Mutual Enforcement of Civil Judgments between Hong Kong and Australia
With the governments of Hong Kong and Australia kicking off the negotiations for a free trade agreement in April 2017, which aims at further strengthening the already vibrant trades between the two regions, trading volume is bound to explode following conclusion of the bilateral treaty. With the explosion in trades also, unfortunately, will come the disputes between trading partners.
This article wishes to introduce briefly how civil judgements obtained in either jurisdiction can be enforced in the other. Broadly, as both Australia and Hong Kong are common law jurisdictions, civil judgments obtained in either jurisdiction can be enforcement at common law or under statute. Given enforcement of judgements at common law could always be uncertain, difficult and complex, this article will focus for the time being on enforcement under statute.
Enforcement of Hong Kong Civil Judgments in Australia
In Australia, the Foreign Judgments Act 1991 and the Foreign Judgments Regulations 1992 provides a certain and clear platform in terms of the procedure and scope for the enforcement of foreign civil judgements in Australia. It is noteworthy at the outset that the Foreign Judgments Act is a commonwealth legislation which means it applies to the whole of Australia instead of a particular state, and thus, for example, once a judgement obtained from a Hong Kong court is recognised under that Act it is registrable at any state (or Territory) supreme court and enforceable against the defendant’s assets all over Australia.
In the Schedule to the Foreign Judgments Regulations, only judgements of Hong Kong’s Court of Final Appeal and High Court (consisting of the Court of First Instance and Court of Appeal) are recognised as registrable. Thus, judgements granted by the District Court or the Lands Tribunal, for example, are not registrable. Further, not all types of judgements from Hong Kong’s CFA or High Court are registrable. To be registrable, the judgement must only be “money judgements” and final and conclusive, although the fact that there is an appeal pending against the judgement or that it may be the subject of an appeal does not prevent the judgement from being final and conclusive. Once the relevant judgement is registrable under the Act it can be registered at more than one states where the defendant’s assets are located.
The Hong Kong judgement must be registered within 6 years after it is granted or the date of the last judgement of the appeal.
After registration, the Hong Kong judgment can be enforced as if it were an Australian judgment.
Enforcement of Australian Civil Judgements in Hong Kong
By virtue of s. 3 of the Foreign Judgments (Reciprocal Enforcement) Ordinance and the Schedule to the Foreign Judgments (Reciprocal Enforcement) Order, money judgements awarded by all state supreme courts, Federal Court and High Court of Australia are registrable at the Court of First Instance, High Court of Hong Kong and thereafter enforced as if it were a judgment of that court.
The foreign judgment enforcement regime in Hong Kong bears a striking similarity to its counterpart in Australia. Both regimes apply only to money judgments granted by a foreign court, and both provide a limitation period of 6 years from date of the judgment or date of last appeal for registration. Both regimes also provide that the relevant judgement must be final and conclusive before it is registrable, but the judgment can still be final and conclusive notwithstanding an appeal is still pending against it or it may be the subject of an appeal.
An interesting difference lies perhaps in that a Hong Kong judgment is registrable in any state of Australia, whereas an Australian judgment is not so registrable in other parts of the PRC than Hong Kong. This is, as is widely known, because Hong Kong is a totally different jurisdiction from other parts of the PRC. Given the ever increasing trading and business intercourses between Mainland China and Australia these days and the relative impenetrability of the PRC legal system to foreign judgment enforcement, an important (but undecided) question arises as to whether an Australian judgment, once registered in Hong Kong under the Foreign Judgments (Reciprocal Enforcement) Ordinance (thereby becoming a Hong Kong judgment), is registrable in the Mainland of PRC (and thus converted into a Mainland judgement and enforceable as such) by virtue of the “Arrangement on Reciprocal Recognition and Enforcement of Judgments in Civil and Commercial Matters by the Courts of the Mainland and of the Hong Kong Special Administrative Region” (“Arrangement”) made between the Mainland of PRC and Hong Kong in 2008 providing for mutual enforcement of commercial judgments between the two jurisdictions. This issue seems to be untested in any courts of the PRC but in view of the closeness of the PRC judicial system to enforcement of foreign judgments, such attempts at “back-door” enforcement of foreign judgments in Mainland China would likely to be frowned up, unwelcomed or even resisted by its judiciary. In any case, if the Australian party wishes to avail himself of the benefits under the Arrangement, the relevant commercial agreement between the Hong Kong party and Australian party should provide for the Hong Kong courts, rather than Australian courts, to determine disputes arising under the agreement.