A2 Milk Company Ltd (A2), a company incorporated in New Zealand, is currently facing class actions in Australia (Victoria) and New Zealand. The Supreme Court of Victoria has just released an interesting judgment dealing with a number conflict of laws issues relating to the Victorian proceeding: Thomas v A2 Milk Company Ltd No 2  VSC 725. In short, the Court decided that it had jurisdiction to determine claims made by some of the plaintiffs in that proceeding under New Zealand legislation, seeking declaratory relief and monetary compensation. The claims allege misleading or deceptive conduct and breaches of continuous disclosure obligations under the Fair Trading Act 1986 and the Financial Markets Conduct Act 2013, in relation to the purchase of shares in A2 on the NZSX.
The Court determined the following preliminary matters:
- That the Court had personal and subject-matter jurisdiction to determine the claims arising under the FTA and the FMCA, subject-matter jurisdiction being an unlikely source of material constraint on jurisdiction (at ).
- That, assuming the New Zealand statutes applied, the claims were enforceable in the Supreme Court of Victoria. It was clear that a foreign lex causae to be applied could include statute law (at ). The claims also did not fall within the exclusionary rule in relation to statutes advancing a foreign ‘governmental interest’, because they were advanced to vindicate the private interests of group members (at ). Finally, the FTA and FMCA did not confer exclusive jurisdiction on New Zealand courts (at -).
- That, assuming the New Zealand statutes applied, the Court could grant the relief sought. The New Zealand relief provisions formed part of the substantive law of New Zealand (at , ) and the Supreme Court of Victoria had the power to grant the relief (at ).
The reason for determining these matters on a preliminary basis was to allow the plaintiffs to make an informed decision whether to opt out of the Victorian proceeding and, instead, opt in to the New Zealand proceeding.
For New Zealand readers, the judgment is of interest in particular because of the Court’s conclusion that the FTA and FMCA should not be construed as conferring exclusive jurisdiction on New Zealand courts. Based on Rimini Ltd v Manning Management and Marketing Pty Ltd  3 NZLR 22 (HC), it was open for foreign courts to apply a New Zealand statute unless Parliament had expressly or by clear implication said otherwise. Where a statute set out for domestic purposes which courts in New Zealand had jurisdiction to apply it, this did not mean that a foreign court was excluded from applying it (at ). Neither the FMCA nor the FTA expressly, or by clear implication, precluded foreign courts enforcing the relevant provisions (at , ).
The judgment also offers a useful reminder that foreign courts may, in fact, apply New Zealand legislation, even where such legislation gives rise to statutory causes of action. This has not always been appreciated. In YPG IP Ltd v Yellow Book.Com.Au Pty Ltd (2008) 8 NZBLC 102,063 (HC) at , for example, the Court suggested in a rather sweeping statement that “[n]o Australian Court has jurisdiction in respect of claims for relief pursuant to a New Zealand statute”: see Maria Hook and Jack Wass The Conflict of Laws in New Zealand (LexisNexis, 2020) at 2.342.
This point is especially relevant to New Zealand courts determining whether they are the only – or the appropriate – forum to determine a claim under New Zealand legislation: see The Conflict of Laws in New Zealand at 2.227 (see also at 6.90). In Wing Hung Printing Co Ltd v Saito Offshore Pty Ltd  NZCA 502,  1 NZLR 754 at , for example, the Court of Appeal suggested that New Zealand is obviously the appropriate forum to determine a claim brought under the FTA. However, in some cases this may not be true, because the foreign court may give effect to the FTA even though it is a New Zealand statute (and there might be other factors making the foreign court the appropriate forum, such as the existence of related proceedings).
The judgment will no doubt be useful to the New Zealand court when determining an application for a stay of the New Zealand proceeding against A2 (see ). A potential limitation in this regard is that the judgment does not address the question of choice of law. The Court proceeded on the assumption that New Zealand law would be applicable to the New Zealand claims. This is unfortunate, because the question of choice of law may affect the question of subject-matter jurisdiction (broadly understood): see The Conflict of Laws in New Zealand at 2.342. In the context of statutory causes of action, common law courts often determine the application of the law of the forum on a unilateral basis, raising questions as to any residual role left for foreign law. It may be the case that the particular issue is exclusively governed by the law of the forum, with the result that any claim falling outside of the scope of the law of the forum also falls outside of the court’s subject-matter jurisdiction. In the context of fair trading and consumer protection, the better view may be that the law of the forum should not be understood to apply exclusively (see The Conflict of Laws in New Zealand at 6.90, Maria Hook “Does New Zealand consumer legislation apply to a claim against a foreign manufacturer?”  NZLJ 201 at 203). However, it would have been helpful for the judgment to address this question head-on.
By Jack Wass (Stout Street Chambers)
International civil procedure has broken into the mainstream news cycle with the US District Court ordering disclosure of the identity of former employees of a New Zealand company who posted scathing reviews of the company online.
Glassdoor, a company headquartered in California, enables employees to post anonymous reviews of their employer. One or more employees posted highly critical reviews of the New Zealand toymaker Zuru. Before Zuru could bring defamation proceedings, it had to find out the identity of the reviewers. It applied for a subpoena in the US District Court for the Northern District of California requiring the website to disclose this information. Magistrate Judge Alex Tse granted the order, opening up the potential for Zuru to bring defamation proceedings against employees who had posted under what they must have thought was a cloak of anonymity.
Debate has swirled over the implications of the decision for employees, employers and the role of online reviews more generally – see, for example, https://thespinoff.co.nz/the-bulletin/22-07-2022/the-implications-of-the-glassdoor-decision-for-new-zealanders, https://www.theguardian.com/world/2022/jul/19/glassdoor-ordered-to-reveal-identity-of-negative-reviewers-to-new-zealand-toymaker and https://www.stuff.co.nz/business/129328682/order-for-glassdoor-to-reveal-employee-identities-could-make-website-unviable.
But the decision is also an illustration of international judicial cooperation in action, and the extent to which the conflict of laws is designed to ensure that national borders do not provide a barrier of immunity. Zuru invoked § 1782, a provision of the US Code that enables a district court to assist in gathering evidence to assist proceedings in a foreign court. Whatever one’s opinion of the merits of allowing Zuru to sue (or intimidate) disgruntled former employees, the purpose of that mechanism (and the equivalent rules in New Zealand’s Evidence Act 2006) is to ensure that the trial court is able to decide the case with the benefit of all the evidence it requires, so that a defendant cannot hide behind the fact that relevant evidence happens to be in a server in another country.
In making his decision, Judge Tse was alert to the competing policy concerns. He had to consider the relevant New Zealand authorities to satisfy himself that a claim in defamation under New Zealand law was tenable, and concluded that the reviewers’ expected reliance on a defence of honest opinion was a matter for trial that did not justify refusing disclosure in the first place. It remains to be seen whether Zuru will pursue a defamation action, or whether it was a sensible public relations decision to embark on the exercise in the first place, but the decision is a useful illustration of the practical significance of international civil procedure.
In Body Corporate Number DPS 91535 v 3A Composites GmbH  NZHC 985, the High Court recently concluded that neither the Consumer Guarantees Act 1993 (CGA) nor the Fair Trading Act 1986 (FTA) applied to a claim against a German manufacturer of cladding products.
The defendant, 3A Composites GmbH (3AC), was a German manufacturer of a cladding product installed on the plaintiffs’ buildings. The plaintiffs alleged that the product was highly flammable because it contained aluminium composite panels with a polyethylene core. Panels of this kind were the main reason why the fire at Grenfell Tower in London had spread so rapidly. The plaintiffs brought proceedings against 3AC, as well as the importers and distributors of the cladding in New Zealand. They alleged negligence, breach of s 6 of the CGA and breaches of the FTA. In response, 3AC protested the New Zealand court’s jurisdiction.
The High Court upheld 3AC’s protest in relation to the CGA and FTA causes of action, on the basis that they fell outside of the territorial scope of the Acts. In relation to the CGA, the Court concluded that the Act did not apply to an overseas manufacturer like 3AC that did not have a presence in New Zealand (see –). In relation to the FTA, the Court concluded that the Act did not apply to 3AC’s allegedly misleading or deceptive conduct, apparently on the basis that the conduct did not fall within s 3(1) extending the Act to “conduct outside New Zealand” (at ).
An analysis of the decision is available in the latest issue of the New Zealand Law Journal: Maria Hook “Does New Zealand consumer legislation apply to a claim against a foreign manufacturer?”  NZLJ 201. The note argues that the Court misapplied the principle of territoriality and that, on a closer examination of the statutes – combined with an application of the general principles of the conflict of laws – the claims were at least arguably covered by New Zealand law.
ABLI-HCCH webinar: Cross-Border Commercial Dispute Resolution – HCCH 2005 Choice of Court and 2019 Judgments Conventions (27 July 2022)
Readers of this blog may be interested that the Singapore-based Asian Business Law Institute (ABLI) and the Permanent Bureau of the Hague Conference on Private International Law (HCCH) are co-hosting a webinar on the HCCH 2005 Choice of Court Convention and the 2019 Judgments Convention on Wednesday, 27 July. Details about the webinar can be found here. New Zealand is not currently a party to either Convention, but there are good reasons why it should consider joining both schemes. One of the speakers will be Justice David Goddard of the Court of Appeal, who chaired the Diplomatic Session that adopted the Judgements Convention.
By Maria Hook (University of Otago)
Is a claim for the breach of a deferred mahr agreement enforceable in a New Zealand court? This question arose in the context of proceedings between Ms Almarzooqi and Mr Salih, which was the subject of previous posts on this blog. The High Court has now granted Ms Almarzooqi’s claim ( NZHC 1170): parties may indeed be held to a promise to pay a mahr upon divorce.
In a succinct judgment, Simon France J held that the agreement was governed by the law of UAE but that, whatever its proper law, the mahr had become payable.
- On the proper law point, his Honour considered it particularly relevant that the parties had travelled to UAE to be married there in accordance with Sharia traditions (at , ). The intended residence in New Zealand was given less weight, partly because the obligation to pay the mahr “is unaffected by the place of residence” and “becomes relevant once the marriage is ended” (at ). Finally, despite the universality of the nikah (and the mahr), it was also relevant that UAE law – unlike New Zealand law – was a system reflecting Sharia principles (at , cf Amin Rasheed Shipping Corporation v Kuwait Insurance Co  1 AC 50 (HL) for an interesting parallel).
- Regardless of whether UAE or New Zealand law was applicable, his Honour held that the mahr had become payable upon divorce ( and ). The particular ground of divorce was immaterial. In other words, the court was not required to consider whether the plaintiff was in fact entitled to obtain a divorce under Sharia law.
Notably, the defendant did not dispute that the promise to pay the mahr was to be characterised as contractual. He also did not argue that enforcement of such a promise – whether pursuant to foreign law or New Zealand law – would be contrary to public policy in principle. The Court therefore did not consider these questions, noting only that a different characterisation was arguable (referring to this post).
The confined nature of the issues must be borne in mind when assessing the precedential weight of the decision. Yet, despite this caveat, the fact remains that the Court was happy to enforce the promise, on the basis of a contractual approach. For the reasons explored in my previous post, this may well be the most appropriate solution to the problem of the mahr.
By Maria Hook (University of Otago)
As we have previously noted on this blog, many areas of private international law benefit from international cooperation and harmonisation. The recovery of child or spousal maintenance is no exception. A person who seeks to recover maintenance from a person in another country may face significant hurdles. They may find, for example, that they are entitled to maintenance in their own country of residence but that a decision to that effect is not recognised or enforceable in the debtor’s country; or they may lack the resources or expertise to bring an application in a (to them) foreign country. The worst-case scenario is that the other party avoids all liability simply because they are located in another country.
In a previous post we shared the news of New Zealand’s signing of the Hague Convention on the International Recovery of Child Support and Other Forms of Family Maintenance (concluded 23 November 2007, entered into force 1 January 2013) (the Convention). With 43 contracting States (including the European Union, the United Kingdom, Brazil and the United States), the Convention offers a well-established framework to facilitate the cross-border recovery of maintenance. New Zealand has now ratified the Convention and given effect to it by way of an Order in Council under s 215 of the Child Support Act 1991.
The purpose of this post is to provide a brief overview of the main features of this new regime. As between contracting States, it will largely replace the obligations assumed under the United Nations Convention on the Recovery Abroad of Maintenance (UNCRAM) (signed 20 June 1956, entered into force 25 May 1957) and the Commonwealth Scheme. It does not affect the bilateral agreement with Australia on child and spousal maintenance as given effect in Child Support (Reciprocal Agreement with Australia) Order 2000.
What does the Convention do?
The Convention has three main functions. First, it provides for the recognition and enforcement of maintenance decisions of other contracting States. A decision must be recognised and enforced if it falls within one of the six bases of recognition and enforcement set out in Art 20(1). These bases are broad in scope. It is sufficient, for example, that either the respondent or the creditor was habitually resident in the contracting State at the time proceedings were instituted. The obligation to recognise and enforce maintenance decisions is subject only to the narrow exceptions listed in Art 22 (for example, that recognition and enforcement would be manifestly incompatible with public policy).
The effect of these rules is to make maintenance decisions more enforceable as between contracting States. Under New Zealand common law, the only decisions that are generally enforceable in New Zealand are judgments for a fixed sum of money (Maria Hook and Jack Wass The Conflict of Laws in New Zealand (LexisNexis, 2020) at 5.C.3). Administrative decisions are unenforceable, as are decisions for the periodic payment of maintenance. The grounds for recognition and enforcement are more narrowly conceived, too, requiring the respondent’s presence or submission. Similarly, UNCRAM and the Commonwealth Scheme do not apply to administrative decisions and, in fact, UNCRAM does not directly provide for the recognition and enforcement of maintenance at all, focusing instead on cooperation in the establishment of maintenance decisions (at 9.181).
By contrast, the Convention is designed to capture maintenance in all its forms (Art 19), from countries that have a sufficiently close connection to the matter (see Art 20(1)). Not only does this mean that foreign maintenance decisions can more easily be enforced in New Zealand; New Zealand decisions, too, will enjoy more widespread recognition overseas. It is estimated that the Convention will enable recovery of about $7.7 million in outstanding child support payments (Ministry of Foreign Affairs and Trade National Interest Analysis: Hague Convention of 23 November 2007 on the International Recovery of Child Support and Other Forms of Family Maintenance at ).
The second main function of the Convention is to provide for administrative cooperation between contracting States in the establishment, management, enforcement and collection of maintenance (Chapters II and III). This framework builds and improves on mechanisms that were first introduced under UNCRAM (see Alegría Borrás and Jennifer Degeling Explanatory Report on Convention of 23 November 2007 on the International Recovery of Child Support and Other Forms of Family Maintenance (HccH) at , ), and it replaces UNCRAM insofar as the two Conventions coincide (Art 49). Cooperation takes place through a system of Central Authorities established under the Convention.
An important focus of cooperation is the transmission of applications for maintenance, which makes it easier for claimants to access maintenance in (to them) foreign legal systems. A claimant resident in Country A (the requesting State) can apply through the Central Authority in Country A to obtain a maintenance decision in Country B (the requested State). The Convention does not, however, provide for uniform rules of jurisdiction (see Art 10(3)). This means that it is a matter for the law of Country B whether it has jurisdiction to make a maintenance decision (for example, on the basis that the child or the debtor is resident in the country). The Convention merely restricts proceedings for maintenance where there is an existing decision from a country that is a party to the Convention and the creditor is habitually resident in that country (Art 18).
The third function of the Convention is to ensure that processes for the cross-border recovery of maintenance are accessible, efficient and simple. This means, for example, that foreign maintenance decisions are to be registered or declared enforceable “without delay” (Art 23), and that registration or enforcement does not ordinarily require an application to the court (see Art 23, cf Art 24). In New Zealand this task falls to the Inland Revenue.
Scope: child support and spousal maintenance
The primary focus of the Convention is on child support, and it is in this area that the Convention will have the greatest impact. In addition, New Zealand has opted to extend the entire Convention to spousal maintenance, with the result that all of its features will be available vis-à-vis countries that have done the same (Art 2). Some parts of the Convention are automatically applicable to spousal maintenance (all parts except for Chs II and III on cooperation and establishment of a system of Central Authorities, which, however, apply to applications for recognition and/or enforcement that form part of a claim for maintenance arising from a parent-child relationship (Art 2(1)(b)).
The Convention also gives States the option to extend the Convention to maintenance obligations arising from other family relationships (Art 2(3)). New Zealand has not entered a declaration to that effect even though, under New Zealand law, maintenance is available outside of spousal and parent-child relationships (ie civil unions and de facto relationships). This omission may in part be explained by the reluctance of other contracting States. The European Union, for example, has refrained from extending the Convention to other family relationships, undertaking instead to “examine the possibility” of doing so within seven years (compare Brazil, which has extended the Convention to obligations to provide maintenance “arising from collateral kinship, direct kinship, marriage or affinity, including, in particular, obligations in respect of vulnerable persons”). Given that any extension would only become effective in the case of matching declarations, there would have been limited immediate practical benefit in New Zealand extending the scope of the Convention to civil unions or de facto relationships. Be that as it may, it is a shame that New Zealand did not take the opportunity to lead the way by being one of the first countries to extend the Convention in this manner, which might have provided an incentive for other countries to follow suit.
Implementation of the Convention
The Convention is given effect by the Child Support (Reciprocal Agreement with Hague Convention Countries) Order 2021, made under s 215 of the Child Support Act 1991. The Order achieves this largely by providing that the definitions of “child support” and “domestic maintenance” in s 2(1) of the Act have effect as if they included “payments required to be made under administrative assessments or court orders made by a contracting State” (see Schedule 2).
It has already been pointed out that the Convention does not include uniform rules of jurisdiction. In other words, the question whether New Zealand authorities have the power to make a maintenance decision continues to be determined under New Zealand law. Sections 5(1)(d) and 6(1)(b) of the Act set out the jurisdictional requirements for making a child support assessment. In particular, a child will only qualify for child support if they are either a New Zealand citizen or ordinarily resident in New Zealand, and child support may only be sought from a parent “who is a New Zealand citizen or is ordinarily resident in New Zealand”, or from a parent who is ordinarily resident in a country with which New Zealand has entered into a reciprocal agreement for enforcement of child support”. The Order purports to extend these grounds of jurisdiction, by stating that ss 5(1)(d) and 6(1)(b) of the Act have effect as if they included a child and parent who are “habitually resident in a contracting State”. Given that the Convention itself does not provide for uniform rules of jurisdiction, the rationale for extending ss 5(1)(d) and 6(1)(b) in this way is unclear.
By Jack Wass
A recent High Court judgment demonstrates the real costs of New Zealand’s poor record on accession to international civil cooperation treaties. The Hague Service Convention was concluded in 1965 and enables the service of originating documents overseas for the purpose of civil proceedings. It has been signed by dozens of countries, and is particularly important when dealing with civil law countries who regard service as a sovereign act that cannot be effected by private parties, but requires official sanction.
In Huang v Huang  NZHC 2902, Campbell J found that the Court did not have jurisdiction in a case involving property investments in Auckland because the proceedings had been served in China contrary to the law of that country. If New Zealand were a party to the Service Convention, that problem would not have arisen. Although it ultimately made no difference on the facts (because the judge found that New Zealand wouldn’t have been the appropriate forum for the trial), it illustrates the real practical consequences of New Zealand’s failure to accede to what should be an uncontroversial convention.
By Jack Wass and Maria Hook
Most practitioners and judges only encounter the conflict of laws (or private international law) intermittently. The subject can be seen as an arcane corner of civil procedure, or a set of complications that must be passed before getting to the real issues on the merits. However, Associate Judge Bell is one judge that has always known a conflicts problem when he sees one – and has been prepared to engage with the principles underlying a cross-border problem, even if the parties were not.
With the news of the Associate Judge’s retirement, this post notes some of the Associate Judge’s contributions to the subject in New Zealand.
At the cutting edge of conflicts debate is the question of how common law courts should deal with allegations that foreign courts lack the independence that we regard as the hallmark of a recognised legal system. Associate Judge Bell examined this subject by reference to overseas authority in Hebei Huaneng Industrial Development Co Ltd v Shi  NZHC 2992, where he articulated the different approaches the courts should take to such an allegation, depending on whether it is raised prospectively (on a dispute as to jurisdiction) or after the fact (on an application to enforce a foreign judgment). With a further judgment on the subject having just been released ( NZHC 2687) and the case apparently going to trial, this will not be the last word but represents an important guide to the proper approach.
One topic with which all Associate Judges are familiar is the enforcement of foreign judgments, since most applications are brought by way of summary judgment. Yoonwoo C & C Development Corp v Huh  NZHC 2986 is typical of the Associate Judge’s approach: having cited the Court of Appeal’s “helpful” outline of the basis on which foreign judgments were enforced, the Associate Judge proceeded to explain—by reference to cases as old as 1760—the basis of enforcement actions in the historical writs, or the historical phenomenon of “jamming of other obligations into actions in debt and indebitatus assumpsit”.
Jurisdiction matters, too, are a staple for Associate Judges and are another area that has benefited from Associate Judge Bell’s nuanced reasoning. In Perpetual Trustee Co Ltd v Downey (2011) 21 PRNZ 28, for example, the Associate Judge carefully outlined the proper approach to be taken to the enforcement of exclusive jurisdiction agreements, referring to English, Australian and New Zealand authorities, and distinguishing clearly between the court’s discretion not to apply an exclusive jurisdiction clause and the question of forum non conveniens (at ) – a distinction that is often ignored in practice. Having laid the groundwork in this way, the Judge was then able to explain with great clarity why an exclusive jurisdiction clause could not prevail over Part 16 of the Companies Act 1993.
In yet another oral judgment, the Associate Judge contributed to the deeply controversial topic of jurisdiction of cross-border intellectual property claims, which has vexed common law courts to the highest level. In Jedis Ltd v Vodafone New Zealand Ltd  NZHC 2448, the judge not only made observations about how the existing cases should properly be read, but went as far as discussing the implications under Australian constitutional law of the case being heard in Australia, and English authority on the extent to which it would serve a useful purpose to bring a foreign defendant into the proceeding.
We could point to numerous other cases along similar lines – discussing trans-Tasman proceedings (Leeds v Richards  NZHC 1191,  NZAR 1016), cross-border restitutionary claims (Fruit Shippers Ltd v Petrie  NZHC 749), the law applicable to corporate identity (Addleman Trustee Ltd v Lambie  NZHC 2504) and the meaning of fraud (Guangzhou Dongjiang Petroleum Science & Technology Development Co Ltd v Kang  NZHC 3068). While counsel might not have always welcomed it, New Zealand law is better for the contributions of the Associate Judge on these topics.
Cross-border insolvency: joint hearing by New Zealand Court of Appeal and Federal Court of Australia
By Jack Wass (Stout Street Chambers)
Readers may be interested to know that on Thursday 23 September 2021, the New Zealand Court of Appeal will be sitting in a joint hearing with the Full Court of the Federal Court of Australia.
Earlier this year, the High Court of New Zealand and the Federal Court of Australia gave judgment on parallel applications for directions concerning the distribution of funds held by Halifax Investment Services Pty Ltd and its New Zealand subsidiary. The hearing of those applications was conducted by VMR with counsel in Sydney and Auckland; witnesses were sworn and examined in both proceedings, and the parties agreed that the judges could deliberate jointly. The upcoming hearing is of appeals against those judgments, to be heard by Kós P, Cooper and Goddard JJ in New Zealand, and Middleton, Beach and Moshinsky JJ in Australia.
Cross-border insolvency cries out for international judicial cooperation; significant strides have been made under the UNCITRAL Model Law on Cross-Border Insolvency, while the legal barriers between New Zealand and Australia have been substantially lowered by the Trans-Tasman Proceedings Acts. The use of joint hearings is a welcome and pragmatic development of the techniques and procedures introduced by those regimes.
A little while ago, the Ministry of Justice published a Discussion Document on Adoption in Aotearoa New Zealand (June 2021), which includes sections on overseas and intercountry adoption. Submissions are due by the end of this month.
The Law Commission is conducting a review of surrogacy that includes issues of cross-border surrogacy. Submissions on the Issues Paper Te Kōpū Whāngai: He Arotake / Review of Surrogacy (IP 47, 29 July 2021) are due by 23 September.