A Common Market Problem Becomes More Common: the Trans-Tasman Proceedings Act 2010

As part of a wider process of economic integration and the move towards a single integrated economic market, Australia and New Zealand entered into bi-lateral treaty in 2008 in order to resolve existing issues with the reciprocal enforcement of civil judgment which had arisen between the two countries. Labelled the “Christchurch Agreement” this treaty was incorporated by both countries into their domestic law in 2010 and now governs the allocation of disputes between Australia and New Zealand, where the parties are located within the common market of Australia and New Zealand and inter-state enforcement of civil judgments more generally. The Trans-Tasman Proceedings Act 2010 (Cth) and (NZ) (“TTPA”), will arguably provide significant benefits by reducing barriers to trade and improving the economic prosperity of both countries. However it is argued that, similar to other common market reciprocal enforcement schemes (such as the Brussels Model in the European Union), Australia and New Zealand failed to consider the impact of the outer world problem. The outer world problem is a recurring theme in common market arrangements, and results from a failure to provide generic proportionate jurisdictional test for cases involving foreign defendants sued in a common market state. The result is excessive jurisdictional rules within a particular state can potentially result in proceedings being retained where there is a strong argument the dispute is more closely connected with another forum. The resulting judgment (should judgment in the plaintiff’s favour be granted), can then be quickly enforced throughout the common market (specifically New Zealand) to the disadvantage of the defendant. The outer world problem is clearly present under the TTPA scheme, beginning in Australia and cumulating in enforcement of the judgment in New Zealand. It remains present even in the case of international commercial contract disputes. This is unfair and discriminatory towards foreign defendants, and arguably justifies reform, or at least discussion and justification of this approach.