Neilson v Overseas Project Corporation of Victoria Ltd

[2005] HCATrans 192

[2005] HCATrans 192

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
  Perth   No P85 of 2004

B e t w e e n -

BARBARA MARY JOSEPHINE NEILSON

Appellant

and

OVERSEAS PROJECT CORPORATION OF VICTORIA LTD

First Respondent

MERCANTILE MUTUAL INSURANCE (AUSTRALIA) LTD

Second Respondent

GLEESON CJ
McHUGH J
GUMMOW J
KIRBY J
HAYNE J
CALLINAN J
HEYDON J

TRANSCRIPT OF PROCEEDINGS

AT CANBERRA ON WEDNESDAY, 6 APRIL 2005, AT 12.15 PM

Copyright in the High Court of Australia

__________________

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

MR G. GRIFFITH, QC:   If your Honours please, I appear with my learned friend, MS L.G. De FERRARI and MR A.B. LU, for the respondent.  (instructed by Minter Ellison)

GLEESON CJ:   Yes, Mr Walker.

MR WALKER:   Given in this country the approach to jurisdiction required by the decision in Voth, what might be called the choice against Spiliada, there is necessary in this country a view, we would submit respectfully, clear and workable of the common law, unless and until one or other of the Parliaments does something about it ‑ ‑ ‑

KIRBY J:   Or this Court changes its mind.

MR WALKER:    ‑ ‑ ‑ the common law to be pronounced by this Court, in relation to the choice of law, as that phrase and concept is understood for the decision of cases by Australian courts.  In our submission, it follows from the Voth choice anti-Spiliada that it is perhaps peculiarly or characteristically Australian, differently from other common law jurisdictions, that we accept that our trial courts will receive evidence of and seek to apply the doctrines, rules or standards that they perceive more or less clearly, according to the pleading and proof, to be derived from another system’s law, another country’s legal system.

We have submitted, it appears to be accepted by the respondents - it certainly appeared to be the premise of the undertaking both at trial and in the Full Court below, that the common law does not reveal in reasons for decisions, that is, in a binding precedent for courts below this Court, what should the answer be to the question, how does the choice of law for international tort at common law, binding Australian trial courts deciding cases in Australia, operate when the legal system chosen by lex loci delicti following Zhang, itself contains a provision by whatever nomenclature you label that provision – I am going to come back to the nomenclature point – which has the effect of itself referring – to use a word much used in this area – referring or requiring or indicating or suggesting or permitting ‑ ‑ ‑

GUMMOW J:   This case is of permitting, is it not?

MR WALKER:   Yes, or permitting which includes not prohibiting, in this case express permission, another system of law for our case we may confine the difficulties to the particular species of question, namely our law.  Now, there are problems concealed in my attempt to state the question albeit my statement is not excessively brief.  They are problems concealed which require elaboration.  Some of them are as follows:  what does “our law” mean given that we are the happy beneficiaries of a federal system?  That ought not to be seen as anomalous or something which the Australian common law of choice of law would see in itself as being somehow an embarrassment or an incidental or non-essential matter for our common law to take into account.  The common law in this country builds on the constitutional precepts of federalism.

In private international law it is impossible in today’s world, one would go so far as to say it has been impossible since the Americans beat the British in war, to leave out of account in relation to the trading relations affected by litigation and international litigation, the federalism of the United States of America.  One adds to that Canada and India and it suffices to state that this is no mere footnote to the problem to observe that federalism poses a question.

In our submission, that is not going to matter in this case on the facts of this case, but we accept it as a matter which any statement of principle that we essay has to accommodate.

GUMMOW J:   Why would it not matter?  This is a corporation.

MR WALKER:   When I say it does not matter, I am saying that on the facts of this case the result of the application of the principles for which we contend will not be rendered obscure, impossible ‑ ‑ ‑

GUMMOW J:   What is the nationality of the respondent?

MR WALKER:   Your Honour anticipates a question about the content of the Chinese law to which I do wish to come and I will come very quickly to it out of the intended order because it does jell with what I am about to finish.

GUMMOW J:   Yes.

MR WALKER:   My point is, in this case so far as starting with the nebulous description “our law” then calling it “Australian law” one descends simply treating one or other of the parties or both of them as what might be called the prepositus and asking how is that person treated in the court of decision.  The court of decision here was Western Australia, which presents no difficulty because we are not Americans, in relation to the common laws, the common law of Australia, and in relation to statutes requires familiar forum techniques of construing whether the statutes command the way in which the courts go about their business or provide so‑called substantive matters which fall to be determined according to the operation of the common law choice of law rules.

May I come immediately to what Justice Gummow has raised.  Could I come about it crabwise because one cannot understand 146 without seeing the setting in which it appears.  In the appeal book at page 115 appears some of “Chapter I – Fundamental Principles” in the General Principles of “Civil Law of the People’s Republic of China” in the CCH translation, which I regret to say is the only one proved.

KIRBY J:   Just before you plunge into this, we have to have the legal setting and there is no statute yet, though I think there was a Law Reform Commission Report for legislation, so we are into the common law of Australia to be applied in this Court where they are into the realm of Zhang and Pfeiffer.

MR WALKER:   Zhang, yes.

KIRBY J:   In Zhang.  Is there a passage in Zhang which most clearly says what is to be done in a case like this?  Did the Court in Zhang express clearly a rule that is to be applied in a case of this kind, at least, as a general approach?

MR WALKER:   It would be disingenuous for me to say yes, but as a, as it were, debating point I can say yes but that assumes my conclusion.  We say that the lex loci delicti, as your Honours have read in our written submissions, will include provisions such as Article 146 permitting the law of the parties – I am trying to avoid the words that Justice Gummow has asked me about at the moment – to be the law of decision, and that would have led by route that I have to track and demonstrate back to the relevant Australian law.  Now, one does not get that out of Zhang because Zhang did not deal with anything in the nature of so-called renvoi.

McHUGH J:   One of the problems about this case is the fact that the reference back is permissive and ‑ ‑ ‑

MR WALKER:   Yes.

McHUGH J:   I have to tell you that going into the special leave application, I thought that was the reason why we should not take the case on.

KIRBY J:   Well, his Honour said that in the special leave hearing.

McHUGH J:   It is one thing where the remitting country will remit the matter back.  You can then say that the remitting country has shown no interest in determining the issue and, therefore, there is no conflict with the rationale of conflicts law for the forum court to deal with the matter.  But how do you deal with a case like this where the court to which the court of the forum says the matter should be decided then has a permissive, or discretionary, provision?

MR WALKER:   Your Honour, if you will forgive me, that is a large question.  It is really our case; that is, to answer that I need to put the whole of my – all but my Article 137 argument.  I wonder if your Honour will permit me to develop my answer.

McHUGH J:   Yes.

MR WALKER:   May I, at the outset, without reservation, accept that that is a difficulty and that it is a major matter for us to address in our argument.  Can I – I hope, keeping in mind and addressing the concerns your Honour raises by asking that question, then proceed back to the General Principles in order to continue my attempt to answer Justice Gummow’s drawing to attention of the nature of 146, not only in its permissive aspect but in how it refers to the actors or the parties.

At page 115, in Chapter I – Fundamental Principles, one finds Article 8 which is the proper starting point, we submit, for the questions at hand in relation to Chinese law, and I stress this is in English, there is no evidence that this is, as it were, an authorised translation - why would it be, it is not a treaty - and your Honours will find less than perfect idiomatic English in this translation.  It is a familiar experience, I regret to say, in trial records involving proof of foreign law.  The same is true of the testimony.

HAYNE J:   There is lurking around this part of your argument the question of whether the courts, this Court in particular, are entitled to take the text and construe it.

MR WALKER:   Yes.

HAYNE J:   Or whether those are matters that are to be only the province of expert evidence.

MR WALKER:   Yes.

HAYNE J:   Now, not now while you are embarking on the taking us through the text, but at some point we will need to be alerted to what you say about that subject.

MR WALKER:   Yes, and may I say at the outset of my attempt to answer that, which I also accept is a fundamental matter of method, that we are commanded by our law that the foreign law shall be proved as a matter of fact, that is, by evidence.  The foreign law in many, if not all cases, will have been promulgated and is available or published in its own territory, in another language.  Neither Australia nor its courts are notoriously fluently polylingual and we do not have advantages of idiomatic understanding of all sorts of other languages and, indeed, one knows that even when the language is called English it may not be that our approach to its understanding would be the same as those who used it or use it day by day. 

So I start my answer to Justice Hayne’s observation by observing that, at the very outset, we are not dealing with the actual Chinese law, we are dealing with that trace or indication or picture of it, imperfect, a sketch, Professor Kahn‑Freund’s metaphor, which starts with a translation from Mandarin to English, and to an English which has no status apart from that which is lent by the parties’ consent or the judge’s decision in relation to its evidentiary deployment, and one ‑ ‑ ‑

HAYNE J:   But it is related to the point which Justice McHugh raised with you.

MR WALKER:   Yes.

HAYNE J:   When you say refer to the law of China, does one stop at the inquiry about text?  Does one go on to examine the manner of application of the relevant Chinese text within the courts of China?

MR WALKER:   Probably not in the latter.  The evidence ‑ ‑ ‑

HAYNE J:   But – if I can just finish it – in relation to what would happen when Article 146 says “may”.  Now, these are large questions and I am taking you out of your way.

MR WALKER:   The brief answer to that last one is no, and partly that will have to do with the way the parties chose to frame and fight that issue, it not being possible, as your Honours all well appreciate, for me to take you to an exemplary Bullen & Leake exchange of pleadings, statement of claim, defence and reply, on the question of the relevant foreign law now before the Court.  Rather, I fall back on Moustakis v The Water Board and can and will show your Honours, in due course, the way in which the parties fought the case so as to make Article 146 one of the many issues.  It is to be recalled, of course, and, in due course, I will address what might be called the Allstate issue, which is called up by Justice Hayne’s question. 

So, at the outset, I am already in jeopardy of assuming in my favour certain answers to Justice Hayne’s question by inviting your Honours’ attention to the exhibit which is the private English translation of the General Principles.  However, that is all we have, and, more to the point, that is all a court could ever have, and because the law is made in words there will always be, unavoidably of its nature and unexceptionably, a requirement for a court to conduct at least that amount of interpretation or construction of a text said to embody, reflect or demonstrate the content of a foreign law, because our own private international law at common law requires our courts to make a decision by applying rules or standards to be gathered from the content of another legal system. 

Making a decision in the quintessential, judicial task of ascertaining the law, in this case ascertaining as a matter of fact, the semantic or normative or descriptive content of rules or standards and applying them to the facts then as found, particular to the parties or the events in question, that always involves understanding and interpretation so as to permit application.  That is why Allstate – to use that as the convenient compendium of the common law approach concerning the division of function between expert foreign law witness and trial judge – that is why, in that compendium, one finds and attempt to distinguish between an explanation of what the law is and how it operates.  The second part is difficult because it is so close to the forbidden territory, that is, forbidden from the expert and reserved to the trial judge, how should that be applied to this case? 

That is not a complete answer to Justice Hayne, but it does announce our position on the matter, that what I am now doing is not trespassing, that this is what the court, the trial court, and all courts in Australia have to do.  They have to look at the evidence and try to understand it.

HEYDON J:   Do you have a reference to All State?

MR WALKER:   Yes.  It is Allstate Life Insurance Co v Australian and New Zealand Banking Group Ltd (1996) 64 FCR 79. It is cited in our footnote 11 on page 8 of our written submissions in-chief.

Now, Article 8 on page 115 of the appeal book says:

Unless stipulated by law –

and we interpolate, we would invite – it appears that my friends would join us in this – your Honours to consider the General Principles obviously part of that law.  To put it another way, on an evidentiary level, there was no question raised of a kind that this Court is familiar with as to whether or not that reference to law meant a law other than these General Principles.  In any event, one has to reconcile the different articles of the same General Principles.  It continues:

the laws of the People’s Republic of China shall apply to civil activities carried out within the territory of the People’s Republic of China.

Pausing there, that is a claim to territoriality, to use a term which may have varying content, but which has a large and useful basis of consensus in writers, both judicial and scholarly in this area.  Of course there may have been, but were not in an evidentiary fashion, debates had it mattered as to what are civil activities and are the activities in question in this case, were they civil activities, and what does “within the territory of the PRC” mean?  That does not arise in this case as a matter of dispute.  The next sentence of Article 18 again says:

Unless otherwise stipulated by law –

leading to the same observation about that.  It goes on –

the provisions of this Law –

with a capital “L” – I am not able to point to any evidence about typography or layout as that may assist your Honours or not –

with regard to citizens apply to foreign nationals and stateless persons within the territory of the People’s Republic of China.

Now, that requires, in particular, attention to what is then said in the critical articles which appear to lie at the basis of the dispute between the parties.

Before I come to those critical articles, may I draw to your attention what appears on pages 121 and 122.  These were not critical, that is, it would appear, sub silentio perhaps, by implication arguably, that the parties were ad idem about how these applied to the particular controversy.  This is Chapter III headed “LEGAL PERSONS”, and there are a number of concepts which are too detailed for me to spend time on, but you will see that Article 36 starts off by stipulating that “A legal person is an organisation” et cetera.  Article 37 sets out what appear to be definitional criteria.  They must fulfil certain conditions and number (i) of those is:

it must be established in accordance with the law –

Article 39, interestingly, uses in the translation the expression “domicile”, and says:

The location of the main place of work of a legal person is the domicile of the legal person.

I am quite unable, bereft of any evidentiary material, to suggest how one might, for example, understand the similarity of that to headquarters doctrines in American PIL and, with respect, we think none of this will arise, it forms no part of the recorded controversy between the parties at the hearings nor in the reasons for decision.

The top of page 122, in Article 41, your Honours will find a reference to not only “Sino-foreign joint equity enterprises”, and “Sino-foreign co-operative enterprises”, but also things called:

enterprises with sole foreign investment established within Chinese territory ‑ ‑ ‑

GLEESON CJ:   Mr Walker, there is repeated reference in these articles with capital letters to a “People’s Court”.  May we take it that for practical purposes that just means a court with a small “c”?

MR WALKER:   Yes.  Another way to look at that is ‑ ‑ ‑

GLEESON CJ:   All the courts in China are called People’s Courts, are they not? 

MR WALKER:   Yes. 

GLEESON CJ:   The supreme court is called the Supreme People’s Court.

MR WALKER:   Yes.  If I may suggest, a linguistic analogy is the old expression, the King’s or Queen’s Courts, and no doubt it was a deliberate contrast.  One has, for example, if I may give this reference in response to the Chief Justice’s question, at page 167 – now, this is not the General Principles, this is the Code of Civil Procedure.  One finds in:

Chapter II – Jurisdiction

Section 1 – Jurisdiction by Level of Court –

that Article 18, for example, in what is obviously a fundamental and important provision, refers to what is called:

a basic level people’s court –

and there is a hierarchy, to which the Chief Justice has referred.  As we understand it, there is no suggestion in the evidence, nor any argument at any level, including in this Court, against us, distinguishing, let alone introducing, hierarchical stare decisis emanating from the decision of individual cases as opposed to another source of law, to which I will be coming, with respect to any different levels of the People’s Courts in China.

I have drawn to attention this notion at the end of Article 41 on page 122, this idea of:

enterprises with sole foreign investment established within Chinese territory –

but I cannot tell you that that was ever the subject of investigation or deployment in this case.  There have been assumptions made by a combination of pleading, non‑pleading, proof and non‑proof, argument and non‑argument, whereby these matters, which are clearly relevant, were the matter res integra, in an evidentiary sense, where there is a trial.  These are not considered in the material.

Could I take you then to the critical one which is at page 135, Article 106.  That is the critical one because without it there would be no liability in China.  Now, your Honours may have picked up that there was, as it were, a bit of a climb-down by Mr Liu, the expert, between his evidence-in-chief in written report and his cross‑examination, but it is not about a matter which was critical or which will much inform, except by engendering some caution in approaching his evidence, the issues between the parties here.  That was the issue concerning there being no concept of negligence in Chinese law.  Yes, maybe – certainly not by that name – but there was, as is well established by the material which cross-examining counsel on behalf of my client established, there is certainly a concept of fault.

Now, in Article 106 one sees that textually as well.  One starts by noting the, as it were, normative language in reverse in the first sentence:

A citizen or legal person –

and that is a description that picks up those provisions I have drawn to your attention –

or fails to fulfil other obligations –

other than a violation of a contract –

shall assume civil liability.

And then again:

A citizen or legal person –

and “legal person” is the Chapter III concept –

who though his own fault infringes upon . . . property or upon another person, or who harms another person, shall assume civil liability.

If he is not at fault but the law stipulates that he shall assume civil liability – idiomatic English would perhaps have included some word like “nevertheless” or “despite” – he shall assume such liability.  There is a danger of redundancy in such a statement; that is, the law is the law is that law, but one can see that there is, therefore, what we would recognise in conceptual terms as fault liability and no fault liability.

Now, that is the critical provision but the one upon which, I suppose, everything ultimately turns is 136 and 137 in light of what happens with 146.  One finds the first two of those, which should march as a pair, at page 140, in Chapter VII, “Limitation of Actions”.  Article 135 has a general limitation of two years and Article 137 will tell you in its first sentence how one starts the running of time.  Article 136 provides specifically for a shorter period of one year:

(i)       demand for compensation for bodily harm -

and that, with the modicum of interpretation that is inevitable in any such application of our choice of law rules at common law, must have applied if this law is applying to my client and, as your Honours know, the facts mean that 12-month limit, if that was all that was known about the matter, would have been fatal to the case.  Now, Article 137 was not drawn to attention in his report text by Mr Liu.  However, in Socratic dialogue with the cross‑examiner, 137 did become the subject of his expert opinion in cross‑examination.  I should make it clear, of course, the whole of the General Principles were tendered.  There was no attempt at concealment of any of its provisions by, as it were, a cut and paste excerpting exercise.

HEYDON J:   Did he not mention Article 136 on page 263? 

MR WALKER:   I am sorry?

HEYDON J:   Did you not say that he did not mention Article 136?

MR WALKER:   No, 137.

HEYDON J:   I see, right.

MR WALKER:   No, he drew to attention in his report that 136 provided a one-year bar, bang, extinguished the cause of action, finish.  He certainly did that.  What he did not draw to attention was 137 which has three parts to it, really quite distinct.  The first says, to use our language, when does a cause of action accrue so as to start the time running.  The second sentence is the period of ultimate repose and the third sentence was a relatively familiar provision generically to us, namely a discretion under special circumstances to “extend the period of limitation of actions”.

GLEESON CJ:   That is a point at which it might have been possible to have a pretty close inquiry as to what the original text said that has been translated as “under special circumstances”.

MR WALKER:   Yes, but it did not happen.

GLEESON CJ:   I mean, it might have meant something like for good and sufficient reason, or ‑ ‑ ‑

MR WALKER:   There is some content given to which I am going to come, but alas not so directly as being an expert explanation of what that phrase itself meant as a matter of Chinese law.  There is an answer which is pretty close to that, namely that as a matter of Chinese law, fairness and justice would govern. 

GLEESON CJ:   Justice Wheeler seems to have applied that as meaning under unusual circumstances.

MR WALKER:   Yes.

GLEESON CJ:   What was the basis for that?

MR WALKER:   I am going to come last of all to the Article 137 argument, but in a nutshell the basis of that seems to be the overuse, as we would put it, or the excessive reliance upon, some implications of Mr Liu’s testimony, which included the reading of what appears to be a judicial form of binding authoritative judicial gloss employed in China, to which I will be coming, from the Supreme Court, which in turn was translated by him in the witness box as involving what were called objective barriers, but my submission is it is not clear whether they were exhaustive of the possible special circumstances or merely a paradigm case.  There is no satisfactory answer as to why “special” was in what had to be a House v The King kind of challenge, treated in the Full Court as meaning rare or difficult to imagine.

GLEESON CJ:   Was there any evidence in this case as to why action was not commenced within one year of your client becoming aware of her injury?

MR WALKER:   No, there is nothing in the record.

KIRBY J:   I think in your written submissions you invite us to just infer that it was because they were away.

MR WALKER:   I cannot take it further than from what appears in the record.  There was an earlier discontinued District Court action about which all I can say is, it was discontinued.

GLEESON CJ:   But did she set out to make out a case of special circumstances, whatever exactly that phrase might mean?

MR WALKER:   Ultimately, yes, and I will come to that in due course.  Yes.  And the trial judge made a determination.  Why he did so, bearing in mind the decision he had made under Article 146 – to which I am about to come – is a conundrum I cannot solve, unless it was in the familiar fashion of, “Lest I be wrong, here is what I would have done under what then would have been the regime in question”.  Those words do not appear, but obviously that is something which this Court would, in general terms, approve in the interests of functional efficiency of determinations. 

GLEESON CJ:   Well, it might just have been belt and braces.

MR WALKER:   Yes.  It is certainly not a defect in his reasoning to have done so.  Can I then, before I come to 146, come to the whole of Chapter VIII.  That comprises Articles 142 to 150 in this translation.  It is headed: 

APPLICATION OF THE LAW TO CIVIL RELATIONS INVOLVING FOREIGNERS –

I have no material by which I can invite your Honours to give no weight, full weight or something in between weight, to what is suggested by the heading of sections.  That may matter, may have mattered, had there been such material.  There is not, because, as your Honours will readily see from some of the articles to which I will go, it does not follow from the discrete terms of the individual provisions that follow in these articles that they are necessarily civil relations involving foreigners, as opposed to some foreign element not necessarily being between foreigners.  For example, Article 143 concerns the Chinese denizens of other countries, countries foreign to China.  That obviously does not match Chapter VIII’s heading.

GLEESON CJ:   And also is permissive in terms?

MR WALKER:    Yes, it is not the only one that is permissive obviously.  It is permissive.

GUMMOW J:   Sometimes they are mandatory, though.

MR WALKER:    Sometimes they are mandatory, sometimes they are permissive.  May I observe then about Article 143 that it would be difficult, if one was inclined to jurisprudential taxonomy – and we do not suggest one should be, but if one were, it would be difficult to call that a choice of law rule or provision, bearing in mind that we use, when we are talking about our own common law – no question of jurisprudential taxonomy, it is the way the common law is framed in words – we use choice of law to describe that system of rules and principles which provides the rules or standards for the determination of the substantive dispute once it has been determined by common law, our deciding court, the forum, that this is a case calling for the application of choice of law rules which always involves some foreign element, a question which is answered separately from the related issue of jurisdiction, related but conceptually and procedurally quite distinct.

Your Honours will have noted that the Full Court proceeded – our learned friend’s argument proceeds - the so‑called majority in this ballot of scholarship that both the Full Court and our learned friends bring to attention - on the basis that there is something that can be identified in a foreign country system of law using this label, holus bolus transferred from the common law, the Australian common law, other common law, namely, choice of law rules and, in our submission, that ought to be looked at askance because sometimes they will be serving functions similar to a choice of law rule, sometimes they will be serving functions which are simply to accord different legal outcomes according to discriminations between different statuses of persons.

For example, here, in Article 143, the discrimination is between a Chinese person at home and a Chinese person abroad and, in our submission, one has to be careful before therefore accepting that our common law would express a principle which applied, say, to a Chinese system of law, the notion that one will be able to spot or identify or characterise one of its provisions as a choice of law rule not to be taken when lex loci delicti indicates China.

GUMMOW J:   There is a question of characterisation, is there not, as to what we mean when we say the lex – the law of the place of the tort, what we mean by the law.

MR WALKER:   That is one way of stating the only and ultimate question in this case, yes, your Honour.

GUMMOW J:   We already ourselves seem to take upon ourselves some analysis of what is procedural.

MR WALKER:   We do.

GUMMOW J:   And then visit that upon the foreign legal system.

MR WALKER:   We do not really visit upon them.  None of our decisions affects what they ever do to decide their cases. They may never come to know of it.  They may not, it is surprising to be told, I suppose, even be interested.  We do not affect them.

GUMMOW J:   The problem that arises in all the academic writing is that we then seem to impose upon them some dichotomy between internal and choice of law rules which these sort of provisions show it is not so simple.

MR WALKER:   Yes, quite.  Exactly so.

HAYNE J:   And thus the choice starts to come closer to a choice between attempted replication of disposition in the other court, compared with disposition of a hypothetical case, a case in which there is no foreign element whatever but otherwise factually the same or similar.

MR WALKER:   Yes.  And, like all such exercises, very early on one has to work out what are the counterfactuals that one inserts and what are the factuals that one takes out.  What are the differences between what is truly the position of the parties that you are forced to imagine by the hypothesis that you pose, such as if this were being heard in China what would happen?  Do you have to investigate jurisdictional issues?  Do you have to investigate their view on Spiliada, for example?  So far, the answer has been either silence in response to such questions, or no, you do not.  We do not have to go into that in this case.  May I, noting the time, simply add this in response to Justice Hayne’s last point.

Because an Australian court is the deciding court, it could be called the forum, but it is the decisional aspect that I wish to emphasise.  There is no equivalence of any kind between a court of the foreign system in question and the Australian court.  There is no court of the foreign system which is engaged in deciding anything, nor is it a forum.  There may be an imaginary court along the path of any of the several methods that might be followed by the common law but there is no actual court deciding anything.  There is only one decisional court here.  The judge who is going to make the decision is, except for happy or unhappy as the case may be, irrelevant coincidences, going to be somebody who is not trained in the foreign law; who has not practised the foreign law; who has certainly not decided or adjudicated upon the foreign law as a judge; has never had errors or misunderstandings by him or her in relation to that foreign law corrected within any hierarchical appellate system manned by experts in that foreign law.  That immediately shows, before one even gets to the substantive procedural question, that the simulacrum that on any view of this matter is what people are arguing about, to be attempted by the application of lex loci delicti is, of its nature, again not an embarrassing incidental but of its very nature overtly not very exact at all.  Then one adds to those circumstances ‑ ‑ ‑

HAYNE J:   Well, not very different from any determination in a court of a question which is the subject of expert evidence.

MR WALKER:   Yes.  However eminent the expert evidence, I have never heard of a judge who wishes to undertake himself or herself cranial lobotomies, for example.

GUMMOW J:   Say that again.

HAYNE J:   I do not know, Mr Walker.

MR WALKER:   Judges do not become doctors by constant reception of expert evidence.

HAYNE J:   You said we do not wish to.

GUMMOW J:   You have not done enough patent cases, Mr Walker.

MR WALKER:   Unfortunately, that would be criminal.

GLEESON CJ:   Is that a convenient time?

MR WALKER:   Yes, your Honour.

GLEESON CJ:   We will adjourn until 2.00 pm.

AT 12.59 PM LUNCHEON ADJOURNMENT

UPON RESUMING AT 2.01 PM:

GLEESON CJ:   Yes, Mr Walker.

MR WALKER:   Your Honours, to complete my remarks in response to Justice Hayne’s observation, there is of course then the substantive procedural distinction which, however it operates, it still being part of our law:  see Zhang, will mean that, to paraphrase Professor Kahn-Freund, Australia being A, the foreign country being B, it is not the same for country A to apply, using its procedure, the substantive provisions of the law of country B.  That is not the same exercise as the courts of country B applying the laws of country B, and that is a difference which is embraced, although such disparity as it may produce between the resulting country B and the country A may be deplored, but it is embraced by the fact that our doctrine of common law choice of law, of lex loci delicti for international tort involves a distinction of substance and procedure.

There are also laws that it may be difficult to characterise as either substantive or procedural. In terms of their effect they are even more devastating than many substantive provisions in terms of what they are directed to.  They appear to be directed to the operation of courts, hence suggestively, procedural.  I am referring here to what might be called jurisdictional provisions which serve in other systems the function which the choice of law provision serves in our system, namely, to avoid disharmony of outcomes depending upon forum.

A jurisdictional provision such as the courts of this country shall not hear cases of a particular kind with foreign elements, or more likely, the courts of this country have a discretion quasi‑Spiliada not to hear cases of this kind if there is another forum somewhere else more appropriate.  It is difficult to understand how any classification or characterisation system would see that as a choice of law provision, and yet according to the argument against us, if you had a principle which applied the lex loci delicti apart from its choice of law rules, you might, depending upon a view you took as to what those jurisdictional provisions are, are they substantive or procedural, you might end up with a result if you decide they are not choice of law, whereby the Australian court solemnly decides that in deference to internationalism and territorial concerns, they will decide a case the way say, Ruritania would decide it, the way Ruritania deciding it being solemnly determined on a factual inquiry which shows that Ruritania would not take the case on at all.

That, in our submission, is the kind of conundrum which is created by the argument against us which uses a concept, namely choice of law rule, as a conceptual carve out from other country systems of laws without, in our submission, giving due weight to the procrustean nature of the procrustean bed nature of that whole exercise. 

HAYNE J:   But the argument you just advanced is but one example of the general proposition applicable throughout this whole field of discourse.

MR WALKER:   Yes.

HAYNE J:   Any criterion you adopt can produce endless intellectual gains or analyses.  Any rule you adopt can generate a hard case.

MR WALKER:   Yes.

HAYNE J:   Therefore, to argue from a premise which assumes out there some platonic idea ‑ ‑ ‑

MR WALKER:   Is fallacious, we accept that.

HAYNE J:   It just gets you nowhere.

MR WALKER:   We are offering our principles in our submissions as best practical fit, least likelihood of the most undesirable outcomes, and we compare it, we hope unflatteringly, with similar qualities of the argument against us.  Now, there is another and last point I need to make about the “lost in translation” exercise, to which Justice Hayne has drawn attention.  What about critical, they are called in our jurisprudence, fundamental matters such as some of the privileges that litigants or persons who may be important to a litigant’s success may enjoy, and what about evidence?

In our submission, all of these are matters which, when one regards the changing attitude to limitation periods, substance or procedure, when one regards the devastating effect of what I have called jurisdictional provisions, all of this suggests that one ought not to be going about using a concept of our common law, private international law, namely, a choice of law rule, as if it were readily transferable to the very foreign systems which our choice of law rules require us to have pleaded, proved and applied by local judges.

In our submission, the fact that so much must be lost in translation, both literally and in an extended figurative sense, means, as Justice Hayne has put and we respectfully adopt, that no set of principles ought to be adopted by this Court as the common law in Australia on the basis that one rejects anything which cannot attain near to perfection.  It is, again to quote and paraphrase from Professor Khan‑Freund in the articles to which the parties’ attention was drawn by a message from the Court, this calls for pragmatic as well as principled responses.

GUMMOW J:   Granting all of that, how do you then fit in the problem you deal with in footnote 11, with reference to Allstate, in terms of the proof that is to be offered in this case where the law is of the kind that Justice McHugh is putting to you?

MR WALKER:   Yes.

GUMMOW J:   You see, in Allstate there is reference to Justice McLelland’s judgment in Surgical Corporation v Hospital Products, I think, where evidence went on not only this is the law of New York, or wherever it was, as to how you discern a fiduciary duty, but this is how it would fall out in this case.

MR WALKER:   How would a judge deal with this particular material.  A judge would take this away from the jury because.

GUMMOW J:   Yes.  That is said not to be proper and those affidavits get rejected.

MR WALKER:   Yes.  That part of the affidavits, yes.

GUMMOW J:   That may be a step too far, but there is an intermediate step, which is this sort of law.

MR WALKER:   Quite so, partly of a kind that I tried to describe in answer to an earlier question from Justice Hayne, that is, how much can we interpret?

GUMMOW J:   Yes.

MR WALKER:   It is written in words we have to read.  That is interpreting.  We must understand it, before we can purport to apply it.  That is interpreting and that is the function of the trial court, not of the expert evidence.  But, to go back to a question of the Chief Justice, what about expert evidence about how a discretion granted in apparently untrammelled terms ought, by the law of the foreign country, be administered?

HEYDON J:   Justice Gummow held in National Mutual, did he not, that you could have evidence as to how the foreign courts administered that discretion?

MR WALKER:   Yes, quite, and your Honour anticipates me.  When I cited the Allstate, I omitted the all important number.  According to the Federal Court Reports, this is, for their reports indexing, this is (No 6).  For the actual court’s operation, in litigation it sounds horrendous, it was No 33.  So it is Allstate (No 6) according to Federal Court Reports at 64 FCR 82 where Justice Lindgren draws together the principles to which Justice Gummow has made reference and at F attempts this generalisation:

The distinction is between identifying and expounding, in general terms, the scope, meaning and effect of relevant statutory and non‑statutory foreign law (content evidence) and opining how that foreign law applies to the facts of a particular case (application evidence).

HAYNE J:   Now, that is a dichotomy that may encounter difficulty of application in the facts of this case.

MR WALKER:   Yes, very much so.

HAYNE J:   And seems to be a dichotomy founded perhaps ultimately in notions of experts giving evidence of the ultimate issue, perhaps related to that.

MR WALKER:   Yes.  Now, this is not an area where it seems to us that we could call in aid the Evidence Act’s abolition, for those happy jurisdictions governed by it, of the ultimate issue rule and one finds, in any event, reference to the ultimate issue matter at the foot of page 84, top of page 85, in relation to the reasoning of Justice Lindgren.

HAYNE J:   But the learning that has developed, starting with Di Sora v Phillips and moving forward, may well be founded upon happier, simpler days when the systems to which reference was to be made were at least understood as being rather closer to the home life of our own dear Queen than now is something that is encountered.

MR WALKER:   It is tempting to suggest, though I have no authority to support this, that, by dint of the imperial experience at the broadest reach territorially and politically of the British empire, there was probably available intellectually far more access to commercial and legal dealing with foreign systems, including an English translation, than is probably now the case, perhaps perversely.  That is, the courts of the empire, where a more centralising compulsory point of reference under ‑ ‑ ‑

GUMMOW J:   The Privy Council had to deal with all sorts of law.

MR WALKER:   Quite.  It may well be, as Justice Hayne points out, we are talking about a different time where the differences may well have deprived this time of some of the advantages; in other words, it is not an inexorable progress to the present time.

HAYNE J:   But also founded upon unstated premises that the legal system of foreign countries will draw radical distinction, for example, between legislation and judicial function.

MR WALKER:   Quite.

HAYNE J:   A distinction of a kind that may not find as ready application in connection with the legal system of the People’s Republic.

MR WALKER:   Quite.  For example, the old chestnut about whether French courts have any concept of stare decisis, to which one can get a variety of answers even today:  “No” emphatically, “Yes”, properly understood and “Sort of” in the middle.  The same is true in relation to other matters of points of comparison and contrast between our system and systems on the continent.

Your Honours, what we get from Allstate is that there remains a judicial function which it is not proper, to borrow Justice Gummow’s words in the question to me, for the witness to intrude.  We would put it another way.  An area where the judge cannot delegate his or her functions to the expert; similar to the way in which this Court has not countenanced attempts to have experts tell tribunals of fact whether a witness is telling the truth or not, whether by polygraphs or other psychological material.

It may be difficult to articulate that in more than a division of function sense, and it may be that there was a lot of virtue in the ultimate issue rule.  For present purposes, in our submission, it has to be appreciated that the testimony of Mr Liu in this case did include some reference in general terms, to use the expression of Justice Lindgren, to the exercise of discretion, but in order to observe the second limb of Allstate, that is, the embargo on experts giving application evidence, there was ample room for Justice McKechnie to do what he did under Article 137, with which I will deal separately and later. 

I am in the course, however, of answering a question about Article 146, and it is to be borne in mind that he also made a decision under Article 146 about which Mr Liu gave evidence but not evidence, it would seem, based upon any of his own experience.  In that respect, it was uncannily similar to the evidence he gave about Article 137 when he also had no personal experience.  Now, that does not mean it was not admissible evidence but, in our submission, the evidence he gave on both in order to be understood as going no further than the law permitted it to be used, treated as content evidence, did not in either case foreclose the application of the law by the judge, notwithstanding one can easily infer that Mr Liu, had he been a Chinese judge, would have reached decisions different from the West Australian judge.

GUMMOW J:   The reference to National Mutual that Justice Heydon referred to is 22 FCR 209.

MR WALKER: It is in the collection of authorities which are noted in the parentheses that start at 64 FCR 82E.

GUMMOW J:   Page 82?

MR WALKER:   Yes, at page 82E there is a list of authorities, and National Mutual is found just above letter F.

GUMMOW J:   Yes.  Well, there is more to it than that.

MR WALKER:   I am just saying.  Your Honour gave the reference.  I am saying Justice Lindgren had that before him.

Your Honours, can I go back, please, to the General Principles at page 141 of the appeal book.  There are, of course, provisions in these articles which do resemble, so as surely to be characterised, if one had to do it, as choice of law rules.  Thus for ‑ ‑ ‑

GLEESON CJ:   I do not suppose the second sentence in Article 146 could happen to be the flexible exception?

MR WALKER:   Yes.

GLEESON CJ:   It could not be possible, could it, that this was actually written by a common lawyer and then translated into Chinese, and the common lawyer expressed the first paragraph of Article 146 by reference to the law of England?

MR WALKER:   Yes.  It is unlikely that it was a common lawyer, but it may have been a draftsman educated not only in Germany, but also in England, yes.

GLEESON CJ:   Well, if somebody knew of a principle that says, “You apply the lex loci delicti, but that’s subject to a flexible exception”, you might write that in the way that the first paragraph of Article 146 is written.

MR WALKER:   Yes.  I am about to come to flexible exceptions in other systems, in further answer to Justice McHugh’s question to me, in just a moment.  Going back to the previous page, Article 144, for example, is fairly clearly a combination of a choice of law rule and perhaps also an element of Mozambique, although it has not got the full jurisdictional element of Mozambique.  In relation to Article 145, on the foot of 141, top of 142, that looks pretty similar to – that looks to be a choice of law provision.

The first sentence of 146, out of context, unless you can do things from its context, of course, speaks generally, both inside China and outside China, between foreigners, between citizens, between a foreigner and a citizen.  That must be so, because the second sentence contemplates a possibility, not a certainty, of both parties being nationals of presumably some other country.  That is, one does not go through the nonsense of being a national of China, therefore, the law of their own country may also be applied.  That is not literally possible.

So Article 146 is partly a choice of law provision in the sense that we understand it; namely, the importation of a foreign system of law because the case has some foreign element, and partly also a declaration of territoriality, which is in accordance, of course, with Article 8, to which I drew attention at the commencement. 

The second sentence of 146 is the one that we ultimately, as the issues were fought at trial, called in aid as a fallback position and which now is our position.  That is the one that involves the two elements raised by your Honours Justice Gummow and McHugh.  Justice Gummow raised the question about how does one understand “apply”, how does one consider this case in relation to this notion of being nationals or domiciled?  And Justice McHugh asked, what about the merely permissive nature that one sees from the words “may also be applied”?

As to the first of those matters, as your Honours know from the trial judge’s reasons which at this point are found at page 351, paragraph 204, he said:

I propose to apply Article 146.  It gives me a right to choose to apply the law of Australia because both parties are nationals of Australia.

Now, “nationals”, there was no evidence that enables me to say one way or the other that in Chinese law “nationals” describe citizens and “citizens” mean natural persons, although that would appear that citizens are natural persons from the earlier chapters concerning citizens and citizenship.  In particular, there was no evidence to which I can point as to whether “nationals” is thus a concept which can apply to corporations or to what are called in Chapter III of these General Principles legal persons, to which I drew attention earlier.  It would appear that it was always the defendants’ case below and here, that they are a legal person.  Certainly, the parties have fought the case on that basis and looking ahead in the provisions of Chinese law to the Civil Code that I draw to your Honours’ attention the provisions of its Article 5 at page 165 which uses, apparently from the same stable of translators, the following expressions:  “A foreign national”; a “foreign enterprise or organisation” and that is in an article which gives them:

the same litigation rights and obligations as a citizen, legal person or other organisation of the People’s Republic of China.

Subject to reciprocity.  Now, this is a use of words which was not explored in the evidence below and is simply in the record for this Court, nor was it explored in the Full Court below, that is, the issue raised in the notice of appeal in relation to section 146 comes in two places but, put together and read in light of the reasons of Justice McLure, it is clear that Article 146 was challenged in its deployment by Justice McKechnie on only one ground, namely that it fell to be characterised as a choice of law rule and thus ought to be excised or ignored in the Australian choice of law exercise in the Western Australian court of so-called applying Chinese law.

GLEESON CJ:   Is it fair to say that the case was conducted in the Supreme Court of Western Australia on both sides on the basis that all parties were nationals of Australia?

MR WALKER:   Yes, although there is an unspoken alternative, namely both domiciled and ‑ ‑ ‑

GLEESON CJ:   It does not seem like a surprising assumption.

MR WALKER:   No, nothing I have said was intended to be a criticism of those that precede me in the brief at all or on the other side, but in terms of what is an issue now, what was the basis upon which the parties by their silence as well as their speech about the content of the foreign law proceeded, they treated this corporation and this lady as being both nationals, alternatively, both domiciled.

GUMMOW J:   Where?

MR WALKER:   In Australia, same country, Australia.  There was no exploration of the federal question to which I have referred.  In particular, there was no reference, and I have not found anything in my researches of the text that we are confined to in this appeal book in the General Principles, there is absolutely no reference to how one deals with federal systems which have individual law districts within them of a kind that, for example, the old GATT Treaty used to have.  Your Honours, I am told by my learned friend – I am obliged to him – that what I have just said on this topic is common ground at the Bar table.

Returning to Article 146 at page 142, the Chief Justice has already drawn to attention the evocative similarity of the second sentence to flexible exception, either case law or statutes, to which I will be coming in a moment.  The third sentence has a double actionability flavour to it and/or a local public policy flavour to it, probably a bit of both.

GUMMOW J:   You have to read it with 150, have you not?

MR WALKER:   Yes, and then we come to 150 which seems to be very similar to provisions that one finds both judge‑made, codified and legislated in a number of different systems around the world.  The translation in 150 was not subjected, for obvious reasons, to any explanation in this case.  The phrase:

this must not be contrary to the public interest of the People’s Republic of China -

whether that is, in truth, comparable with our notion of the policy of the law or so‑called public policy is an entirely open question and, fortunately, did not need to be litigated in this case.

Certainly, there was never any suggestion by any party and that is a good example, in our submission, of a perfectly proper setting of issues and narrowing of issues of a factual kind about foreign law by what the parties choose to speak about and choose to be silent about.  On the other hand, as I started off by saying, the whole of this text is before the Court as it was before the trial court.

Now, if one goes back to the second sentence of 146 one thing to be remarked is that although that has certain effects in common with a classic choice of law rule in the sense that we apply that to doctrines of our common law, it may not involve, for example, any tort foreign to China in the sense that we use the expression “foreign tort”.  So it goes further in its scope than any closely similar or comparable provision of so-called choice of law rules in Australian common law.

We point that out because in the other side’s argument there is an assumption – not confined to them, I should say – that one can simply use an expression from within our jurisprudence, namely, choice of law rule, and fix the label as a matter of appropriate nomenclature to provisions of another system, provisions which may of course functionally discharge some or all of the functions of choice of law rule but may go further or may have attributes which are contrary to what we would understand in the choice of law rule, including, for example, jurisdictional restrictions.

Your Honours, we have supplied over the adjournment more provisions of the United Kingdom Private International Law (Miscellaneous Provisions) Act of 1995 than were supplied by reference in the list of authorities.  In order to respond in particular to some matters of concern as raised by Justice McHugh, I am now turning to this question of the merely permissive or flexible exception attributes of the second sentence of Article 146.  In the United Kingdom - that is, this is Scots, not just English and Welsh - though we do not find words of classic judicial discretion, we do find the following kind of provisions if the United Kingdom could be seen with its own quasi federal attributes as a locus delicti for the purposes of some exercise of Australian common law for an international tort, as we would call them, where the location of the liability engendering act or omission was in the United Kingdom.

For example, one starts with the general propositions in section 9, which announce in subsection (1) that they are going to lay down the rules:

for choosing the law to be used for determining issues relating to tort or (for the purposes of the law of Scotland) delict.

And then subsection (2) uses overtly the scholarly language of “characterisation” and places that familiarly with the “courts of the forum”.  Subsection (5) has, as is famously known of course, just one of the numerous examples of chasing renvoi away but not just renvoi, any choice of law rules so as to avoid renvoi. 

Then section 10 names, one hopes for everyone involved, accurately and then abolishes aspects of common law doctrines and then in section 11 comes to do the business of stipulating the rule, and one sees that it is ‑ ‑ ‑

KIRBY J:   Can I just ask, as I understand it, the Australian Law Reform Commission made a recommendation similar to section 9(5).

MR WALKER:   Yes.

KIRBY J:   In respect of that subsection, that was based on a report of the English Law Commission, was it not?

MR WALKER:   I think so, your Honour.

KIRBY J:   Or was it a special parliamentary inquiry?

GUMMOW J:   It was a committee.

KIRBY J:   You are looking now at the Australian Law Reform Commission Report; just leave that for one moment.  In respect of the United Kingdom statute, was that based on a report of the law commission or some other enquiry?

MR WALKER:   I think it was more than one, your Honour.  Can I take that on notice?

HAYNE J:   In any event, the ‑ ‑ ‑

MR WALKER:   I would like to avoid ‑ ‑ ‑

KIRBY J:   What I want to know is what was the reasoning behind those who recommended subsection (5)?  What was the reasoning of principle that led them to recommend it and then to adopt it?  It may be that the same logic is relevant to a common law decision.

HAYNE J:   The 1995 Act has received what might be charitably described as a most unhappy academic press, has it not?

MR WALKER:   Yes. 

HAYNE J:   You can find some of it recorded in Harris’ piece, (1998) 61 MLR 33.

MR WALKER:   And there is a deal of it.  Your Honours I hope will understand that we did not wish to develop an argument which used as its point of departure the 1995 Act, the commentary upon which is considerable and, with respect, illuminating and somewhat controversial.  It does contain, however ‑ ‑ ‑

HAYNE J:   I have not found a defender.

MR WALKER:   I am sorry, your Honour?

HAYNE J:   I have not found a defender of it in the 1995 Act.

MR WALKER:   The controversy is not always between the scholars.  Sometimes it is between the scholars on the one hand and the legislators on the other, your Honour.

HAYNE J:   Yes.

KIRBY J:   Well, there are a few commentaries noted in the footnotes critical even, it is amazing to see it, of our decision in Zhang.  I mean people in this area are very disputatious academics.

MR WALKER:   Well, Professor ‑ ‑ ‑

KIRBY J:   Therefore, we do not want to allow ourselves to get too upset that there is some criticism.

MR WALKER:   No, and as Professor Kahn-Freund has abjured, or admonished, perhaps there ought to be a deliberate attempt to make it less interesting, a deliberate attempt to make it less the fit topic of lifetimes of high intellectualising and, with respect, what we are offering is intended partly to supply that quality.

GUMMOW J:   And more apt to a world of enormous growth in international trade.

MR WALKER:   Yes.

GUMMOW J:   Why the English were turning their backs on that in 1995, I have no idea.

MR WALKER:   Quite so.  In our submission, it is the common law that provides a much more adapted approach.  It is certainly the argument that we put, and also, if I may say so, the common law retains obviously the capacity to continue to adapt.

GUMMOW J:   1995 was in the high-water mark of the English retreat from Empire, I think.

MR WALKER:   Your Honours ‑ ‑ ‑

GUMMOW J:   The historians are having second thoughts about that now.

MR WALKER:   I am very obliged to my learned friend.  There are two references to be supplied in answer to Justice Kirby’s question.  The first is Working Paper No 87 of the Law Commission, which was also Consultative Memorandum No 62 of the Scottish Law Commission and, finally, the final report – this time it is the Law Commissions [193] and the Scottish Law Commissions No 129, ordered to be printed by the Commons on 11 December 1990 headed “Private International Law:  Choice of Law in Tort and Delict”.  Your Honours, could I go back then to section 11 ‑ ‑ ‑

GUMMOW J:   What is all this demonstrating?

MR WALKER:   This demonstrates that there are judgmental evaluations and assessments and uncertainty in the prescriptive law to be found in the print exactly ‑ ‑ ‑

GUMMOW J:   Even if the lex loci delicti is English.  Is that the idea?

MR WALKER:   No, no.  It means that there are possibilities that it will go somewhere else as an alternative, and that of course is something about Article 146.  There is a possibility it will go somewhere else on the face of 146.  Not a certainty.  It is permissive, 146.  Well, the United Kingdom Act, which is surely not describing something freakish or unusual to be expected in PIL possibilities; that is, it is part of the law of the United Kingdom.  It is not unusual.  There may be cases involving the United Kingdom to be heard in Australian courts.  They too have, in the modern guise I suppose or a form of flexible exception, that too has possibilities of other systems of law being chosen apart from the prima facie rule.  Not a certainty, a possibility.  The resemblance is between the possibility in 146 by the permissive “may” and the possibility in the provisions I am about to come to in the United Kingdom legislation coming about by reason of a judgmental evaluation to be made in place of the common law flexible exception.

The general rule then in section 11 can be called, perhaps over‑casually, lex loci delicti.  Then in section 12, full of phrases that would tell a lawyer advising a client that no certain result is to be got from this particular juristic machine, we have the following:

(1)      If it appears, in all the circumstances, from a comparison of –

(a)      the significance of the factors which connect a tort or delict with the country whose law would be the applicable law under the general rule; and

(b)      the significance of any factors connecting the tort or delict with another country -

Now, there we have words that probably most had their currency in scholarly rather than judicial talk, but the scholarly language has come into a statute and you have comparison, significance, connect and then we have a very ‑ ‑ ‑

KIRBY J:   Connecting factors has been a formula that has been used.

MR WALKER:   Yes, quite so.  Then we have:

that is substantially more appropriate –

another phrase redolent of impossibility of prediction in all but the clearest cases –

for the applicable law for determining the issues . . . the general rule is displaced -

and it is important to note that the following words are not discretionary, they are mandatory -

the applicable law for determining those issues . . . is the law of that other country.

So this is not grammatically or even strictly a discretion in the same way as the words of 146 understood by an Australian lawyer would appear to convey a discretion but they are certainly packed full of evaluative judgments about which reasonable minds may differ.

GUMMOW J:   What is the forensic point of all this, to say it is not only the Chinese that do it, the English do it, so it is okay?

MR WALKER:   That is the point.  This is no reason for this case not to be regarded as a proper vehicle for the determination of this issue.

McHUGH J:   How do we do it?  It is one thing - section 12 is a statutory direction to English courts, but how as a matter of principle do we develop some rule?

MR WALKER:   Well, your Honour, if I can complete my answer, under subsection 12(2) you will find that there is a permissive, not exhaustive, reference to factors that can be taken into account.  Now, what that means is that an Australian court would need to take account of the position in the United Kingdom in light of the evaluative uncertainty, the possibilities, in effect, the same as a permission, as applies in China and, in our submission, one cannot sensibly devise a common law rule that distinguishes between foreign systems which merely permit or leave open a possibility of another choice of law rule apart from their primary one and take those away from a general common law principle.  In our submission, one takes either the whole or none of the foreign system and if you take the whole of the foreign system, then you take it with the possibilities that it contains concerning the choice of law.  In other words, a choice of law rule cannot be seen for the purposes of our common law when it is to be found in another system of law as a choice of law rule permitting only ever one answer.

McHUGH J:   Yes, but if the foreign conflicts rule itself indicates that the foreign jurisdiction has no interest in determining the substantive questions in the case, that is one thing, but when the foreign court’s conflicts rule has a discretionary element, how do you deal with it?

MR WALKER:   Well, one thing you can say about that is that they do not hang on for dear life to such disputes.  May I say, your Honour, we are not talking ‑ ‑ ‑

McHUGH J:   There are policy grounds for accepting your argument about accepting the return when you can see that the foreign court is not interested in determining the substantive issue.

MR WALKER:   Your Honour, can I challenge entirely the mode of reasoning that attributes intention or covetousness or jealousy of its power or jurisdiction to a foreign court as being of any assistance in the analysis here.  We are not talking about a competition between two courts, or more, all of whom are actual potential decision‑makers.

McHUGH J:   But we are trying to solve a problem.

MR WALKER:   One deciding court only – the Australian court.  This has nothing to do with the operation, that is actual operation of any foreign court even though what a foreign court may do may well become a very important part in the factual reasoning by the one and only deciding court, the Australian court.  So we are not talking about anything in the nature of comity, collegial or otherwise, between courts here.

McHUGH J:   Surely we must talk about policy in this area because the problem of circularity arises.

MR WALKER:   No, your Honour.

McHUGH J:   It does with ‑ ‑ ‑

MR WALKER:   There is no ping pong, no hall of mirrors, no inextricable circle, for reasons I will come to in a moment.

McHUGH J:   There are, at least in certain cases.

MR WALKER:   But only, your Honour, if one applies logic having first abandoned all commonsense.

McHUGH J:   That does not tell me much about deciding a case.  In this area, in particular, I do not know how you decide it by commonsense.

MR WALKER:   It is a tendentious label applied by advocates to their arguments, your Honour.

HAYNE J:   Bring your authorities to Court with you, Mr Walker.

MR WALKER:   Yes.  I withdraw all reference to commonsense.  May I, however, maintain my proposition that there can be an excess of strict logic, or perhaps it is false logic, for the following reasons.  This is about how Australian courts decide.  The ping pong, the hall of mirrors, et cetera, is inside the head of an Australian judge.  There is nothing moving between Australia and China, no lease, no litigants, no communication between courts, no diplomatic intercourse between nations.  It is all within the one head, the decision-maker and he is going to decide.

GUMMOW J:   I think it is on a blackboard with some academic with chalk, actually.

MR WALKER:   A whiteboard nowadays, your Honour, yes.  The smell of methylated spirits pervades this – we have here, raised by the scholars, people who find this entertaining, the notion of the inextricable circle, the ping pong, the hall of mirrors, whatever, but they are talking about a judge who says, “I can’t decide which because no sooner do I apply the choice of law rule that says China, I see it has a choice of law rule back to Australia, I just keep going”.

This is the common law, and I am entitled, surely, to say that has to be pragmatic and practical and it is about working to make a decision whereby, as your Honours know, we offer the obvious proposition, it was never a possibility, except in the imagination of scholars, never a possibility that the common law court would engage in a hall of mirrors.  The common law judge is going to decide a case.

To decide a case you need a set of rules or standards against which to measure the conduct or position of the parties which are the stuff of their dispute.  So there is going to be a decision, there is going to be a choice of law.  The only question in this case, and we would avoid the nomenclature of double renvoi, single renvoi, foreign court theory and would certainly avoid the notion that the world divides into three possibilities – there are presumably as many possibilities as there are people willing to articulate one‑ in our submission, the spending of the choice of law process approach which one sees linguistically in Lord Justice Scrutton’s dissenting judgment in Casdagli, the Egyptians under British protection - my learned friend knows it as Italian - approved in the House of Lords, and we have given the reference in paragraph 44 and another reference in paragraph 45 of our submissions in‑chief ‑ ‑ ‑

GUMMOW J:   Not picked up by the academics actually.  In all this volume of scribbling no one seems to have read Lord Justice Scrutton, one of the great judges of England of the time – a great mercantile judge.

MR WALKER:   Yes. Your Honours, what we say is that because this is, after all, called “choice of law” – you have to make a choice, you cannot just keep bouncing around in your head – because it is all for the purposes of deciding a case brought by parties in dispute, then it is obvious that once the common law has observed the territoriality requirement of any civilised and sophisticated private international law, once it has observed the equally important value of taking as much, and as accurately as possible, of the foreign law as is consistent with serving the purpose of its own choice of law rules, and driven always by the paramount requirement to minimise the possibility – you cannot eliminate it – but to minimise the possibility of the same case being decided differently according to arbitrary choice of forum. 

When one adds the fact that what Professor Kahn-Freund calls the homeward trend is not an atavistic thing to be deplored always, but may in fact be a very efficient and sensible preferring for courts to apply their own law well, and then other people’s law not so well, the quote from Soulié’s Case in the Cour de Cassation by Professor Kahn‑Freund is very much to the point.  I will spare your Honours my French pronunciation. 

When you put all those factors together, it is obvious, in our submission, that the solution which gives the best fit in a less than ideal world is for the Australian court to say, “Because of lex loci delicti as our rule, I go to China.  I find that China permits two outcomes, either Chinese law or Australia law.  I see nothing in the Chinese law to deflect me from Australian law, whereby I take back the case and decide it according to Australian law, my choice of law having been spent because I have done it, and I do not go off into an anti-decisional, non-choice process of bouncing to and fro”.

Now, this does not involve any artificial surgery to get so‑called internal law and private international law.  It simply says this.  A choice of law rule is called a rule because it binds the deciding court.  It is something the deciding court must obey, it provides a duty that must be done.  It is not possible to say, after the Western Australian court has found out the facts of Chinese law, having identified it as the locus delicti, it cannot be said that the Australian court has not obeyed, followed, complied with the duty imposed by the choice of law rule, when the Chinese send or may send it back to Australia. 

It is not possible to say that upon that being accomplished, the judge has now become recreant to the duty of choosing the law.  He has obeyed the rule, she has obeyed the rule, it has been done.  It does not get done better by being absurdly involved in a perpetual repetition, which, of course, is not a choice at all, is not a decision at all. 

So, in our submission, the solution that we offer calls in aid the fact that the common law of private international law and the choice of law rules is about deciding cases, about choosing the rules and the standards to do so, and when the common law is offered a scholarly conundrum of “This just keeps going back and forwards”, they say, “Well, it cannot possibly do that because this is the law about how to make decisions.  And to make a decision, you have two choices only.  Are you going to give any regard to the foreignness of the tort before you, or not?” 

We do, we have made that decision in Zhang, lex loci delicti, for reasons which are imbued with observance of what I would call the territorial principle, for psychological, social and internationalist purposes, imbued as well with intense practicality and pragmatic expedience, for the kind of world in which Australia finds its place as a trading island nation. 

So, for all of those reasons, in our submission, the second choice – ignore the foreignness – having been rejected, we are left only then with the question which, for example, Professor Briggs has pursued in the articles that we have cited to your Honours written by him.  What is it, as a matter of common law approach method, technique or principle, which provides a basis for ignoring on the basis that it is somehow not internal or domestic or municipal, whatever those words relevantly mean in this context, the very rules which the foreign court hypothetically would be obedient to concerning choice of law or would be able to use concerning choice of law, mandatory and permissive.

McHUGH J:   Well, one reason may be that a choice of law rule should meet the expectations of parties.

MR WALKER:   Quite.

McHUGH J:   And one would expect that an accident that happened in China should be dealt with according to the substantive law of China.

MR WALKER:   And the substantive law of China says your substantive law, your national law, when you are here for a contract made with an Australian corporation in Australia, for the provision of Australian foreign aid as part of a State-owned enterprise - that is, Victorian State-owned enterprise – why the expectations of the parties would be that whatever goes in Wuhan must apply to them, in our submission, particularly with their contract claims in parallel to their tort claims, is by no means straightforwardly answered in favour of it being China.

Our submission is simply this.  A choice of law rule cannot be seen as merely procedural, or procedural if the word “merely” is a loaded word.  It may be there are other categories apart from the dichotomous procedural substantive, but as things presently stand, doing the best we can, one would have to say there must be some other reason why you would not apply a choice of law rule, and the best answer to your Honour Justice McHugh’s concern is this.  In particular, given that the purpose of the choice of law rules is, as this Court has said now repeatedly, to minimise the prospect of disharmony of decision according to the arbitrary choice of forum, given that that is a purpose, then why would you devise a common law doctrine which avowedly and openly says, “For some countries we will do exactly what they either couldn’t do or can choose not to do”?

That, in our submission, means that you are going out of your way by a common law rule to maximise, in one’s relations with those cases, with that foreign element, to maximise the disparity or disharmony of result that will only be either coincidence of the substantive law of the two places being the same but you will get the same result.

McHUGH J:   Yes, but the Australian choice of law rule requires the Chinese to deal with it and the Chinese say, “We will deal with it unless we exercise our discretion not to deal with it.”

MR WALKER:   But, your Honour, you ‑ ‑ ‑

McHUGH J:   Now, that is where you are stuck.

MR WALKER:   No, we are in this position.  The Chinese law leaves open the possibility of it being Chinese or, in this case, Australian law that will govern because there is no evidence in the book and there is nothing in the text legitimately within this Court’s interpretative function of the General Principles that would say that there is some prima facie or onus of persuasion approach in relation to the second sentence of Article 146.  We know nothing about whether in China there is a prima facie position which has to be displaced by persuasion using any particular kind of circumstances in relation to the second sentence possibility.  Your Honours should not proceed on that basis, as familiar as it is ‑ ‑ ‑

McHUGH J:   Well, the trial judge did.  How did it come about that the trial judge applied Chinese law on the limitation period?

MR WALKER:   Well, I have already said, your Honour, it may be for more abundant caution in case he was wrong, maybe it is just inexplicable.  I think the Chief Justice asked me about that at special leave.

KIRBY J:   At 204 he said: 

I propose to apply Article 146.  It gives me a right to choose to apply the law of Australia ‑ ‑ ‑

MR WALKER:   Quite, as it does.  There is only one court here, Western Australian court, there is no Chinese court.

KIRBY J:   Yes, but a question is where a foreign law reposes a discretion in a national judge, does not purport to repose the discretion in the foreign judge ‑ ‑ ‑

KIRBY J:   But, your Honour, no, with respect, that is what some might call the mutatis mutandis requirement which is one of the reasons why lex loci delicti and similar choice of law rules do not even pretend to be a perfect mirror of the foreign exercise because the assessment of damages in China is not by a West Australian judge according to either the Code of Civil Procedure or by the General Principles.  It is by one of the People’s Courts and that is mandatory.  The finding of there being fault or liability is by a People’s Court, not by a West Australian court.  There is no difference between it being a People’s Court that decides the second sentence of 146 and a People’s Court that decides liability and damages and yet because we are going to use lex loci delicti we tell ourselves, with respect correctly, that we do so as civilised people.  Because we are going to apply that for the territorial reasons that this Court has explained in Zhang, we must take on the implementation, lost in translation no doubt, the implementation imperfectly of what we can understand as rules which are expressed to be applied in China by a Chinese court and the mutatis mutandis transformation is done silently in private international law, choice of law of foreign systems of law in order that there be any such doctrine at all.

Now, bearing in mind, as I opened this appeal, that in this country the jurisdictional way of avoiding different outcomes according to choice of forum, what might be called the Spiliada approach is not available because of Voth, it is very important that emphasis be placed in this Court’s devising of a common law solution to the so-called problem of renvoi - I stress so‑called problem - it is very important that the solution permit the Australian courts actually to implement the laws to be imported so as to serve, not subvert, the purpose of lex loci delicti according to Zhang.

GUMMOW J:   I think the passage in John Pfeiffer Pty Ltd v Rogerson 203 CLR 503 at 526, paragraph 39, explaining the nature of what goes on underlines what you are saying, I think.

MR WALKER:   Yes, your Honour. 

GUMMOW J:  

the law of the forum enforces an obligation of its own creation ‑ ‑ ‑

MR WALKER:   Yes, this is an Australian piece of litigation being decided by an Australian court.  When we say lex loci delicti we know we are not becoming a Chinese judge.  Statements to that effect, both in transcript and in his reasons by Justice McKechnie are, with great respect, to be treated as rhetorical surplusage.  They appear not to have caused him to slip into any error, but they are an inappropriate way to talk, just as it is inappropriate to talk, and I am sure I have done it myself, your Honours, about a court referring the case to another country.  That is very shorthand for ‑ ‑ ‑

GUMMOW J:   Well, this is back on the blackboard, I think.

MR WALKER:   Yes.  I do not want to say anything more about that.

HEYDON J:   Mr Walker, that second sentence of 146, “the law of their own country . . . may also be applied”.  You do have to look, do you not, to see what principles Chinese law acts on in deciding when to apply the law of “their own country”?

MR WALKER:   Yes.

HEYDON J:   Now, is there any evidence as to those principles, or does not ‑ ‑ ‑

MR WALKER:   No.  I am going to take you to the best - your Honour may ‑ ‑ ‑

HEYDON J:   Does the case not then fail?

MR WALKER:   That would be one logical possibility which should not be preferred because there is material, sparse, slight, but it includes material from the expert which, in our submission, did provide Justice McKechnie with factual foundation for the approach he took.  Can I take your Honour to it.  Your Honour asked me the question is there evidence in effect of Chinese law concerning the way in which the second sentence of 146 is administered or should be administered.

HEYDON J:   Yes, and you ‑ ‑ ‑

MR WALKER:   My answer is no because there is nothing so specific.  What I have to put together is expert evidence about the availability of 146 – now, availability is different from how it should be administered – I have expert evidence as to its availability and I have expert evidence as to what I will call a general principle which governs decisions of a kind which would include 146.  That is the best I can do.  That is why I said no to your Honour’s question, but it is why I am also saying no to “Should we therefore not fail?” 

GLEESON CJ:   Well, Justice McKechnie dealt with this on page 351 where he simply says, “Article 146 gives me a right to choose and I’m going to choose Australia for these reasons.”  He did not express any interest in any principles of Chinese law about what he called the “right to choose”.

MR WALKER:   And he did not have much of a record if he had, your Honour.  Can I take you to page – I am going to do this in a particular order – first to page 92.  At forensic risk I can tell your Honours this is my best shot.  The top of the page:

Can I put it to you that article 146 would have enabled Mrs Neilson, had she sued in China, to apply for an order applying Australian law?---Apply for that.  That’s a possibility ‑ ‑ ‑

GUMMOW J:   Well, who was called by whom?

MR WALKER:   Called by the defendant.  Your Honours will recall Article 146 had not been mentioned by Liu ‑ ‑ ‑

GUMMOW J:   Not in his report.

MR WALKER:    ‑ ‑ ‑in his report or evidence-in-chief -

Apply for that.  That’s a possibility, yes.

Now, that is a little ambiguous because he has earlier, for example, said, “It is possible to sue after the limitations period has expired, but you’re going to lose the case.”  So that is a bit ambiguous, “Apply for that.  That’s a possibility”:

The basis of her application would be that she and the defendant were Australian citizens –

at which last word naturally I winced, but it came back to something else.  Then I can tell your Honours the whole of this passage is not re-examined on at all.  Line 14:

In dealing with an application that Australian law apply, I suggest the court would in China determine that according to its own ideas of fairness and the justice of the case?

Now, counsel clearly was not making that up.  There are other answers to which I am going to come, given earlier, and there is other material – and one might not be surprised to know that they are stipulations as to how courts should proceed in China.

I cannot vouch for the introduction of what appears to be an idiosyncrasy requirement but that does not matter.

It’s own idea - if the court decides - if this case is here that you can submit to a Chinese court, first of all, Chinese court would decide on whether the governing law should be Chinese law or Australian law ‑

he was hooked up on a choice of law question -

because there’s a possibility, otherwise they just only use Chinese law because there’s a possibility the court will decide and to decide that the court will take into account some other issues; for example, the construction of the buildings (indistinct) of buildings, all of this make explanation.

English was not his first language.

If the court decide, the Chinese court decide to use Australian law, he will use Australian law fully, also of course if Australian common law were used.

Yes?---In terms of fairness or justice, he will also use what the meanings in Australian law – what means fairness or justice.

The point I’m making is that if this case is being tried in Wuhan, then the learned judge of the court might be in the same position of his Honour in having to hear evidence of Australian law if the court thought that Australian law, applied?‑‑‑That’s right.  That’s a possibility.  That’s a possibility, yes.

Your Honours, I suppose I should draw to your attention the exchange between judge and counsel at lines 39 to 43 below.  In terms of fairness and justice, in a related…..fairness and justice on that page – in a possibly cognate matter, namely, the discretionary extension under Article 137, the same kind of material applies.  I take your Honours first to page 71 of the book.  At about line 45 or so there is a reference to what might be called a lack of stare decisis and then at the top of page 72 there is a description of:

the general principles –

that should be capital “G” and “P” –

themselves are based on ideas of justice and fairness –

lines 5 and 6.  Then on page 73 at lines 11 to 20 there are the not surprising positions that the obligations of a judge in China – using the witness’s words – when:

They do everything . . . 

. . . they would say “fairness and justice”.  We use that.

CALLINAN J:   Mr Walker, are we entitled to infer something in your favour from the facts that really the Chinese authorities would have no interest in any way in the outcome of this case, that no Chinese defendant would be liable and that, were the matter to be prosecuted in the Chinese court, then expense to the Chinese state would be incurred?

MR WALKER:   Yes.

CALLINAN J:   Might these be available inferences?

MR WALKER: Yes, subject to section 73 of the Constitution and there being material available, yes, and there would be in this case, in the nature of things. Your Honours have seen of course the discretionary grounds that were relied upon. The Chief Justice has already referred to them. They are contained at pages 351 to 352 in paragraphs 205 to 207.

It is not exactly clear that the matters that Justice Callinan has raised are explicit in those but the reference to the ability of the Chinese court to do what an Australian court could do in relation to compensatory needs by reason of Australian conditions is surely a reference to the greater facility of an Australian court to quantify damages for Australian conditions than for a Chinese court to do it.  So, there are those elements present already, your Honour, yes.

CALLINAN J:   And on that question, is it relevant that part of your client’s claim, the part that ultimately failed, was, however, based upon an Australian contract?

MR WALKER:   Yes.  Paragraph 207:

The dispute between the parties had its genesis in Australia in the assumption of the duty of care by OPC –

That assumption of duty of care, to use his Honour’s words, comes about because two contracts brought them into propinquity.  It was the husband’s contract that does the job of giving her a tort claim, but she also had her own contract.  Now, she lost on her own contract case because there was no implied term in relation to the provision of accommodation held, but yes, there is a contract between two Australians, they are citizens, two Australians with an Australian-owned and incorporated State-owned corporation for the provision of Australian foreign aid ‑ ‑ ‑

CALLINAN J:   You had two Australian polities involved, did you not, indirectly the Commonwealth as well as the State?

MR WALKER:   Yes.  In our submission, to return to language that might look at a governmental interest analysis, it is by no means clear that Article 146 should be seen as saying the primary rule, that is the rule to be preferred until displaced by a certain set of factors, is Chinese law.  That is not how the second sentence of 146 is expressed, and it was surely for the defendant if they wished to expand on this piece of important Chinese law, that their expert had not put in his report in-chief, it was for them to do so by questions and answers in re-examination.  No fetter on the discretion, no onus of persuasion, no prima facie position, no set of factors which would have disqualified Justice McKechnie from deciding as he did was drawn to attention by Mr Liu in any answers because he was not then asked any appropriate questions.

HEYDON J:   Did he make the same submission in relation to the word “law”.  Is it right that Mr Liu did not say, “by the law of their own country” is meant the domestic law, short of any secondary renvoi?

MR WALKER:   Yes.  Can I take your Honours to the way in which Mr Liu dealt with the question of Article 146, being irrelevant as he said it.  It starts at page 89.  Just to remind your Honours, it is pages 88 through 92 where all the interesting bits of Mr Liu’s evidence are to be found.  There is the 137 and there is the 146.  Significantly, after the now irrelevant battle about whether there was negligence in China which precedes this, significantly none of this was in his, no doubt, more coherent written report in‑chief.

At the foot of 89, having dealt with the 137 and demonstrated that this expert knew of no cases in which it had been applied, the cross‑examiner then says:

There are also provisions in the civil code –

and that really means General Principles -

that affect the rights of foreigners?---Yes, that’s right.

To which you had not made any mention in your opinion? . . .

You haven’t made any reference in your opinion to any provisions in the General Principles that specifically pertain to disputes between foreigners?---You see, there’s a special chapter for this, the last chapter.

I am not sure it is the last chapter, but certainly there is a chapter towards the end.  And then he says –

of course I didn’t mention in the (indistinct) because I don’t think – I didn’t think it’s relevant in this case.

But you appreciate that both Mrs Neilson and the defendant company are both Australian persons?

another variation on a theme –

That’s right, yes.

Can I turn you to article 146?---Yes.

It is read –

Is that not a relevant provision in the context of this case?---That’s because – the reason I think it’s irrelevant is because I think this is the law of conflict – I mean, lieu of conflict laws –

I do not know what that word is.  It may – I simply do not know what the “lieu” should be –

under my knowledge is only used when a court – court used that – courts decide a case, decide which application is in a place where the case will be submitted –

I am sorry, I cannot explain to that your Honours –

So, for example, this clause is only used when a case submitted in the Chinese court and the Chinese courts before hearing any further on the substantive issues would decide which law should be used as governing law, so this article will be used to decide that.

The answer to Justice Heydon’s question is yes.  He seems to have taken the view that this was not relevant, because it was, I will call it, a choice of law rule for Chinese judges, therefore of no relevance to this case.  So his expert evidence was apparently foreclosing the doctrinal argument that was then had, and which is before this Court.  That, of course, is not expert evidence at all.

GUMMOW J:   That is why at line 14 he said he thought it was not relevant.

MR WALKER:   That is right.  That, in our submission, is going way past content evidence.  That is going well and truly into application evidence.  In particular, he cannot become an expert on how the Australian choice of law doctrine looks to, characterises, identifies, understands the foreign law being imported by our choice of law rule, and that is what he was really doing there.

HAYNE J:   Does it then come to this, from your side of the argument, that if we read this record as providing no proof of how Article 146 would be construed or applied by a Chinese court, nonetheless it is open to infer, and, indeed, I think you may have to go so far as to say a court would be bound to infer, that (a) where an exception is made to the general rule of Chinese law that the law of the place of a delict applies; (b) where that exception is grounded in foreign nationality and domicile; and (c) the conclusion, that the exception would be engaged, there being no countervailing feature other than place of occurrence?

MR WALKER:   Yes, that is right, and place of occurrence is, of course, where you start.

HAYNE J:   Just so, but is that the highest at which it can be put from your point of view?

MR WALKER:   One more element, if it please your Honour?

HAYNE J:   Yes.

MR WALKER:   I would add that there was no evidence or attempt by the people who called this witness in re‑examination to say that “may” does not mean “may”.  That “may” is a closed door, not an open door.  So we ‑ ‑ ‑

HAYNE J:   That simply is emphatic of the proposition with which I started, that if you assume there is no proof of the manner of construing or applying the provision ‑ ‑ ‑

MR WALKER:   I am differing in this respect, your Honour.  The words in the English translation given to the court said “may” – and there is no Allstate problem, with great respect, with the Court understanding “may” in its ordinary sense of “a permission or possibility; something available”, and there was no attempt to show that in its mode of application “may” did not mean “may”, “may” meant “ever”, or “never for people like you” or “never for cases like this”.  There was no attempt to do that at all. 

So we were left not with no evidence as to how it was administered, but the only evidence being – and this is, after all, a civilian rather than a common law tradition – the only evidence being that the translated text said you could.  That goes further than saying there is no evidence about how it would be understood or applied.  With that addition, your Honour, yes, otherwise I adopt what your Honour has put.

CALLINAN J:   Mr Walker, would you explain to me, assume this, assume that there is no evidence for present purposes on the way in which 146 would be construed, why should we not assume that the Australian law of statutory construction, whatever it is, should not apply and what would that law be and what would the result be?

MR WALKER:   Would your Honour just excuse me?

CALLINAN J:   I should have put it differently, the Chinese law, construction law on this point, is the same as Australian construction law.

MR WALKER:   Yes.  The first part of my answer is to, as briefly as I may, observe that it may be slight but page 92 is something more than no evidence.

CALLINAN J:   Well, I understand what you ‑ ‑ ‑

MR WALKER:   But then, taking for the purposes of argument the assumption your Honour has put to me, it raises the difficulty of what I will call the interstitial use of the presumption that lex causae is lex fori in the sense that the foreign law is the same as lex fori which, in our submission, is a very large problem and it can and ought to be avoided in this case because it applies to substantive matters, of course, by observing that this is about how a judge, an Australian judge required by Australian law to make a decision under the choice of law rule, this is about how an Australian judge would go about it.

Now, it is Australian law that supplies most of the means by which this exercise of discretion would be, to use the Chinese expression, fair and just.  Thus, for example, the judge will be impartial; will take into account only relevant considerations; will not take into account irrelevant considerations; will consider the purpose and nature of the discretion to be effected; this is Australian approach but I am not relying upon the presumption that the foreign law is the same as lex fori, I am simply saying this is an exercise being performed by an Australian judge in a way that Australian judges judge.

CALLINAN J:   Why do you not rely on the presumption?

MR WALKER:   I would only do it as an alternative, your Honour.  My primary position would be that we simply have here an Australian judge with a possibility under the chosen law being required to decide and doing so as an Australian judge.  Alternatively, and gingerly, we would say that particularly where the party with the capacity to re-examine does nothing to touch this evidence, then by the speaking silences of the parties who have joined issue on these questions of fact and by then the issues clearly included 146 as a fall-back, then by those speaking silences, one can proceed on the basis that the approach in China is not different from the approach in Western Australia to such matters.

CALLINAN J:   I understand that, but assume you are thrown back on the presumption.

MR WALKER:   Well, that is a form of the presumption, your Honour, that we did not hear anything about statutory interpretation in China either in this case.

CALLINAN J:   Well, there was not, was there?

MR WALKER:   No, there was not and we therefore do say, otherwise there would be no litigant who would ever succeed in a lex loci delicti case unless it was something really straightforward like New Zealand because we do not have jurisprudential treatises in such evidence about how do you read statutes in the kind of detail that produces books and books, even for our own system, so that yes, the presumption does operate that “Unless I am told otherwise”, says the judge to himself or herself, “I am going to read this translated law, which happens to be in English because I speak English and the law of this court is English, in the same way with appropriate caution and asking questions when I feel nervous about that, in the same way as I would read a legal text of a prescriptive kind of my own system”.

CALLINAN J:   If you did that, taking into account the matters that I earlier put to you, why would you not get the benefit of the exception?

MR WALKER:   You absolutely would.  It points all one way.

HAYNE J:   There is a lot of discussion of this in at least past editions of Dicey & Morris going back to that with which some of us grew up, the 8^th Edition, pages 1116 and following.  In particular, reference may have to be made to F and K Jabbour v Custodian of Israeli Property (1954) 1 WLR 139, particularly at 147 to 148. There is a considerable degree of judicial tilling of the field of what experts can and cannot say and what courts can and cannot do in connection with foreign statutes, is there not?

MR WALKER:   Yes.  In our submission, it would be not a sensible accretion to the common law choice of law rule in international tort in this country to require, as it were, an immersion course in the foreign country’s system of law in order for cases to be decided in an Australian court by that choice of law rule.

HAYNE J:   But non constat that you do not have to call an expert who gives relevant evidence.

MR WALKER:   No. Vehemently non constat, yes, your Honour.

KIRBY J:   An argument of policy against that is that it is the accretion of nationalism and your own way of doing things instead of going to the trouble of finding out how others do it.

MR WALKER:   Your Honour, of course. The cross‑cultural exercise is difficult enough without doing it with your eyes closed.  Yes, I accept that entirely.  I have pointed to the best evidence I can in our record and that is as far as it goes.

McHUGH J:   Mr Walker, I have a more fundamental problem.  It arises out of the nature of this discretion.  If the theory is, and it seems to be that it is the accepted theory, that in this area of the law the Court enforces an obligation that its own law has created in respect of an act done outside the jurisdiction, could you define for me precisely what is the obligation that the court in Western Australia enforces?  I think that will tax even your considerable mind because of the element of discretion and, unless you can do it, it seems to me that we do not reach first base.  What is the obligation, because you have this discretionary element floating around?

MR WALKER:   May I add, as it were, to the challenge.  It is not just discretions.  There are also things like the United Kingdom Act to which I drew attention, not strictly discretions, but they certainly leave open multiple possibilities and I think it is the multiple possibility, with respect, that may be as serious as a discretion.

GUMMOW J:   It is the nature of the norm.  That is how we characterise the nature of the norm.

MR WALKER:   Yes.  The norms to be applied - “the rules of standards” is the expression I have been using - we are told by the chosen law, under lex loci delicti, may be X or Y, a possibility, not a choice of a single one.  Hitherto, the common law has never said you can only choose a lex loci delicti if it only has one law, one possibility.  Hitherto, we have never said that.  That may be the respondent will finally ‑ ‑ ‑

McHUGH J:   If you had set out in your statement of claim what is the obligation that you are enforcing, the obligation created by the law of this country.

MR WALKER:   I am going to try, your Honour, but I want to make sure it is comprehensive of all the possibilities.  Then there is, for example, the law of Hong Kong, Red Sea v Bouyques [1995] 1 AC 190 which is a Boys v Chaplin flexible exception at common law.

Then we have the United States laws, for example, Missouri talked about in Richards as the position then was, where there is a proper law of the tort, a kind of differential State interest, governmental interest analysis undertaken, which leaves open – all of these possibilities leave open multiple choice.  Sometimes the choice is the true discretion, sometimes the choice is tick the right boxes and then it is mandatory, such as the United Kingdom statute, but then when you look at the boxes, you find out that though they are not strictly speaking discretions, they are so evaluative, so coloured, so judgmental that it is going to feel very much to a person advising beforehand and to a litigant afterwards that they have just suffered or endured the outcome of a discretion.

Now, against that background, that is, that the world is full of systems of law that hold open multiple possible norms, rules or standards, by reason of what their chosen law says about that kind of dispute, the first proposition to make is that it is unlikely the common law would throw its hands up, asked to devise the choice of law rule for such cases and how it works, and say, “Can’t do it”.  That is the first thing.  It is either not in the nature of the common law or it is impossible for the common law to say “Can’t do it”.  There has to be a decision.

Now, a decision without rationale is not the common law, so there has to be a rationale.  The rationale, in our submission, will always be driven by avoidance of different results, including the other factors to which we draw attention, the territoriality matter, that is no longer a problem in this case, for reasons that I think are probably common ground.  In particular, there is, we say, the idea that when all other things are equal, the homeward trend is not an atavistic horror, it is a perfectly good thing for all the reasons that Professor Kahn-Freund points out.  We should not be scared, the common law should not be scared about the notion that a choice of law rule may end up with a judge applying the law that he or she is trained and expert in, if that has recognised along the way, and given full obedience to the purpose and precepts based on territoriality and on using and respecting the whole of the law and seeking to avoid a disparate outcome by, for example, applying only a truncated, artificial, non-existent version of the foreign law.

Now, against that background, my answer to your Honour’s question sounds like a foreign court theory and goes something like this, that the rights and obligations obtaining between the parties to a dispute decided in an Australian court, applying the lex loci delicti where the locus delicti is a foreign country, is (a) entirely a product of Australian common law; (b) the outcome of an inquiry by the court factually as to the lex loci delicti’s terms and operation; next, as an outcome of applying the factual understanding of that foreign law’s terms and operations to the facts of the case; next, all those inquiries and decisions being made according to forensic and judicial procedures and duties obtaining in this country; and finally, making decisions of a kind which the foreign law would require to be made so as to produce an answer to the question, which norms govern these parties’ dispute - not hypothetical, plain vanilla Chinese citizens, as it were, but these parties.

McHUGH J:   Yes, but what you have said just seems to me to be a description of a result or a description of a ‑ ‑ ‑

MR WALKER:   Your Honour asked me what are the rights and obligations, and the key is that they - it is the ‑ ‑ ‑‑ ‑ ‑

McHUGH J:   I asked you to define the obligation.  How would one join issue on the catalogue that you have just stated?

MR WALKER:   If your Honour is asking me to plead it ‑ ‑ ‑

McHUGH J:   Yes, that is what I am asking.  Once I see it, to my simple common law mind, I might understand your argument, but at the moment I am having some difficulty because of this discretionary aspect and because of the received theory about the nature of this obligation.

MR WALKER:   There is no received theory at all, with respect.

McHUGH J:   Well, in Pfeiffer’s Case, as Justice Gummow pointed out to you, we said that the court enforces an obligation that its law creates in respect of an Act that takes place outside the jurisdiction.

MR WALKER:   I am sorry, your Honour.  Your Honour ‑ ‑ ‑

McHUGH J:   It is the obligation.  It is a common law obligation you are enforcing.

MR WALKER:   But I thought your Honour was asking me to describe conceptually what the law is.  I had not understood your Honour was asking me to plead ‑ ‑ ‑

McHUGH J:   No, that is what I want to know.

MR WALKER:   I will have one more go conceptually and then try to plead.  Conceptually, I want to stress the idea that it is the outcome of an Australian forensic process.

McHUGH J:   Exactly.

MR WALKER:   And there is nothing wrong with that as a description of a set of obligations.  They are what is produced by this process.

McHUGH J:   Yes, but what I want to know is what is the obligation?

MR WALKER:   Well, that will depend upon the case.

McHUGH J:   And it seems to be able to throw a lot – no, in this particular case.  That will throw a lot of light, it seems to me, on ‑ ‑ ‑

MR WALKER:   The obligation in this case is to pay damages.  That is what Australian courts award, mercifully no problem under the General Principles.  It looks like they can be called damages.

McHUGH J:   But under what conditions?  What are the conditions of the payment?  The conditions are the obligation.

MR WALKER:   Your Honour, the obligation is to pay damages.  This is a retrospective liability.  It is a liability created by conduct adjudicated in the Australian court as if, to the tolerable extent, a Chinese court were seized with it.  Now, “to the tolerable extent” is the ‑ ‑ ‑

HAYNE J:   But you have rammed together statement of claim, defence and reply.

MR WALKER:   Yes.

HAYNE J:   Statement of claim would be negligence, simple.

MR WALKER:   Yes.

HAYNE J:   No plea of foreign law.

MR WALKER:   And defence says China ‑ ‑ ‑

HAYNE J:   Defence presumably says Chinese law applies, Chinese law has consequences A, B, C.

MR WALKER:   Quite.

HAYNE J:   Damages are limited, time has run.

MR WALKER:   Limitation period, yes.

HAYNE J:   Reply says no ‑ ‑ ‑

MR WALKER:   146?

HAYNE J:    ‑ ‑ ‑see what Article 146 ‑ ‑ ‑

MR WALKER:   Maybe a rejoinder says 146 does not apply ‑ ‑ ‑

HAYNE J:   Just so.

MR WALKER:    ‑ ‑ ‑because in Chinese law you have to be in a coma for 146 to apply or whatever.

GLEESON CJ:   Mr Walker, was this case conducted at first instance on the assumption that in terms of fault and liability to pay compensation there was no material difference between the law of Western Australia and the law of China and that the only aspect of the law of China that operated to defeat the plaintiff’s claim was the limitation period?

MR WALKER:   Ultimately, yes.  Ultimately my submission is, with respect, that is what it came down to ultimately.  There were controversies along the way; I have mentioned one of them.  Ultimately the question was if Chinese law governed – and that was determined that it did – that is, that it governed.  It was the choice - it was the law chosen by lex loci delicti.  The question came down to whether or not the so-called renvoi operated so as to have the law obtaining in Western Australia apply without any Chinese content.

GLEESON CJ:   But did Mr Liu give evidence that, for example – there was some suggestion, was there not, that it was not enough that a person was an occupier of premises, you had to be the owner or the lessee.  I forget what it was.

MR WALKER:   That is why I say ultimately, yes, there were controversies of that kind, yes. 

GLEESON CJ:   So Mr Liu was saying, to put it in Australian terms ‑ ‑ ‑

MR WALKER:   I think “no duty”.

GLEESON CJ:   OPC did not owe a duty of care to Mrs Neilson, according to Chinese law.

MR WALKER:   Yes.

HAYNE J:   But are the issues accurately encompassed by looking at pages 24 to 25 of the book where we see the pluperfect, re-amended, substituted defence?

MR WALKER:   No, they are not.  Things moved on, your Honour.  That is why there are openings in the book.  Can I ‑ ‑ ‑

HAYNE J:   Because there, there were allegations of “not actionable” “liability”, “limitation period”, “maximum damages”.

MR WALKER:   That is right, all of that, and you will not see any reference, for example, to 146 in that – there is a numeral 146 but your Honours should be warned that at page 25 at about line 18, that is a reference to an article of the “Opinion of the Supreme People’s Court of Implementation of the General Principles”.  It is apparently the authority of commentary that is irrelevant to our present case altogether.  Now, there is no reply pleaded.

CALLINAN J:   Well, Justice McKechnie stated the issues as he saw them at 310 and 311.

MR WALKER:   Yes, your Honour, and that is why I used the word “ultimately”.  Things shifted.  They shifted in the opening and Article 146 came up in the cross-examination.  Article 146 was not the subject of any argument at trial or in the intermediate appeal.  The court had no right getting into that because it was not mentioned in a pleading.  This is a classic case of the parties defining inappropriately the issues by the manner in which they fought the trial.  Bearing in mind that the expert did not even mention 146 in-chief, it was understandable the defendant did not take any objection to the issues being framed so as to include the interesting news of its existence, just as with Article 137 of the General Principles.

GLEESON CJ:   But to come back to Justice McHugh’s question to you, put aside the contract case, put aside the argument about limitations for the moment, Justice McKechnie said this is a case of occupier’s liability, occupier did not provide a balustrade on the stairs and the plaintiff was injured and is entitled to damages.  Your opponent said, “Just a minute, in Wuhan occupiers don’t have liability of this kind unless they are the owners of the premises or have some other relationship of a kind that didn’t exist here”, and Justice McKechnie said, “Well, if you look completely at the law of China, you will see that an occupier may have such a liability if, pursuant to the second sentence in Article 146, Chinese law looks back to a system of law under which an occupier does have such a liability”.

MR WALKER:   Yes, there being no double actionability, it is to be recalled.

Then, if one goes to page 374 and, for that matter, page 373, look at paragraphs 1 and 2 of the grounds of appeal in the Full Court in Western Australia.  That is why I said “ultimately”.  Ultimately, those were the issues that survived after the trial had transformed the pleaded issues or added to them, decisions accepted had reduced them.  Now, I drew attention earlier to 1(a) at about line 15 to 20 on 373.  That needs to be read together with 2(a), plus the way in which the Full Court records the argument and decides the matter.  The only point about 146 was, I stress, that being a choice of law provision, it was not to be applied, because of an approach to so‑called renvoi. 

There are no other grounds of appeal which, in our submission, have anything to do with any substantive head of Chinese law, except, I think, assessment of damages.  There were other grounds that had to do with matters that were important for Victorian statutes, matters that had some relevance to insurance positions, but none of those have survived the controversy before your Honours.

HEYDON J:   Mr Walker, can I just try and put this to you and see whether this is your argument.  Proposition one is that the parties have agreed that the relevant foreign law is contained in a particular enactment, namely, Article 146.  Correct?

MR WALKER:   Yes.

HEYDON J:   Two, the Court is at liberty to examine that and work out the meaning of Article 146 without expert assistance, though Mr Liu may have offered some expert assistance on how the discretion would be exercised.

MR WALKER:   Yes, so long as that does not go beyond what is conveyable by the English offered by the parties in their evidence.

HEYDON J:   Yes.  Another proposition is that the meaning of the words “law of their own country” is something that the Western Australian court could work out by applying the Western Australian rules of statutory construction.

MR WALKER:   No, by seeking simply to understand that as a matter of English.  We would not wish, for example, to embrace the notion that statutory interpretation of the common law thereof, if there is such a thing, is in some respect adjectival and can always be used in understanding foreign law.  That would appear to be wilfully, in some cases, closing your eyes to the possibility that an Australian judge’s way of reading an Australian statute is not the way the Australian judge should read a Chinese statute.  So we do not say that you are entitled to use the statutory interpretation law applying to Australian enactments or to Western Australian enactments or to Commonwealth enactments, I should say. 

McHUGH J:   But there is a technical difficulty about the matter in any event, is there not, because there is no relevant law of Australia.  So far as tort is concerned, although there is a uniform common law, the fact is that tort in different jurisdictions is governed by different regimes.  The law of Victoria is different to the law of Western Australia.

MR WALKER:   Your Honour, there may once have been such a problem in this case, but, by the way the parties framed the issues and argued the matter, that did not become a difficulty.  In other words, it was not said that the law of Australia, as the formulation which would emerge from a reading of the second sentence of Article 146, was a meaningless concept.

GLEESON CJ:   You get the impression that the drafter of Article 146 decided just to rise above problems of federalism.

MR WALKER:   Yes.

GLEESON CJ:   Which would be a sensible thing to do.

MR WALKER:   Some treaties do that as well.  Other treaties notoriously try to grapple with it, not always successfully.

HEYDON J:   If we go back then.  So you say you do not apply any local rules of statutory construction; you just read the words of the law of their own country as a matter of English.

MR WALKER:   Yes.

HEYDON J:   You want to reach the conclusion that that means the domestic law, no conflict element, sending it back anywhere else, correct?

MR WALKER:   Your Honour, we are vulnerable to the criticism that that is really what we are doing.

HEYDON J:   But you want it read that way.

MR WALKER:   I want it read with that result.  I want it read a different way, your Honour.

HEYDON J:   With that result.

MR WALKER:   I want to do the choice of law once only.

HEYDON J:   Yes, with that result.  And you get to that result by pointing to what you say are a number of absurdities or inconveniences in any other result.

MR WALKER:   Yes.

HEYDON J:   Well, that is a conventional method of statutory construction in Western Australia, is it not?

MR WALKER:   No, I am now talking about the common law, about choice of law doctrines.

HEYDON J:   The questions – what do the words in 146 “the law of their own country” mean?  Do they merely mean the domestic law of tort, or do they mean ‑ ‑ ‑

MR WALKER:   Your Honour, I may have been at cross purposes.  The absurdities and inconveniences I rely upon in my argument about common law principle and, in my submission, as to what our common law should be, and they are not special to the Chinese example we have.  I have not put an argument about using the interpretative canon against absurd or inconvenient result, or anti-purposive results perhaps, for the reading by the Australian judge of the translated Chinese law.  I have not put that argument.

HEYDON J:   Why not?  Do you?

MR WALKER:   No, I do not put that argument.  I do not put it because the law of statutory interpretation, in our submission, is on its face designed for and confined to the interpretation of the statutes of the polity, or polities, where that judge is exercising judicial power.  For a Western Australian judge the Acts Interpretation Act and the common law of Australia concerning the enactments of the Commonwealth Parliament plus Western Australia’s interpretation statute for the enactments of Western Australia plus the common law.

Now, that is a body of law or doctrine which may include a lot of, not coincidentally, simple reading of English; trying to ascertain the ordinary natural meaning of English.  So there is going to be a large overlap in the judicial method adopted.  Whether one overtly does that under the common law of statutory interpretation statutes or whether one does that just as a matter of ordinary English trying to understand the translated Chinese text, that it would be wrong, in our submission, as a matter of principle to see that as the judge - because he or she is attempting to read it as a matter or ordinary English, it would be wrong to see the judge as using local statutory interpretation law.

HEYDON J:   So reading it as a matter of ordinary English, you take into account those inconveniences and absurdities, do you, to reject a reading that would lead to them and favour a reading that avoids them?

MR WALKER:   No, not necessarily.  All ordinary English reading is contextual of course, and the context would include that this is a legal text – it is not a poem – so that you are looking for less rather than more possible meanings, for example.  There is that context that one can use.  Because it is a law, one would contextually read it as a matter of ordinary English as doing law-like things, so providing for outcomes rather than obfuscating the position, but beyond that, no, I would not go, your Honour.

HEYDON J:   Well, what are the criteria that lead one to the conclusion that “law of their own country” means the domestic tort law only?

MR WALKER:   It does not mean only the domestic tort law, it means the applicable law.  It happens in this case that the only body of laws that would then be looked at, following the second sentence of 146 being actioned, implemented, it is only the law of tort and measure of damages that would in fact be applied.  That is because of the nature of the case.

HEYDON J:   You have probably said all this before, but just so we can neatly find it in one place – in numbered form, what are the factors that lead your submission to that conclusion?

MR WALKER:   One, lex loci delicti is our choice of law rule.  Two, Article 146 is part of the lex loci delicti.  Three, Article 146, second sentence opens the possibility of the law of the party’s country providing the law to decide their dispute.  Four, their dispute is, to use our language, now the relevant issue is one in tort for personal injury.  Next, the word “may” in the second sentence of Article 146 permitted Justice McKechnie so to apply Australian law, because that was a possibility open to a Chinese judge – see Mr Liu’s evidence.

Next, that upon so doing, the trial judge, having observed the Australian choice of law rule in such a way as to have spent its effect of inquiring about the content of the Chinese law, decides the case by reference to the norms produced as the outcome of that inquiry, namely, the tort law as it applied respectively in Western Australia and Victoria, depending upon the issue.

HAYNE J:   Does that complete the list?

MR WALKER:   Yes.

HAYNE J:   You make no mention of place of domicile.

MR WALKER:   I am sorry, that was at the beginning.  They have been treated as either both nationals or both domiciled.

HAYNE J:   The statement of claim at page 2, paragraph 3, asserted that the plaintiffs were domiciled in Western Australia and that it was a Victorian ‑ ‑ ‑

MR WALKER:   And the Victorian corporation could not possibly be so seen.  In answer to Justice Heydon’s question, that is the list of points by which I reach the position.  Your Honours saw that the trial judge did not use “domicile”, but used “national”, and we know that there is no material to permit us to understand whether for a Chinese judge domicile would include a subset of a nation state, that is, whether you would be identified in what we would call law districts.  So the domicile issue was not explored and was not the basis of the decision, and the nationals basis of the decision has not been challenged.  I do not want to repeat what I have already said about that.

KIRBY J:   Mr Walker, you remember in Zhang that the Court had - I think it was in a report to the House of Lords when it was considering the legislation from the Law Commission, it was a conspectus of the approach of different countries, including different European countries to whether the principle of the law of the place of the wrong lex loci delicti should be adopted or some other rule.  Now, has there been any conspectus or analysis of a similar kind in relation to the renvoi question?  Has that been the subject of any international analysis, because as far as possible we should, I think, try to provide our Australian solution to this in a way that is conformable to the way the world appears to be going on it?

MR WALKER:   Would your Honour just forgive me, I will look up a reference.  I think there is ‑ ‑ ‑

KIRBY J:   Overwhelmingly, the lex loci solution was the one which was favoured in that House of Lords Committee Report. 

MR WALKER:   I am sorry, your Honours, the answer to your Honours question is yes, there is a reference with which we are familiar.  If by accident we have not given it to your Honours we will.  It is from the International Encyclopaedia of Comparative Law.  It is in Volume II, Private International Law, Chapter 6, Renvoi.  It is by Monsieur J. Georges Sauveplanne who is an emeritus or was an emeritus professor at the University of Utrecht.  I thought that we had given a footnote reference to that, I apologise.  It is very much by way of background.  There is reference to quite a bit of case law, they go place by place.  I regret to say, such is the place of Australia in that, that there is an innominate reference only to Simmons v Simmons.  You have to know that it is Simmons v Simmons.

GUMMOW J:   Yes, but what do you think?

MR WALKER:   That is 1990.

KIRBY J:   If there are any materials of that kind, I agree with Justice McHugh that this case has no inherently logical solution and has to be solved as far as possible on grounds of principle and policy.

MR WALKER:   And pragmatism, your Honour, we would stress.  It has to produce results.

KIRBY J:   The common law’s approach to principle is always pragmatic.

MR WALKER:   Sorry, yes, your Honour.

GUMMOW J:   I will read you a passage from the fourth edition of Conflict of Laws by Professor Scoles and others, including Professor Symeonides who seems to be a coming figure in the United States, paragraph 3.13:

the forum accept the reference to its own law, refer no further, and apply its own law.  This is the practice of most jurisdictions that do employ renvoi.

Footnote 10 has a whole collection of jurisdictions ‑ ‑ ‑

MR WALKER:   Thank you, your Honour.

GUMMOW J:    ‑ ‑ ‑ starting with Austria, and including Japan, Germany.

MR WALKER:   I regret to say I had not got that reference.

HAYNE J:   And it is necessary, I think also, to take account of what Professor Kahn-Freund points out, that the problems of renvoi arise in this field of discourse when foreign legal systems resort to questions of or connecting factors of domicile or nationality.

MR WALKER:   Yes, your Honour, that is right.

HAYNE J:   And that once that is done, there is inevitably a problem.

MR WALKER:   Yes.

HAYNE J:   The problem is simply one to be solved, but as Professor Kahn-Freund says, it is a problem that could only be solved by discarding references to domicile and nationality, and nothing short of an international convention can do that.

MR WALKER:   Yes.  That is why its best fit – no one would assume that it can achieve its stated purposes, some of which are somewhat in tension with each other.

HAYNE J:   But the search for overarching principle is a search which encounters the fact that for every case you produce, unless you are of very limited imagination, you can produce a hard case that is entailed by it.

MR WALKER:   Well, we are drawing lines, your Honour, and when one draws lines, there are going to be people very close to each other but on different sides of the line.  I accept that entirely. 

KIRBY J:   If there are any articles or any materials that might be difficult otherwise to pick up that you have referred to, then I would appreciate having a copy of them.

MR WALKER:   May it please your Honour.  Your Honours, may I very briefly remind your Honours of the straw in the wind that might be gathered from the position in the United States by reason of the coincidence that the Federal Tort Claims Act in its attempt to assimilate, for internal United States claims, the position of the United States themselves to that of private citizens, private persons, that they – by talking about the “law of the place where the act or omission occurred”, it is clear in Richards v United States 369 US 1 (1962) though the word “renvoi”, I think, appears only once or so, certainly as understood in a later decision – we have given both references in paragraph 38 of our submissions in-chief – it is clear that their Honours took it – I almost said assumed – they took it that the choice of law rules, as they are there called – see page 3 for Richards – they took it that it included the choice of law rules in a manner which would involve what is sometimes called “single renvoi”. 

Now, these are decisions on a statute.  They are useful only if your Honours find persuasive, perhaps compelling, the similarity of the expression “law of the place where the act or omission occurred” and the context, namely, to assimilate the position of the United States, a la section 64 of the Judiciary Act, to that of private persons.  It is complicated, as your Honours know, by very important policy, the so-called foreign tort exception, foreign country exception.  That was what was at the heart of the very recent decision in Sosa v Alvarez-Machain 124 S Ct 2739; 159 L Ed 2d 718 (2004). We have given the Supreme Court reference in our paragraph 38.

I should add particular references there.  Justice Souter for the court in his footnote 5, that is at page 2752 of the Supreme Court reference, refers to the renvoi question.  In a separate concurring opinion of Justice Ginsburg, agreed in by Justice Breyer, there is even more explicit reference to the renvoi question, the footnote at page 2780 of the Supreme Court reference.  I want to take your Honours to it. 

That is a very recent decision, which makes it clear that in Washington it is considered that Richards decided that when one applies the law of the place where the act or omission occurred, one does pick up the choice of law rules, they are part of the law of that place, with whatever renvoi effect occurs, but without absurd bouncing.  The absurdity of bouncing is not discussed in either decision.  Justice Ginsburg does use the word “questionable” in a footnote concerning some aspects of renvoi, and that is as far as we can take it in recent case law in the United States.

HAYNE J:   But Richards has been understood by some commentators, based particularly on the opinion of the majority at pages 13 to 14 in Richards, as being motivated in part by a desire to get away from lex loci.

MR WALKER:   Yes.

HAYNE J:   I have in mind there Shapiro’s piece, “Choice of Law Under the Federal Tort Claims Act:  Richards and Renvoi Revisited”, 70 NCL Rev 641.

MR WALKER:   Yes, quite so.

HAYNE J:   That in turn leads on to, in connection with this search for overarching principle, if a motive for adopting lex loci is either, in neutral terms, to ensure uniformity of outcome, in pejorative terms, to avoid forum shopping, that tends in favour, apparently, of doing what the foreign court would do.

MR WALKER:   Yes.  I hesitate to use the label ‑ ‑ ‑

HAYNE J:   I know you want to avoid foreign court theories.

MR WALKER:   Yes, thank you, your Honour.

HAYNE J:   I am not invoking foreign court theories.

MR WALKER:   Yes is the answer, your Honour.

KIRBY J:   The problem though is that both of you – this is why I asked you to start with Zhang and to try and identify some fundamental principle or policy in it that could give us a guiding post in this, and the trouble is both of you draw on Zhang and say it is inherent in its principle that your position is correct.  I mean, you have to do that.

MR WALKER:   The best common law precedents provide something for everyone, your Honour, but that is as far as we can take it, I am afraid.  Your Honours, there is just one last point, that is the Article 137 point.  May I take your Honours to the way in which it was dealt with by the trial judge in the Full Court.  It starts at page 348 of the book.  It contains a reference to some but not all of Mr Liu’s evidence.  Paragraph 190 on page 349:

I am not a People’s Court.  I am a Western Australian Judge –

et cetera.  The reference to “principles of fairness and justice” is there no doubt because the evidence to which I drew your attention earlier - your Honours will recall page 72, in particular.

Then there is a long list of matters starting at paragraph 192 which are, with respect, compelling, not only for 137 but partly also for 146.  I do not linger to defend in particular paragraph 196 because the temporal sequence does not seem to make that a particularly powerful point.

Could I then take your Honours quickly to the way in which Justice McLure dealt with that matter.  It is to be found starting at page 401, paragraph 58.  There is a reference to Mr Lieu’s evidence, as to a Chinese characterisation - query whether that has anything to do with the matter – of limitation periods.  Then there is a reference to what was decided by the trial judge after Mr Liu decided to answer questions in cross‑examination about Article 137, he not having drawn that to attention.

Then over the page, 402, paragraphs 59 and 60, there are lengthy excerpts.  I will not read them.  They have real problems of comprehensibility.  This is from the “Supreme People’s Court Opinion”, which is not a decision in a particular case but which is in the nature of an authoritative commentary, as the evidence suggests, of the General Principles; hence the propriety of referring to it.  Then over the page, 404, paragraph 61, her Honour picks up the reference in Mr Liu’s I think translation to the lack of any objective barrier.  Paragraph 62, there is a reference to James Hardie & Co v Putt, a Court of Appeal decision from New South Wales, which includes a passage in Justice Sheller’s reasons, overturning and deprecating what happened when a judge preferred his own interpretation of a New Zealand statute to the interpretation cogently delivered by two experts.

It is not obvious, with respect, that Justice McLure intends by this to suggest that the trial judge did any such thing.  Certainly he did not.  In Putt, I repeat, what happened was the trial judge heard from the New Zealand silk, and an academic, I think, what the law meant and simply disagreed without giving any reasons for the disagreement.  That was overturned in the Court of Appeal.

That has not happened here.  Mr Liu has not given interpretive evidence of a kind that says “‘may does not equal ‘may’” and, in our submission, neither was there any evidence given about what objective barriers are.  At page 405 in paragraph 64 her Honour says that it cannot be correct:

that the content and interpretation of Chinese law differs according to whether the decision-maker is part of the Chinese judicial system or the Australian judicial system.

That could only be a piece of idealistic aspiration.  Of course they are different.  They are doing different things, for a start.  In the comparison posited here, only one is actually decided.  There is only one actual court engaged.

The reference to Mr Liu’s uncontradicted evidence is to evidence which, in our submission, strays over the line between content and application evidence.  And it is not correct to say between lines 10 and 15 on page 405, that:

The determination of the factual issue is not to be found in generalised notions of fairness and justice to a particular claimant.

The evidence to which we have drawn attention would suggest that is exactly and understandably where it was to be found.  The last sentence on paragraph 64 is, with great respect to her Honour, of no relevance whatever and provides no cogent reasoning whatever for her disagreement with a discretionary position taken by Justice McKechnie.  It reads:

There are broader questions of public policy involved in this area of the law –

no doubt there are, but they are normally for legislatures, we would interpolate –

as is amply demonstrated in this Federation by the wide ranging tort law reforms introduced –

that means into legislatures –

to address third party liability insurance issues connected with fault based claims.

With respect, that has nothing whatever to do with the question whether Justice McKechnie was committing an error either under private international law or simply as a matter of deciding the case before him involving the exercise of the discretion to extend a limitation period.  For those reasons, in any event, there ought not to have been an application of Chinese law had Chinese law been required to be applied in such a way as to defeat the claim by reason of a time bar.  It is only of course – that requires to be addressed by this Court only if Chinese law applies substantively rather than the Australian law to which we have referred in our main arguments.  May it please your Honours.

GLEESON CJ:   Thank you, Mr Walker.

CALLINAN J:   Mr Walker, before you sit down, Justice Hayne mentioned when he referred to Dicey, Jabbour v Custodian of Israeli Absentee Property [1954] 1 WR 139.  In that case no expert evidence of foreign law was called but the judge had before him the ordinances and statutes of Israel and he said in the middle of page 148:

It must be assumed that the Israeli rules of construction are the same as the English rules of construction –

There then follows a construction of those rules in a completely orthodox English common law fashion.  His Lordship seemed to take the view that, absent evidence of the Israeli rules of construction, you should assume they were the same as the English rules.

MR WALKER:   Your Honour, on that basis I should reverse an answer I gave to Justice Heydon.  There are three rather than two possibilities.

KIRBY J:   Of course, Israel had ‑ ‑ ‑

MR WALKER:   As a third possibility I would adopt - by interstitial presumption of sameness I would have to adopt that the Western Australia judge was entitled to proceed to interpret – not directly applying Western Australian law but on the assumption that its content was the same.  That is a third fallback.

CALLINAN J:   The same thing was done In re Cohn [1945] Ch 5 in relation to German law. Although there is no discussion about it, his Lordship there just seems to have gone ahead and done it.

MR WALKER:   Yes.

KIRBY J:   I think it is understandable in the case of Israel because they quote and use all the time common law authority from the mandate, but I am just a bit anxious that this is nationalism rampant where we are saying that because we are so perfect that everybody is going to be like us.

MR WALKER:    No, it comes back to an understandable familiarity with one’s own tools.

CALLINAN J:   And if there is not evidence on the point, there can always be contradictory evidence, different approaches and different laws.

MR WALKER:    Yes, your Honour.  May it please your Honours.

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

MR GRIFFITH:   Your Honours, may I deal with the Article 137 point as a discrete issue before we adjourn?  Your Honours, Mr Liu did give evidence at appeal book page 88, which is set out at page 402 of Justice McLure’s judgment, on the effect of Article 137.  We say it quite plainly was admissible evidence as to the content of the law.  The evidence did establish that the Chinese legal system is not one that depends on a doctrine of precedent or case law.  It does depend, your Honours, on authoritative statements from – I would not call it the People’s Court, but the Supreme People’s Court, that are regarded as being of binding nature to the other courts. 

What Mr Liu did, as one sees extracted on page 402, he says that he does have the document from the Intermediate People’s Court of Wuhan, and he translates it, your Honours, as his evidence.  So it is a direct translation, we say, of a binding direction as to the meaning of Article 137, being:

the “Opinion of the Supreme People’s Court on Implementation of the General Principles”.

That has the same force in China as a judgment of this Court has, for example, on the same issue.  When one reads the translation, he says:

We have got the document in front of us.  Does that not provide, ‘The People’s Court may, under special circumstances, extend the period of limitation of actions’?---That’s a possibility.  There are possibilities, so there is a way for the court to extend the limitation, but that’s impractical.  It’s very difficult and they are very rare cases and in fact the opinion of Supreme Court has a relevant explanation in this article, in this particular article or sentence.

What does the opinion say?

So he is asked to translate to your Honours the opinion, which he says at 169 says:

(indistinct) force the meaning of article 137 of the General Principle of Civil Law, if the right holder cannot exercise his right of request due to the objective barriers during the legal time limitation period.

And then he goes on to say:

So impractically this is very difficult use, only, for example, if there’s some war which stopped a person, for example, going for overseas qualification or some –

et cetera.  There is absolutely no evidence whatsoever for the learned trial judge to say that there is anything that may be regarded as an objective barrier during the legal time limitation.  The legal time limitation is 12 months, and when one goes to the pleading itself in the statement of claim, your Honours, one sees not only is it pleaded in the statement of claim that the appellant here returned to China within a few months of the injury, the husband claims the costs of accompanying her to Australian and return as part of his compensatable damages.  One picks up the claim on page 11 of the appeal book, paragraph (c) of the particulars saying:

The female plaintiff was also required to spend several months in Perth recuperating before being able to resume her employment in Wuhan.

You have the claim at paragraph 28 about the husband being required to return to Western Australia to be with her, you have a claim for damages in paragraph 31, and you have the particulars also in the appeal book giving the dates of that travel, which apparently was from November until no later than February.  So that such evidence as there is, is that the plaintiff was living in China, she was living in these premises, she was injured in China, she returned to Australia for three months or so, and then was in China for the remainder of the limitation period.  And we would say, your Honours, that in those circumstances, the judgment of Justice McLure for the Court of Appeal was plainly right.

GLEESON CJ:   Mr Walker says against you, as I understand it, true it is the evidence showed that this discretion is applied or exercised in China restrictively.

MR GRIFFITH:   Yes, your Honour.

GLEESON CJ:   But that is a matter relating to the application rather than the content of the Chinese law, he argues, and Justice McKechnie said, “Well, I’m vested with the discretion and I’m going to exercise this discretion expansively”.

MR GRIFFITH:   Your Honours, we say that it is not open because the Chinese court is obliged by force of the opinion of the Supreme Court’s interpretation of General Principles to take as an absolute doctrine the aspect that the extension can only be made if there are objective barriers.

GLEESON CJ:   So it is not a question, you say, of application, it is a question of construction of Article 137.

MR GRIFFITH:   That is the authority of meaning laid down by a court which is no higher in China, your Honour.  The Supreme People’s Court is the ultimate court and that is the only way, in effect, as I understand it there had been no doctrine of precedent effectively, your Honour, that one can say that the meaning is established beyond any contrary contention.  That is the view plainly that Justice McLure took, your Honour, and it is the only construction that can be made as to the evidence of Mr Liu which was not his evidence, it was a translation.

GLEESON CJ:   How long do you expect to require for the rest of your argument?  I am asking this so that we can give a marking to the next case.

MR GRIFFITH:   Your Honour, my learned friend and I thought we would finish the case by 3.15 today.  Your Honours, I must say two hours.

GLEESON CJ:   We will resume at 10.00 am and we will say that the next case will be taken not before 11.45 am.  We will adjourn until 10 o’clock tomorrow.

MR GRIFFITH:   I will do my best to be as brief as your Honour’s fixture has implied, your Honour.

AT 4.19 PM THE MATTER WAS ADJOURNED
UNTIL THURSDAY, 7 APRIL 2005