Background
The parties entered into a fried chicken franchise arrangement. When the relationship deteriorated, they agreed that the defendant would take over the business and repay the plaintiff $178,750. On 21 September 2016, they executed an Instalment Payment Agreement requiring the defendant to pay the remaining balance of $143,000 in instalments, with the final payment due 15 May 2018 and 4% per annum interest on overdue amounts.
The defendant made only partial payments and subsequently refused to continue. The plaintiff sued in the Beijing Chaoyang District People’s Court, which on 30 August 2024 awarded judgment of $63,200 AUD plus 4% interest from 16 May 2018. The defendant appealed to the Beijing No. 4 Intermediate People’s Court, which dismissed the appeal on 26 March 2025. Despite the failed appeal, the defendant paid only $2,044.40 on 10 April 2026.
The plaintiff filed a summons in the NSW Supreme Court on 27 March 2026 seeking to enforce the Chinese judgment. The defendant was served on 7 May 2026 but took no part in the proceedings and did not appear.
The Court’s Holding
Elkaim AJ held that the Chinese judgment should be enforced at common law (the Commonwealth Foreign Judgements Act 1991 did not apply). The court applied the four-part test established in Bao v Qu; Tian (No 2) [2020] NSWSC 588: (1) the foreign court must have exercised jurisdiction over the defendant; (2) the judgment must be final and conclusive; (3) there must be identity of parties; and (4) the judgment must be for a fixed, liquidated sum.
All requirements were satisfied. The defendant submitted to the Chinese court’s jurisdiction by appearing and appealing the first instance decision. The appeal decision was final and conclusive, with no challenges to jurisdiction raised. Identity of parties was clear, and the judgment was for a fixed amount of $63,200. After the partial payment of $2,044.40, the outstanding balance was $61,155.60, with accrued interest of $20,632.77, totalling $81,788.37.
The court granted judgment for the full amount plus assessed costs of $11,745.91, ordered to be served on the defendant by email, SMS, and WeChat.
Key Takeaways
- Australian courts will enforce foreign judgments at common law where the foreign court had jurisdiction, the judgment is final, parties are identical, and the sum is fixed and liquidated.
- A defendant’s submission to jurisdiction through appearance and appeal constitutes clear acceptance of the foreign court’s jurisdiction for enforcement purposes.
- Failure to participate in enforcement proceedings does not prevent judgment being entered; the absence of defence does not defeat the claim.
- Modern service methods (email, SMS, WeChat) are now recognized for serving court documents on foreign judgment debtors.
Why It Matters
This decision reinforces the common law framework for enforcing foreign judgments in Australia when the statutory regime does not apply. It provides guidance to creditors seeking to recover debts from defendants who obtained judgments overseas but relocated to Australia. The case demonstrates that even without statutory mechanisms, Australian courts will enforce final foreign judgments meeting the common law requirements, provided proper jurisdiction was exercised and the judgment is for a fixed sum.
The decision also reflects practical judicial approaches to modern international commerce, permitting service via contemporary digital channels. For Australian businesses involved in cross-border disputes, particularly franchise and contractual arrangements with Chinese counterparts, this case confirms that obtaining a final judgment in China can form the basis for enforcement in Australia against a defendant present within the jurisdiction.