As a result of the increasingly global scale on which we now operate our businesses, thanks to the internet and the prolific use of social media for trade, we are now faced with increasing numbers of cross-border disputes and debt recovery issues.
Perhaps you did business with a Japanese-based company and the contract has gone wrong, or perhaps someone owes you money and has now moved to live in Australia: should you just write off the debt as it will be too hard to chase? No, not necessarily. While there are certainly a few extra hoops to jump through, there are procedures in place in most jurisdictions so that justice can still be done regardless of where the parties are based.
There are a number of variables when pursuing Court proceedings or judgment debts involving a person or entity based outside New Zealand. The two primary considerations are:
- Where the dispute or debt arose (to determine which jurisdiction applies and which country proceedings should be filed in, if judgment is not already obtained); and
- Which country the other party is based in (to determine whether there will be any particular barriers to locating and serving the other party with proceedings, or enforcing a judgment).
If it is appropriate to commence proceedings in New Zealand, the High Court Rules provide a regime for service on overseas parties. The manner of service allowed will vary depending on the country in which the defendant is to be served. For example, in Switzerland, service on a party requires consular assistance.
If the other party is based in Australia, for example, the process is relatively straight forward. The Trans-Tasman Proceedings Act 2010 (both the New Zealand and the Australian versions of the Act) governs proceedings and the enforcement of judgments between Australia and New Zealand. The Act provides a regime which is designed to streamline the process for resolving civil disputes of a trans-Tasman nature. The provisions of the Acts include how service should be carried out, how to determine the appropriate Court for the proceedings, and how to register a New Zealand judgment in Australian Courts so that it may be enforced there.
The process in other jurisdictions is unique to each country. For example, in Japan, a foreign judgment is only able to be registered in the Japanese Courts and enforced if it meets all of the requirements set out in Japan’s Civil Procedure Act. In summary, those are:
- The jurisdiction of the foreign court is recognised under laws and regulations, conventions, or treaties;
- The defendant has been served (excluding service by publication or similar) with the requisite summons or order for the commencement of litigation, or has appeared without being served;
- The content of the judgment and the litigation proceedings are not contrary to Japanese public policy; and
- A guarantee of reciprocity is in place.
Those criteria all require careful consideration. If you want to enforce a judgment in the United Kingdom, New Zealand is specifically covered by UK legislation which allows for registration of New Zealand judgments within 12 months of judgment having been obtained in New Zealand. The judgment will then be treated as if it is a UK judgment, and may be enforced as such.
Once we have completed proceedings which result in a judgment in favour of our client against a foreign-based person or entity, we then liaise with appropriate overseas lawyers or agents to assist with enforcement options in the relevant jurisdiction. We have a number of world-wide connections who assist in these sorts of matters.
We are also able to assist people who are based in different jurisdictions and want to enforce their judgment in the New Zealand Courts. We can arrange for the judgment to be registered in New Zealand and then provide advice on enforcement actions and action whatever is the preferred option for recovery of the judgment debt.
The Hague Conference has, for a number of years, been developing a new Convention for the Recognition and Enforcement of Foreign Judgments in Civil or Commercial matters. New Zealand is not currently a party to the existing version of the convention, however the New Zealand Law Commission has considered earlier drafts of the convention and suggested that New Zealand becomes a signatory. A Diplomatic Session at the Hague is scheduled to be held in mid-2019, and, if New Zealand becomes a party to the convention, pursuing cross-border litigation will soon become a much easier prospect in a great number of jurisdictions.
If you have a dispute of a cross-border nature, contact a member of Harkness Henry’s litigation team to discuss how we can assist.
This article is current as at the date of publication and is only intended to provide general comments about the law. Harkness Henry accepts no responsibility for reliance by any person or organisation on the content of the article. Please contact the author of the article if you require specific advice about how the law applies to you.