Yoonwoo C & C Development Corp v Huh
[2018] NZHC 3015
•20 November 2018
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE
CIV-2018-404-000664
[2018] NZHC 3015
BETWEEN YOONWOO C & C DEVELOPMENT CORP
Plaintiff
AND
JAE HO HUH
Defendant
Hearing: 4 October 2018 Appearances:
B R Saldanha for Plaintiff
Judgment:
20 November 2018
JUDGMENT OF PAUL DAVISON J
This judgment was delivered by me on 20 November 2018 at 4:00 pm Pursuant to r 11.5 of the High Court Rules
Registrar/Deputy Registrar
Solicitors:
Jackson Russell, Auckland
YOONWOO C & C DEVELOPMENT CORP v JAE HO HUH [2018] NZHC 3015 [20 November 2018]
Introduction
[1] The plaintiff, Yoonwoo C & C Development Corp, applies for entry of summary judgment against the defendant Jae Ho Huh, and seeks orders for the registration of two judicial arbitration decisions made by a Court in the Republic of Korea in 2010, which order the defendant to make payments to the plaintiff. Although formerly a resident of South Korea, the defendant has since moved to New Zealand and is presently residing and conducting business here.
[2] The proceedings and summary judgment application have been served upon the defendant pursuant to an order for substituted service made by the Court on 27 June 2018.1 The application for summary judgment was initially set down for hearing on 21 August 2018. The defendant has taken no steps in the proceeding and there was no appearance by or on his behalf at the hearing on 21 August 2018, so the application for summary judgment was adjourned and set down for a formal proof hearing on 4 October 2018.2 Again, there was no appearance by or on behalf of the defendant at the formal proof hearing before me on 4 October 2018.
[3] Although no defence has been filed, in order to obtain an order for summary judgment, and as a preliminary issue the plaintiff must satisfy this court that the judicial arbitration decisions made by the Court in the Republic of Korea (South Korea) meet the requirements for the registration of foreign judgments. A further issue I must determine is whether the plaintiff’s reliance upon the South Korean Court’s judicial arbitration decisions made in 2010 is prohibited by the relevant provisions of the Limitation Act 1950.
1 The order for substituted service made by AJ Smith on 27 June 2018 directed that service upon the defendant be effected by delivering the statement of claim, notice of proceeding, interlocutory application for summary judgment, and the affidavits of Sang Kweon Lee and Moon Woo Park together with a sealed copy of the order for substituted service at the registered office of KNCC Limited in Auckland, and by advertising the proceeding once in the New Zealand Herald newspaper.
2 A Minute issued by Edwards J on 21 August 2018, in which her Honour noted that the application for summary judgment had been adjourned from 21 August and was to be allocated a further hearing date to procced as a formal proof hearing, together with email correspondence from the Registrar setting the matter down for a formal proof fixture on 4 October 2018, was served upon the defendant by means of substituted service by delivery of the documents to the registered office of KNCC Limited in Auckland on 5 September 2018.
Background
[4] The plaintiff’s application for summary judgment is supported by affidavits of Moon Woo Park, an attorney practising in Korea who is engaged by the plaintiff and who was directly involved in the legal proceedings conducted by the plaintiff in South Korea, and Sang Kweon Lee, who is also an attorney practising in South Korea. The background and events leading to the making of two judicial arbitration decisions in March and April 2010 are set out in their affidavits.
[5] The plaintiff is a construction company having its registered office in the Republic of Korea. In April 2009 the plaintiff commenced two proceedings against four parties, one of whom was the defendant. The other defendants to the proceedings were subsidiaries of the Dae Joo Group of companies, of which the defendant is the president.3 The proceedings related to the plaintiff’s sale of a business licence and land for the construction of apartment buildings on a property located at Maseokwoo- ri, Hwado-eup, Namyangju-si. In the proceedings the plaintiff sought to enforce the contract and establish its entitlement to the deposit money and the balance of the purchase price.
Judicial arbitration decision 18 March 2010
[6] The plaintiff commenced the first of the two proceedings against the South Korean defendants in April 2009 by application for a payment order requiring the Korean defendants to pay the sum of 890,000,000 Korean Won, being the amount of a deposit payable by them in relation to the Korean defendants’ purchase of the business interest and land. The Application for Payment Order document set out the background and basis upon which the plaintiff alleged that it was entitled to a payment order and provided particulars of the allegations, in much the same manner and as required by a statement of claim filed in New Zealand proceedings. The application alleged that the parties had entered into a contract on 4 June 2008, and it referenced documentary exhibits in support of the application. It concluded by seeking an order for the payment of 890,000,000 Korean Won together with interest and costs.
3 The defendants named in the South Korean proceedings were: Dae Joo Construction Corp; Mirae RAC Corp; Dae Han Construction Corp; and the defendant Jae Ho Huh.
[7] Following service of this proceeding, the four defendants all filed an objection to the making of a payment order, and the plaintiff’s application was transferred to the Uijeongbu District Court for trial. Subsequently the parties agreed to participate in a judicial arbitration of the dispute. A judicial arbitration hearing was held on 18 March 2010, and was presided over by three judges, including the Chief Judge of the Court. Both the plaintiff and the defendants were represented at the arbitration. The plaintiff was represented by its president Kyung Chel Kim and its attorney, Moon Woo Park. All four defendants were represented by Byung Won Lee, who was the manager of the third defendant, Mirae RAC Corp.
[8] Moon Woo Park deposes that at the judicial arbitration, the parties reached an agreement to settle the dispute and the agreement was formally recorded by the court which proceeded to issue a Judicial Arbitration Decision.
[9] The terms of the arbitration decision which are set out in a formal sealed court order are as follows:4
1. The Defendant5 and Dae Joo Construction Corp, Dae Han Construction Corp, Jae Ho Huh shall jointly pay 890,000,000 Korean Won to the Plaintiff by April 30, 2010. Once they defaulted on the payment by the date, 20% interests (sic) per annum shall be added from the date to the full payment.
2. The Plaintiff shall waive other claims against the Defendant.6
3. The legal costs and arbitration costs shall be borne separately by each of the parties.
Claim Purpose and reason of the claim
The purpose and the reason are [the] same as those on the application of the payment order attached herein.
Assistant Clerk Ki Hwan Kwon
4 An English translation of the Judicial Arbitration Decision of the Uijeongbu District Court is produced as an exhibit to the affidavit of Sang Kweon Lee (affirmed 9 March 2018), and supported by a Notarial Certificate confirming that Jang-Suk Suh, who prepared the English translation, has confirmed its accuracy to a Registered Notary.
5 The defendant referred to is Mirae RAC Corp, which was named as the “selected” defendant in the Judicial Arbitration Decision.
6 The judicial arbitration decision contains a list of four defendants being (1) Dae Joo Construction Corp; (2) Mirae RAC Corp; (3) Dae Han Construction Corp; and (4) Jae Ho Huh.
Chief Judge Jong Won Kim
Judicial arbitration decision 8 April 2010
[10] Also in April 2009, the plaintiff filed a separate and second application by which it sought a payment order against the same four Korean defendants named in the first application. In this second application, it sought a payment order for 1,200,000,000 Korean Won against the defendants being the balance of the purchase price for the business licence and land. In the same manner as the first payment order application, the Application for Payment Order document set out the plaintiff’s allegations and reasons why it was entitled to a payment order, including particulars in the manner of a statement of claim as required in New Zealand civil proceedings.
[11] As with the plaintiff’s first application for a payment order, all four Korean defendants filed an objection to the application, and the application was transferred to the Uijeongbu District Court for trial. The parties subsequently agreed to refer their dispute to judicial arbitration.
[12] The judicial arbitration was held on 8 April 2010 before Chief Judge Jong Won Kim and two other judges. Moon Woo Park and the president of the plaintiff, Kyung Chel Kim, again represented the plaintiff, and the manager of Mirae RAC Corp, Byung Won Lee, represented all four defendants.
[13] At the judicial arbitration the parties reached an agreement to settle the dispute and the agreement was formally recorded by the court in a Judicial Arbitration Decision as follows:
1.The Defendant (selected) and Dae Joo Construction Corp., Dae Han Construction Corp., Jae Ho Huh shall jointly pay 1,050,000,000 Korean Won to the Plaintiff by May 30, 2010. Once they defaulted on the payment by the date, 20% interests (sic) per annum shall be added from the date to the full payment.
2.If Wol Pyung General Contruction Corp. files a lawsuit against the Defendant (selected) and Dae Joo Construction Corp., Dae Han Construction Corp., Jae Ho Huh in connection with this case and the Defendant (selected) and Dae Joo Construction Corp., Dae Han Construction Corp., Jae Ho Huh lose the case, the Plaintiff shall pay the costs spent for the lawsuit.
3.The plaintiff shall waive other claims against the Defendant.
4.The legal costs and arbitration costs shall be borne separately by each of the parties.
Claim
Purpose and reason of the claim
The purpose and the reason are the same as those on the application of the payment order attached herein.
Assistant Clerk Ki Hwan Kwon
Chief Judge Jong Won Kim
Status of Korean judicial arbitration decisions
[14] In support of the application for registration of the two judicial arbitration decisions, the plaintiff has also filed an affidavit by Mr Bohsoon Kang, who practices in Auckland as a solicitor and who has the equivalent of both a Bachelor of Laws degree and a Master of Laws from universities in South Korea. Having qualified in law he worked as an assistant patent attorney in Seoul between 1998 and 1999. In 1998 he graduated from the University of Auckland with a Bachelor of Laws degree, and was admitted as a barrister and solicitor of the High Court that same year. He subsequently commenced his own legal practice in Auckland. He is fluent in the Korean language and has provided affidavit evidence as an independent expert witness to explain aspects of the Korean legal system for determining civil disputes, including the judicial arbitration process, the outcome of which may be a final and conclusive court judgment in Korea.
[15] In his affidavit Mr Kang explains that the District Courts in Korea primarily deal with civil claims, criminal claims and family claims. Contractual disputes such as those with which these two judicial arbitration decisions are concerned lie within the jurisdiction of the District Courts in Korea. In respect of civil claims, where the claim is for a sum less than approximately the equivalent of NZ $260,000, the case is heard by a single judge. Where the claimed amount exceeds that level, the case is heard by a panel of three judges. Mr Kang explains that where a plaintiff claims to be owed money, Korean law provides a procedure whereby a plaintiff can apply to a Court for a payment order to be made against the debtor. Mr Kang says that where an application for a payment order is made, the procedure is as follows:
Payment order applications filed in the District Courts are dealt with in the following ways:
(a)Settlement demand: the court issues a payment order based only on a review of the documents submitted by the plaintiff. If there is no objection to the payment order by the defendant within 2 weeks, the payment order is fixed and has the same effect as a formal judgment.
(b)Lawsuit: if the defendant objects to a payment order within 2 weeks or is likely to object to any payment order application, then the proceeding follows an ordinary lawsuit procedure.
(c)Judicial arbitration: if there is an objection to the payment order, the parties can agree to judicial arbitration instead of a lawsuit under section 2 of [the] Civil Judicial Arbitration Act. In a judicial arbitration, judges preside over the arbitration:
(i)If the parties reach an agreement at the arbitration, it is recorded by the Court and has the same effect as a final judgment;
(ii)If the parties do not agree, then the judge issues a settlement decision with reference to the plaintiff’s claim and both parties’ interests which if not objected to within 2 weeks, is taken to have the same effect as a final judgment.
(iii)If there is objection to the judge’s settlement decision within 2 weeks of the decision, then the matter is converted back to the law suit procedure or the parties can attempt judicial arbitration again.
[16] The procedure that was adopted and followed in the present case is further described by Mr Kang as follows:
22.The Judgments record that the Plaintiff filed payment order applications in Uijeongbu District Court and the defendants objected. The parties then pursued judicial arbitration (instead of a law suit) in accordance with the Civil Judicial Arbitration Act which was presided over by a panel of three judges. Three judges were required because the Judgments each involved an amount exceeding 200 million Korean Won.
23.The Judgments record that Mr Byung Won Lee acted as a representative for the Defendant.
24.In each of the Judgments, the parties reached an agreement which was recorded by the Uijeongbu District Court. In accordance with section 29 of the Civil Judicial Arbitration Act, the Judgments have the effect of a final judgment in Korea, and are binding on the parties.
25.Under section 34 of the Civil Judicial Arbitration Act, the parties have 14 days to appeal against a judicial arbitration decision. The affidavit
of Mr Moon Woo Park sets out that no appeal was filed against either Judgment. The Judgments are therefore final and conclusive.
Registration of foreign judgments in New Zealand
[17] A foreign judgment does not have the force of law in New Zealand unless transformed by the judicial or statutory machinery into a debt recoverable in New Zealand. Nevertheless, as the Court of Appeal in Eilenberg v Gutierrez explained:7
… its existence creates a substantive right under domestic law in the creditor’s favour to apply for enforcement of the debtor’s obligation to pay the moneys owed: enforcement of foreign judgments as debts due in this country is an important part of the High Court’s inherent jurisdiction as a superior court of general and original jurisdiction. Subject to the settled exceptions, the approach developed by the common law recognises the transnational reality of private obligations which are thus enforceable against persons and property in New Zealand.
[18] In the present case the Reciprocal Enforcement of Judgments Act 1934 has no application as the Republic of Korea is not designated by an Order in Council as a foreign country to which the Act applies. Nor does s 172 of the Senior Courts Act 2016 apply, as the judgments were not obtained in a Commonwealth country. Consequently, enforcement and registration of a judgment of a Korean Court must satisfy the common law requirements for registration in New Zealand. The three pre-requisites to the High Court exercising its jurisdiction to enforce a foreign judgment are:8
(a)The foreign court must have had jurisdiction to give judgment.
(b)The judgment must be for a definite sum of money.
(c)The judgment must be final and conclusive.
[19]There are three settled exceptions to these requirements, which arise where:9
(a)The judgment was obtained by fraud.
7 Eilenberg v Gutierrez [2017] NZCA 270, (2017) 31 FRNZ 408 at [35].
8 Reeves v One World Challenge LLC [2006] 2 NZLR 184 (CA) at [36]; cited in Eilenberg v Gutierrez [2017] NZCA 270, (2017) 31 FRNZ 408 at [30].
9 Eilenberg v Gutierrez [2017] NZCA 270, (2017) 31 FRNZ 408 at [30].
(b)Enforcement of the judgment would be contrary to public policy.
(c)The proceedings in which the judgment was obtained were contrary to natural justice.
[20] The applicable principles were succinctly set out by Tipping J in Kemp v Kemp:10
It is a general principle of private international law that, subject to three exceptions, a judgment in personam of a foreign court of competent jurisdiction, which is final and conclusive on the merits in the foreign country, is to be regarded as final and conclusive in New Zealand as between the same parties and their privies and as regards any issue which the judgment or order settles. Subject to the exceptions, such an overseas judgment is not impeachable or examinable on its merits whether for error of fact or of law. In proceedings on a foreign judgment the burden lies on the party who seeks to impeach it.
[21] The rationale for the enforcement of foreign judgments is the presumption that the defendant was bound by and enjoyed the protection of the laws of the foreign country at the time of the judgment, and that a foreign judgment imposes a duty or obligation upon the defendant to pay the sum for which judgment was given and which the courts of this country are bound to enforce.11 The overriding consideration, however, is whether a foreign judgment created an obligation to pay which the debtor is bound to discharge.12 Accordingly it is necessary to determine whether the foreign Court had jurisdiction over the defendant at the time and in the circumstances where judgment against him or her was entered.
The present case
[22] The plaintiff submits that the pre-requisites for the registration of the two judicial arbitration decisions made by the Court in Korea have been met. Counsel submits that the defendant was a resident of the Republic of Korea and engaged in business there, and although he is now resident in New Zealand, he was at the time of the judicial arbitration hearings and orders, subject to the jurisdiction of the courts in
10 Kemp v Kemp [1996] 2 NZLR 454 (HC) at 458, approved in Eilenberg v Gutierrez [2017] NZCA 270, (2017) 31 FRNZ 408 at [31].
11 Eilenberg v Gutierrez [2017] NZCA 270, (2017) 31 FRNZ 408 at [32]–[33].
12 Eilenberg v Gutierrez [2017] NZCA 270, (2017) 31 FRNZ 408 at [34]; citing Adams v Cape Industries plc [1990] 2 WLR 657 (Ch) at 680.
South Korea. Counsel further submits that the contractual dispute from which the civil proceeding arose in South Korea was within the jurisdiction of the Korean District Court, as explained in the affidavit evidence of Mr Bohsoon Kang. Moreover, the defendant had a representative present during the judicial arbitration hearings, and consequently participated in both of the arbitrations in which agreement was reached resulting in the two judicial arbitration decisions.
[23] I am satisfied that the plaintiff has established that during the relevant time the defendant was a resident of South Korea and subject to the jurisdiction of the Court, and that the Court had jurisdiction to issue the decisions of 18 March and 8 April 2010. In each case the judgments of the Korean Court are for definite sums of money.
[24] I am also satisfied that the judgments of the Korean Court are final and conclusive. Although the decisions are described as “Judicial Arbitration Decisions” rather than judgments of the Court, I accept Mr Kang’s evidence that under Korean law such decisions have the effect of a final judgment and are binding on the parties. The period for filing an appeal against either or both decisions has now expired, and the decisions are therefore final and conclusive.
[25] Furthermore, I am satisfied that none of the three exceptions to registration arises in the present case. There is no claim or suggestion here that the judgments were obtained by fraud and the circumstances do not give rise to any basis for the suggestion that enforcement of the judgments would be contrary to public policy. I note that both parties were present or represented at the judicial arbitration hearings, and the defendant was represented by way of a manager of one of the companies in the defendant’s group of companies.
[26] Nor is there any suggestion from the material before the Court that the judgments were obtained in any manner contrary to natural justice. In this regard it is relevant to note that the judicial arbitration decisions were issued following agreement being reached by the parties.
[27] I am therefore satisfied that the pre-requisite criteria for registration of the judgments have been made out by the plaintiff, and having regard to the defendant’s
current residence in New Zealand, I consider that it is in the interests of justice that the two judgments of the Korean Court be registered in New Zealand, so as to enable the plaintiff to take steps to enforce the judgments.
[28] However, before deciding whether to make an order for the registration of the judgments, I note that counsel raised the issue of limitation. I therefore turn to consider whether any action upon the Korean judgments is precluded by operation of the Limitation Act 1950.
Is any action upon the judgments nevertheless barred by operation of the Limitation Act 1950?
[29] At the time the two Korean judgments were obtained by the plaintiff in March and April 2010, the Limitation Act 1950 applied.13 Section 4 relevantly provides:
4 Limitation of actions of contract and tort, and certain other actions
(1)Except as otherwise provided in this Act or in subpart 3 of Part 2 of the Prisoners’ and Victims’ Claims Act 2005, 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 or on tort:
(b)actions to enforce a recognisance:
(c)actions to enforce an award, where the submission is not by a deed:
(d)actions to recover any sum recoverable by virtue of any enactment, other than a penalty or forfeiture or sum by way of penalty or forfeiture.
(2) ….
(3)An action upon a deed shall not be brought after the expiration of 12 years from the date on which the cause of action accrued:
Provided that this subsection shall not affect any action for which a shorter period of limitation is prescribed by any other provision of this Act.
(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 or on any judgment which has been obtained before the
13 Limitation Act 1950, s 2A; and Limitation Act 2010, s 59.
commencement of this Act after the expiration of 20 years from the date on which the judgment became enforceable; and no arrears of interest in respect of any judgment debt shall be recovered after the expiration of 6 years from the date on which the interest became due.
[30] Section 4(4) of the Act refers to an action brought upon “any judgment” and requires an action to be brought before the expiration of 12 years from the date on which the judgment became enforceable. The term “judgment” is not defined in the Act, but is readily understood as referring to a court’s final determination of the rights and obligations of the parties to the proceeding to which it relates. The words “any judgment” are consistent with a legislative intention that the phrase be given a broad interpretation, and there is nothing to indicate a legislative intention that the term is intended to only apply to judgments of New Zealand courts.
[31] The different limitation periods of six years for bringing an action founded on simple contract or on tort and 12 years for actions upon a deed and upon a judgment can be explained by reference to the inherently different qualities of the two types of action. In the case of an action brought upon a judgment, a court has already determined that the plaintiff has established the defendant’s liability for the debt or damages for an amount that has been specified and is therefore certain. There is no need for the plaintiff or the defendant to assemble evidence and witnesses as to the validity of the plaintiff’s claim to recover the amount of a judgment.
[32] Similarly, by reason of the formality of executing a deed, it can be considered to have established the entitlements and obligations created by the document with a greater degree of certainty by comparison to less formal documents.
[33] There is nothing either in s 4 or elsewhere in the Act that specifically deals with the limitation period for the enforcement of foreign judgments. Ms Saldanha for the plaintiff submits that s 4(4) of the Limitation Act 1950 applies to both domestic and foreign judgments, and that the applicable limitation period for the two judgments obtained by the plaintiff arising from the judicial arbitration decisions of the District Court in Korea in 2010 is a period of 12 years. Accordingly both judgments are within the limitation period and are not time barred for registration in New Zealand.
[34] Ms Saldanha notes that in SHC Corp v O’Brien, Master JH Williams QC held that s 4(4) of the Limitation Act does not apply to foreign judgments.14 She submits however that O’Brien was wrongly decided, and notes that the obiter remarks of Master Williams were founded on the United Kingdom case of Berliner,15 which in her submission misapplied the principles derived from earlier cases.
[35] In SHC Corp v O’Brien, Master Williams found that foreign judgments are to be treated as giving rise to an implied contract obliging the debtor to pay the amount of the judgment, with the consequence that the six-year limitation period in s 4(1)(a) applies. He held that s 4(4) does not apply to foreign judgments, reasoning as follows:
The Limitation Act 1950 s 4(4) provides that an action shall not be brought “upon any judgment which has been obtained . . . after the expiration of twelve years from the date on which the judgment became enforceable”. “Judgment” is not defined by that Act, but it could only apply to a judgment given outside New Zealand if it expressly said so. Actions in New Zealand on a judgment given outside this country are, counsel for Dr O’Brien submitted, to be treated as actions on a contract and thus to have a limitation period of six years pursuant to the Limitation Act 1950 s4(1). That this is the case overseas appears from 28 Hals 4th ed para 658, p 296, para 661 p 297 and from the authorities of (by an odd coincidence another) Williams v Jones (1845) 13 M&W 628, 633, 153 ER 262, 265 and Grant v Easton (1883) 13 QBD 302,
303 relied on by the English Court of Appeal in Berliner Industriebank
Aktiengesellschaft v Jost [1971] 2 QB 463. In the Berliner case, Brett MR inGrant v Easton is noted as saying “the liability of the defendant arises upon the implied contract to pay the amount of the foreign judgment”. There does not appear to be any New Zealand authority on the point.
[36] Ms Saldanha notes that Master Williams, having observed there was no New Zealand authority on the point, based his conclusion upon the English Court of Appeal decision in Berliner. She submits however that Berliner is not good authority for the proposition that the liability of a defendant to pay the amount of a foreign judgment arises from and is based upon an implied contract to pay the amount of the foreign judgment.
[37] In Berliner, the Court considered whether the ascertainment and recording of a debt by the court in a German bankruptcy proceeding was to be treated as a final and conclusive judgment of a court of competent jurisdiction for a fixed sum (being the
14 SHC Corp v O’Brien HC Wellington CP823/90, 18 April 1991.
15 Berliner Industriebank Aktiengesellschaft v Jost [1971] 1 QB 278 (QB).
amount of ascertained debt) on which the plaintiffs became entitled to sue in England. A further issue was the date upon which the limitation period commenced to run. The relevant provision of the Limitation Act 1939 (UK) was in substantially the same terms as s 4 of the Limitation Act 1950 (NZ): it too provided for a limitation period of six years for actions founded on simple contract or on tort (s 2(1)(a)), and a limitation period of 12 years for enforcing “any judgment” (s 2(4)).
[38] In his judgment at first instance, Brandon J noted that the parties agreed that s 2(1)(a) of the Limitation Act 1939 applied and in consequence the limitation period was six years. He said:16
The basis of the right of action appears from the judgment of Parke B. in
Williams v. Jones (1845) 13 M. & W. 628. Parke B. said, at p. 633:
“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 sustained. 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.”
The principle there enunciated has been followed in numerous cases since. The action is regarded as being on an implied debt, Grant v. Easton (1883) 13
Q.B.D. 302. Because of this, the period of limitation is, as both sides agreed, six years under section 2(1) (a) of the Limitation Act, 1939.
[39] The issue of whether s 2(1) or s 2(4) of the Limitation Act 1939 applied was not addressed when the case was subsequently considered by the Court of Appeal,17 which upheld Brandon J’s finding that the German court’s ascertainment of a bankruptcy debt took effect as a final and conclusive judgment for the amount of the debt from the date of the court’s entry of the debt in the table of bankruptcy debts.
[40] Brandon J cited Williams v Jones18 and Grant v Easton19 to support his finding that foreign judgments were to be treated as giving rise to an implied contract obliging the debtor to pay the amount of the judgment, and therefore providing the contractual
16 Berliner Industriebank Aktiengesellschaft v Jost [1971] 1 QB 278 (QB) at 285.
17 Berliner Industriebank Aktiengesellschaft v Jost [1971] 2 QB 463 (CA).
18 Williams v Jones (1845) 13 M&W 628.
19 Grant v Easton (1883) 13 QBD 302 (CA).
foundation for an action of the kind referred to in s 2(1)(a). However, neither of those cases dealt with limitation issues and both pre-date the Limitation Act 1939 (UK).
[41] Williams v Jones (decided in 1845) dealt with the question of whether an action for debt could be brought based upon a judgment of a county court (being an inferior court and not a court of record), where the cause of action arose within the jurisdiction of the county court, and irrespective of whether the defendant resided within the jurisdiction. The remarks of Parke B relied on by Brandon J in Berliner referred to the creditor’s ability to bring an action on a debt found due by a judgment of an inferior court, which the Judge said was founded upon the same principles as applied to the supporting and enforcement of the judgments of “foreign and colonial courts.” The principle is that in both contexts, the judgments had the effect of being an adjudication by a court of competent jurisdiction that a sum certain was due by one person to another, which the debtor had an obligation to pay.
[42] The second case cited by Brandon J was Grant v Easton (decided in 1883), in which the Court of Appeal considered whether an action on a judgment obtained from a foreign court could be brought in an English court. The plaintiff had commenced an action founded upon a judgment obtained in the Vice-Consular Court at Cairo, and an order was made by a master authorising the plaintiff to enter judgment summarily. Upholding the order made by the master, the Court of Appeal said:20
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 [sic] 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.
[43] These two cases therefore simply addressed the issue of why courts should recognise inferior court judgments or foreign judgments; they decided nothing whatsoever regarding limitation periods. As Ms Saldanha submits, the ratio of the two cases was that the judgments of the inferior court and foreign court gave rise to an implied contract obliging the debtor to pay the amount of the judgment. The Court in
20 At 303.
Berliner then wrongly treated the reference to implied contract as the reason why the limitation period in s 2(1)(a) of the Limitation Act 1939 (UK), which provides for a limitation period of six years for actions founded on contract, should be applied to foreign judgments. I agree with Ms Saldanha’s submission that the Court in Berliner misapplied the principles derived from Williams v Jones and Grant v Easton, and consequently by adopting and applying Berliner in SHC Corp v O’Brien, Master Williams similarly erred.
[44] Moreover, as noted by Brandon J, the parties in Berliner agreed that s 2(1)(a) of the Limitation Act 1939 applied, and there was no consideration or discussion as to the application of s 2(4) or the phrase “any judgment” and whether the term included judgments made by foreign courts as well as courts of the United Kingdom.
Conclusion on limitation issue
[45] I consider that s 4(4) is properly read and interpreted as applying to both domestic New Zealand judgments and foreign judgments. The ordinary meaning of the words “any judgment” in s 4(4) supports this interpretation. A clear distinction can be drawn between a judgment, which is the result of a Court’s determination regarding the merits of a claim, and actions founded on simple contract or tort as referred to in s 4(1), where a plaintiff is yet to establish the validity of their claim in contract or tort.
[46] Further, there is no principled reason to distinguish between enforcement of foreign judgments and enforcement of New Zealand judgments for limitation purposes. As discussed earlier, for a plaintiff to bring an action founded upon a foreign judgment, they must satisfy the prerequisite criteria to register the judgment in the New Zealand court. The prerequisites for registration will ensure that any foreign judgment has been delivered by a court of competent jurisdiction and is final and conclusive as to the merits of the plaintiff’s claim and the liability of the defendant. The criteria governing the registration of foreign judgments combine to ensure that only those judgments which can be demonstrated to be the product of legitimate judicial determination and fair process will qualify for registration. Provided the plaintiff establishes the prerequisite criteria for registration and thereby the validity
and reliability of the foreign judgment upon which they rely, there is no reason why the foreign judgment should be regarded or treated differently than a judgment of a New Zealand court. As observed by Brett MR in Grant v Easton:21
…the question is, whether the defendant can shew [sic] 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?
[47] The Limitation Act 1950 makes no distinction between the two, and I note that the Limitation Act 2010 now expressly provides that “judgment” includes a judgment obtained in a foreign country.
[48] Accordingly I find that s 4(4) of the Limitation Act 1950 applies and the relevant limitation period in relation to the two Korean judgments is a period of 12 years, expiring on the twelfth anniversary of the date on which the judgments became enforceable. The Limitation Act 1950 therefore does not operate as a bar to action being taken by the plaintiff in reliance on the two judicial arbitration decision judgments obtained in March and April 2010.
[49] The judicial arbitration decisions were issued following agreement between the parties as to the joint liability of the Korean defendants, including the defendant in the present proceeding Mr Jae Ho Huh. The judgments in each case are a final and conclusive basis upon which the plaintiff can and has established that the defendant is liable to pay it the sums specified in the judgments, together with accrued interest. There is no defence advanced by the defendant, and I am satisfied that the defendant has no defence to the plaintiff’s claim.22 It is appropriate that summary judgment be entered. The relief sought by the plaintiff on the summary judgment application is simply registration of the two Korean judgments.
21 At 303.
22 High Court Rules 2016, r 12.2; Pemberton v Chappell [1987] 1 NZLR 1 (CA).
Result
[50] Accordingly I enter judgment for the plaintiff against the defendant and I make an order for the registration of the two Korean judgments such that they are of the same force and effect as a judgment of the High Court of New Zealand.
[51] The plaintiff has succeeded and is entitled to costs. I reserve the question of costs and direct the plaintiff to file a memorandum as to costs within 10 working days. The memorandum is not to exceed four pages in length excepting any annexures or schedules.
[52] I also reserve leave to the plaintiff to apply for any further orders consequent upon the orders made herein.
Paul Davison J
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