Final and Conclusive
76 It will generally be presumed that the foreign law is the same as the local law: Damberg v Damberg [2001] NSWCA 87 except to the extent that a material difference is proved: US Surgical Corporation v Hospital Products International Pty Ltd [1982] 2 NSWLR 766 at 799. The plaintiffs bear the onus of establishing that the judgment is final and conclusive: Carl Zeiss Stiftung v Rayner & Keeler Ltd [1967] 1 AC 853 at 927 and 970.
77 In this case, on this issue, the Court is primarily concerned to determine the status of the US judgment under the US law and that will depend upon the construction and the effect of the applicable US Rules. The test of finality is the treatment of the judgment by the foreign tribunal as res judicata. A default judgment may be enforceable as a final and conclusive judgment even though it is liable to be set aside in the very court that rendered it. The approach that has been adopted is that until the steps are taken to set the judgment aside the judgment is enforceable as a final and conclusive judgment.
78 In Vanquelin v Bouard (1863) 15 CB (NS) 341, 143 ER 817 the defendant and the plaintiff's late husband had suffered judgment by default for failure to appear in the Court of the Tribunal of Commerce in the Department of the Seine. After her husband's death, the plaintiff paid the judgment debt and then commenced proceedings against the defendant in the Tribunal Civil of the First Instance of the Department of the Seine. That Court granted an injunction requiring payment by the defendant to the plaintiff and it was that liability that the plaintiff sought to enforce in the Court of Common Pleas.
79 The defendant resisted the claim and in his Twelfth Plea claimed that the judgment of the Court of the Tribunal of Commerce was a judgment by default for non-appearance that under French law would become void and of no effect as soon as the defendant entered an opposition to the judgment.
80 Erle CJ, with whom Williams J agreed, said at ER 828:
The Twelfth Plea, to the first count, alleges that the judgment in the first count mentioned was a judgment by default for want of an appearance by the defendant in the court of Tribunal of Commerce, and by the law of France would become void as of course on an appearance being entered. I apprehend that every judgment of a foreign court of competent jurisdiction is valid, and may be the foundation of an action in our courts, though subject to the contingency, that, by adopting a certain course, the party against whom the judgment is obtained might cause it to be vacated or set aside. But, until that course has been pursued, the judgment remains in full force and capable of being sued upon.
81 In Nouvion v Freeman (1890) 15 AC 1 the House of Lords considered a judgment of the Spanish Court known as a "remate". Such a judgment could be recovered in what was known as executive proceedings. If a plaintiff or defendant were unsuccessful in the executive proceedings they were entitled in the same court and in respect of the same subject matter to take ordinary or "plenary" proceedings in which all defences and the whole merits of the matter were once again litigated. In the plenary proceedings the remate judgment was unable to be set up as res judicata or otherwise. A remate judgment could be enforced by the plaintiff if security was given and irrespective of whether an appeal or plenary proceedings were pending. A plenary judgment rendered a remate judgment inoperative and required restoration of any monies paid under it. The House of Lords held that since a remate judgment does not finally and conclusively establish an existence of a debt, no action could be brought upon it in England.
82 Lord Herschell said at page 8:
Now, My Lords, there can be no doubt that in the courts of this country effect will be given to a foreign judgment. It is unnecessary to inquire upon what principle the Courts proceed in giving effect to such a judgment, and in treating it as sufficient to establish the debt… But it was conceded, and necessarily conceded, by the learned counsel for the appellant, that a judgment, to come within the terms of the law as properly laid down, must be a judgment which results from an adjudication of a Court of competent jurisdiction, such judgment being final and conclusive.
My Lords I think in order to establish that such a judgment has been pronounced it must be shewn that in the Court by which it was pronounced it conclusively, finally, and for ever established the existence of the debt of which it is sought to be made conclusive evidence in this country, so as to make it res judicata between the parties.
83 In Boyle v Victoria Yukon Trading Company (1902) 9 BCR 213 the Full Court of the Supreme Court of British Columbia considered an action on a judgment obtained in the Yukon Territory Court. One of the objections raised by the defendant was that as the judgment was a default judgment it was not final and conclusive within the meaning of that expression as applied to foreign judgments in Nouvion v Freeman. The defendants in that case contended that no judgment obtained by default is enforceable as a foreign judgment. Hunter CJ said at 222:
This contention is, on the face of it, unreasonable, as of course all that a defendant, having no assets in the foreign jurisdiction, would have to do would be to ignore the process. I do not think that this is the effect of Nouvion v Freeman . In that case the action was brought on a "remate" judgment, which, by the law of Spain, concludes nothing between the parties as the same, and in fact all questions may be agitated in another action, called a plenary action, in which it may happen that the remate judgment is for all purposes annulled, and had for nothing .
84 After citing the earlier mentioned portion of what Lord Herschell said in Nouvion v Freeman, Hunter CJ continued at 223:
It is true that under the system that prevails in the Yukon, as well as in our Courts, as also in England, a default judgment may be set aside either absolutely or on terms, but so long as it stands it is a final and conclusive adjudication that a debt is due by the defendant if the claim is for debt. It is also true that other expressions occur in the judgments which at first sight would seem to imply that a default judgment has not the finality necessary to make it an enforceable foreign judgment, but I think such expressions must be taken secundum subjectam materiam , as remarked by Lord Bramwell in Sewell v Burdick (1884) 10 App. Cas. 74 at p 104. For example, Lord Watson, p. 13, says: "It must be final and unalterable in the Court which pronounced it." Now, of course, this judgment is not unalterable in the wide sense, because it can be set aside by a Judge of the Yukon Court, but it is unalterable in the sense that it is conclusive while it stands, being for a fixed ascertained amount, and as Lord Bramwell says, at p. 14, " The judgment is of such a nature as would found an action of debt." Again, Lord Herschell says, p. 10, that "The judgment must be such as cannot thereafter be disputed, and can only be questioned in an appeal to a higher tribunal." This also must be taken to mean so long as the judgment stands, as both the Lord Chancellor, at p. 14, and Lindley, L.J., in the case below, 37 Ch. D. 25-6, evidently considered that default judgments may possess the necessary degree of finality and conclusiveness, and if a default judgment taken as here by reason of the defendant not appearing at the trial (being equivalent to a judgment on the merits, according to Armour v Bate (1891), 2 QB 233) has not this quality, then it is difficult to see what kind of default judgment would have the quality required. In fact, if we were to say merely because a default judgment may be set aside by the Court in which it is taken that therefore it is of not final legal validity for the purpose of international suit, we would, in effect, be saying that the clearer the plaintiff's case the more useless his judgment would be. Take, for instance, the case of a defendant having no defence to a promissory note. Is it to be said that a plaintiff on getting a default judgment takes nothing by his judgment in the foreign jurisdiction? It seems to me that the law is, as stated by Erle, CJ, in Vanquelin v Bouard … subject to the limitations as above explained laid down in Nouvion v Freeman about the quality of the judgment, and subject to the qualification that it is not void for manifest error or for want of jurisdiction or fraud, or as being contrary to natural justice, or the like. He says, at p 367-8, "I apprehend that every judgment of a foreign Court of competent jurisdiction is valid, and may be the foundation of an action in our Courts, though subject to the contingency, that, by adopting a certain course, the party against whom the judgment is obtained might cause it to be vacated or set aside. But, until that course has been pursued, the judgment remains in full force and capable of being sued upon".
85 Armour v Bate, to which reference was made by Hunter CJ as authority for the proposition that a judgment obtained by a plaintiff against a defendant who did not appear at trial was a judgment "on the merits", was a case in which a plaintiff had claimed an entitlement to recover a sum of 300l deposited by the plaintiff with the defendant, his employer. The defendant pleaded that the deposit was made in lieu of a fidelity bond and as an indemnity to the defendant. There were also claims in the defence of dishonesty and negligence in the plaintiff entitling the defendant to indemnify himself. The defendant had also brought a counterclaim. The plaintiff did not appear at trial and counsel for the defendant abandoned the counterclaim and sought the entry of judgment for the defendant. Judgment was entered and the plaintiff appealed.
86 On appeal the plaintiff claimed that the primary judge should have merely dismissed the action for want of the plaintiff's appearance rather than entering a judgment for the defendant in circumstances where there were claims of dishonesty and negligence against the plaintiff. Lord Esher MR, with whom Lopes and Kay L.JJ. concurred, was not aware of any form given in the rules for a judgment dismissing an action in the common law. In Chancery, prior to the Judicature Act, the form that was in use recited that no one appeared for the plaintiff and ordered that the action should stand dismissed out of Court. As there was no form then applicable Lord Esher said at 235: