A definitive win, hooray! But the defendant (or “the other side” as we like to say) has now decided to pack up and leave across the seas to avoid payment. How do you get your overseas judgment enforced in the country that the other side has run away to?
Lets say, for our benefit that the other side
has run away to New Zealand (because that is where we practice!). If you’re lucky and your judgment is from an Australian or other Commonwealth country, you can apply to have the overseas judgment enforced in New Zealand under the Trans-Tasman Proceedings Act 2010 (if the judgment is from Australia) or the Reciprocal Enforcement of Judgments Act 1934
(if the judgment is from a country with with New Zealand has a reciprocal agreement, including many Commonwealth countries).
“Ah, but what if my judgment is not from one of these countries?” you say. What if, like many of our clients, your judgment is from China? A judgment from a Chinese court is not directly able to be registered in New Zealand. That doesn’t mean that you can’t enforce it here though – you just need to go through a few more steps before you can enforce it in New Zealand.
I recently worked on a case where we had a judgment from China in the sum of approximately $4,000,000.00 NZD. The judgment was against a debtor who did not have sufficient assets in China to satisfy the judgment but there was real property in New Zealand, which might satisfy some of the amount owing. A Chinese judgment can be enforced in New Zealand through the common law. That is, you need to bring fresh proceedings in New Zealand at the High Court, based on the Chinese judgment.
Before you can do so, however, you need to satisfy a few requirements if the defendant is outside New Zealand. In the above example, we could satisfy the requirement because:
- the contract between the parties was to be performed in New Zealand, and
- the subject matter of the case was land or other property in New Zealand.
Once the requirements are satisfied, the New Zealand High Court is able to hear the case. But it may still decline to hear it if the Court is satisfied that New Zealand is not the most appropriate country to hear the case – for example, if the Court thinks that it is better for the case to be dealt with in China instead. In legal jargon, we call this the forum non conveniens.
Okay, so you’ve passed the first hurdle. What now?
Now, you need to make a claim to the High Court. You do this by filing:
- A Statement of Claim
- A Notice of Proceeding
- To make the process shorter, you can also make an application for Summary Judgment. This is basically an application to tell the court that the other side does not have a defence to your claim and it asks the court to give judgment in your favour. The procedure for seeking summary judgment is in Part 12 of the High Court Rules.
- The application for Summary Judgment needs to be supported by affidavit evidence (this is basically your written evidence, giving information about the proceedings in China, about the Chinese judgment and the amount owing to you).
The case of Reeves v One World Challenge LLC
helpfully sets out the three things that you must show in order to successfully enforce the overseas judgment in New Zealand. These are:
1. The Chinese court had jurisdiction over the debtor according to New Zealand’s conflict of law rules. This means, you need to show one of the following:
- The debtor was in China at the time the case was heard
- The debtor was the plaintiff (the person bringing the case) in China, or he/she made a counterclaim against you in China
- The debtor voluntarily appeared in the court proceedings in China
- the debtor agreed to submit to the jurisdiction of the Chinese court before the case began in China.
2. The judgment is for a definite sum of money
3. The judgment is final and conclusive. That is to say, the debtor has exhausted all his/her appeal rights in China.
The debtor can try to defend the case, but he/she is not allowed to reopen the entire case, which has already been decided by the Chinese court. In case, the debtor tried to do just that, claiming various things regarding the contract and repeating the arguments brought before the Chinese court. It is not a valid ground of defence for the debtor to say that the plaintiff (you) did not attempt the enforce the judgment in China first.
In our case, the High Court granted the summary judgment and found that the Chinese judgment is enforceable in New Zealand. However, we now have a question about the interest ordered on the $4,000,000.00 by the Chinese court, which is calculated at a significantly higher rate than that prescribed by the Judicature Act.
The question is this: Can the New Zealand High Court direct the debtor to pay a lower amount of interest than that ordered by the Chinese judgment (or order that no interest is payable at all)? If you have any thoughts on this, I would be interested in hearing your views 🙂