Trans-Tasman jurisdiction disputes – a wrong turn

(By Jack Wass, Stout Street Chambers)

Trans-Tasman jurisdiction disputes – a wrong turn

 The fundamental reform of the TTPA

The Trans-Tasman Proceedings Act 2010 fundamentally reformed the approach to civil proceedings involving New Zealand and Australia. It recognised that approaching trans-Tasman disputes in the same way as disputes involving other foreign countries did not reflect the special relationship between the two countries (Whyte v a2 Milk Co Ltd [2023] 2 NZLR 486 at [31]). The solution was to cast aside most of the usual rules that govern jurisdiction and enforcement of judgments and replace them with a new set of rules that, in many respects, treated New Zealand and Australia as more like a loose confederation than foreign countries (Davis (2010) 16 Cant LR 47).

The result is that the usual rules that apply where a New Zealand plaintiff wishes to serve proceedings on a foreign defendant do not apply where the defendant is in Australia. An Australian defendant is subject to the jurisdiction of the New Zealand court as of right; they may apply to stay the proceedings on the basis that Australia (or some other country) is the more appropriate forum, but they are not entitled to object to the jurisdiction in reliance on the fact they were served outside New Zealand.

This was not the conclusion reached in the recent decision of Commerce Commission v Go Car Finance Ltd [2025] NZHC 4072, where the High Court found that a defendant served in Australia could protest the jurisdiction under the High Court Rules. This post explains why, in the author’s view, that decision was wrong.

The concept of jurisdiction

The starting point is that territorial personal jurisdiction is based on service of the originating document. New Zealand law draws a fundamental distinction based on where the proceedings are served. If the proceedings are served on the defendant within New Zealand, then the defendant is subject to the jurisdiction of the Court as of right; they cannot protest the jurisdiction under rule 5.49, but they can apply to stay or strike out the proceedings under rule 15.1 on the basis that New Zealand is not the appropriate forum (rule 6.29(3)) (https://blogs.otago.ac.nz/conflicts/protests-to-jurisdiction-by-new-zealand-defendants/).

Where a defendant has been served outside New Zealand, the High Court does not have jurisdiction as of right but only where the plaintiff can establish the criteria in rule 6.27-6.29: essentially that there is a sufficient connection to New Zealand (either because there is a good arguable case that one of the gateways in rule 6.27 applies or there is a real and substantial connection in terms of rule 6.28(5)(a)), that there is a serious issue to be tried, that New Zealand is the appropriate forum, and any other relevant circumstances support the assumption of jurisdiction. A defendant in such circumstances is entitled to file a protest to jurisdiction under rule 5.49 instead of filing a statement of defence.

The TTPA was intended to cast aside the rules that govern cases of extraterritorial service and treat service in Australia as if it were service in New Zealand. Section 13 specifies that an initiating document may be served in Australia in the same way as a document served in New Zealand and it is not necessary for the New Zealand court to (a) give leave or (b) be satisfied that there is a connection with New Zealand. Section 14 then provides that service in Australia “has the same effect…as if the initiating document had been served in New Zealand”.

The consequence is that where proceedings have been served in Australia, the defendant cannot object to the jurisdiction on territorial grounds, just as a defendant served in New Zealand cannot do so (see generally Hook & Wass at [2.96]-[2.99] and [2.382]).

Rule 5.49 and the framework for service out of the jurisdiction under rules 6.27-6.29 do not apply, because those rules are concerned with service out of the jurisdiction, and s 14 of the TTPA provides that service in Australia is to be treated as service in the jurisdiction. The fact that service in Australia is not treated as service outside New Zealand is made explicit by rule 5.49(7A) of the High Court Rules, which makes rule 5.49 subject to the TTPA, and rule 6.36, which was added when the TTPA was enacted and provides that “This subpart (which contains rules on service out of New Zealand) does not apply to service in Australia of an initiating document…which may be served in Australia” under the TTPA.

A defendant served in Australia cannot protest the jurisdiction

In Go Car, the defendant was served in Australia and argued that the attribution rules in the Commerce Act 1986 (incorporated by reference into the Contract and Commercial Law Act 2017) did not apply to bring it within the extraterritorial reach of the latter legislation. It filed an appearance under protest to jurisdiction under rule 5.49 and argued that there was no serious issue to be tried as required by rule 6.28(5)(b).

The Associate Judge found that the defendant was entitled to protest the jurisdiction because the TTPA rules only applied to arguments about whether New Zealand or Australia was the appropriate forum, leaving a defendant served in Australia free to raise other jurisdictional arguments, including whether the requirements of rule 6.28(5) were met.

For the reasons given above, this conclusion reflects a misunderstanding of the jurisdictional framework. The whole set of provisions under rule 5.49 and 6.27-6.29 apply to cases where a defendant has been served in a country other than New Zealand or Australia, and rule 6.36 (which is not discussed in the judgment) disapplies them where the defendant has been served in Australia.

The error in the Court’s approach is apparent when the Court turned to consider whether the requirements of rule 6.27 and 6.28 were satisfied, and was required to ask which of the gateways in rule 6.27 applied. But rule 6.36 explicitly disapplies all of those rules. This is because, as s 13(3)(b) makes explicit, a plaintiff may serve proceedings in Australia without establishing any connection between the proceeding and New Zealand. Indeed, the defendant in Go Car submitted that recourse to rule 6.27 was not required because of the TTPA.

The High Court Rules and the TTPA provide for a defendant served in Australia to apply for the proceedings to be stayed on the grounds that Australia is the more appropriate forum (and s 21 contemplates that this involves an application by the defendant, not a protest to jurisdiction). A defendant may also apply to stay proceedings on the basis that a third country is more appropriate or on other recognised grounds unconnected with territorial jurisdiction, such as abuse of process. These situations are saved by s 27(2) (which provides that the TTPA “does not affect any power of the New Zealand court to stay the proceeding on any other grounds”) as was noted by (respectively) Associate Judge Bell in Haines v Herd [2015] NZHC 3265 and the High Court of Australia in Zurich Insurance Co Ltd v Koper [2023] HCA 25, (2023) 277 CLR 164 at [50]. What s 27(2) does not do is treat a defendant served in Australia in the same way as a defendant served outside the jurisdiction, or give them a right to protest jurisdiction on territorial grounds.

The High Court accepted that where the defendant was arguing New Zealand was not the appropriate forum, the argument needed to be considered under the TTPA. But this is the only ground on which an Australian defendant can contest the New Zealand court’s jurisdiction. The Judge was influenced by the phrasing of rules 5.49(7A) which provides that an application to stay proceedings “on forum grounds connected with Australia” must be dealt with in accordance with the TTPA and inferred from this that jurisdictional arguments other than on forum (non conveniens) grounds could still be pursued. But “forum grounds” in this context is synonymous with “on the grounds of territorial jurisdiction”. The verbal formulation in rule 5.49(7A) reflects that arguments about appropriate forum are the only basis on which a defendant served in Australia can ask the New Zealand court to decline jurisdiction.

Conclusion

It has become common for Australian defendants seeking a stay of proceedings on the basis that an Australian court is the more appropriate forum to file a protest to jurisdiction under rule 5.49. For the reasons given above, a defendant in such circumstances should instead file an interlocutory application for a stay, for which a form is prescribed in the Trans-Tasman Proceedings Regulations and Rules 2013. But the practice of filing a protest does little harm when it is just a means of getting the question of appropriate forum resolved.

What an Australian defendant cannot do is file a protest to jurisdiction as a means of raising other jurisdictional objections. In Go Car, the argument was that there was no serious issue to be tried because the legislation did not have extraterritorial effect. The purpose of the serious issue to be tried requirement is to ensure that foreign defendants are not hauled before the courts to defend speculative claims. In true cases of service outside the jurisdiction, a defendant can object to jurisdiction solely on the ground there is no seriously arguable case on the merits (Kuwait Asia Bank EC v National Mutual Life Nominees Ltd [1990] 3 NZLR 513 (PC)). But an Australian defendant does not have that right (see, for example, Drink Tank Ltd v Morrows Pty Ltd [2020] NZHC 1391, [2020] 3 NZLR 443); if they consider that the case discloses no arguable cause of action, then they can apply to strike out the proceedings under rule 15.1. In most service-out cases, a defendant is well-advised to protest the jurisdiction (on the basis of the absence of a serious issue to be tried) instead of applying to strike out, because the former does not involve a submission to the jurisdiction and can preserve the defendant’s right to withdraw from the proceedings and resist enforcement of the judgment overseas. But even if a protest were available to an Australian defendant, that strategic benefit would not be available because New Zealand judgments are enforceable in Australia regardless of whether the defendant submitted to the jurisdiction of the New Zealand court.