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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.

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