Yoonwoo C & C Development Corp v Huh
[2025] NZCA 209
•3 June 2025 at 11.00 am
| IN THE COURT OF APPEAL OF NEW ZEALAND I TE KŌTI PĪRA O AOTEAROA |
| CA363/2023 |
| BETWEEN | YOONWOO C & C DEVELOPMENT CORP |
| AND | JAE HO HUH |
| Hearing: | 24 October 2024 |
Court: | Katz, Cooke and Collins JJ |
Counsel: | A J B Holmes for Appellant |
Judgment: | 3 June 2025 at 11.00 am |
JUDGMENT OF THE COURT
AThe application for permission to continue the appeal under s 76(2) of the Insolvency Act 2006 is granted.
B The appeal is dismissed.
____________________________________________________________________
REASONS
Cooke and Collins JJ [1]
Katz J [44]
REASONS OF COOKE AND COLLINS JJ
(Given by Cooke J)
| Table of contents | |
| Background | [2] |
| Which provision of the Limitation Act 1950 applies? | [12] |
| Was the claim brought within six years? | [37] |
| Conclusion | [41] |
| Result | [42] |
The appellant appeals from a decision of Duffy J in the High Court who dismissed its proceedings seeking to enforce two judgments obtained against the respondent in the Republic of Korea on the basis that they were time barred.[1] The appellant contends that the High Court misapplied s 4 of the Limitation Act 1950 (LA 1950) in doing so.
Background
[1]Yoonwoo C & C Development Corp v Huh [2023] NZHC 1395 [judgment under appeal].
The appellant was engaged in an apartment development in the Republic of Korea. Contracts with purchasers were entered in 2008. The respondent, in his personal capacity, was one of the purchasers. He allegedly failed to pay a deposit and purchase price required by the contracts. The appellant brought proceedings against the respondent and other purchasers before the Uijeongbu District Court in the Republic of Korea. A representative was appointed to represent all of the defendants. In accordance with what was described as a “judicial conciliation hearing”, the defendants to these proceedings then reached agreements to make payments of specified sums. Two judgments, dated 18 March 2010 and 8 April 2010, were then issued by the Uijeongbu District Court in relation to these payments. The respondent was identified as a liable party in these judgments.
The appellant did not attempt to enforce the judgments immediately, and potentially was not able to enforce the judgments until a later date. The appellant’s submissions record that attempts were made to serve the judgments for the purposes of enforcement in 2014, and subsequently the Uijeongbu District Court served the judgments “by way of publication” with a publication date of 4 September 2014 and an effective date of service of 19 September 2014.
In April 2018, proceedings were commenced in the New Zealand High Court by the appellant against the respondent. The proceedings were not in the nature of enforcement proceedings, but rather involved a new claim to have the foreign judgment recognised.
Judgments from courts in the Republic of Korea are not capable of registration in New Zealand under either the Reciprocal Enforcement of Judgments Act 1934 (REJA) or the now-repealed Judicature Act 1908. The appellant accordingly seeks to take steps to have its judgment recognised in New Zealand pursuant to the common law.[2]
[2]See Maria Hook and Jack Wass The Conflict of Laws in New Zealand (LexisNexis, Wellington, 2020) at [5.77].
Given the date of the Korean judgments it is the LA 1950 rather than the Limitation Act 2010 (LA 2010) that applies notwithstanding its subsequent repeal.[3] The LA 1950 relevantly provides:
4 Limitation of actions of contract and tort, and certain other actions
(1) Except as otherwise provided in this Act …, the following actions shall not be brought after the expiration of 6 years from the date on which the cause of action accrued, that is to say,—
(a)actions founded on simple contract …
…
(4) An action shall not be brought upon any judgment which has been obtained subsequent to the commencement of this Act after the expiration of 12 years from the date on which the judgment became enforceable …
[3]The Korean judgments were obtained in March and April 2010 respectively. Section 2A of the Limitation Act 1950 provides that the Act continues to apply to actions based on acts or omissions before 1 January 2011.
The appellant contended that the claim was an action on a judgment of a kind contemplated by s 4(4) of the LA 1950 to which a 12‑year limitation applies, and that the proceedings brought in 2018 were within 12 years of obtaining judgment in the Republic of Korea in 2010. The appellant also argued that the cause of action under s 4(4) did not accrue until the Korean judgments became enforceable in 2014, rather than when the judgments were first obtained in 2010. The appellant also argued, in the alternative, that any cause of action under s 4(1)(a) did not accrue until the Korean judgments became enforceable in 2014, rather than when they were first obtained in 2010.
Duffy J addressed a range of issues when the proceedings came before her, including the expert evidence on Korean law called by both the appellant and the respondent. The Judge found that the appellant’s claim was one in contract and that the six‑year limitation period applied.[4] She concluded that, as the appellant did not fully address this argument or present evidence on whether the later date was the appropriate date, it was not appropriate to consider that question.[5] She dismissed the claim as time barred accordingly.
[4]Judgment under appeal, above n 1, at [67].
[5]At [72].
The appellant now contends that the High Court erred in its conclusions on the first issue, and advances the second issue in the alternative.
The respondent was made bankrupt in New Zealand on 1 August 2024. The appellant accordingly seeks permission of the Court to continue with the appeal against the respondent under s 76(2) of the Insolvency Act 2006. This application was served on the Official Assignee. By memorandum dated 8 October 2024 the Deputy Assignee advised that she did not oppose that order, and she recognised that the judgment debt would be provable in the bankruptcy if the appeal succeeded. Having regard to the approach to s 76(2) approved by this Court in Ma v Tay, we consider the grant of permission to be appropriate.[6] We make an order accordingly.
[6]Ma v Tay [2014] NZCA 608 at [25]–[26], referring to Saimei v McKay (1998) 6 NZBLC 102,611 (HC) at 102,613–102,614.
The respondent argued his case in person before the High Court but did not appear before us.
Which provision of the Limitation Act 1950 applies?
The first issue is whether the claim brought by the appellant is a claim in contract under s 4(1)(a) or an action on a judgment under s 4(4) of the LA 1950.
It is first important to recognise that there is a difference between proceedings taken to recognise the effect of a judgment, which is what we are addressing, and the subsequent enforcement of a judgment. The appellant has brought proceedings in New Zealand not to enforce the Korean judgment, but to take steps to have the judgment first recognised. Enforcement in New Zealand can only take place if the liability created by the judgment is first recognised in New Zealand.
Mr Holmes, for the appellant, argues — on the basis of the authorities which we address in greater detail below — that an “action on a judgment” is a term of some antiquity which involves a claim brought by a party to obtain a judgment based on an earlier judgment of another court. This claim can be advanced in relation to both foreign and domestic judgments. It is not in the nature of enforcement, but rather a separate claim of a particular kind that is taken prior to enforcement. In domestic law, recognition mechanisms that have since been developed have rendered such claims largely obsolete. Mr Holmes argues that s 4(4) of the LA 1950 nevertheless preserves the longer limitation period for such claims, both domestic and foreign, to recognise the liability created by the judgment.
The legal process known as an “action on a judgment” has been referred to as a claim relating to both domestic and foreign judgments in the early English cases. For example, in Williams v Jones, which concerned an action brought to recognise a judgment issued by a County Court, Parke B described the nature of the cause of action in the following way:[7]
The principle on which this action is founded is, that, where a court of competent jurisdiction has adjudicated a certain sum to be due from one person to another, a legal obligation arises to pay that sum, on which an action of debt to enforce the judgment may be maintained. It is in this way that the judgments of foreign and colonial courts are supported and enforced, and the same rule applies to inferior courts in this country, and applies equally whether they be courts of record or not.
[7]Williams v Jones (1845) 13 M & W 628 at 633, 153 ER 262 at 265 (Exch). See also at 634 per Alderson B; and Russell v Smyth (1842) 9 M & W 810, 152 ER 343.
In Godard v Gray this claim, described as an action on a foreign judgment, was expressly recognised in relation to a French judgment.[8]
[8]Godard v Gray (1870) LR 6 QB 139 (QB).
In Grant v Easton, the Court of Appeal of England and Wales dealt with a claim in relation to a judgment obtained in the British Vice-Consular Court at Cairo during British occupation of Egypt.[9] It was argued that, unlike domestic judgments, additional defences could arise in relation to the claim on the basis it was obtained in a foreign court.[10] The Court of Appeal did not accept this argument. Brett MR said:[11]
An action on a judgment has been treated as an action of debt. It has been suggested, however, that a difference exists between English and foreign judgments, but in the present case the question is, whether the defendant can shew any defence to the claim made against him. Upon principle what difference can there be between an English and a foreign judgment in this respect? An action upon a foreign judgment may be treated as an action in either debt or assumpsit: the liability of the defendant arises upon the implied contract to pay the amount of the foreign judgment.
[9]Grant v Easton (1883) 13 QBD 302 (CA). Vice-Consular Courts were a feature of the British occupation of Egypt.
[10]At 302.
[11]At 303.
The origins of this cause of action were more recently referred to in Owens Bank Ltd v Bracco, where the House of Lords addressed whether a defendant could oppose the registration of a foreign judgment in accordance with the legislative provisions.[12] In the course of doing so Lord Bridge described the common law origins of such proceedings, saying:[13]
A foreign judgment given by a court of competent jurisdiction over the defendant is treated by the common law as imposing a legal obligation on the judgment debtor which will be enforced in an action on the judgment by an English court in which the defendant will not be permitted to reopen issues of either fact or law which have been decided against him by the foreign court.
[12]Owens Bank Ltd v Bracco [1992] 2 AC 443 (HL).
[13]At 484.
Similarly the Court of Appeal of England and Wales referred to the enforcement of a Turkish judgment as an action on a judgment in Fonu v Demirel, albeit in circumstances where there was no issue arising from different limitation periods.[14] On the basis of this line of authority, the reference in the limitation legislation to an “action on a judgment” including s 4 of the LA 1950, appears to be a reference to this claim, applying whether the underlying judgment is a domestic or a foreign judgment.
[14]Tasarruf Mevduati Sigorta Fonu v Demirel [2007] EWCA Civ 799, [2007] 1 WLR 2508.
Notwithstanding the cases recognising the origins of this action, there is nevertheless a line of cases in New Zealand,[15] England and Wales,[16] and Australia[17] where the courts have applied the six‑year limitation period referred to in s 4(1)(a) of the LA 1950 (and the foreign legislative equivalents) to such claims. These authorities explain that judgments are enforced on the basis of the doctrine of obligations, which gives rise to the claims of a contractual nature of the kind recognised in s 4(1)(a) of the LA 1950. But there has been no analysis outlining why such claims are not considered to be an action on a judgment contemplated by s 4(4).
[15]Emajor v Emajor [2016] NZHC 2022 at [124], upheld on appeal in Eilenberg v Gutierrez [2017] NZCA 270, [2017] NZFLR 471; and SHC v O’Brien (1991) 3 PRNZ 1 (HC).
[16]Berliner Industriebank Aktiengesellschaft v Jost [1971] 1 QB 278 (QB) [Berliner (QB)]; and Berliner Industriebank Aktiengesellschaft v Jost [1971] 2 QB 463 (CA) [Berliner (CA)].
[17]Dennehy (a bankrupt) v Reasonable Endeavours Pty Ltd [2003] FCAFC 158, (2003) 130 FCR 494.
Two related reasons for that conclusion can be identified, however. The first is that a foreign judgment does not have the same status as a domestic judgment and should not be treated as having the same status for limitation purposes. A claim of the kind contemplated by s 4(1)(a) has not yet been made in domestic law. A second explanation arises from the historical rationale for the longer limitation period in s 4(4) — that domestic judgments create a charge over land, and for this reason the longer limitation period applicable to claims secured by a mortgage or lien over land is appropriate.[18] That rationale does not apply to foreign judgments.
[18]See Lowsley v Forbes (trading as LE Design Services) [1999] 1 AC 329 at 335–336.
The line of cases applying the shorter limitation period has been doubted in subsequent High Court decisions in these proceedings, however. When initially granting summary judgment, Davison J carefully analysed the cases and disagreed with the line of analysis conducted in them, concluding that the relevant limitation period was set by s 4(4).[19] He granted summary judgment as a consequence. That summary judgment was subsequently set aside, but when doing so Associate Judge Bell nevertheless agreed with the analysis of Davison J on the limitation issue.[20] In the judgment under appeal Duffy J preferred the reasoning adopted in this line of cases, however.
[19]Yoonwoo C & C Development Corp v Huh [2018] NZHC 3015 at [29]–[48] [Davison J judgment].
[20]Yoonwoo C & C Development Corp v Huh [2019] NZHC 2986 at [48]–[51] [Associate Judge Bell judgment].
Other authorities in Canada and Singapore have also addressed these issues. The most comprehensive analysis is provided by the Singaporean Court of Appeal in Poh Soon Kiat v Desert Palace Inc (trading as Caesars Palace), which involved assessing the limitation period to be applied when there was an attempt to register a Californian judgment in Singapore.[21] The Court considered that there were important conceptual differences between bringing claims on a domestic judgment and bringing claims on a foreign judgment, and that reference to an action on the judgment in the Singaporean equivalent of s 4(4) of the LA 1950 only meant an action on a domestic judgment.[22] Chan Sek Keong CJ said for the Court:[23]
… an action on a foreign judgment will produce the same effect or outcome as an action on a domestic judgment only after the foreign judgment in question has actually been sued on in a domestic court. Before that, the foreign judgment is still merely a foreign judgment. For a foreign judgment to acquire the status of a domestic judgment with its attendant right of immediate execution, the judgment creditor must first sue on the foreign judgment as an implied debt. The difference between an action on a domestic judgment and an action on a foreign judgment is also apparent from the legal defences available to the defendant in each case. In the case of the former only the defence of abuse of process applies … whereas, in the case of the latter, other defences such as fraud, breach of natural justice and public policy are relevant …
[21]Poh Soon Kiat v Desert Palace Inc(trading as Caesars Palace) [2009] SGCA 60, [2010] 1 SLR 1129.
[22]At [41]–[43].
[23]At [43] (emphasis in original).
This reflects the view that foreign judgments do not have the same status as domestic judgments. As one commentator has described it:[24]
… judgments of foreign courts have no direct effect in England, for foreign judges have no authority in England … If adjudication is thought of as an exercise of state sovereignty, this will come as no surprise: state sovereignty ends at the border of the state, and while international comity requires respect for the exercises of that power within the sovereign’s own territory, it does not acknowledge its direct power to act outside it.
[24]Adrian Briggs Conflict of Laws (3rd ed, Oxford University Press, Oxford, 2013) at 138.
As this Court said in Eilenberg v Gutierrez:[25]
It is perhaps trite to observe that a foreign judgment does not have domestic force of law unless and until it is transformed by the judicial or statutory machinery into a debt recoverable in New Zealand.
[25]Eilenberg v Gutierrez, above n 15, at [35].
A similar approach to the equivalent of s 4(4) has been applied in Canada. In Lax v Lax the Ontario Court of Appeal referred to the fact that Canadian courts had traditionally treated claims based on foreign judgments as involving the six‑year limitation period.[26] It also acknowledged the contrary view that had been taken at first instance by Cumming J in Girsberger v Kresz.[27] Feldman JA said for the Court with respect to the Canadian equivalent of s 4(4):[28]
[31] In my view, although there is merit in the philosophical approach advocated by Cumming J, in order to achieve the type of parity between domestic and foreign judgments that he is advocating, more significant changes must be made to the enforcement scheme than interpreting “judgment” in s 45(1)(c) to include a foreign judgment. This would require legislative action. As long as only domestic judgments can be enforced by execution and the other methods discussed above, and therefore foreign judgments must be transformed into domestic judgments or registered before they are enforceable as domestic judgments, there is not parity of treatment.
[26]Lax v Lax (2004) 70 OR (3d) 520 (ONCA) at [14].
[27]At [6], citing Girsberger v Kresz (2000) 47 OR (3d) 145 (ONSC). See also Pollier v Laushway 2006 NSSC 165, 244 NSR (2d) 386.
[28]Lax v Lax, above n 26.
The above analysis of the case law shows that there are competing views in the authorities over whether proceedings taken to recognise and enforce a foreign judgment should be treated as an “action on a judgment”, at least for limitation purposes. From a purely technical point of view there are arguments going both ways on this question. For that reason, both conclusions are theoretically open as a matter of technical legal analysis.
We do not agree with Katz J that the weight of authority overwhelmingly supports a conclusion that an action on a judgment only contemplates domestic judgments. The English and Welsh Court of Appeal first proceeded on that basis in Berliner Industriebank, but without the matter being argued or any analysis.[29] Given the description of this action in the authorities referred to above, it seems to us that there have been conflicting views on the meaning of this phrase. We are also unpersuaded that the answer is supplied by extracting the word “judgment” from the expression “action on a judgment” and interpreting the meaning of that word in isolation. It seems clear that this is a composite expression which addresses a particular type of claim for limitation purposes.
[29]Berliner (CA), above n 16.
But we reach the same ultimate conclusion as Katz J by approaching the question purposively. The meaning of legislation is ascertained from its text in light of its purpose and in its context.[30] Legislation applies to circumstances as they arise, so that its meaning can change over time with the development of the law.[31] Identifying the legislative intention can involve making the statute work in the way that Parliament must have intended.[32] That may involve looking across statutes in an attempt to identify legislative intent in a broader way. We consider there are factors that are decisively in favour of the six-year limitation period in s 4(1)(a) applying which arise from an overall view of legislative intent.
[30]Legislation Act 2019, s 10.
[31]Section 11. See Wood-Luxford v Wood [2013] NZSC 153, [2014] 1 NZLR 451 at [37], n 44 and [38], n 45; and RI Carter Burrows and Carter Statute Law in New Zealand (6th ed, LexisNexis, Wellington, 2021) at 540–551.
[32]Northern Milk Ltd v Northland Milk Vendors Ass Inc [1988] 1 NZLR 530 (CA) at 538.
In 1934 Parliament enacted the REJA. Under that Act a six-year limitation period was introduced for recognising foreign judgments falling under its regime.[33] Broadly speaking, the REJA operates on the basis of reciprocity, where judgments of a foreign country will be enforceable where the foreign court would enforce a New Zealand judgment in the same circumstances.[34] In practice, the countries to which the REJA has been extended by Order in Council are primarily Commonwealth states.[35] Judgments from other jurisdictions, such as the Republic of Korea, do not benefit from this regime. For that reason, it would be most unlikely that Parliament intended a longer and more generous 12‑year limitation period to apply for actions on judgments from those other jurisdictions. We consider this is a strong factor which points against s 4(4) being given such an interpretation.
[33]Reciprocal Enforcement of Judgments Act 1934, s 4(1).
[34]Hook and Wass, above n 2, at [5.54].
[35]At [5.55]. The primary exceptions are Belgium and France.
Similar points have been made in both Canada and Singapore when concluding that the more generous limitation period was not intended for judgments from foreign jurisdictions fully outside the reciprocal enforcement legislation. In Lax the Ontario Court of Appeal observed:[36]
[33] Importantly, the legislature has seen fit to distinguish statutorily between foreign judgments from reciprocating states and from non-reciprocating states, by providing a registration procedure with a six-year limitation on registration. That six years is equivalent to the six-year limitation on actions on foreign judgments, and can arguably be seen as a legislative attempt to impose some parity on foreign judgments as distinct from domestic ones.
[36]Lax v Lax, above n 26.
Similarly, in Poh Soon Kiat the Singaporean Court of Appeal said:[37]
[44] Further, when considered in the context of the regime for registering foreign judgments under the RECJA [Reciprocal Enforcement of Commonwealth Judgments Act] (vis-à-vis Commonwealth judgments) and the REFJA [Reciprocal Enforcement of Foreign Judgments Act] (vis-à-vis non-Commonwealth foreign judgments), the Judge’s opinion that a foreign judgment is or should be the same as a domestic judgment is inconsistent with the underlying legal basis upon which these two statutes were enacted. If a foreign judgment (whether emanating from a Commonwealth court or a non-Commonwealth foreign court) is legally the same as a domestic judgment, no legislative purpose would be advanced by those Acts. Furthermore, in respect of non-Commonwealth foreign judgments, s 4(1)(a) of the REFJA provides that such a foreign judgment may be registered “within 6 years after the date of the judgment”, and s 7(1) states that no proceedings for the recovery of a sum payable under such a foreign judgment will be entertained by a Singapore court other than “proceedings by way of registration of the judgment”. Thus, if, for example, the REFJA were applicable to California, the Respondent would not be able to register the 1999 California Judgment after six years of its issue. On the other hand, if the REFJA were not applicable to California (as is presently the case), the Respondent would, on the Judge’s view that s 6(3) of the LA is applicable, have 12 years to commence a common law action on that judgment. In the face of such a result, there would be no reason for any foreign State to enter into an arrangement with Singapore for the reciprocal enforcement of its judgments under the REFJA as to do so would merely be to shorten the period during which its judgments can be enforced in Singapore.
[37]Poh Soon Kiat v Desert Palace Inc, above n 21.
We see force in these observations.[38] They support s 4(1)(a) of the LA 1950 applying on the basis that the more generous limitation period in s 4(4) cannot have been intended to be applicable to claims in relation to foreign judgments falling outside the regime of the REJA.
[38]We note there has been some criticism of the approach in Canada. See Stephen Pitel and Jonathan de Vries “The Ontario Limitation Period for Actions to Enforce Foreign Judgments” (2004) 29 Advoc Q 312.
Given these legislative steps, and the fact that the kind of claims contemplated by s 4(4) are anachronistic, we consider it appropriate to give the subsection a narrow interpretation. There is a basis for concluding that foreign judgments and domestic judgments are conceptually different, and for concluding that foreign judgments need to be addressed as part of the law of obligations at common law as Katz J has emphasised. So a distinction can be drawn. There is then no compelling reason why steps taken to recognise and enforce such foreign judgments at common law should benefit from a more generous limitation period. For that reason, we consider the better interpretation is that s 4(4) only applies for actions on domestic judgments. We also observe that the difference between this line of analysis, and that preferred by Katz J, may only be one of emphasis.
This overall legislative intent has subsequently been made clearer. The LA 2010 has now eliminated the 12-year period referred to in s 4(4).[39] So s 4(4) represents what has been accepted to be an anachronism and an anomaly which has now been removed from the statute book. There is no good reason for having a more than six-year limitation period for claims concerning a foreign judgment. There is no need to give this provision a broad interpretation in the absence of some clear purpose for doing so. The LA 2010 now dispels the potential anomaly.
[39]See Limitation Act 2010, s 35(1). “Judgment” in s 35(1) includes a judgment obtained in a foreign country: s 35(2)(b).
For these reasons we agree with the High Court that s 4(1)(a) of the LA 1950 applied to the appellant’s claim and that, subject to the further argument addressed below, the claim was time barred.
Was the claim brought within six years?
The appellant’s alternative argument is that its claim was brought within the six-year limitation period in s 4(1)(a) of the LA 1950. Mr Holmes argued that, if the claim advanced by the appellant is treated as part of the doctrine of obligation, it only arises when the judgment was obliged to be honoured and when there is a failure to pay on that judgment. That is the notional breach date. This did not occur until the Korean judgments were enforceable, which was when execution orders were made by the Uijeongbu District Court in 2014, making the attempted enforcement in New Zealand within the six-year limitation period.
This argument potentially introduces the difference between the majority and minority judgment in Berliner Industriebank.[40]Here the issue was whether the six-year period commenced from when the German judgment was entered in Germany, or when it could be enforced.[41] There were limitations on enforcement of the judgment under German law while the creditor was subject to a bankruptcy order.[42] The majority of Salmon and Phillimore LJJ held that the six years ran from when judgment was first entered.[43] Lyell J disagreed. He referred to the action as an action of either debt or assumpsit,[44] and that the bankruptcy proceedings in Germany had prevented the personal debt being enforceable against the debtor during the period of the bankruptcy.[45] He said:[46]
… From the moment the ascertainment of the debt is made in the bankruptcy proceedings and has the effect of a final and unappealable judgment, it cannot be enforced under German law save against the assets of the bankrupt which are being administered in the bankruptcy; he is free from any liability in Germany until the bankruptcy is terminated. It seems to me impossible to imply from those facts a promise to pay the debt forthwith. There is only a present debt payable by him personally at a further date, and to treat such a judgment before the termination of the bankruptcy as ‘final’ in England would be to give to the creditor a right which by no procedure could he get in Germany. …
[40]Berliner (CA), above n 16.
[41]At 468.
[42]At 466–467.
[43]At 471.
[44]At 473.
[45]At 475.
[46]At 475.
Whilst we see force in Lyell J’s view, we do not think that it assists the appellant here. Expert evidence was provided on Korean law in the High Court. There is no evidence that, under Korean law, the judgments entered against the respondent could not have been enforced by obtaining the execution orders earlier. There is nothing equivalent to the bankruptcy order in Germany that prevented enforcement of the judgments in German law. It is clear that there was, in fact, a period of time before a further order was obtained in Korea, and that such a further order was needed before enforcement steps could take place. But there is no evidence before us that shows that this further order could not have been obtained earlier in Korea.
For these reasons, we conclude that the judgments in Korea created an obligation for the respondent to pay the appellant the amount of the judgments. Those judgments can be recognised in New Zealand by bringing a new claim, on the basis that the judgment creates a debt which must be paid. That claim falls within s 4(1)(a) of the LA 1950. If, under Korean law, that debt was not immediately payable for some reason, then the six-year period may not have started to run. But here we have no evidence that steps could not have been taken earlier under Korean law. We accordingly conclude that the six-year period began from the date the judgments were obtained, and that the action in New Zealand was taken outside that period.
Conclusion
For the above reasons, the six-year limitation period in s 4(1)(a) applied to the appellant’s claim, and the claim fell outside the six-year limitation period as the High Court held.
Result
The application for permission to continue the appeal under s 76(2) of the Insolvency Act 2006 is granted.
The appeal is dismissed.
REASONS OF KATZ J
| Table of contents | |
| Introduction | [44] |
| What is an “action on a judgment”? | [47] |
| The different status of foreign and domestic judgments | [49] |
| The implied obligation theory | [51] |
| The legislative history of s 4 of LA 1950 | [56] |
| The inter-relationship with the REJA | [59] |
| Conclusion | [61] |
Introduction
I agree that the appeal should be dismissed and support the reasoning of the majority in relation to the second issue on appeal. I am writing separately in relation to the first issue, as my reasons for concluding that the six-year limitation period in s 4(1)(a) of LA 1950 applies rather than the 12-year limitation period in s 4(4) differ in some respects from those of the majority.
The majority view is that the issue of whether actions on a foreign judgment fall within the six-year limitation period in s 4(1)(a) or the 12 year limitation period in s 4(4) is finely balanced, with both interpretations being “theoretically open”.[47] The majority refer to “competing views in the authorities” on the issue and conclude that there are “arguments going both ways”.[48] In reaching that view, the majority place considerable weight on the fact that the phrase “action on a judgment” has historically been used in relation to actions on both domestic and foreign judgments, in support of the view that s 4(4) applies.[49] They note, however, that legislation applies to circumstances as they arise and hence its meaning “can change over time with the development of the law”.[50] They therefore consider that it is helpful here to “[look] across statutes” to identify legislative intent.[51] Viewed through that lens, the majority conclude that Parliament must have intended that the six year limitation period for simple contract debts in s 4(1)(a) to apply, to ensure parity with the six-year limitation period in the REJA.[52]
[47]Above at [27].
[48]Above at [27].
[49]Above at [15]–[20].
[50]Above at [29].
[51]Above at [29].
[52]Above at [29]–[33].
I would dismiss this appeal on a somewhat broader basis. Specifically, in my view, both the legislative history and the weight of authority (including, it would appear, all the relevant appellate case law) overwhelmingly supports the conclusion that the six-year limitation period in s 4(1)(a) was intended to apply. The very limited number of first instance decisions that have taken a contrary view appear to have each been over-ruled by a subsequent appellate decision.[53] Similarly, two earlier High Court decisions in this proceeding, made in a summary judgment context, were not followed in the subsequent substantive judgment.[54] I accordingly do not accept that the correct legal position (putting aside any impact the REJA may have on the interpretation exercise) is uncertain or equivocal, or that the issue of whether s 4(1)(a) or 4(4) applies is finely balanced.
What is an “action on a judgment”?
[53]For example, the Court of Appeal for Ontario in Lax v Lax, above n 26, decisively rejected the contrary view expressed by Cumming J in Girsberger v Kresz, above n 27. The decision of the High Court of Singapore in Desert Palace Inc v Poh Soon Kiat [2009] 1 SLR 71, which followed Girsberger, was subsequently overturned by the Singapore Court of Appeal in Poh Soon Kiat v Desert Palace Inc, above n 21.
[54]The two decisions made in this case during the summary judgment phase (Davison J judgment, above n 19; and Associate Judge Bell judgment, above n 20) were not followed by Duffy J in the decision under appeal. Further, the first of the Yoonwoo High Court summary judgment decisions was made at a time when the respondent was not represented and there was accordingly no contradictor.
The majority place considerable weight on the fact that the phrase “action on a judgment” has historically been used in relation to actions on both domestic and foreign judgments, reasoning that this supports the inclusion of actions on foreign judgments within s 4(4). In my view, however, nothing turns on the meaning of the word “action” (which is a defined term essentially meaning a civil proceeding)[55] or the associated phrase “action on a judgment”. An “action on a judgment” is simply the bringing of a fresh claim on an existing judgment to obtain a new judgment for the same underlying debt or obligation.[56] It is uncontroversial that an action on a judgment can be brought in respect of either a foreign judgment or (more rarely in modern times) a domestic judgment.[57] An action on a foreign judgment is simply the longstanding process for obtaining recognition of foreign judgments at common law, which still applies today.
[55]“Action” is defined in s 2(1) of the Limitation Act 1950 as “any proceeding in a Court of law other than a criminal proceeding”.
[56]For a more detailed explanation, see Lowsley v Forbes, above n 18.
[57]Historically, it was necessary to bring an action on a domestic judgment in (at least) two circumstances. The first was to convert a judgment of an inferior court (a court not of record) into a judgment of a superior court, to facilitate execution. See for example Williams v Jones, above n 6. Following the enactment of the County Courts Act 1846 (UK), actions on inferior court judgments to obtain a judgment of a court of record for execution purposes became increasingly rare, as inferior courts were progressively phased out. The second reason was to extend the time period available for execution. Case law following the enactment of the Limitation Act 1939 (UK), however, differentiated between suing on a judgment and execution processes, concluding that the 12 year limitation period for an “action upon a judgment” did not apply to proceedings brought to execute or enforce an existing judgment, but only applied to an action to obtain a new judgment based on an existing judgment: see W T Lamb & Sons v Rider [1948] 2 KB 331; and Lowsley v Forbes, above n 18, where the House of Lords discusses of the definition of “action” in the Limitation Act 1980 (UK). As a result, it was no longer necessary for judgment creditors to obtain a new judgment (by way of an action on the original domestic judgment) within 12 years to preserve most forms of execution rights.
In my view, the outcome of this appeal does not turn on whether actions (proceedings) seeking recognition of foreign judgment are “actions” on a foreign judgment — they undoubtedly are. Rather, the issue turns on the interpretation of the word “judgment” in s 4(4) and whether that term was intended to refer to domestic judgments only, or to also extend to foreign judgments.
The different status of foreign and domestic judgments
The starting point for analysis is the fundamentally different nature and status of foreign and domestic judgments within a domestic legal system. A domestic judgment places the parties under an immediate obligation to comply with its terms and can be enforced directly by execution. Such a judgment is conclusive on the merits between the parties and is not open to collateral attack domestically. Domestic judgments emanate from the forum’s own judicial system, where the courts can be assured of the necessary jurisdiction and that appropriate procedural and other safeguards have been met.[58]
[58]See Peter Twist Laws of New Zealand Courts (online ed) at [15].
Foreign judgments, on the other hand, have no direct status within a domestic legal system.[59] This difference reflects the principle of territorial sovereignty, which directly impacts how courts and their judgments are viewed and treated by other nations.[60] As this Court observed in Eilenberg v Gutierrez:[61]
It is perhaps trite to observe that a foreign judgment does not have domestic force of law unless and until it is transformed by the judicial or statutory machinery into a debt recoverable in New Zealand.
A foreign judgment — even if final in its home jurisdiction — is accordingly not recognised as a “judgment” within a domestic legal system. As Williams J observed in SHC v O’Brien, although “‘judgment’ is not defined by [LA 1950] … it could only apply to a judgment given outside New Zealand if it expressly said so”.[62] Hence, in statutes where the term “judgment” is intended to refer to foreign judgments, such as the REJA or the Trans-Tasman Mutual Recognition Act 1997, that intent is made clear by express words or necessary implication.
The implied obligation theory
[59]Hook and Wass, above n 2, at [5.6]; Adrian Briggs The Conflict of Laws (5th ed, Oxford University Press, Oxford, 2024) at 112; and Lord Collins and Jonathan Harris (eds) Dicey, Morris & Collins on the Conflict of Laws (16th ed, Sweet & Maxwell, London, 2022) at [14-002].
[60]Hook and Wass, above n 2, at [2.41], [5.38] and [5.108]; Briggs, above n 59, at 31; Exportrade Corp v Irie Blue New Zealand Ltd [2013] NZCA 675, [2014] NZAR 495 at [9], citing Wing Hung Printing Co Ltd v Saito Offshore Pty Ltd [2010] NZCA 502, [2011] 1 NZLR 754 at [27]. See also Gordon Pacific Developments Pty Ltd v Conlon [1993] 3 NZLR 760 (HC) at 765, citing Sirdar Gurdyal Singh v Rajah of Faridkote [1894] AC 670 (PC) at 683–684; and Elmar Hertzog und Partner Management Consultants GmbH v Perlich HC Whangārei CIV-2011-488-185, 23 September 2011, quoting Pemberton v Hughes [1899] 1 Ch 781 (CA) at 791.
[61]Eilenberg v Gutierrez, above n 15, at [35] (footnotes omitted). See also Hook and Wass, above n 2, at [5.6] and [5.16]–[5.17].
[62]SHC v O’Brien, above n 15, at 32.
As foreign judgments are not automatically recognised as judgments within a domestic legal system, determining the appropriate limitation period for actions on them turns on identifying the legal basis on which they are recognised domestically. The common law articulates this as “the implied obligation” theory, which was first referred to in case law at least as far back as the early eighteenth century.[63] As the learned authors of The Conflict of Laws in New Zealand observe, however, it was in a pair of judgments handed down on the same day in 1870 that the modern approach to the recognition and enforcement of foreign judgments was firmly established.[64] Subsequently, in an oft-quoted statement by the Court of Appeal of England and Wales, in Grant v Easton, Brett MR (later, Lord Esher) stated the principle as follows:[65]
An action upon a foreign judgment may be treated as an action in either debt or assumpsit: the liability of the defendant arises upon the implied contract to pay the amount of the foreign judgment.
[63]See for example Dupleix v De Roven (1705) 2 Vern 540 at 541, 23 ER 950 (Ch) at 951; and Walker v Witter (1778) 1 Doug 1 at 4, 99 ER 1 (KB) at 3.
[64]Hook and Wass, above n 2, at [5.31]–[5.32], citing Godard v Gray, above n 7, and Schibsby v Westenholz (1870) LR 6 QB 155 (QB).
[65]Grant v Easton, above n 9, at 303.
English courts at all levels, including the Court of Appeal and Supreme Court, have relied on the doctrine of obligation as providing the jurisdictional basis for the recognition and enforcement of foreign judgments.[66] The same approach applies in New Zealand[67] and other Commonwealth countries, including Australia,[68] Canada,[69] Singapore[70] and Hong Kong.[71]
[66]Rubin v Eurofinance SA [2012] UKSC 46, [2013] 1 AC 236 at [9]; Owens Bank Ltd v Bracco [1992] 2 AC 443 (HL) at 484; Adams v Cape Industries Plc [1990] Ch 433 (CA) at 513; Goldstein v Conley [2001] EWCA Civ 637, [2002] 1 WLR 281 (CA) at [51]; and Lewis v Eliades [2003] EWCA Civ 1758, [2004] 1 WLR 692 at [48]. See also David McClean and Verónica Ruiz Abou-Nigm Morris: The Conflict of Laws (10th ed, Thomson Reuters Sweet & Maxwell, London, 2021) at [10-008]–[10-009]; Briggs, above n 59, at 121; Collins and Harris, above n 59, at [14‑008]–[14-009]; Halsbury’s Laws of England (5th ed, 2024, online ed) vol 19 Conflict of Laws at [307]; and Adrian Briggs “Recognition of Foreign Judgments: A Matter of Obligation” (2013) 129 LQR 87.
[67]Eilenberg v Gutierrez, above n 15, at [32]. See also Sharps Commercials Ltd v Gas Turbines Ltd [1956] NZLR 819 (SC); Gordon Pacific Developments Ltd v Conlon, above n 59; Hook and Wass, above n 2, at [5.30]–[5.44]; Anthony H Angelo Private International Law in New Zealand (Kluwer Law International, The Netherlands, 2012) at [360]; and John Turner “Enforcing Foreign Judgments at Common Law in New Zealand: Is the Concept of Comity Still Relevant?” [2013] 4 NZLR 653.
[68]See Martin Davis and others Nygh’s Conflict of Laws in Australia (10th ed, LexisNexis Butterworths, Chatswood (NSW), 2019) at [40.1]–[40.5]; and Reid Mortensen, Richard Garnett and Mary Keyes Private International Law in Australia (5th ed, LexisNexis, Chatswood (NSW), 2023) at [5.8].
[69]Lax v Lax, above n 26, at [27] and [29]; Laasch v Turenne 2012 ABCA 32, 522 AR 168; Pollier v Laushway, above n 26, at [17] and [18]; and Commission de la Construction du Québec v Access Rigging Services Inc 2010 ONSC 5897, 104 OR (3d) 313 at [10]–[12]. See generally Janet Walker Canadian Conflict of Laws (7th ed, LexisNexis, Markham (ON), 2023); and Halsbury’s Laws of Canada (2024 reissue, online ed) Conflict of Laws at HCF-80.
[70] Poh Soon Kiat v Desert Palace Inc, above n 21, at [43]; and Giant Light Metal Technology (Kunshan) Co Ltd v Aksa Far East Pte Ltd [2014] SGHC 16, [2014] 2 SLR 545 at [59].
[71]Hung Fung Enterprises Holdings Ltd v Agricultural Bank of China [2012] 3 HKLRD 679 (CA).
The necessary corollary, however, of treating an action to enforce a foreign judgment as being based on an implied obligation to pay the amount of the foreign judgment, is that the limitation period applicable to simple contract claims applies to such actions. The leading English decision on the issue is Berliner Industriebank Aktiengesellschaft v Jost, in which the Court of Appeal of England and Wales confirmed that as an action on a foreign judgment is based on the implied obligation or debt created by the foreign judgment, which is akin to a simple contract debt, the shorter limitation period for actions on a simple contract applies. The Court confirmed that the longer limitation period for “actions on a judgment” applied only to domestic judgments.[72] Appellate case law in other Commonwealth jurisdictions, including Canada and Singapore, has reached the same conclusion.[73] In what appears to be the only New Zealand case directly on point prior to this case, SHC v O’Brien, Williams J followed the same approach.[74]
[72]Berliner (CA), above n 16, at 471: Salmon and Phillimore LJJ dismissed the appeal against Berliner (QB), above n 16, at 285–286, where Brandon J recognised that the right of action on a foreign judgment is regarded as being on an implied debt, and is subject to the six-year limitation period.
[73]Lax v Lax, above n 26, at [29]; and Poh Soon Kiat v Desert Palace Inc, above n 21, at [49]–[54].
[74]SHC v O’Brien, above n 15, at 50–51.
In 1977, the Law Reform Committee of England and Wales summarised the longstanding English position under the Limitation Act 1939 (UK) (LA 1939) (on which LA 1950 is based) as follows:[75]
4.12 By virtue of section 2(4) of the Limitation Act 1939, the limitation period in respect of an action on a judgment is 12 years … The subsection applies only to an action on a judgment obtained in England and Wales; the period for suing on a foreign judgment is six years, since such a claim is in the nature of a simple contract debt.
[75]Law Reform Committee of England and Wales Twenty-first Report: Final Report on Limitation of Actions (Cmnd 6923, 1977).
This legal position is also consistently reflected in leading commentaries. For example, the learned authors of Halsbury’s Laws of England state that:[76]
Subject to certain qualifications, a judgment in personam of a foreign court of competent jurisdiction is capable of recognition and enforcement in England. Apart from statute, such a judgment will not be enforced directly by execution or any other process, but will be regarded, for procedural purposes, as creating a debt between the parties to it, the debtor’s liability arising on an implied promise to pay the amount of the foreign judgment. The debt so created is a simple contract debt and not a specialty debt, and is subject to the appropriate limitation period [(six years)].
The legislative history of s 4 of LA 1950
[76]Halsbury’s Laws of England (5th ed, 2024, online ed) vol 19 Conflict of Laws at [307] (footnotes omitted), citing (inter alia): Walker v Witter, above n 63; Russell v Smyth, above n 7; Williams v Jones, above n 7, at 633–634; Godard v Gray, above n 7, at 148–150; Schibsby v Westenholz, above n 64, at 159; Grant v Easton, above n 9; Barber v Mexican Land and Colonisation Co Ltd (1899) 16 TLR 127; Dupleix v De Roven, above n 63; Re Flynn (No 2), Flynn v Flynn[1969] 2 Ch 403; and Berliner (CA), above n 16.
The above analysis is supported by, and consistent with, the legislative history of LA 1950. New Zealand’s limitation law was historically (and still is) closely modelled on English limitation law. The Limitation Act 1623 (Eng) formed the basis of limitation statutes throughout the common law world.[77] The 1623 Act prescribed three basic limitation periods: twenty years for land actions, six years for contract and some tort actions and four years for torts affecting the person.[78] Over time, this hierarchy of limitation periods continued to develop, with actions concerning land, (domestic) judgments and “specialties” (generally, obligations under seal or contained in statutes) being afforded longer limitation periods than other actions, such as those in tort or simple contract.[79]
[77]Limitation Act 1623 (Eng) 21 Jac I c 16; and Law Commission The Limitation Act 1950 (NZLC PP3, 1987) at [38].
[78]Law Commission, above n 76, at [40].
[79]Law Commission of England and Wales Limitation of Actions (Consultation Paper 151, 1998). For a discussion of the legislative history, see Lowsley v Forbes, above n 18, at 338–342. See also Aiken v Stewart Wrightson Members Agency Ltd [1995] 1 WLR 1281 (QB).
As the English Law Reform Committee noted in their 1977 Report, the original justification for the inclusion of a longer limitation period for actions on domestic judgments was due to the historic connection between such judgments and real property.[80] The provisions relating to the limitation of actions on judgments and land were not separated in England until LA 1939 (UK) and in New Zealand until LA 1950.[81] The six year limitation period for simple contract claims, however, appears to have remained consistent since 1623 and was carried through into both LA 1939 (UK) and LA 1950.
[80]Law Reform Committee of England and Wales, above n 75, at [4.13].
[81]Law Commission, above n 76, at [50].
It is apparent from the legislative history that the longer limitation period for “actions on a judgment” was squarely directed to actions on domestic judgments which historically (unlike foreign judgments) were directly enforceable against real property.[82] Further, aligning the limitation period for actions on domestic judgments with the limitation period for actions on specialties reflected the higher status and formality of judgments, documents under seal and statutory obligations, relative to other actions such as (for example) claims on oral contracts, where there are clear policy reasons (including evidential reliability over time) for applying a shorter limitation period.
The inter-relationship with the REJA
[82]At [19]; and Law Reform Committee of England and Wales, above n 75, at [4.12]–[4.16].
Finally, I turn to consider the inter-relationship between s 4 of LA 1950 and the REJA. The majority reason that it can be assumed that Parliament intended that the six‑year limitation period in s 4(1)(a) apply to common law actions to enforce foreign judgments, because the REJA (which predates LA 1950) included a six-year limitation period.[83] In my view, however, it is helpful to take the analysis back a step further and consider why Parliament enacted a six-year limitation period in the REJA. It seems highly likely that this reflected a parliamentary intent to align the REJA with the longstanding common law position that the limitation period applying to actions on foreign judgments was the six-year period that applied to claims in contract. As the Court of Appeal for Ontario observed in Lax v Lax, this “can arguably be seen as a legislative attempt to impose some parity on foreign judgments as distinct from domestic ones”.[84]
[83]Above at [29]–[30].
[84]Lax v Lax, above n 26, at [33], referring to the enactment of a similar six-year limitation period for registration of foreign judgments in that jurisdiction.
Subsequently, when LA 1950 was enacted, it is reasonable to assume that Parliament again understood and intended to preserve the pre-existing legal position, rather than change it. Specifically, it is implicit that Parliament recognised that the jurisdictional basis for the enforcement of foreign judgments at common law is the implied obligation theory, and on that basis the limitation period for “simple contract debts” in s 4(1)(a) would apply. The only (inherently unlikely) alternative is that Parliament did not intend that there be any limitation period for actions on foreign judgments at all as, for the reasons outlined at [49] and [50] above, it would be contrary to well-established legal principles for the word “judgment” in s 4(4) to be interpreted as extending to foreign judgments in the absence of any express indication of Parliamentary intent to that effect.
Conclusion
For the reasons outlined above, it is my view that the six-year limitation period in s 4(1)(a) applies to actions to recognise and enforce foreign judgments under LA 1950, rather than the 12-year limitation period in s 4(4). Mr Yoonwoo’s proceeding is therefore time barred and I agree with the majority that his appeal must be dismissed.
Solicitors:
Loo & Koo, Auckland for Appellant
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