Newsletter No. 123 (EN)

I. Introduction

 

There are certain cases and situations where it is necessary to enforce a court judgment in Hong Kong which has been obtained in an­other juris­diction.

 

For example, a plaintiff may sue a defendant out­side of Hong Kong because both parties reside in another coun­try, e.g. Germany.  However, the plaintiff then finds it diffi­cult or even impossible to enforce the judgment in Germany, be­cause the defendant does not have any assets there or has now relocated to Hong Kong. In such cir­cum­stances, it is nec­essary to enforce the for­eign judgment in Hong Kong.

 

Under Hong Kong law any judgment which is awarded by a non-Hong Kong court is re­ferred to as “foreign judg­ment” This in­cludes judgments which are awarded in the courts of Mainland China and Macau. Foreign judgments are not automatically enforceable in Hong Kong. Thus the judgment credi­tor (the person who succeeded in the proceed­ings) has two choices:

 

(1)     Commence a new set of proceedings in a Hong Kong court (assuming that Hong Kong has jurisdiction over the re­spective matter). At the end of these proceedings the judgement creditor would have a Hong Kong i.e. domestic judgment which could be enforced as such; or

 

(2)     Register the foreign judgment with the Hong Kong court and seek to en­force the foreign judgment in Hong Kong.

 

The Foreign Judgments (Recipro­cal Enforce­ment) Ordinance governs the registration system and court orders for the enforcement and recog­nition of all foreign judgments except those obtained from Mainland China and Macau courts.

 

II. Common law vs. Statutory regime

 

There are two regimes governing the enforce­ment and recognition of foreign judgments in Hong Kong: the common law regime and the statutory regime.

 

1. The common law regime

The common law regime is based on princi­ples established by case law, and it governs the recogni­tion and enforcement of foreign judg­ments from all courts in most countries.

 

2. The statutory regime

In contrast, the statutory regime only governs judg­ments from “superior courts” in certain foreign countries. The foreign coun­tries under the statutory regime include the Com­monwealth countries, (Australia, Brunei, Can­ada India, Malaysia, New Zealand, Singapore etc). It also includes some EU countries, such as Belgium, Germany, France, Italy, Austria, and The Netherlands, and interestingly, it also includes one non-EU and non-Common-wealth country: Israel.

 

Except for Australia, the statutory regime only en­forces and recognizes judgments from “su­pe­rior courts”. The “superior courts” are de­fined as the courts in the receptive country which have unlimited jurisdiction over civil and criminal mat­ters. Further only monetary judgments may be enforced under the statuto­ry regime.

 

3. The differences between the two re­gimes

Although there are many technical differences between the two regimes, the underlying sub­stantive rules and principles are largely the same.

 

Countries and courts which are not cov­ered by the statutory regimes are covered by the common law regime. Equally non-monetary judgments are covered by the common law regime as well.

 

4. Conclusion

Due to the combined efforts of the common law and statutory regimes any civil judgment from any court in the world is, in principle, enforceable and recognizable by Hong Kong courts.

 

III. Requirements to Enforce a Foreign Judgment in Hong Kong

 

1. The Judgement is final and conclusive

According to Section 3 (2)(a) of the Foreign Judgment (Reciprocal En­forcement) Ordinance, a foreign judgment must be final and con­clusive in or­der to be enforceable in Hong Kong. This is echoed in the case Nouvion v Free­man (1989) 15 AC 1, where the judge stated that a foreign judgment must be “conclusively, fi­nally and forever estab­lished” in order to be en­forced.

 

A foreign judgment will only be “final and conclusive” once it cannot be chal­lenged by the judgment debtor in the issuing court anymore, i.e. it cannot be varied or set aside.

 

However, if  there is a possible or even pend­ing appeal, then a judgment can still be classed as final and con­clusive (Linprint PTY Ltd v Hex­ham Textiles PTY Ltd [1993] 23 NSWLR 508). This rule was designed to prevent judg­ment debtors from making multiple and/or groundless appeals. However, in practice, Hong Kong courts rarely enforce judgments until the outcome of any pending appeal has been determined.

 

2. Criminal and non-monetary civil for­eign judgements

According to Section 2 of the Foreign Judgment (Reciprocal En­forcement) Ordinance, only for­eign judgments which concern monetary civil mat­ters can be enforced. Criminal monetary pen­alties such as a tax pay­ment or fine will not be en­forced on the basis that such matters are beyond the concern and remit of the Hong Kong courts.

 

3. Sufficient notice of the original pro­ceedings

The judgment debtor may object to the en­forcement of the foreign judgment in Hong Kong if he was not given sufficient notice of the original proceed­ings in the foreign court, and as a result had no opportunity to defend his case. This concept of reasonable notice and opportu­nity is at the heart of sub­stantial jus­tice/natural justice principle which the Hong Kong courts follow.

 

However, the burden of proof in this regard is quite high. As such this argument has only been successful once in the English case of Adams v Cape Industries plc [1990] 1 Ch 433.

 

4. Judgement not obtained by fraud

Hong Kong courts will not recognize and en­force any foreign judgment which is obtained by fraud.

 

The definition of fraud includes:

• a party knows false evidence has been introduced;
• a party procures any false evi­dence;
• a party deceives the foreign court(s);
• intimidation by violence or other ille­gal acts; and
• the foreign court is corrupt.

 

An example of fraud is the case Price v Dewhurst (1837) 8 Sim 279, where the judge had a financial interest in the outcome of the case.

 

It should be noted that a judgment debtor can allege that the for­eign judgment was obtained by fraud even if the same fraud allegation was made and rejected in the original foreign court (Abouloff v Oppen­heimer (1882))

 

5. Judgement is not contrary to public policy

The enforcement of the foreign judg­ment must not be contrary to Hong Kong public policy. There are very few cases where the judgment debtor has raised this argument suc­cess­fully in Common Law countries, and there is no such reported case in Hong Kong.

 

6. Conflicting judgment(s)

Under Common Law tradition and the princi­ple of res judicata, a Hong Kong court will not recog­nize and enforce a foreign judgment if there has been a previous conflicting Hong Kong decision on the same matter. This was confirmed in Ver­vaeke v Smith [1983] 1 AC 145. Further, the case Showlag v Mansour [1994] 2 All ER 129 established that if there are two conflicting prior decisions, then the one which was decided first will usually apply.

 

7. The foreign court had jurisdiction

A Hong Kong court will not recog­nize or en­force a foreign judgment if the for­eign court did not have jurisdiction over the case. There are two ways to prove a foreign court’s legiti­mate jurisdiction.

 

First, the judgment debtor resided in the for­eign jurisdic­tion at the time the proceedings were commenced. If the judgment debtor is a company, then it must either have been registered in the foreign country or have had its place of busi­ness in the foreign coun­try when the proceed­ings began in order to be classified as a resi­dent thereof.

 

Second, the judgment debtor par­ticipated in the foreign court proceedings. The judgment debtor must have had a certain level of partic­ipation in or given some level of con­sent to the court pro­ceed­ings. If the judgment debtor vol­untarily ap­pears before the foreign court in the origi­nal proceedings, then such con­sent/participation is deemed to have oc­curred.  In addition, if the judgment debtor brought a counterclaim in the original pro­ceed­ings, then the foreign court is also deemed to have jurisdiction to the case.

 

IV. Procedure to Enforce a For­eign Judgement in Hong Kong

 

1. Time limit

Any person who obtains a foreign judg­ment must register the said judgment with the Hong Kong Court of First Instance within 6 years of the judg­ment date.

 

2. Application to register a foreign judgement

An application made to enforce a foreign judg­ment may be made ex parte (with­out noti­fying the other party). A “writ of fieri fa­cias to enforce a foreign registered judgment” should be used to begin the registration procedure. The Court may direct the appli­cant to is­sue the originate summons via an “origi­nating sum­mons-expedited form” and then serve the same upon the judgment debtor.

 

Further, according to the Rules of the High Court, the registration application must include an affidavit which is supported by the follow­ing:

• An authenticated copy of the judg­ment;
• The name, business and last known abode of the judgment credi­tor and judgment debtor;
• Evidence to show that the judg­ment creditor is enti­tled to en­force the judgment and the judg­ment is enforceable in Hong Kong;
• Other evidence to prove that the judg­ment is enforceable in Hong Kong.

3. Court order for registration

Once the application has been submitted, the Court will review the contents thereof and make an order for regis­tration.  This order will state the final date on which the judgment debtor may apply to set aside the registration. Once issued, the or­der must be served upon the judg­ment debtor along with a Notice of Registra­tion.

 

4. Notice of Registration

The Notice of Registration of a foreign judg­ment must be served upon the judgment debtor, either by de­livering it to him personal­ly, or by sending it to him at his last known address or place of busi­ness. The Notice must state:

• Full particulars of the registered judg­ment and the order for regis­tra­tion;
• Name and address of the judg­ment creditor or his solicitor;
• That the judgment debtor has the right to apply to set aside the reg­istered judgment; and
• The deadline for making such an application to set aside the regis­tered judgment.

5. Application to set aside a registration

The judgment debtor may apply to the court to set aside the regis­tration order if the judg­ment:

• was obtained by fraud;
• is contrary to public policy;
• was granted by a foreign court which had no jurisdiction; or
• was obtained without giving suffi­cient op­portunity to the judg­ment debtor to de­fend himself in the foreign court.

6. Execution

After the period to apply to set aside the regis­tra­tion has expired, or, if such an application has been made and rejected, the judgment creditor may initiate the execu­tion of the judgment by providing an affi­davit of ser­vice of the Notice of Registration to the Registrar of the High Court.