Liu v Ma

[2017] VSC 810

IN THE SUPREME COURT OF VICTORIA Not Restricted

AT MELBOURNE

COMMON LAW DIVISION

S CI 2017 03657

JIAN LIU	Plaintiff
v
JIANSHU MA and XIULIN LI	Defendants

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JUDGE:	MUKHTAR AsJ
WHERE HELD:	Melbourne
DATE OF HEARING:	19 December 2017
DATE OF JUDGMENT:	19 December 2017
CASE MAY BE CITED AS:	Liu v Ma & anor
MEDIUM NEUTRAL CITATION:	[2017] VSC 810

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PRIVATE INTERNATIONAL LAW — Foreign in personam judgment ― Requirements at common law for local recognition and enforcement of foreign judgment — Requirement that foreign court have a recognisable or international jurisdiction over defendant — Nationality of foreign state sufficient connection to justify recognition – Emanuel v Symon [1908] 1 KB 302 applied

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr A Dinelli	Sunlit Legal
No appearance for or on behalf of the Defendant

HIS HONOUR:

1. This application seeks recognition and enforcement of a foreign judgment at common law.  The judgment was given by the People’s Court of Jiangsu Nantong Chongchuan District in China on 6 April 2017.[1]  That Court is not specified to be a superior court under the Foreign Judgment Regulations 1992 as made under the Foreign Judgments Act 1991 (Cth), and therefore its judgment is not capable of being registered in this Court under statutory procedures. That is why the plaintiff seeks recognition and enforcement of the foreign judgment at common law.

   [1]See Exhibit SZ-1 to the affidavit of Si Zhang sworn 5 September 2017.

1. On 1 December 2017, the Court made orders permitting service of the legal process in this proceeding by substituted means.  An affidavit of Si Zhang affirmed on 15 December 2017 proves substituted service in accordance with the Court’s orders.  There has been no appearance by or on behalf of the defendants.  The application is therefore unopposed.

1. The foreign judgment was a civil judgment for moneys due to the plaintiff Jian Liu for repayment of a loan of RMB ¥3,900,000.  The loan was  made initially made to the first defendant Jianshan Ma by another lender whose rights were then assigned to the plaintiff with notice.  The first defendant is married to the second defendant Xiulin Li who, the court’s judgment says, ‘shares the collateral liability with Jianshu MA as the borrowing occurred during their marriage’.  A third defendant in the foreign proceeding, a corporation, guaranteed under seal the borrower’s obligations.  The fourth defendant in the foreign proceeding was the assignor.  The court in China found the indebtedness to be proven; the liability to be joint and several; and the assignment to be legally effective.  The judgment given was a default judgment against Jianshu Ma and Xiulin Li, and against the guarantor.  The foreign Court found ‘The Defendants do not have legitimate reason for being absent and waives the right to defend, and therefore the Court has power to issue a default judgment’.

1. The total judgment was for is RMB ¥3,938,698 which includes RMB ¥38,698 for certain court fees as quantified in the foreign judgment.  There was an order for interest ‘as determined by the loan interest rate stipulated by People’s Bank of China and calculated from 4 March 2017 to the date the judgment debt is paid’.  This Court notices that in the body of the foreign judgment, reference is made to the assignment being effective on 14 March 2017 and the interest being sought from 14 March 2017 to the date of judgment.  But, the judgment also states that the notice of the assignment was published on 4 March 2017.  This Court will proceed faithful to the orders as made by the Chinese Court which states the date of 4 March 2017.

1. On the basis of the affidavit sworn on behalf of the plaintiff by Si Zhang on 5 September 2017, this Court is satisfied that the preconditions for the recognition and enforcement of the foreign judgment have been made out.  The judgment was final and conclusive.  There is an identity of parties.  The judgment is for a fixed sum.  Jurisdictional competence or ‘international jurisdiction’ of the foreign court is the most important requirement for recognition and enforcement here.  The foreign court must have jurisdiction over the defendants when the jurisdiction of the foreign court was invoked and exercised, by which is meant a competence that is recognized under Australian conflictual rules: see Nygh’s Conflict of Laws in Australia.[2]  It is said that this and the other requirements will be presumed unless put in issue by the defendants — see Sykes and Pryles, Australian Private International Law.[3]  That, I think, may be an incautious way to proceed.  But, the requirement is made out anyway on the authorities and the facts as stated in the plaintiff’s written submissions, the essential elements of which are as follows.

   [2]M Davies, A S Bell, P L G Brereton, Nygh’s Conflict of Laws in Australia (LexisNexis Butterworths, 8^th   ed, 2010) [40.4] ff esp at [40.23]–[40.25].

   [3]E I Sykes, M C Pryles, Australian Private International Law (Law Book Co, 3^rd ed, 1991) [1.2].

1. There is sufficient authority for the view that Australian Courts will enforce a foreign judgment where the defendant is a subject of the foreign country in which the judgment was obtained.  That view has its critics[4] and it may have its difficulties especially if the citizenship is inactive.  Nevertheless, it is founded on a line of English authority exemplified by the statement of Buckley LJ in Emanuel v Symon[5] that —

In actions in personam there are five cases in which the Courts of this country will enforce a foreign judgment: (1) where the defendant is a subject of the foreign country in which the judgment has been obtained; (2) where he was resident in the foreign country when the action began; (3) where the defendant in the character of plaintiff has selected the forum in which he is afterwards sued; (4) where he has voluntarily appeared; and (5) where he has contracted to submit himself to the forum in which the judgment was obtained.

[4]See Sirko Harder, ‘Recent Judicial Aberrations in Australian Private International Law’ (2012) 19 Australian International Law Journal 161.

[5][1908] 1 KB 302.

1. That statement of principle was applied by Sully J in Federal Finance and Mortgage Ltd v Winternitz[6] and by Bryson AJ in Independent Trustee Services Ltd v Morris.[7]  The authors of Nygh’s Conflict of Laws in Australia say that ‘[t]he judgment of Sully J implies that the connection must be an active one as evidenced by the holding of a passport, an application for a pension and voter registration’.  Counsel for the plaintiff Mr Dinelli submits, and I agree, that ‘active citizenship’ should not be seen as a separate test of jurisdiction but rather (returning to Emanuel v Symon[8]) ensuring that the defendant is indeed ‘a subject of the foreign country in which the judgment has been obtained’.  In any case, as the submission went, the facts here show sufficient a linkage and connection to show the defendants to have an active citizenship.  They were natural citizens born in the jurisdiction.  They were married to one another in China.  Each held a Chinese passport.  They had substantial  activities or financial affairs in China.  The first defendant was an executive director of the third defendant.  And there is evidence that Chinese law does not recognize dual nationality.

   [6](Unreported, Supreme Court of New South Wales, 9 November 1989).

   [7][2010] 79 NSWLR 425.

   [8][1908] 1 KB 302.

1. In my view, there is a legal and factual basis sufficient to establish ‘international jurisdiction’.  Accordingly, the application ought be granted.

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