¶ 2301
Overview
Scope of the chapter. This chapter examines what happens in the Cook Islands when a creditor, a spouse, a revenue authority or a foreign court officer arrives with a judgment obtained elsewhere and seeks to use it against an international trust, its settlor, its trustee or its property. The central provision is section 13D of the International Trusts Act 1984, which forbids the courts of the Cook Islands to entertain, recognise or enforce a foreign judgment against any interested party in an international trust to the extent that the judgment applies law inconsistent with the Act or concerns a matter that Cook Islands law governs. International Trusts Act 1984, § 13D (Cook Is.) (as substituted by International Trusts Amendment Act 1995–96, § 13). The chapter also examines the general law of the Cook Islands on foreign judgments, against which section 13D operates, and the corresponding provisions of the Limited Liability Companies Act 2008 and the Foundations Act 2012.
Why the general law matters. Section 13D is a firewall. A firewall is understood only by knowing what it stands against. The Cook Islands has no statute for the registration of foreign money judgments of the kind found in most Commonwealth jurisdictions. The Judicial Committee of the Privy Council recorded in 2020 that "the Cook Islands have no reciprocal enforcement of judgments regime." Webb v. Webb [2020] UKPC 22, [53] (appeal taken from Cook Is.). Judgments of the New Zealand courts may be filed as memorials in the High Court under section 173 of the Cook Islands Act 1915, and other foreign judgments may be sued on at common law. Id. [54]. Foreign arbitral awards are enforced under the Arbitration Act 2009, which gives effect to the New York Convention. Arbitration Act 2009, § 5(1)(f) (Cook Is.). Each route is examined below, because each is a route that section 13D closes when an international trust is the target.
Plan of the chapter. Paragraph 2310 identifies the routes by which a foreign judgment can take effect in the Cook Islands. Paragraph 2320 examines the common-law action on a foreign judgment and the section 173 memorial of a New Zealand judgment. Paragraph 2330 sets out the text and history of section 13D, from its enactment in 1989 to its substitution in 1995–96. Paragraph 2340 examines its two limbs: a judgment based on law inconsistent with the Act, and a judgment on a matter governed by Cook Islands law. Paragraph 2350 examines what the creditor must do instead, which is to bring a fresh action under section 13B, and discusses the two leading decisions, 515 South Orange Grove Owners Ass'n v. Orange Grove Partners and E v. A. Paragraph 2360 examines family, heirship, tax and penal judgments, including the Privy Council's decision in Webb v. Webb on the foreign tax principle. Paragraph 2370 examines arbitral awards, foreign insolvency orders and criminal orders. Paragraph 2380 examines the corresponding firewalls for limited liability companies and foundations. Paragraph 2390 compares the Cook Islands with Nevis and Belize and closes with model provisions and a checklist.
Relation to other chapters. The fraudulent-disposition rule in section 13B, its standard of proof, its limitation periods and its solvency test are examined in chapter 21. The procedural bars to suit, including the requirement that proceedings be brought in the High Court within the statutory periods and the bankruptcy provisions, are examined in chapter 22. Procedure in the High Court, including freezing orders and disclosure, is examined in chapter 24, and the treatment of Cook Islands structures by foreign courts, including contempt and repatriation orders, in chapter 25 (see infra chs. 24–25; supra chs. 21–22). This chapter refers to those chapters and does not repeat them.
Terms. The Act spells the word "judgement" throughout. This chapter uses "judgment" in its own text and keeps the statutory spelling in quotations. The Act defines a "judgement" as a judgment or order given or made by a court in any civil proceedings, or in any criminal proceedings, and as including an arbitral award that has become enforceable in the place where it was made in the same manner as a judgment given by a court there. International Trusts Act 1984, § 2 (definition inserted by International Trusts Amendment Act 1989, § 3). An "interested party," in relation to any trust, means "any settlor, donor, trustee, protector, beneficiary, and any person claiming through any one of such persons." Id. § 2 (definition inserted by International Trusts Amendment Act 1995–96, § 2).