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Page 6 House of Representatives Monday, 10 October 2016 Judgments Act principles, in that instance. I do not think it would be covered by this convention. I will think about that and get back to you. Senator BACK: If you could reflect further on that and advise the committee in writing, please. Finally, is there any incentive or desire or demand that we try to extend this beyond the countries who are currently parties to the convention? Mr Walter: As you can see, the convention has only just come into force, with the EU becoming a party. There is a growing movement, within the Hague conference of parties, looking at actively considering signing up to the convention. We anticipate that over time the numbers of parties involved will steadily grow. CHAIR: It seems like it is moving at the speed of an asthmatic ant with a heavy load of shopping, Mr Walter. It was negotiated and agreed in 2005, and the EU is now just on board; six years after they signed, they have ratified. These things move slowly in the Hague. Mr Walter: Yes. Interestingly, I was in the Hague in March—I am Australia's representative to the Council on General Affairs and Policy, the governing body of the Hague— CHAIR: How is our ambassador? Is he well? Mr Walter: He is very well. CHAIR: Excellent. Mr Walter: I can vouch for his health at that point. There were some interesting statistics that the Hague conference had across all its conventions—it has a large number of conventions, about 60-odd—but it is about eight or nine years from conclusion of agreement to commencement for these instruments. I think the issue, here, is that it is a significant step for a lot of countries. For the EU, the big issue for them was that they have an internal regulation that applies within the EU for the recognition and enforcement of judgements between EU countries, and they want to make sure the two are lined up. For countries like Australia, the issue for us is, largely, if other countries are not onboard what is the point of us signing up? A few countries fell into that kind of category. Now there is a bit of momentum and more countries are coming onboard. CHAIR: Thank you, Mr Walter and Ms Vasenszky, for your evidence today. Brooke Marshall and Mary Keyes, in their submission, believe that the act will result in more complexity than which currently exists. What is your view on that statement, and do you agree? Mr Walter: If I can start, first, with a comment. There are only a small handful of academics in Australia who really know about private international law, and these are two of them. Ms Marshall is, of course, at the Max Planck Institute in Hamburg. They are people whose views we take very seriously. We are, actually, thinking through this very issue. What we will end up with is a range of schemes. The very narrow is the Trans-Tasman scheme, which we will leave untouched because it provides for a very fluid process between Australia and New Zealand, reflecting our close ties, legally. We will then have the choice of court convention. You will then have, going wider again, the Foreign Judgments Act and, going wider again, you will have the common law. So, yes, that potentially sets up a whole set of regimes that are broadly consistent with one another but will have subtle differences. In developing the international civil law act, that is exactly what we are considering— whether the act itself should cover the field and just set up a clear structure for when you get recognition and enforcement of judgements, in particular. It is a very valid point and something that we are working through in the development of the act. Senator IAN MACDONALD: What is the issue with Denmark? Mr Walter: That is a good question. Senator IAN MACDONALD: They think our crowns are linked so they do not need this sort of thing. Mr Walter: I think that when Denmark became a member of the EU—when you become a member of the EU you can withhold certain elements that you retain competency for. I think they retained matters relating to their courts as a competency issue. I think that is the issue, why they are not included in the broad EU proposal. I do not think they have got anything against choice of court per se. I think it is just that the EU exercises competency for everyone else but not for Denmark in this particular instance. Senator IAN MACDONALD: As far as this goes, it seems like a good idea, but what happens in the case of, particularly, Japan and Singapore, who have been trading partners for years and who have what we would consider a fairly robust system of justice? That is one question. Perhaps you could just comment on that. What TREATIES COMMITTEE
Monday, 10 October 2016 JOINT Page 7 happens there if you get a judgement in a document where Australian law applies but you want to enforce it in Korea? Can you not do that now? Mr Walter: No, you can. The issue there is whether they provide reciprocity for us or not. So if they recognise our judgements then we can recognise their judgements under the Foreign Judgments Act as it currently stands— Senator IAN MACDONALD: Under the Foreign Judgments Act? Mr Walter: and there will be certain circumstances in which recognition, particularly as opposed to enforcement, will be valid in claims that are brought in Australia. They can be led as evidence that proceedings have already dealt with a particular matter and that perhaps you should just be stopped from bringing the action in an Australian court. That only relates to the recognition and enforcement element. It is a different question—as I mentioned, there are kind of these multiple obligations in the convention. Recognition and enforcement is kind of the pointy end, if you like, but the two earlier ones are that an Australian court must say, 'We're not going to hear that matter if there is an exclusive choice of court agreement nominating another court'— Senator IAN MACDONALD: So if a private agreement with a Korean company says, 'Korea's will be the law applied and the courts applied,' and there is a judgement given, and then action is taken in the Australian courts, the Australian courts currently could re-hear it, but, under this treaty, if Korea were a— Mr Walter: They would be stopped from actually doing that, subject to some exceptions—and they are important exceptions, to do with justice issues. But, yes, that is the basic principle: that the Australian court should say, 'No, we're not going to hear that matter; you've agreed that you're hearing that matter in Korea'—if Korea were a contracting state— CHAIR: Mr Walter, if this convention had been ratified a few years ago, how many judgements would this have covered? What is the historical number we are looking at here? Mr Walter: We do not have numbers, and the reason for that is: it is actually quite complicated because every court in Australia could potentially have something that they would be considering an application for under the common law or under the Foreign Judgments Act. So I cannot actually give you an exact figure. We expect that that number will actually grow—well, acknowledging that there is no figure there! We expect that there will be an increase in the number of judgements you will see coming in this area, partly from a transference of matters being dealt with by arbitration. Just to give you some context there, the New York convention, which relates to the recognition and enforcement of arbitral agreements, has a very large membership—one of the largest of any convention in the world—and has a quite seamless process for recognising and enforcing arbitral awards. There is no corresponding agreement for judgements, and so we think that, with the growth of choice of court and the potential conclusion of a broad based judgements agreement, we will see more and more of these things. CHAIR: Can you give an example of what it looks like? Let us say there is a company—let us call it Bloggs—and it is the global producer of radiators on racing cars. Mr Walter: Yes? CHAIR: Well, Bathurst was just on; I was trying to be relevant! It is hypothetical. Mr Walter: Sure. In the typical instance, pretty much any commercial contract that goes across borders has a choice of court agreement in it and often will have a choice of law agreement in it. But to sort of simplify it: let us say that an Australian and Chinese business— CHAIR: So Bloggs is selling radiators into the Chinese NASCAR. Just work with me. Mr Walter: Okay. So Bloggs is selling radiators into Chinese NASCAR. They have a contract with the Chinese company to provide those radiators. In that agreement, they will have some dispute resolution clauses. They might nominate the method of dispute resolution. Typically, it is either going to court or it is going to arbitration, but in this instance they have decided to nominate that they are going to court. The two companies might, for a number of reasons, decide they want to nominate a court. One is to avoid parallel proceedings—that is, a dispute arises, the Australian company takes action in Australia, the Chinese company takes action in China; you have got two disputes going on simultaneously, potentially resulting in conflicting judgements. You do not want that. That is not good for business. So they might nominate a particular court to hear their matter. Their choice of that will take into account a number of factors. Often in international agreements they will nominate a neutral venue. So those two countries might say: 'We won't have an Australian court, we won't have a Chinese court, we will choose Singapore,' or, 'We will choose London.' TREATIES COMMITTEE
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