IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE	
CIV-2018-404-664
[2019] NZHC 2986	

UNDER	the Insolvency Act 2006	
IN THE MATTER OF	the bankruptcy of JAE HO HUH	
BETWEEN	YOONWOO C & C DEVELOPMENT CORP
Plaintiff	
AND	JAE HO HUH
Defendant	

	CIV-2019-404-608	

BETWEEN	
YOONWOO C & C DEVELOPMENT CORP
Judgment Creditor	
AND	JAE HO HUH
Judgment Debtor	

Hearing:	11 November 2019	
Appearances:	B Saldanha for the Plaintiff/Creditor
O Collette-Moxon and E Boshier for the Defendant/Debtor	
Judgment:	11 November 2019	

ORAL JUDGMENT OF ASSOCIATE JUDGE R M BELL

Solicitors:
Duncan Cotterill, Auckland Jackson Russell, Auckland Counsel:
O V Collette-Moxon, Barrister, Auckland

YOONWOO C & C DEVELOPMENT CORP v HUH [2019] NZHC 2986 [11 November 2019]

[1]	On  20  November  2018  Davison  J  gave  summary  judgment  to   Yoonwoo C & C Development Corporation against Mr Huh by formal proof.1 I am dealing with two matters:

(a)	Mr Huh’s application to set aside that judgment; and

(b)	Yoonwoo’s application to adjudicate Mr Huh bankrupt.

[2]	The parties are Korean. Yoonwoo is a corporation which has never carried on business in New Zealand. Mr Huh comes from Korea. He now has New Zealand permanent residence. In Korea he ran a group of companies called the Dae Joo Group, which was involved in property development and construction. In 2006 to 2007 the annual turnover of the group was in the order of $NZ7 billion and it employed about 35,000 staff. He was president of many of the companies. The businesses failed. He got into tax disputes with the Korean government. In January 2008 he was no longer involved in day-to-day operations of the company and turned over managerial responsibility for the Dae Joo Group to another man. He claims that his companies went bankrupt because the Korean Government blocked certain bank accounts. He has lived more or less permanently in New Zealand since 2009 while travelling overseas from time to time. He will not return to South Korea because the government may take action against him for alleged breaches of its tax laws. Other creditors have taken  action  against  Mr  Huh.  I  dealt  with  him  in  an  earlier  proceeding  –  CIV- 2014- 04-3372 where he was examined as a judgment debtor.

[3]	Mr Huh was one of four defendants Yoonwoo sued in two proceedings in a District Court in Korea. The other defendants were companies in the Dae Joo Group. The proceedings went to a form of conciliation which resulted in agreed outcomes. The District Court recorded those outcomes. In the first proceeding, the defendants agreed to pay Yoonwoo ₩890 million and, in the second, ₩1,050,000,000. The judgment debts come to ₩1,940,000,000 Korean won. The judgment debts also carry interest. ₩1,940,000,000 is about $NZ2.127 million.

1	Yoonwoo C & C Development Corp v Huh [2018] NZHC 3015.

[4]	In CIV-2018-404-664, Yoonwoo sued Mr Huh on these judgments. He was served by substituted service. He took no steps to defend the proceeding. Davison J heard the summary judgment application on a formal proof basis and gave judgment for Yoonwoo. Mr Huh accepts that the judgment was regularly obtained. Yoonwoo issued a bankruptcy notice based on the judgment. Mr Huh applied to set aside the bankruptcy notice but that application failed for a procedural mishap. While the application to set aside was filed in court within ten working days of service, it was not served on the creditor’s address for service within time.

[5]	Yoonwoo followed with its application to adjudicate Mr Huh bankrupt, and he has applied to set aside the summary judgment under r 12.14 of the High Court Rules:

12.14 Setting aside judgment

A judgment given against a party who does not appear at the hearing of an application for judgment under rule 12.2 or 12.3 may be set aside or varied by the court on any terms it thinks just if it appears to the court that there has been or may have been a miscarriage of justice.

[6]	Where a plaintiff has regularly obtained judgment by default and the defendant applies to set aside the judgment complaining that there has been a miscarriage of justice, the courts have noted that three factors are regularly taken into account:

(a)	Whether the defendant has a substantial ground of defence;

(b)	Whether the delay is reasonably explained; and

(c)	Whether the plaintiff will suffer irreparable injury if the judgment is set aside.

Two authorities commonly cited for these propositions are Patterson v Wellington Free Kindergarten Association and Russell v Cox.2 Where a defendant applies to set aside a summary judgment decision given on formal proof, there is guidance in the Court of Appeal’s decision in Equiticorp Finance Group v Cheah:3

2	Patterson v Wellington Free Kindergarten Association Inc [1966] NZLR 975 (CA); Russell v Cox
[1983] NZLR 654 (CA).
3	Equiticorp Finance Group v Cheah [1989] 3 NZLR 1 (CA) at 8.

It was ever the case that a defendant seeking to set aside a judgment regularly obtained needed to show an actual or possible miscarriage of justice. One, indeed a common way of doing so, is to show an actual or arguable defence. In the case of a summary judgment regularly obtained, it will normally be necessary for a defendant seeking to set aside judgment to adduce material which leads the Court to the conclusion that the plaintiff has not satisfied the court that there is a defence to the claim.

[7]	For this decision I intend to focus mainly on whether Mr Huh has an arguable defence to the claim for summary judgment. The other factors, delay and injury to the plaintiff, are less important. There is another reason for focussing on the defence that arises out of bankruptcy law. For the bankruptcy application, I have to decide whether Yoonwoo is in truth and reality a creditor of Mr Huh. For that, although the judgment is evidence of indebtedness, indeed it is prima facie evidence, it is not conclusive. Doctrines as to the merger of a cause of action in a judgment and res judicata do not apply on a bankruptcy application. This rule is of long standing. In Ex parte Bryant Lord Eldon said:4
Proof upon a judgment will not stand merely upon that, if there is not a debt due in ‘truth and reality’ for which the consideration must be looked to.

A case illustrating the point is Re Fraser ex parte Central Bank of London, where Lord Esher MR said:5

The mere fact that there is a judgment for the debt does not prevent the Registrar from saying that there is no good petitioning creditors’ debt. The Court of Bankruptcy can go behind the judgment, and can inquire whether, notwithstanding the judgment, there was a good debt. In so doing, the Court of Bankruptcy does not set aside the judgment. If I may use the expression, the court goes round the judgment, and enquires into the subject matter.

…

That this is so was determined by this court in Ex parte Lennox 16 QBD 315, which shows that though there is a judgment which the judgment debtor cannot set aside, he may nevertheless ask the court of bankruptcy to enquire whether the debt on which the judgment was founded was a good debt, and that if the court is satisfied that it was not, it may refuse to make a receiving order in respect of the debt. The decision was based on the highest ground – viz., that in making a receiving order the court is not dealing simply between the petitioning creditor and the debtor, but it is interfering with the rights of the creditors, who, if the order is made, will not be able to sue the debtor for their debts, in that the court ought not to exercise this extraordinary power unless it is satisfied that there is a good debt due to the petitioning creditor.

4	Ex parte Bryant (1813) 1 V&B 211 at 214.
5	Re Fraser ex parte Central Bank of London [1892] 2 QB 633 (CA) at 636.

The existence of the judgment is no doubt prima facie evidence of a debt; but still the court of bankruptcy is entitled to enquire whether there really is a debt due to the petitioning creditor.

That case is striking because the judgment debtor had applied to set aside the judgment against him. His application failed. His appeal to the Court of Appeal against that decision failed. Nevertheless, on the bankruptcy petition a receiving order (an adjudication) was refused and the Court of Appeal upheld that on appeal. Two decisions of the High Court of Australia helpfully explain the power of a bankruptcy court to look behind a judgment: Corney v Brien and Ramsay Healthcare Australia Pty Ltd v Compton.6

[8]	In my judgment the same approach applies under New Zealand’s Insolvency Act 2006. Under s 13(a) of the Insolvency Act, a requirement for a creditor’s application is that the debtor owes the creditor $1,000 or more. Under s 36, the Court may, at its discretion, adjudicate the debtor bankrupt if the creditor has established the requirements in s 13. Just as the Australian courts have emphasised the need for the court to be satisfied as to the fact of indebtedness, a New Zealand court is also required under ss 13 and 36. Accordingly, regardless of the application to set aside the judgment, I have to be satisfied that Mr Huh is in truth and reality indebted to Yoonwoo.

Suing on a foreign judgment

[9]	At common law, a person is liable to pay a foreign judgment if that foreign judgment is binding on them. That obligation is enforceable by ordinary proceedings. The judgment is binding on them if it is final and conclusive, if it is for a fixed sum of money, and if the foreign court had jurisdiction under New Zealand’s jurisdiction recognition rules. The Court of Appeal outlined the jurisdiction recognition rules in Von Wyl v Engeler.7 In this case there are two relevant jurisdiction recognition rules. Where the claim is based on a judgment in personam, New Zealand’s jurisdiction recognition rules include:

6	Corney v Brien (1951) 84 CLR 343 and Ramsay Healthcare Australia Pty Ltd v Compton [2017] HCA 28.
7	Von Wyl v Engeler [1998] 3 NZLR 416 (CA) at 420 – 421.

(a)	whether the debtor was present or resident in the foreign country when the proceeding was instituted, and

(b)	whether the debtor submitted to the jurisdiction of the foreign court by voluntarily appearing in the proceedings.

The Court of Appeal said:8

The foundation of the jurisdiction in personam is service of the writ or other originating process. Personal service on a defendant present within the jurisdiction and, where it is impracticable to serve the proceeding in the prescribed manner, substituted service within the jurisdiction by taking such steps as the Court may direct to bring the proceeding to the defendant's notice, satisfy that requirement. And it seems there is no jurisdiction to order substituted service within the jurisdiction on a defendant who was outside the jurisdiction when the proceeding was issued. The principle underlying the concept of submission to the jurisdiction is that a person who would not otherwise be subject to the jurisdiction of the Court may preclude himself or herself by his or her own conduct from objecting to the jurisdiction and thus giving the Court an authority over that person which, but for that submission, it would not possess. Accordingly, the onus is on the party seeking to enforce the foreign judgment to establish that the non-resident accepted the jurisdiction of the foreign Court to determine the proceeding.

…

[10]	The Court of Appeal also helpfully outlined the basis on which the court enforces judgment debts in personam in Eilenberg v Gutierrez.9 It emphasised that the court is enforcing an obligation under New Zealand law, and New Zealand applies its own concepts as to whether the obligation arising out of the foreign judgment is binding. The defences to claims to enforce foreign in personam judgments include whether the judgment was obtained by fraud, whether enforcement of the judgment will be contrary to public policy, and whether the proceeding in which the judgment was obtained was contrary to natural justice. None of these principles were in contention. Davison J applied them in his decision of 20 November 2018.

[11]	I add two comments. A proceeding on a foreign judgment is based on debt. The remedy at common law is judgment for a monetary sum. The court does not register the foreign judgment. Instead it recognises that the foreign judgment gives

8	At 421.
9	Eilenberg v Gutierrez [2017] NZCA 270 at [30] - [35].

rise to a liability enforceable in New Zealand and enters judgment for the amount of that liability. There are of course statutory provisions for the registration of foreign judgments, where the procedure provides for registration, not suing to obtain a money judgment. Examples are the Reciprocal Enforcement of Judgments Act 1934, the Trans-Tasman Proceedings Act 2010 and s 172 of the Senior Courts Act, but none of those apply here. I mention this because in its statement of claim Yoonwoo sought registration of the decisions of the South Korean courts. Yoonwoo ought to have sought a monetary judgment. Regardless of other aspects the judgment will need to be modified to correct that.

[12]	The other aspect is the historic origin for proceedings in the English courts to enforce foreign judgments. The English courts recognised that a foreign judgment gave rise to a debt obligation, and accordingly made a defendant in England pay a judgment that had been obtained elsewhere. But for that obligation to be enforceable under the common law, the claim had to be brought within one of the recognised forms of action. The courts held that the available forms of action claiming on a foreign judgment were debt and indebitatus assumpsit.

[13]	A case recognising that is Williams v Jones.10 That was a proceeding on a judgment obtained in a Welsh county court but the dicta are equally applicable to claims on foreign judgments. Indeed, the judges commented to that effect. One issue was the appropriate form of action for a proceeding on the county court judgment. Parke B said:

The principle in which this action is founded is that where a Court of competent jurisdiction has adjudicated a certain sum to be due from one person to another a legal obligation arises to pay that sum on which an action on debt to enforce a judgment may be maintained. It is in this way that the judgments of foreign and colonial courts are supported and enforced and the same rule applies to inferior courts in this country and it applies equally whether they be courts in record of not.

(Emphasis added)

Pollock CB’s and Alderson B’s judgments are to similar effect.11

10	Williams v Jones (1845) 13 M&W 628 at 633.
11	Other examples are Buchanan v Rucker (1808) 9 East 192 and Russell v Smythe (1842) 9 M&W810 at 818-819.

[14]	Claims brought as an action in debt or as an indebitatus assumpsit began as claims to enforce contractual promises but they were press-ganged into enforcing other debt obligations as well. The history of the law of restitution shows how restitutionary claims were initially brought as claims under indebitatus assumpsit, beginning with Lord Mansfield CJ’s decision in Moses v Macferlan.12 This jamming of other obligations into actions in debt and indebitatus assumpsit led to dicta which suggested that the court was enforcing a contractual claim, but the contract was entirely fictitious. When I come to the limitation defence, it will be seen that judges have from time to time suggested that a claim on a foreign judgment debt is a claim to enforce an implied contract. It is important to recognise that that is entirely fictitious. In United Australia Ltd v Barclays Bank Ltd Lord Atkins dealt to the fiction of an implied contract in the context of restitutionary claims, memorably saying:13
These fantastic resemblances of contracts, invented in order to meet the requirements of the law as to forms of action which have now disappeared, should not in these days be allowed to affect actual rights. When these ghosts of the past stand in the path of justice, clanking their medieval chains, the proper course for the judge is to pass through them undeterred.

[15]	I will come back to this when I deal with the limitation defence. My point here is that the court is not concerned with enforcing contractual rights when it deals with a proceeding based on a foreign judgment. The obligation does not arise out of a contract but from the foreign judgment itself.

The proceedings in South Korea

[16]	The evidence for the setting aside application is more extensive than that presented to Davison J. The evidence before him was an affidavit from the lawyer who represented Yoonwoo in the proceedings in Korea and an affidavit from a local lawyer in New Zealand who is also qualified in Korean law deposing as to the procedures of the Korean courts. Korea has a civil law system. Its procedures are markedly different from those followed in common law jurisdictions. That does not mean that we should be suspicious of them. It is timely to remember Cardozo J’s dictum in Loucks v Standard Oil:14

12	Moses v Macferlan (1760) 2 Burr 1005. See 1008-1009 for discussion of the form of action.
13	United Australia Ltd v Barclays Bank Ltd [1941] AC 1 (HL) at 29.
14	Loucks v Standard Oil (1918) 224 NY 99 at 111.

We are not so provincial as to say that every solution of a problem is wrong because we deal with it otherwise at home.

While procedures in civil law jurisdictions may be different from ours, they ultimately lead to just outcomes, just as we hope that our procedures also lead to just outcomes.

[17]	The procedures in the Korean courts are relevant. Mr Jae Hwan Kim, a Korean lawyer in Seoul, has given expert evidence for Mr Huh. Part of his evidence sets out in general terms the relevant aspects of proceedings in District Courts in Korea.

1.	In Korea a creditor may file an application for payment order to the court, requesting the debtor to pay a certain amount of money (Article 462 of the Civil Procedure Act of Korea). This is to allow a creditor to obtain a payment order through a simplified and expedited process, without going through a lengthy formal litigation proceeding.

2.	If the debtor, after receiving the application for payment order, does not file an objection within two weeks, then the court issues a payment order (Article 470 of the Civil Procedure Act of Korea), which is enforceable against the debtor as a final and non-appealable court judgment (Article 474 of the Civil Procedure Act of Korea).

3.	If the debtor files an objection within the two weeks, then the case is automatically transferred into a formal litigation proceeding (Article 472(1) of the Civil Procedure Act of Korea).

4.	During a formal litigation proceeding, either party may apply to resolve the case through a conciliation process to the court (Article 5 Civil Conciliation Act); an application can be made orally, even during a hearing of a formal litigation proceeding.

5.	If such a request is made, the court clerk (not a judge) is required to record the outcome of the conciliation process (Article 24 of the Civil Conciliation Act); and that outcome will be either that an agreed settlement is reached between the parties, or that no settlement has been reached. If the parties reach agreement then it is usual for the agreed terms of settlement to also be noted.

6.	An in-court settlement agreement (Article 29 of the Civil Conciliation Act) has the equivalent effect of a final and non-appealable judgment issued by the Court (Article 220 of the Civil Procedure Act).

[18]	Civil proceedings in District Courts in Korea allow for a form of representative proceeding but the procedure is quite different from representative proceedings in New Zealand. Article 53(1) of the Korean Civil Procedure Act provides that where there are persons with similar or common interests in a lawsuit, they may appoint a representative among themselves to represent all of them in the lawsuit in a representative capacity. That is called a representative proceeding. If a party appoints

a representative to represent it in a representative capacity the appointing party is treated as having seceded from the case (Article 53(2) of the Civil Procedure Act). Even though that party has seceded, a final and binding judgment on the representative party also binds the appointing party (Article 218 of the Civil Procedure Act).

[19]	The courts in Korea attend to service of proceedings. The Korean courts are not required to serve the final judgement on an appointing party if the representative party has received the final judgment. If the plaintiff wishes to enforce the final judgment against one of the appointing parties, apart from the representative, the plaintiff is required to apply for a separate court order to enforce against the appointing parties.

[20]	Mr Kim describes service in Korea. Private process servers are not engaged. Service of court documents can be carried out by delivering the documents to a person’s place of business or office (Article 183(1) of the Civil Procedure Act). It is not necessary for the documents to be given personally to the person to be served. In practice service of documents is carried out through postal mail or delivery to the address. Substituted service is available. Substituted service typically takes the form of a notice on the notice board inside the courthouse, publishing in an official gazette, or publishing on the court’s official website. Where substituted service is ordered, service is regarded as complete two weeks after service by publication.

[21]	In civil proceedings in Korea a litigant does not have to be represented by a lawyer. They may appear in person, and they may be represented by an agent who need not be a lawyer.

[22]	Yoonwoo brought two proceedings in 2009: 2009/6537 and 2009/6520. In both proceedings the defendants were Dae Joo Construction Corporation, Mirae RAC Corporation, Dae Han Construction Corporation and Mr Huh. The 6537 proceeding was filed in about April 2009. The claim was for ₩890 million. Yoonwoo claimed that it was entitled to a deposit because the defendants had failed to pay the full price for acquiring a business licence and land for building apartments. Its case was that all the defendants were parties to the agreement.

[23]	Yoonwoo applied for a payment order application. The defendants filed an objection to the application. The proceeding had been filed in a city court but it was transferred to the Uijeongbu District Court. In South Korea the District Court is equivalent to the High Court in New Zealand.

[24]	Records of the District Court have been put in evidence, including records of service. The service record shows that a notice of the proceeding was sent by mail to Mr Huh on 7 August 2009 at a business address. On 1 September 2009 a document was filed in Court. The document is referred to an “Answer”, but it seems to be similar to a statement of defence under our procedure. The document has not been signed, but instead a seal for each of the defendants has been affixed to the document. The seal said to have been affixed for Mr Huh is smaller than the seals for the other defendants. It is oval, whereas the others are circular.

[25]	The lawyer who acted for Yoonwoo in the proceeding, Mr Park, says that on 2 September 2009 all the defendants applied to appoint a representative. The selected party was Mirae RAC Corporation. The court’s service record shows that from that time onwards all documents were served on Mirae RAC Corporation. The parties requested conciliation. Yoonwoo, represented by its president and by Mr Park, appeared at a sitting of the District Court on 18 March 2010 before three judges. Mirae RAC Corporation was represented by its manager, Byung Won Lee.

[26]	At that sitting the parties entered into an agreement. The agreement provided that the defendants would jointly pay Yoonwoo ₩890 million by 30 April 2010. If the defendants defaulted, interest would run at 20% per annum until payment was made in full. Yoonwoo would waive all other claims against the defendants, and each party would pay its own legal costs. That was recorded as a part of the court’s formal record. It was sealed. There are seals of the clerk (or registrar) and of the Chief Judge.

[27]	Mr Park says that in the appearance before the judges in April 2010, Mr Lee did not say that he was not appearing for Mr Huh, or any other defendant. If Mr Lee had made any such statements that would have been an important development and would have stood out at the hearing. It would have been a factor in whether any agreement could be reached.  He would expect that to be expressly noted in the court

documents. So far as Mr Park was concerned, at the sitting Mr Lee represented all the defendants, including Mr Huh.

[28]	The role of Mr Lee as a manager requires some explanation. Under Article 11 of Korea’s Commercial Act a manager may perform “all judicial and extra-judicial acts with respect to the business or the business owner on behalf of the business- owner”. Mr Kim, Mr Huh’s expert, searched the company registration records for Mirae. Those records show that Byung Won Lee was a registered manager of Mirae from September 2004 to December 2017.

[29]	No payment was made under the April 2010 agreement. As I have mentioned, the companies collapsed. In 2014, Yoonwoo took further steps in the District Court to enforce its judgment against Mr Huh. That required a court order for execution against Mr Huh. He was served by substituted service.

[30]	The procedure in the other proceeding (2009/6520) was broadly the same. Yoonwoo filed an application for a payment order against all the defendants for
₩1,250,000,000. That is said to be the balance of the purchase price on the sale of a business licence and land for building apartments. The defendants were the same as in the 2009/6537 proceeding. While the proceeding was filed in a city court, it was transferred to the Uijeongbu District Court for trial. Again, the parties chose to go to conciliation. That was held on 8 April 2010 before three judges, one of them being the Chief Judge who also sat in the earlier proceeding. Again, Mr Park appeared for Yoonwoo with Yoonwoo’s president and Mr Lee appeared for Mirae RAC Corporation. The court’s record of service shows that the proceeding was sent by mail to Mr Huh on 3 November 2009 using the same address of a meeting room of the Dae Joo Group as was used in the earlier proceeding. The parties served a document in opposition. Again, documents were filed for representative proceedings and the parties agreed to go to conciliation. The documents in this proceeding, for example the statement of defence and a further statement of defence, have seals apparently given on behalf of each defendant.

[31]	There was an agreed resolution in the court sitting on 8 April 2010. The defendants agreed to jointly pay Yoonwoo ₩1,050,000,000 by 30 May 2010 and in

default of payment interest would run at 20% per annum until payment was made in full. If a claim was made against the defendants by a third party, the Wol Pyung General Construction Corporation, and the defendants lost, Yoonwoo promised to indemnify them. Yoonwoo waived all other claims against the defendants, and each party would pay their own costs. Again, a formal court record was drawn up and sealed by the clerk of court and by the Chief Judge. Again, the defendants did not pay. Later, Yoonwoo applied for execution against Mr Huh and the execution orders were served by substituted service on Mr Huh in 2014.

Mr Huh’s grounds of opposition

[32]	Mr Huh raises these objections to the results of the proceedings in the District Court in Korea being enforced against him:

(a)	the results of the sittings in the District Court were not judgments which are recognised as such under our rules recognising foreign judgments. They are, at the most, contracts;

(b)	the judgments were the result of breaches of the rules of natural justice; and

(c)	the claim is time-barred, because the relevant limitation period is six years under s 4(1)(a) of the Limitation Act 1950. The plaintiff relies on judgments made in March and April 2010.

Is Yoonwoo suing on final judgments?

[33]	Mr Huh has adduced evidence from an expert, a Korean lawyer, obviously well qualified in Korean law. Yoowoo has, in turn, also provided further evidence from Mr Park who represented Yoonwoo in the original proceedings and from a Myoungsang Moon, also an expert in Korean law.

[34]	Some of that evidence has helped put the proceedings in Korea in a fresh light. In its original application for summary judgment, Yoonwoo referred to the process in the District Court as a judicial arbitration and the result of that process as a judicial

arbitration decision. For Mr Huh, Mr Kim says that is a mistranslation and he suggests that the process is better understood as a conciliation. In the hearing today, both parties emphasised that it is important to look at the substance of what was done and not to be bothered too much about the labels that were put on it. The issue here is whether the process that the parties adopted under the Korean procedure resulted in judgments or, as Mr Huh would have it, no more than enforceable contracts. Mr Huh would have it that there are only enforceable contracts because he can then point to the six year limitation period under s 4(1)(a) of the Limitation Act and say that the claim is accordingly time-barred.

[35]	Mr Kim says that the proceedings resulted in no more than an agreement in Korea, although he also accepts that Article 220 of the Civil Procedure Act is important domestically in South Korea. He accepts that under Article 220 an agreement reached in conciliation is recorded as part of the court record and on his translation, that record of the agreement has the equivalent effect of a final and non-appealable judgment issued by the court. Accordingly, in South Korea itself, the agreement that the parties entered into is binding on them, not just contractually but also as a court order and it is enforceable using the court’s ordinary machinery for enforcement of judgments. No fresh proceedings have to be started to obtain a court order for enforcement. Admittedly, under South Korean procedure at the execution phase, a fresh application needs to be made to the Court to enforce an existing judgment. A fresh judgment does not have to be obtained. The argument was that while that might be the case in South Korea, when it is exported it is something less – only a contractual agreement.

[36]	With respect, that argument overlooks the context in which these arrangements were made. Yoonwoo had begun proceedings which set in train the processes of the court. The processes of the Court were designed to achieve a resolution of differences between the parties. That resolution can be reached by negotiation agreement under the auspices of the Court, but if those are unsuccessful, then the matter will go to a disputed hearing where the court would hear evidence and submissions and then the Court will give its own independent judgment on the merits. The fact that the Court processes resulted in an agreed outcome does not mean that the result is nevertheless not a judgment. It had that effect in Korean law. I cannot help thinking that if the equivalent process were adopted in New Zealand, that is, the parties came to court,

went through a period of negotiation and then agreed for the outcome of their negotiation to be recorded as a court order, it would be just as much a judgment of this Court as one given after a hearing following a dispute of facts and law. In my judgment we would be short-changing the Koreans if we were not to recognise that conciliations which result in agreement between the parties and which are entered as records of the court and treated as enforceable through having been recorded as such are not judgments under New Zealand’s rules for recognising foreign judgments. The important point is that judgments can be reached by different processes. Judgments can be given when one party fails to appear and the court makes an order in the absence of an appearance. Judgments can be given when the court hears a dispute and rules on the merits. Equally, judgments can be given when parties in dispute reach agreement and agree that the court should give a judgment based on their agreement. The South Korean court did that in this case. That it is as much a judgment as a default judgment or a judgment on the merits.

[37]	There is a question whether the judgment is final and conclusive. I have found that these are judgments. Under Korean law, they bind the parties. They provided for time to pay.15 Under Article 220 these were final and unappealable and they were accordingly also final and conclusive under our judgment recognition rules. Admittedly further steps had to be taken by way of enforcement but that arose only if there was a default in payment. The fact that further steps might have to be taken later to enforce the judgment in Korea does not mean that the judgments were not final and conclusive on the dates that the court record was drawn up.

Did the South Korean Court have jurisdiction under New Zealand’s jurisdiction recognition rules?

[38]	I directed counsel to consider whether the South Korean Court had jurisdiction under New Zealand’s jurisdiction recognition rules. I saw that as relevant and, to a certain extent, as bypassing the question of breach of natural justice.

[39]	I come back to the matter of service. In both cases the District Court mailed the documents for the proceedings to a business office of the Dai Joo Corporation. Mr

15	I record that for limitation purposes they became enforceable from the dates for payment. The cause of action accrued on the dates for payment.

Huh’s evidence is that he did not receive those documents. He says that he has no memory of receiving the documents. He has presented plausible supporting evidence that he did not receive the documents. He has attached to his affidavit records from New Zealand Immigration showing his arrivals and departures from New Zealand. The records run from February 2002. From March 2009 onwards he is consistently shown as holding a resident’s visa. His pattern of movements was that when he flew out, he returned to New Zealand after a relatively short period of time, but there were longer gaps between his returns and his next outward flight. That is consistent with his living in New Zealand. His evidence shows that he was in New Zealand on these dates in mid to late 2009:

(a)	18 July to 7 August

(b)	14 August to 5 October

(c)	8 October to 22 October

(d)	19 November to 25 November

(e)	1 December to 13 December

That covers periods when the documents are said to have been served on him in Korea. It is arguable for him that in 2009 he was resident in New Zealand and not in South Korea. While he had come from Korea, his immigration records show that he was spending more time in New Zealand than anywhere else in the world. On that evidence it is arguable that he was resident in New Zealand not in South Korea. He has an arguable defence to Yoonwoo’s claim that he was not resident in Korea when each proceeding was started.

[40]	That, however, is not the end of the matter because there is the question whether the other test applies: whether he submitted to the jurisdiction because steps were taken in his name in each proceeding. The court documents show that statements of defence were filed in his name and that a seal was affixed to documents, a seal being attributed to him. It appeared to Yoonwoo’s representative, Mr Park, and obviously it

must have appeared to the District Court, that Mr Huh was taking an active part in the proceeding. He took steps after the court sent notice to him but Mr Huh says that he never knew of the proceeding and he never gave any directions for any steps to be taken on his behalf for that proceeding. One can be sceptical about that, but Mr Huh has put a copy of his registered seal in evidence. In South Korea seals are apparently used frequently on formal documents and there are registers of seals. Mr Huh says he has his own seal which is appropriately registered. That seal is different from the images of the seal that appear in the court documents. It is round, not oval. By saying that the documents lodged in Court do not have his seal, Mr Huh is running what might be considered a non est factum defence.

[41]	In response, Yoonwoo refers to paragraph 14 of Mr Huh’s affidavit of September 2019. In that part of his affidavit Mr Huh gives background explaining that during the period January 2008 to 2011, no one would have troubled him personally with court documents for the Yoonwoo proceeding. At that stage he was no longer president of the Dae Joo Group, so he was no longer involved in management. In any case, these were relatively minor matters. It was the job of company executives to handle these matters. He would not have to be troubled by it. Based on that evidence, Yoonwoo says that Mr Huh obviously delegated matters widely to the executives of the companies within the Dae Joo Group, left them to handle matters rather than being troubled by them himself. That equally applied when he had resigned as president of the companies. Yoonwoo submits that, having set up the system under which he delegated matters to subordinates, Mr Huh cannot complain if steps have been taken by subordinates which were not referred to him and he is bound by the acts of the agents to whom he left responsibilities.

[42]	That argument may win at the end of the day, but I am not persuaded that Mr Huh’s case is not arguable. His case is that steps were taken in the proceeding without his authority and without his knowledge and therefore the judgment ought not to be binding on him. Steps taken without his authority cannot be considered a submission by him to the jurisdiction of the District Court in South Korea. He can take the point that while companies within the Dae Joo Group were sued, and he could leave it to the executives of those companies to deal with claims against the companies themselves,

a claim against him is different, because that affected him personally. That was beyond the scope of any general delegated authority he gave to executives.

[43]	In considering this matter I have considered a decision of the Exchequer Court in Russell v Smyth.16 In that case a Scottish plaintiff sued a defendant resident in England on an order for costs she had obtained against him in a divorce proceeding in Scotland. The evidence showed how an appearance could be entered in a proceeding in Scotland. It involved an unusual procedure under which a party’s lawyer went to the court and uplifted it so that an advocate could consider the file and decide whether the proceeding could be defended. That was treated as an appearance in the proceeding. The English court held that that amounted to a submission to the jurisdiction of the Scottish court and the defendant was held bound by the acts of the lawyer who had entered the appearance. On the authority question Parke B was robust:

It is unnecessary to deliver an opinion as to the effect of a judgment upon a party who is absent, and has no property in the country where the judgment is pronounced. Here we must assume that the defendant entered an appearance, and that the agent took that step for him had authority for that purpose. If this had not been the case, the appearance might have been set aside in Scotland, and the party would have had a remedy against his attorney.

In short, he looked to the external appearances of agency and would not let the English defendant get away by alleging a lack of authority on the part of the lawyers who took steps on his behalf.

[44]	While acknowledging that, in my view, it would still be a stretch to apply the same presumption against Mr Huh at the summary judgment stage. That is because the steps taken in the proceedings were a few steps removed from Mr Huh. Accepting that his own personal seal was not used on the documents, it appears that someone else has taken steps on his behalf without any clear evidence as to their authority to do so, when it involved a claim against him personally. Those people, whoever they are, have arranged for somebody else to appear in the proceeding in Court. Given that remove, I cannot be satisfied to the summary judgment standard that it would be appropriate to regard Mr Huh as bound by the steps taken in his name in the District Court in South Korea. Accordingly, it is arguable for Mr Huh that he did not submit

16	Russell v Smyth (1842) 9 M&W 810.

to the jurisdiction of the District Court. The matter may turn out differently at trial. That is a matter for further evidence and further submission.

[45]	I have considered the two bases on which a New Zealand Court might regard the South Korean Court as having jurisdiction, and I find that he has arguable defences under both heads.

Was there a breach of natural justice?

[46]	As Mr Huh was not resident in South Korea and as it is arguable for him that he did not authorise the steps taken on his behalf, it is unnecessary to consider the question of breach of natural justice. Obviously, if judgment was given against him in his absence without him taking any part in the proceeding, it cannot be said that natural justice was observed. There was arguably a breach of natural justice, but that follows from my findings under the jurisdiction recognition rules.

[47]	That is enough to find in favour of Mr Huh on the merits of the summary judgment application.

Limitation

[48]	Strictly it is not necessary for me to deal with the limitation point, but I record some thoughts. The parties agree that the Limitation Act 1950 applies. The judgments in the District Court in South Korea were given before the Limitation Act 2010 came into force. The Limitation Act 1950 continues to apply for acts and omissions that occurred before 1 January 2011.17 However, the parties disagree as to which provision under s 4 of the Limitation Act should apply. The section says:

(1)	Except as otherwise provided in this Act …, the following actions shall not be brought after the expiration of 6 years from the date on which the cause of action accrued, that is to say,—

(a)	actions founded on simple contract…

17	Limitation Act 1950, s 2A, Limitation Act 2010 s 59.

(4) An action shall not be brought upon any judgment which has been obtained subsequent to the commencement of this Act after the expiration of 12 years from the date on which the judgment became enforceable or on any judgment which has been obtained before the commencement of this Act after the expiration of 20 years from the date on which the judgment became enforceable; and no arrears of interest in respect of any judgment debt shall be recovered after the expiration of 6 years from the date on which the interest became due.

Anyone looking at those provisions in isolation would consider that the plaintiff’s claim is under s 4(4) as a proceeding brought on a judgment and could not be a claim based on a simple contract.

[49]	Mr Collette-Moxon developed submissions to the effect that s 4(4) applies only to proceedings based on domestic judgments and does not apply to proceedings based on foreign judgments. He ran two arguments. The first was that under s 4(4) time runs only from when a judgment becomes enforceable. In his submission, a foreign judgment becomes enforceable only when a New Zealand court gives judgment on it. That would make s 4(4) a nonsense because time would not run at all and therefore s 4(4) cannot apply to a foreign judgment.

[50]	I do not accept that. I come back to the point that a claim on a foreign judgment is a claim in debt and when a court gives a judgment on a claim in debt it is enforcing an existing liability. Enforceability arises from the judgment, not from the court’s recognition of the judgment. A foreign judgment may become enforceable when it is delivered or, as in this case, it may become enforceable some time later. In this case both the judgments of the District Court provided that payment was to be made at a future date. Those judgments become enforceable from those dates, not earlier. Section 4(4) makes perfect sense when it has regard to the terms of the judgments in this case. Time could not run from the date when the judgments were recorded because they had not become enforceable then. It could only run from the time when payment arose.

[51]	Mr Collette-Moxon’s second argument was that claims on foreign judgments are really claims in contract. I come back to the earlier part of my judgment where I explained the origins of claims based on foreign judgments in the forms of action in debt and indebitatus assumpsit. Somewhat unfortunately, some judges have continued

to use the terminology of an implied contract. One case cited was Grant v Easton, where Brett MR said: 18

It has been suggested, however, that a difference exists between English and foreign judgments, but in the present case the question is, whether the defendant can shew any defence to the claim made against him. Upon principle what difference can there be between an English and a foreign judgment in this respect. An action upon a foreign judgment may be treated as an action in either debt or assumpsit but liability of the defendant arises upon the implied contract to pay the amount of the judgment debt.

That was said in 1884. At this stage the forms of action had been abolished, but the old thinking that claims in debt and indebitatus assumpsit involved an implied contract still prevailed. That idea ought to have been dispelled by the 20th century but we still find loose terminology to that effect. For example, in Berliner Industriebank AG v Jost, Brandon J recorded the parties’ agreement that the limitation period was six years because of an implied debt.19 In my judgment this reliance on implied debt is misconceived in just the same way as Lord Atkin regarded claims that restitutionary claims arose out of an implied contract as also misconceived. Master Williams QC’s decision in SHC Corporation v O’Brien was also cited to similar effect.20 Again, I respectfully disagree with his obiter findings on limitation. On this I agree with Davison J that s 4(4) of the Limitation Act applies to a proceeding on a foreign judgment just as it applies to a proceeding on a domestic judgment. I do not regard Mr Huh as having an arguable defence on the limitation defence.

Result

[52]	I grant the application to set aside the summary judgment. I regard the other aspects of the application as relatively inconsequential. I do not regard Mr Huh as being particularly impressive in his conduct. He has been evasive when Yoonwoo’s lawyers have tried to serve him. In the way of some judgment debtors once pressured by the plaintiff with a bankruptcy notice, he has taken steps. I would continue a miscarriage of justice if I were to find that he had an arguable defence but deny him the opportunity for a full hearing. I accept that there will be inconvenience to the

18	Grant v Easton (1884) 13 QBD 302 at 303.
19	Berliner Industriebank Aktiengesellschaft v Jost [1971] 1 QB 278 at 285- 286 citing Grant v Easton.
20	SHC Corporation v O’Brien HC Wellington CP823, 19 April 1991.

plaintiff who will now face the costs of taking this matter to a full defended hearing. But the plaintiff would have faced that if Mr Huh had defended the case at the outset. The court would not have granted summary judgment. That aspect does not count against the judgment being set aside.

[53]	Counsel agreed that as Mr Huh was seeking an indulgence in applying to set aside a judgment that had been regularly obtained, he ought to pay costs for the summary judgment application. Mr Huh, however, demurred at having to pay the full costs for starting the proceeding. In my judgment it would be appropriate to allow Yoonwoo all its costs in obtaining judgment. The matter can be further adjusted when the matter comes to final hearing. The parties agree that the costs and disbursements totalled $21,834.48. Those costs are to be paid and are enforceable as a court order.

[54]	As Mr Huh has been uncooperative with service, it is important that he not carry on evasive tactics. It is a condition of judgment being set aside that he is to advise the court and Yoonwoo’s lawyers of his current residential address. If he changes his address, he is to give notice of his new address. His address for service will continue to be at the offices of Duncan Cotterill. That will only be changed if he appoints another lawyer to act for him in his place in place of Duncan Cotterill.

[55]	Because I have set aside the summary judgment, there is no longer a debt on which Yoonwoo can rely for its bankruptcy application and accordingly, the bankruptcy application is dismissed. The costs on the bankruptcy application are reserved in the meantime. If Yoonwoo ultimately prevails at the hearing of the substantive proceeding, it may also ask for costs on the bankruptcy application.

[56]	The case is given a fixture for five days beginning 15 February 2021. The registrar is to arrange a case management conference for further directions.

[57]	I reserve leave to apply further.

Associate Judge R M Bell