Neilson v Overseas Project Corporation of Victoria & Anor

[2004] HCATrans 528

[2004] HCATrans 528

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
  Perth  No P42 of 2004

B e t w e e n -

BARBARA MARY JOSEPHINE NEILSON

Applicant

and

OVERSEAS PROJECT CORPORATION OF VICTORIA LTD

First Respondent

MERCANTILE MUTUAL INSURANCE (AUSTRALIA) LTD

Second Respondent

Application for special leave to appeal

GLEESON CJ
McHUGH J

TRANSCRIPT OF PROCEEDINGS

AT CANBERRA ON FRIDAY, 3 DECEMBER, 2004, AT 9.31 AM

Copyright in the High Court of Australia

MR B.W. WALKER, SC:   May it please the Court, I appear with my learned friend, MR A.S. BELL, for the applicant.  (instructed by Talbot & Olivier)

MR G. GRIFFITH, QC:   Your Honours, I appear with MS L.G. DE FERRARI for the respondents.  (instructed by Freehills)

GLEESON CJ:   Yes, Mr Walker.

MR WALKER:   Your Honours, this is a case where the outcome turned on the question whether Chinese law would determine the outcome of a dispute based upon the commission of a wrong in China.

GLEESON CJ:   Was part of the relevant law a limitation period?

MR WALKER:   Yes. 

McHUGH J:   But is that not part of the problem?  I mean, there are some very important questions involved in this case, but, given the discretionary nature of the Chinese choice of law provision, is this a suitable vehicle?  And how did it come about that the primary judge applied Chinese law on the limitation period?

MR WALKER:   If I say, that could only be explained as some kind of an alternative, I think that is the closest I can come to justifying that approach.  Your Honours will appreciate from our argument that, quite clearly, the position should have been – which is a primary way of justifying the result below – that the Australian limitations law applied because that was what Chinese law required.

GLEESON CJ:   What was the relevant Australian limitations law?

MR WALKER:   That was the law in Western Australia, there being no other candidate.  That is the law of the forum.

GLEESON CJ:   What was the basis of the reasoning on which the primary judge, having decided the Chinese law, in effect, sent the matter back to Western Australia, then applied the Chinese limitation period and exercised his discretion in favour of the plaintiff?

MR WALKER:   There is no way of explaining why that aspect of Chinese law was employed by the judge, the judge having held that the Chinese law chose Australian law to determine the rights and obligations between the parties.

McHUGH J:   Well, the expert evidence was that extensions of time in China are almost never granted after the 12 month limitation period has expired.

MR WALKER:   That, of course, is expert evidence of a most invidious kind, illustrating the caution that ought to be applied to expert evidence which, as it were, predicts statistically the outcome of discretions ‑ ‑ ‑

McHUGH J:   Well, I appreciate that, but one of the reasons that makes it a difficult case is that the primary judge failed to identify what special circumstance warranted the granting of an extension of time under Chinese law.

MR WALKER:   Yes, well, if your Honour is asking about how Chinese law would have attached ‑ ‑ ‑

McHUGH J:   No, I am just wondering whether or not, important though all these questions are – and they must be decided by this Court sooner or later, preferably sooner – is this the case to be determined now?

MR WALKER:   Yes, because the problems that your Honours have raised do not in fact divide the parties on this proposition, was it decisive as to whether or not Chinese law, in choosing Australian law, ought to determine the issue between the parties?  The parties are agreed that that is decisive of the matter. 

Your Honour Justice McHugh inquires about special circumstances.  Justice McLure understood the matter, page 94 of the application book, at the end of paragraph 60, in the way there set out, which perhaps could be summed up in this anodyne fashion.  They were away.  Now, that may not be the strongest set of special circumstances, but your Honours must have heard many times a reference to people being abroad as being an explanation for why litigation does not proceed as briskly as it might otherwise proceed, and, with respect, that was something well within the discretionary ambit. 

When her Honour talks about “objective barrier” in paragraph 61, that, in our submission, is a reference to a matter of Chinese law, as your Honours will appreciate, but in itself is not to the point, for the reasons that we have put in writing, namely, that between these parties there is no dispute but that.  Had the Chinese law operated in the way that principally the trial judge found, namely, as the law which said how this controversy was to be determined, then but for the important but presently immaterial aspect of limitation extension, that Chinese law would have chosen the Australian law under which my client would have succeeded on the limitations question.

McHUGH J:   Well, now, if the Court came to the view that Chinese law applied in its entirety, do you concede you must lose?

MR WALKER:   No.  In its entirety, the Chinese law remits the matter to Australia.  That is the whole point about why this case is an appropriate vehicle, it being, as I say, common ground that the remission to Australia would have the Australian limitation law, upon which we would succeed, governing the relations between the parties.  It is for those reasons that the history, anomalous as it undoubtedly is concerning the limitation period from China somehow surviving after the Article 146 exercise was carried out by the trial judge, does not matter and should not deter this Court from seeing this as the appropriate vehicle, partly because it is here, to settle something which ought to be clear, and which, following the abolition of double actionability, is now calculated to arise in a way which would not have occurred while double actionability had the effect it did on the real application of the content of foreign law to foreign tort cases being heard in Australia.

GLEESON CJ:   If this Court were to uphold the primary judge’s reasoning on the matter of the limitation period, then the other issue would be irrelevant, would it not?

MR WALKER:   Your Honours would only get there by also upholding contentions about the way in which the Chinese law applied at all.  That is, the trial judge made a decision about limitations which then permitted success for my client under Australian law.

GLEESON CJ:   If Western Australian limitation law had applied, what would it have been?  Would it have had the same exercise in discretion involved?

MR WALKER:   We were within time.

GLEESON CJ:   You were within time?

MR WALKER:   That is why this does provide a clear vehicle, it being common ground that, of course, we were in time under Western Australian law.  The anomalous exercise that your Honour the Chief Justice has noted, namely, that the trial judge somehow purported to exercise a Chinese discretion, notwithstanding having correctly held that the Chinese law worked a remission which should have been accepted by the Australian court, does not matter.

McHUGH J:   Well, maybe he did not think there was a complete remission of Chinese law.  After all, Article 146 Is expressed in very curious terms.  It makes you wonder whether the translation is accurate.

MR WALKER:   Well, as in all cases – Zhang is an example – we have the evidence we have.  There has never been any suggestion that the generality of expression “the law of their own country” ought to be ‑ ‑ ‑

McHUGH J:   What the article says in its second sentence: 

If both parties are nationals of the same country or domiciled in the same country, the law of their own country or of their place of domicile may also be applied –

The word “also” itself seems to suggest that maybe they run the two of them together in some way.  Maybe that is what the judge thought.

MR WALKER:   Whether it is applied or also applied, we win under it.  That is why it is decisive.  There is certainly no suggestion, never has been a suggestion and could not now be a suggestion that “may also be applied” are words which mean that the law of their country would have no effect.  If it is to be applied, it would be applied so as to work an outcome.

GLEESON CJ:   Did the evidence show that the Chinese law meant that the Chinese court had a discretion as to whether it would apply Chinese law or Western Australian law?

MR WALKER:   As we read the record, only insofar as the translated text has the word “may”.  It may be that the answer to your Honour’s question is yes.  However, what was not explored was whether “may also be applied” included by silence a category of “But there are cases where it will not be applied”.  There is no evidence of that at all, whereby there was the remission available which, on the expert evidence, meant that the Chinese court would have available Australian law to determine the outcome.  That is why it is important for our special leave application to note that the result of this case, whether my client is compensated at all, depended on an issue simply of whether 146 worked a remission.

GLEESON CJ:   Yes, thank you Mr Walker.  Yes, Dr Griffith.

MR GRIFFITH:   Your Honour, in this case, the applicant’s difficulty is that she was out of time by the applicable law.  Properly advised, by reference to Zhang, she would have appreciated, your Honour, that she should have issued in China within 12 months, because that is the applicable limitation period.

GLEESON CJ:   But there was a discretion, according to the trial judge, under Chinese law to extend it.

MR GRIFFITH:   Your Honour, with respect to that, there is plain evidence – and that was dealt with particularly at page 94 of the application book in paragraph 61 of her Honour’s judgment – that there must be “objective barriers”.  We say, on that aspect, not only was the learned primary judge in error and the appeal court correct, my learned friend’s submissions to this Court advance no reasoning why that matter should be interfered with.

GLEESON CJ:   How did the primary judge, having held that it was Western Australian law that applied, come to treat as decisive the Chinese limitation period?

MR GRIFFITH:   Your Honour, we say, when one follows the course of the judge’s reasoning, amongst other things, he rejected the applicant’s own case, because it had a problem which would have resulted in her not being successful before him.  What, in effect, he did, your Honour, was to take the course necessary to obtain a result that judgment would be entered in her favour notwithstanding the expiration, we say, of the plainly applicable limitation period.

GLEESON CJ:   Why would she not have succeeded if he were correct in saying that Chinese law remitted the matter to Western Australia, and there was no limitation period in Western Australia?

MR GRIFFITH:   Your Honour, one can go not much beyond what my learned friend said.  The judge seemed to be covering all bases in an inconsistent fashion.  With this aspect, it became relevant upon the Full Court’s reviewing of the matter, because it did, we say, apply the correct Chinese law and correctly came to the view that an extension was not possible.

McHUGH J:   The judge may have applied the single renvoi theory, that is, that he accepted the consequence of applying the choice of law rule and only applied the substantive law of the country to which the transmission was made.

MR GRIFFITH:   Yes, your Honour, we say that could be the only explanation.  My learned friend seemed to remain with a foot in either camp, saying that no renvoi is wrong, but did not say whether it is double or single.  We have addressed that issue and say that it would seem explicable only on single, but that is the one that does not have any legs.  We say double renvoi has the problems that perhaps John Morris, who taught me this at Magdalen, your Honour, would like to be disinterred to discuss one day at an absolute level of this Court.  Our point is that this is not an appropriate vehicle.  There is no error demonstrated.  There is no other authority to say that there is inconsistent authority, and we say that it is not a suitable vehicle, just a plain case of a person suffering the misfortune of being out of time.  It may be she has a remedy against those who did not advise her with respect to what quite plainly, under Zhang, is the applicable law. 

With respect to the extension issue, your Honour, we would say, on no view is there a case made out for special leave on that.  My learned friends do not address that issue at all in their written submissions, and we say the appeal court is quite plainly right in accepting the uncontradicted evidence of the expert with respect to these matters, saying, there must be an objective barrier.  And as stated in paragraph 61 of Justice McLure’s judgment, there is no suggestion that anything here is an objective barrier.  The facts are plain, your Honours, that she was out of time.  That is an unfortunate situation in any case, when the limitation period applies, whether it is a year, three years, six years or twelve years. 

If you are out of time, you are out of time.  You look around to see whether you have got your remedy somewhere else; if not, the public policy vindicated by limitation statutes is vindicated, and to say there is a harsh result here is to say merely that that is the result here.  If one says, we must develop what we would assert, your Honours, is in essence a flexible exception, in circumstances, we say, where this Court has made it plain in Zhang that with respect to offshore torts, the position is one where there is an opting by the Court for obvious reasons, for certainty, one will then be introducing a concept of flexible exception.  In the next case, your Honour, that might produce a harsh result.  One does not know.  Our position is that there has been no argument or case put at all with respect to the issue of the determination of the limitation period by the Full Court.  We say that that should not be made the subject matter of appeal. 

With respect to the issue of my learned friend’s submissions, which might be summarised, your Honour, in saying, “Renvoi is a very interesting issue.  I had dinner with Sir Zelman Cowen the other night, your Honour.  He made me come back at dawn and put a copy of this Full Court judgment under his door”.  It is a very interesting issue, your Honours, but it is a question of whether ‑ ‑ ‑

McHUGH J:   You say that the Western Australian court should have ignored the choice of law rule of China, and applied the substantive law of that place.

MR GRIFFITH:   We say that that is so plainly right.  Zhang establishes it, there is no conflicting authority.  Richardson is the only case cited, which we say, in our submissions, your Honour, is not apt.  My learned friends are saying, in effect, this is a case about renvoi.  We say that it is plain from the Court’s decisions that the no renvoi approach is adopted, apart from the reservation with respect to the issue of damages, which is not applicable here.  It has been determined.  My learned friends could only start to get somewhere if there was a single renvoi approach.  We say the argument on that is so scant, it is not worth looking at ‑ ‑ ‑

McHUGH J:   Well, the weight of academic opinion is certainly against it, is it not?

MR GRIFFITH:   Yes, your Honour.  It is no use citing academic opinions.  We can have bigger ones,…..ones, older ones.  That is the controversy, but there is no reason to suppose that single renvoi has legs within Australian jurisdictions, including onshore and offshore torts.  So we say, your Honour, that although it remains a matter of academic interest, the issue here is whether the applicant wins. 

The other difficulty, your Honour, is that if there is a residual argument for double renvoi, in fact here the expert evidence was called by the defendants, not by the plaintiff.  She has not put in any evidence with respect to Chinese law of renvoi.  For all we know, your Honours, they do not have one.  Chinese law is statute law.  When I went there in 1976, I was told by the Chancellor of Peking University that they have no lawyers and no law.  They have advanced beyond that, but one only finds it in a statute, so where one has a provision such as Article 146, with a permissive discretionary provision, one cannot say that that is the law of renvoi for China at all.  It is not something that was explained in the evidence.  The evidence called by the defendant was for a different purpose. 

My learned friends are now saying, “We wish possibly to run a double renvoi argument, or possibly a single renvoi”.  That have no evidence, and the Court has made it plain, your Honours, in Zhang and in Pfeiffer, particularly Zhang, that one must have evidence with respect to these matters ‑ ‑ ‑

McHUGH J:   Well, the double renvoi rule requires that the foreign country have a renvoi rule ‑ ‑ ‑

MR GRIFFITH:   Yes, your Honour.  Well, there is no evidence on that.  All we have is Article 146, the words themselves, as my learned friend says to your Honour.  We know from Zhang that it is for my learned friends to put the foreign law if they are relying upon a double renvoi, and, of course, double renvoi has that macabre dance issue of, well, where do you break the renvoi?  We would say that it is a very scant authority to suppose that in this Court one would vindicate double renvoi in the exceptional situation of an

offshore.  The Full Court’s judgment, with respect to your Honour, is very powerful from end to end, and one can say that no error is demonstrated. 

If my learned friend seeks to run double renvoi, his problem is that he has no evidence, so this is not a suitable vehicle.  Single renvoi, we say, is dead on its feet, and with respect to the issue of the limitation period, your Honour, we say that on no view should there be leave granted because my learned friend did not even – apart from formally raising it in grounds 7, 8 and 9 of his notice of appeal, he has presented no argument for it in his written submissions, and we say just faintly supports what your Honour has taken up with him.  So, on the limitation point, our submission is that it is dead.  It should not get leave in any event. 

That leaves very little, your Honour, to grant leave on.  For my learned friend to agitate general principles of renvoi, with no single or double, or to agitate the issues in the hope that it might fall out in a way which overcomes his basic problem, which is the fact that he was out of time by the applicable limitation period.  It is applicable because this Court in Zhang said so in unqualified terms, and the reservation with respect to damages, we say, has no application here. 

So for those reasons, we say, interesting that it is – and your Honour, all of us would be delighted to take renvoi to the ultimate court of appeal in any jurisdiction – one has here a case where there are no prospects, there is no evidence sufficient to put your foot on a renvoi argument, there is no really tenable argument put forward that even if my learned friend makes some way on renvoi, it will produce a result in his client’s favour, so one can say at the moment there is no reasonable prospect of success in any event, and, we say, no error demonstrated. 

It suffices that the judgment of the learned Full Court can be expressed as the first appeal judgment on this issue within the Australian jurisdiction, and, as far as we can gather, other jurisdictions, your Honour, it can stand, we say, with the authority it deserves on its merits, without the Court at this stage uplifting the level of authority in an unsuitable vehicle for general discussion as an academic exercise, which will not affect the result in this Court.  As the Court pleases.

GLEESON CJ:   Yes, in this matter, there will be a grant of special leave to appeal. 

We will adjourn for a short time to reconstitute.

AT 9.52 AM THE MATTER WAS CONCLUDED