Foreign judgment - Enforcement or recognition - Jurisdiction of foreign court

Re New Cap Reinsurance Corporation Ltd (in liquidation): Court of Appeal, Civil Division (Lords Justice Mummery, Lloyd, Mr Justice McFarlane): 9 August 2011

The liquidator of the claimant company applied to the court to enforce in England an order made in Australia, providing for, amongst other things, the payment of sums of money by the defendants, members of Lloyds syndicate, to the applicant. There were three possible bases for doing so, firstly under the Foreign Judgments (Reciprocal Enforcement) Act 1933 (the 1933 Act), secondly under s 426 of the Insolvency Act 1986 (the 1986 Act) and thirdly under Common Law.

The court rejected the argument based on the 1933 Act, having regard to the Reciprocal Enforcement of Foreign Judgments (Australia) Order 1994 (SI 1994/1901) (the 1994 Order), allowed the request under the 1986 Act and found alternatively, it could also have done so under the Common Law. The defendants appealed.

The issues were, inter alia: (i) whether, having regard to the 1994 Order, the 1933 Act applied to judgments under which a sum of money was payable, made in insolvency proceedings by a recognised court; (ii) whether a registration under the 1933 Act could be set aside under s 4 of the 1933 Act; (iii) whether the court had power under s 426 of the 1986 Act to assist with a view to enforcement of a money judgment issued in foreign insolvency proceedings; (iv) whether the power under s 426 of the 1986 Act should be exercised in the discretion of the court; and whether the judge at first instance had correctly exercised his discretion (v) whether there existed at common law the duty to help the Australian court. The appeal would be dismissed.

(1) The 1933 Act did apply to judgments under which a sum of money was payable made in insolvency proceedings by a recognised court, subject to the terms of the order by which the court was recognised (see [83] of the judgment).

It could not be said that the 1933 Act had not been intended to apply to judgments in insolvency proceedings. There was nothing to indicate that insolvency proceedings were regarded as altogether outside the scope of the proposed system of registration contained within the 1933 Act.

The class of judgments to which the 1994 Order made the 1933 Act apply was any order (for the payment of money) in any proceeding that a common law jurisdiction would call civil proceedings. That therefore did not exclude orders for payment made in insolvency proceedings. The use of the phrase 'civil or commercial matter' in the 1994 Order did not limit the class so as to exclude money judgments issued in insolvency proceedings (see [33], [34], [47], [75], [83] of the judgment). State of Norway's Application (No 2), Re [1989] 1 All ER 745 applied.

(2) In the instant case, if the liquidator had obtained the registration of the Australian order under the 1933 Act, it would have been be open to the defendants to apply to have that registration set aside. The only ground that would be relevant would have been s 4(1)(a)(ii) of the 1933 Act, namely that the Australian courts had had no jurisdiction in the circumstances of the case. That avenue, however, was not available to the defendants on the basis of established case law (see [77] of the judgment). Rubin v Eurofinance SA [2010] All ER (D) 358 (Jul) applied.

(3) Section 426 of the 1986 Act extended to providing assistance by way of the enforcement of a foreign judgment made in insolvency proceedings (see [72] of the judgment). In the instant case, in principle, therefore both the 1933 Act and s 426 of the 1986 Act applied (see [76] of the judgment).

(4) In the instant case, because, it would have been open to the liquidator to register the judgment under the 1933 Act, and that judgment could not have been set aside. It would be possible to take that factor into account by not giving assistance under the s 426 of the 1986 Act, leaving the liquidator to take the necessary steps under the 1933 Act.

Equally, it would be appropriate to take the situation under the 1933 Act into account, not least in order to ensure that nothing relevant under the 1933 Act was being avoided by the use of s 426. Although the trial judge had proceeded on a different basis, the basis on which he had proceeded was correct (see [81] of the judgment).

The judge's exercise of his discretion under s 426 of the 1986 Act was not at fault, and the position had not been altered by conclusions as to the application of the 1933 Act (see [83] of the judgment). Decision of Lewison J [2011] All ER (D) 54 (Aug) Affirmed In Part.

Gabriel Moss QC and Barry Isaacs QC (instructed by Mayer Brown International LLP) for the claimant. Robin Knowles QC and Blair Leahy (instructed by Edwards Angell Palmer & Dodge LLP) for the defendants.