Background – cross-border litigation cumbersome and complex
Increasingly New Zealand businesses are operating in an international environment and dealing with other businesses and individuals who are located overseas.
When disputes arise in other countries, or that involve other parties located outside of New Zealand, the procedures to have them resolved can be cumbersome and have discouraged many businesses from pursuing claims or enforcing payment against overseas debtors.
Despite the close relationship between Australia and New Zealand, until recently Australia was treated in the same way as any other foreign country when it came to cross-border litigation.
A new regime – streamlining trans-Tasman litigation
Against this background, the New Zealand and Australian Governments agreed in 2008 to streamline the process for litigation with a trans-Tasman element so as to reduce costs, improve efficiency, and minimise existing impediments to enforcing certain judgments.
Arising out of that agreement was the enactment of the Trans-Tasman Proceedings Act 2010 ("TTPA"), which came into force in October 2013 along with its Australian equivalent.
The TTPA introduces a new regime for litigation between New Zealand and Australia which simplifies the process for a number of procedures, including service of proceedings and enforcement of judgments overseas.
Simplified procedure for service of proceedings
One of the main features of the TTPA is a simplified procedure for serving New Zealand court proceedings in Australia. Previously there were rules that set out when proceedings could be served overseas as of right, and when the court's leave was required. Often it was necessary to show a link between the subject of the proceeding and New Zealand
Under the TTPA a party bringing New Zealand proceedings can now serve those proceedings on a defendant in Australia in the same way that the proceedings are served in New Zealand, without the need to obtain the leave of the court, and without the need to show any connection between the proceeding and New Zealand.
There are some formal requirements when serving proceedings overseas, for example they must be accompanied by a particular form containing information for an Australian defendant about the steps they can take in relation to the proceedings, and the consequences of being served. An Australian defendant wishing to challenge the jurisdiction of the New Zealand courts has 30 working days from when they are served to do so.
Importantly service of the proceedings in Australia in accordance with the TTPA will have the same effect as if the proceedings had been served in New Zealand.
The difficulties of serving overseas defendants with New Zealand court proceedings meant that claimants were often reluctant to pursue debtors who had left the country (or indeed other claims). The new service procedures will assist in making it easier to pursue these parties outside of New Zealand.
More recognition for what the parties have agreed
Another feature of the TTPA is that greater emphasis is placed on what the parties have agreed in terms of which court should hear a dispute.
Subject to limited exceptions, the court must give effect to an 'exclusive choice of court agreement' designating a New Zealand court as the court to determine the dispute.
Now more than ever it is vital to ensure that the parties' intentions in terms of their court of choice are documented in writing at the outset.
Enforcement of judgments – a step forward
Once of the major advancements in the new legislation is the simplified procedure for enforcement of judgments obtained in New Zealand in Australia. Under the TTPA and its Australian equivalent, most final judgments of the New Zealand courts can be recognised and enforced in Australia, and vice versa.
To register a judgment an application is made to an Australian court in a specified form. Much of the application can be submitted by email or fax, streamlining the process.
Once the judgment has been registered, notice of the registration by way of a specified form must be given to every person liable under the judgment within 15 working days.
There are limited grounds on which a liable person can apply to set aside the registration of a New Zealand judgment, such as that enforcement of the judgment would be contrary to public policy in Australia, or that the judgment was registered in contravention of the TTPA. Any application to set the registration aside must be made within 30 working days of being given notice of registration.
Upon registration the judgment has the same force and effect and may give rise to the same proceedings for enforcement as if the judgment had been given by the Australian court in which it is registered.
A New Zealand judgment can be enforced in Australia as soon as it is registered and notification is given.
How we can assist you
Our litigation team are experts in the new regime under the TTPA, and in all forms of cross-border disputes.
The simplified nature of the processes under the TTPA mean that it is now easier than ever to undertake litigation with overseas parties, and to enforce judgments and debts against defendants who have left the country.
It is crucial to ensure that your interests are protected in terms of your international dealings and we can advise you on all aspects of commercial agreements, including exclusive choice of court and other relevant clauses.
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.