Introduction

In February 2011 the prime minister of Australia, Julia Gillard, visited New Zealand in the interests of strengthening economic relations between the two countries. This objective will be further assisted by the Trans-Tasman Proceedings Act 2010, which was recently passed into law in New Zealand. The act implements New Zealand's obligations under a cooperation agreement that was signed with Australia in July 2008. A corresponding Australian act has also been passed and both acts will come into force at some future date. The act is intended to make it easier for individuals and businesses to resolve trans-Tasman legal disputes through court process and to support closer economic relations between the two countries by strengthening commercial regulatory enforcement. It will make trans-Tasman litigation different from New Zealand litigation involving parties in other countries.

Key changes

The main changes that the act will effect are as follows:

• A statement of claim in civil proceedings properly commenced in New Zealand may be served on a defendant in Australia as of right. In contrast to the present rules regarding service outside New Zealand, a plaintiff will no longer be required to prove a connection between the proceedings and New Zealand or to seek the leave of the court. Initiating documents for proceedings commenced in specified New Zealand tribunals may also be served on a defendant in Australia if the tribunal's procedural rules permit proceedings to be served outside New Zealand. The New Zealand procedural rules for service will apply and service will have the same effect as if the proceedings had been served in New Zealand.

• A consistent test will be introduced to determine where to try a trans-Tasman dispute (subject to the parties' ability to designate the appropriate court themselves by an exclusive choice of court agreement). At present, the courts of New Zealand and Australia apply different tests to determine forum issues; this change should reduce the expense and uncertainty associated with such differences. A New Zealand court will be able to stay a trans-Tasman proceeding on forum grounds only if it is satisfied that an Australian court has jurisdiction to determine the matters in issue and that it is the more appropriate court to determine those matters. In determining whether an Australian court is the more appropriate court, the New Zealand court may not give weight to the fact that the proceeding has already been commenced in New Zealand. The New Zealand court may determine an Australian defendant's application for a stay without a hearing, unless either party requests a hearing.

• New Zealand courts will be empowered to give interim relief in support of civil proceedings in Australian courts. The court may grant interim relief if it considers it appropriate and if it would have given relief had the proceeding been commenced in a New Zealand court. Such relief may include freezing orders and search orders, but specifically excludes orders for discovery, interim payment and arrest of property.

• The act will facilitate the increased use of technology to enable parties and their lawyers to appear remotely in proceedings in Australia. Remote appearances in specified tribunals will also be possible; applications to stay proceedings on the grounds that an Australian court is the more appropriate forum for the proceeding will be able to be heard remotely as of right.

• The process for recognising and enforcing an Australian judgment from a court or specified tribunal in New Zealand will be further streamlined. The Reciprocal Enforcement of Judgments Act and other methods of enforcing judgments in New Zealand will no longer apply to Australian judgments, which will be subject to a new process. It will no longer be possible to set aside the registration of an Australian judgment on natural justice grounds. However, the general public policy exception will continue to apply generally to the enforcement of all Australian judgments under the Trans-Tasman Proceedings Act.

• Certain regulatory judgments given in Australian trans-Tasman market proceedings will be enforceable in New Zealand. The term 'Australian trans-Tasman market proceedings' is likely to be specified in regulations, which are being drafted.

• Civil judgments in Australian trans-Tasman market proceedings that impose pecuniary penalties (other than those expressly excluded by the regulations) will be enforceable, as will interim injunctions and interlocutory orders made in Australian trans-Tasman market proceedings. Criminal judgments given in Australian trans-Tasman market proceedings will be enforceable only if they impose a type of criminal regulatory fine specified in the regulations.

With some minor differences, the corresponding Australian act provides for the same in Australia. 

Comment

The act will bring the two jurisdictions closer together and support the steps being made by the two governments towards closer economic relations. The procedural changes to trans-Tasman civil proceedings will simplify the process for disputes of this nature, with each country having ceded a degree of legal sovereignty on a mutual basis. 

The extent of the changes in strengthening regulatory enforcement is still unknown, as it is unclear which civil penalties or criminal regulatory fines will be included in (or excluded from) the regulations. However, in view of the significant penalties and fines that can be imposed for anti-competitive conduct, the further easing of procedural and jurisdictional constraints on cross-border enforcement means that directors and managers of companies with a trans-Tasman dimension will have even greater reason to exercise care about their conduct in both markets.