16 September 2003

Edward Alder

The Appellate Division of the Supreme Court of New York (perhaps the leading US court outside the Federal judicial system) has recently confirmed that Hong Kong’s judicial system will continue to comply with the “due process” requirement of US constitution notwithstanding that sovereignty over Hong Kong has been transferred from the UK to China. This means that Hong Kong judgments are entitled to enforcement in New York.

In Downs v Yuen 748 NYS 2d 131, a divorce action, the wife brought an action in the New York courts to enforce a Hong Kong judgment awarding her a US$10 million lump sum and ongoing support. The Supreme Court, New York County, gave an order enforcing the lump sum component of the judgment. The husband appealed. The Appellate Division held that the Hong Kong judgment was enforceable under ‘principles of comity’, or in Hong Kong and English terms, was enforceable at common law outside the various statutory schemes for reciprocal enforcement and registration of judgments.

The husband argued that the judgment should not be enforced as a matter of comity because he had been denied due process by the Hong Kong court. The New York court held that the question was not whether a defendant had been denied due process but whether the Hong Kong judicial system as a whole conforms with due process. There is ample precedent that the Hong Kong judicial system has always complied with due process, both prior and subsequent to the transfer of sovereignty to China (see, for example, Kwongyuen Hangkee Co. v. Starr Fireworks, 2001 SD 113). The burden was on the defendant to adduce evidence on the point, and in this case, he had failed to do so. In any event, the New York court rejected the husband’s argument that the Hong Kong court’s refusal to grant a second adjournment in the face of a pattern of delay (as an English court might well have done) amounted to denial of due process.

The Hong Kong judgment was held to be enforceable despite the fact that it was in part, a judgment for support and therefore not enforceable, in part, under the Foreign Country Money-Judgments Recognition Act.

It is unclear from this case whether the enforceability of Hong Kong judgments applies only to money judgments or to Hong Kong judgments generally. However, the principles on which the case was decided, i.e. general principles of comity and the fact that Hong Kong’s judicial system was held to comply with due process, suggest that the recognition of Hong Kong judgments would extend beyond money judgments to judgments in general.

Important - The information in this article is provided subject to the disclaimer. The law may have changed since first publication and the reader is cautioned accordingly.