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Litigation Alert: Million dollar U.S. judgment recognised by the Supreme Court of Queensland - 24 June 2013

HopgoodGanim has acted for the world’s largest commercial cleaning franchisor in obtaining recognition of a Texas Judgment in the amount of nearly $1 million by the Supreme Court of Queensland. In Jani-King Franchising, Inc v Wong, His Honour Justice Martin refused an Application by the Defendant to set aside Jani-King’s default judgment. The case serves as a useful reminder of the ability of the Queensland Courts to recognise foreign judgments at common law in the event that the foreign judgment does not fall within the registration process provided for in the Foreign Judgments Act 1991 (Cth). The courts of the United States of America do not fall within the registration process. 

A foreign judgment on its own will represent little more than an obligation by the foreign judgment debtor to pay a debt to the foreign judgment creditor. A foreign judgment creditor must commence proceedings for recovery of the debt by way of Claim and Statement of Claim where the registration process is not available.

In Jani-King v Wong, Jani-King had obtained a Final Judgment from the District Court of Dallas County, Texas (Texas Court) in the amount of nearly $1million (Texas Judgment). Jani-King commenced proceedings in the Supreme Court of Queensland against the Defendant to recover the debt represented by the Texas Judgment. The Defendant did not file a Notice of Intention to Defend and default judgment was obtained by Jani-King. The Defendant applied to set aside the default judgment. The Defendant argued that the Texas Court had not validly exercised jurisdiction over him and that he had not voluntarily submitted to the jurisdiction of the Texas Court.

His Honour Justice Martin dismissed the Application to set aside the default judgment. In doing so, Justice Martin affirmed the requirements that a foreign judgment creditor must prove to recognise a foreign judgment at common law, namely:

  • the judgment must be final and conclusive;
  • the judgment must be for an amount that was fixed or readily calculable;
  • the parties in the foreign proceedings must be identical to the parties in the Queensland proceedings; and
  • the foreign court must have had and validly exercised jurisdiction over the Defendant and the Defendant must have submitted to the foreign jurisdiction.

There are a number of ways in which a foreign debtor may be found to have submitted to a foreign court’s jurisdiction, including by agreement or participation in the foreign proceedings. Jani-King relied on the finding of the Texas Court that it had jurisdiction over the Defendant and that the Defendant had submitted to the jurisdiction of the Texas Court.

Section 11 of the Foreign Judgments Act provides that, where the registration process under the Act does not apply, a court is not taken to have had jurisdiction to give the Judgment merely because the judgment debtor (the Defendant in the Queensland proceedings) had entered an appearance in the foreign court or had participated in the proceedings only to an extent necessary to contest the jurisdiction of the foreign court.

The issue then became whether the Defendant’s conduct in the Texas proceedings went further than was necessary to contest the jurisdiction of the Texas Court. This question was to be decided by the law of the forum (Queensland).
In determining whether section 11 of the Foreign Judgments Act applied, His Honour analysed the steps which the Defendant took in the Texas proceedings.

The Defendant had filed a “Special Appearance” in the Texas proceedings which His Honour found had similar characteristics to a Conditional Notice of Intention to Defend under Rule 144 of the Uniform Civil Procedure Rules 1999. Pursuant to Texas law, if a defendant failed to obtain a ruling on their Special Appearance prior to Trial, they were deemed to have waived the Special Appearance and submitted to the jurisdiction.

His Honour found that the Defendant had opposed the joining of another Defendant to the proceedings and this was unrelated to the Defendant’s claim for a Special Appearance. His Honour also found that the Defendant “engaged with the Texas court and went beyond merely entering an appearance to contest the jurisdiction of the court.”

His Honour likened the Defendant’s failure to make a request for the reconsideration of the Special Appearance to an analogous situation in Queensland where a Conditional Appearance had been struck out, the Defendant had been given leave to file a new Conditional Appearance and had then failed to do so. His Honour found that in those circumstances, the Supreme Court of Queensland would have regarded a Defendant as having abandoned their claim for a Conditional Appearance and would have proceeded to deal with the matter.

The Judgment serves as a useful reminder to practitioners and U.S. litigants that it is possible to obtain recognition of a U.S. Judgment in Queensland and the critical factor is establishing that the U.S. court had validly exercised jurisdiction over the defendant (as judged by Queensland law).

With offices in Brisbane and Perth, HopgoodGanim offers commercially-focused legal advice, coupled with reliable and responsive service to clients throughout Australia and across international borders.