An Australian woman who was a victim of identity theft was shocked when she received a legal notice from the United States ordering her to pay Adidas and the US National Basketball Association a total of US$1.2 million in damages.

Identify theft victim told to pay US$1.2m in damages

Without her being present or even being aware of the charges, default judgements against her were handed down in a Florida court of trademark infringement and cybersquatting – the unauthorised registration of a company or brand name as an internet domain.

The court found her PayPal account was used over two days to make hundreds of fraudulent transactions.

The ABC reported the woman was a victim of identity theft by hackers who had taken control of her PayPal account.

The woman said Medibank had told her that her personal data was exposed in the 2022 data breach, but Medibank insisted passwords were not compromised in the breach. (Please see Byron Bay breach victim told to pay Adidas, National Basketball Association $US1.2m by US Courts, ABC News, 25 July 2023.)

She told the ABC that before the court judgement she had received earlier emails referring to counterfeit Adidas items traded under her name, but had deleted them as spam or a hoax.

She is trying to get the Florida court, Adidas and the NBA to withdraw the charge, as she was a victim of identity theft and hacking.

Could the US judgement be enforced in Australia?

But could debt collectors come knocking on her door to force her to pay the US$1.2 million?

A final and conclusive money judgment made by a court having jurisdiction recognised by the Australian courts is prima facie entitled to enforcement in Australia.

The Foreign Judgements Act 1991 establishes a statutory scheme under which both final and interlocutory judgements of foreign courts can be registered and enforced in Australia.

For a foreign judgement to be enforced under the scheme, it must be from a court that is specified under the Act and the Foreign Judgments Regulations. (Please see Recognising and enforcing foreign judgements.)

Countries recognised as having jurisdiction in Australia

Courts in several Commonwealth countries, as well as France, Germany, Israel, Italy, Japan, South Korea, Poland and Switzerland are recognised as having jurisdiction in Australia under the Foreign Judgements Regulations.

If the debtor doesn't apply for the registration to be set aside, under this scheme the foreign judgements in these recognised jurisdictions can be registered and ready to be enforced the same way a judgement of an Australian court is enforced.

This can include seizure and sale of personal property, instalment orders and the appointment of receivers.

How the US companies could pursue damages in Australia

However, US courts are not included under this scheme, so Adidas and the NBA would have to go through Australian common law procedure to pursue the Florida judgement in an Australian court.

Four conditions must be satisfied for a foreign judgment to be recognised and enforced at common law in an Australian court. These are as follows.

  • The foreign court must have exercised an "international" jurisdiction that Australian courts recognise.
  • The judgment must be final and conclusive.
  • The parties must be the same.
  • The judgment must be for a fixed sum (although certain nonmoney judgments may be enforceable in equity).

What can a debtor do to resist a foreign judgment?

There are limited grounds on which a judgment debtor can resist the recognition and enforcement of a foreign judgment at common law.

The debtor can seek to set aside the registration if the requirements of registration were not properly met, the judgment was obtained by fraud, or enforcement of the judgment would be contrary to public policy.

The woman could seek to have the Florida judgement struck out in an Australian court due to the identity theft and her stolen ID being used fraudulently to trade in counterfeit goods.

Even if Adidas and the NBA don't pursue the woman for US$1.2 million, the judgment remains and could affect her financial reputation and ability to travel to the US.

Safeguarding against identify theft

This is a horrifying example of the consequences of identity theft and a reminder that we should all safeguard our online accounts and secure our devices. (Please see ID Support NSW, NSW Government.)

If you are a victim of identity theft, act quickly to minimise financial and other damage. Change passwords, report the event to police and obtain a reference number to prove you reported the matter.

Contact the organisation that issued your identity document and your bank and tell them what happened. Report the crime to the Australian Cyber Security Centre.

Anne-Marie Fahey
Intellectual property
Stacks Law Firm

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.