In a recent legal proceeding before the Supreme Court of New South Wales, the Court granted leave for Yangpu Huigu Pharmaceutical Corporation Limited (the plaintiff) to enforce a Chinese judgment against Gaogeng He (the defendant). This case provides valuable insights into the procedural and legal requirements for enforcing foreign judgments in Australia.
Background of the Case
The judgment in question, dated 30 November 2022, was issued by the First Intermediate People’s Court of Hainan Province in the People’s Republic of China. The judgment pertained to the recovery of RMB 10,705,796.08, including principal loans, interest, travel expenses, and court acceptance fees. The defendant, a guarantor of the loan, had actively participated in the original Chinese proceedings but failed to appear before the Supreme Court of NSW.
Due to the absence of the defendant and non-compliance with the originating service process, the Court previously granted substituted service orders, which the plaintiff complied with.
Legal Framework for Enforcing Foreign Judgments
In Australia, foreign judgments can be enforced either under the Foreign Judgments Act 1991 (Cth) or through common law principles. Chinese court judgments are not listed under the Foreign Judgments Regulations 1992 (Cth) for automatic statutory recognition, necessitating reliance on common law principles.
Key Common Law Requirements for Enforcing Foreign Judgments
As outlined in Bao v Qu; Tian (No 2) [2020] NSWSC 588, four conditions must be satisfied for the recognition and enforcement of foreign judgments at common law:
- Jurisdiction in the International Sense
- The foreign court must have exercised jurisdiction over the defendant. This condition is satisfied if the defendant was personally served or voluntarily submitted to the jurisdiction.
- In this case, the defendant was served via registered mail and appeared at the hearing, thereby submitting to the Chinese court’s jurisdiction.
- Final and Conclusive Judgment
- The foreign judgment must resolve the legal controversy between the parties.
- The Court determined that the Chinese judgment was final and conclusive as it made definitive orders and was not subject to any appeal within the provided timeframe.
- Identity of Parties
- There must be consistency between the parties in the foreign judgment and the enforcement action.
- The plaintiff provided evidence linking the defendant in both proceedings, satisfying this requirement.
- Judgment for a Fixed, Liquidated Sum
- The judgment must specify a precise monetary amount.
- The Chinese judgment clearly delineated the principal amount, accrued interest, and additional court-ordered costs.
Limited Grounds for Challenging Recognition
Once the four common law requirements are established, the defendant bears the onus of proving any grounds for refusing recognition. Typical defenses include fraud, breach of natural justice, or violations of public policy. However, since the defendant did not appear in this case, no such defenses were raised.
Court Findings and Resolution
Having established compliance with the common law principles, the Supreme Court of NSW found no valid basis to decline enforcement. Accordingly, the Court issued the following orders:
- Judgment Enforcement: The defendant was ordered to pay RMB 11,125,042.66, representing the full amount awarded by the Chinese judgment, including interest and court fees.
- Costs: The defendant was ordered to cover the plaintiff’s legal costs as agreed or assessed.
- Accruing Interest: Interest will continue to accrue under s 101 of the Civil Procedure Act 2005 (NSW).
Conclusion: Practical Lessons for Enforcing Foreign Judgments
This case underscores the importance of meeting common law requirements when seeking to enforce foreign judgments in the Supreme Court of NSW. For jurisdictions not recognized under statutory frameworks, plaintiffs must meticulously demonstrate jurisdiction, finality, party identity, and a liquidated sum.
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