Trends in International Commercial Litigation Part II - The Future of Foreign Judgment Enforcement Law
Trends in International Commercial Litigation Part II* - The Future of Foreign Judgment Enforcement Law
THE HON JUSTICE C.R. EINSTEIN** and ALEXANDER PHIPPS***
In view of the difficulties occasioned international litigants as a result of the enforceability of foreign judgments remaining largely a matter of national law, examined in the Australian context in part one of this paper [1], for the last decade the Hague Conference on Private International Law has been attempting to formulate a comprehensive international convention in this area. Part two of this paper examines the progress of the Hague Conference in this respect, and observes that substantial work remains to be done if regional and national disputes concerning, in particular, the acquisition and exercise of jurisdiction are to be overcome. It concludes, with reference to developments in Canadian case law, that notwithstanding seemingly intractable delays at the diplomatic level, significant advancements can be made at the domestic level in the interim.
I. The problem stated: harmonisation v disparate national traditions
The proposition, discussed in part one of this paper, that national laws relating to the enforcement of foreign judgments are in drastic need of harmonisation is by no means novel; as stated by the then Attorney General of the Commonwealth of Australia, Michael Duffy, in his second reading of the Foreign Judgments Bill 1991:
Considerations of justice, convenience, greater certainty in international transactions and comity between nations show the desirability of the scheme reflected in this Bill. With the increased mobility of persons and money across borders, the need for, and benefits of, an effective capacity to enable a judgment given in one country to be enforced against assets in another country are obvious.[2]
In a more exact sense, international transactions are already subject to manifold, unavoidable commercial risks such as fluctuating exchange rates and language barriers; thus it is nonsensical to add to such uncertainty the legal risk of an inconsistent ability to enforce judgments internationally. Indeed, and again as discussed in part one of this paper, the imperative of harmonisation in the enforcement context has recently been reinforced by the promulgation of the Principles and Rules of Transnational Civil Procedure by the International Institute for the Unification of Private Law (UNIDROIT) and the American Law Institute (ALI).[3] That is to say, the procedural streamlining of transnational commercial litigation that the ALI/UNIDROTI Principles and Rules have the potential to engender will be manifestly undermined should similar progress not be made in the judgment enforcement context.
Set against that obvious proposition, however, is the equally manifest state of affairs that "systems of procedure do indeed show very pronounced differences from one country to another, and that one cannot reasonably expect them to disappear as a result of efforts at harmonisation."[4] The means by which litigious disputes are resolved, and indeed the substantive laws from which actionable rights spring, are deeply enmeshed with cultural traditions and understandings very often valued well above the demands of international commerce; thus it is only understandable that national courts and legislatures have shown a proclivity for retaining means to protect their citizens and residents from foreign judgments rendered contrary to such traditions. As stated by Kirby P in Wentworth v Rogers, [5] for example, domestic courts of most legal systems have jealously guarded an entitlement to "reserve to themselves an assessment of the integrity of the process upon which the [foreign] judgment was based." Viewed from this perspective, it is the sheer diversity of procedural and substantive systems and the reluctance of states and regions to forfeit their specific legal heritages in favour of uniformity that presents the most fundamental obstacle to the creation of a wide-ranging convention on the enforcement of foreign judgments.
II Particular obstacles to harmonisation
There are two areas of difference that have presented themselves as especial obstacles to harmonisation:
1. Rules as to the Assumption of Jurisdiction: The Persistence of Exorbitance
As detailed elsewhere by the authors in respect of the acceptable bases of jurisdiction under ALI/UNIDROIT Principles and Rules,[6] the manner in which municipal courts seise and exercise jurisdiction over defendants not ordinarily domiciled or resident within their territorial jurisdiction is a matter of great controversy between different legal systems. For example, the 'tag' or 'long arm' jurisdictions claimed by most common law countries is repugnant to many civil lawyers, particularly when such jurisdiction is enlivened by the service of process overseas. Whereas according to the common law the drafting and service of process is an essentially private act, albeit with the imprimatur of the court, the equivalent procedure under many civil law systems is an act of state, with the result that service abroad is often conceived as an impost upon the sovereignty of the state in which it is effected. The common law perspective has been elucidated by one commentator as follows:
"Another problem that arises in international litigation is service of litigation documents in a foreign country. Many foreign countries are inclined to regard such service as an official act that, if done without their consent, infringes upon their sovereignty. This attitude is regrettable. Service of litigation documents in a foreign country is designed merely to give notice of proceedings brought in another country. The proper governmental attitude should be to permit and facilitate such notification, unless the foreign proceedings themselves can properly be regarded as unfair or improper."[7]
In response, however, a civil lawyer might argue that objection can be taken to the enlivening of long arm jurisdiction not merely on the basis that it involves service abroad, but further that it exposes foreign defendants to the potentially massive expense of defending common law proceedings on the basis that procedural institutions such as jury trials, exemplary damages and pre-trial discovery form no part of the various civil law systems.[8] Thus when the United Kingdom and Ireland acceded to the Brussels Convention on Jurisdiction and Enforcement of Judgments in Civil and Commercial Matters 1968 (the Brussels Convention) - which adopts the defendant's place of domicile as the principal basis upon which jurisdiction can be acquired and exercised, save insofar as there is a substantial connection between the defendant and another Contracting State[9] - Article 3 of that instrument was amended so as to specifically record 'tag' jurisdiction as one of the prohibited bases of jurisdiction in respect of domiciliaries of Contracting States.[10]
Of course, it is not merely common law courts that have long manifested a tendency towards an expansive assertion of jurisdiction. Perhaps most infamously of the continental legal systems, Article 14 of the French Civil Code provides for a breathtakingly exorbitant territorial jurisdiction in the following terms:
"An alien, even if not residing in France, may be cited before French courts for the performance of obligations contracted by him in France with a French person; [and] he may be called before the courts of France for obligations contracted by him in a foreign country towards French persons." [Emphasis added.]
Provided that the plaintiff is a French national, therefore, Article 14 enlivens the jurisdiction of the French courts over an alien defendant regardless of his/her place of domicile, the locus contractus, the place of performance or indeed the place of breach. Turning upon the nationality of the moving party alone, this is claimed jurisdiction well in excess of the typical bases of common law long arm jurisdiction. Similarly, Article 23 of the German Code of Civil Procedure (Zivilprozessordnung) provides, in effect, that the German courts are competent to take jurisdiction when the defendant owns property in that country and regardless of any other connection between the forum and the cause, the parties or the subject matter of the dispute.
Accordingly, national conflicts rules manifest a clear reluctance to enforce foreign judgments rendered in pursuance of all but the most circumscribed bases of jurisdiction. Taking Australia as an example, and as detailed in part one of this paper, at both common law and under the Foreign Judgments Act 1991 (Cth) (the FJA) a foreign judgment is incapable of enforcement in this country unless the judgment debtor was resident or present in the forum at the time of commencement, there was an express contractual submission to the jurisdiction of the foreign court or the judgment debtor voluntarily submitted to the jurisdiction of the foreign court. Such a narrow approach is undoubtedly illustrative of the extent to which this area remains concerned with the protection of persons domiciled in Australia from the aggressive assertion of jurisdiction by foreign courts and is, to say the least, incongruous in light of the extent to which Australian courts are themselves prepared to seise jurisdiction over matters involving defendants located offshore. This contradiction notwithstanding, however, the fact remains that "one of the most fundamental, and probably the most important and troublesome, conditions that any foreign judgment must satisfy in order that it be entitled to recognition and or enforcement in the forum is that it must have rendered by a court which had jurisdiction."[11]
2. United States Procedural, Damages and Antitrust Law
In Smith, Kline & French Laboratories v Bloch,[12] Lord Denning MR said:
"As a moth is drawn to the light, so is a litigant drawn to the United States. If he can only get his case into their courts, he stands to win a fortune. At no cost to himself, and at no risk of having to pay the other side. The lawyers there will conduct the case "on spec" as we say, or on a "contingency fee" as they say. They lawyers will charge the litigant nothing for their services but instead they will take 40% of the damages, if they win the case in court, or out of court on a settlement. If they lose, the litigant will have nothing to pay to the other side. The courts in the United States have no such cost deterrent as we have. There is also in the United States a right to trial by jury. They are prone to award fabulous damages. They are notoriously sympathetic and know that the lawyers will take their 40% before the plaintiff gets anything. All this means that the defendant can be readily forced into a settlement. The plaintiff holds all the cards. "
Whilst this is, with respect, perhaps a somewhat unkind and exaggerated assessment, it is undoubtedly the case that in respect of institutions such as notice pleading, oral discovery, liberal class action mechanisms and jury-assessed damages, United States civil procedure is largely unique. Moreover, United States competition and consumer law is notorious in its extensive use of 'treble' and punitive damages; as recently stated by Le Bel J of the Canadian Supreme Court:
"The most common source of punitive damages awards that are unusually high by international standards is the United States. In that country, it is more common to use punitive damages as an instrument of social engineering than it is in Canada, and American law tends to permit larger awards as a way of modifying the behaviour of well-funded defendants."[13]
Certainly, the Unites States cannot be begrudged the right to formulate its procedural and damages laws in a manner calculated to further its chosen public policy goals, particularly considering that many such objectives go to the heart of that country's political raison d'etre. The right to trial by twelve ordinary citizens, whether in respect of a charge of murder or the assessment of damages in massively complex antitrust litigation, is a cherished institution of representative democracy that will not be lightly abandoned in the interests of international commercial expedience or the harmonisation of world conflicts rules. However it is equally true that the existence of such legal devices, when coupled with the United States' status as the world's most powerful trading bloc, is one of the most intractable obstacles to be overcome in any move towards a substantially global judgment enforcement convention.[14] In the late 1970s, for instance, negotiations between the United States and the United Kingdom on a bilateral convention collapsed due to concerns expressed by the English insurance industry over the enforcement of United States antitrust judgments;15 and this notwithstanding the relative similarity in nearly all other relevant respects between the two countries' legal systems. Equally, one commentator has stated of the civil law's reaction to the phenomena of treble or punitive damages that:
"many on the continent fear the punitive damages often awarded in US courts. The availability of punitive damages when no actual damage has been caused has led legal experts on the continent to think that punitive damages are an abuse of the litigation process."[16]
Regardless of how meritorious their reasons for existence in a social sense, that is to say, the application of such procedural institutions to foreign defendants has led to widespread consensus in diplomatic and academic discourse that "US civil litigation fulfils the function of policy formation and social reformation in addition to the more traditional judicial functions of dispute resolution";[17] being a function considered wholly unsuited to, in particular, international commercial litigation.
Indeed, the reluctance of other jurisdictions to readily enforce United States treble and punitive damages awards against their residents has in many cases escalated into the enactment of statutory provisions positively nullifying the effect of such awards or 'clawing back' monies obtained pursuant to them. Again taking Australia as an example, s 9(1) of the Foreign Proceedings (Excess of Jurisdiction) Act 1984 (Cth) empowers the Attorney General to declare by instrument that, in respect of certain foreign antitrust judgments, "the assumption of jurisdiction or the manner of exercise of jurisdiction by the foreign court, or the exercise of a power or the manner of the exercise of a power by the foreign court, was contrary to international law or inconsistent with international comity or international practice." In turn, s 9(2) provides that any judgment the subject of such an instrument is either not enforceable in Australia per se, or not enforceable over and above an amount specified by the Attorney in that instrument. Moreover, when the judgment debtor is an Australian citizen or corporation, s 10 provides a cause of action to such persons to 'claw back' any damages already recovered from them in respect of judgments for multiple damages in foreign antitrust proceedings, or, alternatively, any damages already recovered and in excess of any amount declared by the Attorney pursuant to a s 9 instrument.[18]
III Overcoming the obstacles
Shortly stated, therefore, the lodestar of a truly international judgment enforcement convention- or even the liberalisation of existing domestic laws- is dimmed by the general reluctance of states to relinquish firmly entrenched bases of jurisdiction, enforce foreign judgments obtained pursuant to the exorbitant jurisdictions of other states or expose their residents to liability under substantive laws whose effect is considered to be unduly harsh. The challenge facing legislators, judicial officers and plenipotentiaries is thus to find means by which these contradictory attitudes can be reconciled, provided always that such reconciliation is consistent with the ultimate goal of reducing the legal risk inherent in international commercial transactions. While this is by no means a straightforward task, the seemingly intractable obstacles in the path of a workable convention in this area do not foreclose the domestic implementation in Australia of a variety of reforms designed to broaden the range of foreign judgments susceptible to enforcement. Specifically, it is open to variously; reformulate both the common law and FJA test by which the exercise of jurisdiction by a foreign court is considered acceptable for enforcement purposes (in line with recent developments in Canadian jurisprudence); discard the rule in Abouloff v Oppenheimer as to scope of the defence of fraud on the foreign court;[19] implement procedures in the form or to the effect of the ALI/UNIDROIT Principles and Rules pursuant to which foreign judgments could be more expeditiously enforced at common law; and seek to become a party to the Lugano Convention on Jurisdiction and Enforcement in Civil and Commercial Matters 1988 (the Lugano Convention).
1. Existing regional agreements
At present there are a mere three multilateral judgment enforcement conventions in existence, being the Brussels Convention, the Lugano Convention and the 1979 Inter-American Convention on the Extraterritorial Validity of Foreign Judgments and Arbitral Awards (the Inter-American Convention).
a) The Brussels and Lugano Conventions
The Brussels Convention, now an EU Regulation,[20] was originally concluded in 1968 between the six founding states of the European Economic Community, and was supplemented two decades later by the coming into force of the substantially identical Lugano Convention. The need for two parallel instruments arose from the fact that certain significant European economies- Spain and Portugal especially- were not then members of the EEC such as to be bound by Brussels, with Lugano therefore extending in effect to all member states of the broader European Free Trade Association.[21] Taking Brussels as the example, the two Conventions operate so as to, first, provide for the mutual recognition and enforcement of money judgments rendered in "civil and commercial matters" (Art 1) amongst Contracting States and, second, to prescribe the acceptable bases of jurisdiction which may be exercised by national courts if the resulting judgment is to be so enforceable. Thus the basal rule is that judgments issued in the courts of one Contracting State are accorded exterritorial effect in any other, it being mandatory that such judgments be enforced "without any special procedure being required" (Art 26), provided that it has been rendered on the basis of various, expressly enumerated heads of jurisdiction. In this respect, the general rule is that "persons domiciled in a Contracting State shall, whatever their nationality, be sued in the courts of that State" (Art 2), consistent with the actor sequitur forum rei theory dominant in continental legal systems- that the plaintiff must follow the defendant to the place of the alleged wrong [22]- and subject only to the exceptions listed in Title II and detailed by the authors elsewhere.[23] Provided that these conditions are met, a judgment is thus conclusive on the merits (Art 34) and must be automatically enforced in any Contracting State save for a right of appeal against enforcement (Art 37) and the 'safety valve' defence that enforcement would be "contrary to public policy in the State in which recognition is sought" (Art 27).
According to the parlance and by providing for both jurisdiction and enforcement simultaneously, Brussels and Lugano are thus 'convention doubles'. From the perspective of clarity and certainty, such instruments are ideal in that simply by "reading the convention's text, potential litigants can [...] determine at one stroke where they can be sued or be sued, and the availability of recognition and enforcement for any resulting judgment."[24]
b) The Inter-American Convention
By way of contrast, the Inter-American Convention, to which ten states of the Organisation of American States are presently party, is a 'conventions simple', providing for the extraterritorial effect and foreign enforcement of judgments when (Art 2(d)):
"the judge or tribunal rendering the judgment is competent in the international sphere to try the matter and to pass judgment on it in accordance with the law of the State in which the judgment, award or decision is to take effect."
What constitutes a judge or tribunal 'competent in the international sphere' to seise jurisdiction is, however, not defined in the convention, and thus whether jurisdiction has been validly enlivened for the purposes of enforcement remains a matter for the national law of the enforcing court. In light of this deficiency and the uncertainty it engenders as to which judgments will be enforced by other Contracting States, in 1984 the Inter-American Convention on Jurisdiction in the International Sphere for the Extraterritorial Validity of Foreign Judgments was opened for ratification, Article 1 of which specifies, in the manner of Brussels and Lugano, precisely what constitutes a court 'competent in the international sphere' for the purposes of Art 2(d) of the 1979 treaty. However, with Mexico the sole signatory to have deposited ratification this convention at time of writing is yet to enter into force.
2. The Hague Conference and the attempts to formulate an international convention
a) Origins of the Draft Hague Convention
In respect of the formulation of an enforcement convention at supra-regional level, it is certainly true that, like so many other nascent reforms in this area, the idea is far from new; the Netherlands' government memorandum accompanying the diplomatic note calling the first Hague Conference on Private International Law in 1893, for instance, raised the possibility of the conclusion of an international treaty on the subject, providing for both mechanisms of enforcement and uniform rules of jurisdiction.[25] To this end, buoyed by the existence of Brussels and Lugano as potential templates, in October 1992 the American delegation to the Hague Conference Special Commission on General Affairs and Policy recommended the founding of a working group for the purposes of examining the feasibility of drafting a multilateral jurisdiction and enforcement convention. Thus the following year, delegates from thirty-five states- including Australia- began work on a text that, while roughly based on Brussels and Lugano, was expected to take several years to complete; indeed the Australian Law Reform Commission in 1994, while heralding the project as being "particularly valuable because it will address concerns about exorbitant jurisdiction and excessive damages awards in US litigation", estimated that the process would take ten years to reach fruition.[26]
b) Form of Text: A 'Convention Mixte'
At the initiative of the United States the form of text chosen was a hybrid of the Brussels/Lugano and Inter-American models- known as a 'convention mixte'- which differs from the latter in that it expressly identifies acceptable and non-acceptable bases of jurisdiction and from the former in that such bases are non-exclusive. More particularly, the United States envisaged the distilling of three 'lists' of jurisdiction comprising:
(a) a 'white list', such as the defendant's place of domicile, the exercise of which would render the judgment automatically enforceable in any contracting state;
(b) a 'black list', such as 'tag' jurisdiction based upon the temporary presence of the defendant, the exercise of which would render the judgment unenforceable in any contracting state; and
(c) a 'grey list', whose exercise would not render the judgment liable to automatic enforcement under the convention but would, rather, provide a contracting state with a discretion to enforce the judgment pursuant to its own national laws.[27]
The concept was, therefore, to attempt to balance states' desire to both retain potentially idiosyncratic bases of jurisdiction and refuse enforcement to certain judgments via the grey list, while using the white and black lists to provide greater certainty to international litigants.[28]
c) The Failure to Achieve Consensus: The 2001 Draft
While the first draft text was prepared by 1999 and subject to intensive scrutiny at the Nineteenth Session of the Hague Conference in June 2001, the above discussed national and regional differences in regards to jurisdiction and damages ensured that consensus on a final text was not achieved. As stated in March this year by two of the Conferences' rapporteurs:
"As work proceeded on drafting ... it became apparent that it would not be possible to draw up a satisfactory text for a "mixed" convention within a reasonable period of time. The reasons for this included the wide differences in the existing rules of jurisdiction in different States and the unforeseeable effects of technological developments, including the Internet, on the jurisdictional rules that might be laid down in the Convention."[29]
Accordingly, it was resolved to truncate the project to the preparation of a text dealing with certain bases of jurisdiction on which some degree of agreement had been reached, including voluntary submission, habitual residence, and the place of acting in physical torts. Even in respect of such restricted subject matter, however, resolution still proved impossible and the project was further scaled down, resulting in the preparation and release in May 2004 of a draft text dealing solely with the effect of exclusive choice of court agreements in business to business transactions. This text dictates that the "court or courts of a Contracting State designated in an exclusive choice of court agreement shall have jurisdiction to decide a dispute to which the agreement applies" (Art 5), with courts in other contracting states before whom proceedings are brought in breach of such an agreement being under a general obligation to suspend or dismiss the proceedings (Art 7). In turn, judgments rendered by a court designated as having exclusive jurisdiction are to be accorded exterritorial effect and enforced in all other contracting states, subject to the usual defences such as fraud or public policy (Art 9).[30] Thus while the present text retains in a formal sense the structure of the 1992 United States proposal- comprising a white list of jurisdiction pursuant to an exclusive choice of court agreement, a black list of jurisdiction contrary to such a agreement and a grey list of every other possible basis of jurisdiction known to the world's legal systems- it falls manifestly short of a convention that has the potential to do for the global community what Brussels/Lugano has done for the European.
Even the most cursory glance at the 2001 draft [31] reveals the most fundamental areas of division. In respect of the white list, for example, while bases of jurisdiction such as the defendant's place of habitual residence (Art 3), express choice of forum (Art 4) and the place of acting in tort (Art 9) are all present and relatively settled, the United States concept of 'activity' or 'minimum contacts' jurisdiction[32] (Art 6), the application of the text to consumer contracts (Art 7) and jurisdiction to determine rights in rem to immovable property within the forum (Art 12) remain matters of contention. Moreover the proposed contents of the black list (Art 18) was to trigger an even greater degree of controversy, it being proposed but by no means agreed upon to proscribe exorbitant bases of jurisdiction such as the mere location of property within the forum (such as in the German Civil Code), the nationality of the parties (such as in the French Civil Code) or service within the forum (such as in most common law jurisdictions). Certainly, substantial progress was made at the Nineteenth Session in respect of allaying the fears expressed by many states as to the enforcement of large United States damages awards, with consensus reached on a proposed Article 33(1) reading as follows:
"A judgment which awards non-compensatory damages, including exemplary or punitive damages, shall be recognised and enforced to the extent that a court in the State addressed could have awarded similar or comparable damages. Nothing in this paragraph shall preclude the court addressed from recognising and enforcing the judgment under its law for an amount up to the full amount of the damages awarded by the court of origin."
Similarly, proposed Article 33(2) provides a discretion to limit enforcement to a lesser amount than the full quantum of damages awarded when the enforcing court considers that sum to be "grossly excessive."
d) The Future of the Draft Convention
These advances notwithstanding, it remains evident that, first, "reaching a standard for adjudicatory jurisdiction that is acceptable to all parties represents the greatest challenge to drafting a treaty on reciprocal judgment recognition" [33] and, second, that to settle upon such an acceptable standard will require nothing short of the complete abandonment of many cherished bases of jurisdiction. Further, it is equally clear that it would be of scant utility to attempt to formulate an international convention in the absence of such agreement in the manner of a convention single. The whole purpose of the move towards a uniform judgment enforcement scheme is to provide greater certainty to international litigants in an increasingly interdependent global economy, a goal which would be furthered not at all by leaving it to national courts to apply national law to the process of determining whether the rendering court was properly seised of jurisdiction. While such a convention may well provide for more streamlined avenues of enforcement were the judgment creditor to successfully prove up the question of jurisdiction, it would be of no value whatsoever as a means of enabling litigants to determine the optimal forum in which to sue so as to maximise the possibility that any resulting judgment would be enforceable in any given venue. Indeed, a fortiori Brussels and Lugano have precisely this effect due to their status as conventions double, but those Conventions and the jurisdictional compromises upon which they rest must be understood in the context of their particularly European provenance. That is to say, while it is one thing for an Italian plaintiff to have to travel to Belgium to commence proceedings in accordance with the general Brussels rule of actor sequitur forum rei, it would be quite another for a New South Wales plaintiff to have to travel to India were many of the bases of jurisdiction now prescribed in, for example, Pt 10 r 1A of the New South Wales Supreme Court Rules[34] overridden by an international judgment enforcement convention.
Accordingly the Hague Conference judgments project currently faces the task of Sisyphus; to draft a convention dealing with jurisdiction when it is the very question of jurisdiction that will prevent any such draft becoming final. Thus it would seem that lawmakers in Australia, while not abandoning efforts to formulate such a convention, must turn their attention in the interim to the simplification and reform of domestic laws on the subject.
3. Accession to the Lugano Convention
While the Lugano Convention was intended to apply principally to members and future members of the European Free Trade Association, Article 62(b) dictates that it is open to accession by any other state provided that an explicit invitation in accordance with the unanimous agreement of all Contracting States is received. In light of the potential benefits to Australian litigants that such accession could potentially engender, principal among which would be the extra-territorial effect of Australian judgments throughout virtually the whole of Western Europe, exploration of the feasibility of such accession was one of the express recommendations of the Australian Law Reform Commission's 1994 report Legal Risk in International Transactions.[35]
However, the rationale behind Australia actively exploring the possibilities of accession extend beyond such practical benefits to the partial neutralisation of the positive disadvantage non-parties to the 'Fortress Europe' created by Brussels and Lugano presently experience. Namely, common Article 4 of those Conventions dictates that "[i]f the defendant is not domiciled in a Contracting State, the jurisdiction of the courts of each Contracting State shall [...] be determined by the law of that State"; thus in contrast to defendants domiciled in a Contracting State, it is open for defendants in non-Contracting States to be subject to the various grounds of exorbitant jurisdiction whose exercise is otherwise proscribed. For example, while it is not open for a French plaintiff, relying on Article 14 of the French Civil Code, to commence proceedings in France against a British company for a breach of a contract made and performed in Malaysia, the same does not follow in respect of an Australian company in an otherwise identical situation. Furthermore, and as discussed above, a judgment rendered in one Contracting State must be enforced, subject only to a narrow range of exceptions, by the courts of every other Contracting State by virtue of common Article 26. Continuing the example, therefore, while any resulting French judgment would be unenforceable in Australia unless the Australian company voluntarily submitted to the jurisdiction by appearance or express contractual agreement or was present in France at the time of commencement, the French judgment debtor could nonetheless seek automatic enforcement in any Contracting State to Brussels or Lugano in which the Australian company might conceivably have assets. Of course while the obverse is equally true- that the recognition of an Australian judgment by a court of a Contracting State to Brussels or Lugano opens the way to enforcement in any other Contracting State in which the defendant may have assets- the cumulative effect of common Articles 4 and 26 and the relative powerlessness of Australian courts to protect an Australian defendant in such a situation [36] is undoubtedly a matter for concern.
It must be noted, however, that a degree of protection for Australian defendants from the enforcement of judgments obtained in like circumstances to the above example has been achieved via the entry into force in 1994 of a bilateral treaty with the United Kingdom providing for the 'Reciprocal Recognition and Enforcement of Judgments in Civil and Commercial Matters.'[37] Viz, Article 59 of the Brussels Convention provides that:
"This Convention shall not prevent a Contracting State from assuming, in a convention on the recognition and enforcement of judgments, an obligation towards a third State not to recognize judgments given in other Contracting States against defendants domiciled or habitually resident in the third State where, in cases provided for in Article 4, the judgment could only be founded on a ground of jurisdiction specified in the second paragraph of Article 3 [being those exorbitant bases of jurisdiction which cannot be exercised against defendant domiciled in Contracting States]."
In turn, therefore, Article 3 of the 1994 UK-Australia treaty provides that the former will not enforce any judgments obtained against defendants domiciled in Australia and rendered in another Contracting State.
4. Reform of domestic laws as to the jurisdiction of the foreign court
As explored in part one of this paper, at both common law and under the FJA Australian conflicts rules demand as a precondition to enforcement that the foreign court have acquired jurisdiction on the restricted bases of either voluntary submission (by either appearance or contract) or the residence or presence of the debtor in the foreign forum. Especially considering the physical remoteness of Australia from the centres of world trade in Europe, North America or even South-East Asia, the unfairness potentially imposed upon foreign plaintiffs by this approach is self-evident. Consider the following example; an Australian toy manufacturer contracts in South Korea with a relatively impecunious South Korean distributor for the manufacture and supply of toys specifically to the South Korean market. The duly made and supplied goods are retailed extensively in that country, but are later found to be dangerous to children and are subject to a recall the cost of complying with which drives the distributor into insolvency. Proceedings against the Australian company are commenced by injured parties in South Korea, to which the former responds by declining to appear or otherwise participate.
Were Australia and South Korea parties to Brussels or Lugano, the South Korean plaintiffs would have no need to follow the defendant to its forum, common Article 5(3) providing that proceedings may be commenced in tort in the place where the harmful event occurred rather than exclusively in the place of the defendant's domicile. Indeed the same conclusion would follow even pursuant to the contentious 2001 Hague Convention draft, proposed Article 10(1) permitting a plaintiff to commence in tort in the courts of the State "in which the injury arose" (provided that that place was reasonably foreseeable to the defendant, being hardly an issue on the facts of our example). Under existing Australia law, however, the plaintiffs would be forced to travel to Australia in the certainty that any South Korean judgment would be unenforceable in this country absent the participation in the foreign proceedings by the Australian company. For obvious reasons, therefore, it is simply unacceptable for Australian law to retain such a restrictive approach to the question of the jurisdiction of the foreign court, being an area which, like the Abouloff rule, is of nineteenth century origin.
a) Recent Canadian reforms as to jurisdiction
aa) The First Step: Morguard Investments Ltd v De Savoye and 'Real and Substantial'
In this respect, a potential way forward is contained in recent developments in Canadian jurisprudence. In Morguard Investments Ltd v De Savoye,[38] De Savoye was mortgagor of certain lands in Alberta who, during the currency of the agreement, moved to British Columbia and ceased to have any business or presence in Alberta. Upon the mortgage falling into arrears, the mortgagees (Morguard) commenced proceedings in Alberta and effected service on De Savoye pursuant to the long arm jurisdiction of the Alberta courts, to which De Savoye responded by refusing to participate or appear. Upon the commencement of enforcement proceedings in British Columbia in respect of the default judgment, De Savoye submitted that the Alberta courts were not validly seised of jurisdiction for that purpose in accordance with the traditional test then applicable in Canada (and still applicable in Australia).
La Forest J, delivering the judgment of the Supreme Court (Dickson CJ, La Forest, L'Heureux-Dube, Sopinka, Gonthier, Cory and McLachlin JJ), began his analysis by stating that "[t]he common law regarding the recognition and enforcement of judgments is firmly anchored in the principle of territoriality as interpreted and applied by the English courts in the 19th century." [39] In contrast, his Honour noted that in the contemporary context "the rules of private international law are founded in the need in modern times to facilitate the flow of wealth, skills and people across state lines in a fair and orderly manner",[40] resulting in a diminished concern with the right of sovereign states to control absolutely matters within their own territory and an increased focus on the reasonable minimisation of legal risk to those engaged in such trans-border commerce. Shortly stated:
"The world has changed since the above rules were developed in 19th century England. Modern means of travel and communications have made many of these 19th century concerns appear parochial. The business community operates in a world economy and we correctly speak of a world community even in the face of decentralised political and legal power. Accommodating the flow of wealth, skills and people across state lines has now become imperative. Under these circumstances, our approach to the recognition and enforcement of foreign judgments would appear ripe for reappraisal."[41]
Accordingly, the Court effected a significant change to the Canadian common law by holding that the courts of one province will have been sufficiently seised of jurisdiction for the purpose of the enforcement of a judgment in another province when a "real and substantial connection" between the proceedings and the rendering forum can be established. For La Forest J, such a test at once provides a reasonable degree of protection to defendants from being "pursued in jurisdictions having little or no connection with the transaction or the parties" and relieves plaintiffs of the burden of travelling to potentially distant jurisdictions when the matter is substantially connected to their place of domicile.
Thus in this case the Court had little difficulty in holding that the Alberta court was properly seised of jurisdiction, given that the contract was made between an Alberta company and a person domiciled at that time in Alberta, and concerned land situated in that province.
bb) The Second Step: 'Real and Substantial' Developed
Subsequently in Hunt v T&N plc,[42] La Forest J elaborated upon the Morguard test and reiterated that, rather than laying down a "rigid test", the concept of a real and substantial connection is concerned with determining whether it was 'reasonable' or 'fair' to both parties for the rendering court to have seised jurisdiction. That is to say, the question is to turn upon "the gradual accumulation of connections defined in accordance with the broad principles of order and fairness" and not the mechanical accumulation of factors for and against the existence of a relevant connection. Thus more recently in Muscutt v Courcelles,[43] another case concerning intra-Canadian proceedings, Sharpe JA (with whom Feldman and Rosenberg JJA agreed) of the Ontario Court of Appeal noted that by introducing flexible notions of fairness and reasonableness into an area formerly dominated by the bright line tests of submission and residence or presence, the Supreme Court in Morguard "rewrote the law of jurisdiction and enforcement." Moreover, his Honour was of the opinion that the nature of the 'real and substantial connection' to be established "is deliberately general to allow for flexibility in the application in the test";44 thus the connection may be in respect of either/or the jurisdiction and the subject matter of the proceedings, the jurisdiction and the parties, the jurisdiction and the wrongdoing or the jurisdiction and the cause of action.
cc) The Final Step: Beals v Saldanha
However, of course, neither Morguard nor either of the subsequent decisions above directly concerned the enforcement in Canada of a truly foreign judgment, as opposed to a mere inter-provincial award, leading to doubts in the academic literature as to its potential application in that regard. Handed down in December of 2003, however, the majority decision of the Supreme Court in Beals v Saldanha[45] appears to have quelled such uncertainties.
In 1981, Ontario residents Mr and Mrs Saldanha purchased a vacant block of land in Florida. Three years later they were contacted by a realtor acting on behalf of Mr and Mrs Beals, who were Florida residents interested in purchasing the still-undeveloped land. The Saldanhas agreed, but were sent a contract erroneously referring to the conveyance of 'Lot 1' rather than 'Lot 2'; the realtor was notified of the error, the contract was changed to refer to 'Lot 2' and returned to Florida executed. The Beals, however, commenced construction on Lot 1, and upon discovering the mistake commenced proceedings against the Saldanhas in Florida claiming- as required by the pleading rules of that jurisdiction- 'damages in excess of $5,000'. The Saldanhas were served with process in Ontario, and appeared and filed a defence, but the action was subsequently discontinued by reason of having been commenced in the wrong circuit. In 1986 a second action was commenced by the Beals in Florida again claiming 'damages in excess of $5,000', but differing from the first in its claim for treble damages by reference to allegations of fraud; yet again the Saldanhas, after service of process in Ontario, appeared and filed a defence. However, no defence was filed to a subsequent amendment by the Beals to their claim, being an omission which under Florida law entitled them to default judgment. This having been obtained, the Beals served notice on the Saldanhas of a jury trial to determine the quantum of damages- to which no response was received- which were eventually assessed at US$210,000 compensatory and US$50,000 punitive, plus interest from the date of judgment accruing at a rate of twelve percent. In sum, the final award was an amount described later by Binnie J in the Supreme Court as "breathtaking" and "Kafka-esque"[46] in light of the fact that, while the Saldanhas had paid US$8,000 for the lot in 1981, by the time of the Supreme Court hearing the judgment debt owing had amassed to over $1 million Canadian. While the Saldanhas were alarmed at the sheer size of the award, no action was taken to have the jury verdict set aside as they had received legal advice to the effect that it would be unenforceable in Ontario due to their failure to voluntarily submit to the Florida court's jurisdiction. Nonetheless in 1993 the Beals commenced enforcement proceedings in Ontario, and the matter eventually came before the Supreme Court on the questions of whether the Morguard 'real and substantial connection' test applied in the international context and the applicability of the defences of fraud, denial of natural justice and public policy.
dd) The Approach of the Majority
Writing for the majority (McLachlin CJ, Gonthier, Major, Bastarache, Arbour and Deschampes JJ), Major J was of the firm opinion that the Morguard test should indeed be applied to the context of foreign judgments on the basis that:
"International comity and the prevalence of international cross-border transactions and movement call for a modernization of private international law. The principles set out in Morguard ... and further discussed in Hunt v. T & N plc, [1993] 4 S.C.R. 289, can and should be extended beyond the recognition of interprovincial judgments, even though their application may give rise to different considerations internationally. Subject to the legislatures adopting a different approach by statute, the "real and substantial connection" test should apply to the law with respect to the enforcement and recognition of foreign judgments."[47]
From this assumption, his Honour held that "a defendant can reasonably be brought within the embrace of a foreign jurisdiction's law where he or she has participated in something of significance or was actively involved in that foreign jurisdiction";[48] in contrast, it will be unreasonable to assume jurisdiction when the relevant connections are merely "fleeting or relatively unimportant." Most significantly, however, the majority in this case determined that the real and substantial connection test of jurisdiction is, with respect to the former position, of an overriding rather than supplementary nature. While under the old law the service of process within the foreign jurisdiction, no matter how fleeting the defendant's presence, was sufficient to ground jurisdiction, under the Morguard test as applied in Beals such service would merely comprise one indicia relevant to whether the requisite connection was established. As stated by Major J:
"There are conditions to be met before a domestic court will enforce a judgment from a foreign jurisdiction. The enforcing court, in this case Ontario, must determine whether the foreign court had a real and substantial connection to the action or the parties, at least to the level established in Morguard, supra. A real and substantial connection is the overriding factor in the determination of jurisdiction. The presence of more of the traditional indicia of jurisdiction (attornment, agreement to submit, residence and presence in the foreign jurisdiction) will serve to bolster the real and substantial connection to the action or parties."[49]
On the facts of this case, therefore, the majority found that it was clearly reasonable for the Florida court to have seised jurisdiction given that the subject matter of the action was a transaction in Florida concerning land in Florida.
Moreover, the majority were of the opinion that the more liberal enforcement regime engendered by Morguard and the decision in this case should not be circumvented by a simultaneous expansion of the various defences to enforcement of fraud, denial of natural justice and public policy. Thus in respect of the defence of fraud, Major J reiterated that the Abouloff v Oppenheimer rule has no application in Canada in the sense that it is only fresh evidence of fraud, rather than allegations that were or might reasonably have been ventilated before the foreign court, that will be sufficient to ground the defence.[50] Similarly the defence of denial of natural justice was explicitly limited to issues of due process rather than the substance of the proceedings, and was, further, held not to extend to notice of idiosyncrasies in foreign procedural law at variance with those of the defendant's forum; thus it was irrelevant that the Saldanhas did not know that they were liable to suffer default judgment if they failed to respond to the Beals amended pleading in the second action.[51] Major J said:
"A defendant to a foreign action instituted in a jurisdiction with a real and substantial connection to the action or parties can reasonably be expected to research the law of the foreign jurisdiction. The Saldanhas ... owned land in the State of Florida and entered into a real estate transaction in that state. When served with notice of an action against them in the State of Florida, the appellants were responsible for gaining knowledge of Florida procedure in order to discover the particularities of that legal system."[52]
And, finally, in relation to the defence of public policy the majority rejected the submissions put on behalf of the Saldanhas to the effect that it should be expanded to encompass situations where the outcome of a specific case is repugnant to the public policy of the enforcing forum, as compared to the repugnancy of the foreign law per se. Given that the whole purpose of the decision in Morguard and the majority decision in this case was to liberalise Canada's enforcement laws in light of changed notions of sovereignty and comity in the modern context, this rejection is hardly surprising; as stated by Major J:
"The use of the defence of public policy to challenge the enforcement of a foreign judgment involves impeachment of that judgment by condemning the foreign law on which the judgment is based. It is not a remedy to be used lightly. The expansion of this defence to include perceived injustices that do not offend our sense of morality is unwarranted. The defence of public policy should continue to have a narrow application."[53]
Thus, given that there was no fresh evidence of fraud on the Florida court, the Saldanhas had at all stages been put upon notice of the proceedings against them and the mere institution of treble and punitive damages was not repugnant to Canada's sense of basic morality, it was held by the majority that none of the defences applied.
ee) The Approach of the Minority
In contrast the minority, represented in greatest depth by the judgment of Le Bel J, manifested a primary concern for the protection of Canadian defendants from potentially vexatious and oppressive foreign proceedings. Thus, for his Honour the question of whether a real and substantial connection exists should take cognisance of "the additional hardship imposed on a defendant who is required to litigate in a foreign country" and the "possibility that the quality of justice there may not meet Canadian standards."[54] More specifically, in addition to factors such as the place of contracting, where the cause of action arose, the place of acting in tort, the location of any relevant property, and so forth, Le Bel J was of the opinion that primary consideration should be given to "the burdens that defending in the foreign forum would impose on a defendant, in order to determine whether it is reasonable to expect the defendant to accept them."[55] Using the example of a Canadian defendant sued on the Continent as an example of his point, his Honour said:
"Such a defendant cannot hope to protect herself unless she retains local counsel who can both negotiate the process on her behalf and explain it to her in a language she knows. It is not a simple thing to find trustworthy, competent, bilingual counsel in a foreign country; nor is it cheap. The plaintiff, who chose the forum, will presumably not face these difficulties, and therefore the parties will not be on a level playing field."[56]
Overall in respect of the application of the Morguard test, therefore, Le Bel J was concerned that the "implication of the position of the majority is that Canadian defendants will from now on be obliged to participate in foreign lawsuits no matter how meritless the claim or how small the amount of damages in issue reasonably appears to be, on pain of potentially devastating consequences from which Canadian courts will be virtually powerless to protect them."[57] Given the presence of such an obligation should a Canadian defendant wish to protect his or her assets in Canada, for his Honour:
"the risks and thus the transaction costs to our citizens of cross-border ventures will be increased, in some cases beyond what commercially reasonable people would consider acceptable. Canadian residents may consequently be deterred from entering into international transactions -- an outcome that frustrates, rather than furthers, the purpose of private international law."[58]
Moreover, this protective attitude flows through into Le Bel J's conception of the proper scope of the various defences to enforcement in that the "old, strict approach to these defences struck a balance appropriate to the requirements of international comity under the pre-Morguard common law, where the jurisdiction test was a difficult threshold for foreign plaintiffs to cross."[59] Accordingly, the broader bases of recognised foreign jurisdiction under the post-Morguard test for Le Bel J justifies a concomitant expansion of the defences of fraud, denial of natural justice and public policy. In respect of the fraud test, while agreeing with the majority that as a statement of general principle the Abouloff v Oppenheimer rule should continue to have no application in Canada, his Honour mooted the development of a broader test in cases of foreign default judgments "where the defendant's decision not to participate was a demonstrably reasonable one."[60] Similarly in respect of natural justice, his Honour advocated its expansion so as to encompass "substantive principles of justice" applied to each individual case in a "purposive and flexible manner";[61] thus on the facts of this case, the Saldanhas should have been put upon notice not merely of the fact of the Florida proceedings, but also that their failure to respond to the amended claim constituted a default. And in respect of the public policy defence his Honour, while affirming that its scope extends only to "the law of the foreign forum, rather than the way the law was applied",[62] discussed (without deciding the matter) its possible extension to particularly egregious United States laws concerning multiple or punitive damages.[63]
ff) Assessment: The Majority Approach Preferable
On balance, the approach of the majority in Beals is to be preferred on the basis that, with the greatest respect, the dissenting judgment of Le Bel J appears to have been influenced by the very unusual facts of this case and the plight of the Salhandas as $8,000 family investors eventually liable for over $1 million in damages.[64] In attempting to develop a jurisprudence which affords a significant degree of protection to Canadian defendants, that is to say, it is strongly arguable that the minority lost sight of both the imperative of modernising conflicts rules to suit a highly integrated world economy and the need to accord fairness to foreign plaintiffs as much as domestic defendants.
Certainly, a more liberal enforcement regime in any particular country may increase the transactional risks for domiciliaries of that country by placing their domestic assets at greater risk; but, equally, a more rigid enforcement regime acts as a disincentive to foreign parties wishing to do business with such domiciliaries. And, similarly, while foreign litigation in a distant forum chosen by the plaintiff may not be conducted on a 'level playing field' given the increased burdens on the defendant, to instead force a foreign plaintiff to travel to the defendant's forum is not to level that field but, rather, to merely tip it in favour of the defendant. Considered from this perspective, to refuse to develop conflicts rules in this area out of concern for domiciliaries is to risk perpetuating the nineteenth century, nationally chauvinistic bases of the existing order. In addition, it is strongly arguable that the test of a real and substantial connection as applied by the majority already affords the defendant a significant degree of protection, to which it is unnecessary to add further the primary consideration of the cost to the defendant of defending the foreign proceedings. Specifically, for jurisdiction to be enlivened under the majority's test a Canadian needs to go to the expense of travelling to a foreign forum and conducting business or other activities there sufficient to establish the requisite real and substantial connection, being an enterprise that (as with the Saldanhas) would be typically conducted with the intent of turning a monetary profit. Provided that proper notice of subsequent proceedings in that forum was given, and that the substantive law in issue was not wholly repugnant to Canadian notions of morality, it thus appears incongruous in the extreme to permit a defendant to argue that while he or she was prepared to go to the expense of travelling to the foreign forum in the expectation of profit, it is unreasonable to compel them to travel there for the purposes of defending the litigation. The plaintiff may well have chosen the forum, but a priori the defendant chose to establish a substantial connection with that forum in the first place and the injustice to the plaintiff of continuing to allow the defendant to renege on that choice is manifest.
In respect of the future scope of the various defences, while detailed analysis is not yet possible due to the brevity of Le Bel J's discussion of his proposed reforms it is open as a preliminary issue to observe that to add 'flexibility' to the defences when the prevailing test of jurisdiction after Morguard and Beals does just that appears to be layering protection upon protection. To posit as the sole test of jurisdiction the reasonableness of the foreign court's assumption of jurisdiction in light of the substantiality of the connection between the parties, the subject matter or the cause of action and the foreign forum is to extend to defendants a degree of protection which did not exist under the pre-Morguard test. Thus, for example, the service of process in the foreign forum, regardless of how fleeting the defendant's presence of the relative insignificance of his or her business there, would be conclusive of the issue of jurisdiction under the old test; but following Morguard and Beals, the sole question would be whether a real and substantial connection in the relevant sense existed, regardless of the place of service. For example, while in Close v Arnot[65] the Australian defendant served during a brief holiday in New York had no basis upon which to challenge the jurisdiction of the American court, this conclusion would by no means follow in Canada following Morguard and Beals. While the new test outlined in those cases does indeed liberalise the range of foreign judgments potentially enforceable in that country, that is to say, it does so primarily in respect of recalcitrant defendants who strategically refuse to participate in foreign proceedings comfortable in the knowledge that any resultant judgment would be unenforceable in their place of domicile, while protecting those whose presence or business in the foreign forum was merely temporary or insubstantial.
gg) The Adoption of Beals v Saldanha in Australia?
Therefore, a strong case may be made to the effect that the Morguard and Beals test presently applicable in Canada should be followed at common law in Australia, and that s 7(2)(a) of the FJA be likewise amended to incorporate a general test of 'real and substantial connection.' Indeed, Australian courts are already familiar with applying a similar test in a different area of the conflict of laws- namely the determination of which jurisdiction a contract has its 'closest and most real connexion' [66] with in the context of the implied choice of laws in contract- such that the adoption of the Canadian approach would not cause any significant interpretative difficulties. Moreover, the existence of a "substantial connection" between the defendant and the forum is the primary test of jurisdiction under the ALI/UNIDROIT Principles and Rules of Transnational Civil Procedure [67] thus, were specialist rules to the same or similar effect introduced in Australia to apply to the resolution of international disputes, the dual benefit of harmonised procedures for the enforcement of foreign judgments at common law and a merger of case law on jurisdiction would be achieved.
IV. Conclusions and Observations
In light of the substantially reformed state of procedural law in Australia and the recent promulgation of the ALI/UNIDROIT Principles and Rules of Transnational Civil Procedure, it is incongruous in the extreme that the law relating to the enforcement of foreign judgments remains based upon concepts whose provenance lies indelibly in eighteenth to nineteenth century English jurisprudence. Regardless of the degree of harmonisation attained in respect of procedural laws, the benefits of such reform are set at naught in the absence of an efficient and modern system of judgment enforcement. Accordingly, and in view of the sluggish progress being made at the Hague Conference in respect of the finalisation of a comprehensive treaty, lawmakers in Australia must prioritise; (a) the exploration of the possibility of accession to the Lugano Convention; (b) the extension of the FJA to significant trading partners such as the United States, China and India; and (c) the adoption of the Canadian approach in respect of the acceptable bases of foreign jurisdiction. While giving effect to such reforms would require a minimum degree of institutional exertion the benefit of doing so would be little short of the long-overdue propulsion of Australian conflicts rules into the modern era.
END NOTES
* Teil I erschienen in IPRax 2005, 273 ff. [The published version of this paper is to be found in Praxis des Internationalen Privat - und Verfahrensrechts (IPRax), issue 4, July/August 2005, s293-400, at 365]
** A Judge of the Supreme Court of New South Wales
*** BA (Hons), LLB (Hons). Commercial List Researcher, Supreme Court of New South Wales.
1 Einstein/Phipps, IPRax 2005, 273
2 Commonwealth of Australia Parliamentary Debates, House of Representatives, 29 May 1991, No 10 of 1991, page 4219.
3 The American Law Institute/UNIDROIT, Principles and Rules of Transnational Civil Procedure, Final Draft, November 2004.
4 Cornelius van Boeschoten, "Hague Conference Conventions and the United States: A European View" (1994) 57(3) Law and Contemporary Problems 47 at 50.
5 (1986) 6 NSWLR 534 at 541.
6 "The Principles and Rules of Transnational Civil Procedure and their Application to New South Wales " (2004) 4 Unif. L. Rev. 815
7 Hans Smit, "International Control of International Litigation: Who Benefits?" (1994) 57(3) Law and Contemporary Problems 25 at 27.
8 See generally: Cornelius van Boeschoten, "Hague Conference Conventions and the United States: A European View" (1994) 57(3) Law and Contemporary Problems 47 at 50-53.
9 For greater detail on the operation of the Brussels Convention in this regards, see the authors' report paper: "The Principles and Rules of Transnational Civil Procedure and their Application to New South Wales" (2004) 4 Unif. L. Rev. 815
10 Brandon B. Danford, "The Enforcement of Foreign Money Judgments in the United States and Europe: How Can We Achieve a Comprehensive Treaty?" (2004) 23 Review of Litigation 381 at 409.
11 Bradford A. Caffrey, International Jurisdiction and the Recognition and Enforcement of Foreign Judgments in the LAWASIA Region, CCH Australia, Sydney, 1985, page 76.
12 [1983] 1 WLR 730 at 733-4.
13 Beals v Saldanha [2003] SCC 72 at [225].
14 Jenifer M. Anglim, "Crossroads in the Great Race: Moving Beyond the International Race to Judgment in Disputes Over Artwork and Other Chattels" (2004) 45 Harvard International Law Journal 239 at 241-2.
15 Smit, "International Control of International Litigation: Who Benefits?" (1994) 57(3) Law and Contemporary Problems 25 at 27.
16 Takeshi Kojima, "Cooperation in International Procedural Conflicts: Prospects and Benefits" (1994) 57(3) Law and Contemporary Problems 59 at 64.
17 Kojima, "Cooperation in International Procedural Conflicts: Prospects and Benefits" (1994) 57(3) Law and Contemporary Problems 59 at 65.
18 See also: Protection of Trading Interests Act 1980 (UK) ss 5-7 to the same effect.
19 (1882) 10 QBD 295. Broadly speaking the rule in Abouloff v Oppenheimer dictates that the enforcing court may refuse to enforce the foreign judgment on the ground that it was obtained by fraud, regardless of whether that fraud was known to the judgment debtor at the time of the foreign proceedings or raised as an issue in the foreign proceedings. In contrast, English and Australian common law dictates that a domestic judgment can only be set aside on the ground of fraud when the party asserting the fraud has discovered fresh facts indicating the wrong, subsequent to the judgment said to be tainted by fraud. For further detail on the nature and operation of the rule, see part one of this paper.
20 Council Regulation 44/2001, 2001 OJ (L 12) 1.
21 Danford, "The Enforcement of Foreign Money Judgments in the United States and Europe: How Can We Achieve a Comprehensive Treaty?" (2004) 23 Review of Litigation 381 at 391.
22 Caffrey, International Jurisdiction and the Recognition and Enforcement of Foreign Judgments in the LAWASIA Region, page 77.
23 "The Principles and Rules of Transnational Civil Procedure and their Application to New South Wales" (2004) 4 Unif. L. Rev. 815.
24 Arthur T. von Mehren, "Recognition and Enforcement of Foreign Judgments: A New Approach for the Hague Conference?" (1994) 57(3) Law and Contemporary Problems 271 at 283.
25 Georges A.L. Droz, "A Comment on the Role of the Hague Conference on Private International Law" (1994) 57(3) Law and Contemporary Problems 3 at 3. The enforcement of foreign judgments was, however, omitted form the final draft of the 1904 Civil Procedure Convention.
26 Australian Law Reform Commission, Legal Risk in International Transactions, Report No 80, 1996, page 98.
27 See generally: von Mehren, "Recognition and Enforcement of Foreign Judgments: A New Approach for the Hague Conference?" (1994) 57(3) Law and Contemporary Problems 271 at 283.
28 Danford, "The Enforcement of Foreign Money Judgments in the United States and Europe: How Can We Achieve a Comprehensive Treaty?" (2004) 23 Review of Litigation 381 at 403-404.
29 Masato Dogauchi and Trevor C. Hartley, Preliminary Draft Convention on Exclusive Choice of Court Agreements: Draft Report, Preliminary Document No 25 of March 2004, Hague Conference on Private International Law, page 4. (www.hcch.net)
30 Special Commission on Jurisdiction, Recognition and Enforcement of Foreign Judgments in Civil and Commercial Matters, "Draft on Exclusive Choice of Court Agreements", Working Document No 110 E, Hague Conference on Private International Law, May 2004. (www.hcch.net)
31 Commission on Jurisdiction and Foreign Judgments in Civil and Commercial Matters, "Interim Text: Summary of the Outcome of the Discussion in Commission II of the First Part of the Diplomatic Conference 6-20 June 2001", Hague Conference on Private International Law, 2001. (www.hcch.net)
32 Where jurisdiction is seised on the basis of commercial activity carried out by the defendant in the forum, regardless of presence, residence or whether such activity was related to the dispute in question.
33 Danford, "The Enforcement of Foreign Money Judgments in the United States and Europe: How Can We Achieve a Comprehensive Treaty?" (2004) 23 Review of Litigation 381 at 406-7.
34 For more detail on these bases of jurisdiction, see the authors paper: "The Principles and Rules of Transnational Civil Procedure and their Application to New South Wales" (2004) 4 Unif. L. Rev. 815
35 Australian Law Reform Commission, Legal Risk in International Transactions, Report No 80, 1996, page 15.
36 The sole exception being where the foreign plaintiff has in a presence in Australia so as to be susceptible in personam to an anti-suit injunction issued by an Australian court. See generally: CSR Ltd v Cigna Insurance Australia Ltd (1997) 189 CLR 345.
37 Agreement between the Government of Australia and the Government of the United Kingdom of Great Britain and Northern Ireland providing for the Reciprocal Recognition and Enforcement of Judgments in Civil and Commercial Matters, Australian Treaty Series 1994 No 27.
38 [1990] 3 SCR 1077.
39 [1990] 3 SCR 1077 at 1095.
40 [1990] 3 SCR 1077 at 1096.
41 [1990] 3 SCR 1077 at 1098.
42 [1994] 109 DLR 4th 16 at 41-2.
43 [2002] 213 DLR 4th 577 at 585 [15].
44 [2002] 213 DLR 4th 577 at 591 [36].
45 [2003] SCC 72.
46 [2003] SCC 72 at [82] and [88].
47 [2003] SCC 72 at [28].
48 [2003] SCC 72 at [32].
49 [2003] SCC 72 at [37].
50 [2003] SCC 72 at [50]. See part one of this paper for further detail on the application of the rule in Canada
51 [2003] SCC 72 at [64].
52 [2003] SCC 72 at [68].
53 [2003] SCC 72 at [75].
54 [2003] SCC 72 at [134] and [171].
55 [2003] SCC 72 at [176].
56 [2003] SCC 72 at [196].
57 [2003] SCC 72 at [132].
58 [2003] SCC 72 at [136].
59 [2003] SCC 72 at [213].
60 [2003] SCC 72 at [234].
61 [2003] SCC 72 at [236].
62 [2003] SCC 72 at [221].
63 [2003] SCC 72 at [223] - [229].
64 This appears to have been a sentiment shared by some authors: Antonin I. Pribetic, ""Strangers in a Strange Land"- Transnational Litigation, Foreign Judgment Recognition and Enforcement in Ontario" (2004) 13 Journal of Transnational Law and Policy 347.
65 Unreported, Supreme Court of New South Wales, Graham AJ, 21 November 1997, BC9706194. See part one of this paper for detail of the facts of this case.
66 Bonython v The Commonwealth (1950) 81 CLR 486; John Kaldor Fabricmaker Pty Ltd v Mitchell Cotts Freight (Aust) Pty Ltd (1989) 18 NSWLR 172; Reese Bros Plastics Ltd v Hamon-Sobelco Aust Pty Ltd (1988) 5 BPR 11, 106.
67 The American Law Institute/UNIDROIT, Principles and Rules of Transnational Civil Protection Procedure, Final Draft, November 2004, Principle 2 and Rule 4.
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