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The Conflict of Laws in New Zealand: News and Comment

Webb v Webb

In the relatively recent Cook Islands case of Webb v Webb, the Privy Council ([2020] UKPC 22) considered the relevance of a New Zealand tax debt to matrimonial property proceedings in the Cook Islands. The proceedings were brought under the New Zealand Matrimonial Property Act 1976 as incorporated into Cook Islands law. The two main issues in this regard were (a) whether a personal tax debt owed by Mr Webb to the New Zealand Inland Revenue had to be enforceable in the Cook Islands in order to be deductible from the value of Mr Webb’s matrimonial property located in that country and (b) whether the debt was enforceable against the matrimonial property in the Cook Islands or whether it was barred by the “foreign tax principle”. We provide a critical analysis of the the Board’s reasoning on these issues here. The case may be of particular relevance to New Zealand law. In relation to the first issue, the Board considered whether the meaning of “debt” in s 20(5) of the Act is confined to debts that are enforceable against the matrimonial property in question. This question could still arise in New Zealand under s 20D of the Property (Relationships) Act 1976. In relation to the second issue, the case raises general questions about the relevance of the foreign tax principle in the context of cross-border insolvency.

The complex meaning of ‘the good arguable case’ standard

In Zhang v Y [2020] NZCA 592, the Court of Appeal recently considered whether there was “a good arguable case” that the plaintiffs’ claim fell within the heads of jurisdiction of r 6.27 of the High Court Rules for the purposes of service outside of the jurisdiction. The judgment provides a useful opportunity to re-examine the meaning of the “good arguable case” standard, which has caused difficulty in New Zealand (both before and after the reform of the High Court Rules in 2008) as well as in England.

Relevance of the “good arguable case” standard

In order to bring a claim against an overseas defendant in the New Zealand court, a claimant must first persuade the court to assume personal jurisdiction over the defendant. The court may assume personal jurisdiction only if there is a basis for serving the defendant outside of New Zealand. The two main bases for service outside of New Zealand are rr 6.27 and 6.28 of the High Court Rules. Under r 6.27, the claimant may serve the proceeding out of New Zealand if its claim falls within one of the heads of jurisdiction listed in the rule. For example, r 6.27(2)(a)(i) provides that a claim in tort may be served out of New Zealand if “any act or omission in respect of which damage was sustained was done or occurred in New Zealand”. The purpose of these heads of jurisdiction is to set out the circumstances in which there would ordinarily be a real and substantial connection to New Zealand sufficient to justify the assumption of jurisdiction over a foreigner. Service under r 6.27 is without the leave of the court. However, if the defendant subsequently protests the court’s jurisdiction, the claimant must show “a good arguable case” that its claim falls within one or more of the heads of jurisdiction in r 6.27.

The meaning of the “good arguable case” standard has caused a great deal of confusion in the past: it has “become befuddled by ‘glosses’, glosses upon glosses, ‘explications’ and ‘reformulations’” (Kaefer Aislamientos SA de CV v AMS Drilling Mexico SA de CV [2019] EWCA Civ 10, [2019] WLR 3514 at [59]). This is not surprising, because it is expected to do some heavy lifting: to negotiate the fact that it is not usually appropriate to resolve disputed questions of fact at the jurisdictional – and hence interim – stage of the proceeding. For example, what if a claimant who sues in the tort of deceit relies on r 6.27(2)(a)(i) to argue that the court may assume jurisdiction because the alleged misrepresentation was made in person in New Zealand, but the defendant disputes that she was in the country at the time? Or what if a claimant who sues for breach of contract relies on r 6.27(2)(b)(i) to argue that the contract was made in New Zealand, but the defendant disputes that they entered into the contract at all?

On the one hand, the answer cannot be to leave the dispute for trial, because the purpose of the inquiry is to establish whether there is a sufficient connection for the purpose of jurisdiction. If it turns out that the defendant was right, then there would have been no basis for determining the claim on the merits in the first place. On the other hand, it would not be feasible for the court to engage in a preliminary trial of the question of jurisdiction, especially if the same facts will also be relevant to determining the merits of the claim (which they may or may not). Yet it would also be unfair to decline jurisdiction every time the defendant disputes that the claim falls within a relevant head of jurisdiction.

The standard of a “good arguable case” involves a necessary compromise between these two extremes. Ideally, the standard of proof should not be so onerous as to make it impossible for the plaintiff to succeed in the face of conflicting evidence, while being sufficiently stringent for the court to be able to conclude with some confidence that the requisite connection to New Zealand is met.

The Court of Appeal’s judgment in Zhang

The plaintiffs in this case had obtained a default judgment against the defendant for deceit in relation to an investment into a company operated by the defendant in New Zealand. The defendant subsequently applied for recall of the judgment and filed a protest to jurisdiction. She argued that the High Court’s assumption of jurisdiction (and judgment by default) was based on an error of fact, which was that the defendant had made the alleged misrepresentations while they were visiting New Zealand in 2014. In fact, the defendant was not in New Zealand at the time, with the result – she argued – that r 6.27(2)(a) was not satisfied. The plaintiffs now seemed to accept that they had not met with the defendant in New Zealand in 2014. But instead, they insisted that the misrepresentations were made when the defendant visited New Zealand with one of the plaintiffs for ten days in 2015.

The High Court recalled its judgment and allowed the protest to jurisdiction on the basis that r 6.27(2)(a) was not engaged (Zhang v Yu [2019] NZHC 29). The Court was “far from persuaded that any relevant representations were made by [the defendant] to [the plaintiff]” during their visit in 2015 (at [54]). If such representations were made, it was “more likely that they were made in China”. The plaintiffs appealed to the Court of Appeal.

The Court of Appeal allowed the appeal. It noted that, to find that the good arguable case standard was met, it was “only necessary to find that there was a sufficiently plausible basis for the relevant representations having been made in New Zealand” (at [51]). It was not necessary to establish “a prima facie case” (at [12], referring to Wing Hung Printing Co Ltd v Saito Offshore Pty Ltd [2010] NZCA 502, [2011] 1 NZLR 754 at [41]) or “to find the representations were ‘more likely’ to have occurred in New Zealand” (at [51]). Disputed questions of fact could not be resolved on affidavit evidence (at [12]).

Here, there was “a sufficiently plausible basis on the evidence for the claim that [the defendant] made the relevant representations while in New Zealand” (at [51]). The plaintiff and the defendant had spent 10 days together on a trip in New Zealand, and it was “entirely plausible” that the defendant would have made relevant representations during that time. In fact, given the context and the timing of the visit, it seemed “implausible” that the parties would have avoided discussion of the investment altogether. It was not appropriate to form a view of the plaintiffs’ credibility, in relation to their claim that the misrepresentation occurred in New Zealand (at [52]). This could only be done after cross-examination.

The good arguable case – a low bar?

The Court of Appeal dismissed the defendant’s argument that the plaintiffs had not shown a good arguable case that their claim fell within r 6.27(2)(a)(i). The Court reached this conclusion even though the key question of fact – whether the representations were made in New Zealand – had been the subject of apparently inconsistent evidence from the plaintiffs and was directly disputed by the defendant. Does that mean that the good arguable case necessarily favours the plaintiff?

The answer, I think, is ‘no’. As previously noted, the purpose of the good arguable case standard in this context should be to provide the court with sufficient confidence that the claim has the requisite connection to New Zealand to assume jurisdiction. This means that the inquiry must be approached with a certain degree of flexibility and a willingness, where possible, to evaluate the relative merits of the parties’ competing positions.

The English courts have provided useful guidance on how to achieve this in practice. In Four Seasons Holdings Inc v Brownlie [2017] UKSC 80, [2018] 1 WLR 192 Lord Sumption accepted that a good arguable case involves the plaintiff having the better argument on the material available. He then broke down the inquiry into three limbs (at [7]):

(i) that the claimant must supply a plausible evidential basis for the application of a relevant jurisdictional gateway; (ii) that if there is an issue of fact about it, or some other reason for doubting whether it applies, the Court must take a view on the material available if it can reliably do so; but (iii) the nature of the issue and the limitations of the material available at the interlocutory stage may be such that no reliable assessment can be made, in which case there is a good arguable case for the application of the gateway if there is a plausible (albeit contested) evidential basis for it.

This approach was later confirmed in Goldman Sachs International v Novo Banco SA [2018] UKSC 34, [2018] WLR 3683. A useful analysis of each limb can be found in Kaefer Aislamientos SA de CV v AMS Drilling Mexico SA de CV [2019] EWCA Civ 10, [2019] WLR 3514. The Court of Appeal here clarified that:

  • “plausibility” under limb (i) still involves a relative inquiry – in other words, the plaintiff has to show that it has the better argument (at [73]);
  • limb (ii) asks the court “to overcome evidential difficulties” if it “reliably” can, using judicial common sense and pragmatism (at [78]);
  • limb (iii) operates as an exception to the relative inquiry, where the court “finds itself simply unable to form a decided conclusion on the evidence before it and is therefore unable to say who has the better argument” (at [79]; and
  • the effect of limb (iii) is that a plaintiff may satisfy the evidential test even though the court is unable to conclude that it has the better argument (at [80])

The New Zealand Court of Appeal in Zhang did not refer to these authorities. In fact, some of its dicta seem to be at odds with the English position. Both in Wing Hung and in Zhang, the Court of Appeal said that a good arguable case does not require the plaintiff to establish a prima facie case; but the English authorities are quite clear that a good arguable case requires at least a prima facie case (Four Seasons Holdings Inc v Brownlie at [5]; Aspen Underwriting Ltd v Credit Europe Bank NV [2018] EWCA Civ 2590, [2019] 1 Lloyd’s Rep 221 at [34]). This is not a recent development but reflects the position adopted by the House of Lords in Seaconsar Far East Ltd v Bank Markazi Jomhouri Islami Iran [1994] 1 AC 438 (HL) at 453: see Hook & Wass The Conflict of Laws in New Zealand (LexisNexis, 2020) at 2.153.

Does that mean that the New Zealand “good arguable case” is different from the English “good arguable case”, and that the English approach is more defendant-friendly than the New Zealand approach? Not necessarily, for two reasons:

  • As we have seen, the English authorities recognise (under limb (iii)) that, where the court cannot take a reliable view on the material because of the interlocutory stage of the proceedings, a prima facie case (or less) may be sufficient for the plaintiff to succeed. To some extent, the evidential uncertainty is here resolved in the plaintiff’s favour. Perhaps this is the situation that the New Zealand Court of Appeal had in mind when it said that the plaintiff need not establish a prima facie case – so what it really meant to say was that the plaintiff need not establish a prima facie case where the court cannot come to a concluded view on the conflicting material before it. This is, in any case, how the drafters of r 6.29(1)(a)(i) may have intended the expression to be understood, based on Seaconsar Far East Ltd v Bank Markazi Jomhouri Islami Iran [1994] 1 AC 438 (HL).
  • It is far from clear that the New Zealand court and the English court mean the same thing when they refer to a “prima facie case”. In some ways, this expression may simply be another “gloss”, “explication” or “reformulation” that does more harm than good in elucidating the meaning of the good arguable case.

Ultimately, the Court of Appeal’s reasoning seems to be consistent with the approach summarised in Kaefer. There is no doubt that questions of jurisdiction – to the extent that they raise questions of fact – cannot be determined on the balance of probabilities (cf Kaefer at [75]). In Zhang, there seemed to be a genuine dispute whether the alleged representations were made during the 2015 trip to New Zealand, bringing the case within limb (iii). The parties made competing claims to that effect, and there was no further (eg documentary) evidence that would have enabled the court to “[work] around the problem” and resolve the issue as required under limb (ii) (Kaefer at [78]). In determining whether the plaintiffs had provided sufficiently plausible evidence, the Court did not accept the plaintiffs’ evidence uncritically but evaluated the overall plausibility of the plaintiffs’ version of events. Arguably, the inconsistencies in the plaintiffs’ evidence could have been thrown into the overall mix to raise some doubt as to the plausibility of the plaintiffs’ claims. What was not necessary, however, was to engage in a relative inquiry of the merits of the parties’ respective positions – that is, to conclude that it was more likely than not that the defendant made the alleged misrepresentations in New Zealand.

The enforcement of Chinese money judgments in common law courts

The High Court recently rejected an argument that a Chinese money judgment should not be enforced because the courts of China do not qualify as “courts” for the purpose of New Zealand’s rules on the enforcement of foreign judgments: Hebei Huaneng Industrial Development Co Ltd v Shi [2020] NZHC 2992. For a brief note on the judgment, see this post by Jack Wass on Conflictoflaws.net.

The enforcement of Australian judgments concerning New Zealand land

By Jack Wass (Stout Street Chambers)

The Trans-Tasman Proceedings Act 2010 (TTPA) and corresponding legislation in Australia fundamentally reoriented the rules of private international law concerning trans-Tasman disputes. It recognized that it was no longer appropriate for many purposes to treat Australia as a foreign country, thus (among other changes) making judgments essentially enforceable in the other country as of right, and much circumscribing the traditional defences to enforcement. The remaining limits on enforcement were the subject of the High Court’s recent decision in Lange v Lange [2020] NZHC 2560.

Lange arose out of relationship property proceedings in Western Australia, where the couple had lived. Mr Lange had purchased a property in Kaitaia during the marriage, but after separation had transferred it to his daughter from a previous relationship and forgiven the debt. Moncrieff J set aside the forgiveness of debt and granted a charge over the Kaitaia property. He did not grant Ms Lange’s request to set aside the transfer itself, or to make a declaration that Ms Lange was the equitable owner of the property.

Ms Lange registered the judgment in New Zealand under the TTPA, and obtained a sale order by way of execution of the judgment debt. Mr Lange sought a stay of execution of that order and (belatedly) leave to oppose registration. In substance the question for Gault J was whether the judgment was entitled to recognition under the TTPA.

The first ground on which Mr Lange sought to have the registration set aside was that the judgment was contrary to public policy, because the result was contrary to what the New Zealand Family Court would have ordered applying New Zealand law; Mr Lange had not been treated fairly; and Moncrieff J did not have jurisdiction under the Australian Family Law Act 1975. Breach of public policy has been retained by s 61(2) of the TTPA as one of the few defences to registration, but it imposes a high threshold requiring that the result “shock the conscience” of the ordinary New Zealander (Reeves v OneWorld Challenge LLC [2006] 2 NZLR 184 (CA) at [67]). It has never been sufficient that a New Zealand court would decide the case differently, and it has been clear since Godard v Gray (1870) LR 6 QB 139 that a foreign judgment will not be re-examined on the merits. It would be a rare case indeed where an Australian judgment was held to breach New Zealand public policy, and the judge found that this was not such a case.

The more difficult question was whether the judgment could not be registered because it concerned New Zealand land. Private international law has long afforded special treatment to land, and this is reflected in s 61(2)(c) of the TTPA which requires the court to set aside registration of a judgment if it was “given in a proceeding the subject matter of which was immovable property” located outside Australia.

Gault J found that this exception was only engaged if the New Zealand property was “in issue” in the proceedings. Although the judge noted that no authorities had been cited concerning the scope of s 61(2)(c), its antecedent language in s 6 of the Reciprocal Enforcement of Judgments Act 1934 has been considered twice: in McCormac v Gardner [1937] NZLR 517, Myers CJ held that a proceeding for payment of arrears under a mortgage was not “an action of which the subject matter was immovable property”, and in Gordon Pacific Developments Ltd v Conlon [1993] 3 NZLR 760, Henry J held that an action for damages for breach of a contract for the sale of land also fell outside that description because the section only caught “actions where title to or possession of property is at issue” (both judges leaving open the question of whether an action for specific performance would qualify). Thus Gault J got to the right result albeit without the benefit of relevant authority: a judgment setting aside a fraudulent disposition is not rendered unenforceable simply because the debt concerned the sale of New Zealand land.

The judgment also illustrates two more difficult questions that the judge was not required to decide.

The first is whether the charge imposed by Moncrieff J would be enforceable. The Family Law Act 1975 (Cth) empowers a court to order that any judgment sum be secured (s 80) and to alter the property interests of third parties (s 90AE). Unlike the common law, the TTPA allows the enforcement of non-money judgments, but it is doubtful whether a charge over New Zealand land would be enforceable: a charge creates a proprietary interest and s 61(2)(c) allocates exclusive jurisdiction to the New Zealand courts to determine legal title to New Zealand land.

For the same reason, an order setting aside the transfer of the property itself would not be enforceable in New Zealand. (Moncrieff J appeared to be conscious of this issue, since he refused to make such an order, and his judgment records for the benefit of the New Zealand judge why his orders did not infringe the immovable property limitation in the TTPA). But if the judge had declared that Ms Lange was the beneficial (ie equitable) owner of the property, without purporting to affect legal title, then there is a good argument that the judgment would have been enforceable (see Jack Wass “The court’s in personam jurisdiction in cases involving foreign land” (2014) 63 ICLQ 103).

The final interesting point concerns the relationship between the enforcement of foreign judgments and relationship property regimes. Gault J acknowledged that if the positions had been reversed, s 7 of the Property (Relationships) Act 1976 would have limited the court’s ability to take into account the existence of Australian land in assessing the appropriate division of relationship property. He noted that Australian courts were under no such disability, and was reluctant to adopt a reading of the legislation that prevented Australian judges from taking into account the existence of New Zealand land. That approach is to be commended (as is the New Zealand Law Commission’s recent proposal to abolish s 7). It also illustrates the paradox that New Zealand courts may be willing to enforce foreign judgments where a New Zealand court would not have exercised original jurisdiction in the same circumstances.

The law governing collisions on the high seas

By Maria Hook (University of Otago)

In American Eagle Fishing Llc v Ship “Koorale” [2020] NZHC 1935, the High Court recently considered an important question of choice of law in maritime torts: what is the law governing maritime collisions on the high seas where both vessels are flying the same flag? The answer, according to Whata J, is the lex fori. However, his Honour also acknowledged that there was force in the submission that the law of the flag should govern. This post offers some brief comments on the Court’s reasoning.

Two tuna fishing boats flying the flag of the United States had collided on the high seas. One of the boats, the Koorale, was subsequently served with proceedings in New Zealand while it was undergoing repairs in Nelson. The plaintiffs, the owners of the American Eagle, sought compensation for damage suffered in the collision. The defendant, the owner of the Koorale, applied for a stay of proceedings on the basis that New Zealand was not the appropriate forum to determine the claim. It argued that the dispute should be determined in the US courts, where it had filed proceedings against the plaintiffs. The question of the applicable law arose in the context of that application. Under New Zealand law, liability of the boat owners would be capped at about US$2m. Under US law, compensation would be based on the market value of the vessel and its freight. The defendant estimated its damage and loss to exceed US$10m.

Whata J concluded that New Zealand law was applicable, but that the applicable law was in any case a neutral point in the forum conveniens analysis (at [41]-[68]). His Honour accepted the claimants’ submission that the law of the forum has traditionally been applied in collision cases (at [44], [55]-[57]). He seemed to reject the defendant’s submissions that, where the ships involved have the same home jurisdiction, it should be the law of the flag that is applicable (at [41], [55]-[57]. He also rejected the argument that the claim was subject to the choice of law rules contained in the Private International Law (Choice of Law in Tort) Act 2017, because the Act “presupposes the tort occurred in ‘a country’” (at [42], [63]-[68]).

This reasoning confirms the orthodox common law position that the law of the forum applies to collisions on the high seas. More specifically, it is the “maritime law as administered in the courts of England” that has traditionally been said to be applicable (Chartered Mercantile Bank of India v Netherlands India SN Co (1883) 10 QBD 521 at 545, per Brett LJ) – although in practice this seems to mean “nothing more than English law” (Lloyd v Guibert (1865) LR 1 QB 115 at 123 per Willes J).

Where the ships involved in the collision fly different flags, this position makes sense, because there is no immediately obvious alternative. It would seem unfair to prioritise the law of one ship over the law of the other and there is no other objective connecting factor available. But where the ships fly the same flag, the law of the flag is a viable alternative, and there is no need to rely on the lex fori. His Honour acknowledged the potential merit of this proposition (at [59]). In fact, courts in other jurisdictions have applied the law of the flag in such circumstances (see, eg, The Eagle Point 142 F 453 (1906), referred to by the defendant’s counsel at [41]). There is also academic support for this solution: see, eg, M George “Choice of Law in Maritime Torts” (2007) 3 Journal of Private International Law 137 at 159; S Gahlen Civil Liability for Accidents at Sea (Springer, 2015) at 356; C F Finlayson “Shipboard torts and the conflict of laws” (1986) 16 VUWLR 119 at 138 (“There is no reason why the Eagle Point principle should not be applied in England provided English law is properly pleaded and proved”).

It would be open to the New Zealand court to take this approach. The Private International Law (Choice of Law in Tort) Act 2017 does not apply, because it expressly preserves any choice of law rules for torts that were not previously governed by the double actionability rule (s 11(1), see Hook & Wass The Conflict of Laws in New Zealand (LexisNexis, 2020) at 6.73). Moreover, as noted by the Court, the Act presumes the relevant acts to have been committed within a country. This means that the question remains a question for the common law. In the leading English case, Chartered Mercantile Bank of India v Netherlands India SN Co, the Court applied the lex fori in a case involving a collision between two Dutch ships. However, the claim was brought by the (English) shipper of the cargo (which had been damaged in the collision), so the decision is distinguishable. In any case the Court’s rigid reliance on “general maritime law” (at 544) may not sit well with the principles and policies underpinning the modern conflict of laws. Drawing on the principles of the Private International Law (Choice of Law in Tort) Act 2017 for guidance, the law of the flag would seem an appropriate solution, on the basis that it would be more closely connected to the tort than New Zealand law (cf the submission for the defendant at [52]).

In light of these considerations, one might have expected the Court to have more sympathy for the defendant’s argument. The Judge placed particular weight on the need to give effect to international maritime sources that have been incorporated into New Zealand law (at [55]). Clearly, the application of the law of the flag should not undermine the operation of uniform rules of maritime law. However, another way of dealing with this concern would have been to clarify that such rules have overriding mandatory force (so would invariably be applicable, even if the law of the flag is not New Zealand law).

The Supreme Court affirms orthodox approach to the application of foreign law

By Jack Wass (Stout Street Chambers)

The Supreme Court has recently confirmed the approach that the courts should follow where a question of foreign law appears on the facts of a case, but the parties have failed to plead foreign law.

In earlier Blog posts, we explained that where the parties have failed to plead or prove foreign law, then the general rule is that the court can and must apply the substantive law of New Zealand in default. Although courts in recent years have recognised that this default rule may sometimes be displaced, this has only been permitted in three categories of case: where the plaintiff’s claim positively relies on foreign law and they have failed to establish it; where case management considerations make it necessary for the parties to address foreign law; or where New Zealand law is inherently local and cannot be applied to foreign facts. We explain these principles in more detail in Chapter 3 of The Conflict of Laws in New Zealand.

In Schaeffer v Murren [2020] NZSC 98, the trial had been conducted on the basis of the New Zealand law of negligent misstatement and the Fair Trading Act 1986 (except for one cause of action based on a Nevada statute). The Court of Appeal rejected the proposition that the High Court ought to have applied Nevada law to all issues, and because Nevada law had not been proved by the plaintiffs the claim should have failed. The Supreme Court dismissed an application for leave, confirming the orthodox position described in The Conflict of Laws in New Zealand that where the parties have not pleaded foreign law then the court is entitled and required to decide the case on the basis of New Zealand law. Although acknowledging that there were exceptions to the default rule, these were not engaged on the facts.

While only a leave decision, the Court’s judgment is a valuable affirmation of the orthodox approach to the application of foreign law. The scope of the exceptions to the default rule remains an interesting issue for determination in a later case.

Pre-judgment charging orders against overseas defendants: reasons for leaving

By Jack Wass (Stout Street Chambers)

It is now established that the High Court has the power to grant interim relief without notice against foreign defendants. The High Court has recently considered a different question: does the fact that the defendant is outside New Zealand create a basis for ordering interim relief in advance of trial?

The court’s power to grant interim relief

The High Court may grant a wide range of orders to protect a plaintiff’s ability to enforce a judgment on the merits. Some of these orders are designed to preserve assets before trial, “in order to improve the prospect of the court being able to do justice between the parties after a determination of the merits at a trial” (Commerce Commission v Viagogo AG [2019] NZCA 472 at [7]). These include freezing orders and interim injunctions. Other orders are granted after judgment has been obtained to secure property for the discharge of the judgment debtor’s obligations. These include attachment orders, sale orders and possession orders.

Charging orders straddle this distinction, because they can be granted both before and after judgment. Although a charging order does not create a proprietary interest in the charged property, it has the effect converting the plaintiff’s in personam claim for a sum of money into a security interest by charging the property with payment of the judgment sum and preventing the debtor from disposing of the property without paying the plaintiff. It constitutes an “interest” in terms of the Land Transfer Act 2017 and a security interest in terms of the Insolvency Act 2007. By contrast, a freezing order operates strictly in personam (see McGechan on Procedure at [HR17.40.03]).

Pre- and post-judgment charging orders

Where a plaintiff has already obtained judgment and had it sealed, they may obtain a charging order as of right (r 17.42). In such a case, a judge has already determined that the defendant owes a liquidated sum to the plaintiff, and the plaintiff has a prima facie right to enforce that judgment which justifies granting them an interest in the defendant’s assets. While the court also has the power to grant pre-judgment charging orders, it must be satisfied that “the liable party, with intent to defeat either his or her creditors or the entitled party or both,– (a) is removing, concealing, or disposing of the liable party’s property; or (b) is absent from or about to leave New Zealand.”

This condition was recently considered by the High Court in ASI Global Investments Inc v Yousef [2020] NZHC 1983. The applicant had begun substantive proceedings against the respondent in Switzerland. He sought leave to obtain a pre-judgment charging order over a Northland forestry block to secure payment of the anticipated Swiss judgment.

Duffy J refused the order. The judge accepted evidence that the respondent had taken steps overseas which demonstrated an intent to defeat creditors, and apparently that unless interim relief were granted then the applicant’s ability to enforce any judgment against the Northland property might be defeated. But there was no evidence that the respondent’s presence outside New Zealand had anything to do with his intent to defeat creditors, particularly if he had never been here in the first place. The judge concluded:

Before I can draw the necessary linkage between the respondent’s absence from New Zealand and his intent in terms of r 17.41, I would need to be informed of the respondent’s movements to and from New Zealand and how they may be connected with the acquisition of the subject land as well as any potential alienation of that land. It must necessarily be the case in these days of global transactions that persons who reside overseas buy land in New Zealand as an investment [without residing here]. In such circumstances I do not consider it can readily be inferred that they remain absent from New Zealand because they intend to defeat creditors or other entitled persons who may otherwise seek to attach their New Zealand based assets.

The judge indicated that she was willing to reconsider the application if the applicant could produce specific evidence that demonstrated the necessary link between the limbs of r 17.41.

The judgment is consistent with earlier authority emphasising that even where the defendants had left New Zealand recently, the applicant must show that they did so with the necessary intent (Amplexus Ltd v Liao [2016] NZHC 924). By contrast, where Australian residents arranged for construction of a house platform in New Zealand but failed to pay, then apparently returned to Australia and put the property up for sale, the court was satisfied that they had left the country with the intention of defeating their creditors (AHS Construction Ltd v Andrews [2019] NZHC 1779).

The significance of the debtor leaving the country

The effect of these requirements is that the applicant must demonstrate that a purpose of the respondent in leaving the country was to make it more difficult for creditors to enforce their rights. That higher standard may be justified by the more extensive rights afforded to the holder of a charging order, by comparison with a freezing order which operates strictly in personam (although as I note below, the effect can be the same). Nevertheless, the requirement substantially narrows the scope for the application of pre-judgment charging orders, particularly where the respondent has never been in New Zealand. Where there is proof of an intention to defeat creditors (but not proof that the respondent is actually disposing of property sufficient to satisfy r 17.41(a)), and the respondent’s presence outside New Zealand may make it easier for them to evade their creditors, it is arguable whether Parliament intended to require proof of a conscious causative nexus between the two facts.

It is not only in the context of pre-judgment charging orders that the court may take into account the respondent’s departure from the country. Section 40 of the Senior Courts Act 2017 empowers the court to issue a warrant to arrest a defendant if they are satisfied that the plaintiff has a good cause of action against the defendant, and there are reasonable grounds to suspect that the defendant is about to leave the country with the intention of evading payment of the amount claimed. This replaced the old prerogative writ of ne exeat regno (most famously sought to restrain the All Blacks leaving New Zealand on a tour of South Africa in Parsons v Burk [1971] NZLR 244).

Section 40 was formerly found in s 55 of the Judicature Act 1908. That section did not require the plaintiff to show that the defendant was leaving the country to evade payment, but that their absence would “materially prejudice the plaintiff in the prosecution of those proceedings” (for example by making them unavailable as a witness). It is not clear whether Parliament intended that change (see Hook and Wass The Conflict of Laws in New Zealand at [3.205]).

Freezing order?

There remains a question whether the court’s broad jurisdiction to grant interim relief is capable of addressing the dilemma in which the applicant found itself. It appears from the judge’s summary of the evidence that the applicant was concerned that it would have no means of monitoring compliance with a freezing order, other than after the fact. It appears that the particular value of the property was in cutting rights, and the applicant was concerned that the respondent might exploit these rights and dispose of the proceeds without the applicant’s knowledge.

The court has a broad power to fashion interim relief to meet the requirements of justice. The freezing order is merely one – particularly famous, sophisticated and codified – instance of this inherent jurisdiction. Any third party on notice of an injunction who assists in its breach commits a contempt of court. A freezing order should be capable of preventing the transfer of title to the land itself out of the respondent’s name. While recognising the difficulties of monitoring activity on a remote forestry block, one would have hoped that it would be possible to fashion interim relief that is designed to put anyone who might be involved in a large-scale cutting operation on notice that to assist would be a breach of the High Court’s orders.

Enforcement of a promise to pay a deferred dower/dowry

When parties enter into a marriage or a marriage-like relationship, they do so with the expectation that the relationship will last. Parties make financial decisions and adjust their economic expectations in light of the union they have entered into. So when the relationship does not last, most legal systems provide for rules to ensure a fair financial outcome between the parties. In New Zealand, we have laws on the allocation of relationship property and on the payment of maintenance, including rules to give effect to “pre-nuptial agreements”, relationship property agreements and maintenance settlements. Needless to say, such agreements or arrangements might differ in style and substance from those customarily relied upon – and given effect to – in other countries, even though they may serve similar functions. In some Muslim countries, for example, it is customary to enter into a marriage contract that entitles the wife to a “deferred” dower or dowry, which becomes payable upon divorce.

The High Court recently considered whether such an arrangement would be enforceable in the New Zealand courts, in the context of an application for security for costs (Almarzooqi v Salih [2020] NZHC 1049). Associate Judge Johnston answered this question in the negative. In this post, I ask whether the Judge was right.

I should note at the outset that I am using the term “dowry” in this post, simply because that is the term that is used in the judgment. It seems, however, that common law jurisdictions have customarily used the term “dowry” to refer to a payment made by a bride’s family, while the term “dower” has been used for arrangements of the type considered here (that is, a payment made by a husband or his family to this wife).

Background

Ms Almarzooqi, the claimant, sought recovery of a “dowry” from Mr Salih. Ms Almarzooqi and Mr Salih had been married in the United Arab Emirates (UAE), which involved the parties entering into a contract of marriage. This contract provided that Mr Salih would pay Ms Almarzooqi a “deferred dowry” of about $212,000 in the event of Mr Salih’s death or the parties’ divorce. The marriage did not last long. Ms Almarzooqi, a UAE citizen with New Zealand residency, moved to New Zealand to live with Mr Salih, who had both Iranian and New Zealand citizenship. After a month of living together the parties separated, and Ms Almarzooqi eventually returned to UAE to file for divorce. The UAE Court awarded a default judgment in Ms Almarzooqi’s favour, ordering Mr Salih to pay the deferred dowry. Ms Almarzooqi subsequently issued the present New Zealand proceedings, pleading two causes of action: enforcement of the UAE judgment, and a claim for breach of the contract of marriage.

Mr Salih applied for an order for security for costs. In the context of determining that application, Associate Judge Johnston considered the likelihood of Ms Almarzooqi’s claims being successful, and concluded that the prospect of enforcing the marriage contract was “very poor” (at [53]).

The Court’s reasoning

In relation to the first cause of action, Associate Judge Johnston concluded that the UAE judgment was not enforceable under the common law rules for the enforcement of foreign judgments because the UAE Court had not had personal jurisdiction over Mr Salih when determining the claim. Counsel for Ms Almarzooqi argued that Mr Salih had submitted to the UAE Court’s jurisdiction by voluntarily appearing in the proceeding. The Associate Judge rightly rejected that argument. The marriage contract itself could not be construed as an agreement to submit to the jurisdiction of the UAE courts; and while Mr Salih had attempted to file a response to Ms Almarzooqi’s proceeding, the registrar in the UAE court had refused to accept the documents. The Associate Judge noted that “[i]t would be ironic if, having been prevented from submitting to the jurisdiction, Mr Salih was somehow deemed to have done so by the very actions that were thwarted by the rejection of this documentation” (at [39]).

In Pawson v Claridge HC Auckland CIV-2009-404-4367, 25 June 2010, Associate Judge Sargisson had previously considered whether an application for an extension of time that was rejected by the foreign court and struck from the file amounted to a submission to that foreign court’s jurisdiction. The Judge did not reach a conclusion on the matter, noting that it was arguable that the defendants should have specifically reserved their right to object to the court’s jurisdiction when entering the appearance. Her Honour did not specifically consider whether it was also arguably relevant that the application had been rejected and struck from the file. But in any case, Associate Judge Johnston expressed the view that “the court having struck the defendant’s appearance from the file, the defendant is entitled to be treated as not having entered any appearance at all” (at [40), and that the present facts were distinguishable because Mr Salih’s defence had not even been accepted for filing.

Whether an appearance that has been struck from the file may nevertheless amount to a submission to jurisdiction must surely depend on the facts of the particular case. However, the conclusion that Mr Salih had not submitted because his documents had never been accepted for filing appears to me to be unassailable. (It may be useful to note at this point that it is a curious feature of the rules for enforcement and recognition of judgments that, when determining whether the foreign court had personal jurisdiction over the defendant, the New Zealand court applies much stricter standards than it would apply to itself.)

It is the Court’s reasoning in relation to the second cause of action that I want to focus on here. This was Ms Almarzooqi’s claim for the debt alleged to arise from the contract of marriage. With the UAE judgment unlikely to be enforceable in New Zealand, the only way for Ms Almarzooqi to obtain relief in practice was to bring the claim afresh in the New Zealand court. The marriage contract provided that Mr Salih would pay Ms Almarzooqi a “deferred dowry” of about $212,000 in the event of Mr Salih’s death or the parties’ divorce. This promise was apparently enforceable under UAE law but, according to the Associate Judge, would not be enforceable under New Zealand law (see at [50] and following). Thus, the question was whether UAE law or New Zealand law applied.

The Court proceeded on the assumption that the question whether the promise was enforceable had to be resolved by the proper law of the contract. In other words, the Court characterised the issue as being contractual in nature, with the result that the choice of law rules relating to contract were applicable. The Court summed up these rules by stating that “in the absence of express agreement as to the proper law, the legal system with the closest connection with the dispute will be treated as the proper law of the contract” (at [47]). Here, the most important factor in identifying the law with the closest connection with the dispute was “the reality that [the parties] intended to, and did, reside in New Zealand”, and that the parties “must have intended the contract to govern their married life [in New Zealand]” (at [47]-[48]).

Application of New Zealand law

Whether a deferred dowry would be enforceable under New Zealand substantive law

The Associate Judge’s reasoning may be open to criticism on two fronts. The first concerns the Judge’s assessment that New Zealand substantive law would be hostile to the enforcement of a promise to pay a deferred dowry. I raise this question first because the answer may have implications for the second question, which is whether the Judge was right to conclude that New Zealand law – rather than the law of UAE – was applicable to the claim. In particular, the approach taken to the enforcement of a dowry as a matter of New Zealand substantive law is relevant to the proper characterisation of the claim for the purposes of choice of law.

I wonder whether it is truly right to say, as the Associate Judge did, that the New Zealand regime relating to marriage, maintenance and the division of relationship property is “entirely inconsistent with the terms of the contract of marriage” in this case (at [51]). It seems that the arrangement might not be caught by s 4 of the Property (Relationships) Act 1976, which excludes the rules and presumptions of the common law and of equity to the extent they apply to “transactions between spouses or partners in respect of property” (emphasis added). Perhaps there would be jurisdiction under s 182 of the Family Proceedings Act 1980 to vary the terms of the agreement, but that does not mean that New Zealand law is “entirely inconsistent” with the concept of a deferred dowry. I would be very interested to hear from family lawyers/academics on this.

To add a further comparative angle, it seems that the English Court of Appeal has been willing to enforce a promise to pay a deferred dowry as a matter of English contract law, through the incorporation of the relevant rules of Shariah within English law (Uddin v Choudhury [2009] EWCA Civ 1205; see John R Bowen “How Could English Courts Recognise Shariah?” (2010) 7 University of St Thomas Law Journal 411 at 422 and following for an interesting analysis). English courts have also been willing to give weight to cultural factors when exercising their discretion under s 25 of the Matrimonial Causes Act 1973. In Otobo v Otobo [2002] EWCA Civ 949, the Court of Appeal said that an English judge determining the question of ancillary relief pursuant to English law should “give due weight to [foreign] factors and not ignore the differential between what [the spouses] might anticipate from a determination in London as opposed to a determination in [the foreign country]” (at [57], see NA v MOT [2004] EWHC 471 (Fam) for another example). In Quereshi v Quereshi [1971] 2 WLR 518, the Court enforced a deferred dowry in the context of recognising an extra-judicial divorce effected at the Pakistan High Commission.

Whether the promise to pay the dowry was governed by New Zealand law or the law of UAE

Proper law of the contract: The second point of criticism concerns the Associate Judge’s choice of law analysis. Assuming the Judge was right to characterise the issue as contractual (a question which I will consider briefly below), it seems to me that there was considerable strength in the argument that the proper law of the contract was the law of UAE.

New Zealand courts have not always been consistent in the way they have identified the proper law of a contract. Some courts have effectively applied three distinct connecting factors: express intention, implied intention and the place with the closest and most real connection (which is consistent with English authority: Bonython v Commonwealth of Australia [1951] AC 201 (PC) at 219; Amin Rasheed Shipping Corp v Kuwait Insurance Co [1984] AC 50 (HL)). Others, like the Associate Judge in this case, have subsumed the relevance of implied intention within the identification of the law with the closest connection, treating the two enquiries as interchangeable (see, eg, McConnell Dowell Constructors Ltd v Lloyd’s Syndicate 396 [1988] 2 NZLR 257 (CA) at 272–273 per Cooke P).

Either way, to the extent that the purpose of the proper law is to give effect to the parties’ expectations, it seems that the law of UAE should have been a serious contender here. The parties had entered into the arrangement in the UAE, in accordance with local rules and customs, in circumstances where they must have appreciated that the concept of a dowry was foreign to New Zealand law. There is a point about cultural autonomy here. In this day and age, the conflict of laws should take seriously its role of protecting a person’s interest in cultural and religious self-determination. In fact, there is common law authority that an agreement to pay a deferred dowry that is valid under the proper law of the agreement is enforceable in the English court by way of an action for breach of contract. In Shahnaz v Rizwan [1965] 1 QB 390, the Divisional Court upheld such a contractual right to be paid a deferred dowry where the parties had been married in India in accordance with “Mohammedan law”. In a considered judgment, Winn J grappled with the policy questions raised by this issue, noting at 401-2:

“As a matter of policy, I would incline to the view that, there being now so many Mohammedans resident in this country, it is better that the court should recognise in favour of women who have come here as a result of a Mohammedan marriage the right to obtain from their husband what was promised to them by enforcing the contract and payment of what was so promised, than that they should be bereft of those rights and receive no assistance from the English courts.”

This is not to say that the contrary position – that a marriage contract is most closely connected to the law of the place where the parties are resident – is ill-founded. In particular, a good argument can be made that, insofar as contracts involving potentially vulnerable parties are concerned, identification of the proper law should rest on more objective factors that recognise, for example, a community’s interest in regulating the personal relationships of those who are members of that community. But this was not the approach adopted by the Associate Judge in the present case. Rather, the Judge appeared to be reasoning backwards, concluding that the parties must have intended to subject themselves to New Zealand law because the concept of a dowry was so outlandish that it would never be enforceable here (see [53]).

The bigger question of characterisation: The final question that I want to raise is whether the Court was right to characterise this issue as one relating to contract. The argument before the Court had proceeded on that basis, and we have already seen that there is authority to support that approach (Shahnaz v Rizwan [1965] 1 QB 390, where the Divisional Court specifically considered the question of characterisation). In fact, if there were a basis in New Zealand contract law to give effect to deferred dowry contracts (cf Uddin v Choudhury [2009] EWCA Civ 1205), then it is very likely that characterising the issue as contractual for the purposes of the conflict of laws was the right approach.

An alternative view is that marriage contracts are not simple contracts. As the Associate Judge pointed out himself, the concept of a deferred dowry seems to fulfil functions that, in the New Zealand legal system, would be performed by laws on the division of relationship property and maintenance. The task of the conflict of laws is to identify the law that is most appropriate to govern the issue, having regard to the functions of the competing substantive laws (Dicey, Morris and Collins at [2-039]). It is possible, therefore, that the question of the enforceability of the dowry in this case should have been characterised as an issue relating to the property consequences of the relationship, or maintenance, with the result (potentially) that New Zealand law would have been applicable. For an interesting discussion of this question more generally, see Diana Schawlowski “The Islamic Mahr in German and English Courts” (2010-2011) 16 Yearbook of Islamic and Middle Eastern Law 147.

Conclusion

As I mentioned at the beginning of this post, the question of the merits of Ms Almarzooqi’s claim arose in the context of an application for security for costs. It would be prudent, therefore, not to attach too much weight to the Associate Judge’s reasoning – the precedential value of the decision may be limited. Nevertheless, it is important to remember that such decisions have real consequences for the parties involved. Ms Almarzooqi would be forgiven for having second thoughts about proceeding with her claim. That would be a shame – in my view, her claim deserves an opportunity for in-depth analysis.

Call for papers (New Zealand Yearbook of International Law)

The New Zealand Yearbook of International Law (Brill), launched in June 2004, is an annual, internationally refereed publication intended to stand as a reference point for legal materials and critical commentary on issues of public and private international law. The Yearbook serves as a valuable tool in the determination of trends, state practice and policies in the development of international law with particular regard to New Zealand, the Pacific region, the Southern Ocean and Antarctica.

Editors call for both short notes and commentaries, and longer in-depth articles, for publication in next volume of the Yearbook, which will be published in early 2021.

Notes and commentaries should be between 3,000 to 7,000 words. Articles may be from 8,000 to 15,000 words.

The Editors seek contributions on any current topic in public or private international law. The Editors particularly encourage submissions that are relevant to the Pacific, the Southern Ocean and Antarctica, and New Zealand.

Submissions will be considered on a rolling basis. However, the *closing date for submissions for Volume 17 is 15 June 2020.

Contributions must be original unpublished works and submission of contributions will be held to imply this. Manuscripts must be word-processed and accepted papers should comply with the fourth edition of the Australian Guide to Legal Citation. The Guide is available online
at: https://apc01.safelinks.protection.outlook.com/?url=http%3A%2F%2Flaw.unimelb.edu.au%2Fmulr%2Faglc%2Fabout&data=02%7C01%7Cmaria.hook%40otago.ac.nz%7Cbeb5e66ea5474d27404c08d7f0a65eb3%7C0225efc578fe4928b1579ef24809e9ba%7C1%7C0%7C637242469677040258&sdata=HfuRkC2FxC9%2F1f7UyxlR2ZdEqrZD%2FjMruXPXq9CsrL8%3D&reserved=0.

Submissions should be provided in English, using MS Word-compatible word processing software, and delivered by email to the General Editor at janjakob.bornheim@canterbury.ac.nz

High Court decision on anti-suit injunctions

In Lu v Industrial and Commercial Bank of China (NZ) Ltd [2020] NZHC 402, Fitzgerald J was recently faced with the question whether to grant an anti-suit injunction restraining proceedings for the recovery of a debt in China. This is only the second time a New Zealand court has had occasion to determine an application for such an injunction. In the first case, Jonmer Inc v Maltexo Ltd (1996) 10 PRNZ 119, the High Court had granted an injunction to restrain proceedings in Texas, on the basis that the Texan proceedings were oppressive because they seemed to be motivated by a desire to hold on “to a legalistic right” rather than the existence of any legitimate advantages in that forum (at 123). In granting the injunction, the Court adopted the principles set out in Société Nationale Industrielle Aerospatiale v Lee Kui Jak [1987] 1 AC 871 (PC), which also formed the basis for Fitzgerald J’s reasoning in Lu v Industrial and Commercial Bank of China (NZ) Ltd. The judgment in Lu confirms that New Zealand courts are likely to adopt the English approach to anti-suit injunctions and provides an updated summary of that approach. In this note, I offer a brief analysis of the decision while cautioning against the introduction of anti-suit injunctions into the New Zealand conflict of laws.

Background
The plaintiffs, Ms Lu and her husband Mr Mao, were Chinese residents. Ms Lu had borrowed a large sum of money from the defendant, the New Zealand branch of the Industrial and Commercial Bank of China (the Bank), to finance the purchase of a property in Auckland. The loan was secured by a mortgage over the property. The loan documents between Ms Lu and the Bank were expressed to be governed by New Zealand law but did not contain a jurisdiction agreement. Ms Lu soon defaulted under the agreement. The Bank brought proceedings against her and her husband in China to recover the debt (on the basis that the debt was owed jointly by the spouses). The plaintiffs then brought proceedings against the Bank in New Zealand, claiming that the Bank had breached a number of duties in the way it had dealt with the plaintiffs and the property.

In the context of this New Zealand proceeding, the plaintiffs applied for an order enjoining the Bank from continuing the Chinese proceedings (an anti-suit injunction). The application was brought on the basis that New Zealand was the appropriate forum for determining the Bank’s claim and that the Bank’s pursuit of the Chinese proceedings was vexatious and oppressive. The defendant applied for a strike-out of the plaintiffs’ New Zealand proceeding. Fitzgerald J granted the Bank’s application for strike-out and refused the plaintiffs’ application for an anti-suit injunction.

Principles
According to her Honour, the principles relating to anti-suit injunctions were “reasonably well-settled” (at [100]). The ultimate question was whether “the ends of justice require the injunction to be granted” (at [101]). As part of this inquiry, the court had to be satisfied that New Zealand was the natural forum for the claim and that the commencement or continuation of the foreign proceedings was vexatious, oppressive or otherwise unconscionable (at [103]). The jurisdiction had to be exercised “sparingly and with caution” because the injunction may be viewed as an indirect inference with the foreign court’s process (at [102]).

For the purposes of determining whether the Chinese proceeding was vexatious, oppressive or otherwise unconscionable, Fitzgerald J accepted that the court “should not become distracted by labels” but “must apply its own notion of the principle of unconscionability” (at [103]). Her Honour listed a number of examples that might meet this threshold (at [104]), as well as examples that would not meet the threshold (at [105]). The former included the situation where the foreign claim is “doomed to fail” or is brought in bad faith, or where there is no good reason for trying the proceeding abroad. Conversely, where there are genuine reasons for bringing the proceeding in the foreign jurisdiction (for example, because the claimant receives an advantage that is not available in the forum), the claimant’s conduct would not usually be treated as vexatious, oppressive or unconscionable.

Decision
In relation to the first threshold question of the natural forum, Fitzgerald J proceeded on the assumption that New Zealand was the natural forum for the resolution of the parties’ entire dispute. It was true that the Chinese court had dismissed the plaintiffs’ protest to jurisdiction, and that the New Zealand court should generally respect a determination by a foreign court that it was forum conveniens (at [115]). However, the foreign court must have “acted on principles similar to those that obtain here”; otherwise the New Zealand court “must consider whether the result is consistent with those principles” (at [115] citing Amchem Products Inc v British Columbia (Workers’ Compensation Board) [1993] 1 SCR 897 at 932).

In this case there was insufficient evidence of the basis of the Chinese Court’s decision (at [117]). The New Zealand Court could not be satisfied that the Chinese Court acted on principles similar to those that a New Zealand court would have applied to determine the appropriate forum. In these circumstances, Fitzgerald J was prepared to assume that New Zealand was the natural forum.

In relation to the requirement that the Chinese proceedings be vexatious, oppressive or unconscionable, Fitzgerald J was “far from persuaded” that this requirement was satisfied (at [118]). The Bank, as creditor, had a legitimate interest to pursue the plaintiffs in their home jurisdiction where they had assets (at [119]) and where any judgment would ultimately be enforceable (at [121]). The Bank also had the advantage of freezing orders in China, which may not have been granted in New Zealand (at [123]). The plaintiffs argued that they would not be able to raise their own claims in the Chinese proceedings. But in light of the advantages and benefits available to the Bank in China, Fitzgerald J did not attach much weight to the risk of parallel proceedings (ie the Bank’s claim in China and the plaintiffs’ claim for damages in New Zealand) (at [125]). There was also “nothing inherently wrong” with the Bank pursuing a claim against Mr Mao available to it under Chinese law, even if the claim “might be seen as somewhat surprising from a New Zealand law perspective” (at [120]).

Comment
The judgment offers a clear and concise summary of the principles that have shaped the jurisdiction to award anti-suit injunctions in other common law jurisdictions. On the basis of these principles, it would be difficult to argue with Fitzgerald J’s conclusion that the Bank did not act vexatiously, oppressively or unconscionably in pursuing the Chinese proceedings.

More generally, it may be asked whether New Zealand courts should, in fact, adopt the same approach to anti-suit injunctions that has been taken in overseas common law courts, or whether it should apply an even higher bar to the exercise of the discretion. What makes New Zealand courts entitled to decide whether it is appropriate for a foreign court to exercise jurisdiction? The question of jurisdiction is shaped by a multitude of principles and policies. In most cases, nothing is gained by applying local principles and policies to the question whether a foreign proceeding should go ahead, which is a call best left to the respective forum and its courts (cf the approach adopted in most civil law jurisdictions: see Turner v Grovit (C-159/02) [2004] ECR I-3565; Allianz SpA v West Tankers Inc (C-185/07) [2009] ECR I-663).

For example, common law courts routinely issue anti-suit injunctions to hold parties to a contractual obligation not to sue in a particular forum (Dicey Rule 39(4)). But what may appear, to the New Zealand court, as a blatant attempt to evade an exclusive jurisdiction agreement in favour of a more favourable law applicable in the foreign court, might be construed by the foreign court as a legitimate reliance on that forum’s public policies (see, eg, Akai Pty Ltd v People’s Insurance Co Ltd [1998] 1 Lloyd’s Rep 90 and Akai Pty Ltd v The People’s Insurance Co Ltd (1996) 188 CLR 418). Taking an internationalist approach to the conflict of laws, there is a good argument that the New Zealand court should simply trust the foreign court to do the right thing.